Jim O’Hara, President, Media Product Leadership, The Nielsen Company

The Findings

One of our primary tools for observing three screen behavior has been the TV/Internet Convergence Panel, which is made up of 1,000 households in the U.S. that formerly participated in our TV ratings panels. These households, accounting for almost 3,000 people, were asked to install a Nielsen software meter on their computers in addition to the meters these households had already permitted us to install on their televisions, enabling us to measure both Internet and television activity.

What we have found to date is that despite the initial presumptions and fears of some, media consumption has actually increased. Each of the three screens has its benefits and people are using them as complements, not as substitutes, for one another. With respect to TV and Internet usage, we found that a fair number of people are doing both simultaneously, though in relatively small increments per day – an average of ten minutes per day per person. In our multitasking culture, watching TV while checking e-mail or surfing the Internet has become more and more common: more than half of our panelists had some simultaneous activity. Among that group, 3.7% of the time they were watching television they were also on the Internet and 31.6% of the time they were online they were also watching television. What was rather unexpected was that this behavior was not limited to any one age demographic: a teen was as likely to be engaged in simultaneous usage as was someone 54 years old. And the amount of time they were doing this was comparable.

So who is sharing their time online with TV? Women age 25 and over and persons 35 and up are most likely to juggle the two media. Further, they tend to be above-average consumers of each platform. Simultaneous users watch 14 percent more TV a day and use the Internet 61 percent more than the average consumer. Clearly, during that expanded timeframe they are exposed to a large number of ads and the opportunity to reach them is greater.

Implications for Marketers

Until fairly recently, marketers would develop campaigns based on the individual medium – one for TV and another for the Internet. Often times, these campaigns would bear little resemblance to each other. But today, we know that doing so risks passing up an opportunity to reach a captive audience. The simultaneous usage phenomenon presents new marketing opportunities: the unique strengths of each medium can be leveraged to allow consumers to be reached – and allow them to reach back – in ways that they choose themselves.

For example, TV can deliver the call-to-action via advertising. The Internet can provide a convenient venue for the action, and enable the consumer to get more information about or actually purchase a product or service. Advertising that takes advantage of this linkage of platforms is already being implemented with particularly strong results.

To gauge the effectiveness of this concept, we looked at a few traditional retailers during the 2008 holiday season to see which of them were most successful in stimulating cross-platform behavior. In December, the highest percentage of people who watched TV while using retailer web sites went to Target.com Target was also among three retailer web sites (second to Walmart and before Best Buy) that were uniquely able to draw a high percentage of simultaneous Internet and TV users – 3.8 percent. Visitors to its web site were more likely to be watching TV while at the site, and 10.2 percent of Target.com visitors said that they had seen a Target commercial on TV. Based on these figures, it seems clear that the simultaneous use of the two media had a measurable effect on behavior.

All signs are that media consumption across screens will continue to grow. Advertisers and media outlets that develop ways to capitalize on consumer cross-platform experiences and leverage the strengths of each will likely benefit. Now more than ever, a call-to-action – be it to visit a web site for more information or to make a purchase – can yield an immediate reaction from the consumer using both TV and Internet. But regardless of the medium, the key to successful marketing is having the right message that can make a real impact with the target audience the advertiser wants to reach. With increasing numbers of consumers expanding their use of media, marketers have more opportunities than ever to do so.

We are now expanding the scope of the Convergence panel to include measurement of video viewing on mobile phones. So expect more from Nielsen on simultaneous usage, cross-platform measurement and marketing implications as the three screen evolution continues.

When it comes to making television programs available online, many companies are testing the consumer adoption of different business models and the technology required for each. In recent months we’ve heard about initiatives such as “OnDemand Online” and “TV Everywhere” from Comcast and Time Warner Cable, respectively. The goal is to make available TV shows online to authenticated cable subscribers, at no cost, in the format that each show was originally presented on television – the same program, the same national commercials. These initiatives have received a lot of support from cable and broadcast network programmers.

OnDemand Online, TV Everywhere and similar offerings could provide the best way for video content providers to monetize TV programs online. Importantly, these initiatives are very compatible with Nielsen’s television ratings system; that is, online audiences viewing these programs could be included in Nielsen’s TV ratings.

At Nielsen, OnDemand Online and TV Everywhere are examples of what we refer to as the “Extended Screen” — initiatives that treat the computer as another screen in the home used to watch television. In fact, we’re already working to capture television viewing that takes place online and to add that viewing back in to the ratings. That includes in our National C3 ratings.

How will we be able to do this? It’s all part of our Anytime Anywhere Media Measurement (A2/M2) initiative. Nielsen has developed an Internet software meter that uses the same technology to measure video viewing online as the Nielsen Active/Passive (A/P) Meter does for television. We’ve currently installed this Internet software meter among 375 homes in our National People Meter panel, allowing us to evaluate the measurement of Internet usage alongside TV usage. Given that more than $70 billion of television advertising is bought and sold using Nielsen ratings, we are careful not to take any actions that would dilute the reliability of the core television ratings data. Consequently, we are undertaking an extensive evaluation program before fully integrating television and Internet measurement.

