The Nielsen revolt

I was asked by a reporter today what I thought of TV companies revolting against Nielsen and threatening to start their own measurement company. My response:

I’ve been waiting for something like this to happen as I’ve argued for sometime that the old sample-based (that is, Nielsen-family) structure of ratings simply cannot work in a niche media world. That is, there’s no way to get a large enough sample to even pretend to accurately measure audience in the unlimited number of special interests that can now be served online. Complicating this further is the on-demand nature of media now, making it hard to measure audience for things we consume via Tivo, the internet, our phones, and so on.

It’s also true that audience size matters less. The presumption of old media was that everyone in the audience saw every advertisement and that’s why ads were bought on the basis of the size of the audience. Size mattered. But today, what advertisers really want is verification that their ads reached the audience they were sold – not just in size but in relevance. (This is why Google’s model of selling clicks is so powerful; it takes the risk of matching relevant ads to audience is paid on the resultant clicks.)

Finally, the web is so much more measurable; servers know what they serve. This, too, changes the structure of measurement online.

We are seeing may industry-wide organizations falter in this new world — Nielsen, the Associated Press — because they were built to support industries that are now turned upside-down in a new media age.

  • rrpjr

    Then this would the second time this took place. In the 1960s, Robert Pauley, president of ABC Radio network, prodded congress to investigate Nielsen’s practices and methods in radio ratings. His argument was somewhat similar to yours, in that he maintained Nielsen — beyond their shoddy performance — made no effort to track the exploding use of transistor and auto radios. Nielsen was arrogant and unresponsive to his calls for change. He testified before the House subcommittee to Nielsen’s gross discrepancies and inaccuracies (including cases in which regional market shares absurdly exceeded nationals for the same program and time period). Pauley’s campaign drove Neilsen out of radio altogether.

  • Jimmy

    If this happens I hope it will be a better system than Nielsen. My family has been asked a couple of times to fill out the diaries, which I found annoying. A company as large as Nielsen should have a more modern system for tracking viewing choices. I particiapted the first time because I thought it would be interesting; I passed the second time around.

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  • Jeff, I came to your blog to tell you that I enjoyed your book and you inspired a blog entry of my own:

    And here you’ve written on a similar topic. Regarding Nielsen, their methods are now suspect, as you point out. But also, Nielsen does not do much in this area except collect, count, and deliver data — surely internet technologies can do that better. What value do they add that would justify them being in the middle?

    — Joe Hopper, Ph.D.

  • As we see more census-based and hybrid census/panel-based television audience measurement, we are also going to see new and different consumer characteristics measured. Total audience numbers will always be important, but they will be complemented with much more information about how consumers interact with the media and marketing and how they actually responded to the marketing messages. A new television world is coming. The web of the past 15 years gives us some sense of what it might look like. It is coming fast.

  • Jeff-

    How is it that cable companies haven’t yet figured out how to track everything that’s being watched, downloaded, tivo’d, and DVR’d yet? Seems like the natural place in the chain of technology to measure viewership. (At least for televisions-online viewership via hulu etc. is it’s own beast, but should be even easier to track.)


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  • A digression…
    I followed Jeff’s link to the story at the Financial Times and was rather surprised not to see any ads on the story (other than a few links to other FT properties).
    Here we have an excellent example of a wasted link — a wasted opportunity for the FT to generate advertising revenue from the traffic that Jeff sends it. As long as news sites are wasting their assets by not even trying to monetize link-generated traffic, we should not take seriously anything they have to say about the viability of the advertising-based business model. They simply have no credibility.

    bob wyman

    • As usual, Bob, a good point. Yes, monetizing content becomes the responsibility of the creator. Like it or not.

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  • Val

    As someone who runs the online arm of a newsroom and three long-form current affairs show, I’m always stunned at how such a small sample becomes the ‘bible’ for how well a program performed… and how quickly TV shows live & die by this remarkably inaccurate sample.

    After working with detailed analytics in online for the past six years the idea of reach seems, well, almost irrelevant.

    I’m wondering how long it will be before engagement becomes THE last word in analytics, ad rates, and success.

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  • Andy Freeman

    One problem is that counting is political.

    and ask yourself whether the validity of the complaint actually matters, whether a senate committee would know an accurate counting system.

  • Trevor

    Just wanted to let you know, that there are many companies that are tracking, analyzing, and selling interactive research coming from Tivo, set top boxes, and even interactive TV Guides and VOD. The media intelligence industry is actually pretty advanced and on top of the game in terms of new technologies, viewing platforms, and media consumption.

    This industry awakening is definitely a positive indicator, though. These type of measurement shifts only happen when their is a vertical industry alignment, in this case: media companies, agencies, advertisers are all willing to use a new currency for measurement, and thus media research companies like TNS Media, Rentrak, and Nielsen, will be responding.

  • A minor nit to pick, but I don’t think that advertisters ever believed that everyone in the audience saw every advertisement. Rather, the larger the audience, the more people would fall into the 1% (or whatever figure they use) that do watch it.

    What the link economy allows them to do is increase the number of people watching/reading their ads in a second way – by increasing the 1% figure to 2 or 3 or 4% (or even 100%, if they truly pay for clicks and not “impressions.”). It’s just a different way of achieving the same goal – one that was only achievable before by increasing the size of the total audience, or by (what we would now consider) rudimentary targeting strategies…

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