Advertising Week 2015

What Does ComScore-Rentrak Deal Mean to Marketers? Maybe Nothing Revolutionary

Deal Produces a Bigger Rival for Nielsen, but Product Impact Unclear

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What does ComScore's acquisition of Rentrak mean for marketers? Maybe not as much as some people think.

Marketers long have clamored for better measurement of media audiences, particularly across platforms, than research heavyweight Nielsen has been able to deliver. Procter & Gamble Co. and Unilever were among founders of the Coalition for Innovation in Media Measurement in 2009, for example, to help prod this process along.

And the proposed merger of Nielsen's arguably most significant competitors was billed Tuesday by their executives and Martin Sorrell, CEO of their mutual minority shareholder WPP, as a boon for innovation in marketing measurement.

But the plan to combine ComScore and Rentrak has produced strangely little rejoicing among CMOs. Privately, some marketers shrugged. Procter & Gamble Co. and Unilever declined to comment.

"I don't think anybody really cares at this point," said Bill Kashimer, a former media and marketing executive with Colgate-Palmolive Co. and Sun Products who left the latter in July to form a media and marketing consultancy. "Nobody knows ultimately what the product is going to be. It's going to be a wait and see whether it's going to ultimately benefit the advertiser."

Marketers complaining about Nielsen ratings has been as common as people complaining about weather for decades, Mr. Kashimer said, and produced similar results. For years as a member of the Association of National Advertisers Media Leadership Committee, he recalls long discussions about media-measurement problems, but no clear vision on how to fix them.

For its part, the Coalition for Innovative Media Measurement officially favored the ComScore-Rentrak combination. "The newly formed entity will help bring needed competition into the field of cross-platform audience measurement," the group said in a statement. "But at the same time, the industry cannot have a fractured approach to measurement."

The ad industry's preference for a uniform TV ratings currency that is recognized by both buyers and sellers alike ultimately helped foster Nielsen's monopoly.

More recently the industry learned that too much competition can be a problem: After the Media Rating Council accredited more than 20 vendors to measure digital ad viewability, media companies in particular complained about the cost and complexity of dealing with so many systems, often delivering different numbers, with one vendor often favored by a given client and another by the ad seller.

Speaking on a call for analysts Tuesday, ComScore CEO Serge Matta said the deal will combine ComScore's ability to track 1.8 trillion consumer digital interactions monthly and its multi-million-member digital and mobile panels with Rentak's monitoring of 120 million TV sets. "There's also the ability at scale to start measuring cross-platform online and then attributing it to offline sales," he said.

But he didn't get into specific products that might emerge as a result, and the two potentially could have produced them through the common-enough industry practice of joint ventures.

The deal should, however, allow unfettered combination of Rentrak data with one piece of ComScore's offering: its access to the Nielsen Audio Portable People Meter panel, access mandated by the Federal Trade Commission as part of the 2013 approval of Nielsen's Arbitron acquisition. Rentrak and Arbitron had talked about potential collaboration prior to that deal, according to people familiar with the matter. That panel, now used mainly for radio ratings, theoretically could be used for national age-gender TV ratings by tracking individual viewership, whereas Rentrak captures TV viewership at a household level.

But then again, perhaps not. "If we thought the audio panel could help in TV measurement, we would be using it ourselves," said Megan Clarken, exec VP-global product leadership for Nielsen, in an interview.

One thing the ComScore-Rentrak announcement accomplished was to eclipse what she and other Nielsen executives are billing as a revolutionary cross-platform measurement breakthrough -- Nielsen's new Total Audience Measurement product.

Nielsen Global President Steve Hasker said on an Advertising Week panel that the product will count viewership across traditional and digital platforms by the end of the year. Ms. Clarken noted that this will cover not only conventional TV and digital ad formats but the whole range of content created by and for brands, provided it's properly tagged for tracking purposes. So the #LikeAGirl video produced for P&G's Always would rack up gross rating points in paid or earned digital and mobile media placements the same as the 30-second TV version did on the Super Bowl.

"While the ComScore/Rentrak merger has caught the attention of most investors, we believe Nielsen's pending release of Total Audience like-for-like audience metrics is actually more significant," Bernstein Research analyst Todd Juenger said in a note Wednesday. Mr. Juenger believes the industry will move to define a new currency soon, and that Nielsen will ultimately be the supplier.

CBS Chief Research Officer David Poltrack joined Mr. Hasker in an Advertising Week announcement of an initiative with Nielsen that will count viewing on the CBS All Access direct-to-consumer service.

But Mr. Poltrack in an interview welcomed the ComScore-Rentrak merger, which goes beyond widespread entrepreneurial activity in cross-platform content measurement.

"Having a second major player operating across all silos is very positive for the industry," Mr. Poltrack said. "The question is how will the industry support these two players."

Another question is whether WPP's involvement -- including a 16% stake in the combined ComScore-Rentrak -- will engender any resistance from competing agency holding companies or skepticism from marketers about using analytics from a WPP-backed firm to evaluate work of WPP media agencies.

A ComScore spokeswoman said the company will continue to be independent from WPP, which won't have a board seat. WPP took stakes both in ComScore and Rentrak earlier this year, and since then, she said ComScore has "seen an increase in spend by the other major agency holding companies."

Pivotal Research Group senior research analyst Brian Wieser wrote in a note Tuesday that Nielsen and ComScore both will likely continue to grow as third-party measurement becomes increasingly important to large marketers. Ultimately, their services may be more complimentary than competitive, he said.

Nielsen's position in ratings used as deal currency between marketers, agencies and media companies won't likely change as long as large marketers "continue to prioritize the use of age and gender-based metrics in their media planning and buying," Mr. Wieser said.

Contributing: Jeanine Poggi

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