Since the news of the “consortium to challenge Nielsen that really isn’t“, I’ve been writing that it was largely just blowing off steam to cope with a changing business landscape that isn’t pretty, as well as to put some pressure on Nielsen. It seems to have achieved the latter result.
I wasn’t at all surprised last month to see this public communication from Sara Erichson who is president of media client services at Nielsen touting Nielsen’s plans for convergence measurement of TV and online viewing.
Now according to Broadcasting & Cables Claire Atkinson, Erhichson has sent a later to 75 of its bigger advertising and TV clients inviting them to a meeting next Friday October 16 to move the ball forward citing the similar themes Erichson publicly wrote about last month:
The letter, penned by Sara Erichson, Nielsen president, media client services, North America, invites clients to “a special client meeting in New York City to discuss ‘TV Everywhere’, ‘OnDemand Online’ and similar initiatives and their implications for television audience measurement.” Erichson notes “these initiatives are very compatible with Nielsen’s television ratings system; that is, audiences viewing television programs online could be included in Nielsen’s national TV ratings, including C3.”
As I’ve written before, Nielsen is in the unpleasant position of getting a lot of heat for things that aren’t entirely its fault. Nielsen has some real measurement challenges, and for what it charges subscribers, they need to be addressed. But the changes to the way people watch TV from DVR to online to on their iPhones; I see these as being gut-wrenching for the TV networks, not because of measurement issues, but because they haven’t figured out how to make money on them.
Advertisers don’t want to pay for DVR viewers who skip ads. The online streaming sites have far, far fewer commercial spots than on television. That’s a gap that costs the networks a lot of money. Same for On Demand viewing where most shows have very few commercials and they are mostly network promotions. (Kudos to AMC, “Mad Men” has been running the exact same ad spots with On Demand as ran with the TV airing). But it’s not entirely Nielsen’s fault that advertisers don’t want to pay for DVR viewers, and its not Nielsen’s fault TV networks aren’t putting more ads in the online and on demand streams. And even if they add more ads, if they are not the exact same ads as on TV, why does it matter?
I understand why the TV Networks want convergence numbers, but I’m not clear on why advertisers care. I think if I was an ad buyer I would want to keep the TV and online metrics separate, especially since it’s not like if you buy an ad during Heroes it makes its way into NBC.com/Hulu and On Demand. I get wanting the metrics around who is watching online, and on TV, but how does it benefit the advertisers to have the results combined?
Nielsen seems to be trying to give its clients what they are asking for, and I do understand that its biggest clients are the TV networks. Again, I understand why they want convergence metrics: they want to be able to say “No, it wasn’t only 5.5 million people who watched Heroes, it was 8.5 million!”
But with so many of those additional views being DVR skippers and online watchers who aren’t seeing the TV ads, why does that matter to the advertisers?
Any advertisers/ ad buyers/ agency people out there who can set me straight, please feel free to do so!
I’m not even sure how C3 would work if it included online viewing. Even if there were the same number of ads, those on Hulu don’t match those on TV.
I was updating the post as you were commenting — one of the updates was:
And even if they add more ads, if they are not the exact same ads as on TV, why does it matter?
Maybe the networks are actually looking to make cross-media buys the norm. That’s the only explanation I can think of. If they dump the in-house ads and local spots, they cut out some of the ads, though not nearly as much as is currently cut out.
I think convergence matters if you start thinking about product placement costs to companies. Also, I think that ads will someday air during the show as well on breaks. You could eventually see the tag running at the bottom of the screen while the show plays. Convergence could measure that because that ad would show on any reshowing of the actual show, while the breaks can be sold by the online streamers. People will bitch I’m sure, but if it means keeping good shows on I’ll take it. People don’t like the beginning ads at the movie theater, but they help keep the theater running.
“The online streaming sites have far, far fewer commercial spots than on television.”
I would note that the nets have not been paying much attention to the usability of their online platforms–MLBAM is probably the poster child for sudden loss of functionality, but I’ve have very little success with Hulu and friends for the past few months. Sure, OS X 10.3.9 probably isn’t “supported,” but if Megavideo is the only place with a functional streaming product, there’s a problem of core competence.
How do the advertisers know that I am not closing my eyes and plugging up my ears every time one of their commercials shows while I am watching live?
