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Monday, 18 February 2013

Measurement challenges

With new media consumption patterns emerging, measuring media audiences has become a challenge. Yet, solving the problem is critical because without sound understanding of media consumption it is hard to justify advertising budgets, which in the U.S. today, stand at around half a trillion dollars (all media confounded). Just TV advertising, which is traditionally driven by media ratings, represents some $75 billion. The industry faces three broad problems related to measurement. First. little is known about consumers' behavior on new media. Take online video that seems to take off fast, yet there are huge differences in the estimates on how much time consumers spend watching it (for 2012, comScore estimated 4.2 billion hours while Nielsen's guess was a little more than 1 billion hours). The second problem concerns traditional media (mostly Television) and relates to time-shifted viewing. Consumers save shows for later viewing and devices often screen out the advertising. It is difficult to estimate the proportion of consumers affected but if time-shifted viewing becomes general, the implications are dramatic for the advertising industry. The final problem relates to the trend that, increasingly, consumers are connected to multiple devices (e.g., while they watch TV, they do other things on their tablets or smartphones). The industry talks about the "second screens" phenomenon. Here, it is not even clear how to measure the impact. Consumers watch the show, but are they turning to their i-Pads during the ads?

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