July 9th, 2008

Audience measurement always stirs up a lively debate: Advertisers demand more accurate numbers - they don’t want to pay for eyeballs that aren’t actually watching their ads. TV stations, on the other hand, want numbers that reflect their viewership and justify the amount they charge per CPM (cost per thousand impressions). The audience measurement firms that produce these numbers have their own set of challenges, such as keeping up with our rapidly changing media consumption habits.

According to this NYT article, Nielsen has developed a series of new “three-screen” reports in an attempt to keep up with current video-viewing habits and present a “complete picture of consumers’ media habits.” The report tracks video viewing over the TV, Internet, and mobile devices. Some significant findings include:

• Americans are watching more television than before (4% increase in screen time over last year)
• Two-thirds of Internet users in the US watch online videos
• Mobile video viewing is becoming more significant - the average user watches 3hrs 15mins per month

Questions about the validity of these findings aside, my main issue is with the problem of simultaneous media consumption. These days, it is not unusual for people to multitask, to watch an online video while the TV is playing in the background, or to watch TV and also watch an online video when ads are playing on TV.

Save a complete invasion of privacy, it will be hard to determine which screen gets the consumer’s attention at any one point of time - and that is what advertisers really want to be paying for. That said, the fact that Nielsen recognizes the need to track these “three screens” is a step in the right direction. At the very least, reports like this will begin to provide TV stations with more information about potential cannibalization.

Nielsen’s “three-screen” report also highlighted the disproportionate relationship between Internet use and online video viewing. “Those under 24 use the Internet less than older users but spend a greater percent of time viewing video,” said Nielsen CMO John Burbank. Not surprisingly, companies have recognized the potential to monetize these eyeballs and have come up with various ways to do so, such as viral videos or overlay ads.

However, a recent New York Post article about YouTube is less enthusiastic: “while 3 billion videos are viewed every month, revenues could total an anemic sub-$200 million this year - a reflection that less than a third of the videos generate income from ads.”

Enter Involver, a new start-up with a new solution. Its platform allows users to add an interactive call-to-action in the last frame of an online video. Viewers can then participate in a range of activities from taking a quiz to placing an order without having to navigate anywhere else, because everything takes place within the framework of the video. Whether people actually want to engage with the videos they watch in this manner remains to be seen. It will probably still be a number of years before working business models are established for online videos.