Measuring 'Engagement’

Forget how many viewers watched a show, how it did among adults 18-49 or even live plus same-, three- or seven-day ratings. What advertisers really want to know is how many people care so deeply about their favorite shows that they race home to see them, or forget to skip through the commercials if they record them.

Twenty million viewers may be tuned in to a program, but how many are obsessed fans? How many are recording the show, following it online and blogging about it? “Going forward, the emphasis on mere tonnage is going to decrease and be replaced,” says Alan Wurtzel, president of research at NBC Universal, who is working to develop a metric that values both a show’s reach and its impact. “The Holy Grail is, 'Did I reach as many people who are primary targets for my message as I could? And of those people, how many of them were highly engaged and interested?’ When engagement is higher, the impact of advertising is higher.”

While ratings remain the television industry’s currency, advertisers are increasingly evaluating “engagement” when they buy spots. Some shows, like NBC’s moderately rated The Office, are much more attractive to advertisers due to its engagement factors: The Office’s ratings increase nearly 30% once three-day viewing is factored in, and it’s one of TV’s most downloaded shows.

“In the end, you should never lose sight of what the advertisers really want,” says reality TV impresario Mark Burnett, executive producer of Survivor, The Apprentice, Are You Smarter Than a Fifth Grader? and many more. “Actual companies such as General Motors and Procter & Gamble, they just care about selling products. There’s never really been a connection between someone viewing an ad and actually buying something. And that’s what they really care about. The engagement has to be there. If engagement numbers are true, a sponsor might pay 10 times cost-per-thousand. It’s like lead generation in advertising: an almost-guaranteed sale is worth 50 times what a cold call is worth.”

Designing and offering a realistic measurement of viewer engagement is the name of the game right now. That’s exactly what Nielsen Media Research hopes to add with its social networking site, Hey! Nielsen, which it launched in beta last week. A visit to www.heynielsen.com reveals a site that looks a lot like other social-networking sites—MySpace, Friendster and Facebook. At the site, visitors can chat about pieces of pop culture—TV shows, movies, music—and note their preferences and passions. Part of the site’s pull, Nielsen hopes, is the company’s promise that people’s opinions will get to important entertainment decision-makers.

“When people come to Hey! Nielsen, they are looking to participate in research,” says Jennifer Geissel, the site’s executive manager. “They are giving their opinions to be used by studios. The blogosphere has already picked up on that, and bloggers are calling this a fun place to give feedback on entertainment.”

More importantly, Nielsen wants the site to provide the company and its clients with a way to quantify engagement—assigning a score or an index to shows, stars or songs, for example—and then incorporate that information into its ratings reports. The Nielsen Co. has plenty of resources to draw from: Nielsen Media Research already slices TV ratings in a multitude of ways (see chart), SoundScan measures music, and Nielsen EDI counts box-office receipts.

“We designed this because our clients have a need for this,” says Karen Watson, senior vice president of communications at The Nielsen Co. and the site’s executive sponsor. “As they try to figure out where to place their bets between all these different emerging media—Internet, DVR, mobile, iPod—they are trying to figure out where they should put their resources. We hope this is a way to give it to them.”

Right now, Nielsen is running other experiments besides just Hey! Nielsen, all intended to crack the code of engagement. In one example, a panel of 45 industry leaders is running an “engagement pilot.” The pilot monitors 1,000 Nielsen homes equipped with people meters, calling them every night and asking them quantifiable questions such as “How many episodes of this show have you watched?” and “Did you watch the entire program?” and then seeing what they recall about what they’ve watched.

“The question is whether these intrinsic viewing variables are better than a host of more qualitative questions, such as, 'Is this one of your favorite programs?’ If they are, then engagement becomes an easier variable to plan and buy on,” says Paul Donato, executive vice president and chief research officer of The Nielsen Co.

That’s important because up to this point, research companies have relied largely on what people report about their viewing behavior without being able to confirm what they actually do.

“If you believed everything people told you about what they watched or what they did, then last week nobody watched O.J. get arrested and nobody accessed porn on the Internet and PBS would be the number-one network,” says Jack Wakschlag, chief research officer of Turner Broadcasting Co. “But we do need metrics to help us figure out our value to advertisers. That’s really the vexing challenge: How do we combine television with broadband? Until it’s all measured, we’re just testing it. Once it’s enough of an industry to support serious measurement, then the multiplatform business will fall into place.”

Networks already are trying to do some of this themselves. All the networks have their own vast Web sites—and increasingly, online distribution networks such as the CBS Audience Network or Hulu.com—where fans can learn more about shows, chat online, stream episodes and check out extras, such as Heroes’ graphic novel, The Office’s Webisodes or Lost and Grey’s Anatomy’s podcasts with stars and producers. These days, no new show launches without a complete Website to accompany it, and most shows are available online well before their broadcast premiere.

Online metrics—how many hits a Website gets or how many times an episode was streamed or downloaded—are easy to measure, giving networks a good idea of how beloved their shows are. Producers can troll Web chat rooms to get feedback on their shows, giving them some idea of what fans think about characters and plotlines.

Network sales forces already have started using engagement indices to sell advertising time, with information largely provided by brand-recall information from Manhattan-based research firm IAG. Every day, the company conducts research to determine the programs in which viewers are most engaged, the ads that are most recalled and the product placement that is most remembered.

Ad buyers love the idea of measuring engagement, placing ads against that information and then, they hope, drastically increasing their return on investment. But for now, it’s just one of many factors they consider.

“You start with: Is the program’s target audience desirable for our client and is the program itself a good environment? If the answers to those questions are favorable, then things like engagement may act as a tie-breaker with other shows. So yes, engagement does play a role,” says Sam Armando, senior vice president, director of research, Starcom USA.

“You don’t look at it through any one filter, but if you were to put a higher priority on engagement, the hidden jewel for us would be a program that has a lower rating but a higher level of engagement so that the cost is not as high,” says George Newi, senior vice president, group director, Initiative.

What the quest to quantify engagement doesn’t change is the value of a hit. In fact, driving people to the TV set to watch a show they love and to the water-cooler—or online chat room—to talk about it remains programmers’ top priority.

Says Burnett: “What’s the net-net of all this? The need to create appointment television is greater than ever.”

With additional reporting by Ben Grossman, Anne Becker and Marisa Guthrie