Nielsen turmoil and TV measurement's future—everything brands need to know

In the week since this story was initially published on March 23, Nielsen has agreed to be sold to a group of private equity firms. You can read more about what's next for Nielsen, here. Please find the original story below. TV measurement has been in the midst of upheaval as Nielsen’s monopoly is called into question and measurement upstarts vie for its business. It began with a band-aid solution at the start of the pandemic, but Nielsen’s hastiness has revealed more deeply rooted issues in how TV ads are measured and sold in marketplaces. Even aside from Nielsen’s actions, TV measurement is a confusing space, one that requires buyers, sellers and services to all be on the same page. As the upfront season nears, marketers need to understand how the ecosystem functions, what exactly led to the suspension of Nielsen’s accreditation and where the industry goes from here. Below, Ad Age takes a look at these topics and answers several questions on the matter. Media measurement blog Tracking TV, social and digital updates Click here How has TV viewership traditionally been measured? Nielsen has been the standard by which TV audiences are measured for nearly 70 years. Nielsen’s measurement is based on its panel of more than 41,000 households, which the firm says covers about 100,000 individuals. TV viewing is measured using people meters, providing data on how many people are in the room. But the functional number is subject to debate (see below). Media sellers use these metrics as the basis for their audience guarantees, and typically strike deals against Nielsen’s audience demographics like adults 18-49 or 25-54. But Nielsen’s monopoly is being called into question due to several missteps. Read: NBCU certifies Nielsen measurement alternatives What are the issues with Nielsen ratings? Nielsen has long been criticized within the TV industry for being slow to adapt to changing viewing habits and the shift to watching content on mobile devices and streaming. But amid the pandemic, the validity of what Nielsen has long been believed to do well—measure live, linear audiences—has also been called into question. Nielsen needs to regularly update its national TV panel to maintain the quality of its data. What this has historically entailed is visiting these houses in person to conduct surveys and install equipment. Beginning in March 2020, however, COVID quarantines prevented Nielsen’s traditional home visits, so the company implemented workaround strategies, such as suspending the two-year term limit for panelists, providing financial incentives to retain panelists and reworking the onboarding process to allow for remote surveying and self-installation. Amid claims that these COVID workarounds led to undercounting audiences, TV network groups, led by industry trade body the Video Advertising Bureau (VAB), last year began calling for a suspension of Nielsen’s Media Rating Council accreditation. On May 10, the MRC revealed Nielsen undercounted TV viewing by 2% to 6% in February 2021, resulting in a loss of ad revenue for media companies anywhere between $39 million and $234 million. The VAB estimated in January that the Nielsen miscount cost networks $350 million and expects the overall total will be more than $700 million, with the biggest gaps among young, Black and Hispanic audiences. Read: Nielsen miscount costs TV networks $350 million Nielsen also admitted in December that it has under-counted out-of-home audiences since September 2020. Nielsen put its MRC accreditation for national TV measurement on hiatus in August, before the MRC ultimately suspended its accreditation a month later. At the time, Nielsen CEO David Kenny said he expected accreditation would be back sooner than many people think. Nielsen’s issues have also resulted in legal action: Byron Allen sued the company in March, alleging Nielsen committed fraud by claiming it could accurately measure their TV networks (which include The Weather Channel) when it really couldn’t. What is MRC accreditation? The Media Rating Council (MRC) is an organization that is responsible for accrediting audience measurement services in the advertising industry. In terms of TV measurement, Nielsen used to be the only service with accreditation, but that was revoked last year due to the company’s miscount. Competitors Comscore and iSpot.tv are currently being reviewed for accreditation. Just how much weight MRC’s accreditation holds is being thrown into question. The accreditation process can take years and even strong backers of the MRC and its accreditation say it has been too slow to keep up with the changes needed to measure digital media and connected TV. Audits needed to get accreditation are also expensive and can be burdensome for portions of the industry with relatively thin margins and staff. Read: Nielsen measurement hiatus tests MRC relevance What do Nielsen’s issues mean for the current state of TV measurement? The suspension of Nielsen’s MRC accreditation means that for the first time in decades, the TV measurement market is open to legitimate competition. Rivals offering alternative currencies may now seem more appealing to advertisers since they are operating on an equal playing field as Nielsen—that is, lack of MRC accreditation (Nielsen was formerly the only accredited TV ratings