The results of our evaluation show tremendous promise to date. We are positioned to start the roll out of the Internet meter to all People Meter households before the end of this year, with complete installation in 2010 and full implementation in early 2011. In the meantime, we will continue discussions with all our clients about their Extended Screen initiatives and will work with MSOs and programmers to support their tests of OnDemand Online and TV Everywhere. We will also continue our work on other TV/Internet cross platform initiatives such as the TV/Internet Convergence Panel, our TV/Online data fusion and our measurement of online video through VideoCensus. Additionally, we have deployed the Internet software meter to our online panel of over 230,000 individuals to further measure program usage online.

Though no one knows for sure which business models for online video will emerge as the most successful, Nielsen will be prepared to measure audiences no matter which ones prevail.

“Although we have seen the computer and mobile phone screens taking on a significant role, their emergence has not been at the cost of TV viewership,” said Jim O’Hara, President, Media Product Leadership, The Nielsen Company. “The entire media universe is expanding so consumers are choosing to add elements to their media experience, rather than to replace them.” Nielsen data also shows Americans are using DVRs more than ever, watching one hour more of timeshifted TV each month than a year ago. Currently, 30% of homes in the U.S. have DVR devices.

The Simultaneous TV and Internet Experience

Nielsen’s Convergence Research Panel, launched in 2008, provides single source electronic measurement of TV and Internet usage in the same homes. As of June 2009, this panel shows 57% of consumers with Internet access at home watch TV and go online simultaneously at least once a month. On average these consumers spend 2 hours, 39 minutes each month simultaneously using the Internet while also watching TV. Their online experience at home is in front of the television almost a third of the time.

Other Key Facts and Trends

• As Americans continue to watch more TV each year there are also more TVs in each home than people – in 2009 the average U.S. home had only 2.5 people vs 2.86 television sets. 54% of Americans have three or more TV sets in the home. (link to universe estimates)
• Online usage is relatively flat since last year, though more people are viewing video online than ever before. Certain age groups also view online video more than others do – Adults 18-24 watch more than 5 hrs each month vs. Adults 65+ watching just over 1 hr of online video.
• Short form video (such as YouTube clips) still makes up the lion’s share of online video viewing – 83% in May 09 – while name-brand TV network content comprises the majority of mobile video viewing.
• Younger demographics aren’t using the Internet as much as older demographics, yet the growth rate of kids 2-11 online clearly outpaces the overall Internet penetration. The number of kids online has increased 18% compared to 10% growth for the total active Internet universe (P2+).
• Mobile video viewing continues its upward trend, with over 15 million Americans reporting watching mobile video in Q2 2009. This is an increase of 70% versus last year – the largest annual growth to date.

Download Nielsen’s complete Three Screen Report for complete details and methodology.

For years, it has been assumed that home internet usage would cannibalize live television viewing, but there’s something interesting happening between social networking and live television.  Could it be that what Pete Blackshaw termed “telecommunities” – people simultaneously watching live television programs and chatting in real time with an online network of like-minded fans - will gain scale and give consumers a reason to stick with live viewing?

Let’s look at what happened during the Oscars.

During this year’s broadcast, we used Nielsen’s “Convergence Panel” – a sample of homes in which we measure both television and Internet in the same households — to monitor the people in our panel who were simultaneously following the Oscars on live television and over the Internet.  We saw some very impressive numbers.  Of course, it’s important to note that the base sizes for this research are small – in the dozens of users, not the hundreds — so we can’t draw truly scientific conclusions from the data.  That said, we did observe some interesting directional trends:

• More than 1 in 10 people (11%) watching the Oscars this year did so while logged onto the Internet.  This is nearly four times greater than the normal rate of simultaneous usage we observe.
• While there was some expected surfing to places like IMDB for more information on movies, the true winner of the night was Facebook.
• People who used Facebook during the broadcast used it for an average of 76 minutes.  This compares to a little more than 30 minutes on average for MySpace, and just a little more than 20 minutes for the major portals.
• People who used Facebook while watching the Oscars watched about 50% more of the broadcast than the average Oscar viewer.

Additionally, we estimate that more than 100,000 messages were sent via Twitter during the broadcast – that’s more than 400 message per minute, or nearly 7 per second.

What were people talking about?  From my personal observations of Tweets during the broadcast, it was just what you’d expect if you had a living room filled with thousands of your closest friends.  Comments ranged from the snarky (”OMFG when did SJP get a boob job?????”) to the gushing (”My faves from the Oscars – Kate<3, Penn, Ledger’s win and his darling family…I shed tears, I won’t lie.”)  Some directed to the broadcaster (”Dear CBS: Next time something big like, oh The #oscars is on, RESCHEDULE your shows! I’m sure many would LOVE to watch Amazing Race now!”) and others regarding the advertising (”after watching a billion diet coke commercials during the oscars, i caved in and got a can”)  Interestingly, Tweets came in from all over the world in a range of languages – a true world wide event.

