VIDEO MEASUREMENT: RESULTS UNVEILED

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PRESENTATION SPEAKERS

Cheryl IdellEVP, Client Solutions,

Nielsen

Kris MagelChief Investment Officer,

Initiative

Eric SolomonSVP, Global Product Leadership,

Nielsen

Adam GerberVP, Sales Development

and Marketing, ABC Television Network

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AGENDA

Time Topic Presenter

11:00 am Evolution of Video and Measurement Cheryl Idell

11:05 am Agency Perspective Kris Magel

11:20 am Media Perspective Adam Gerber

11:35 am Nielsen Roadmap Eric Solomon

11:45 am Roundtable discussions:1. How will the video business evolve (3-5 yrs)?2. If you were Nielsen CEO, what investments would

YOU make (2-3 years)?

12:15 pm Open group dialogue

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C360 2013 INTRODUCTION

Distributors and programmers are going big in 2013

and 2014

Measurement is a critical enabler and must be in place

Consumers are primed and ready

Third wave of TV innovation—place

shifting—is upon us > > >

> > >

> > >

> > >

The Big Bang

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CONSUMERS ARE DRIVING RAPID CHANGEAccelerating change in our future

1950s& 1960s

Black & White TV

First Satellite Broadcast

1970s& 1980s

Rise of Cable TV

More Advertiser-Supported Networks

Video Games

VCR

1990s–2005

Digital & Internet Revolution

DVD DVR VOD

2006–Present

Smartphones HDTV Tablets

Over-the-top Distribution

Smart TV with Social Capabilities

App-Driven Digital World

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MEDIA COMPANIES ARE RAPIDLY MAKING CONTENT AVAILABLE ON MOBILE DEVICES

104 April 2013

118 February 2014

OPERATING SYSTEMS

43% | 24%iOS only

57% | 76%iOS and Android

62% | 35%Short Form

CONTENT TYPE

15% | 36%Live Streaming

23% | 28%Full Episode Vod

AD MODELS

45% | 50%Digital+Pre-Roll

3% | 10%DAI

7% | 11%Linear

44% | 29%No Advertising/Banner Only

Most programmers have announced a substantial expansion of ad-supported simulcasts and VOD with a DAI adload until c3is measureable—and then both models will be in the market.

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NIELSEN IS CONDUCTING RESEARCH TO FUEL MOBILE MEASUREMENT

• Electronic Mobile Measurement Panel = 16,000

• National Probability Survey = 4,000

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TABLET SHARING

M 2-12

M 13-17

M 18-24

M 25-34

M 35-44

M 45-54M 55+

F 2-12

F 13-17

F 18-24

F 25-34

F 35-44

F 45-54F 55+

65%49%

33%49% 53%

32%19%

66%51%

41%49% 50%

39% 34%

35%51%

66%51% 47%

68%81%

34%49%

59%51% 50%

61% 66%

Almost half of respondents share their tablet with a household member. Household members aged 2–12 are most likely to use the respondent’s tablet.

Weighted data; among tablet users (N=2,024) and among persons living with tablet users (N=3,892).

52%

48%

No

Yes

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Children's

programming

Comedy

Drama

Feature films

NewsSports

Variety

User-g

enerated content

Other

26%

36%

27% 28%31%

19%16%

56%

8%

14%

33%

14% 13%

30%

18%13%

53%

4%

Tablet

Smartphone

CO-VIEWING BY GENREUser-generated content is the genre most likely to be co-viewed, and it is co-viewed almost as much on tablets as it is on smartphones.

Weighted data; among all viewers (1,590 tablet; 2,370 smartphone).

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THE INDUSTRY NEEDS RESOLUTION AROUND SEVERAL BUSINESS ISSUES

Business ModelsDigital RightsPrivacy Metrics

ADVERTISING PERSPECTIVE

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HOW NEW CHANNELS, DATA AND TECHNOLOGY CAN MAKE TV ADVERTISING EVEN MORE POWERFUL

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CHANGING LANDSCAPE HAVE YOU WORRIED?

