TV’s Measurement Mess: Industry Strives to Count the Modern Couch Potato

Meeting the myriad challenges of tracking viewers across platforms has vexed everyone from Nielsen to Madison Avenue

Upfronts Seven Dollar Bill
Ryan Huddle for Variety

ESPN pays millions of dollars each year to air professional basketball games, baseball contests and the venerable “Monday Night Football.” These days, there’s a new contest that’s getting more attention from the company’s executives: audience measurement.

In recent months, ESPN has worked with Nielsen to provide a measure of viewers who watch offerings from the Disney-owned sports-media juggernaut in bars or at friends’ homes. For years, ESPN executives knew they had a sizable group of viewers that watched its programs in places other than their own living room. Without a standard way of measuring that crowd, however, ESPN could not get paid for it easily.

The network has recently worked with select buyers and clients to do deals based on so-called “out-of-home” viewing, and hopes to make the measure more widely used.

“Measurement is now a team sport,” says Artie Bulgrin, senior VP of research and global analytics at ESPN. In years past, a measurement service such as Nielsen might have devised the infrastructure for mapping out audience, he says.

But now, in an era when consumption of video entertainment is increasingly taking place away from the TV set, the measurement services and the media companies must link hands. The goal is to get all the players with skin in the game to follow a standard set of rules.

Audience measurement, once a wonky subsection of the TV industry, is fast becoming one of its most important areas of focus. But no one can agree on a system that will allow for counting eyeballs across streaming video, video on demand and good old linear TV. And because each media company has its own set of priorities — for ESPN, counting out-of-home views of its sporting events is of major importance, but the assignment may not hold the same luster for, say, FX — getting every media-industry player to come to a consensus on rolling out new yardsticks is difficult.

“There is always the possibility that we can’t come to an agreement,” says Lyle Schwartz, who, as head of implementation for North America at the GroupM media-buying consortium, has a large say in how U.S. advertising is bought and sold. For the past several months, Schwartz and his colleagues have worked on a system that would count views of commercials no matter the screen on which they air.

Whether every company in the industry will accept the idea remains to be seen. “It could be we use only those media companies that want to participate,” he says. “So it won’t have to be an entire industry moving left or right. And I think if they don’t want to do it, it will be more of an a la carte, you might say, and we will be able to do it with some.”

He’s been down this path before. About a decade ago, Schwartz and his GroupM colleague Rino Scanzoni set out to rework the economic foundation of the TV business. With Americans fascinated by the time-shifting and ad-skipping abilities conferred upon them by digital video recorders, TV networks and Madison Avenue had begun a bout of collective hand-wringing. If consumers preferred to avoid ads, here was a machine turning their wishes into reality.

To solve the problem, GroupM made a bold proposition: For decades, advertisers had judged TV programs on how many viewers they attracted. With more people skipping ads, why not shift the standard to how viewers were attracted to the average commercial break? They prodded for a new Nielsen measure that accounted for three days of time-shifted viewing. The process took the better part of two years to implement, but GroupM, which oversees $30 billion in ad spending in the U.S. and Canada as one of the nation’s biggest media-buying companies, made the change stick.

Now Schwartz is leading a different effort to shake up the way the industry counts who is watching its many programs.

Under a plan making its way to ad-sales chiefs and research gurus at several U.S. media companies, GroupM is offering a way to account for views of commercials across multiple screens. The plan would require a certain number of commercial breaks built with the same “ad load” to appear across television sets, desktop computers, and mobile devices. That means that if an ad break contains spots for Coca-Cola, Apple and Home Depot during an hour of, say, “This Is Us,” then the same break would have to appear in every other transmission of the same episode. With that fixed order in place, viewership of the commercial interruption could be tracked, says Schwartz, and networks would presumably gain back some of the mass viewership they’ve lost over the years as linear audiences erode.

But others feel the GroupM system forces new restrictions on media where fewer ads has become the norm. To these executives, the business is better off dealing with each method of viewing on its own merits, rather than forcing each to accommodate a convention tied to linear TV watching.

“We are going to have to be comfortable on some level that there’s not going to be a single reliable measure across all the different platforms where video goes,” says Jon Swift, chief executive of North American investment at Omnicom Media Group, where he oversees how approximately $29 billion in ad spending is allocated in the U.S. and Canada. “We are going to have to figure out how they work together.”

As the industry tries to find common ground on a new universal measure, others are introducing ideas that define audiences in very different ways.

Time Warner’s Turner, Viacom and 21st Century Fox’s Fox Networks Group have joined together to get more advertisers to tap them for “audience buying,” a technique that makes use of various kinds of data to find narrower crowds of consumers based on such criteria as income or product preference.

Too often, a marketer seeking, say, a first-time car buyer or a consumer more prone to go to the movies, must cobble together individual deals for ad plans that target these special groups with each different media company. What the trio hopes to achieve is an agreement that no matter which of the three is involved, advertisers can buy against specific audiences with the same defined sets of data. The idea is to make the process easier for advertisers who need to find millions of orange soda drinkers or new financial-services seekers at scale, says Donna Speciale, president of ad sales for Turner.

The backers all expressed hope that other media companies would join. Now that the system has been unveiled with more detail, the question is whether rivals will come knocking.

“Standardization and transparency is integral for our business and is in best interest of clients,” says Ben Price, president of ad sales for Discovery Communications. “There needs to be more standardization for the marketplace to scale and for agencies to be more comfortable transacting on it. We are open to working with other media companies on this issue.”

TV’s push into new measurement frontiers simply won’t be as quick as it was in a previous era, says ESPN’s Bulgrin. “Things in the 1980s, 1990s, early 2000s moved more quickly, because syndicated services like Nielsen and comScore had total control over measurement,” he says. “It was pretty much all linear, and they could deploy measurement methodologies and it was available to the industry. They did not have to count on collaboration and services from the immediate clients or from a third party. Now measurement across the board is a hybrid approach.”

In other words, it’s the Wild West in the multiplatform era. The challenge for ad-supported media firms is whether they can be more effective going it alone with their patchwork quilt efforts, or find the resolve to forge an industry-standard solution.