July 3rd, 2007
Nielsen to Track Video Game Use
By Alex Pham
Los Angeles Times
Deal to measure Sony consoles' audiences may boost flow of ad dollars.
Nielsen Co., which tracks viewers as they click through television channels, now wants to measure the games people play.
Nielsen on Monday announced a deal with Sony Corp. to collect data from hundreds of thousands of PlayStation 3 and PlayStation Portable owners, capturing such information as which video games were being played and for how long.
For the Japanese electronics and media giant, the agreement is likely to help it eventually sell a wide variety of ads on its online game platform, PlayStation Network, as well as within each game it publishes.
“This gives us an opportunity to validate video games as an advertising medium,” said Phil Rosenberg, senior vice president of Sony Computer Entertainment of America, the division responsible for PlayStation. “It will help present the value of games to advertisers against other options they have, such as TV, Internet and print.”
For Nielsen, the deal furthers the New York-based firm’s ambition to measure the consumption of media content wherever it appears, whether it’s delivered by television, cellphone, computer or game console. Nielsen is also trying to keep up with people, in particular 18- to 34-year-old men, who are spending less time watching TV and more time playing games.
“About 41% of U.S. homes have a console,” said Jeff Herrmann, vice president of Nielsen Games, which announced plans in the fall to produce monthly reports on video game usage starting July 25. “We think it’s an important device to measure as it relates to in-home media consumption.”
It also gives Nielsen, which is the de facto standard for TV ratings but has struggled in recent years to keep up with nimbler rivals in measuring online activity, a chance to get ahead of the curve in the nascent game advertising business.
“It’s not the old media world anymore,” said Michael Cai, analyst with Parks Associates in Dallas, who estimates that spending on advertising within games will grow to more than $800 million in 2012, up from $90 million this year. “You now have lots of new platforms, new media, new business models. Nielsen is trying to branch out. They’ve learned from the past, and now they want to make sure they’re on top of any emerging media.”
To protect player privacy, the data Sony will supply to Nielsen starting in a couple of months will be organized by the game, not the individual player, said Sony spokesman Dave Karraker.
Other console makers are also sensing opportunity. Microsoft Corp., maker of the Xbox 360 console, last year paid more than $200 million to acquire Massive Inc., whose technology dynamically weaves ads within games. Players of a driving game, for instance, would speed past billboards advertising motor oil one day, tires the next.
“It’s a big and robust area for us, and we’re investing more into it,” said Kevin Brown, general manager of Xbox New Media. Although Microsoft does not break out revenue from ads on its Xbox platform, Brown said the figure grew 350% last year and is on track to triple this year.
Games are ripe for advertising, said Cai, who estimates that companies will spend $2 billion in 2012 to promote their products in all game-related settings, including sponsored tournaments, display ads on casual game websites, creating a presence in virtual game worlds such as there.com and Second Life, as well as product placement within games.
But because only a handful of companies, including Interpret, founded last year by former Nielsen executives in Santa Monica, provide independent audience measurement data across all consoles, advertisers have been hesitant to jump in.
“Advertisers don’t necessarily understand the medium,” Cai said. “So their spending on this platform will continue to be inconsistent.”