Due to growing fragmentation, the single currency model has been broken. New measurement upstarts claim to more effectively measure disconnected viewing habits for the majority of audiences watching video across multiple devices and services.
For Nielsen, the historically dominant TV ratings leader, the cracks are coming apart. Ad buyers and sellers want to connect the dots for holistic audience measurement with a depth of insight into demographics that goes beyond the scope of a single measurement panel. While Nielsen invests in integrated measurement capabilities for digital video to retain its dominance, new contenders to the throne knock at its door.
In the good old days of linear TV, brand marketers could run a TV campaign relying on industry stalwarts like Nielsen for a single integrated report on reach and frequency. Today, a plethora of viewing information is available from measurement providers, including YouTube, Facebook, Google, Comscore, Inscape, 605, Roku, and a raft of new upstarts.
In the age of digital, advertisers have developed an appetite for deeper audience segmentation and insights that go far beyond age and gender. These capabilities require more data points than traditional models provide.
This tsunami of data sources, driven by fragmentation in the media space, has had a critical impact on measurement. Five years ago, Nielsen offered unduplicated reach between different elements in a TV campaign to identify desirable audience segments on the local and national level. Nowadays, it’s tough to define and calibrate ad buys, based on whether addressable inventories are being duplicated for audiences that include linear TV in their multiscreen/cross-platform mix, let alone digital.
Further, new video distribution models and even the TV sets a majority of audiences own offer more potential for measurement than previous linear TV hardware. CTV and OTT video are making this worse.
eMarketer estimates that in 2019, nearly 60% of Americans were watching CTV, and over 70% were watching digital video. It’s no surprise that Nielsen’s business is suffering. With increasing fragmentation across distribution, audience viewing habits, ad inventories and capabilities for measurement and targeting — if it can only measure a small fraction of ads outside its mainstay of traditional linear TV, who will?
Comscore, formerly Rentrak, has been attempting to reach Nielsen market share for years with its set-top-box data, but historically had the same blind spots as Nielsen. The Inscape ACR dataset is providing census-level measurement of ad detection (excluding Hulu and Amazon Prime) on Vizio set- top-boxes. Companies like 605 and Comscore are now looking to integrate these datasets into set-top-box data to provide a more comprehensive view — not just linear and time-shifted ads, but also CTV and addressable.
But digital — YouTube and Facebook in particular — often takes flak for not being open with data. They might cite privacy concerns for this now, but it’s no strange coincidence that their initial walled gardens, with limited access to specific data, meant they set the rules by which they are measured. Brands have subsequently had to focus efforts on trying to connect the dots themselves to measure how digital video ads translate into real business outcomes.
Digital doesn’t always have to be a black box; we can trust that Disney knows every single impression running on Disney+. With Discovery’s recent announcement that it is licensing Inscape data directly, we can see the beginning of a trend where programming groups are taking these datasets in-house, where they can match instantly with the clickstream data from their direct-to-consumer services.
With so many parts of the industry rushing to build their measurement solutions, who can rebuild Nielsen? It’s ironic that rather than encouraging Google and Facebook to open up data, the TV industry has started to embrace the same outcomes-based attribution approach. It’s possible that Nielsen — or another player (LiveRamp recently paid $150 million for an early stage business in this space) — will become the new TV currency.
Nielsen is taking steps to adjust, recently working with Amobee to leverage its national TV panel and ACR data to expand the company’s cross-platform measurement to four screens. If buyers can believe these attribution models could tie ad spend to outcomes, we may start to see investment switch from the unmeasured media of Facebook and Google.
Attribution will become the new currency. For Nielsen, only time will tell whether it fully embraces the broader opportunity or retreats to the core age and demo measurement of linear TV advertising.
If I owned Nielsen shares, I know which option I’d prefer.
Tom, there is no doubt that Nielsen needs to upgrade its rating panel to better measure streaming activity and you are right, that "TV" time buying is, incresingly seeking better targeting methods, However, it is not true that time buyers routinely got reach and frequency tallies from Nielsen either locally or nationally when negotiating with the sellers. Invariably this aspect was handled by the planners ---based largely on formulas developed from Nielsen data and updated periodically. Usng these the planners divided their buys by daypart and network type and the buyers bought GRP tonnage accordingly. No problem, really. The same practice will apply today---the buyers buying to planned GRPs by type of platform but the planners deciding which ones get what weight. Also, bear in mind that 65-70% of national TV time is bought upfront---there is no way to r&f tabs on programs which do not exist as yet.
