Nielsen’s evolution and the coming of the ad-buy structure shake up

By Cameron Yuill , written on March 12, 2013

From The News Desk

Ever since television became woven into the fabric of mainstream America, the Nielsen ratings system, which arose from radio in the early 1900s, has been the sine qua non of viewer engagement measurement. Fast forward to today, a time of free flow evolution and reinvention in media consumption, and Nielsen continues to lord over TV ratings, dictating where coveted advertising dollars are spent.

Modernity, however, is a fickle mistress, and as times change so do user preferences. With the rise of tablets, smartphones, and streaming media, television consumption has gone rogue. And so, Nielsen, the staunch overseer of ratings, has had to hop-skip from the staid television set to a whole new array of hardware, recording the behavior of viewers who prefer streaming video through on-demand services such as Hulu.

The reason, of course, has been the increasing popularity of the tablet. NPD DisplaySearch projects the number of tablets to grow from 374 million units in 2012 to 809 million in about five years with Apple’s iPad, even in the wake of recent slips, still holding on to a 48 percent market share. With this boost in tablet sales, there has been a corresponding rise in online ad spending. Not only that, but users’ viewing habits are influencing the kind of advertising we’re seeing.

This has led to an increase in ads with interactivity and video. According to recent data, between 2009 and 2014, online video ad spending is estimated to swell from $1.97 billion to $5.71 billion. Forrester Research released a report in October, 2012 known as “The Digital Media Forecast 2012 – 2017,” which predicts that video ads will be the fastest growing sector of advertising, rising by an average of 26 percent a year until 2017. By 2014, Forrester forecasts that at least 40 percent of the online display ad market will take on the video format, perhaps eliminating the static banner ads and archaic click through rate attempts of old.

Thus far, these video ads appear to be more effective than traditional ads. According to a 2012  report from leading ad management and distribution platform, DG , and its online campaign management solution, MediaMind, the click-through rates (CTR) for interactive online video is about 27.4 times that of standard banner ads and almost 12 times that of rich media advertisements. Furthermore, according to the study, people globally are 10 percent more likely to watch an interactive video ad to completion than a rich media ad that simply contains video within it.

Nielsen’s part in this unfolding drama is to provide accurate measurement tools. While there is plenty of competition, such as Comscore, Google, and Quantcast, Nielsen has an advantage with video streaming for one very good reason. It is the measurement tool in television. Think of it as a default setting, and you know how hard it is to get users to change their browsers. As ad buyers shift their attention to video streaming, and want to measure how their ads are doing on TV, tablets and mobile, they’ll want a one-stop shop to fulfill their needs. They’ll want what is familiar. They’ll want Nielsen.

The streaming media game will finally give the powers that be a transparent look into the behaviors of users gobbling up content on their own time, free from the clutches of scheduling and cable programming. The result: a new channel of revenue and exposure for brands and advertisers looking to allocate their spending habits in a previously untapped market.

While it may have been fashionably late to the game, Nielsen may turn out to be the scrappy sidekick that helps the tablet achieve advertising dominance.