New Nielsen measurements more likely to benefit online vid providers than TV: analyst

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Analyst Todd Juenger of Sanford C. Bernstein & Co. offered a cogent view on Friday of Nielsen‘s announcement that its ratings will soon take online video usage into account.

“The monetization of this viewership could be increased with better holistic cross-platform measurement, but that would mostly help the YouTubes of the world at the expense of the TV networks,: he said in a Friday research note.

“When advertisers are able to understand the impact on total reach/frequency … of their campaigns from moving dollars from ‘TV’ to Internet video, on the margin that will likely increase dollars to Internet video and decrease dollars to TV.”

“On the margin” is one of the keys to that statement. Juenger does not think this dollar shift will be very big, at least initially.  He seems inclined to believe Nielsen’s most recent quarterly study of cross-platform viewing, which concluded that time spent watching video on tablets, phones and other devices is still miniscule compared to traditional TV.

For all the panic that occurs daily in network office suites about disappearing audiences, the biggest national advertisers have largely stayed with tradition. According to a Kantar Media study released last December, only about 12% of the biggest buyers of national television ads also buy online video spots.

Juenger said the issue, as ever, is supply and demand, and advertisers won’t automatically pay more because the audience is somewhat larger than had been assumed.

“Simply increasing reported audiences doesn’t translate to increased ad revenue …  Revenue depends on demand,” he explained. “Everything else being equal, by increasing the reported audience delivered, advertisers need fewer spots to achieve their marketing objective.”

If the networks are going to get more ad revenue from non-traditional viewing, they’ll have to get it from video-on-demand, Juenger asserted. Among other things, he said, this means VOD streams must “uniformly carry advertising,” and the networks have to find a way to get the most value for shows that are seen more than three days after airtime.

One key to VOD advertising will be so-called “dynamic insertion,” in which fresh commercials can be inserted into the video stream of a show. “We doubt any advertisers will be willing to pay for ad impressions against commercials that are a year old,” Juenger said.

As the analyst also pointed out, much of the viewing Nielsen discovers will be via subscription video-on-demand services such as Netflix and Amazon, which don’t carry advertising.

— David B. Wilkerson