Ratings Analysis: Audience Measurement and Analytics

You have probably heard the phrase, “What is measured is known.” It can be attributed to William Thomson, who is also known as Lord Kelvin. More recently, a management consultant and one of the most influential business thinkers in the last century, Peter Drucker, took the thought further. He observed that “what’s measured is managed.”

Through measurement and analysis, we are able to evaluate relative opportunities, progress, performance, and more. Measurement and information are used to value assets and drive strategic decision making. In many ways, measurement and information define our world.

Measurement is all around us—in clocks, calendars, thermometers, even the stock market. Measurement is inescapable. That’s for good reason. Imagine a world without measurement and everything you know quickly unravels. Today, there is more measurement in our grasp than ever. That’s thanks to technological advances—just in our lifetime—that relate to obtaining, recording, computing, storing, and analyzing data. These advances are remaking the world.

Today, measurement is driving and transforming entire industries.

Another oft-spoken phrase, that every company and human being is in fact a “media company,” appears equally true. The same forces driving measurement allow us to reach audiences like never before. For the media industry—those who by definition seek audiences—the stakes are growing even higher. Media companies require innovation for better-informed decisions. These companies are driving a need to be smarter and more perceptive in understanding the “who, what, where, why, and how” of people’s interactions with media.

Global advertising expenditures are predicted to reach $522 billion by 2013. Key to commercializing that ad spend is audience measurement and the ratings that are produced as an output of that effort. Companies selling advertising space use ratings to maximize the value of their inventory, and those buying ads use ratings and audience analytics to identify and reach consumers efficiently and effectively.

Players that rely on accurate measurement to drive business outcomes range from those who have been in business more than a 100 years to others, who may be less than 100 days old. As media consumption choices expand exponentially, and consumer preferences and attitudes evolve in parallel, measurement is the constant. It is the constant that informs what happened in the past, is happening now, and what is to come.

Wherever your career takes you across media and marketing, understanding the theory and practice of audience measurement, insight and analytics will remain vital and omnipresent—and serve as your guide in an ever-changing world.

David Calhoun
Chief Executive Officer
Nielsen Media Research