Business

Now TV Wants Nielsen to Measure Up

TV executives have been complaining about Nielsen for years, saying their shows have more viewers than they get credit for. They have also claimed that Nielsen, the 98-year-old research firm whose name is practically synonymous with TV ratings, uses antiquated technology that hasn’t kept up with viewers who have moved away from cable and network TV.

Now the television industry is looking for other options.

On Tuesday, NBCUniversal plans to host a forum to discuss alternative ways to measure its audience. Representatives of major advertising agencies, industry trade groups and companies including Ford Motor, L’Oreal and Pfizer are expected to attend. NBCUniversal is also sifting through proposals from 80 measurement companies, Nielsen among them, to create new methods for quantifying viewers.

“One company with one metric and one currency is probably unlikely in the future,” said Linda Yaccarino, the head of global advertising and partnerships at NBCUniversal. “We’re very, very bullish on the fact that all key stakeholders have jumped in and said, ‘We need to come together.’”

For decades, Nielsen has been the research firm of choice for gauging the behavior of viewers, and the major entertainment companies have used its data to set the price of commercial time and to decide which shows to extend for another season and which ones to cancel.

Nielsen comes up with ratings with the cooperation of more than 40,000 so-called Nielsen Families meant to represent the American population in all its diversity. In their homes, the firm places devices that can measure only what is viewed on television screens, whether a show is streamed or broadcast. (Nielsen does not count what is watched exclusively on phones or laptops.)

The pandemic threw Nielsen into a crisis. With millions more people than usual working from home, there were complaints that Nielsen’s numbers were low. The company conceded in May that it had undercounted total television use — people watching shows or playing video games — for February by as much as 6 percent.

In August, the Media Rating Council, a nonprofit group that functions as watchdog over audience measurement companies, announced that it would suspend its accreditation of Nielsen. In a statement, the council said Nielsen had “some deep-rooted, ongoing performance issues.”

That same month, David Zaslav, the powerful chief executive of Discovery, went on the attack in a call with investors. “I don’t have a lot of hope for Nielsen,” he said. “I think somehow, as an industry, we’re just going to have to work our way out of it from a technology perspective and leave them in the dust.”

In September, ViacomCBS said it would allow advertisers to use VideoAmp Metrics as an alternative to Nielsen. This month, Univision chose another Nielsen rival, Comscore, to measure TV viewership in three cities.

David Kenny, Nielsen’s chief executive, has admitted to mistakes while also pushing back against some of the criticism. In September, he posted an open letter to the television industry on the Nielsen website, noting the company’s “need to move faster in advancing our measurement because the audience itself is moving faster.”

He added that Nielsen had been “slow to explain how the health and safety-related measures” it took during the pandemic caused it to undercount audiences. Rising vaccination rates had since allowed Nielsen to overcome the problem, he said.

Many of Nielsen’s critics work at companies that rely on commercials for revenue — that is, entertainment powerhouses in the business of network and cable TV when many viewers are cutting the cord and paying for subscriptions to Netflix and other platforms without ads.

“There are always challenges when there are big technological changes in media,” Mr. Kenny said in an interview this week. “Any big change every 10 years or so is going to result in some noise. That comes with the territory and, I think, is what’s happening now.

“There are a lot of players here who we’re working with,” he continued, “and I think we’re trying not to lean into the drama and just do a good job.”

Mr. Kenny said he was skeptical that the big media companies, longtime Nielsen clients, would “start over with something completely different.” On Oct. 28, when Nielsen announced its third-quarter earnings, it beat Wall Street forecasts and reported a 3.9 percent increase from a year earlier in revenue from audience measurement clients.

At the end of next year, Nielsen plans to start offering a measurement system called Nielsen ONE, which it said would evaluate traditional TV, streaming platforms and digital services. This summer, the company introduced the Gauge, a metric to compare streaming viewership with cable and broadcast channels.

Advertising executives from Procter & Gamble, Anheuser-Busch and others have worried that the search for other options will result in each media company’s using different criteria to count viewers. Arun Kumar, the chief data and marketing technology officer for the ad giant Interpublic Group, described this potential outcome as “Balkanization at a massive scale.”

“It’s hard enough to measure some of these new devices and the new data sets that are flowing through them, but it becomes even harder if you don’t have consistent standards,” he said. “The one thing Nielsen had going for it was that, no matter how good or bad it was, it was standard. But now you’re going to have these big, fragmented data sets.”

NBCUniversal’s attempts to keep up with viewing habits have led it to branch out from broadcast and cable into streaming with the Peacock service and partnerships with tech companies.

An arrangement with Holler, a messaging company, will allow companies advertising during NBCUniversal shows to display their brands on the payment app Venmo. This week, NBCUniversal was in the final round of pitches from YouTube, Snap, TikTok and other digital platforms hoping to work with the company on its Olympics marketing.

Questions about measurement loom over many new initiatives at NBCUniversal and its competitors. Ms. Yaccarino said relying on outdated counting techniques was “frustrating for someone who oversees approximately $12 billion of advertising.”

“If we want to properly value our content and deliver impact for advertisers, we can’t do it if we don’t have the proper tools to measure that impact,” she said.

NBCUniversal said it plans to test new measurement alternatives in February, when it will broadcast the Beijing Olympics and the Super Bowl. It is now considering proposals from Comscore, VideoAmp and other measurement companies.

Nielsen was among the first to submit a pitch.

John Koblin contributed reporting.

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