Monday, June 13, 2011

Nielsen: New Approach to Measuring Online Advertising

From Charles Buchwalter, SVP, Nielsen Online Campaign Ratings:

As networks wrap up their yearly upfront ad sales, there has been no shortage of pontifications about how well (or not) online advertising fared in this year’s negotiations. Media companies are in a race to boost revenue from their online offerings. They know the audiences are there, but are unable to fully monetize their online inventory without the right metrics to prove its value in reaching their clients’ specific targets, relative to TV. On the other side of the fence, TV advertisers know their customers are online. But they don’t have enough evidence that their online media buys are reaching their desired audience well enough to justify allocating more of their ad dollars to the medium.

The answer to this fundamental problem lies in Nielsen’s new approach to online ad measurement which produces Reach, Frequency and Gross Rating Points (GRP) statistics, comparable to TV ratings.
Nielsen Online Campaign Ratings measures the true audience of an online ad campaign by combining Nielsen panel data with aggregated, anonymous demographic data from online data providers. Using this unique hybrid approach, Nielsen is able to measure online advertising campaigns of nearly any size, running nearly anywhere on the web.

This will help advertisers better understand how their media investments are performing against their online only and cross-media campaign goals.

Nielsen Online Campaign Ratings, first announced last September, has been in beta testing since March and, after approximately 40 campaigns across 20+ brands and range of verticals, the preliminary findings have been enlightening:

1. We’re seeing audience sample coverage that’s unheard of in the industry.
Traditional panel sample coverage (the % of impressions of an ad campaign delivered to panelists) is typically less than 3 percent. Sample coverage within Nielsen Online Campaign Ratings (defined as the % of impressions that can be directly tied to a logged-in user from a contributing data provider) is an average of 42 percent. This means Nielsen Online Campaign Ratings’ methodology, which is based on aggregated demos for millions of people, is able to show a highly accurate sample coverage, 20x that of traditional panel-based measurement. Sample Coverage was consistently high across all advertiser brand verticals and all publisher types.
2. We’re seeing high incidences of campaigns not reaching their desired audiences.
Online has typically been viewed as the most “targetable” medium, but with Nielsen Online Campaign Ratings’ ability to precisely measure actual audience delivery vs. desired audience delivery, preliminary findings suggest that audience delivery within targets for online campaigns is not much different from what’s occurring in TV. For example, an analysis of the campaigns showed that when comparing campaigns with narrow audience (less than 20 year age span or age + gender) vs. broad audience (greater than 20 year age span), narrowly defined demos typically delivered 30 percent on-target vs. 77 percent for broad. Age + Gender-specific campaigns exhibited the highest delivery outside of the desired audience (27% for age + gender vs. 75% for general).

In one instance, Nielsen Online Campaigns Ratings showed that, in a campaign in which a CPG advertiser intended to reach females 18-34 for a personal care product, 55% of the impressions were served to men.
This precise measurement of audience delivery will open up new opportunities for online advertising and answer the industry’s need for transparency and accountability.
Nielsen Online Campaign Ratings will continue its beta program through mid-Summer and will be commercially available on August 15, 2011

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