Nielsen Expands Online Ratings System to Foreign Markets

Nielsen Holdings NV (NLSN), best known for tracking television audiences, is expanding a newer service measuring online advertising to countries outside the U.S.

Nielsen, based in New York, will start counting audiences exposed to online ads in Australia, Italy, Germany and Canada, according to a statement today. The system lets marketers easily compare online campaigns against TV commercials, Steve Hasker, Nielsen’s president of global product, said in an interview.

“It’s enabled advertisers to really understand what digital is delivering, and how that compares against what they’re spending on television,” Hasker said. “That comparability is really important.”

Online advertising data has been available to U.S. clients for the past 18 months, Hasker said. Nielsen is seeking to unify audience measurement by applying the Gross Ratings Point metric widely used in television to all online ads, from Sponsored Stories on Facebook to banner ads on the New York Times website to 30-second spots running with an AOL video.

Advertisers have had difficulty discerning the value of Internet audiences because TV has used a slightly different measurement. The uncertainty led marketers to focus on the dominant television market rather than the faster-growing digital market, according to Hasker.

Faster Growth

Television accounts for 40 percent of global advertising revenue, or $197.6 billion in 2012, according to ZenithOptimedia, a media buying and planning agency within Publicis Groupe SA. (PUB) That compares with $88.6 billion spent online. While television ad spending is expected to rise 3.7 percent to $205.5 billion this year, Internet marketing is expected to grow 15 percent to about $101.5 billion.

Nielsen’s online measurements include demographic data such as age and gender, just as TV ratings do. The system alerts advertisers to any audience duplication across television and the Internet.

Sometimes, individuals are intentionally targeted with overlapping ads so they can see a commercial more than once, which leads to a higher likelihood of a purchase, also known as ad frequency.

Since it’s been offered in the U.S., Nielsen’s online data has been used by more than 90 companies representing more than 600 brands, including consumer-goods manufacturer Kimberly-Clark Corp. (KMB), according to Hasker.

TV Dollars

Nielsen, which dominates the television market, counts Facebook Inc. (FB), New York Times Co. and AOL Inc. (AOL) as digital clients. The company will have to attract more website partners to make its digital system a success, said Lyle Schwartz, managing partner at GroupM, a media buying agency within WPP Plc (WPP), the largest advertising agency in the world.

Google Inc. (GOOG)’s YouTube, for example, doesn’t use Nielsen’s system, Schwartz said. The online search company has its own measurement method, called Google Analytics, that Web publishers often cite to advertisers.

Even so, better data from Nielsen has helped shift some TV ad dollars online, said Schwartz. “It’s been a huge help for advertisers,” he said. “We’ve been waiting for this for a long time.”

At Menlo Park, California-based Facebook, advertising accounts for more than 84 percent of annual sales. The company has been looking for ways to increase advertising, and online data that compares with TV ratings could help draw in more television dollars, according to Sean Bruich, the social network’s head of measurement.

“Marketers don’t want to silo their budgets between digital or television,” Bruich said in an interview. “They want to measure success on one yardstick.”

To contact the reporter on this story: Edmund Lee in New York at elee310@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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