Social TV Up-and-Comers to Replace Nielsen as Kings of the Rankings

 

One more indication that the world of TV is in massive reset mode: the all-powerful Nielsen ratings are being flushed out as the standard by which all TV audiences are measured. New modes of measuring are taking TV data crunching and analysis to new heights and scale, soon leaving Nielsen ratings in the dust.

We are at an inflection point in TV history, where the mass-market medium that has been reaching into American households for decades (the TV) is now intersecting with the newer mass communication phenomenon of social networks. And this intersection is an explosive combination that will redefine the world of television, as we know it.

Case in point: the traditional way by which the popularity of TV shows have been measured since the inception of TV – the infamous Nielsen rating system – is becoming a thing of the past. It’s ironic – Nielsen rankings have killed (or made) so many careers in the TV industry and now it’s their turn to be in the ICU with a low prognosis of survival.

What’s happening is that Nielsen is being pushed over the cliff by young up-and-comers who provide analytics about social buzz – something that is becoming a lot more relevant than the small sample of households that Nielsen monitors (for a good overview of how Nielson monitors “TV households” in the US, click here). The potential to track the likes and dislikes of millions of viewers is now much higher with the newer “second screens” apps and social network analytics technologies that are now on the market.

Facebook and Twitter alone reach 800 million and 100 million users, respectively. The fact that an ever-growing subset of these Facebook and Twitter fans now use the social platforms to engage around TV shows points to a huge potential for monitoring the popularity of these shows. Technologies to analyze the TV-related chatter on social networks are already being leveraged by dozens of “second screen” app providers (a good summary of the leading ones is here) and social analytics companies (like BlueFin Labs, Netbase, Trendrr, etc.)

These companies can reach the kind of scale that could not achieved by the Nielsen method of monitoring a small sample of households and they can also they can crunch BIG data in REAL TIME.

What’s particularly fascinating to me (I am a data analytics addict given my background as a Gartner analyst) is that I have seen this happen before. I call it the “wisdom of the crowd” applied to Big Data.

That’s how Gartner Group, the leading research company in IT, got created a few decades ago. Its founder, Gideon Gartner, got the idea by observing how Wall Street financial experts issued “ratings” on stocks of IT companies like IBM, Microsoft etc. Like Nielsen in the TV world, “Buy, Sell and Hold” stock ratings by Wall Street analysts from leading firms like Morgan Stanley or Goldman Sachs could make or break stocks. What Gideon cleverly figured out was that the people issuing these ratings were financials experts who did not necessarily understand the brave new world of IT and thus based their analysis on a limited view of a company’s health: they only looked at the balance sheet. It was certainly a good indicator but not the whole story – just like Nielsen only monitoring 25,000 households without taking into account all the types of screens that are now been used to watch TV (see Wikipedia).

Gideon had the vision to go ask the people who actually used the IT products created by the IT companies rated by Wall Street analysts, whether they liked these products and thus would keep buying them. By talking to Chief Technology Officers (CTOs) of large banks, retail chains etc., Gartner analysts gathered data on how the actual users of IT products sold by IBM, Microsoft and others rated these products, thereby learning whether they would keep buying them (if they liked them) or switch to another product from another vendor (if they didn’t like them).

Thus, based on the data gathered from the actual users of IT, Gartner was able to predict (and influence) the market success of IT products and provide a new type of ratings about IT product vendors, above and beyond Wall Street’s financial-based ratings.

History is now repeating itself in the world of data analytics. Different industry (TV versus IT) but same model: the Bluefin’s and Trendrr’s of this world are now doing to Nielsen what Gartner did to Wall Street firms in the early 80′s: tapping the crowds of TV viewers to gather and crunch data about TV products versus relying on the limited views of a select few. That’s game changing, folks – it’s way up there in the category of “paradigm shift.”

We can only start to imagine the possibilities unleashed by the ability to analyze and define consumer profiles from the massive data streams produced by millions of TV viewers every data “on the fly”. It’s like being able to channel a tsunami (the exploding waves of data) into well-managed rivers of data streams that will then feed the fields of advertising and content creation with relevant data to better target audiences with better ads and better content.

The dawn of a new TV era…

 

Articles referenced in this post are:

http://splitsider.com/2011/01/why-nielsen-ratings-are-inaccurate-and-why-theyll-stay-that-way

http://www.fastcocreate.com/1679561/the-race-for-the-second-screen-5-apps-that-are-shaping-social-tv)

 

 

 

 

3 Responses

Ms Roussell

outstanding article! Our company, 3SG.tv has been preaching this gospel to TV Networks for the past couple of months – I only wish we’d had this article with us then!

We are building a platform with the express intent of creating a 21st Century audience measurement system. However, unlike Bluefin, Trendrr etc we are not just looking to measure social media interactions. Our platform will allow networks to look at all the ways their viewers interact with their TV shows, no matter where, when or how.

Having spent 20 years in the ad business I know how hungry advertisers are for better audience data than Nielsen provides and are particularly interested in anything that can measure engagement, which so many digital tools allow you to get at. Our platform with allow them to access that information in real-time.

Thanks for the article. i hope you won’t mind if we use it to help keep our positive momentum going?

Kind Regards

Phil Smith
CEO, 3SG.tv.

There are so many counter arguments to her points, that I’m not sure where to start!

First off, saying Gartner is the leading research company in IT, is simply dismissing so many others in the marketplace that do much greater things.

The take away is that you are being short sighted on so many facets such as currency status, 360 consumer insights, standardization, business ecosystems that rely & accept the methodologies, and lastly, the notion that Nielsen is just a small sample where indeed, they leverage partnerships with entities like facebook where they have direct access to 150 million people, set top box data and so many other means of reading the consumer in terms of what they watch and buy.

Many writers come up with op ed pieces like this all the time trying to show that Nielsen’s days are numbered. This is a typical phenomena where echoes of claims such as changing times, disgruntled execs pointing fingers due to unpleasant ratings, networks trying to come up with an aggregated approaches to establish a competing measurement standard and so on and on… Have not produced much.

The writer neglects to mention that Nielsen actually owns a social buzz solution that was ranked by Forrester as being the best and most accurate solution to measure SM. In fact, McKinsey and Co established a JV with Nielsen (the first time ever that they lent their name to a partnership) as its Buzz solution carried so much weight in the industry.

She also mentioned that Nielsen doesn’t take into account all the screens when they have been doing 3 and 4 screen measurement for some time. In fact Nielsen launched OXC which is bringing GRPs to mixed measurement across multiple mediums.

She lacks true insight and is trumpeting a horn to those that don’t know better or the whole story. This was full of half truths and not giving credit for things that she obviously neglected to mention or simply isn’t knowledgeable about!

Just my two sense :)

Interesting points, thanks for sharing.
I am aware of Nielsen’s efforts to diversify from its traditional TV ranking and I would love to hear more about Media-Synch and NM Incite, for example –I assume that the latter is the jv with McKinsey that you are referring to.
My blog is intended to start a discussion about new companies offering novel ways of measuring TV and how they compared to Nielsen’s traditional TV rankings. Different point of views are welcome and if you have more details about how Nielsen’s new offerings compare to the ones mentioned in my blog, please share.
As for Gartner versus its competitors in the IT research market, it’s a separate discussion. If you prefer the research produced by other research groups like Forrester, that’s great. And since you mention Forrester and its review of Nielsen, I wonder if you have also read a recent post by Forrester: is Nielsen in Trouble? http://blogs.forrester.com/david_cooperstein/11-12-06-is_nielsen_in_trouble

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