January 17th, 2006
New Media Should Distrust Nielsen
Despite all the buzz about the intersection of Buzzmetrics, Intelliseek, and VNU/Nielsen, I haven’t found anybody looking at it through the lens of Old Media, who knows what it’s like to have their market under the thumb of the dominant research provider, i.e. Nielsen.
The blogosphere is understandably excited that they’re finally going to get “measured” and play in the big league — “Yes, we are ready for prime time,” Jeff Jarvis asserts, and I share his excitement. The blogosphere is finally big enough to drive big league M&A. Steve Rubel focuses on the M&A angle, bragging that the fast pace of consumer generated media has forced Nielsen to buy it rather than build it. He’s right, and it’s a huge leap forward.
But be careful what you wish for. Jeff Jarvis’ choice of metaphor is actually quite ominous — ask broadcast media about the “privilege” of being measured by Nielsen, and why there has been an endless parade of headlines like “With Billions at Stake, TV Networks Question Ratings Measurements.”
The merger of Intelliseek and Buzzmetrics sounded like great news for blogs — and it still might be, because these are both innovative companies that probably still have New Media’s best interests at heart. It’s only when I found out that VNU had its paws on it and had branded it Nielsen that I got this ill feeling. And the ramifications for the blogosphere are (potentially) huge — as Old Media knows all too well, whoever controls the data controls the marketplace, i.e. the BIG ad dollars.
The business of media is about audience, at least as to advertising — advertisers pay to reach an audience. Thus whoever measures the audience controls everything. Nielsen has had a stranglehold on the broadcast market for decades, and I bet they’re licking their chops over the the blogosphere and New Media.
Many will be quick to point out that this is New Media, and we’re creating new business models, and we’re going to re-write all the rules. I can only hope that’s true.
The real incentive is for New Media to hurry up and figure out these new business models and get all the big advertisers (and other big spenders) on board, before Nielsen casts its long shadow over the playground.
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[...] Publishing 2.0 » New Media Should Distrust Nielsen Says: January 17th, 2006 at 8:11 pm [...]
Scott - I agree that we should have a healthy skepticism of this multi-company mashup, and posted about it in my own blog yesterday. The real opportunity with blog research and mining is to give marketers an unvarnished view into what people are actually doing and saying, and even more importantly a way to engage in the conversation. Combining BuzzMetrics and Intelliseek under the Nielsen umbrella subjects them to all the mass-media profit pressures of the parent company. I question the ability to stay true to their own missions in their new corporate family.
Great post Scott. Leslie I appreciate your addendum. The “playground” metaphor is spot on. The playful aura that has enveloped the blogosphere is contracting and with it the blogosphere itself. History shows us it was only a matter of time. Early film communities used to be “playgrounds” as well. I’ll stay tuned.
[...] Nielsen BuzzMetrics: Let the Naysaying Begin! « From GFK Influentials to KFG Edfluentials: Meet The Keller Fay Group | Main Tony Obregon over at MediaResearcher has some thoughts on Nielsen BuzzMetrics. He also points to an interesting post by naysayer Scott Karp over at Publishing 2.0. Basically, Scott points to the recent "Nielsen TV Ratings Suck" article from the WSJ and then asserts that Nielsen will ruin the entrepreneurial magic created by Carson, Nazzaro, Blackshaw, et al. I say hogwash. Scott makes some interesting points but I simply don’t agree. His assertions are based on the idea that the relationship of Nielsen and Television will be analogous to that of Nielsen BuzzMetrics and Blogs (and other CGM content like forums, etc. which everyone seems to be forgetting.) I think this idea is fundamentally flawed. Nielsen BuzzMetrics is not measuring the popularity or success of individual blogs or assigning them ratings (although they might work to determine the sphere of influence of blogs, but this is all together different). Instead Nielsen BuzzMetrics will be using all of CGM in aggregate to gain consumer insight. Nielsen is not looking to trade in old media for new media, they are looking to trade old market research data collection methodologies for new ones - or at least to supplement the old with the new. To make this a little more clear, think of it this way… can you figure out what consumers are thinking by watching every second of every television channel available in the US? Of course not. This is intuitively ludicrous. BUT… can you figure out what consumers are thinking by monitoring every blog, forum, newsgroup, and discussion board on the web? Hmmmm. MAYBE. And this is the difference. The thing about CGM is the C. CONSUMERS produce this new "media". There is no need to measure what consumers think of CGM because they created it. Duh! This is about listening to consumers. Say what you will about Nielsen and VNU but I think they get this. I think they understand that the way they are measuring MGISWOTBC (Media Generated In Some Way Other Than By Consumers) is failing. But they also know that television, radio and movies aren’t going away… but how we select, subscribe and watch is changing. Nielsen BuzzMetrics is a strategic move to stay ahead and on top. VNU is not interested in measuring new media because old media is dying; they are interested in measuring new media because old media isn’t dying and measuring new media is a better way to measure old media than their aging old media measuring measurements. Dig? In other words, if your ruler sucks, get a better ruler. Scott’s argument, I think, is that Nielsen will destroy the value of BuzzMetrics and Intelliseek because their system for measuring old media is aging and failing. Ironically, I think it’s precisely this reason that Nielsen has invested so heavily in CGM analytics, and why this strategy will win. I suspect that somebody at Nielsen also gets the Wall Street Journal and perhaps they read the same article. In summary of my views vs. Scott’s… either VNU is very, very smart or very, very dumb. Why do I think it’s the first one? Because if VNU wanted to look cool by bloggifying its portfolio, they could have stopped at just one acquisition. Or they could have bought a younger, smaller, cheaper, CGM analytics firm. Of course, they didn’t. They bought 3… and not just any 3… they bought something like 65-85% of the market. They left nothing but breadcrumbs for whoever is stupid enough to try to be #2. This is akin to someone breaking into the soft-drink industry by buying Coca-Cola and Pepsi Co… you know, just to be sure. Maybe it’s just me, but I get the impression that these kids are serious. But enough of the armchair quarterbacking,let’s hide and watch. Posted by Matt Galloway at 2:53 AM in Word-o-Mouth Comments (0) Trackbacks (0) [...]
