There were a couple of high profile developments in the audience measurement industry this week that will likely have profound implications for how audiences are measured and valued in the years to come. First came Nielsen and Twitter’s announcement that the two companies would be collaborating on a new metric — a “Nielsen Twitter TV Rating” for television programs. Then came the announcement from Nielsen and Arbitron that Nielsen would be acquiring the radio audience measurement firm in a cash and stock deal.
Looking first at the Nielsen-Twitter deal, Nielsen’s collaboration with Twitter follows close on the heals of Nielsen’s acquisition of social TV analytics start-up Social Guide last month (Social Guide, it should be noted, produces its metrics primarily from Twitter data). This combination of activities suggests two important things going forward:
First, Twitter may very well end up as not just the primary, but perhaps even the exclusive, input into whatever becomes the dominant social media-based performance metric for television programs. Some of the social TV analytics start-ups have focused their efforts on obaining data from as wide an array of social media platforms as possible, as part of a strategy to differentiate themselves from their competitors by providing what could be argued is a more inclusive representation of social media activities surrounding TV programs. Recent developments suggest that this was not a strategy worth pursuing, as stakeholders in the audience marketplace may prove willing to accept the Twittersphere alone as sufficiently representative of the social media space.
Second, obviously, is that despite the large number of firms that moved more quickly than Nielsen into the social TV analytics business, Nielsen appears to now be maneuvering effectively to incorporate social TV analytics into its sphere of audience measurement products. Nielsen’s actions simultaneously help to accelerate the legitimization of social media as a means of measuring and valuing television audiences, and to create a strong likelihood that even as the accepted means of measuring and valuing audiences diversify, these measurements are likely to be produced by a single firm.
And so, as the Social Gudie and Twitter initiatives help Nielsen to maintain a dominant position in the broadening sphere of television audience measurement, the company’s acquisition of Arbitron helps it to expand its reach to an additional platform — radio. In some ways, it’s somewhat surprising that the business of measuring an “old” medium such as radio would represent an appealing proposition at this point in time. But, like Nielsen’s position in television, Arbitron holds more or less a monopoly in radio audience measurement (along with the massive profit margins that accompany such a position).
But I suspect that an equally important aspect of the acquisition is Arbitron’s Portable People Meter technology, which is capable of measuring audience behavior across multiple platforms (it’s a small, audio-sensitive device that individuals carry with them throughout the day). Arbitron offered Nielsen the opportunity to be a partner in the PPM a decade or so back, but Nielsen declined, electing to focus its efforts on its set-top based People Meter technology. Today, the notion of measuring television audiences via devices tethered to traditional TV sets seems somewhat archaic, given the range of platforms people use to watch TV. And so, as with the Social Guide acquisition, Nielsen is once again able to make up for lost time in terms of moving rapidly into new measurement approaches.
In some ways it’s ironic that in the news reports thus far the key question being asked is whether the Nielsen-Arbitron deal will be able to withstand government scrutiny. In the media sector, regulators have been historically quite tolerant of cross-platform mergers (the FCC, for instance, is about to allow greater TV-newspaper cross-ownership). Television and radio are fairly separate businesses, in terms of the advertisers that rely on each of them and in terms of how audiences use them. Rather, it has been within-platform mergers (that is, direct horizontal integration) that have provoked stricter governmental scrutiny. Thus, for instance, way back in 2002 the Federal Trade Commission blocked the merger of Internet audience measurement firms NetRatings and Jupiter Media Metrix; obviously taking a very pro-active stance in trying to prevent monopolization of the then-still nascent Internet audience measurement business. And yet there has been virtually no discussion of whether the Nielsen-Social Guide deal merits governmental scrutiny.
In any case, it will be interesting to see what, if any actions, regulators take in response to these developments.
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