After a nine month review by government regulators, Nielsen’s $1.3 billion acquisition of Arbitron was approved in September. Henceforth, Arbitron will be called Nielsen Audio. More importantly, Nielsen will now be, for the most part, the sole company to measure the audience of the estimated $70 billion spent annually on local and national television and $16 billion spent annually on local and national radio. While there are concerns about Nielsen becoming the sole company measuring the currency for both radio and television (which was the primary reason for the nine-month long government review), there could be some positives for the research community and radio.
Radio is a mobile medium. According to Arbitron’s 2013 Radio Today report, 63% of all radio listening occurs outside the home. Arbitron’s Portable People Meter has, for several years, passively collected audio signals outside (and inside) the home. On the other hand, television has historically not been a mobile medium. With the exception of college dormitories, Nielsen does not collect any out-of-home television viewing. With the growing popularity of smartphones now available in over 60% of U.S. households and tablets in over 30%, consumers are spending more time with mobile media, such as audio and video, outside the home.
According to Business Insider, over 40 million people in the U.S. have watched videos on their phones. Ooyala said that time spent on watching videos on tablets increased by a massive 59% during the first half of 2013. eMarketer forecasts that mobile video will account for $520 million in ad spending in the U.S. this year, representing 13% of the digital video ad market. The dollar amount is expected to reach $2.7 billion by 2017.
With adoption of mobile media spiraling upward, the acquisition of Arbitron by Nielsen could potentially enable radio and television to be measured by the same representative sample. Advertisers have always sought the media “touch-points” of consumers using a single source. With television and radio combining with digital video and audio, the merger would go a long ways toward accomplishing that goal.
A single source could help radio revenue. When Nielsen introduced its People Meter in 1987 the sample was robust enough to provide reliable ratings for the lower rated cable networks alongside the broadcast networks. This allowed for apples to apples comparison for advertisers and gave the then fledgling cable industry a boost in attracting more advertisers and revenue.
Even though Arbitron’s Portable People Meter, which has been around for several years, has the capacity to provide overnight radio ratings, Arbitron had never pursued that service. Nielsen, however, has historically been very aggressive in providing overnight “metered” television ratings to the advertising community. The results are a large amount of “free” publicity for the television industry in the press. Radio could benefit from this strategy, for example, how many people listened to radio for late breaking news the day before or a major sporting event such as The Super Bowl? Overnight ratings information would be beneficial to promoting radio the same way it has been for television.
Although there is some justified concern regarding Nielsen becoming the sole measurement currency for all of television and radio, it could work out for the benefit of the advertising research community.
— Brad Adgate
SVP, Research
Horizon Media
212-220-1676
Twitter @badgate
