Nielsen recently announced new investments in our core media measurement panels in the U.S., including expansion in many local markets and the introduction of mobile measurement in our national people meter (NPM) panel. People have asked me why we’d do this, in a world that is increasingly digital and fragmented. The answer is actually very simple: panels are still fundamental to measurement, though their role is evolving in an increasingly digital world.
In traditional media measurement, panels were used for direct measurement. The panel was recruited to represent the media universe, panelist behavior was recorded (via diary or electronic means), and that usage was projected to the universe to create ratings. That methodology is still used in our TV measurement today. At a national level, the Nielsen panel includes more than 21,000 households and 50,000 people, and in about half of those homes we measure both TV and computer usage electronically. As the core sample for national TV ratings, which are used to transact some $70 billion in advertising annually, it is overseen by the Media Ratings Council (MRC) and audited on an ongoing basis by the public accounting firm Ernst & Young. The NPM panel is widely considered the highest quality sample of media consumption in the world.
That said, in an era of audience fragmentation, direct measurement in a panel is challenged. As consumption moves to digital devices, and advertising is dynamically served (i.e., different people get different ads), the sample size required for direct measurement becomes cost prohibitive. What is required is the application of digital measurement methods, what we call a census-based approach, in which the data needed for measurement is collected from a very large proportion of the full user population. But if the data needed for measurement can be collected from the population, why do we need a panel at all? The reason is that while census methods such as tags or set top box data can tell us what is being consumed, they do not tell us the who. Nielsen has solved for this by partnering with Facebook and Experian for access to large, high-quality datasets that we can access in real time to help determine the audience. But even this is not completely adequate, as all third-party datasets have built in inconsistencies and biases. At the end of the day, even in a world of big data, proper audience measurement requires an observable sample of the population in order to be confident in the who – i.e., a panel.
In other words, while direct measurement means sample size is critical, in census-based measurement quality takes on crucial importance. In this world, what do we mean by quality? Nielsen believes the following are most critical:
To enable quality across these dimensions, a convenience recruiting approach such as online intercepts or browser toolbar downloads simply will not do. Only a robust process that directly approaches potential panelists and spans the full tenure of participation can accomplish this.
Finally, it’s important to understand why data quality is so important. As with traditional media, audience data is increasingly being used as a transaction currency for digital and cross-platform brand advertising. Digital display-related advertising reached nearly $13 billion in 2013, and continues to grow at double-digit rates. With this amount of spend on the line, advertisers and agencies will expect the same quality in the digital currency as they have today in traditional media:
As we move into the cross-platform and digital world, delivery of accurate, stable and accredited data takes on increasing importance. To get there, we will continue to need a valid, representative, consistent and comprehensive view of audiences, which is why high quality panels continue to be of primary importance.