According to Shimmel, shifting to online video mainly appears to be happening in small pockets of the population, including young, emerging households. Households with no cable subscriptions at all, but who subscribe to a broadband service, also reflect a younger population of college graduates and lower to middle income consumers who may not be fully convinced of the need to pay for digital cable. However, Nielsen data shows that these individuals are typically light TV viewers who watch 40% less TV per day than the national average. And while they stream about twice the average amount of video, they still only stream about 10 minutes per day, hardly an indication of a monumental shift to online-only viewing.

There’s no question that marketers and researchers will be eagerly watching this demographic to see whether their viewing habits change over time, but for now the idea of a cord-cutting revolution appears to be purely fiction.

Fast Facts

• The number of people per month viewing online video increased 6% year-over-year.
• There was a 9% increase year over year in the amount of time per month people spent online.
• Online video streaming still only accounts for less than 2.5% of total video consumption across all demographics.
• Among heavy video streamers 12-34, there are significant shares of time allocated to streaming.

We’ve heard from countless brand marketers about the need for guidance when it comes to measuring the value of social media advertising. It’s why we’ve made a major investment towards helping advertisers understand how to achieve their brand goals in a social context. Our joint report: Advertising Effectiveness: Understanding the Value of a Social Media Impression provides early insights from Nielsen’s BrandLift product which analyzed survey data from more than 800,000 Facebook users in response to more than 125 Facebook ad campaigns from 70 brand advertisers.

While the medium of social media advertising is still a wild frontier for some, the BrandLift framework solves a number of advertiser concerns by providing quantifiable data that can be mapped to trusted advertising effectiveness benchmarks already in place: Ad Recall, Brand Awareness, and Purchase Intent.

Suggesting You “Become A Fan” Of Social Engagement
Study after study has shown that consumers trust their friends and peers more than anyone else when it comes to making a purchase decision. It’s critical that we understand advertising not just in terms of “paid” media, but also in terms of how “earned” media (advertising that is passed along or shared among to friends and beyond) and social advocacy contribute to campaigns. To that end, we took a closer look at 14 Facebook ad campaigns that incorporated the “Become A Fan” engagement unit and sliced the effectiveness results three different ways, by each of the types of ads available on Facebook: 1) Lift from a standard “Homepage Ad”; 2) Lift from an ad that featured social context or “Homepage ads with Social Context”; and 3) Lift from “Organic Ads,” newsfeed stories that are sent to friends of users who engage with advertising on a brand.

For those Homepage ads at the top of the marketing funnel, awareness increased on average by 4% between exposed and control audiences. Purchase intent also increased on average by 2% following ad exposure on Facebook.

Comparing the responses of those users who had seen ads with social context against users who saw ads with no social context from the same campaign, we saw a measurable lift in lift.

While exposure to the homepage ad itself increased ad recall, those users exposed to both the “paid ad” and the organic impression remembered the ad at three times the rate of those just exposed to the paid homepage ad. We saw a similar effect for the other two metrics evaluated. Homepage ads increased awareness of the product or brand by 4% on average, but exposure to both homepage ads and organic ads increased awareness by a delta of 13% versus the control group. Exposure to organic impressions also impacted purchase intent as well, increasing the impact of the ad from 2% to 8%.

For more on earned media, social advertising and the methodology behind the study, download Advertising Effectiveness: Understanding the Value of a Social Media Impression.

We invite you to ask questions, leave comments below. We’re love to hear your thoughts.

While we are not yet spending 90% of our time watching “glowing rectangles” as The Onion joked last year, Americans are consuming more and more video across all three screens (TV, Web, Mobile) according to our recent A2/M2 Three Screen Report. But do we watch TV online the same way we watch on our living room TV?

Looking at Nielsen’s online panel data of U.S. visitors to online TV sites (ABC.com, CBS.com, CWTV.com, Hulu.com, or NBC.com) in the last 30 days, we actually found more differences than similarities when it came to viewing behavior, demographics, and even ad effectiveness. Demographically, those watching online TV Network video are closer to DVR users by gender breaks, but closer to the general online population relative to age.

