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September 15, 2021

Special Report:

It’s Time to Get Real About Nielsen and the “Rating Wars”

The recent brouhaha over Nielsen’s loss of MRC accreditation, and ensuing responses from companies like comScore and NBCU, both of which used the opportunity to advance their own interests in the “ratings game,” caused us to take a step back and consider what’s really going on here. It’s time for everyone to take a deep breath, consider the current state of affairs, and understand what’s likely to happen as a result.

Almost everyone, including the staff at MDI, thinks that Nielsen handled the pandemic-related "undercount" badly, but it seems more like an excuse for digital ad sellers to apply pressure to include their digital "audiences" with "linear" projections so they can monetize the former. This is understandable, but there are better ways to accomplish this rather complicated advancement than constantly berating Nielsen and issuing dire threats about "alternatives." What's lacking in all of the rhetoric is exactly what networks, as well as the agencies and advertisers, want to see in an upgraded national TV rating service. Do "we" all agree that an indication of "viewing," not merely device usage, is essential for both linear TV and digital? Do "we" all agree that an attentiveness measure is a vital addition? Most important, are all of "us"—particularly advertisers—prepared to really get involved not only with advice but with serious funding of such a new service?

Let’s take a closer look.

The Current Situation

To begin with, far too many people misunderstand the purpose of the MRC. It does not certify that a service is coming up with accurate findings. In actuality, it verifies that the service is doing what it claims to be doing in terms of the many technical aspects involved, such as sampling methods, data collection, weighting and tabulating, as well as if it is using accepted research standards in doing so. Therefore, it’s really a matter of how a service’s findings are used by those who make decisions based upon its reports. Here, the imbalance of funding, with the media time and space sellers supplying most of the dollars, results in the surveys being seen more as a sales promotional tool with the emphasis always being on providing the largest possible numbers, rather than trying as best as is possible to obtain the most relevant or accurate numbers.

As we have often pointed out, Nielsen's "average commercial minute viewer" projections convey a very misleading and inflated "count" of commercial audiences. Nielsen was pressured into this by the buying side to account for commercial zapping and, at the time, the agencies didn't seem to be concerned about the validity of the "viewing" data, which was assumed but not measured. In short, Nielsen's peoplemeter panel has been asked to do what it was never designed to do, namely to provide granular "viewing" estimates.

There is a huge distinction between the audience profile of TV that you derive from set usage versus viewing indicators. Because younger, larger, and affluent homes contain many more people (and devices) than older/lowbrow homes, set usage tabulations create an ad seller's dream of a medium that is used far more often by younger/affluent homes than older/lowbrow homes. However, the exact opposite finding emerges when you ask people in the same homes if they were "watching" when a set was on and a channel selected. This is because the average resident in a younger home watches only 35-40% of the content that is accessed in their household; in contrast, the average oldster is almost always there. The point is simply this, the alternatives to Nielsen are almost universally device-based, whereas Nielsen gets both types of information. Until this huge gap is remedied, Nielsen is in the driver’s seat.

Nobody has maintained that Nielsen's "linear TV" ratings are all wrong. Even the recent upset about Nielsen's failure to keep in touch with all of its panel members has never caused anyone to seriously question whether Nielsen was substantially wrong about which shows or channels were "winning" or "losing," which is the key determinant of who gets the most ad revenues. The complaint, which is valid, was about the size of the audience, which should have been slightly higher than was projected and reported. Yes, Nielsen made a mistake that caused an "undercount" of 18-49-year-old viewing—the supposed key "currency" metric still in wide use—of perhaps 2-5%. But what the TV networks really want is for Nielsen to include digital audiences in its ratings so the networks can claim all of their "viewers" and charge for them. Nielsen’s admittedly poor handling of the situation has given the networks an opportunity to press this point.

Proposed Changes

To begin with, the specs for a new TV/video measurement that covers all of the ways that people access content would require a panel that is large enough to measure the smaller audience platforms with some degree of stability. That means a lot more than the 100,000 people in Nielsen's national people meter panel, perhaps maybe double or triple that number. Second, the service must be able to monitor all of the screens, including out-of-home usage. Third, the service must also be able to determine the specific content (programs or ad messages) that was on each screen for whatever length of time it was active. Fourth, panel members must identify themselves as "watching" program content whenever a channel is accessed via any device in any location. “Viewing” can’t be assumed. Fifth, and this is critical: some sort of attentiveness measurement is required for all devices in all locations that are used by panel members. This measurement should determine whether a claimed "program viewer" actually watched content of any kind, including commercials, on a second-by-second basis. But who pays for this new service? If it's mainly the TV ad sellers and, to a much lesser degree the ad agencies, but not the advertisers and OTT/tech folks, we've got a problem. Why would a TV network sponsor a service that tells advertisers that only a fraction of its average minute "audience" watches their commercials? It's fine for everyone to sit back and ponder ways to solve the "cross platform measurement problem," or criticize existing systems for not keeping up with all the ways to watch “TV.” That part is fairly easy. The hard part is who leads the charge and who pays?

Funding

To begin with, advertisers are not unified in how to approach, let alone fund a new service. Many buy time on certain program types (sports, news, specials) despite their high CPMs and without much regard for rating erosion, demographics, etc., simply because that's what they want to do. They are silent right now. Other advertisers hold back because they have relegated time buying to the "numbers people" and give the matter of rating accuracy little or no thought. Since advertisers show little sign of stepping up to the plate and providing serious funding for any "new" rating service and since—let's be honest—there is no interest in a compatible "currency" for radio and print or OOH media, we are really talking exclusively about national TV/video. As the media sellers will have to provide 75-80% of the dollars, obviously, their interests will dominate, plain and simple. That means the methodology that provides the biggest numbers—device usage, not viewing—will probably win. This leaves us back where we started, with the new national rating "currency," whatever it is, remaining primarily a time buying and selling tool, so long as the sellers are satisfied that each is getting a fair shake regarding share of "audience" and digital is factored in. It won't matter if the numbers are wildly inflated regarding ad exposure.

Conclusions

As most of us realize, chaos would ensue if each network or cable channel selected whatever rating supplier they prefer (invariably one that makes them look the best), while time buyers trying to meet a brand's GRP requirements would have to somehow reconcile the inevitable discrepancies between the various sources. Therefore, a single, unified supplier is a must. This brings us back to Nielsen, which has filled this role on a national basis since 1950. There simply isn’t another supplier yet ready to step into this role on the scale that is needed to produce reliable results. The question is how does Nielsen mix and match various sets of data into a comprehensive single source rating service to provide the needed currency?

There has always been competition in audience measurement, with alternative sources and rival companies splitting the market for exactly the same kinds of data. For example, in the local market field for TV, The American Research Bureau (later known as Arbitron) was the leader throughout the 1950s. Then Nielsen fielded its own rival service and the two duked it out for many years before Nielsen gained the upper hand. Now we have a virtual monopoly with Nielsen, which everyone accepted without protest for years. Yes, Nielsen’s Covid undercount and the resulting loss of MRC accreditation are a blow to the company and must be addressed, but to date, none of its would-be rivals has been able to show that Nielsen is substantially wrong in its findings. We wish comScore and the other research companies that may answer NBC's (and others’) resulting call for alternatives the best of luck; they will probably need it. The chances of Nielsen being unseated as TV's major rating service are slim indeed. At best, some of the proposed alternatives may be used on a selective basis as add-ons to Nielsen data. And the most likely outcome is if one or more of the supposed alternative sources offers a cheaper way to handle one of the emerging platforms, Nielsen will probably buy it, rather than being unseated by it.


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