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.

I say inevitable because, over the last year or so, social TV analytics has gained enough traction in the audience marketplace that, for Nielsen to maintain its dominant position in television audience measurement, it would need to expand its reach into this growing subfield of television audience measurement (just as it has expanded into set-top box measurement as a supplement/alternative to People Meter-based ratings).

To some extent, you could argue that Nielsen’s acquisition of Social Guide legitimizes social TV analytics as a meaningful supplementary approach to measuring and valuing television audiences.  Through the research I’ve been doing over the past few months, I’ve had the opportunity to see the different social TV analytics firms working to establish themselves (and, for that matter, the very notion of social TV analytics) as a valuable resource for television programmers and advertisers.  Nielsen’s decision to integrate one of the largest of these social TV analytics providers into its business would seem to suggest that the provider of the primary currency in the television audience marketplace sees the importance in offering its clients a version of this emerging secondary currency as well.  And, needless to say, Nielsen wouldn’t have made this acquisition of they were not feeling pressure from their client base to provide a more robust social TV analytics service.

A focal point of research these days has been on understanding the interplay between traditional ratings and social TV metrics.  And certainly, Nielsen’s acquisition of Social Guide represents an opportunity to really ramp up this kind of research.  Imagine, for instance, the kind of findings that might emerge when the viewing patterns of Nielsen household members can be directly linked with these participants’ social media activity. The holy grail of “single source” measurement (in which viewing behaviors and product purchasing behaviors are simultaneously measured from the same panel of participants) has proven untenable due to cost issues and methodological challenges.  However, what we might call “next generation single source measurement,” in which viewing behavior and social media activity measurement are simultaneously measured from the same panel, would seem to be on the horizon.  Though, of course, the great appeal of social media analytics is that the notion of recruiting and maintaining a representative sample can be essentially thrown out the window; so who knows if useful information could be generated from the social media activities of the relatively small sample of individuals represented within Nielsen’s household ratings sample, even when directly linked with traditional ratings data.

Of course, an important question that arises from this development involves what it means for all of the other social TV analytics firms out there (Bluefin, Trendrr, General Sentiment, etc.).  Does Nielsen’s major investment in this space mean that the company is going to be able to establish and maintain the same kind of monopoly status in this area that they have long maintained in the traditional ratings space?  In which case, the future of these other social TV analytics providers might be a bit grim (though most stakeholders in this marketplace would probably agree that some consolidation in this field is both inevitable and even desirable).

But in any case, the prediction that the future of the television audience marketplace is going to be one in which traditional ratings are going to coexist alongside social media metrics, and that both analytical approaches are going to play a meaningful role in the buying and selling of audiences, certainly is bolstered by this latest turn of events.

As this blog has highlighted on a number of occasions, a focal point of late has been on various forms of social media analytics as  the primary mechanism for addressing the challenges confronting traditional approaches to audience measurement, and moving the audience marketplace beyond traditional demographic categorizations.  Advertisers, programmers, and industry associations are continuing to explore if and how these social media analytics could prove useful.

I recently had the opportunity to take part in meetings on this topic organized by the American Association of Advertising Agencies and the Council on Research Excellence. One of the key themes that emerged from these meetings for me is that, despite the constant flow of social media analytics reporting in the trades, and despite the fact that many advertisers and programmers are subscribing to more or less every social media analytics service available, nobody’s quite sold yet that these data should play a prominent role in the functioning of the audience marketplace.

From this standpoint, it is important to recognize that there a number of other analytical approaches seeking to gain traction that have received attention of late that employ much more traditional research methodologies.

Take, for instance, “emotional attachment” as measured annually by the firm NewMediaMetrics, which contends that this metric is a valuable tool in effectively allocating advertising dollars.  This approach involves breaking audiences down into product purchasing categories (e.g., fast food, beauty products, etc.) and then assessing which television programs exhibit the strongest emotional attachment amongst the audiences in these various categories. The methodological approach is fairly old-fashioned, relying on traditional surveys of consumers.

