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Advertisers Jockey for More Control Over TV Networks’ Bid to Launch Nielsen Rival

Neilsons Measurment Problems TV Digital
The Voorhes for Variety

Who’s really going to be in charge?

NBCUniversal and a group leading the nation’s big TV companies are both jockeying to find ways to create a media-measurement rival to Nielsen, but an organization that represents some of Madison Avenue’s largest advertisers is warning the media entities to proceed with caution.

“If NBC wants to do something for NBC, they are well within their rights. They can do whatever they want to do,” says Bob Liodice, chief executive of the Assn. of National Advertisers, which counts more than 800 different marketers who spend $400 billion on advertising each year as members, in an interview. “But our members want to have a common system across all platforms. If the current system doesn’t work or works sub-optimally, then we should get together as trade bodies to investigate how we can work together to create a more advantageous measurement system.”

When the Media Rating Council yanked its accreditation of Nielsen’s national and local TV ratings after months of bickering between the measurement giant and the TV networks it monitors, it set in motion a chaotic process that may, if people don’t proceed cautiously, just serve to widen fissures that already exist between big advertisers and the media outlets they support.

NBCUniversal has declared its intention to convene a new group of measurement vendors to set up a rival methodology to count viewers who watch their favorite programs across traditional and digital screens. The Comcast-backed entertainment giant has lined up support not only from its TV rivals, but some of the industry’s biggest media buying agencies and even some advertisers that it has yet to name publicly. Meanwhile, the Video Advertising Bureau, a trade group that represents the TV networks to Madison Avenue, earlier this month unveiled its own “task force” that it expects to “accelerate the pace of overdue innovation in media measurement and currency.”

At issue is rising dissatisfaction with Nielsen, the de facto judge of how many people watching a particular program as well as the commercials that support it. The company has, for decades, served as the arbiter of viewing activity, which is the bedrock of negotiations for tens of billions of dollars in advertising. Nielsen generated nearly $2.1 billion in revenue for its measurement services in 2020, according to company reports. Much of that money flows from NBC, CBS and other TV entities.

The ANA on Monday suggested that discussions for any new measurement standard move beyond the TV networks and insisted that any new system gain the approval of the Media Rating Council. “It is necessary to support and justify the billions of advertising dollars spent annually on paid media,” the group said in a statement. “Fiduciary transactions require accurate foundational measurement enabled by the MRC.”

Some advertisers are concerned that a measurement proposal emanating from the networks will favor that side, Liodice said in the interview. “You can’t have the sellers dictating how the market is going to go. You need the collaboration of everybody.”

The networks say their efforts are open to all. “We want to partner with the ANA, and help bring more awareness and understanding of alternate measurement capabilities,” said Joe Benarroch, a spokesman for NBCUniversal. “The way forward is ongoing collaboration for best mutual benefit,” said Sean Cunningham, CEO of the VAB, in an emailed response to a query.  “I don’t think any player is trying to seize control of the process. We’re expanding our already established working relationships with marketers.” Both parties said they are eager to work with the ANA to expand the work it is already doing to find a standard to measure audiences across various media platforms.

Advertisers worry that the new system will affect how billions get spent, but the networks have skin in the game as well: they pay millions of dollars in fees to Nielsen and other measurement companies every year.

Madison Avenue has other concerns, says Liodice. “A common approach involves having unduplicated  reach and frequency, but it also involves recognizing that there is a qualitative difference between an video impression on TV and an impression that may air on one of the digital platfoms.”

Media outlets and advertisers like to portray themselves as the most durable of partners, but a relationship based on the spending of millions of dollars every year is bound to be tested more than occasionally. The rapid embrace of streaming video by consumers and the advent of the crippling coronavirus pandemic have opened rifts between the nation’s big media companies and their sponsors. Last year, many advertisers demanded that the industry go as far as to delay its annual “upfront” market, when the networks sell the bulk of their commercial inventory for the next programming cycle. The process was drawn out and more contentious than any in recent memory.

This one may be as well. Executives at TV networks make snap decisions every day, but changing the industry’s measurement standards will likely be a slow and onerous effort.

Executives from across the sector tried a similar feat in 2006 and 2007, when they switched the currency of ad deals to viewership of commercial breaks over three days of playback, instead of the program ratings that had long been the standard. The shift to the measure known in the industry as “C3” required participation from Nielsen, a bevy of broadcast and cable networks and the industry’s coterie of large media buying agencies, which allocate dollars on behalf of top advertisers. TV networks owned by Viacom, which were expected to see more significant declines in commercial viewing due to their youth appeal, held off implementation of the new standards for several months.

The formation of a system to rival Nielsen could take even longer. “Going to C3 was a hell of a lot easier than what we are going through right now,” says Kelly Metz, managing director of linear and advanced TV activation at Omnicom Media Group.