Nielsen Backpedals On Ratings Dominance, Acknowledges It's Not Yet The Online Standard

CalhounAfter a series of chest-thumping quarterly earnings calls in which he essentially claimed Nielsen’s Online Campaign Ratings (OCR) had become the “industry standard” currency for planning and buying online advertising campaigns, Nielsen CEO David Calhoun struck a more tepid note during the research giant’s first quarter earnings call Thursday morning, acknowledging: “We are not yet a standard in the industry.”
While change in Calhoun’s tenor was not explained explicitly during the call, it’s possible the answer lies in something else he acknowledged during it -- that it will take at least another 60 days and as much as four months before it can convince federal regulators to approve its acquisition of another research giant, Arbitron.
Calhoun indicated that Nielsen is still confident that its acquisition of Arbitron will be approved, and he said that the antitrust scrutiny by the Federal Trade Commission hasn’t slowed down Nielsen’s voracious appetite for acquisitions, but that most of the other deals it is looking at are smaller “tuck-ins” such as its recent purchase of online brand effectiveness researcher Vizu, which complement its other businesses.
“No, no, no, no,” Calhoun said in response to an analyst asking if the FTC’s antitrust query would slowdown Nielsen’s acquisitions. “We look at them all day long. We have a pretty rich pipeline. Our appetites are usually built around smaller, tuck-in acquisitions that complement our portfolio. We will continue to add things.”
While he backpedaled on Nielsen’s online ratings dominance, Calhoun said the world’s biggest research company is still “bullish” that it will dominate the online industry, much the way it has with television.
“We are not yet a standard in the industry,” he conceded, adding: “I think we are becoming one in the video advertising space, which is a rich space and the important one to capture.”
He cited a recent corporate deal for Madison Avenue giant to begin utilizing OCR as a reason for his confidence that it will become the online industry’s standard, telling the Wall Street analysts, “I don’t know what to tell you other than we are adding more advertisers and more agencies... How agencies learn to make money with this product will determine its success.”
While Nielsen has not disclosed the fees it is charging big agency holding companies to license those ratings, it acknowledged early on that it was essentially giving the OCR service away to big advertisers during its beta phase in order to convince them to use it, and implying that once the buy-side of the industry utilizes a ratings system as its currency, it is a fait accompli that the sell-side will adopt it.
“Our job is to eventually turn this into a standard,” he said, adding later: “We feel good about it and that’s what I can tell you at this stage.”
Executives from comScore have routinely dismissed Nielsen’s dominance of online campaign ratings, noting that big advertisers, agencies and publishers continue to utilize comScore’s data.
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