Nielsen audience measurement hiatus tests Media Rating Council relevance

There is a measurement legitimacy crisis brewing in the media industry not seen since 1964, when the Media Rating Council sprang up as the answer to questionable TV and radio ratings that spawned Congressional hearings a year earlier. Now, nearly six decades later, Nielsen is testing whether audience measurement accreditation from the MRC is even still relevant. Earlier this month, Nielsen requested a hiatus on MRC accreditation for its national TV ratings. It remains to be seen whether the MRC will accept a hiatus or suspend the accreditation entirely. Either way, Nielsen appears to be betting the market will shrug off its loss of accreditation and keep doing deals on its numbers anyway, at least in the short term as it prepares to launch its Nielsen One cross-platform measurement service in late 2022. So far, the industry heavyweight seems to be right. Even the TV network trade group VAB, which is pushing to yank Nielsen’s accreditation over problems with its TV panel undercounting audiences, particularly minority audiences, acknowledged that deals would still use Nielsen ratings while it fixes its problems. There’s no other accredited alternative, either. Nielsen has already experimented with foregoing accreditation: Its Digital Ad Ratings (DAR) service, used in 90% of digital media deals according to the company, has been on accreditation hiatus since late last year, while its local TV measurement service is also on accreditation hiatus. Yet its revenue appears to be unaffected so far, though the controversy over TV ratings has sent its stock down around 25% since May. In an earnings call late last month, just before Nielsen declared its TV ratings hiatus, CEO David Kenny characterized MRC accreditation as important, but not required. “We think it really builds trust in the industry,” he said. “But it’s a vote of confidence. It’s not required to use the product, and it’s not in our contract. So we’re not required to maintain accreditation. We certainly have it as a goal.” Nielsen has essentially said it’s putting resources it could be using to rescue its current TV accreditation into building its next generation Nielsen One cross-platform measurement. But one Nielsen competitor says the company could be staring at the prospect of four years without MRC accreditation for any of its key products in the interim. Nielsen in a statement noted that it has plenty of experience developing measurement products and getting MRC accreditations, but declined to project a timetable. MRC CEO George Ivie says Nielsen has been working to bring DAR back into active accreditation, though it’s unclear when or if that will happen. Has MRC become irrelevant? The MRC’s 1960s legacy and roots in vetting broadcast ratings have some people questioning whether the group has outlived its relevance. Accreditation is a process that can take years. Even strong backers of the MRC and its accreditation say that’s too slow to keep up with changes needed to measure digital media and connected TV. And the audits needed to get accreditation are an expensive burden on a portion of the industry with relatively thin margins and staff. MRC’s Ivie says the process takes as long as needed for audits to ensure research firms are delivering what they promise. The process also can be considerably faster for newer tech players with relatively simple automated processes that don’t involve panels of people, he says. Omnicom Media Group said in a statement to clients earlier this month that Nielsen’s move to request a hiatus “indicates they believe they can remain the single currency for transactions in national linear television without the accreditation. In the near term, they are probably right. But the loss of accreditation opens the door for other parties to pursue accreditation and challenge Nielsen’s currency status. We do not anticipate Nielsen will try to prevent their potential suspension by the MRC, but their path for accreditation for Nielsen One will face more obstacles given the industry’s displeasure.” Realistically, other industry players, including OMG, also are betting they can do deals on measures that aren’t MRC accredited in the near term – or longer. People familiar with the matter say TV networks pushed their case to revoke Nielsen’s accreditation largely to break the company’s de facto monopoly on TV ratings and open the marketplace to rival deal currencies from Comscore, VideoAmp and others, which also aren’t currently accredited to measure TV audiences. The expectation is that Nielsen rivals will ultimately get MRC accreditation, but waiting for that to happen before using the newer services, which cover tens of millions of households rather than the tens of thousands in Nielsen’s TV panel, would mean waiting years to try alternatives. So they’re increasingly using rival audience measurements from companies that also aren’t MRC accredited, and in some cases, have yet to even apply. Fox and ViacomCBS have recently announced they are willing to strike deals with advertisers using Nielsen or Comscore data. Last week, NBCUniversal announced a sweeping request for proposal for audience measurement and other deal currency alternatives with 70 firms participating, and MRC accreditation or applications for it, are not necessarily required. A spokeswoman for NBCU does however, say, “our long-term hope is that they may all pass through the MRC accreditation process.” For its part, OMG, while firmly backing the importance of MRC accreditation, has incorporated unaccredited VideoAmp data into its Omni data platform, and is testing its use in automated TV buying via a supply side platform run by the TV consortium OpenAP. OMG also hopes to use its recently incorporated attention measurement from Amplified Intelligence as a media deal currency in the future, but AI has yet to begin an MRC application. Some services used as TV deal currency aren’t even contemplating MRC applications yet. Take EDO, a measurement firm co-founded by actor Edward Norton, which measures the impact each individual ad placement on TV has on Google search queries for brands. It works around the complexity of counting people watching ads by measuring whether ads make people interested enough to type a brand name into a search box. EDO is participating in the NBCUniversal RFP. It counts Toyota, Interpublic’s MediaHub and Xandr among its clients, and it’s being used as currency in some TV deals that include guarantees, according to CEO Kevin Krim. But he says he has never