Thursday, September 20, 2012, 10:23 AM ET|Posted by Will Richmond
Talk to anyone involved in the business of online video advertising and they will quickly say that the number one challenge to increased spending is better audience measurement. If only advertisers and agencies had a TV-style Gross Rating Points (GRP) metric - not just impression and clickthrough levels - to gauge the effectiveness of their spend, then traditional TV ad dollars would flow more freely into online video campaigns. Inevitably, the online measurement discussion focuses on Nielsen, the undisputed king of TV ratings, whose measurement standard is the common currency for billions in brand advertising dollars.
And that's why Nielsen's announcement yesterday, that 15 leading video and digital ad platforms - which together deliver thousands of online video ad campaigns and billions of impressions - are integrating Nielsen's Online Campaign Ratings (OCR) for use by their clients in campaign planning and analysis is a big milestone. As Amit Seth, Nielsen's EVP of Global Media Products explained to me late yesterday, these new partners will help cement OCR as an "online GRP" helping them to establish accountability and ROI quantification, two pre-requisites for traditional TV advertisers.
Amit noted that OCR has been steadily building momentum since it gained MRC accreditation in August, 2011, with VideoHub becoming the first ad platform to adopt it in last December and Unilever becoming the first brand advertiser to sign on in February. Then last spring, as part of the "NewFronts," AOL said it would use OCR to guarantee audience delivery. Amit said over 50 brands are now using OCR and publishers' adoption has been strong as well.
But Amit said the missing piece for OCR has been the networks, platforms and exchanges that have become huge enablers of online video advertising. These entities have been eager to extend OCR as a data source to help clients better plan campaigns and continuously evaluate them. In short, these platforms understand that better accountability will drive more business for them. Importantly, OCR works across all connected and mobile devices, so campaigns delivered to iPads, connected TVs, gaming consoles, etc. are all supported. Amit said extending OCR to ads in apps will follow soon.
While the establishment of an online GRP has been considered crucial by many, a concern that has been raised is whether using such a traditional metric might actually devalue online video advertising, because a GRP doesn't factor in valuable engagement attributes that are possible with online video, but weren't with TV.
Nielsen understands this and therefore is advocating a "3 R's" framework, which includes "Reach, Resonance and Reaction." Reach is the basis and is accomplished through OCR. Resonance is a measure of brand lift, which Nielsen is accomplishing via its recent acquisition of Vizu. And Reaction is measured through its suite of analytical services in its "Buy" segment that measure actual retail impact of specific campaigns. By deploying all 3 of these pieces, Nielsen believes it can provide advertisers a comprehensive ROI of their online video spending.
Next up is when Nielsen can give ad buyers insight into campaigns across platforms. That's where its Cross-Platform Campaign Ratings service, which is being developed in collaboration with GroupM, the world's largest media buyer, comes in. Utilizing data from OCR and Nielsen's TV measurement, Cross-Platform would allow ad buyers to see total unduplicated reach for both online video and TV ad buys. This is essentially the holy grail; ad spending accountability and analysis across all device and viewing permutations. Amit said a number of brands are currently beta testing Cross-Platform, but Nielsen isn't ready yet to identify a timeline for broader availability.
As I've often said, since the vast majority of online video is free and ad-supported, the maturation of online video advertising is absolutely critical to the medium's continued development and the health of online-only original programming that is proliferating. Online video lacks the guaranteed monthly carriage fees typical in the pay-TV industry which in the early days sustained pioneering cable networks like ESPN, MTV, USA and others that have become powerhouses today. As a result, online video content providers are mostly dependent on advertising, which in turn explains why the industry's development can not be underestimated. Nielsen has often been the industry's pinata, accused of not moving fast enough. However, as OCR gains momentum, there is good reason for optimism about a healthy online video ad ecosystem.
For more, Beet.TV also has a good interview with Tom Acquaviva, Nielsen's SVP, Strategic Accounts here.