The broader usage patterns suggest that online video is, for the most part, a replacement of DVR use, or used by those who do not have immediate access to TV. In short, TV network content online is used to catch up with programming, and not typically as a replacement for TV viewing as results from our email survey showed.

When We Watch
Online TV Network consumption appears to be an activity set aside in specific sessions from most other online activities. When we go online to watch TV shows, that activity dominates that particular online session, with women and the 18-34 crowd spending the biggest parts of their sessions on network viewing.

While many of us may watch TV with friends or family members, the viewing of TV shows online proves to be a rather solitary activity. This may change as internet connectivity to our main TV screens becomes more ubiquitous, but right now, the majority of online viewers prefer to be alone.

Advertising Impact
TV commercial spots reused online appear to be more impact on recall and likeability than creative just designed for online as this case study with food and beverage ads shows.

This look into the similarities and differences of TV viewing on the web should be a reminder to brand managers that “context” is just as much king these days as content.

Last week, Silicon Alley Insider published a piece titled “Yahoo’s New Ad Campaign Is Flopping,” judging the impact of Yahoo’s $100 million ad campaign to promote its new homepage. The piece’s main criticism was this: Yahoo’s unique audience did not increase as a result of the campaign. Our numbers agree with those in the piece — Yahoo’s unique audience did not increase.

However, our data also suggests that Silicon Alley Insider may have missed the broader point of the campaign.

Obviously, Yahoo wants to increase its audience – wouldn’t anyone? But this isn’t an easy task for a brand that’s already very large. Think about it – Yahoo! already reaches 68% of the web audience and faces stiff competition from the likes of Facebook, Google, MSN and AOL. When you’re this big, new audience is hard to come by.

Rather than focus on getting new customers, then, market leaders like Yahoo often try to sell more to their established base of loyal users. If this was Yahoo’s strategy there’s evidence to suggest that the campaign was a success.

For example, let’s look at time spent on Yahoo before the campaign (9/6 to 9/27) and for two 4 week periods after the campaign (10/4 to 10/25) and (11/1 to 11/22.)

When we looked at the 4 week average running up to the campaign’s launch Yahoo’s homepage had about 10.4 minutes of usage per person per week. The average of the 4 weeks after the campaign saw an increase in time per person of +3%. Four weeks after that saw an average increase of +7%.

On Yahoo’s already substantial base, these kinds of increases signal positive results, not a flop.

Can we attribute this growth to ad campaign? Maybe. Nielsen IAG studied the impact of both the TV and Online components of the campaign and found that while non-Yahoo users weren’t particularly moved by the advertising, Yahoo users were more responsive. In fact, Yahoo users exposed to the online campaign were 83% more likely to try the new Yahoo services than non-users, and Yahoo users exposed to the TV campaign were 240% more likely to try the new services than non-Yahoo users.

So, did the gamble pay off? It’s hard to say. The payoff really depends on two factors. First, was Yahoo able to maintain a CPM level high enough to fruitfully monetize the increased consumption? Second, will these levels of consumption continue? Only Yahoo knows the answer to the first question, and we won’t know the answer to the second for several months.

What we do know, however, is that the gauge for success of this campaign, shouldn’t solely be based on unique audience. When it comes to “success,” we should spend more time worrying about the time consumers spend with a site, and not just the incremental audience generated.

Note: Yahoo, Google, MSN and Facebook are clients of The Nielsen Company.

Jon Gibs, Vice President, Media Analytics, The Nielsen Company

SUMMARY: In the world of media, a new world order is forming. One where the Internet medium has matured from emerging and experimental to established and effective. The pathway to profitability for marketers will be determined by the ability to integrate mobile, TV and Internet traffic and advertising data into a holistic, effective, multi-strand fabric that blankets the consumer in a traceable, measurable way.

