The proposed service will provide advertisers, agencies and outdoor media companies with audience information - including reach and frequency data - that is similar to the ratings data that buyers and sellers have used for years to negotiate television and radio advertising rates.
The Nielsen Outdoor service will use advanced, proprietary global positioning satellite (GPS) technology from Seattle-based RDP Associates to track motorist and pedestrian exposure to outdoor advertising. Members of a randomly chosen, demographically balanced sample will carry small, battery-operated meters that will automatically track their movements at 20-second intervals, making the system almost completely passive. This information will then be matched to a map of geo-coded outdoor sites, to determine the respondents' "opportunity to see" an ad.
"We believe this test will offer a clear indication that an electronic, people-based audience measurement system for outdoor advertising is commercially viable, and that it has strong potential to become the global currency," said Michael P. Connors, chairman and CEO of VNU Media Measurement & Information. "The industry has long demanded such a service, which will enable outdoor to establish - with scientific and verifiable accuracy - its true value for reaching consumers."
"This promises to be a breakthrough system and a quantum leap for accurately measuring outdoor audiences," said Lorraine Hadfield, Nielsen's managing director who spearheaded the development of the Nielsen Outdoor service. "In the past, the outdoor industry and its advertisers have relied on automotive traffic studies or 'claimed recall'- the ability of consumers, through surveys, to remember seeing outdoor advertising - to determine the number of impressions that were achieved.
"With this new service, media planners will be able to buy outdoor with the same confidence they have when they buy TV, radio and print. Outdoor media companies, on the other hand, will be able to offer advertisers quantifiable proof of the medium's value in reaching consumers," Hadfield said. "The Nielsen Outdoor service will benefit players on both sides of the advertising transaction."
The test will be carried out in collaboration with the South African Advertising Research Foundation (SAARF), who will also help to review the test results for accuracy. "This test is a first step toward putting this important and growing medium on par with other traditional media, and providing a realistic audience currency for the first time," said Paul Haupt, SAARF's managing director. "We hope the pilot study in Johannesburg this month will provide the necessary momentum for this project so that the service can be commercialized as soon as possible."
According to Hadfield, Nielsen Media Research believes it can launch a commercial service as soon as next year. The United States will likely be the first target, with other countries to follow. She noted that the U.S. is one of the world's largest markets for outdoor advertising, with expenditures of about $5 billion annually.
Nielsen Outdoor, Hadfield said, is taking an innovative approach to developing the new service. It has formed a global Outdoor Advisory Council - made up of charter clients representing outdoor media companies, advertisers and agencies - to win industry consensus for a worldwide measurement currency. The Council includes such industry leaders as the outdoor companies Clear Channel, JCDecaux and Viacom; the Outdoor Advertising Association of America (OAAA); and the media-buying agencies MediaCom, Starcom MediaVest Group and Universal McCann. Nielsen Outdoor is also in discussions with several major advertisers to become charter clients and members of its Outdoor Advisory Council.
"If the outdoor industry can develop a credible way to more accurately measure the audience it reaches, the medium will be far more competitive and that will provide new opportunities to significantly grow our business," said Paul Meyer, president and CEO of Clear Channel Outdoor. "We believe these new measurement techniques - especially if they are stamped with the imprimatur of Nielsen, a company well known for its high-quality research - will demonstrate to advertisers just how effective outdoor can be in reaching their targeted audiences."
"As one of the world's largest outdoor companies, we are pleased to support Nielsen's efforts in developing a genuine audience measurement service that will offer full reach and frequency for the outdoor medium," said Neil Eddleston, managing director of London-based JCDecaux WorldLink, the company's marketing and research arm. "Major advertisers are recognizing the importance of outdoor for reaching consumers, and in this climate, we believe there is a strong need for a service that increases accountability to the advertiser. We expect the GPS-based system that Nielsen is proposing will provide that accountability, and will allow us to compete more effectively for our share of global advertising spending."
The Outdoor Advertising Association of America (OAAA) is another supporter of the Nielsen test. "We welcome the news that Nielsen is developing a metered audience ratings service for the outdoor medium. We fully support initiatives like this that seek to provide outdoor measurement models and we look forward to seeing the results of their test," said Nancy Fletcher, president of the OAAA. "A scientific measure of outdoor audiences will prove, once and for all, what we have known for years: that outdoor is a unique and powerful medium for delivering advertising messages that get noticed. With that proof will come greater visibility for outdoor among advertisers and agencies, and, we trust, a greater share of advertising dollars."
MediaCom was the first agency to support the pilot test and join the Outdoor Advisory Council. "This is a giant step in the right direction and will fill a huge void for outdoor," said Tony Jarvis, MediaCom's senior vice president and director, Strategic Insights Group. "The Nielsen service will provide a passive, electronic, people-based measure of the medium that will make it comparable to TV, radio and print. Such an audience measure will go a long way toward providing our clients with significantly increased accountability for their outdoor advertising investments."
"This test is a call to arms for all of us in the outdoor industry," said John Connolly, senior vice president, Out-of-Home Media, for MediaCom. "There is an opportunity here to forge an alliance between major sellers and buyers on how best to deliver what this industry has needed for so long: real, substantial credibility. No more crying about not getting a fair share of the media budget. The Nielsen service can level the playing field for outdoor, and give planners and advertisers the information they need to make sound business decisions. It needs to be done now with the best available tools and technology. We think Nielsen is moving in the right direction."
"Having a reliable audience ratings system for the outdoor medium is long overdue," said Kate Lynch, senior vice president and global research director for Starcom MediaVest Group. "Our clients want accountability for their advertising investment, and they want to know how outdoor fits into the lives of consumers. The proposed Nielsen service is an important first step in providing that critical information, and increasing the comfort level with outdoor."
Jack Sullivan, Starcom's director of Out of Home Media, is enthusiastic about the new service. "The Nielsen service will soon provide credible data that will validate the delivery of outdoor advertising," he said. "Not only will we know the number of people exposed to an ad, but more importantly, we'll know their demographic profile. That will enable advertisers, agency buyers and planners to invest in outdoor with an entirely new level of confidence and assurance."
According to Susan Nathan, senior vice president and director of Media Knowledge at Universal McCann, "Advertisers need to know how the outdoor medium connects with consumers. But, until now, the industry has suffered a real credibility gap, with only highly speculative traffic-study numbers to support its audience claims. With the Nielsen outdoor service, we're hoping to finally get credible answers as to who is actually viewing outdoor advertisements, and how often. That's a big leap for this business, and it will certainly give advertisers the accountability they need to invest more in outdoor."
Roger Percy, CEO of RDP Associates, said, "We are delighted to provide Nielsen with the proprietary GPS technology for this test, and we're pleased to be working with them to develop what promises to become the global audience currency for outdoor media."
According to Hadfield, Nielsen Outdoor believes it can launch a commercial service as soon as next year. The United States will likely be the first target, with other countries to follow. She noted that the U.S. is one of the world's largest markets for outdoor advertising, with expenditures of about $5 billion annually.