CBS’s chief research officer, David Poltrack, has for years been one of the leading proponents of migrating the audience marketplace away from demographics-based currencies.  His work in this vein continues with a scheduled Advertising Week presentation tomorrow in which he will present an approach that melds traditional Nielsen ratings data with word-of-mouth metrics generated by the firm Keller Fay (we’re talking actual word of mouth here, as measured by interviews, not any kind of social media-based representation) and what’s been described as a “proprietary segmentation analysis.”  The goal is to be able to identify those programs that are most frequently consumed by a category of viewer described as “media trendsetters,” thereby moving beyond the fairly blunt instrument of age and gender categorizations.

What these initiatives tell us is that the audience marketplace isn’t quite ready yet to take the plunge into the social media analytics pool. More traditional research methods also are capable of tapping into aspects of audience behavior (emotional attachment, word of moth, etc.) that long have resided at the periphery of the audience marketplace, until various web scraping tools made them cheaper and easier to capture.

Only now, as the exposure model continues to strain under a media environment of unprecendented fragmentation, are stakeholders willing to pay attention to this growing array of approaches to measuring and valuing audiences.  The question seems to be emerging is whether new or more traditional methodological approaches to tapping at these previously neglected dimensions of audience behavior and audience value will gain the most traction.

The lawsuit contains a number of damning claims, including accusations that executives were accepting bribes from television networks; and that elaborate systems were in place to manipulate the data gathering process in Nielsen households so that normal viewing could take place on unmeasured televisions, while the measured televisions were tuned to specific channels for extended time periods in order to artificially inflate their ratings.

The lawsuit alleges that such manipulations were facilitated by Nielsen’s refusal to increase the size of its household sample (only eight thousand homes).  That is, when the household sample is so small, it is possible for relatively few corrupted households to significantly affect ratings results.

The lawsuit also alleges that such activities have been taking place for eight years; and that, when presented earlier this year with evidence, Nielsen executives promised to address the problems.  Essentially, the lawsuit contends that Nielsen executives have conducted their own investigation and admitted to the corruption, but have done nothing to rectify the situation.

Audience measurement firms are no strangers to lawsuits.  Radio audience measurement firm Arbitron came under legal attack from a variety of stakeholders (include a number of state attorneys general) as a result of its efforts to to launch its Portable People Meter technology.  Similarly, Nielsen’s efforts in the U.S. to launch its Local People Meter led to a legal attack from Spanish-language broadcaster Univision. And then there was the three-year antitrust lawsuit filed against Nielsen by upstart measurement firm erinMedia.  Generally, these lawsuits either failed, or ended in settlements of one form or another.

It will be interesting to see whether this lawsuit follows a similar path, or whether it becomes a full blown international scandal.  In many ways, the lawsuit reflects one of the key dangers that arises from the overwhelming tendency toward monopoly in the realm of audience measurement.  If only one firm provides the relevant data, there really isn’t any kind of potentially effective system of checks and balances in place.  And thus the potential for corruption and manipulation increases.

And, in the case of Nielsen, the scope of its position of prominence in the provision of television audience data around the globe is remarkable.  Back in 2008, the company announced to its clients that it controlled three quarters of the world’s TV currency data.

As I talk about in Audience Evolution, every once in a while the question of whether more comprehensive government oversight or regulation of the audience measurement industry is required briefly finds its way onto the policy agenda, only to fade back into the background.  One can’t help but wonder whether — if the claims contained within this lawsuit are substantiated — this could be a turning point that finally provokes a more aggressive government response.

Yesterday, Nielsen announced a plan to incorporate set-top box measurement into those markets that are currently measured exclusively via paper diaries.  Nielsen also announced a plan to incorporate a new measurement technology, called a code reader, into the measurement of these local markets.  Nielsen hasn’t provided many details about the code reader, other than to describe it as a proprietary technology with a “watermark-enabled capture device”; but this incorporation of an additional measurement technology is certainly in keeping with the current trend in all areas of audience measurement toward hybrid measurement systems.