The Internet has moved from the “experimental” or “emerging media” categories to a mainstream media outlet. Online video portals like YouTube and Hulu transform the user interface. Facebook reshapes the contours of social media, helping friends connect and communicate. Apple rocked the commercial music world when it rolled out the iPod player.

The artificial media divide created by proprietary measurement tools is slowly going by the wayside as well, as providers realize that advertisers are right: media is media is media, and a common set of measurement solutions is the only sensible approach to align spending with effectiveness and allocate brand dollars.

Three screen view
Media is dominated by the power of three, as in the Big 3 screens: TV, Internet and mobile. The driver behind their continued growth is video. During Q2 2009, the mobile video audience increased 70%, time spent online expanded 46% over the prior year, and traditional TV consumption is at a seasonal all-time high of 141 hours per month.

It seem the more video feeds that are available, the greater the public appetite for video. Rather than replace a video platform, consumers are media multi-tasking on multiple platforms. Some 57% of Americans with home Internet access view TV and Internet simultaneously at least once a month. All told, they log some 2 hours and 39 minutes at each sitting. More than one-quarter of all home-based Internet time involves concurrent TV watching, which explains why both Internet and TV consumption are enjoying an upward trend.

The advertising ecosystem
Like any new medium, the Internet has fought to gain a foothold with media buyers, to get a fair share of the advertising pie, to establish its efficacy at delivering prospects, to make the case for market share, and to re-shape purchasing habits and media schedules.

By all measures, that push for legitimacy has been successful. The Internet now accounts for 7% of Q2 2009 advertising dollars across media, or $2.1 billion, gaining ground against more established media formats like newspapers with a 9% share or radio, outdoor and free-standing inserts with an 8% share. Technology and media-oriented advertisers are bumping up their Internet ad budgets, and even the U.S. government has jumped on the bandwagon, deploying online for military recruitment advertising.

Perhaps more remarkably, these gains have been made even as overall advertising expenditures shrunk by 10%. Magazines (-27%) and newspapers (-22%) were the hardest hit, while Internet and TV took minor blows, down by just 3% each. The news was healthier on the market share front, where TV gained four share points, garnering almost two-thirds of all ad dollars.

Measuring value
As video, audio and text converge on digitally-based networked delivery systems, share of media will become a passé concept, supplanted by anytime, anywhere availability. The Internet has proven its organic ability to adapt and evolve accordingly, but there remains a disconnect between ad dollars committed to the medium and consumer time spent with the medium.

For example, people spend 87–90% of viewing time in front of the TV screen, and advertisers assign a somewhat disproportionate 89–92% of ad dollars to that medium. By contrast, the Internet commands between 10–13% of consumer viewing time, but only receives 8–11% of ad dollars. Converting percentage points to dollars, that spending level represents an almost $4.4 billion shortfall in Internet advertising.

Equalizing measures
Accurately measuring Internet ad effectiveness has posed a major marketing quandary over time. From the earliest days of measuring click-throughs, the maturing Internet medium now proposes to equalize measurement with other media formats based on audience delivery in two possible ways: time-based currency and gross-ratings points. Both possible measures emphasize overall campaign delivery rather than a specific unit.

One idea that has surfaced as a possible measurement unit is the concept of dwell time—the seconds a person is exposed to a given brand during an advertising flight. A Web site would be paid based on the total time of unique exposure to a consumer rather than the number of impressions. In theory, this would reduce clutter, minimize the need for extra page views designed to generate inventory, and in turn increase the average cost per thousand (CPM). Since CPM is a common industry metric, this should facilitate TV comparisons.

Online GRPs
Another approach to homogenizing metrics for easier comparison is to develop an online gross-ratings points (GRP) system for the Internet. The GRP calculation is pretty straightforward: ad impressions divided by total population. Using Tide’s May 2009 TV and Internet ad campaigns, we simulated how the campaign was delivered across multiple demographics to illustrate the power of a GRP-based system. Adding the Internet boosted television-only ratings across the board—especially in the coveted core 25–49 demographic, which demonstrated a 9–10% increase in the total campaign GRPs.