Jack says:
“How do the advertisers know that I am not closing my eyes and plugging up my ears every time one of their commercials shows while I am watching live?”
Do you?
I totally agree with JHazelwood. There are so many ways to watch TV without commercials – Nielsen ratings just aren’t indicative of how many viewers watch traditional ad spots anymore. I think in-show product placement is the safest bet if advertisers want their product to actually be seen, and in that case, convergent numbers are key.
I agree product placement will be a growing revenue source, but for now, it’s a drop in the bucket compared to commercial spot advertising revenue and I doubt seriously that lack of convergence measurement is slowing down adoption of product placement.
I can’t imagine advertisers of traditional spots would care about measuring all the ways “to watch TV without commercials”, or be bent out of shape because they’re not currently measured.
The more that the consumer can control what, when, and how they watch something the less control the advertiser has. They might could put the banner across the bottom, but a little monkeying with the tv picture controls can adjust the ratio and push it down, at least on some tvs. I think that the stations already had to adjust all the stuff they put on the screen because viewers found it too distracting and annoying, and if the viewers won’t watch the show because its annoying they certainly aren’t going to see the commercial. I really don’t have much objection, personally, to product placement, if it remains subtle, like how tv shows used to all use Fords whenever a car was in the scenes if Ford sponsored the show.
It’s not just product placement, though that’s part of it. Big advertisers have built entire models on the kinds of numbers you can get from Nielsen, and while it’s fairly easy to convert print and newspaper and obviously radio to similar numbers it’s always been kind of a nightmare to convert online to that same metric, or to put it into all those reach numbers that media people use. Anything that doesn’t clearly contribute to those numbers—which the marketing people at the advertiser then put into their OWN models of magical prediction—is liable to be cut. Don’t worry about the current level of commercialization, or how many people are skipping ads (the smarter TV buyers have been saying for a while that skipping ads started with the invention of the remote control and now we can just measure it—heck, The Apartment shows CC Baxter skipping ads and that was in 1960) but how moving forward this alternative viewing can be measured in the same way as traditional television, and therefore sold in traditional buys, and accounted for in traditional ways.
Basically, even though the media landscape is changing, advertisers have almost 50 years of research and modeling based on those numbers, and with every MBA addicted to modeling even more than before, and modeling giving folks a justification for their budgets that will withstand the quarterly results requirements, no one wants to give up those solid, comforting numbers that Nielsen supplies.
Robert – I think the way you framed tv everywhere was a little odd; as if Nielsen had concocted it, which isn’t the case and is confirmed in the quote. I think your right on the DVR issue, the only argument I have heard here is the carriage fee argument about revenue neutral programming or perhaps some kind of branding argument.
Dan, you’re not wrong to find that odd. It was a mistake as a result of some cutting and pasting and the whole “called TV Everywhere” bit should have been removed rather than being attached to Nielsen. I’ve removed it.
“if they are not the exact same ads as on TV, why does it matter?”
It doesn’t. I guarantee this will be one of the first objections raised at this meeting.
Ratings exist to measure exposure to advertising, not exposure to programming. Any change that makes it harder to track exposure to advertising is a non-starter.
Man, if I worked for Hulu, youtube, or any online video source I would fight like hell against these convergence ratings. As soon as both platforms are being scored on the same metrics the jig is up for online. They benefit from confusion over their metrics. Transparency can only hurt them.
Ratings exist to measure exposure to advertising, not exposure to programming.
I wish I had your gift for words, Mikey! I’ll be borrowing that phrase often. It is a concept that is lost on many, and not just fans of TV shows.
I agree with Mikey. Programming is the spoonful of sugar that makes the medicine of advertising go down.
Nielsen ratings are a funny business. Everyone in the industry knows that there’s a huge standard deviation in the ratings yet everyone believes that since that error is the same for everyone it all equals out.
It’s unbelievable that in this day and age of incredible technology the majority of television ratings are compiled by people writing in a little paper diary. The ratings are so skewed toward certain demographics it’s a joke. The only reason for this is the absolute monopoly that Nielsen has. Ratings can and should be compiled better.
Todd, none of the national ratings WE report are based on diaries. The national numbers commonly reported here and everywhere else are all people meters.
My understanding is that outside of sweeps, diaries are only used for local measurement, and that’s slowly being phased out in favor of local People Meters.