May 14, 2013

Bloomberg: Nielsen’s Slow Shift to the Web Hinders TV Networks

Bloomberg Article Excerpt
Nielsen’s Slow Shift to the Web Hinders TV Networks

By Edmund Lee, Alex Sherman and Andy Fixmer - May 14, 2013 Broadcast and cable networks like CBS and Viacom Inc. (VIAB)’s Nickelodeon are failing to get paid for surging Web audiences because those viewers are almost invisible to Nielsen Holdings NV (NLSN).

The dominant ratings measurement firm, used by all major advertisers to determine how much they should pay for a TV ad, has been slow to count growing Internet audiences, according to media and advertising executives. They’ve expressed frustration with Nielsen’s technology, saying it leaves out as much as 12 percent of the audience. At the same time, Internet metrics used by Google Inc. (GOOG) and Facebook Inc. (FB) don’t work for TV.

One reason for the 2013 forecast is the growing number of viewers, not captured by Nielsen, who watch their favorite shows on tablets and smartphones, said Lyle Schwartz, managing partner at WPP Plc (WPP)’s media buying arm GroupM.

Internet video advertising, while still relatively small, will increase 41 percent to $4.14 billion this year, according to EMarketer Inc. That’s about 6 percent of the size of the the traditional TV market, the researcher estimates.

“TV consumption as a whole is flat to slightly down in the last couple of years,” Schwartz said in an interview. The viewers aren’t lost, “they’re just watching it on other formats, namely online,” he said.

Schwartz said he challenged Nielsen a few years ago to count the online audience and let clients “spend smarter.” He estimates that would add 3 percent to 12 percent to TV ratings.

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