Horizon Commits Up To 15% Of Upfront To 'Alternate Currency' Deals
- by Joe Mandese @mp_joemandese, April 19, 2022
While most big agencies have intimated plans to utilize so-called “alternative currencies” -- audience measurement estimates other than Nielsen’s -- as part of testing and learning about what works best in this year’s upfront advertising marketplace, Horizon Media this morning put a hard number around it: 15%.
The agency said it has committed to transacting “up to 15% of its deals” in the 2022-23 upfront TV advertising marketplace utilizing “alternate currencies.”
While it did not disclose which audience estimate suppliers it has agreed to utilizes, it said the decision is based on results of a “recent RFI” (request for information) it issued to validate “vendors, sources and solutions in the currency space.”
Horizon added that it is eyeing utilizing the alternate currencies as part of its negotiations with suppliers including Paramount, NBCUniversal, Warner Bros. Discovery, AMC Networks and Allen Media Group.
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To date, NBCU is the only supplier that has “certified” an alternative national TV currency, iSpot.tv, although others like Paramount, which said it is working with VideoAmp, have announced plans to utilize others.
None of the alternate currency suppliers are accredited or are even currently undergoing audits by industry self-regulatory watchdog the Media Rating Council.
“For us, the goal is quite simple,” Horizon Chief Investment Officer David Campanelli said in a statement, adding, “to better measure the impact of our campaigns and the networks which contribute most to business success, versus simply measuring impression viewership.
“Without a doubt, a multi-currency ecosystem will become the new norm for transacting business, and we intend to lead that charge.”
Horizon said it will likely utilize “two to three” alternate currencies, “in addition to utilizing Nielsen’s data and tools, across a variety of networks.”
"We are considering all of the vendors that have been announced previously -- iSpot, Comscore, VideoAmp -- but also are still exploring a few others," Campanelli tells MediaPost, adding, "There are nuances and pros/cons of each, and we think this area is still solidifying."
Looking at this from Nielsen's standpoint if 15% of the buys----or dollars placed----do not use Nielsen data at all then there is a big problem developing for Nielsen. But if just about every buy starts with Nielsen data for audience guarantees and 15% of the time other metrics are factored into the deals as well, then that's much less of a concern for the folks at Nielsen. Which is not to say that they should be compalcent---I'm not suggesting that---but this isn't panic time either----just an indication of people seeking refinements in addition to simple "audience counts".
Ed, I'm not sure how Nielsen determines their agency rate card, but the most common method I have seen is that the media agency annual subscription is based on their 'annual TV spend' summed all networks (generally measured by a third-party) in a series of cascading increasing expenditure.
So, if 85% of that agency's spend is based on Nielsen and the other 15% using other sources, wouldn't the 'annual TV spend' be basically unchanged on the ratings rate card when all the spends are aggregated? Also wouldn't it mean that the agency was 'paying twice' (that would immediately drop to the bottom line), or more probably require the 'new alternate currency' was provided gratis until it has industry-wide acceptance?
John, I believe that Nielsen charges agencies a basic set up and maintenance fee and then calculates more sizeable additional fees based on ad dollars bought with some sort of sliding scale as the figures mount.
As for the costs of the so-called "alternative" sources, at this point, it is my opinion that these are primarily non -audience guarantee sources and that Nielsen will probably remain the base for most transactions. This, in turn, tells me that the sellers will, no doubt, pick up most or all of the added expenses and buld them into their CPMs---meaning that the costs are passed on to the advertiser---as usual.