Scott,
I started to write a comment but then I turned it into a post.
Let me know what you think.
-Matt
[...] This week, the media research market got a major boost with news that VNU (parent to Nielsen Media Research) will acquire Intelliseek and merge it with BuzzMetrics. The combined company will operate as Nielsen BuzzMetrics and will be the measurement megaforce in WOM (word of mouth) and CGM (consumer generated media). Matt Galloway echoed my sentiments that this deal really validates the market and shows how much value corporations place on online perception and influence. But I was provoked by a post from Scott Karp that examined the merger with skepticism considering how ineffective Nielsen’s TV measurement practices has shown - he links to a WJS article as proof. To makes things even more interesting, Media Daily News reported that VNU could be the target of a potential buyout from a consortium of investors. Apparently, Florida real estate tycoon Frank Maggio, onwer of Maggio Media Research, is another potential suitor. [...]
Matt, you’re right that mining consumer insights is different from measuring audience, and I’m all for consumer insights. But if the blogosphere and New media want their share of the BIG advertising dollars, then there will have to be some type of audience measurement, because BIG advertisers want ways to justify their spending (whether rational or not). And it’s naive to think that VNU/Nielsen has no interest in being in the audience measurement business for New Media. I don’t think by any means that Nielsen will impose some old model of audience measurement on Intelliseek/Buzzmetrics — there may will be real innovation in how audience is measured in New Media. And I think this is a very smart move by Nielsen. My point (which I think you missed) is about control — Nielsen/VNU has a strong profit motive to find ways to monopolize the data (it’s worked well for them up to now). In Old Media, when one company monopolizes the data, the marketplace suffers. New Media may be “difference” — but we need to work hard to make sure it is, and not just sit back and assume.
[...] By acquiring a majority stake in Intelliseek (which publishes BlogPulse), plugging that data into Buzzmetrics, and dubbing it Nielsen Buzzmetrics, Nielsen parent VNU effectively cornered the market on blog data. Monopolies can be good. The NFL and Major League Baseball operate as monopolies, and deliver a consistent product for their fans. Fragmenting those markets and having numerous leagues all vying for the top professionals probably wouldn’t benefit anyone, especially the fans. Blogs have fans, and influence. How many fans they have can be determined by assessing their traffic and how many sites link to them. Those actions indicate how authoritative a blog and blogger are perceived. Now Nielsen Buzzmetrics has been formed after Nielsen parent VNU dropped some cash on Intelliseek. They appear poised to take the position of rainmaker for the blogosphere, as advertisers, desperate to place ads in front of their demographics as people move from TV to the Internet, want to know where to spend their ad dollars. Scott Karp blogged that Nielsen’s self-appointment as rainmaker should be viewed not through rose-colored glasses but a critical eye instead: It’s only when I found out that VNU had its paws on it and had branded it Nielsen that I got this ill feeling. And the ramifications for the blogosphere are (potentially) huge - as Old Media knows all too well, whoever controls the data controls the marketplace, i.e. the BIG ad dollars. The business of media is about audience, at least as to advertising - advertisers pay to reach an audience. Thus whoever measures the audience controls everything. Nielsen has had a stranglehold on the broadcast market for decades, and I bet they’re licking their chops over the the blogosphere and New Media. The real incentive is for New Media to hurry up and figure out these new business models and get all the big advertisers (and other big spenders) on board, before Nielsen casts its long shadow over the playground. New Media has begun that effort, as Weblogs Inc sold to AOL for a reported $25 million; meanwhile, banners for Federated Media started popping up on sites recently, as John Battelle and company race to lock up the more popular blogs in advertising deals ahead of competitors. — Email the author here. Drag this to your Bookmarks. Add to document.write(”Del.icio.us”) | DiggThis | Yahoo! My Web View All Articles by David A. Utter Receive Our Daily Email of Breaking eBusiness News About the Author: David Utter is a staff writer for WebProNews covering technology and business. More top_news_top_news Articles Contact WebProNews [...]
in WOM (word of mouth) and CGM (consumer generated media). Matt Galloway echoed my sentiments that this deal really validates the market and shows how much value corporations place on online perception and influence. But I was provoked by a post from Scott Karp that examined the merger with skepticism considering how ineffective Nielsen’s TV measurement practices has shown - he links to a WJS article as proof. To makes things even more interesting, Media Daily News
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VNU deal, and Nielsen’s position wrt the new company have focused on two things: measuring media consumption and using that measurement to inform advertisers (and thereby, for those whose glasses are half-full , influencing the content that hosts the adverts). This perspective is, perhaps, forgivable. However, I would encourage anyone with a true interest in the consolidated company, and the implications for both the user-generated media anlaytics space as
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