Nielsen’s One-Stop Shop for Media Audiences
The Nielsen Company, the company best known for providing television ratings, recently announced its plans to go public. Nielsen had been a publicly traded company in the 1990s, before being taken over by a group of private equity firms. This planned return to being publicly traded is the latest significant change for a company that has become much more than the primary source of television ratings, but rather has evolved into the primary arbiter of media audiences of virtually all types. Whether one works in (or studies) television, radio, music, film, gaming, publishing, or the Web, it is the Nielsen Company that is a primary window onto the audiences for these media. And its reach is expanding.
In 2008, after some substantial acquisitions on the European television audience measurement front, Nielsen proudly informed its clients that it now controlled three quarters of the world’s television currency data. But again, traditional television ratings represent only the tip of the iceberg for a company that is also a primary source of information about video sales (Nielsen VideoScan), book sales (Nielsen BookScan), video game sales (Nielsen Games), music consumption (Nielsen SoundScan), newspaper audiences (Scarborough Research), mobile device usage (Nielsen Mobile Media) and Web traffic (Nielsen NetRatings). Nielsen has even begun competing head to head with Arbitron in the measurement of radio audiences (Nielsen Radio Audience Measurement).
And yet there remain many more media audiences – or at least aspects of these audiences – to capture. Today, Nielsen’s growth involves expansion across three dimensions. The first is geographic. For instance, Nielsen now provides television audience data in over 30 countries around the world. The company’s NetRatings service has established panels and site-centric measurement systems in countries around the world, to the extent that Nielsen now claims to monitor 90 percent of global Internet activity.
The second dimension involves expansion across platforms. One of Nielsen’s most significant ongoing initiatives is the development of its Anytime, Anywhere Media Measurement (A2/M2) system, which seeks to provide comprehensive audience data integrated across the “three screens” (television, computer, mobile device) by which the bulk of electronic media consumption takes place. Nielsen also measures audiences for what it calls the “fourth screen” – location-based video outlets such as those found in health clubs, bars, gas stations, and elevators. As new media platforms enter the mediascape, Nielsen is there.
And the third, and perhaps least discussed, involves expansion across the criteria by which audiences are valued. That is, today, buying media audiences has become about much more than simply buying audience exposure. Data on the size and demographics of the audience that consumed a particular piece of media content represent only scratches the surface of audience understanding in today’s rapidly changing media environment. Today, advertisers and marketers also want information about how engaged those audiences were, how well they recalled what they consumed, and how their behaviors were affected (to name just a few of the emerging currencies).
Nielsen is continuing to expand to meet these demands as well. For instance, Nielsen recently invested in a firm called NeuroFocus, which specializes in applying brainwaves research to the analysis of advertising and content effectiveness. And just this month, Nielsen acquired an online audience measurement firm called GlanceGuide, whose primary product is an “attentiveness score” for online video content. Nielsen IAG measures the extent to which television audiences recall the details of the programs they watched. And Nielsen BuzzMetrics measures how much online conversation is taking place about various media products – both in advance of and after they are released.
The obvious question that arises from this scenario is whether it is a good or a bad thing for one firm to play such a dominant role in the construction of media audiences. Even Congress has looked into this question. I’m not going to try to answer the question of whether this situation is good or bad. It’s too big a question to try to answer here. But what I will say is that this situation may very well be inevitable. Media companies and advertisers hate uncertainty, and what a sole audience measurement service provides is a bit less uncertainty. Competing providers means competing – often contradictory – numbers. And such contradictions equal uncertainty. This isn’t to say that Nielsen’s numbers are necessarily right. But as long as everyone involved chooses to treat them as right, uncertainty is reduced. Such are the somewhat bizarre machinations of the audience marketplace.
Lots of great things noted here Phil. The shift to go public again is interesting–runs somewhat counter to a trend some noted earlier in the decade to go private–which some theorized as valuable for developing longer range strategies for a rapidly shifting marketplace when public trading wasn’t valuing long term innovation investment. The acquisitions and evolution you note here certainly indicate Nielsen’s efforts to play a central role in this coming era of media (and perhaps some of this was enabled by private equity ownership). Your post does a nice job pointing to the many aspects of media economics and industries that we haven’t fully considered.
I will play devil’s advocate here: I think Nielsen’s days are numbered. Every presentation I’ve seen by a Nielsen honcho seems deeply clueless–they and their brethren broadcast network executives seem to be sailing on the same ship headed for an iceberg.
But maybe I’m too hopeful that the Nielsen stranglehold is about to be smashed. Maybe I’ve drunk too much of the new media kool-aid!
But here’s why I’m hoping they’re over as the central clearinghouse (or Audit Bureau of Circulation for new media). First, there are too many new emerging competing metrics. As advertisers question the equation of exposure with effectiveness, people are developing multiple strategies for measuring effectiveness. Brand management, direct response, integration, viral marketing, behavioral targeting and so on are reshaping what’s considered advertising. Mere exposure is so 20th century, just like tonnage or mass audiences. Second, there are too many new ways to track audiences across platforms (DVRs, mobile, digital cable, online streams) and there are too many potential providers of that new info (from Google to Tivo to Comcast to ISPs to you-name-it). These gatherers of data are not sitting on their hands. They are out there trying to sell their data mining. So Nielsen keeps trying to tell its traditional clients it’s going to get this data too, but unlike Google, with access to billions of bits of data, Nielsen’s sampling methodology makes its data way less significant and compelling.
So, I think Nielsen is floundering. I’m sure they’re trying hard to catch up. But their corporate culture is in TV culture, not online culture, so I predict it’s just a matter of time before their salience withers. Their significance as sole provider of ratings was just so that advertisers and networks could agree on a number to start negotiating from. This will end because advertisers will no longer have to deal with the bottleneck control networks used to have over advertiser access to audiences. Once advertisers realize they have many more options, they will move on–I think they already are.
So, have I drunk too much new media kool-aid and am deluded into thinking the revolution is on its way? I’m open to argument!
Totally agree that the exposure currency is on the wane, in light of the variety of new ways of gathering audience data and valuing media audiences. Nielsen’s being very aggressive, though, in terms of buying up many of the new measurement firms that are innovating in these areas, which I think might help them maintain a dominant position for quite some time, even as the relevant currencies diversify.
As an MCS alum and BuzzMetrics analyst, this was an interesting read for me 🙂 I can understand concerns about concentrated power, but I think one advantage is the ability to measure across so many vectors. It’s tough to synthesize data from multiple platforms if you’re getting it from multiple companies. That’s the reason I went to work for Nielsen in the first place – no one else has this kind of access to multiple streams of data. Anyway, interesting article!