This hybridization also extends to the fact that, even with data coming from set-top boxes and the new code reader, the diaries will still be in use in these markets.  Clearly, these diaries are tenacious.  Even the introduction and implementation of new technologies in local TV markets can’t quite bring about their demise.

This persistence of the diary method is a reflection of the fact that diaries remain an appealingly inexpensive way of gathering the demographic data that advertisers continue to value (it should be noted that whether advertisers are right or wrong in placing such value on demos is increasingly debatable).  The bottom line is that local people meters continue to remain too expensive to employ in markets outside of the top 60; and so a hybrid approaching utilizing other less expensive methods is the logical next step.

It’s not surprising that Nielsen is now making some significant headway in bolstering its measurement methodology in diary-only markets.  The past few months have seen Nielsen competitor Rentrak (which employs set-top box data) make significant inroads into local television markets.  The stream of announcements from Rentrak over the past few months about the signing of new station group and ad agency clients has been steady, to say the least (here’s the most recent).

This scenario of course leads to that fascinating Catch-22 in audience measurement: competition is the most effective way of producing methodological improvements, yet marketplace stakeholders face powerful incentives to support just a single measurement system (see Audience Economics and Audience Evolution for discussions of why this has more or less always been the case).  But history tells us that, even if Rentrak ends up being the latest in the long line of upstart measurement firms that has failed to unseat Nielsen, they will succeed (as they apparently already have) in nudging the incumbent down the path of methodological innovation.

In the meantime, here are a few items of potential interest.  On Monday, June 26th, Columbia University’s Institute for Tele-Information, in collaboration with the International Media Management Academic Association and Fordham University’s Center for Communication (which I co-direct), is hosting a workshop on “New Media, New Demand Measurement Methodologies.”  The workshop features a number of interesting speakers from both industry and academia (here’s the full workshop agenda).  And, it is being streamed online here starting at 9:00 AM or so on Monday morning.

The workshop is focusing on innovations in online and mobile audience measurement, and will address specific topics such as methodological issues and challenges, and the societal implications of these new measurement systems.

I’m going to be presenting research on the use of social media analytics to measure and monetize television audiences.  This research is part of the just-published report I completed for the Time Warner Cable Research Program on Digital Communications titled Rethinking Program Value in the Evolving Television Audience Marketplace.

I’m also going to be presenting some recent research that I’ve been working on in partnership with the Collaborative Alliance, a media/audience research industry think tank that focuses on untangling the increasing complexities of audience measurement. Thanks to the Collaborative Alliance, I was able to obtain a limited amount of data from three of of the most prominent social TV analytics firms. I’ll be presenting some findings from this research here soon.

One thing is certain — business of defining and measuring engagement (regardless of the medium) is a complex and competitive space. We’ve yet to see industry stakeholders adhere around a standardized definition or operationalization.

This week sees the latest development on this front, with market research software provider IgnitionOne announcing that they will be introducing an online ”engagement optimization” feature as part of their digital marketing suite.  Their product will produce an Engagement Score derived from a variety of criteria related to a web site’s performance, including: frequency of visits, paid views per session, and time spent on-site.

There are a couple of things worth noting in this description of this approach to the notion of engagement:

1) Engagement is clearly being approached as a multi-dimensional concept; one that can only be operationalized via the integration of a variety of measures of a web site’s audience-related performance.  This seems to be a pretty standard approach at this point. It’s probably unlikely that we’ll ever see any significant contraction in the range of criteria that are being used to operationalize a concept that is as inherently multi-dimensional as engagement.

2) However, engagement, in this case (as well as in many others that I discuss in Audience Evolution) is being operationalized largely in terms of dimensions of exposure.  That is, while on the one hand we tend to think of engagement as some sort of measure of performance that truly takes us beyond exposure; the reality is that very often engagement is simply an amalgamation of traditional exposure criteria. So, in this case, criteria such as frequency of exposure and time spent per exposure are, in combination, being used to represent a concept that one could easily argue should represent a dimension of audience-hood that goes well beyond what can be captured by any combination of traditional exposure metrics, particualrly in a highly interactive context, such as online.

