Nielsen is telling clients it is going to start measuring how many people watch TV commercials in a new way, a move that will mean big changes in the way $70 billion in national TV advertising is bought and sold.
The new currency was one of a number of sweeping initiatives Nielsen unveiled at its national client meeting last month that cover the demand for advanced advertising, the increase in streaming and the growing importance of diversity to programmers and advertisers.
At the meeting, conducted virtually, Scott N. Brown, general manager of audience measurement at Nielsen, said the company will launch a new ad metric that uses not only the panel information from people meters in Nielsen families’ homes but adds “big data,” specifically return-path data from millions of cable set-top-boxes and automatic content recognition data from smart TVs.
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Nielsen will continue to use its panel in addition to big data. A research executive at one of the TV programmers noted that the panel data was essential for confirming human viewing behaviors, including co-viewing. Co-viewing occurs when more than one person in a household watches a particular device at the same time. Co-viewing accounts for about 30% of video impressions, making incorporating it essential for the industry.
In another major change, the new service will provide audiences for individual commercials, rather than the average commercial minute ratings within a program -- C3 and C7 -- now used as currency by Madison Avenue.
Nielsen will continue to calculate C3 and C7 for clients that want to transact using those metrics.
“The integration of return-path data and ACR into the Nielsen process is long overdue,” said one Nielsen client who attended the virtual presentation but asked not to be named. Adding commercial specific ratings “is a pretty dramatic thing” because it would open the door to estimating audiences and negotiating ad prices based on where a spot will be placed in a commercial break, with the first and last ad.spots being most viewed and most valuable. “It has the potential to completely upend the way we currently do business.”
It was unclear when this new metric would be available to be used commercially. Historically Nielsen has run test data for a year to allow buyers and sellers a chance to figure out how they’ll be affected by the new numbers and how to best use the new metrics.
Nielsen said it will be able to measure addressable campaigns, designed to reach only specifically targeted viewers, such as dog owners, recent car buyers or Democratic voters. Nielsen said it will be able meet industry demand for reports on both the targeted impressions delivered by addressable campaigns and the under-addressable audience watching a different linear ad delivered in the same program.
The list of data providers involved in measuring addressable is being finalized. The data will be integrated during the fourth quarter and initial measurement of non-C3 eligible minutes and the initial data coming from a combination of Nielsen's panel plus smart TV and set-top data are expected during the first half of 2021.
Nielsen also told clients it will be expanding its measurement of streaming services. The data will be available in Nielsen’s nPower system on a daily basis starting this month. The data had previously been available quarterly.
The number of streaming services covered will expand from five to 11. Those will include some of the the advertising-supported streaming services owned by the big media companies, including Fox’s Tubi and ViacomCBS’s Pluto TV as well as Comcast’s Xfinity app and Charter’s Spectrum app and Roku. The Nielsen stamp will make it easier for those services to sell commercials.
In phase one, streaming video ratings will be based on 4,500 streaming viewer panelists. Nielsen said it will increase the size of the streaming panel and include more streaming sources and devices.
Subscribers to Nielsen’s streaming video ratings will be able to run ratings, reach-and-frequency, duplication and segmentation reports as well as detailed data.
A service from Nielsen’s Gracenote that determines the diversity and inclusion offered by content is being rolled out by Nielsen as well. Nielsen said that representation metrics across programming “are essential to accelerating industry-wide transformation."
Nielsen said its first report covering the fourth quarter of 2020 will be available free and that metrics will be updated twice a year.
Nielsen declined to comment for this story.
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All of the changes are designed to address a new TV ecosystem fragmented by people watching more content on demand as they shift from traditional pay TV to streaming. In its presentation, Nielsen noted that consumers spent 123 billion minutes streaming video content during one week alone in July 2020. It estimated that the connected-TV ad spend will increase 115% between 2020 and 2024 and that there will 210 million subscription OTT viewers by 2024.
The increase in streaming is caused in part by the COVID-19 pandemic, which is also adding urgency among advertisers to have better measurement of their ad campaigns on both traditional TV and streaming.
In that environment, Brown said at the virtual gathering that the biggest challenges were a lack of standard measurement and a need to de-duplicate audiences, which means making sure that when advertisers measure the reach of their campaigns that an individual who sees a commercial on broadcast and over-the-top media isn’t counted twice.
Nielsen aims to help the marketplace by measuring reach with one total audience number, offering unique demographic profiles by channel and providing clarity on frequency. It will provide simple answers to questions such as who am I reaching on each platform, where do audiences overlap, how do I maximize efficiency and effectiveness to drive business outcomes?
Brown said these issues need to be solved now and that Nielsen was intent on moving measurement into the future, with metrics that offer resiliency, coverage and comparability.
Nielsen said its new Digital In TV Ratings (DTVR) will work without cookies. It will use raw census impressions for relevant digital viewing volumetrics, use Nielsen proprietary data to identify DTVR viewing demographics and take into account co-viewing. Nielsen is also taking steps to ensure that it continues to meet privacy regulations.
Nielsen is the leader in the TV ratings. Since it started its Total Measurement strategy, revenues for its media measurement business revenues were rising until COVID-19 hit. Audience measurement revenue was down 3.1% during the second quarter in which the company reported a new loss of $30 million..
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Nielsen has been under pressure from investors. The company conducted a strategic review and last year decided to focus on its media measurement business and spin off its Global Connect business. On Sunday Nielsen sold Global Connect for $2.7 billion.
A number of start-up companies have been taking the big data approach to grab pieces of the TV measurement business. Nielsen’s biggest competitor is Comscore, which also conducted a strategic review and has an uncertain future. The company faced fraud charges, spent nearly three years on a costly and distracting re-audit of its books and went through several CEOs.
Under current CEO Bill Livek, Comscore has announced an aggressive vision for how to solve the industry’s cross-platform measurement issues and some of the products it says will be available soon sound similar to what Nielsen is planning to do.
Last week, Comscore announced it is launching or enhancing an array of substantial offerings in 2021, including: Comscore TV, a national ratings product that adds information from 10 million Comcast set top boxes to its measurement footprint. Comscore also said it would be addressing privacy-focused solutions for a world without cookies and outcome-based attribution products that measure the results of ad campaigns.
Comscore said it has spent the second half of 2020 working on bringing national programmer's minutes together with the largest MVPDs and connected-TV providers to provide measurement of national addressable inventory.
Comscore said its approach enables measurement for more than 50 million households, which is the largest footprint of addressable households. Comscore expects to be fully enabled and operationalized in 2021 to bring the first independently-measured national addressable advertising service to buyers and sellers, allowing clients to use television at the impression-level for national addressable inventory and to reconcile with the non-addressed minutes.