• TV Fragmenting, usage levels falling, prices climbing• DVRs enabling commercial avoidance in half of US homes• Consumption across screens exploding• Younger audiences favor portable screens, gaming, online

and mobile video, hate traditional ads• Multi-screen usage is distracting viewers, making TV

advertising less effective

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W50+ M50+

-1%-1%

W25-54 M25-54

-4%-5%

W18-24 M18-24

0%

-2%

W18-34 M18-34

-3%

-6%

W18-49 M18-49

4Q104Q114Q124Q13

-3%

-5%

T12-17

-6%

W35-64 M35-64

-2%-3%

YES, IT’S TRUE…Traditional TV usage has begun to fall among younger viewers

Source: Nielsen Media View, TV Usage 4Q10–4Q13

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CONSUMPTION BY PLATFORM IS DIVERSIFYING

1Q12 1Q13 4Q13

82%61%

45%

14%28%

40%

4%11% 15%

Mobile/Tablet

Connected TV

PC

% Viewing by Platform, Hulu

Source: Hulu internal data

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FUELED BY GROWTH IN TECHNOLOGY

DVR VOD OTT Broadband Smartphone Contracts

Tablets Connected TV's

Connected Consoles

0

50

100

150

200

250

20122017

+20%

+26%

+222%

+25%

+60%

+71%

+76%

+88%

Source: MAGNAGlobal Projections

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C2-11 T12-17 A18-24 A25-34 A35-49 A50-64

1.9 2.22.6

4.33.9

3.3

2.1 2.3

3.1

4.84.4 4.5

2.4 2.5

4.7

5.75.2

4.6

Hours Per Week—On Demand ViewingVOD, DVR, PC, Mobile Video

1Q111Q121Q13

ON-DEMAND VIEWING IS ON THE RISE

Source: Nielsen Cross Platform Report; On-demand viewing includes DVR playback, PC streaming, and video on mobile phones.

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LARGELY OFFSETTING DECREASES IN LIVE TV VIEWING

1Q11 1Q12 1Q13

33.42 32.32 32.43

3.08 3.49 4.13

Persons 2+ Live vs On-Demand

On Demand

Live TV

36.50 35.81 36.56+63 min

Source: Nielsen Cross Platform Report; On-demand viewing includes DVR playback, PC streaming, and video on mobile phones.

-59 min

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C2-11 T12-17 A18-24 A25-34 A35-49 A50-64 P2+0

50

100

150

200

250

Hours Per Month w/Video

Live TV Time-Shifted TV Online Streaming Mobile Video

TV STILL REPRESENTS THE VAST MAJORITY OF VIDEO USAGE, EVEN AMONG YOUNGER AUDIENCES

3.5%

Source: Nielsen Cross Platform Report, 1Q13

11.4%15.1%

10.5%7.3%

4.5%

7.5% % Online/Mobile Video

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TODAY’S VIDEO ECOSYSTEM OFFERS OPPORTUNITY TO COMPLEMENT TELEVISION IN WAYS NEVER BEFORE POSSIBLE

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VIDEO IN 2014 REQUIRES A HOLISTIC APPROACH

• Demand for traditional TV is sufficient to continue to result in CPM inflation

• Traditional TV is not reaching some of your best customers• Alternative sources of video reach lighter TV viewers• Data can help us discover untapped ways of reaching

customers through traditional TV

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TV HAS NEVER BEEN PERFECT ON ITS OWN

% U.S.

Heaviest Viewers Average Viewers Lightest Viewers

% TV Viewing

40% 20% 40%

74% 15% 11%

Source: Nielsen, 12/13 TV Season Average

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TV Total Day Hulu.com

74%

25%

15%

37%

11%

35%

Heavy TV Users

Avg. TV Users

Light TV Users

ON-DEMAND HELPS US BALANCE OUT LIGHT TV VIEWERS

% Share of Media Usage

Source: Nielsen 12/13 TV Season Average; Hulu.com internal data; Note: 3% of Hulu.com visitors did not watch TV for 6+ minutes in Dec. 2012.

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THE BEST PLACE TO FIND LIGHT TV VIEWERS IS OUTSIDE THE HOME

Gyms/H

ealth Clubs

Inside T

axis

Office Build

ings

Shopping M

alls

Airports

Gas Sta

tions

Restau

rants/

Bars

Cinema

Sports

Arenas

Retail S

tores

Medica

l Offices

152

134130

126 126 125 124120

115112

108

Viewed last 30 days by A18–49 Light TV Viewers

Source: 2013 Spring GfKMRI. A18–49 Q IV & QV TV viewing quintiles and DPb Media.