provider). Sign up for Ad Age newsletters From influencer marketing to agencies, get the latest news and analysis delivered to your inbox Click here Who are the companies offering measurement alternatives? VideoAmp, Comscore and iSpot.tv are the three biggest players gaining traction as alternative currencies, all of which measure linear and connected TV using large data sets. ViacomCBS added VideoAmp as a currency alternative to Nielsen for national linear and CTV deals, and Comcast said in February that it would let VideoAmp incorporate aggregated set-top box viewership data in its measurement, giving it a huge new data set. Univision is using Comscore to measure some local markets. And NBC Universal has certified iSpot for national cross-platform measurement and Comscore for local measurement. Discovery is working with Omnicom Media Group to test both Comscore and VideoAmp data for clients like AT&T and State Farm ahead of the TV upfront, and WarnerMedia has also brought in both currencies, as well as iSpot.tv, as alternative measurement partners. Calling for “measurement independence,” NBCUniversal issued a sweeping request for proposals from measurement companies in the summer of 2021 that saw more than 70 responses. NBCU selected iSpot.tv as its first alternative cross-platform measurement currency, inking a multi-year deal with the company that included measurement tests of both Super Bowl LVI and the Beijing Winter Olympics. The media giant also established its Measurement Innovation Forum to assist industry experts with weighing in on the future of the business and has signed on with a number of consortiums including the VAB’s Measurement Innovation Task Force. Other contenders include Samba TV, which is working with Disney, and Innovid, which announced a deal to acquire TVSquared for $160 million in February. This combines TVSquared’s linear TV data with Innovide’s strength in CTV. Read: Disney isn't giving up on Nielsen just yet What is the difference between measurement and currency? The words “measurement” and “currency” are often used interchangeably but mean two different things. Measurement refers to the actual data that a service compiles on advertising, such as how many people an ad reached and how many times people saw it. Currency, on the other hand, refers to the use of this data as a medium of exchange between ad buyers and sellers, and is used to settle ad pricing in national linear, local linear and streaming/CTV markets. Are Nielsen’s ratings still relevant? Yes, in fact, industry experts believe that Nielsen will still be the dominant currency during this year’s spring upfront ad haggle, when networks sell a bulk of their inventory for the new season. That’s because tests of alternatives are still in the early days and not enough data will be available during this year’s negotiations. What’s next for Nielsen? There’s an urgency for Nielsen to embrace transparency, verification and full audience representation. To this end, the company has been touting the development of a new currency dubbed Nielsen One. While initially announced before the revelation of Nielsen’s miscount and its subsequent loss of MRC accreditation, Nielsen One is largely a response to the ways in which consumer behavior has fragmented across various devices and platforms, providing deduplicated age and gender information across media platforms The new currency will be able to identify each individual ad that runs on live TV and find it on other devices like mobile and CTV. Nielsen One is scheduled to entirely replace its current solution by fall 2024. Read more: The pressure facing Nielsen's new owners Nielsen launched an alpha test of Nielsen One with Disney and Magna Global, among other buyers and sellers, in December. Disney expanded its relationship with Nielsen One in March, working with Publicis Media to help develop the platform and grow its presence in live events, specifically sports. It is expected that overnight ratings, which have been a staple to live events like the Super Bowl and awards shows, won’t be part of the Nielsen One package, according to people who’ve been briefed by Nielsen. Nielsen planned to release data from its alpha version of Nielsen One ahead of the upfronts along with its data from its TV Ratings panel. The VAB spoke out against Nielsen releasing both data sets, calling for more information on how the new currency data was created and to have “complete confidence in the accuracy of the information to explain the differences to buyers.” Meanwhile, in an effort to revive its image, Nielsen debuted a new logo and mission statement in October. And while buyout chatter emerged in March, with reports that Elliott Management was considering taking the company private, Nielsen ultimately rejected the offer. What is the future of audience guarantees? If Procter & Gamble’s Marc Pritchard had it his way, the TV industry would look to eliminate audience guarantees in favor of more real-time matching of ad supply with viewing demand. In a keynote at the Association of National Advertisers Media Conference in Orlando in March, the P&G chief brand officer Marc Pritchard issued “a call for innovation in media buying and placement,” saying, “it’s time to find a better way.”

Nielsen turmoil and TV measurement's future—everything brands need to know

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