Paramount and Nielsen have been in a standoff since their contract expired Sept. 30
It’s been over a month since Paramount’s contract with Nielsen expired, leaving the media giant without the measurement company’s data amid a dispute over renewal terms.
Advertisers and media buyers are caught in the middle of the standoff, grappling with the sudden shift to dealmaking with Paramount on VideoAmp’s big data set. Media buyers who spoke with Ad Age had differing views on the readiness of buying using VideoAmp at the scale needed.
Buy-side complaints have apparently escalated to the point where Nielsen’s CEO, Karthik Rao, sent a letter to clients on Nov. 11 addressing the “unfortunate turbulence.”
“Contrary to what Paramount has shared, we are not seeking ‘substantial price increases’ in our proposal,” Rao wrote in the letter obtained by Ad Age (and can be read in full at the bottom of this article). In September, Paramount President of Advertising John Halley sent a note to advertisers saying that Nielsen was seeking price hikes and that “Nielsen’s fees already exceed the total advertising revenue of the networks being measured” in some cases.
Nielsen declined to comment on the letter or its ongoing talks with Paramount.
Rao wrote that his letter was prompted by negative feedback from agencies and advertisers about dealmaking with Paramount without Nielsen, including concerns over “Paramount’s disregard for accredited data.”
To be sure, Nielsen operated without MRC accreditation for 19 months from 2021 to 2023, and some of its existing measurement products on the market remain without the MRC’s blessing, including its panel plus big data product (which is in the process of MRC review). VideoAmp is pursuing MRC accreditation.
Responding to Paramount selecting VideoAmp as a primary currency in Nielsen’s absence, Rao wrote: “Unlike Nielsen, which adheres to rigorous quality and accuracy standards, this substitute provider’s data lacks the precision to deliver reliable, actionable insights, particularly for over-the-air broadcasting and live sports. It also does not measure diverse viewership—an insult to audiences that have a painful history of being overlooked and underserved by our industry, and to your clients who rightly value and seek to serve those audiences.”
VideoAmp’s Chief Commercial Officer Pete Bradbury wrote in an email to Ad Age: “We are proud to be Paramount’s preferred measurement provider, after two years of preparation in advance of their decision to move to VideoAmp. We understand that change is hard, but are steadfast in our commitment to deliver a multi-currency future for the industry.”
Rao’s letter was cause for alarm for some media buyers, including one who said it illustrated a larger disparity between Nielsen and Paramount than they’d anticipated. The buyer, who spoke with Ad Age on condition of anonymity, said that while the transition from Nielsen to VideoAmp with Paramount was initially smooth, it has increasingly burdened agencies with managing data from both measurement companies for clients, which isn’t sustainable long-term.
“Paramount would love to see us get comfortable with VideoAmp, and just continue with it,” said the buyer. “And that’s not happening.”
A second buyer, also speaking on condition of anonymity, said that while the transition to VideoAmp with Paramount hasn’t been easy, “most people are not willing to try new opportunities because they can be hard.”
“To get to a point where we are using the best possible measurement services, we need to test all of them in real world scenarios, which is what we are doing now,” said the second buyer. “Nielsen may very well prove to be the best partner in the space, but the best way to figure that out is to test everything.”
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Whether or not Nielsen and Paramount renew their contract will not impact their dealmaking with Paramount, the buyer said. The first media buyer, however, said they’ve already seen Paramount miss out on investment in the scatter market because clients didn’t want to have to “deal with a second source of guarantee.”
Two measurement industry executives said Paramount may be willing to forgo some deals, particularly in scatter, given what they described as substantial savings involved in not using Nielsen, and because VideoAmp will generally show larger audiences, particularly in younger demos, than Nielsen. One executive said the Nielsen cost is second only to talent costs as a line item for networks.
It’s unclear whether Paramount management will be willing to strike a long-term deal with Nielsen prior to closing of its merger with Skydance next year, given new ownership’s interest in cutting costs, with Nielsen’s contract identified as one focus area for savings, according to a June report by CNBC. And even then, these measurement executives said, the bigger question is whether buyers will be willing to forgo NFL games and other key programming in the upfront if they can’t trade on Nielsen.
“VideoAmp has been working diligently with holding companies, over 50 independent agencies and clients directly on the Paramount transition, now supporting billions in media guaranteed on VideoAmp data,” wrote Bradbury. “VideoAmp is sharing early reads (overnights), sports and syndication data with buy-side partners. Our data is currently being publicized by Paramount, highlighted by Yellowstone’s record breaking premiere.”
A Paramount spokesperson pointed to the media company’s recent third quarter call with investors, in which co-CEO George Cheeks said the dispute was “not about affordability. It’s about getting the value we need for what we pay … as we all know, linear audiences, especially basic cable linear, are declining and shifting to streaming. This, of course, is going to affect how we look at the appropriate spend here.”
Although Paramount and Nielsen’s partnership has lapsed before, this impasse comes as the TV marketplace finds itself in the throes of ongoing measurement upheaval, driven by the push to transition from Nielsen’s panel-based data to big datasets from the likes of VideoAmp, Comscore and iSpot, in addition to Nielsen itself.
