Nielsen investors just got a nice payday. Will the company’s biggest customers benefit financially as well?
The media measurement giant raised eyebrows last week when it agreed to be sold to a private-equity consortium led by Evergreen Coast Capital Corp., an affiliate of activist fund Elliott Management — which has been lobbying for a Nielsen sale — and Brookfield Business Partners. The all-cash deal for $28 per share, or $16 billion, represents a 60% premium over Nielsen’s closing stock price as of March 11.
Now, the nation’s TV networks, which depend on Nielsen’s TV ratings as the basis for billions of dollars in advertising deals, want to be sure they’re going to make more money with the company as well.
Such a prospect hasn’t been certain in recent months. TV networks and their owners have grown disenchanted with Nielsen’s ability to count viewers who may watch their favorite programs via digital means, on mobile screens or through streaming video. Led by CEO David Kenny, Nielsen in September lost industry accreditation for its national TV ratings service and is working on a new measurement methodology that would tabulate unduplicated cross-stream viewership, but it will not be rolled out in full for several months — well after the start of the industry’s annual “upfront” ad sales market, which has long been based on Nielsen measures. And the industry body that would give Nielsen its accreditation back says that process isn’t likely to start until at least the third quarter of 2022.
Meanwhile, many media companies, including NBCUniversal, WarnerMedia and Paramount Global, have struck pacts with new measurement vendors to create “alternate currencies” in time for the upfronts.
“For any version of Nielsen, current as-is or next after-sale, the ad industry needs are identical: deep disclosures and real transparency, commitment to the modernization that sharply increased competition demands, and increased collaboration rather than collision with their clients and customers,” says Sean Cunningham, president and CEO of the Video Advertising Bureau, a trade group that represents the TV networks to the advertising industry. “We are rooting hard for these overdue outcomes from any version of Nielsen.”
Nielsen declined to make executives available for comment after its sale announcement.
The industry Nielsen serves remains skeptical, no matter who is in charge. As more couch potatoes opt for the ease of streaming video on demand, traditional TV is losing viewers steadily, constantly and irrevocably. To remedy this, the networks want better accounting of audiences as they spread out to all kinds of new behaviors, whether they involve VOD playback or streaming at times of a consumer’s choosing. And with streamers’ ability to use interactivity and technology to ferret out new kinds of information about TV watchers — location, household preferences and more — there is a good foundation for scrapping the current Nielsen-based system in favor of helping advertisers find narrower but lucrative niches of customers who might include first-time mothers; so-called “auto intenders” in the market for a new car; or young men interested in buying tickets to a superhero movie about to open exclusively in a theater.
The networks aren’t the only ones that see the need for new measurement architecture. Procter & Gamble, one of the nation’s largest and most-scrutinized advertisers, indicates it wants a change. “There must be a better way,” said Marc Pritchard, the consumer packaged goods giant’s chief brand officer, in a recent speech. “Isn’t there a way to buy and place ads synchronized to when people are actually watching — matching ad supply with viewing demand? Can’t we avoid having the same ad run on the same show over and over again? Isn’t there a way to eliminate buying ad inventory based on audience forecasts that we know are wrong? Could we ever eliminate the need for audience guarantees, which are inherently inefficient?”
Nielsen’s new owner is clearly betting that the company will still be part of the mix. The new measurement currencies being offered are ultimately backed by the networks, the equivalent of the student telling the teacher what grade homework should get. Many advertisers would still like an independent arbiter to sit in judgment of who’s watching their commercials. But they may not be as rigid as they have been, because many are allowing Google, Facebook and other new-media venues to supply proof of effectiveness in social media and search. And there is still the lingering question: Do any of the networks and their new partners have millions to invest in an entirely new measurement infrastructure that isn’t likely to scale industrywide?
Taking the measure of Nielsen under new owners may require time and patience.
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April 05, 2022 at 11:20PM
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Nielsen’s New Owners Face Old TV-Measurement Challenges - Variety
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