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Earlier this year the media research giant Nielsen began tracking and analyzing the audiences of TV commercials, not just programs. This is a huge change in the current modus operandi of television advertising. Ad prices were previously based on the ratings of shows, using those ratings as a kind of currency to gauge how advertising should be bought and sold. If the rating of commercials proves successful, not only would the “currency” change to reflect ad ratings, but it would also change how buyers and sellers chose to place ads.

Nielsen measures ratings using the following system:

• Homes are chosen to reflect the demographics of various populations, and Nielsen technicians install monitoring equipment in these homes.
• The monitors track when the television is on and to what programs/stations it is tuned.
• The information from the monitors is transmitted back to Nielsen, and they compile the statistics that feed the advertising industry.

This system works well for programs, but will it be sufficient to measure viewership of commercials? For example, it can generally be assumed that when a TV program is on, it is being watched. The same cannot necessarily be assumed for commercials. If many viewers are like me, they use the commercial break for just that: a break. And Nielsen’s new service will not even measure individual commercials, just an average rating during a complete program. It will, however, take into account shows and commercials that are watched later through a recording service like Tivo or DVR. Clearly, though, it doesn’t take a statistician to see the gaping holes in this measurement system.

But if we forget about the problems with the data that’s being gathered, it is a very compelling initiative with the potential to revolutionize television advertising. If networks and advertisers can agree on a standard rating system, commercial ratings could replace program ratings as the currency used to buy and sell ads. This could be a risky move, especially for networks; since ad ratings are demonstrably lower than program ratings, buyers could negotiate down the prices of advertising on television. However, advertising could become more targeted, with influential businesses targeting particular “spots” within a commercial break, either the first ad or the last ad, which generally have higher viewership. This practice is currently in place only for major TV events like the Super Bowl.

Nielsen may find some stiff competition in the media measurement market from Google, which is rumored to have plans to acquire the old UHF network. Experts warn that simple measurement of TV commercials does not necessarily mean better quality in advertising. But Google may be planning to change the game entirely, by “running a trial to deliver better ads to viewers and help advertisers, operators, and programmers more efficiently buy, schedule, deliver, and measure ads on television.” (Google Press Center). As reported in Talkibie’s earlier article about the Google phone, the internet search giant is working to apply features like those of Google Analytics to television programming and advertising. Analytics uses a series of metrics to track a website’s visitors, providing data on where a visitor is from, how long they stay on your site, where they click, etc. Frankly, the technology makes Nielsen’s black box look about as futuristic as a rotary phone. If Google’s measurement expertise could be applied to improving, and not only measuring, television advertising, Nielsen could face an unexpected rival in media measurement.

Friday, November 16th, 2007 Both comments and pings are currently closed.

By Haley January Eckels