Returning to your basic point, the buyers can't dictate to the sellers that they must guarantee audience delivery on a telecast by telecast basis nor on a variety of more discriminating demos--like adults aged 35-54 with upper incomes,plus adults aged 18-34 with college educations, plus women with children aged 12-17 living in middle income homes, etc.. Nielsen has such data but the sellers will not cut guaranteed audience deals using more than one "demo" as this would be suicidal for them. Instead, sellers will guarantee GRP delivery for a total schedule involving many shows and telecasts, usually on a quarter by quarter basis.
How do we move forward?The problem is mainly that larger advertisers continue to push for low CPMs using corporate purchases to get them--- as opposed to letting each brand go its own way---not that this doesn't also pose problems. At this point I don't see this changing miuch but one can always hope.
Finally, you mentioned alternative rating sources. Yep, there are some of them, however, so far most if not all are offering device usage rather than viewer measurements---yet viewers, not TV sets respond to commercials. And Nielsen remains the only service providing viewer ratings---even if they aren't perfect. The fact is that set usage is a very poor predicter of viewing ---especially in affluent and younger homes as the average person you nmay be targeting in such households watches perhaps 40% of the time when a set is tuned in.Accordingly shows which may seem to target young or upscale men or women---based on set usage--often turn out to be not nearly so good at actually reaching such consumers. Often, somebody else was attending the set.
Thank Ed - the interesting question for me is if and when the "not quite good enough" of device level data becomes more useful than the "not quite good enough" of Nielsen. The key parameter there is going to be if Nielsen enhances their data faster than the new entrants enhance theirs.
The disruption that has been unfolding in the TV space is likely to continue until the marketplace, i.e., marketers and media agencies galvanize support for an alternative source(s) of TV ratings currency. This switchover will be more of a process than an event that unfolds during the next several years as the industry will continue to operate in a multi-source world where Nielsen remains the go-to age and gender currency for audience guarantees. There is mounting evidence, however, that more deals are being guaranteed on data-driven-linear (DDL) targets woven from set top box, smart TV and first- and third-party consumer data. In effect, this dynamic is more like the big bang expansion of the universe that will likely continue until the advertising industry agrees upon standards for cross-media measurement that include tecnological connecting of pipes and standards for metrics; the master plan for this work is now unfolding under the auspices of the WFA (World Federation of Advertising). For the immediate future, grab some popcorn, watch the show and do your best to select the right combination of data sets for planning and transacting TV ads.
It's all about incentives. If marketers reward buyers for delivering efficiencies in maximizing reach, then GRPs will maintain value. If marketers reward agencies and networks for producing meaningful business outcomes, then targeted impressions tied to business impact will become a more accepted and common currency and it will not be from a single provider. I am also reminded of what used to be printed on the back of every Arbitron Ratings book. "Remember, ratings are only estimates"
Gerard, I agree with you about it being a slow evolution. However what the theorists keep ignoring are the anti-targeting realities of corporate time buying---especially the national upfronts---as well as the likely response of the sellers if they were to allow brands to pick and choose among their wares using "advanced" methods or new "currencies". Many years ago late night TV was a bargain basement daypart due to low average minute ratings. When demographics were introduced and it became clear that late night viewers tended to be younger than their early evening counterparts, the planners shifted their focus and suddenly late night TV was on almost every plan. The sellers noticed, of course, and dramatically increased their CPM demands for late night spots, in the process negating any 18-49 targeting efficiencies that might have been gained. The same thing will happen with "advanced" TV. In exchange for playing the set usage refined targeting game---which is heavily stacked in the sellers' favor to begin with---advertisers will have to pay much higher CPMs---again, defeating the purpose. It's simply not realistic to pay 75-100% more per set of targeted "eyeballs" in order to get, perhaps, a 10-20% better result---however that may be defined. Moreover, even if you improve your targeting efficiency in year one there is no guiarantee that such gains will be repeated the follolwing year----but you will be hit with additional CPM hikes none the less.
Why does the headline blame the viewers? I thought the customer was always right. Whoops, the viewer is not the customer, eh? Linear TV is dead so ad buyers and sellers will need to find a more captive audience.
Yep, Douglas, "linear TV" with all of its odious commercials is "dead"---which is why advertisers ----idiots all---continue to spend $70 billion annually using it to motivate consumers. Don't they know that nobody---oops, let me correct myself---except worthless oldsters---is still watching?