once been asked about MRC accreditation by a client in six and a half years. “I’m the kind of person who if somebody asked me I would study it, but I haven’t even bothered learning, because it’s never asked,” he says. “But we are held to a super-high standard of accuracy by our clients.” Why the MRC matters Yet even some critics of the MRC say its accreditation remains an important consideration that agencies and marketers, including Procter & Gamble, ask about early on in any meeting. Accreditation may be slow, but research firms get credit from agencies and marketers in the interim for making the effort and providing transparency, industry insiders say. The MRC is the only industry body that independently evaluates the quality and accuracy of media measurements. Its painstaking audits by Ernst & Young may not guarantee that the numbers are accurate, but they do certify that measurement firms are abiding by their stated processes. Four years ago, Procter & Gamble Co. Chief Brand Officer Marc Pritchard called on digital media to have the same kind of MRC-accredited third-party audience measurement as TV did. Of course, four years later, TV is losing that, and digital never really had it, especially not for demographics like those used in Nielsen-denominated TV deals. Comscore, for example, has an accredited product that can measure demos across much of the web, but it’s not currently accredited for that data inside Google properties. But P&G still sees progress, thanks to the MRC.. “We now have one viewability standard; third-party, MRC-accredited measurement verification of viewability and ad fraud mitigation, and third-party reach and frequency measurement (with MRC accreditation in process) enabled by platforms,” P&G said in a statement. “This has enabled us to elevate P&G data for our decision making.” Comscore is preparing to file for a new MRC accreditation of its TV ratings product, which lapsed years ago, and has even sped up the timetable in light of recent developments, the MRC says. “We’re a supporter of the MRC,” says CEO Bill Livek. VideoAmp likewise intends to seek MRC accreditation “when the timing is right,” says Josh Chasin, chief measurability officer. While Nielsen may be willing to let its MRC accreditations lapse for a time, that could also come at a price. Nielsen’s points of differentiation from all those dozens of competitors in the NBCU RFP have historically boiled down to two things — having the only MRC accreditation to measure TV audiences at the person-level, and the national panel that accreditation was based on. Now Nielsen doesn’t have that MRC accreditation because of issues over accuracy of data from its national TV panel. That same panel is intended to help calibrate Nielsen One, and is the major differentiator against competitors that have had years of a head start on Nielsen in dealing with big data sets from household devices. Nielsen, for its part, says problems with its panel are already being addressed. They were brought on primarily as more households stopped reporting data during the pandemic and Nielsen paused home maintenance visits. But the VAB has cited numbers suggesting Nielsen is still underreporting TV viewing, in part based on other services that rely on millions of household devices. Why accreditation takes so long While MRC audits and accreditations can take years, it’s not because the group is some hulking bureaucracy. It’s tiny compared to other industry organizations: About 160 media companies, agencies and clients each pays membership dues of $16,500, providing an annual budget of $2.6 million that funds seven staffers. Audits conducted by Ernst & Young contribute to the cost and slow pace. It’s worth noting the MRC does not keep any portion of these fees. Applicants can speed things up by paying for more auditors. And by some accounts, Facebook and Google got relatively quick approval for their own audience measures that way. But more auditors also require more internal staff to gather data and answer questions, which many research firms don’t have. Once an audit is done, the MRC board, made up of all members, votes on accreditation. That’s rarely a straight up or down vote for more complicated measures, say people who’ve been through the process. Most of the time a recommendation is made for fixes and a second round of audits, which can take additional years and money. Once a service is accredited, making methodology changes mandated by technology or market conditions means going through the process all over. One industry veteran compared accreditation to painting the Golden Gate Bridge, which takes years and begins anew as soon as it’s done. Ivie disagrees with the notion that the process is bogged down unduly. Improvements brought on by those second-round audits provide much of the value in accreditation, he says. Where things get most complicated is evaluating panels like Nielsen’s, he says. That’s likely to hamper Nielsen competitors, too. TVision, a firm that originally built a panel to measure people’s attention to ads, has become the go-to choice for several Nielsen rivals -- including VideoAmp, iSpot, Xandr and 605 -- who need person-level data to calibrate the household data they track using millions of smart TVs, set-top boxes and other devices. These device data sets are giant, and often called “census,” but they’re not really representative of the U.S. population. They also can’t measure the still substantial number of people who watch TV over the air (16 million as of 2019, per Nielsen), or say exactly who in a household watches. Networks have been asking Nielsen competitors to provide person-level data, and licensing TVision’s panel data could help competitors solve these problems. But it’s not clear who will pay for TVision’s panel to get MRC accredited, or make it bigger if needed. “Technology investors just don’t understand panels,” says TVision CEO Yan Liu. While he’s been talking to Ivie about accreditation, Liu says it won’t be as simple as vetting his panel once for use across multiple services, because they each use the panel differently. So TVision would have to be audited as part of every other firm’s accreditation. Ultimately, that may be like trying to paint a whole bunch of Golden Gate Bridges simultaneously with nothing akin to a federal infrastructure budget to foot the bill. Liu says measurement firms and TV networks still haven’t come up with a plan to pay for it all.

Nielsen audience measurement hiatus tests Media Rating Council relevance

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