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Who Wins When TV and the Web Converge? Nielsen and the Problem of Web Ratings

Aymar Jean Christian October 24, 2011 uncategorized 4 Comments

UPDATE: Nielsen has rolled out a more mature version of its Web/TV ratings. Philip Napoli has some thoughts.

Believe it or not, ever since 1994 media executives have been claiming the web will become television. It’s a theme I will explore extensively in the second chapter of my dissertation.

It’s been a consistent refrain from the likes of Microsoft, who in the 1990s invested millions in created original web content; tech companies like Intel, who hoped to to provide the infrastructure for media convergence; television networks, who looked to the web to support on-air; and advertisers, who’ve been chasing digital audiences from day one.

It still hasn’t happened yet. There are numerous technical and industrial challenges to the convergence of the Internet and television.

One of those big hurdles has been metrics for measuring online audiences. Within the last month, however, a number of announcements from Nielsen suggest the TV/web convergence might happen soon. For real, this time. It’s close enough for us to ask what this means for web/TV in general and what the future holds.

What’s The Problem?

Those of you who watch Netflix on your TV or use Apple TV, Roku, Hulu Plus and Google TV might be wondering what all the fuss is about. TV and the web are already converged!

Alas, not so. Technologically speaking, it’s easier than ever to shift content across traditional, web and mobile devices. You can stream television on your iPad, and watch YouTube on your TV.

But in every other way there’s still a lot of fragmentation. The problem is advertising, which is the primary source of revenue for most content creators and distributors. In a nutshell, the ratings system that governs television — Nielsen C3 ratings which samples viewership on ads within certain time intervals — hasn’t until recently become transferable to other devices. This has caused a lot of anger from TV fans, who feel slighted when the show’s they watch online or on DVR are canceled for low C3 ratings. It also disturbs web and mobile publishers from ABC to Hulu since television content is still the highest quality content on which one can serve ads on online. It upsets media buyers and advertisers, who want a seamless metric they can use to measure the effectiveness of their campaigns.

Nobody’s really happy.

What’s Been Happening

Well, from Nielsen’s standpoint, they’ve provided solutions. As Gary Holmes wrote in MediaPost last month, Nielsen can already measure C3 ratings online. Effectively, TV and the web have already converged, in terms of monetization. ”Media companies that stream their TV shows over the Internet can now have their online computer and laptop viewing counted in the TV ratings,” Holmes wrote. Though “online viewing over mobile devices, including tablets, is not yet included in the ratings.”

If their combined ratings program doesn’t work for you, they also provide “Online Campaign Ratings,” which give publishers a GRP (gross rating point), created through a similar panel sampling method as they do television. This number gives publishers a  metric they can take to advertisers to let them know how many people are watching online programs.

“What’s really holding it back is that we’re still at some sort of fundamental difference in measures…. Online, the GRP is still more or less based on some version of an impression. On TV, it’s based on some version of an average minute,” Job Gibs, Nielsen’s senior vice president of analytics said in the video above.

So it’s not apples-to-apples, exactly. But it’s close. What’s the problem? Gibs says advertisers need to step up and start using it, planning campaigns using the ratings system released just over a month ago. The company has some on board and has been working with Hulu and Facebook to develop demographics and measure effectiveness. But, he says, ”we’re pretty much there.”

Now What’s the Problem?

Networks and publishers do use the Online GRP, but only Turner has signed up for the combined C3 ratings. It seems like the networks have everything they want, but TV by the Numbers has created a nice set of bullet points from David Goetzl’s MediaPost article on what’s the hold-up:

  • Reluctance by the networks to make their content available ubiquitously.
  • A jumble of different authentication methods to verify subscribers for online viewing.
  • Worry that online viewing could cost networks rights fees from cable and satco providers.
  • While PC viewing is captured, viewing on devices like iPads and other mobile devices is not.
  • There are logistical hurdles for the networks to implement the tracking by Nielsen.
  • For some networks it doesn’t make business sense to sell online and TV ads together, and they  want to sell the online and TV viewing ads separately, and so would like them to continue being measured separately.
  • It’s not economically worthwhile for many smaller networks to pay Nielsen for the service.

It seems to me the real problems are the apparent effectiveness of selling TV/web separately, i.e. the possibly higher CPMs online for networks and greater campaign clarity for advertisers who see TV and the web distinct. That content owners and networks are scared of ubiquitously available content also seems very important — although as a Comcast subscriber I’ve started to see some interesting things with Xfinity, mostly with AMC, whose trying to squeeze as much value online as possible without going for pure ubiquity.

The second issue might fade gradually, but the fundamental problem seems to be that the non-TV viewing is actually different, and all the players — except Nielsen — are hung up on that fact. Online GRPs might give everyone an acceptable metric — “accuracy” is a construction — for web viewership, but combining the two with C3, which would appease TV fans for possibly meaningless reasons, is a stretch at the moment.

“There’s a much larger measurement issue,” Forrester’s Michael Greene told the Beet TV crowd. “How should advertisers be measuring the effectiveness of campaigns…We’re probably not doing a too great of a job at that. There’s a lot we could be doing to do better at that…What are we ultimately trying to accomplish with advertising?”

Looking to the Future

As one of my mentors, Joseph Turow, has often said, the idea that media should be free through advertising has been an uneasy proposition throughout the 20th century, and digital media just caused everyone — networks, fans, web publishers, advertisers, media buyers, cable providers — to reflect on what advertising is supposed to do in a convergence environment and how much it’s worth.

But existential questions aside, this isn’t about technology so much as is making everyone happy. And there are a lot different groups who need to agree. The ultimate goal is to make the jobs of all these executives easier, so everyone can tell their bosses that audiences are getting measured and products sold in a efficient and understandable way. Right now, it’s still a bit confusing.

Holmes says the lesson from the impasse is “technology moves faster than business models.” Technology can also cause companies to question business models, and it seems over the past ten years, networks have done as much complaining about the old Nielsen system as the new ones.

Ultimately, though, the industry will figure it out because it has to.

For me, the bigger question is: what happens to everyone not brought to the table? Companies like YouTube, Aol, Yahoo and Netflix, all of whom are investing heavily in web programming (again!) don’t have on-air ratings to worry about, unlike Hulu. Web advertising is getting healthier every year, with Hulu regularly releasing statements on how web ad gimmicks like ad selectors increase brand retention, and younger companies like Blip trying innovating ways to sponsor web programming, bolstered by data on how effective pre-rolls and the like can be. Some web companies like Facebook and Hulu are getting incorporated into the future of television, where it seems the money still is for televisual advertising. Perhaps this is a frivolous concern — after all, most web networks are own by large conglomerates — but I am curious who might be left out.

If Nielsen, the leading analytics company, spends all its energy devising solutions for traditional media companies, what happens to the newer ones, many of whom provide opportunities for independent creators who lack ad sales and research teams? There are still online metrics, obviously, and there will continue to be. But will one be more legitimate or valuable than another?

That, for me, is a question to which we don’t yet have all the answers.

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About The Author

Aymar Jean Christian is assistant professor of communication at Northwestern University. He writes about media and society for a number of publications. For more information, click the "About" tab at the top of the page.

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