For about two years, Google refused to let Nielsen place measurement tags on ads running on YouTube, a stance that media buyers say stopped some advertisers buying time on the online video site. Google’s reversal could fuel the shift of TV ad dollars to online video

Google Relents on YouTube Ad Measurement

Nielsen to Begin Tracking Viewership of Videos

SUZANNE VRANICA

Nov. 11, 2013 4:26 p.m. ET

For about two years, Google Inc. GOOG -0.54% refused to let Nielsen HoldingsNLSN -0.28% place measurement tags on ads running on YouTube, a stance that media buyers say stopped some advertisers buying time on the online video site. Last week, Google reversed its position in a decision that analysts say could fuel the shift of TV ad dollars to online video.Nielsen disclosed late last week that Google was allowing advertisers to test Nielsen’s online ad measurement product when they negotiate ad buys on Google’s YouTube. “Following a brief testing period,” Nielsen said, it expects the “measurement tags to be accepted across all Google properties, including YouTube… by early 2014.”

Google confirmed the decision Monday. “We know our clients want meaningful measurement, which is why we’re investing in brand-friendly metrics. While we continue to build measurement options powered by Google, we’re also partnering with industry leaders, such as Nielsen and Comscore, to offer objective, credentialed, third-party measurement options.”

Google added that Nielsen’s Online Campaign Ratings system, as the tags are known, “recently joined” a rival service operated by comScore “as a certified measurement provider, and we’re working with both on roll-out plan after we do early testing.”

Nielsen’s tags allow marketers to monitor the performance of online ads by tracking the number of people who see the ads and how often. Nielsen also provides demographic data about who sees the ads, information it gets partly through a partnership withFacebook Inc., FB -2.80% in which the social-media site shares information about its users.

Marketers like Nielsen’s service because it gives them a metric that is comparable to audience ratings in television which Nielsen has long supplied. Advertisers can make a similar comparison using comScore’s metric, which is known as Validated Campaign Essentials, but some advertisers already have a relationship with Nielsen for other services and don’t want to use two measurement firms.

Google’s refusal to accept Nielsen’s tags upset those advertisers, media buyers say, particularly as some marketers don’t want to accept Google’s own measurement of ads running on YouTube.

“I am not going to buy from Turner and accept an affidavit from Turner saying their TV ads work, am I?,” said a media buying executive, referring to Time Warner Inc.’s cable networks unit.

It is unclear why Google had refused to accept Nielsen tags but analysts and ad buyers suggest that the Web giant likely held back because of Nielsen’s business relationship with Facebook. A Google spokeswomen declined to comment.

As a result of Google’s stance, some advertisers cut back on buying ads on YouTube, according to advertisers and media buyers. Google declined to comment.

“We have previously heard first-hand that at the individual media agency level, as much as tens of millions of dollars of advertising budgets have been left on the table at several agencies because of Google’s refusal to allow OCR tags,” said Brian Wieser, an analyst at Pivotal Research Group in a note to investors on Friday.

Adweek, an advertising trade magazine, earlier reported that Google was now working with Nielsen.

Google’s change of heart could bring more marketers into the online video marketplace, analysts say. “If online premium video wants to steal TV dollars they need to be able to transact in a currency that is similar to TV,” said David Bank, an analyst at RBC Capital Markets.

Spending on online-video advertising in the U.S. is expected to top $4.1 billion this year, according to eMarketer, up 43% from 2012. Spending on TV ads in the U.S. is expected to increase 2.8% to $66.3 billion during the same time period, eMarketer said. While some advertiser have shifted some of their TV ad dollars into online video the majority of the money being moved has come from online display and print ad budgets, media buyers say.

Google doesn’t break out YouTube’s financial information, but Mr. Wieser at Pivotal estimates that YouTube likely accounts for roughly $1.3 billion in U.S. ad revenue or about a third of the total U.S. video marketplace.

Vik Kathuria, executive vice president of digital investment at MediaCom, an ad buying shop owned by WPP WPPGY -1.00% PLC, said: “YouTube is now in the consideration set for getting TV money and other money moving into online video from other places such as display.”