Photo via: Grant Neufeld
The Financial Times is reporting that some of the biggest names in television broadcasting are banning together to challenge Nielsen, the leader in TV ratings, and its exorbitant fees and inaccurate metrics. Some strong brands and agencies have also joined forces with the networks to reinforce their position.
The problem with Nielsen is that they grossly underestimate the actual numbers of viewers for most programs. You could blame it upon the fact that their sample size is only 18,000 viewers which they then extrapolate data and apply it to the entire country.
Blame it on the Internet
The frustration with TV ratings is more to do with the Internet and its ability to track and report practically every metric necessary. As we all become more familiar with the lexicon of internet advertising and the benefits it provides, the more TV and other mediums such as radio appear dinosaur-like. The next step in TV ratings will be a replica of the web model most likely involving technology in all set top boxes to track viewership and impressions. The analytics that websites have been able to offer for over a decade now will finally be available to those in the television industry as well.
Are you sure you want to do this?
However, accurate reporting could actually unearth more problems than there were before. For example, today a 30 second spot during the Superbowl can cost $1m and reach an audience of about 95 million. That’s a CPM (cost per thousand) of only $10.50. Ten meager dollars to reach 1000 people for 30 seconds. Right?
No! If advanced metrics comes to the television industry, then the ball falls into the advertisers’ court. As a buyer, you’ll be able to tell exactly how many people fast-forwarded through those commercials or the average amount of time spent on the commercial before fast-forwarding. They can even tell you what kind of TV someone has and the resolution their viewing your commercial in. So if it appears that they have the latest and greatest TV there really might not be a point of touting your new latest and greatest TV.
The possibilities are endless but what they essentially do is provide an advertiser with many options to become infinitely granular with their targeting. Ad buys get smaller and advertisers demand much more from them. It’s also a slippery slope because as soon as one broadcaster offers targeted ads they all will. Eventually, the targeting gets more sophisticated in an attempt to win over more advertising.
YouTube Logo
This is exactly the reason why online video advertising, which started with lots of promise and premium (isn’t it funny how those two always go hand in hand), has seen a steady decline in its CPMs over the past few years. This is why the largest video streaming site, YouTube, isn’t yet profitable.
I’m all for pressuring Nielsen so that they either improve or are done away with completely. But… as the saying goes, “you better be careful what you wish for”.
On the other hand, I also believe that there will soon be a tipping point where people forego the old mediums (newspapers, magazines, TV, radio) and the majority of our media consumption will come from online. At that point, I believe advertising rates will see a rise again.
/rant
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