John Burbank, CEO, Nielsen Online, was in India last month to announce a joint venture with McKinsey & Company. NM Incite, the JV company, will provide 'insights' into social media with the aim of helping decision-making across the marketing function — in brands, customer service and new product development — among other things. It hopes to combine Nielsen's understanding of audience measurement and McKinsey's marketing and operational support in 13 markets across the world.
Burbank sits in New York, the commercial centre of the world's largest, most exciting and most disruptive online market in the world. And his firm tracks what audiences are doing online. So he seems to be a good person to talk abut where the whole online media scene is headed. His take - social media (such as Facebook) are having a huge impact on how regular mass media is consumed online and offline. And that eventually these will mimic many of the characteristics of mass media.
Vanita Kohli-Khandekar met Burbank on the sidelines of a CII conference on digital media in Mumbai. Edited excerpts:
Are there patterns you see in the US on how consumers use the Net?
The most interesting (and profound) development in online usage is social media (sites such as Facebook and Orkut). People are spending an average of 6-7 hours a month on it (social media). If a TV programme had those numbers it would be a very successful TV programme. And this pattern cuts across demographics. This has important implications for other websites and media. The number one source of traffic for most websites is Facebook. Therefore, there is a ripple effect on programmes, movies, products and services.
How long-term do you think is the whole social media phenomenon and its impact on other parts of the media business?
What makes a TV ad powerful is sight, sound and motion, all combined at a high scale (in visual appeal as well as the numbers it reaches out to). That is what makes an uninteresting product interesting. Can the web do that? It can't, if you make a commercial and put it online. But it can take an uninteresting product and make it interesting on a large scale, if you insert a friend's name. Then it becomes three times more powerful, according to a study we have done with Facebook.
Given that, do CPMs online match those in, say, TV or print (CPM - cost per mille, meaning thousand in Latin)?
No, they don't and that is because brands are not able to tell their story like they do in a 30 seconder. A banner ad will be on screen for 2-10 seconds, but it is not the same. The TV is a much more powerful vehicle for storytelling than the internet. In the next five years, there will be a revolution in advertising formats (online). Today, there is infinite inventory and finite time. In the future there will be limited ads. Only if we are able to create ad units and have more impact, when the Net begins to look more like TV, can the CPMs improve.
Do advertisers accept that the internet can deliver the same value as TV?
If you have the same TV show with the same ad as on TV, on the Net, the impact on the latter is higher. Therefore, net CPMs are higher for Hulu (Hulu is a website that offers TV programming and films).
But you just said that CPMs on the Net are lower....
Banner ads are different from the ones on Hulu. There are utilities like Google or e-mail (which have banner ads), but social media is entertainment.
How do you measure the impact of an ad across media?
Usually on the Net, clicks and page impressions are used, but they are not suitable for all advertisers. They work for advertisers who need a direct response. However, for most products people don't click on the ad, so 10 million page impressions and a 1 per cent click-through rate means nothing. What you are not able to capture is how the ad impacted the consumer. On TV, you don't calculate how many people ran to the store to buy something after seeing the ad. There are four things advertisers need to know - who they reached, the quality of the delivery (a second, a minute...), how did people who were exposed to this ad think differently and, finally, did exposure to more sales.
In the US we are able to answer all four of these with the help of metrics that were used for TV.
How do you separate the time people spend on utilities (such as mail or search) versus entertainment online, there is so much multi-tasking...
One-third of all time spent online is spent with TV. So people are actually chatting (online) with friends while watching TV and commenting on a show. In fact, I was watching the Oscars live recently and had to put my children to bed. So I paused it (with a PVR, a device that most DTH operators in India too offer). When I came back, I could start seeing the ceremony from where I had left it. But soon I realised that I was out of sync with the comments being passed on Twitter. So I had to fast-forward to the real time telecast.
So when people talk about the death of the 30-second commercial, I say that the question is 'Can the internet save the 30 seconder?' Because, if you want to participate in social media, you have to watch TV real time and therefore the 30 seconder has a chance.
Most online portals is India are not audited and do not share audience numbers easily. Why is Nielsen not selling its online audience measurement harder in India?
Robust measurement is not inexpensive. It will happen here, but when advertisers demand it, when they see that young consumers are spending more time on this medium.
