Like something out of a prime-time melodrama about the Rapture, young TV viewers are vanishing into thin air, leaving behind only a heap of data to show that they were ever here. And while programmers can prove that the disappeared millions are still interacting with their favorite shows in digital-video environs, that knowledge isn't enough to offset the impact the migration is having on TV ratings.
That viewers are steadily abandoning the linear TV experience for the close-quarters comfort of their mobile phones and tablets is plain to see in the Nielsen data. So far in this nearly complete season, prime-time C3 ratings for adults 18-to-49 are down 9% from the year-earlier period, and for adults 18-to-34 the decline is even steeper. (C3, the currency against which the vast majority of TV ratings guarantees are made, represents a blend of average commercial viewing in live programming and three days of DVR playback.)
Younger viewers are Rapturing to digital video at an even faster clip, according to Nielsen, which said that overall linear TV usage among the 18-to-24 set plummeted 17% in the first half of the season alone. The Cabletelevision Advertising Bureau has estimated that about 40% of all TV ratings declines can be chalked up to the adoption of streaming-video services like Netflix and Amazon Prime. But network-research heads and ad-sales executives appear far more concerned about what they characterize as a failure to adequately capture video consumption on nontraditional platforms.
"We are a business that produces ratings," said Alan Wurtzel, president of research and media development, NBC Universal, at a recent panel discussion at the Paley Center for Media. "And if you can't measure it, you can't sell it. The problem is, the currency that we use, Nielsen … is just unable now to follow all the consumer changes that are happening."
Mr. Wurtzel acknowledged during the panel that Nielsen is not to blame for all ratings declines (through Week 27 of the 2014-15 broadcast season, NBC's prime-time live-plus-same-day ratings are down 10%), but the lack of a fully functional mobile-TV ratings sample is putting the squeeze on gross ratings points NBC can offer marketers. By way of example, Mr. Wurtzel noted that 17% of the viewing of NBC's top-rated scripted series, "The Blacklist," is "being done on platforms -- PC, tablet, smartphone -- that aren't being measured by Nielsen."
That means the NBC ad-sales team isn't getting credit for as many as 1.3 million weekly deliveries to the target demo (adults 18-to-49). While "The Blacklist" was renewed for a third season on Feb. 5, for many other NBC shows, that kind of demo bleed could spell the difference between life and death.
The relationship between the suppliers of GRPs and media buyers is nowhere near as adversarial as it would appear during the annual upfront negotiations, but neither are agencies cutting the networks much slack for digital video views they can't see in Nielsen reports. All the third-party and proprietary data in the world is not enough to convince buyers to issue good-faith credits for impressions that aren't validated by the industry currency.
"Nielsen has been talking about trying to get to those screens for years and, until it happens, we are not getting the credit," said Donna Speciale, president of Turner Broadcasting ad sales. "We know that all these viewers just didn't disappear. They're just not where we're used to seeing them. … Mobile viewing is booming, but the agencies simply are not going to acknowledge the [unaccredited] data."
The ratings giant originally hoped to begin a trial of its mobile ratings sample in fall 2014, with an eye toward rolling up traditional-TV and phone-and-tablet data by the end of last year. Difficulties with what insiders characterized as "buggy" software derailed that plan.
Nielsen has begun making the requisite software development kits available to the TV industry, and points out that the success of the effort doesn't rest solely with the company. More than 34 networks and eight distributors (including cable companies) are in "various stages of evaluating, integrating and launching our mobile measurement solution," said Megan Clarken, exec VP-product leadership, Nielsen, in an email.
"Industry-wide availability is dependent upon programmer participation and the time it takes them to embed the software and get comfortable with the data," she added. "Initially, the broadcasters will see the data themselves, and when they are comfortable with the data and sign a commercial agreement, they will allow us to add it to their TV ratings."
Barring any additional unforeseen complications, the mobile-enriched data stream could start flowing sometime in the first half of 2016.
But many of those on the supply side of the ad chain say they'll believe it when they see it. "They swore on a stack of Bibles that they'd be ready to roll this out before the end of last year and they're saying the same thing now," said one ad-sales chief. "Even if they do get it out the door by the end of the year, it'll be too late to have any bearing on the upfront. I mean, you can go in and estimate what the adjustment will be once every [platform] is accounted for, but if your estimates are too high, you'll just owe more inventory."
CBS appears less willing to make a scapegoat of Nielsen, TV's number cruncher of record for 65 years. "Advertisers are a lot at fault," said Dave Poltrack, CBS Corp. chief research officer. "They only want their advertising for the first three days, they don't want to pay for DVR playback 30 days out. Half the things we're talking about, I think advertisers are trying to get for free."
Rather than fixate on Nielsen's shortcomings, Mr. Poltrack emphasized the work the company has done with consumer data in order to advance the conversation beyond musty demographics. "We're telling advertisers this year, 'Forget the ratings. We're going to tell you how many cans of soda you sold, how many movie tickets you sold with this advertising campaign,'" Mr. Poltrack said. "That's where Nielsen has pivoted. We have to shift to demonstrating to advertisers, this is how much money you made when you advertised on television."
Still, the prevailing attitude about Nielsen and its adaptability is less than sanguine. "They're incapable of doing certain things and it's only getting worse," Mr. Wurtzel said on the Paley panel, adding that in time the standard TV ratings "will be increasingly less important." Eventually, Mr. Wurtzel said, Nielsen will be supplanted by targeted ratings, engagement metrics and "all these different kinds of measures that we believe get a lot closer to the reality of the way people are consuming whatever you want to call this new 'television.'"