On Monday, October 6, Nielsen (NYSE:NLSN), best known for its measure of television viewing, released its new Nielsen Twitter TV Ratings which are designed to measure the amount of Twitter (TWTR) conversation surrounding a TV show.
Why the new ratings?
Nielsen's relationship with Twitter is part of Nielsen's continued effort to remain relevant as the habits of TV viewers continue to be shaped by the Internet.
Meanwhile, Twitter, with its initial public offering expected at any moment, is looking to make its integration of the television industry a significant part of its appeal to potential investors.
Nielsen and Twitter expect that both the networks and advertisers will eventually embrace their new metric. In other words, network executives could say to advertisers, Look, our show isn't the number one show in the traditional way that shows used to be measured, but when you examine our fans' Twitter activity you'll notice that we are far and away the leader of social media TV conversation."
What's been the early finding of the Nielsen-Twitter collaboration? According to data released by Nielsen, and reported by The New York Times, there were 1.2 million posts dealing with the series finale of Breaking Bad. Nielsen further calculated that those 225,000 posts were seen by 9.3 million different Twitter users.
The simple rule of television media buying is that the higher the show's rating, whether traditional or modern, within the most desirable demographic group, the more your network can charge for advertising. So the alliance of Nielsen and Twitter could mean good news for networks if their viewers enjoy chatting about their shows on Twitter. Bad news if they don't.
And which age group is most likely to use Twitter? It's the same desirable 18-49 age group that TV advertisers are trying to grab. And that means that the network most likely to suffer loss of advertising dollars should this new metric gain wide acceptance is CBS (NYSE:CBS).
The wrong television golden age
CBS dominates the traditional Nielsen TV ratings for primetime network broadcasts. For the week of September 23 half of the top 10 shows were CBS products. CBS even does well in the desirable 18-49 demographic.
The potential problem is that those CBS viewers are at the upper limit of that age range. As they continue to age, according to Nielsen statistics, they will watch less and less television, creating a continuing drain on CBS' ratings.
What about the level of Twitter activity for those shows? None of the five shows CBS placed in the traditional Nielsen top 10 for the week of September 23 even cracked the top 10 of Nielsen's new Twitter TV ratings.
So, just who uses Twitter? A Pew Internet study published earlier this year answered that question. He's an educated minority, earning an excellent salary, and between the ages of 18-29.
Contrast that with CBS' top shows. It would be difficult to say that CBS aims at that demographic. NCIS, The Mentalist, 2 Broke Girls, Mike and Molly, Two and a Half Men and How I Met Your Mother don't fit the bill. Only NCIS: Los Angeles with LL Cool J and Elementary with Lucy Lui have non-white characters in major starring roles. And only 2 Broke Girls looks like an attempt to attract a younger viewer.
Are madmen mad about the new ratings?
If you're wondering if CBS is showing any early signs of worry, the answer is no. CBS Chief Research Officer David Poltrack told the Los Angeles Times that he gets frustrated when he reads yet another newspaper article glamorizing the 18-49 demographic as "the audience advertisers care the most about." He said that the younger viewers in that age range are still living with their parents, which makes them of limited interest to a substantial number of advertisers.
And what do advertisers say? A few interviewed by various media are embracing the new data while most seem to reflect the non-committal attitude of Ari Bluman. Bluman, media-buyer for GroupM, owned by advertiser WPP PLC, was quoted by The Wall Street Journal as simply saying, "If a show is social, does it mean it helps or hurts the advertisers? We are continuing to investigate."
Fool contributor Joseph Wilborn has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.