Utilizing both a time-based measure and GRPs would better reflect the value of ad formats within each media, while also correcting for TV time constraints. A cross-media metric would recognize the varying degrees of interaction with each media, as well as the array of different ad formats deployed. Internet properties should view cross-media measurement from two core areas: cross-media post-buy analysis and “share shift”.

Share shift
In a classic case of “what if”, a new share shift model from Nielsen uses fusion data and campaign reach and frequency tools to standardize and scale the process of evaluating changes to ad campaign reach, frequency and GRPs prompted by a funding shift from medium to medium—i.e., “what happens if I move X% of the dollars from TV to the Internet”.

Creating share shift simulations enables advertisers to calculate delivery value. Complementing that with a post-buy analysis of cross-media reach and frequency can influence a hard-nosed media buyer with powerful empirical facts. Together, these analyses predict how, and to what degree, the Internet will impact a campaign and then demonstrates precisely how it does so.

Cross-platform engagement
While the two core issues in cross-media advertising—how many ads are served and who sees them—are critical elements, one final question remains: what actually works? Nielsen IAG uses three core metrics to assess the synergies offered by a cross-platform campaign that a consumer sees on both TV and online:

1. Brand recall—did those exposed to the ad remember the brand the next day?
2. Message recall—did those exposed to the ad remember the primary message the next day?
3. Likeability—did those exposed to the ad remember the brand the next day and report liking the ad “somewhat” or “a lot”?

An analysis of ad performance in four different categories for on-air TV versus online full-length TV episodes revealed a remarkable pattern: Internet video impressions were materially stronger than traditional TV on the important measure of brand impact. In fairness, the novelty of online video may have artificially inflated results somewhat, as would artifacts of the medium itself such as an inability to skip online video ad units. But there is no denying the strong showing.

Getting creative
The great debate among agency creative types surrounds the issue of Internet advertising. Does it demand a unique treatment, or can costly TV creative translate effectively across media? Surprisingly, at least for the food and beverage category, evidence shows that, across all brand metrics, repurposed TV ads performed better on average than in-stream Web original video ads or original flash animation designed exclusively for the Web.

The higher production values of TV ads might have influenced results. So too, might have the superior creative treatments of TV ads. Although, given the hundreds of ads analyzed, the impact of creative differences was likely minimized.

Media measurement in today’s multi-platform environment underscores Nielsen’s commitment to developing Anytime Anywhere Media Measurement (A2M2) designed to deliver comprehensive cross-platform, consumer-centric insights.

• Download the full report, The Shifting Media Landscape: Integrated Measurement in a Multi-Screen World.

Source: The Nielsen Company

Video Viewing on Facebook Continues to Grow
During the last year, Facebook’s online video viewing audience has experienced tremendous growth. Year-over-year, total time spent viewing video on Facebook increased 1,840 percent, from 34.9 million minutes in October 2008 to 677.0 million in October 2009. The number of unique viewers of video increased 548 percent and total streams grew 987 percent during the same time period.

“Facebook’s rapid growth in online video during the last year illustrates the site’s evolution from simply a communications focused tool to a media portal,” remarked Gibs. “Social networking sites are evolving from a venue for catching up with friends to a platform for personal expression, allowing consumers to share their experiences in the full variety of content formats available online.”
 

Source: The Nielsen Company

As with many of us who have spent our entire careers on the Internet, I have a bit of media establishment envy. Don’t get me wrong, I love the Internet; I’ve spent the past 10 years analyzing the Web and continue to believe the future is in truly interactive media. Sentiment aside, for the most part Internet professionals have spent much of our careers at the proverbial kids’ table. For far too long the Internet has been relegated to the “experimental” or “emerging media” categories.

Recent developments indicate the Internet is being taken more seriously. Case in point: NBC and Fox joining forces to create Hulu, if for no other reason than to solidify their participation in the increasingly important and transformative online video market. Google reaping ad-driven revenues that were once reserved only for the wilder fantasies of those working in print classifieds. Apple reshaping the entire music industry through innovation of the playback device, distribution and consumer experience. And the latest example of Facebook, transforming the way people congregate, communicate and navigate the Web today.

