NEW YORK (AdAge.com) -- Facing a client insurgency that could threaten its TV-ratings franchise, Nielsen took a step toward linking TV and online video measurement, making better comparisons possible between online and offline audiences for shows such as "Desperate Housewives" and "30 Rock."
Three years in development, Nielsen today told clients it will begin installing electronic meters in Nielsen homes to measure web activity, which will ultimately allow it to include online viewing in its standard TV-ratings service. The hope is a "single source" of data will allow accurate comparisons between TV and online, allowing ratings to include, for instance, viewing for "The Daily Show" Comedy Central, Hulu and ComedyCentral.com.
Nielsen starts the process of installing meters in 7,500 homes later this month and hopes to begin collecting data by Aug. 31, 2010. In September, the company had pegged 2011 as the earliest it could begin to do so.
That Nielsen hadn't yet come up with a system to measure TV across different delivery devices had been a significant source of grumbling among the networks, which are putting more and more TV online and are hoping to make it a bigger business.
In September, a group of 14 Nielsen clients -- both networks and agencies -- banded together to form the Coalition for Innovative Media Measurement and launched a bake-off to see who could come up with the best cross-platform media-measurement solution the fastest.
Theoretically, that could result in the ouster of Nielsen as the de-facto standard for TV ratings. At the time, Nielsen said it wouldn't be able to produce a "single source" metric for video until 2011.
"Nielsen has a lot of heavy lifting to do in a tight time frame -- particularly considering how many installations will be needed," said Colleen Fahey Rush, exec VP-research at MTV Networks and chairman of the coalition board. "But it's encouraging to see Nielsen being aggressive and stepping up their commitment to identifying a true single source measurement."
As their TV audience decline, networks are eager to sell shows across different devices and to have accurate data on who is watching and where.
That's only increasing with the growing popularity of Hulu, the joint venture between News Corp, NBC Universal and Walt Disney, and online video trials such as Time Warner's TV Everwhere and Comcast's On Demand Online.
Right now the online video market is less than $1 billion compared to the $70 billion TV market. But as viewers migrate, it's becoming more important to the TV networks and to advertisers.
"First the technology triggers it; then early adopters embrace it, and the markets follow that. But the research is years behind," said Brad Adgate, senior VP-research at Horizon Media.
Nielsen said the delay is due to the testing the company has had to do over the past year to make sure the added data collection wouldn't taint Nielsen's existing TV viewing sample. Nielsen tested the joint panel in 400 homes over the past year to determine if it affected the quality of data.
Part of the complexity in directly comparing the two is a lack of standard conventions. TV has adopted commercial ratings (meaning if viewers are watching the ads that support the shows they're in), but online the commercials are different. Hulu, for example, shows about a quarter the number of ads as a comparable TV broadcast.
But the new online services contemplated by the networks and cable operators would have the same ad loads as on TV, making direct comparisons easier.
Sara Erichson, president-client services at Nielsen, said the joint panel will allow the company to produce a single rating for online and offline viewing, as well as better understand the interplay between the media and advertisements consumed offline and online.
"We are treating the computer as if it is another screen in the house," Mr. Erichson said. "There is more work to do due to the complexity, to actually combine the data. But having the meters in the household is the first step to enable that."