When NBCUniversal last week put out an RFP for measurement partners, it was the biggest sign yet that the industry has lost faith in Nielsen.
The RFP came after Nielsen put its Media Ratings Council (MRC) accreditation on hiatus after undercounting household viewership during the pandemic. The MRC, run by George Ivie, is a trusted independent industry body formed in 1964 with a stated mission “to secure for the media industry and related users measurement services that are valid, reliable and effective.”
The service is the third from Nielsen to lose MRC accreditation in the past year, including its Digital Ad Ratings (DAR) service, which it paused in October 2020, and local TV ratings, which it suspended in January.
Nielsen has placed its bets on Nielsen One, the cross-platform measurement framework it has promised to roll out in full by 2024. But stakeholders across the industry agree that 2024 is far too long to wait, given how quickly consumer viewing habits shifted during COVID, and especially now that Nielsen is no longer an accredited service.
Buyers began to move away from just using Nielsen for planning purposes years ago. VideoAmp, for example, powers Omnicom’s TV planning tools, and from what I hear, is about to kick off a major test with holding companies after Labor Day to see how its currency matches up against Nielsen’s. Sellers are looking for new partners as well; Comscore, for instance, is growing its remit with ViacomCBS.
Still, Nielsen gross ratings points (GRPs) remain the only independent TV currency in the market. Most buyers and sellers I’ve spoken with agree that NBCU's bold move is, for lack of a better term, the kick in the butt the industry needs to finally move forward.
But they’re also waiting with bated breath for the massive changes, complexities and periods of confusion leading up to the new world order.
1. Juggling multiple currencies
Industry stakeholders agree that transacting on multiple currencies that correspond to advertiser business outcomes is the way forward. Jo Kinsella, president at TV measurement company TVSquared, pointed to the stock market, which trades on multiple currencies, such as futures and options, as an example. Similarly, she says, advertisers can transact on various branding and performance metrics.
Buyers are becoming more open to transacting against multiple currencies, says Michael Perlman, chief revenue officer at TVision, a TV measurement company that tracks attention. TVision recently worked with AB InBev, for example, to buy ads off of guaranteed attention metrics on A+E Network.
“There is room for multiple players,” he says. “The goal of a particular campaign could dictate the right approach for deploying media.”
Media buyers, however, are hesitant. Some worry that using multiple currencies will obscure the methodology to work in the networks’ favor, which can choose to transact against whichever currency values their inventory the highest. Multiple currencies will also make it difficult to compare ratings across networks. And, agencies must deliver on strict pricing and savings guarantees from procurement, and multiple currencies could make it difficult to reconcile costs.
2. Getting stakeholders on board
While the industry applauds NBCU’s bold stance, you’d be hard pressed to find a buyer that wants a major media seller determining TV’s future currency.
Media buyers agree that any new currency adopted must receive cross-industry input and approval, as well as third-party accreditation from an independent body (most likely the MRC). Otherwise, as one buyer put it, the currency will feel “rigged.” Another buyer pointed out that it will be difficult to make the case to clients to move away from Nielsen to a new currency dictated by a media seller.
Collaboration, however, is easier said than done; getting two parties on opposite sides of a transaction to agree is tricky. Many are banking on the MRC to endorse and validate a new currency as an independent body.
But the jury is still out on whether the MRC has the appetite to create new types of accreditation for multiple currencies. As one sell-side spokesperson said, if they don’t do it, “I don’t know who steps in.”
3. Understanding demos
Despite Nielsen’s issues, it's still the largest independent panel backed by demographic household data. The Nielsen panel, though imperfect, provides a critical foundation for understanding who is watching certain types of content, beyond just what is being watched.
There are, however, rising alternatives. TVision has a 15,000-person panel that tracks not just who is in the household, but also who is watching what, using facial recognition and eye tracking technology along with automatic content recognition (ACR) data. Many Nielsen contenders are licensing TVision’s dataset to underpin their systems with demographics.
As the industry slowly moves away from broad, demo-based buys in favor of outcomes, Nielsen’s panel may wane in importance. As one media buyer put it, demos become arbitrary when you can measure actual sales or business goals.
4. Moving past buy-side inertia
This, in my opinion, is the most significant hurdle, and it’s what has held the industry back from adopting a new currency for years. As one media buyer put it, the challenge is large and “people hope it will get solved for them.”
Nielsen’s historical data backs into most clients’ planning processes and helps them determine volume discounts and pricing. Demand and planning haven’t evolved to rightsize pricing, as clients continue to rely on old media mix modeling formulas that are no longer accurate. Even just starting to translate Nielsen currencies to a new baseline of truth would be problematic for many clients.
Another barrier is cost. Agencies spend vast amounts of money with Nielsen (one buyer estimated the costs come in just behind rent and employee salaries). If the industry were to adopt multiple currencies, costs could skyrocket, and it would be difficult for agencies, already with razor-thin margins, to offset those costs to clients.
While tough, most agree these challenges are not insurmountable. Ready or not, the next era of measurement is upon us.