If the Internet has truly “arrived” and is being taken seriously, why have we not yet seen significant brand advertising dollars follow? Maybe it’s because we’re in the midst of one of the worst global recessions in history. Perhaps it’s because online creative units tend to replicate the print experience instead of redefining the consumer experience. Most likely is that the online ad industry has decided to remain independent—we speak our own, at times arcane, language; we use our own effectiveness measures reinforcing the belief that the Internet is a direct response media; and, we have yet to provide easy methods to help advertisers understand the role of the Internet in the entire marketing mix. In effect, we have made our lives, and potential livelihoods, very difficult.

The good news is there is hope. As a medium the Internet is quite the contender (and brand dollars are beginning to shift its way). To continue growing, the online ad world must take a hard look at itself as part of a broader, media industry-wide context and, as one prominent TV client put to me, “grow up.” The Internet does not exist in a vacuum and we’ve moved past the days when it is practical to operate like it does. Leading marketers look at media from a holistic perspective to reach today’s increasingly connected consumers. So too must anyone participating in the ad industry.

• For more about cross-media advertising, download the complete report: Integrated Measurement Solutions

Jon Gibs, Vice President, Media Analytics, The Nielsen Company

SUMMARY: Why do advertisers still debate the value of online advertising? Because no precise measure of online audience delivery exists. The missing factor? Who—as in who is viewing your ads, not just how many ads were served. Does online advertising deliver the target audience? With current evaluation methods, it’s difficult to tell. What’s needed is a shift in metrics for audience targeting from impressions to dwell time, increasing the cost per thousand in the process.

Because of their simplicity, we in media research tend to overlook the core principles of successful advertising. These principles can be reduced to three basic questions:

• How many?
• Who?
• Did it work?

“How many?” is the volume of ads, using measures like impressions, gross rating points and the like. “Who?” is the targeted audience, whatever parameters are selected to define the desired population like age, income, education and household size. “Did it work?” is the effectiveness of the campaign. Did it change the thinking or behavior of viewers? Did it increase brand awareness? Did it drive purchase? The online advertising industry is very good at measuring “how many?” in the form of ad serving reports. We have also developed multiple models around “did it work?”, from branding studies to offline sales impact. We, however, have spent little time on the second question, “who?” The irony is that this question—the demographics of those people exposed to the ad campaign—is at the core of ad delivery reporting in almost all other media.

The missing link
Measures of demographic delivery are critical for every other form of media buying. The Internet, however, skipped over this link in the media value chain. Online publishers have spent a decade trying to answer the question “Does online advertising work?” The problem is, that’s the wrong question. This question has driven advertisers to focus on direct response metrics, such as click through, or short term brand lift, without any consideration of the long-term branding impacts on the advertisers’ targets.

The right question is “who does the advertising reach?” This is the question asked of almost all other media, where there is an understanding that a great deal of the impact of the advertising is related to the creative, rather than the media placement. To get to the answer of “who”, the industry needs to develop a standardized, robust, post-buy reporting structure to help keep the targeters on target, and prove from end-to-end, the value of Internet advertising.

Targeting for today
Targeting in the Internet world refers to any form of online advertising that is not run-of-site, run- of-network or content section-specific. I would argue that even contextual, content section specific ads are targeted. One of the great advantages of online advertising is that, unlike traditional media, targeting happens on the execution side, not just in planning. For online or mobile media, the first step in a campaign mirrors traditional media. Marketers determine a schedule of web sites, portals or ad networks that will deliver the desired audience.

The big difference: online media buyers can also buy actual audience segments based on elements like geo-coded inventory through a reverse IP look-up, modeled segmentation based on cookie or panel data, offline sales data, registered user data and a host of other possibilities. As this form of targeting grows in popularity, conventional census-based delivery reports become less useful as many only show raw server counts of impressions—rather than highlighting the ability of publishers to deliver on their promised targets.