In this way, some aspects of this developing market for engagement metrics really do seem to represent an effort to repackage old wine into new bottles.

For those unfamiliar with Nielsen’s Online Campaign Ratings system, it officially launched back in August of 2010 in partnership with Facebook (as it relies heavily on data drawn from individuals’ Facebook profiles). Essentially, advertisers embed a Nielsen code in their ad and Facebook records when its users view the ad on its site or other sites.  Thus, Facebook’s demographic data are being combined with Nielsen’s ad impression data to produce something on par with a traditional television rating (here’s a more detailed description).

As I talk about a bit in my 2003 book, Audience Economics, historically, the buy-in of a couple of major advertisers has been the key first step in establishing a new currency in the audience marketplace, so this Unilever announcement could prove quite significant.

However, it is important to remember that Nielsen’s biggest competitor, comScore, offers something similar, called Campaign Gross Rating Points.  I recently interviewed an advertising industry executive who described the current situation in online audience currencies as an “arms race” between the two firms. Of cource, comScore is lacking Nielsen’s ability to offer one-stop shopping for both online and television audience currencies, which probably tilts the balance in favor of Nielsen emerging as the online currency.

There were a number of reasons for this, ranging from a lack of resources (in many campaigns, the media buying was actually handled largely by college-age volunteers, who weren’t about to try to reinvent the wheel); to the fact that political candidates themselves didn’t want to deviate from established practices (i.e., they liked seeing themselves on mass-reach broadcast television rather than on more targeted cable channels or online, regardless of whether these other media represented a more efficient way to target voters); to the fact that political media buying agencies get paid based on how much they spend, and thus don’t have much incentive to try to target more efficiently.

I was reminded of this regretfully abandoned project (perhaps I’ll resurrect it one day — still seems like an area that hasn’t received sufficient research attention) by this article about the current state of affairs in political media buying.  This piece illustrates how the process of buying potential voters is employing many of the sophisticated audience analysis tools and data that now characterize the process of buying potential consumers.  And, perhaps most important, this articule illustrates a growing emphasis on trying to reach potential voters more efficiently and effectively through online channels.

The final paragraph of this piece, however, reminds me of the findings that were emerging from my research five or so years back:

“Will 2012 mark a turning point when political campaigns realize that digital advertising offers them even more efficient and impactful marketing channels, and at much lower cost per impact, than their more traditional channels? Not in the sense that campaigns will invest less in their traditional go-to channels, as confirmed by the heavy TV spending we’ve already seen in Iowa, New Hampshire, South Carolina and Florida.”

The 30-second broadcast television spot still tends to be the dominant form of campaign communication.  The bottom line, I think, is that no candidate wants to cede that space to his/her competition. And so while efforts to target and reach potential voters online continue to develop, we still see this tremendous reluctance to diminish their emphasis on a communications strategy that seems a heck of a lot less efficient.  Plus, of course, it still tends to be the older Americans who vote in the greatest numbers, and these potential voters remain reachable via traditional broadcast television.

In the end, as much as new media technologies and analytical tools are dramaticaly changing the dynamics of reaching voters, these developments are taking place alongside — rather than replacing — traditional approaches.

The article describes some well-known examples, such as running a popular program a couple minutes over into the next program’s time slot (in order to goose that program’s reported rating), or labeling certain episodes of a program (specifically, those expected to perform below average, for whatever reason) as “specials” in order to keep them from counting toward the season average.  Obviously, these strategies are intended to exploit the specific procedural dynamics associated with how the ratings data are reported.

Some of the newer examples (at least to me) involved the distribution of the commercial loads within individual programs.  Specifically, networks will front load all of the program’s national commercials.  As the article notes, “Shows receive national ratings from Nielsen only up to the point when the last national commercial is broadcast — after that, the numbers simply do not count.”  The article doesn’t make this explicitly clear, but I’m assuming this strategy is a direct response to the adoption of the C3 rating (which functions as currency at the national level, but not at the local level).

This is a reminder that every new audience measurement system brings with it a variety of challenges — one of them being figuring out how best to exploit the particulars of how the system works.