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Environment-focused approach:Content-driven, multi-screen, sponsorship

Audience-focused approach:Data and technology to target customers, not age/sex demos

EMERGENCE OF AUDIENCE-BUYING IN TV AND VIDEOComplementary reach, frequency and purity against key target segments

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– On-Demand– Across all screens

TV, VOD, online, mobile, tablets

– Web-endemic original programming

– Cinema, place-based– Multi-cultural

Total market approach

A HOLISTIC VIDEO APPROACH WILL COMPLEMENT TV, NOT REPLACE IT

ENVIRONMENT AUDIENCE

– Leverage data and technology

– Extend reach and core target composition

– Target customers, not age/sex demographics

AMPLIFICATION

– Social TV amplification– Target

exposed/unexposed TV viewers

– Custom content– Multi-screen experiences– Gamification

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IN THE LONG RUN, A HOLISTIC APPROACH EXPANDS THE MARKET AND IS GOOD FOR MARKETERS

One video budget across all screens

Traditional TV, on-demand across all screens, cinema

and place-based

More competitive landscape

Adding high quality impressions at efficient prices

to the TV marketplace

Greater use of data and technology

To deliver efficient, incremental reach of customers and more

attention to every ad

Long-term view

Influx of high quality original programming, distributed across more players and

platforms, will ultimately result in more choice and greater

efficiency for advertisers

MEDIA PERSPECTIVE

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THE CHALLENGE

We need a go forward “measurement model”

Video is everywhere Technology and data have complicated how and what we transact

Scaled marketplaces require efficiency, transparency, and units of trade (i.e. liquidity)

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SOME TRUTHS (MAYBE)…

• We “measure” for various reasons (pre, during, post)• How we “transact” and how we “value” can differ• It’s not about Digital and TV…its about supply and demand• We have multiple video marketplaces

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TODAY’S “AUDIENCE” LANDSCAPE1 3 7 35

C3 Ratings

Limited measurement/no monetization

No demos for ads/limited monetization

2+, OCR/VCE & proprietary measurement, DAI

2+ & proprietary measurement, DAI

2+ & proprietary measurement, DAI

Unit ad model No ad model Mixed ad model Impression ad model

Live TV/DVR

VOD

Online (web browser)

Mobile (app)

Connected TV (app)

Day

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UnitAnchored to Show

C3 Ratings“Ad Pods”

ImpressionAnchored to UserCensus“Campaigns”

Constrained

AUDIENCES

Infinite

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TWO AUDIENCE MARKETPLACES EVOLVE

Live TV/DVR

VOD

Online (web browser)

Mobile (app)

Connected TV (app)

Day?1 3 7 35

C3 Ratings

Unit ad model No ad model Impression ad model

DAI with Varying Measurement

?

?

?

Unit Model

DAI Model

C?

DAI M

odel

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ULTIMATELY, IT’S ABOUT IMPRESSIONS

Unit of tradeAbility to price

Seller Buyer

ValueDemographics

Reach/ImmediacyUser Characteristics

EngagementConversion/CPA

ValueLifetime Value

Supply/DemandContent CostEnvironment

Etc.

Impressions

MOBILE MEASUREMENT UPDATE

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THE 2014 PLAN

Delivered in 2014

Credit mobile viewing to linear TV ratings

Launch Digital Program Ratings (DPR)

Add mobile impressions to OCR/DPR

Digital Linear

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WE ARE ALMOST THERE

DIGITAL PROGRAM RATINGS MOBILE OCR MOBILE CREDIT TO TV RATINGS

Design Develop Test Launch R1 Launch R2

On schedule—August

Design Develop Test Launch

On schedule—July

Design Develop Test Internal Preview Industry Preview Launch

Preview/Launch announcement coming in July!

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WHAT’S NEXT?Roadmap items for 2015

Cross-platform Program Ratings (XPR)

OTT and game console crediting to Linear and

Digital TV ratings

PC/Mac crediting via census/SDK

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YOUR OPPORTUNITY TO SHARE AND CONNECT!Table Talk time

What will the videobusiness model be

in the next 5 years?

How would you invest the next $100 at Nielsen?

The Questions