It's become an article of faith among digital folks that once online media can be measured apples to apples to TV, big dollars will flow to the web.
But now that Nielsen is set to roll out its long-awaited internet Campaign Ratings -- the online equivalent of its industry-standard TV ratings , known as gross ratings points or GRPs -- Aug. 15, some are questioning how big that wave of dollars will be, or if it shows up at all.
Last week Nielsen sweetened the pot by adding to those ratings another data set: Facebook's 170 million U.S. users. Facebook's data trove (that U.S. figure is per Steve Hasker, president of media products at Nielsen) includes demographic information, not to mention the personal connections between users, and Nielsen is planning to integrate that data with its panel of 35,000 Nielsen homes to get a better demographic view of who is exposed to what ads online.
The move is certainly good for Nielsen, which has struggled with online measurement of late, and can now use its dominance in TV to gain a bigger foothold where it counts online. And it's clear how Facebook hopes to benefit: The deal will help it state its case, on the eve of a likely IPO, that it, too, can be a partner to mass-reach marketers and steal those big TV ad budgets.
But the ratings ' impact on marketers is still less than clear.
Online media grew up around data reported from publishers, namely clicks, unique users and impressions, while TV grew up around demographics and audience estimates, such as the percentage of women 18 to 34 years old that a show reaches. And TV's so-called GRP has been baked into decades of media-mix modeling, which allows the biggest-spending marketers to predict the impact that $1 spent on advertising will have on sales. Putting the web on GRP footing theoretically means major advertisers will more easily consider it in their media planning.
Starting next Monday, a marketer could more easily decide, say, to reach 50% of its target audience on TV and the next 25% online. The web could compete very well, too, particularly in some segments. There are, for example, some audiences that are very tough to reach on TV and are more easily reached online, such as upscale professionals and young men.
Without a GRP equivalent, conversely, online has little chance at the biggest branding budgets. "For packaged-goods, insurance, financial services, quick-serve restaurants and movie studios, this is your bread-and-butter and how you spend 80% to 90% of your budget," said Dave Morgan, CEO of Simulmedia. "You cannot sell advertising to these folks unless they have a sense of the total audience they are reaching."
But the reality is many of the biggest brand marketers are already using their own online-equivalent web metrics that approximate TV's ratings system. In 2006 several large packaged-goods companies including Kraft, P&G and Nestle came up with their own metrics so they could analyze their online spending alongside traditional TV. Last year, Nielsen rival ComScore rolled out its own online GRP equivalent. Because such metrics already exist at bigger brands, the budgets that should move to digital are already there.
Being judged alongside TV could also expose online advertising's biggest weakness: While it's great at getting clicks or conversions, it's not so great at branding. A direct translation could end up highlighting the limited impact of a tiny box in comparison to the sight, sound and motion of TV. It could also expose some of the bigger ills of online advertising such as s bad creative, cluttered environments, hidden ad units and sketchy placements.
And while commercial TV ratings don't account for those who got up to go to the bathroom, that hardly compares to the credibility issues in online display. Some estimate as many as 40% of reported online impressions are either worthless or downright fraudulent, meaning the ad loaded off-screen, reached the wrong person or demo, was served outside the country, or was registered as part of a click-farm scam. (ComScore's offering includes a so-called Validated GRP, which verifies that the ad reached the right demo, the right number of times.)
Just because online and TV are measured the same way doesn't mean they'll be valued the same way by marketers. "We find most of our CMOs are less and less concerned with audience buys and more concerned about the performance of that investment," said Wes Nichols, CEO of Marketshare.
Still, the entrance of Nielsen will no doubt encourage more mass marketers to measure their online media buys this way. If the dollars don't move en masse, the new system will at least get web publishers into conversations on the world's biggest ad budgets. And that 's a place many of them have never been before.