In formal recognition of a major shift in television-viewing habits, Nielsen announced yesterday that it will now count online content streaming in its uber-important ratings data. This is a major step forward for broadcasters and cable companies, since brands will now pay up for the entire viewership ecosystem, rather than just those views derived from traditional television sets.
Given data indicating that the number of global connected TVs will reach 596 million by 2017, consumer behavior essentially forced Nielsen's hand in this matter. Without attention to online streams, advertisers were--in theory--getting "something for nothing" by paying only for traditional views despite the plethora of TV enthusiasts who enjoy their programming online or via a streaming service.
While this is a necessary first action in the move to modernize the relationship between viewership, ratings and advertising, it's really only the beginning. There is certainly room to improve, and what gets measured is complicated--particularly in light of the fact that Nielsen will also begin a separate effort to track content viewed on mobile devices. For example, does a view on an iPad carry the same value as a DVR-ed view where ads can be skipped? How do these views compare to a Hulu Plus view which has fewer ads, or a Netflix view which has no ads? From a marketing and product placement perspective, overall views might matter more than advertising integration. In pure-play advertising situations, all of these viewership factors must be weighed.
As this New York Times post notes, more entities--i.e. Aereo and even Intel--are getting into the direct-to-consumer television business. As the definition of television evolves, it only makes sense that the definition and significance of TV measurement should adjust and conform as well. It's too soon to tell how Nielsen's most recent announcement will affect ad buying--but I'm intrigued to follow the story as it unfolds.