In 2011, David Cooperstein and I wrote a report (client access required) about set-top box data (STB) and its potential to transform TV ad planning and buying in the US. In the report, we made the call that STB would take hold with local advertisers well ahead of national advertisers, due in part to Nielsen’s outdated diary methodology in local markets where digital, passive methodologies were not financially feasible.

Last month, we were invited down to Nielsen’s engineering headquarters in Tampa to hear about some of their most recent innovations in the ad measurement and effectiveness space. Nielsen’s methodology, through statistically sound and widely used by advertisers and TV networks, has not changed much since its inception, so I was excited to learn what they were doing to adapt their approach to measuring TV. 

Two of the big takeaways I had from my visit to Tampa were:

  • Nielsen has embraced STB data in all the right areas. Nielsen is actively working with STB data to augment their local, diary-based measurement offerings. Instead of waiting for multichannel video programming distributors (MVPDs aka the new chic term for any cable/satellite/telco company) to sort out some of key problems with STB like data quality and sample size, Nielsen is using a hybrid approach that uses STB data combined with diary or meter data to a more stable measurement in small markets. Nielsen’s new hybrid approach addresses the gaps we outlined in our report and gives them the credibility to compete with new entrants like Rentrak and Kantar, which have been making inroads into the local measurement space.
  • Nielsen’s vision of the future is focused on people, not devices. The old idea of families gathering in the living room to watch TV together undistracted is on its way out, if not gone already. Today, people actively use tablets and smartphones while they watch, and sometimes even watch TV entirely on these mobile devices. Nielsen aptly recognizes this consumer behavior as more than a fad and is focused on capturing the actions of people across devices, as opposed to interactions with a single TV set. Without going into too much detail, I saw some really cool prototypes built around the idea of a single platform that measures activity whether it’s on a smartphone, videogame console, laptop, or TV set. 

TV is rapidly transforming from a single-device, passive experience to a multi-device, active, engaging one with a host of measurement issues and obstacles. Now that we are seeing the largest market research firm in the world actively innovating their products to address these trends, I am very confident that TV advertising will both continue to remain the dominant advertising channel for marketers and undergo a massive transformation that reflects today’s connected consumer.