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.