Three buyers who spoke with Ad Age said they hope to see VideoAmp and its peers develop into full-fledged competitors to Nielsen’s panel, but the month since its implementation for Paramount deals has shown that it is not yet a viable alternative.
VideoAmp’s certification earlier this year from the U.S. Joint Industry Committee, of which Paramount is an active member, came with the caveat that it should improve its capabilities in person-level measurement, or the ability to count individuals and break down viewing by age and gender demographics. This is a primary method for transacting broadcast TV and is of particular importance to fall ad deals with Paramount, whose CBS network airs major NFL games.
A third buyer said that while their agency has been testing VideoAmp alongside Nielsen for the past few years, there isn’t enough historical data for them to contextualize how clients’ marketing is performing for planning and optimization across multiple partners, the majority of whose deals have been struck on Nielsen data.
To be clear, the issues described with VideoAmp are persistent challenges in the broader transition to big data sources. The process has required agencies to build historical datasets for each platform and adapt to different methods of data collection, such as cable boxes and smart TVs, to better capture cross-platform viewership, in contrast to Nielsen’s panel, which has relied on a limited group of respondents.
Another issue is the vast differences in the audience delivery reported by Paramount and agencies using VideoAmp, according to two buyers. A fourth buyer said that these gaps well exceed the reasonable margin of error between buyer and seller (which they put at 15%).
That’s not to say VideoAmp hasn’t quickly implemented changes in its product over the past month. While all four buyers said the company’s measurement initially wasn’t capturing out-of-home viewing for sports, the second buyer said it has since been implemented for NFL and college football. A VideoAmp spokesperson said OOH for NFL and college football has been available since September.
As agencies still have access to Nielsen’s measurement of Paramount channels, the fourth buyer said they would continue to measure and report performance to clients on Nielsen data “until we can gain greater confidence and can tell our clients convincingly that it’s working and working well.”
“You need to be able to feel confident in what you tell your clients on why you make a change,” said the fourth buyer. “And it can’t be because Nielsen’s charging Paramount too much.”
A person with knowledge of dealmaking said that while agencies are able to compare datasets for deals struck with Paramount, all measuring and posting is being done on VideoAmp.
The first buyer also said they will continue to use Nielsen to measure delivery on deals with Paramount. This ultimately creates a game of telephone between the agency and Paramount in reporting any action needed from either party in addressing under- or over-delivery on terms.
While the first and fourth buyers both said it is a larger workload for agencies to be doing the analysis of Nielsen data that would historically be shared by both buyer and seller, the first buyer said they’re “not as concerned about the additional work for us because if somebody is standing up to Nielsen, that’s a positive thing. But not to the detriment of my clients’ business. ... The shortcomings of VideoAmp have been magnified during this time.”
At Nielsen, we rarely if ever comment publicly on our ongoing business negotiations. But I feel compelled to update you on the current dialogue between Nielsen and Paramount Global.
Nielsen has been engaged in negotiations with Paramount Global for many months now, and we have heard loud and clear that the current lack of an agreement has created unfortunate turbulence for many of you. I want to state two things very clearly: (1) we are dedicated to sincere and constructive discussions and remain eager to reach a new agreement with Paramount; and (2) we will not let inaccurate information about our position go unaddressed.
Contrary to what Paramount has shared, we are not seeking “substantial price increases” in our proposal. We are simply aiming to maintain fair value for the quality of our services—services that are empirically better than at any point in our history. Our proposal to Paramount is eminently reasonable and commensurate with the value our services deliver. We’ve worked tirelessly to update our tools, refine measurement capabilities, and enhance your monetization options. These innovations are the result of significant investments over multiple years to build and also to maintain/enhance going forward. It’s hard work that we love doing, because it provides best-in-class, MRC-accredited solutions for our clients’ increasingly varied needs.
Unfortunately, Paramount is demanding a nearly 50% reduction in the price of our service. This not only undervalues our substantial investments, but makes it unsustainable to provide the support and quality that all Nielsen clients rely upon. We can not reset the value of our services to a fraction of their worth due to the circumstances and demands of one client. We are an industry solution and price integrity matters for the role we play in the industry.
In the interim, Paramount’s decision to rely exclusively on a non-MRC-accredited provider raises additional concerns. Unlike Nielsen, which adheres to rigorous quality and accuracy standards, this substitute provider’s data lacks the precision to deliver reliable, actionable insights, particularly for over-the-air broadcasting and live sports. It also does not measure diverse viewership—an insult to audiences that have a painful history of being overlooked and underserved by our industry, and to your clients who rightly value and seek to serve those audiences.
I know many of you are anxious about Paramount’s disregard for accredited data. We’ve heard already from many clients about the impact on their ability to connect with desired audiences, meet campaign goals, and maintain consistency in marketing strategies. I encourage you to reach out to me directly with any questions or concerns. We’re here to support your business in any way we can.
I remain hopeful that we will reach a deal with Paramount Global—and I look forward to getting back to communicating about what we do best: innovating and expanding our measurement tools to meet your evolving needs. I hope by providing some additional context on our position you’ll understand why I felt it so important to step forward now to correct the record.
Thank you for your continued partnership.
Warm regards,
Karthik
Contributing: Jack Neff