The really interesting thing was that to be part of the telecommunity, you had to experience the conversation in real time with the broadcast.  At one point I paused the program to say goodnight to my kids – when I came back and starting viewing where I had left off, the Twitter comments were all out of sync with the broadcast.  I immediately jumped forward to the live broadcast so I could keep up with the conversation.  If you watched the program on DVR on Monday – forget it! – the telecommunity had disappeared and you’d be left to watch this very social program, all by yourself.  How sad.

While there is still a lot to learn about the interaction of social networking and TV, it’s clear that there is opportunity for programmers and advertisers to leverage telecommunities to drive audience participation with both the programs and the advertising.  And it doesn’t have to be just live programming such as awards shows and sporting events.  Any show with a deeply loyal fan base could drive live viewing and deeper engagement through these telecommunities.

As social networking because more pervasive, we will continue to study its impact on television and advertising. Learn more about how social networking is expanding its global reach.

The Internet played an important role in the 2008 election campaign, so it’s no surprise that on Election Day, people used multiple news sources to follow results.  By combining television and Internet samples through a process known as fusion, Nielsen provides new data showing how the two media worked together to meet the demand for election news updates.

A total of 163.6 million adults sought election coverage from either television or the Internet — or both. This shows the unduplicated or cumulative audience that used one or the other medium for at least one minute.

158.3 million watched Election Day coverage on television. Of those, 134.8 million only watched TV coverage.

28.8 million used the Internet to get Election Day coverage from major news websites. Of those, 5.2 million only used the Internet for election coverage.

23.6 million got Election Day coverage from both TV and the Internet. Of these, 48% of these accessed online Election Day coverage only while at work; 42% got their online coverage only at home; and 10% checked online coverage both at home and at work.

Demographic Breakdown
From an overall reach perspective, adults aged 50+ were more likely than younger adults to seek Election Day news from TV or Internet — 80% of these adults were reached by one or the other medium, compared to 60% for 18-34s and 76% for 35-49s.

The demographic difference between the TV audience and the online audience wasn’t “younger” versus “older” — but rather, “middle-aged” versus “older.”

Younger adults between the ages of 18-34 made up about a quarter of the audience for both television and the Internet, but from there online coverage skewed younger than television:

-Adults 18-34 were 24.8% of the TV audience and 24.4% of the online audience.

-Adults 35-49 made up 40.7% of the online audience, but only 29.5% of the TV audience.

-Adults over the age of 50 made up 46% of the TV audience and accounted for 35% of the Internet users.

In addition, there are decided differences in demographic composition, based on whether people accessed election coverage online only, on TV only, or both on TV and online:

-Internet Only Users were the youngest: 34.5% were aged 18-34, compared to 34.0% for 35-49 and 31.5% for 50+.

-TV Only Users were the oldest: 25.3% were aged 18-34, 27.3% were aged 35-49, 47.4% were 50+.

-People who accessed Election coverage on both TV and online skewed 35-49: 22.2% were aged 18-34, 42.2% were 35-49, 35.6% were 50+.

Convergence Panel Results
A new Nielsen sample tracks both Internet and television usage with a single sample, making it possible to see how people used the two media simultaneously to check Election Day results.  This “convergence panel” shows that while simultaneous use of TV and Internet for Election Day coverage was limited, TV and online news outlets drew larger than average audiences:

-Only 1% of TV viewers on Election Night were simultaneously searching news websites — three times greater than the prior Tuesday night.

-On the other hand, 25.5% of news website visitors on Election Night were also watching TV election coverage — 2.5 times greater than the normal simultaneous traffic.

Internet users who rank among the top fifth in terms of time spent online also watch more than 250 minutes of television each day, according to Nielsen. In comparison, people who don’t use the Internet at all watch just 220 minutes of TV per day.

The data comes from Nielsen’s new TV/Internet Convergence Panel, which measures both TV and Internet usage within individual U.S. households. The panel consists of nearly 3,000 people in more than 1,000 households. TV viewing and Internet usage data are collected by Nielsen’s electronic People Meters and NetSight meter software.

Internet and TV “multitasking” is also common among these heavy users, Nielsen found.

Almost one-third of home Internet use (31%) is accompanied by background TV viewing, while about 4% of TV viewing occurs when a consumer is also using the Internet, according to Nielsen.

Overall, more than 80% of people who watched TV and used the Internet in September used both simultaneously.

Teens were the most likely to use TV and Internet together, but adults ages 35 to 54 logged the most simultaneous Internet/TV usage minutes, according to Nielsen.

View the full press release.

Read coverage of Nielsen’s findings by Reuters, the New York Post, the San Jose Mercury News, Media Post, Promo magazine, and TechRadar.com.

Submit questions about Nielsen’s TV/Internet convergence research to Howard Shimmel, who oversees Nielsen’s Convergence Panel, by commenting below.