Why TV upfront ad deals are still trading on Nielsen instead of new currencies

As TV upfront negotiations progress, the go-to currency remains Nielsen’s legacy panel, despite years of efforts to push through alternatives, according to five media buyers with knowledge of negotiations. The transition from striking upfront deals on Nielsen’s legacy panel to using big datasets from the likes of VideoAmp, iSpot and Comscore, as well as Nielsen, has dominated industry conversations for years. Still, yet another upfront market begins with little sign of change. 40 under 40 entries are open The final deadline for nominations is Aug. 2 Enter here “Until we have stability, reliability and consistency in our [linear] demo trading, we will have quietness in the marketplace,” said Celeste Castle, executive VP, head of research and measurement at Dentsu, referring to the declining discussions around new currencies during the upfronts. However, the currency conundrum serves more as a marker in the transition of advertisers away from linear TV than as a condemnation of measurement companies’ progress. Currently, alternative currencies have claimed the largest stake in advanced audience deals. Each of the buyers described varying uses of alternative currencies for advanced audiences in upfront deals—one buyer said “less than a handful” would be transacted on non-legacy currency, while a second said their clients were moving quickly into advanced audience buying, equating to about 20% to 30% of upfront deals using VideoAmp. These ad buys are mostly in streaming and digital video spaces, which buyers have previously told Ad Age aren’t as critical to commit to in the upfront market because ad space is abundant. Instead, upfront talks focus heavily on event content with limited inventory, primarily sports, which still mostly air on linear TV. New currency providers’ path to certification for transacting on personified demos—traditional age and gender metrics—has been slower than their third-party approval for advanced audience deals. Castle said that while many advertisers are transitioning to audience-based buying in streaming, the need for measurement to be consistent across streaming and linear is broadly holding back mass adoption of new currencies. “Linear and cable still make up almost 50% [share of TV viewership], so we cannot leave that behind,” said Castle. Until new currencies are able to support measurement of traditional demo-based measurement, “then most people are probably going to stick with legacy measurement until those enhancements have been worked out.” Also: Why streaming platforms are lagging in TV upfront deals Prior to the upfront’s start, only 15% of advertisers and agencies said they were “very interested” in transacting on non-legacy currency in this year’s market, according to an April survey from iSpot. More than a quarter of respondents—27%—said they had no interest in alternative currencies, while 58% said they needed to learn more about them. Across Ad Age’s conversations with buyers, there appear to be three areas of concern that are preventing the industry from adopting new currency solutions in the upfront market. Data stability The process of weaning advertisers off of Nielsen’s legacy panel measurement in favor of big datasets, whether Nielsen’s or others’, has been slower than expected. Most of the media buyers described a distrust in these datasets for predicting viewer numbers used as the basis for audience guarantees. The biggest solve would come in the way of third-party certification from the Media Rating Council (MRC) or U.S. Joint Industry Committee (JIC)—MRC accreditation for Nielsen’s legacy measurement was restored last year after a nearly two year suspension, and Comscore is the only big data measurement provider to receive MRC accreditation for national demos. Comscore and VideoAmp were certified by the JIC for transacting on advanced audiences, but neither was certified for national demos. Although each media company has struck deals with preferred measurement providers, the piecemeal nature of these certifications and endorsements has remained a sticking point for buyers in making the swap to wide adoption. The first media buyer described large week-to-week discrepancies across the board in reports generated on big datasets, with audience numbers sometimes being higher than expected one week and then lower than predicted the next. “There’s concern about whether the data can be fully trusted in order to transact on it as a currency because of how it gets reported with under- and over-delivery—there’s a lot of money involved in that,” said the buyer. For example, the buyer said unreliability in currency data can impact the delivery of makegoods for networks under-delivering on audience guarantees, which can be “damaging to both sides.” Pricing Should the stability of big datasets be solved, the next battle will be at the negotiating table, according to the buyers. Compared to panel-based measurement, big data sets are substantially larger—Nielsen’s panel, for example, includes approximately 40,000 households compared to its big data set, which encompasses 45 million households, according to the company. Measuring TV viewership against larger audience samples increases viewership numbers in most cases, said two of the buyers. As such, the buyers will seek either benefits from TV sellers for transitioning to new currencies or to establish a standard conversion rate to accommodate for the difference in pricing their inventory, i.e. rate reductions. Otherwise, the first buyer said, the change risks forcing them to either pay more for the same amount of inventory or get less inventory at the same rate they’re used to paying. “That’s a fundamental issue that exists as the data gets better in theory,” said the buyer. “So you can’t just change the currency. If we were to change the currency and the media partner weren’t going to give us a benefit, they win all day long.” The first and second buyers said that negotiation will be hard-won, particularly in the current upfront market where TV and streaming companies are fighting for larger shares of ad budgets as marketers increasingly shift dollars away from upfront to shorter-term dealmaking. A third buyer added that the price of maintaining contracts to implement each of the measurement providers is another cost burden that the industry has yet to solve. While many anticipate the future of measurement to balance multiple providers for any one deal, the cost structure of licensing data from multiple providers could be a determining factor in how many remain in use. “We can’t hold a retainer like we all do with Nielsen for millions of dollars—we can’t do that with VideoAmp and Comscore and iSpot and still function as agencies,” said the buyer. Industry consensus Pricing concerns will continue to grow, as each of the five buyers agreed that future dealmaking will likely involve a collection of measurement providers servicing different types of deals. Two of the sources specified they planned to use Nielsen’s panel for deals based on broad demo guarantees, which are common for buying linear TV inventory, and VideoAmp for advanced audience guarantees, which are mostly done in streaming. “We’re not in a world where it’s all or nothing,” said the second buyer, specifying that it was never the goal to endorse a single new currency provider; however, to make progress, both buyers and sellers will need to agree on a select few. The buyer said if each media agency selects a different company as its preferred currency provider, and each TV seller also has its own approved list, it will be impossible for the measurement companies to develop the ability to become interoperable across the industry. Recent news: Media buyers react to upfront ad pitches The first buyer suggested major media companies “rip the Band-Aid off” and force progress by having all deals done on new currencies. While it would take the majority of TV sellers to do this for it to work, said the buyer, some media companies have been aggressive in seeking to strike deals on new currencies, particularly in the diverse-owned and targeted space. TelevisaUnivision and Allen Media Group have both been vocal about doing all deals on new currency, arguing that Nielsen’s panel has historically undercounted multicultural audiences. And at CES, NBCUniversal announced it would endeavor to do 50% of its business in 2024 on advanced audiences, which would equate to growth in the use of new currencies. Dentsu’s Castle said that although it will be a major progress marker when a measurement provider achieves broad accreditation for holistic measurement, it won’t be game over for the other competitors. She added that moving forward, making decisions on which company’s product to use in any given deal will be dependent on interoperability across media companies, as well as which best match client goals. “Those all will come into focus on which measurement partner we use moving forward, but it’s not going to be one or two,” said Castle. Ad Age Leading Women Luncheon Join us Aug. 7 in New York as we recognize this year’s honorees Buy your ticket today

Why TV upfront ad deals are still trading on Nielsen instead of new currencies

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