It’s official: Facebook is the 21st century Nielsen family

from CNN Money

Although it’s widely recognized that people are spending more time and money on the Internet than ever before, the money spent on online advertising is not even close to the stratospheric spending levels poured into TV ads. But thanks to a new product from Nielsen and Facebook, the Internet could become a first-class citizen in the advertising world — for good.

Monday marked the official U.S. launch of a product dubbed “Online Campaign Ratings ” (OCR) by Nielsen, the company best known for its television ratings system. The product is aimed at tracking and measuring online ads at the same level given to television ad campaigns, which are currently the gold standard for media ad spending — as evidenced by the dough shelled out for Super Bowl commercials.

By the looks of it, Nielsen’s OCR could soon prove to have even better viewer metrics than its television ratings. That’s because Nielsen has exclusive access to a very powerful tool for collecting data about people’s online activity: Facebook. Via an exclusive partnership inked last year, Nielsen’s OCR metrics are largely powered by information provided by Facebook about its users’ activity.

Nielsen OCR works with Facebook like this: Online ad campaigns being tracked by OCR will have a Nielsen tag attached to them. If a user encounters an ad while logged into Facebook, either on the Facebook website or while surfing the web within the same browser, Facebook recognizes the encoded tag. Facebook anonymizes the ad viewership data it collects — e.g., it won’t tell Nielsen that I specifically viewed the ad, but it will add me to the group of females in my age bracket and location who viewed the ad — and send that grouped data to Nielsen.

“The results are astonishingly accurate,” Steve Hasker, Nielsen’s president of media product leadership, said in a recent interview. “This product will be directly comparable to TV ratings, and we can say that with great confidence because we are the big provider of TV ratings. You can think of Facebook as a new Nielsen family.”

But there’s one problem with that characterization: Nielsen families have deliberately chosen to have their television viewership monitored, and are paid for their participation. Most people did not sign up to Facebook with the explicit knowledge that their online data would be recorded, packaged and sold to market research firms and advertisers. A good chunk of Facebook’s 160 million American users sign into the social network first thing in the morning, and remain signed in all day as they peruse the web. All of that data is now available to Nielsen — and all the advertisers who opt to buy the OCR product.

When asked how Facebook would respond to criticism on its deal with Nielsen, advertising communications manager Elisabeth Diana said that Facebook “worked really closely with Nielsen to make sure that [OCR] was respecting user privacy.” She pointed out that the data transaction is double-blind: Facebook does not know what specific site or even which ad a Facebook user viewed, only that the user came across the attached tag; while Nielsen does not know exactly who the user is. She also said there are ways users can opt out of having their activity incorporated with OCR.

From Nielsen’s point of view, OCR fills a longstanding void for an accurate and reliable third-party service that allows advertisers to gauge the reach and efficacy of their campaigns online. Until now, if you were an advertiser and wanted to target your ad online to, say, males aged 18 to 34, the data available to you had some serious limitations.

“Unlike TV where you do planning based on Nielsen numbers, online you can’t do that, because the numbers that come out are from the publishers themselves or from an ad platform like DoubleClick,” Hasker said. “There was no third party source for that information.”

Now that there is, we may finally see companies spending Super Bowl dollars online — and for most of us in the tech and new media world, that would be a very good thing indeed.