TV Networks Plan to Include Out-of-Home Audiences in National Ratings in 2020 (EXCLUSIVE)

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The Super Bowl is TV’s most-watched annual event, but would any network executive bet on counting more people to watch in an age when viewers are moving to streaming video and mobile devices?

CBS will. The network believes it could see a 10% to 12% lift in total viewers – “if not more” – for its 2021 broadcast of Super Bowl LIII, says Radha Subramanyam, chief research and analytics officer for CBS Corp., in an interview.

Her optimism is buoyed by the fact that starting in the fall of next year, TV’s national Nielsen ratings – those measurements of audience used to set rates with advertisers – will include people viewing programs “out of home,” in places like restaurants, hotel rooms and at other people’s houses. At a time when TV ratings are eroding season after season as TV viewers latch on to new services like Netflix and Hulu, the move could send some ratings levels spiking upwards.

“It’s real viewing,” says Subramanyam. “It’s measured. It’s verified. And it is what the whole industry is going to start transacting on in the fall of 2020.”

Nielsen says that after many years of testing technology and measurement systems, it is ready to integrate out-of-home viewing into its national TV ratings.  “Brands, agencies and TV networks have always been aware that TV viewing happens away from the home – at places like airports, the office, bars and watch parties – and today there is a broader understanding of the amount of out of home viewing that exists,” says Scott N. Brown, head of product, TV & Audio, at Nielsen, via email. “In fact, some networks in the sports genre see approximately 11% of their total audience on average comprised of out of home viewing. Similarly, on average, 7% of news audiences are coming from out of home sources, all of which underscores the importance of capturing these audiences in the ratings.”

Nielsen has already told networks it intends to start counting out-of-home audiences in local markets starting in October of this year, but has indicated those numbers will not affect national ratings, a detail reported previously by Sports Business Journal.

The 2020 move will help moderate years of debate over whether TV ratings truly reflect the audiences who have tuned in to watch the programs they measure. For years, TV networks have maintained that a good chunk of their viewership – especially for live events and important news broadcasts – isn’t being counted because the national ratings don’t include viewers watching in places other than their own living rooms.

Indeed, in 2015, NBCUniversal’s CNBC business-news outlet said it planned to stop using Nielsen to measure the audience for its daytime schedule, which is watched heavily by Wall Streeters and corporate executives in offices, on trading floors and during travel. The network, which has relied instead on surveys of the daytime media habits of investors and financial advisers by market-research firm Cogent Reports to set rates with sponsors, has yet to return to the traditional system.

An influx of audience could not come at a more critical moment. TV ratings continue to sink. According to Nielsen, only 10 primetime broadcast shows in the 2018-2019 TV season mustered an increase in levels of viewership by people between 18 and 49, the demographic most coveted by advertisers in scripted programming. The dynamic has created an awkward interaction between the networks and their advertisers, who continue to flock heavily to TV due to questions about measurement of and quality of content in digital media venues. Madison Avenue finds itself paying higher rates for TV ads even as the number of linear viewers for them continues to dwindle.

Adding out-of-home audiences into the mix could boost ratings, suggests Subramanyam, particularly for sports and daytime programs.

“We just want fairness,” she says. “Let the chips fall where they may, but we just want all the different ways our consumers are consuming content to be measured and part of currency, so we can get paid for them.”

Nielsen and the networks have been working on out-of-home methodology for more than a decade. In 2008, the measurement company unveiled what it called a stand-alone offering that would monitor out of home viewing in Chicago, Denver, Houston, Los Angeles, Miami and New York. Six years later, it announced it had quantified a meaningful lift in audience – 7% to 9%  in viewers of news programs – due to out of home measurement.

In 2017, Nielsen struck a deal with CNN and Turner Sports that would give the outlets credit for out of home viewership. ESPN and Fox Sports had already signed up for the service. In the past, some media companies have negotiated on their own to include out of home viewers in specific pacts with advertisers.

Disney’s ESPN nudged things further during the “upfront” ad sales season of 2017, telling advertisers it intended to sell a “total live audience” measure for game broadcasts that would included linear TV and streaming audiences. The network also offered to do business incorporating a Nielsen out of home measure.

Not every big media agency has opted to take the service, however. In the fall of 2017, ESPN reported that “more than 50%” of media buyers had agreed to utilize numbers from out of home sources. During some 2019 upfront talks, according to a person familiar with the discussions, agencies that gave the nod to use out of home levels in national ratings may have been rewarded with slightly lower rates in the cost of reaching 1,000 viewers, a measure known as a CPM that is critical in annual ad-sales talks between Madison Avenue and U.S. TV networks.

WarnerMedia is among the TV companies pressing for out-of-home audiences to be counted. “We are strong advocates of accurate and comprehensive measurement of all audiences, inclusive of out-of-home,” says Katrina Cukaj, executive vice president of ad sales strategy at AT&T’s WarnerMedia, via email. “We were first to execute guaranteed deals using out-of-home in 2014 on CNN, and this year more than one-third of CNN’s upfront commitments were negotiated with out-of-home guarantees.” Cukaj said WarnerMedia this year for the first time incorporated out-of-home guarantees for TBS ,TNT and TruTV.

“We believe it is important to measure all viewers across all platforms providing the most complete measurement possible,” she says, “which is why we welcome the addition of out-of-home to the national currency.”