Says who?
Another issue with actual online results is that they tend toward unreliable self-reporting. While reports cover impressions, they tend to skirt the issue of targeting accuracy. Some chalk it up to the fact that audience delivery metrics aren’t sexy, while a more cynical group asserts that it has more to do with not wanting agencies or publishers to look bad if results fall short.

Yet another opinion points to the fact that measurement firms have only recently started to produce post-buy reports. Since each research company uses a slightly different methodology, it is impossible to compare results across campaigns and vendors. Also, in many cases, these reports can’t be generated for some forms of behavioral targeting without the client revealing proprietary information.

Prime examples
Examples of online measurement at work for a mobile phone manufacturer include one case using household income as a segmentation criterion, the other using age as a criterion. In the first scenario, the company wanted to market a low-cost smart phone to middle income households in the $50,000–$75,000 per-year range.

According to a Nielsen analysis, the campaign failed badly. Only about 25% of advertising reached the targeted households. Even more disheartening, the supposedly targeted campaign impacted 9% fewer target audience members than a more general run-of-network buy. Three out of four ad dollars were wasted on other segments.

Killer app
In a second example, the mobile phone manufacturer was rolling out its new killer app—an iPhone substitute designed for young adults ages 18–24 primarily, and 25–34 secondarily. Results were better in this case, albeit mixed.

The good news: the campaign over-indexed significantly among the two targeted age groups, 56% more for the primary audience and 25% more for the secondary audience than a random campaign would deliver. The bad news: 62% of impressions accrued to consumers age 35+, outside of the preferred demographic. Although disappointing, it makes sense given the age distribution of the U.S. and online populations which skew older.

Timing is everything
Although ad impression counts traditionally have been the currency of the Internet, there is reason to believe that this accounting method itself had led to the decline of online advertising CPMs. Since publishers are paid on the number of ads served, many have created cluttered environments that increase inventory levels beyond demand—therefore driving down CPMs.

This decline in CPMs is made up by serving more ads and therefore, continuing to decrease the value of any individual ad unit. This cycle creates a financial situation where publishers are disincentivized in the short-term to provide a good advertising environment because they need to create more clutter. This clutter does not simply decreases CPMs, but also advertising effectiveness and therefore, the value of the media overall to advertisers.

In essence, because the Internet is the first medium with truly unlimited inventory potential (i.e., one can cut pages into tiny bits and there is no significant cost of delivery), an impression-based ad model has driven publishers to look for short-term gains at the expense of the long-term health of the industry.

So, what is the answer? When it comes to online advertising, time is the x-factor. Most research suggests that the longer a person is exposed to an ad, the more effective it will be—up to the point of diminishing returns. Perhaps the future of post-buy reporting—and online advertising—has more to do with time than impressions or page views.

The reason for this is that time is the only equalizing measure between the three core groups of online content—video, social media and standard content. Rather than simply counting the number of impressions served, the appropriate measure becomes the “dwell time” (time spent) on a page or with an impression. Using this method, we are also able to reduce inventory (and perhaps drive up CPMs) by saying that impressions that only have a “dwell time” above certain levels are actually counted as true impressions.

Time vs. frequency
A time-based post-buy measure rewards sites that surround advertising with a robust contextual environment, encouraging audience “dwelling.” As the graph illustrates, Site 3 provides a big bang for the buck on a per-target basis, generating fewer but much longer impressions, effectively increasing the value of each impression to the advertiser.

Conversely, Site 4 pursues an outdated approach of ramping up the number of impressions with much shorter exposure times, decreasing the value of each impression. As the value of each impression goes up, so should the CPM.

The way forward
If the Internet is to improve CPMs—and perhaps save the overall advertising market from its fate—we must focus on time-based post reporting. The post reporting itself provides brand advertisers with what they really need and understanding if their ads reach the audience they seek. The time element rewards those sites that limit their inventory by adding a financial incentive to create a good environment for advertising and also links inventory measures to a counting method that should produce more effective advertising overall.

Now that’s something to dwell on.