Nielsen TV ratings are like the weather. People—in this case TV network executives—complain a lot, but are also resigned to the fact that they can’t do anything about it.
That truth has never been more apparent than amid the pandemic. TV network groups, led by the industry trade body the VAB, have protested loudly that Nielsen’s workarounds for maintaining its TV ratings panel during the pandemic have failed, shortchanging networks on viewership. On May 6—the same day the VAB finally collected enough data to suggest Nielsen was seriously undercounting TV viewership—Nielsen’s stock rose 2.5% thanks in part to healthy margins and renewals of multi-year network contracts with pricing escalators.
Fact is, despite efforts to move away from relying on Nielsen ratings as the currency for TV buying, the shift isn’t happening quickly enough, forcing TV networks to continue to buy Nielsen ratings.
But the latest network-Nielsen controversy is different from the long series of other such tussles. It includes a rare—the VAB calls it unprecedented—rebuke for Nielsen from the Media Rating Council, the industry body whose accreditation gives TV ratings their legitimacy as currency. Aside from acknowledging Nielsen did in fact undercount audiences—at least during the month of February—there’s also the thorny issue around its measurement of Black and Hispanic audiences. At a time of heightened sensitivity to racial justice issues, it’s clear that Nielsen’s recent TV measurement problems disproportionately impacted Black and Hispanic households.
All of this comes as a shift toward streaming deals and new competitors present a real threat to Nielsen’s standing as the prevailing leader.
Finding truth in the ‘truth sets’
The MRC, citing simulations Nielsen provided in response to network complaints, said on May 10 that Nielsen undercounted TV viewing by 2% to 6% and people watching TV by 1% to 5% in February. That only covers one month, but it supports the VAB’s contention that Nielsen has undercounted TV viewing since at least last summer, possibly costing media companies billions of dollars.
Workarounds Nielsen was making in the name of following COVID-19 safety protocols meant fewer panel households participating in data collection either because their equipment was on the fritz, they headed to live with in-laws, or they just stopped pressing buttons to indicate they’re watching.
Nielsen began showing a substantial and growing dip in total TV viewing and total people watching traditional TV starting in June. The VAB already had been arguing with Nielsen privately for months about the numbers and took its grievances public in April. For one thing, Nielsen’s decline in TV-viewing households wasn’t backed up by other data providers, such as Comscore and VideoAmp, which get their data from millions of set-top boxes and smart TVs.
Nielsen too has its own census viewing data from devices and smart TVs, which may be as big or bigger than those of competitors, and which it increasingly used alongside its panel data, says Mainak Mazumdar, Nielsen’s chief research officer.
Nielsen often refers to its panel as the nationally representative “truth set” that will keep the bigger census databases honest, since even those millions of set-top boxes and devices don’t cover everybody in the U.S. But during the pandemic, the bigger data set also had to serve as a sort of truth set for the panel.
Nielsen’s read of its own census data sources led it to conclude that the decline its panel showed in traditional TV viewership during the pandemic was real, Mazumdar says.
For the TV industry, Nielsen’s flub could serve as a much-needed explanation for why ratings have been on a freefall. But Nielsen in an April 9 blog post and white paper pointed to other issues, including a lack of sports, delayed series premieres and “programs produced in homes (and basements).” For example, October 2020 saw 13% fewer new episodes on traditional TV than October 2019, Nielsen said. It believes people shifting to non-ad supported streaming options like Netflix, Amazon Prime and Disney+ were in some cases cutting the cord or just not turning on old-fashioned “linear TV” at all.
Yet executives of Comscore and VideoAmp told Ad Age that their data showed no significant decline of households tuning into traditional TV over the course of the pandemic. Indeed, Comscore even shows sustained increases in traditional TV usage among Black and Hispanic households last year.
Then on May 6 came more evidence that Nielsen was undercounting TV audiences after all. The VAB had been pointing for weeks to 9,400 households that had stopped reporting TV watching or otherwise had spotty data reporting.
These so-called “impaired households” were leading to an undercount that Nielsen wasn’t catching because its field representatives had stopped going into homes during the pandemic to check on problems, says VAB CEO Sean Cunningham.
Some of those homes Nielsen had been servicing remotely, in some cases with field reps working from their cars, Mazumdar says.
But Nielsen resumed in-field maintenance of all panel homes on March 22. Within a month, Nielsen reps had visited about half those homes, fixing equipment in most, but temporarily or permanently suspending data collection from about 1,000, according to VAB. As soon as Nielsen resumed in-field maintenance, its data on total TV viewing began to rebound to levels not seen since June.