This week, the most significant currency in the media business, provided by Nielsen, lost its accreditation with the organization chartered by Congress to keep media ratings honest, the Media Ratings Council.
This post is an attempt to describe the chessboard, players, and possible outcomes regarding a set of moves that one publication called the biggest “measurement legitimacy crisis since 1964.”
First, the problem. Network TV is currently like a cheese shop with a broken scale. If advertisers decide the scale is not too broken, despite having been de-certified, it will make a mockery of the MRC, and the attempts at fairness it represents. The maker of the scale says “it’s only a teeny problem.” Meanwhile, buy a pound of cheese and they’ll cut you a hunk that might be a pound -- or not.
Now go spend a billion dollars on cheese and see if you can keep your job.
At the center of the conflict is the historically tense relationship between media companies and Nielsen. What’s driving the conflict is simple: Nielsen makes the measures that control buying, selling, accountability, planning, etc. -- the whole enchilada. Media companies don’t like a third party in their shorts, but buyers, for obvious reasons, don’t trust the supplier to tell them how much they've got.
Catalyzing the entire milieu, it looks like several media companies are getting ready to use alleged inaccuracies in Nielsen’s measures as a reason to build or buy their own measurement systems. They can probably build good metrics, but who will use them?
Nielsen’s dominance over TV ratings is more than half a century old, and it keeps hanging on. However, bruised by streaming TV, and beaten up by the internet, networks are at the breaking point. They need their numbers to look better, and they apparently believe that can happen if they move to a different currency. Plenty of alternative currencies are available (e.g., Video Amp), but Nielsen’s reaction is to double down.
It’s starting to look as if Nielsen is ready to challenge the entire concept of MRC accreditation, and test whether advertisers will continue to buy media using its ratings even without that accreditation. That would not be the end of the world. A great deal of media is transacted using unaccredited measures already.
And what do advertisers have to say about all this? Not much.
That factoid is fascinating. Either they don’t know what to say or they don’t know what this means to them -- or, possibly, there is nothing they can say that won’t get them in trouble. Advertisers could force their media suppliers to use Nielsen’s ratings with a few phone calls, but that might not be a good move.
The strategic issue for advertisers is that is if they force a decision on ratings, they risk breaking a fragile system. For example, what if Unilever wants to buy Disney media using Nielsen ratings, and P&G wants Disney to use Video Amp ratings via Dentsu? The entire system gets less efficient in all phases. This might cost more than it would cost Nielsen to fix its problem.
There are, however, some interesting alternatives out there.
In most countries, a joint industry committee (JIC) decides who will provide the universal media currency. The currency provider is appointed. That solves the problem of multiple currencies, and keeps the provider of currencies honest. The Advertising Research Foundation once suggested JICs for the U.S., and Nielsen’s response was to threaten a lawsuit.
That was then, this is now. The Association of National Advertisers could begin this move on behalf of advertisers. It might be time.
Regardless, this is our big chance to find out whether the marketplace values a common, universal measure over an accurate or a certified measure.
Or maybe it just wants a cheap measure. If buyers and sellers continue to use the existing Nielsen GRP as currency, inaccuracies notwithstanding, it will confirm that common (or universal) is more essential than accurate.
Exacerbating an already confusing situation, Nielsen’s ratings were built to enable a marketplace, but the parties who inject 100% of the money into that marketplace (advertisers) have taken a hands-off approach, preferring to let the supply chain sort it out.
It’s arguable that letting suppliers spend billions of dollars on other suppliers who sell a diffuse and ephemeral product (consumers’ attention), which is counted by yet another company motivated to spend less on the counting, using a methodology approved by a tiny organization who outsources the analysis of the research … is a process that might benefit from a little hands-on investigation.
You might think this is the part where industry associations swoop in for an easy win, but don’t bet on it. Progress will require a concerted effort from the entire industry, not just an investigation, or a manifesto.
Who should own the process? You can bet advertisers want “the industry” to solve their problem, since they usually want that. It is not unreasonable to want that. It’s just that wanting a $100 billion system to change is unlikely to change it.
As always, asking a broken system to repair itself is an exercise in futility.