Ad Industry Seeks Alternatives After Nielsen Loses Seal of Approval

A multiverse of measurement options might emerge

By Jon Lafayette

The TV industry is trying to figure out how it will do business in a world where Nielsen is no longer the dominant measurement company.

On Sept. 1, the Media Rating Council stripped its seal of approval from Nielsen’s national TV measurement product, long the industry’s gold standard. The MRC’s historic move capped a year in which revelations about Nielsen brought decades of complaints about the ratings leader to a head and created fresh opportunities for a legion of rivals.

“The only thing we know for sure is how dissatisfied a lot of the networks are and how serious they are about advancing measurement,” said Sean Muller, CEO of iSpot.TV, one of the companies hoping to move into any void created by Nielsen’s issues.

The revelation that Nielsen undercounted viewers during the pandemic, potentially costing TV networks hundreds of millions of dollars — a charge made public by the industry trade group VAB and confirmed by the MRC — brought a new focus to the constant criticism Nielsen has historically received as the industry’s umpire.

A More Complex Picture
“The reality is that data has never been more important to content companies, and the challenge of determining exactly who is watching what, when, across multiple platforms has never been more complex,” AMC Networks president of commercial revenue and partnerships Kim Kelleher said. “Any company working in this space needs to evolve and deliver accurate and comprehensive information to its customers and the entire competitive ecosystem that exists around content. That’s the price of admission today and going forward, bottom line.”

In a letter to clients sent after Nielsen’a accreditation was suspended, Nielsen CEO David Kenny said, “Rest assured, we will continue to provide the most representative, reliable and robust audience measurement available, which the market can continue to trade on with confidence.”

Kenny said Nielsen was working on fixing its panels, which became smaller and less reliable during the pandemic; strengthening its business continuity and recovery process; improving how it communicates changes in its methods; and changing the way it incorporates broadband-only homes in ratings.

To measure the industry in the future, Kenny said the company is working on Nielsen One, which aims to use the most advanced data science to reflect the new ways people are consuming media, ensure inclusion and representation, enable comparability across all platforms and de-duplicate audiences.

Comcast’s NBCUniversal has been the most public about trying to create alternatives to Nielsen, sending out requests for proposal to more than 50 measurement and data companies in a quest for an independent system with multiple vendors providing multiple metrics to replace the current “outdated” approach to counting viewers at a time when streaming is on the rise and pay TV subscription continue to erode.

NBCU said that 80% of the companies it called on are participating, including Nielsen. Additional companies have asked to join the process. NBCU said it expects to wrap up its process by the week of Sept. 20.

Discovery president and CEO David Zaslav also has been a public critic of Nielsen, whose failure has cost media sellers money. Behind the scenes, Discovery is also seeking some form of redress from the measurement company, according to sources. Discovery is also preparing to use alternate sources for measurement as currency in negotiations with advertisers as soon as the fourth quarter, the sources said. Discovery officials declined to comment.

As angry as the industry has been with Nielsen in the past, efforts to supplant it have fizzled. This time around, the outcome might be different.

“I think if there’s a memory of 2021, I think it will be as the year when real change finally got set in motion on measurement and currency after decades of frustration,” VAB president and CEO Sean Cunningham said.

The suspension of Nielsen’s accreditation removes the blanket endorsement from the MRC and means instead of treating Nielsen metrics as an agreed-upon truth set, buyers and sellers will know the data is still extremely faulty. “It’s now a starting point. There’s a need to bring in other measurement data bases, benchmarks and currencies, which started in the upfront,” Cunningham said.

How would such a multiverse of measurement work?
If the buyer favors one set of metrics, and the seller likes another, “that becomes part of the art of the deal,” Cunningham said. “The marketer wins ultimately, because you’ve got increased competition for market share. That’s all the fuel for innovation and accelerating product development you could possibly ask for.”

In the past, attempts to replace or supplement Nielsen have collapsed in part because clients weren’t thrilled about paying multiple ratings suppliers.

Cunningham acknowledged buyers and sellers would incur extra costs with a multiverse of measurement options. “But I think those expenses are well incurred if we can assure marketers we’re getting closer to the truth and there’s some real accuracy in the things they’re looking to get business outcomes from.”

Rivals Ramp Up Efforts
While there are thousands of data and research companies, the ones most often mentioned as being able to supply the measurements the industry has been looking to Nielsen for are Comscore, iSpot.TV and VideoAmp.

Even as Nielsen was losing accreditation, rivals were stepping up to get the MRC’s checkmark. Comscore said it was working with the MRC to accelerate the start of the process that could lead to accreditation. iSpot’s Muller said his company is in the pre-assessment phase of the MRC’s accreditations process.

“We’re an independent measurement company and I think some industry body should be there to ensure that measurement companies are doing what they say they’re doing,” Muller said. The MRC process is laborious, lengthy and costly. “Maybe some innovations are needed there as well,” he said.
VideoAmp said it is still evolving the methodology used to integrate data. “It’s in the industry’s interest. We’ll be there when we’re ready,” VideoAmp chief product officer Cameron Meierhoefer said.

Muller said success in the measurement business now is all about trust. “Trust in the current currency is on a very rapid decline at the moment,” he said. “You build trust by having really good products that are consistent, that are accurate, standing behind them and getting people to adopt them. It doesn’t happen overnight.”

iSpot.TV built a business by cataloging commercials and using smart TV data to measure how many people watched each one. It now also measures and benchmarks how well ads perform in terms of business impact. NBCU uses iSpot’s data to show that Olympic ads were having an impact. Discovery in May said it would use iSpot to give advertisers information about the impact of the commercial run across its linear and streaming properties in the United States.

Muller said the industry needs separate systems, one to measure advertising and evaluate its impact and value, another to assess the popularity of content to help decide which shows to produce and how to distribute and schedule them. That’s especially important in an environment where dynamic ad insertion means that different viewers might see different commercials even while watching the same show at the same time.

Ultimately, there will be several companies offering those measurements, but not too many. “Once [buyers and sellers] decide what they want to negotiate on, the best and most trusted in each of these scenarios will rise up,” Muller said. “Our core business is helping marketers assess the effectiveness of their creative and media. From an ad-first capability, both in terms of audience delivery and performance, we feel really strongly that the marketplace has already embraced us.”

Time for Experimentation
VideoAmp also sees itself as being one of the two or three companies whose measurement will be used in the future as currency used in contracts between media buyers and sellers, according to Meierhoefer.

VideoAmp integrates a variety of data sets to measure viewing and advertising outcomes for clients. “We see ourselves pushing into the more fundamental aspects of measurement in terms of how you value and trade specific inventory,” Meierhoefer said.

NBCUniversal used data from iSpot to gauge the impact of ads shown during the Tokyo Olympics. (Image credit: Ulrik Pedersen/NurPhoto via Getty Images)
Meierhoefer said that VideoAmp’s approach to measurement yields more granular data at a lower cost than legacy measurement companies. He said the expense of maintaining a large-scale sample household panel isn’t necessary in a world where data is plentiful.

“It’s a software problem and the type of problem that we can solve,” he said. “I don’t have to be a $2 billion company in order to construct a system that has new capabilities to help our clients make money.”

Between now and the next ad-sales upfront, Meierhoefer said there will be a period of experimentation with clients running things in parallel to see what would happen if they used different metrics. “I don’t think you’re going to see a sort of control-alt-delete reboot scenario where suddenly the whole industry just moves,” he said.

“The environment is really fascinating right now,” Meierhoefer said. “The industry has grumbled about Nielsen forever. Clients are asking are there alternatives. This is fantastic for us. We feel we’re ready to meet the challenge.”