Nielsen has a new proposal for TV networks that have been threatening for months to find other means of measuring their audiences: Stick with the yardstick you already use.
The company, which has for decades offered viewership counts that are at the heart of how TV outlets set advertising rates, plans in 2022 to overhaul one of its most critical tabulations. Since 2007, Nielsen’s “commercial ratings,” or measures of the viewership of ad breaks on TV, have been at the foundation of advertising negotiations between media companies and Madison Avenue. Now Nielsen says it has the technology to measure the audiences for individual ads.
“Currently, buyers and sellers transact on ‘C3’, which provides the average of all commercial minutes within a program,” says Kim Gilberti, senior vice president of product management at Nielsen, responding to questions via email. “As we move to a world where linear television is becoming more addressable, it’s important to be able to post on the individual ads that were served. Nielsen’s technology advancement gives us the ability to detect and credit tuning events at this lower level of granularity.”
She adds: “Over time, we anticipate that buyers and sellers will begin to transact against the individual commercial metrics of a given ad, rather than maintain the current construct of looking at the average of all minutes within a program.”
Nielsen reveals its new abilities at a fraught moment. U.S. TV networks, frustrated by what executives say are faulty methodologies, have started to strike out on their own to create new measurement options for advertisers. NBCUniversal, ViacomCBS, WarnerMedia and Univision have all solicited rival vendors to help create new ways to measure audiences who are increasingly watching their TV favorites at times of their own choosing, usually via broadband technology. Nielsen is also grappling with a loss of accreditation for its national ratings service.
The networks typically pay Nielsen hundreds of millions of dollars each year to get its audience data for TV programs and ads. Nielsen reported revenue of $637 million from audience-measurement activities in its third fiscal quarter.
The measurement company says it has enlisted Extreme Reach, a technology company that will help attach digital watermarks to most national linear TV commercials, allowing for tracking by Nielsen. Nielsen intends to launch that effort in the first half of next year.
”Nielsen has been working on this technology enhancement for well over the year.” Gilbrrti says. “This is the culmination of innovation, and meticulous testing to ensure that we can meet the industry’s changing needs.”
But the new individual commercial viewership ratings likely won’t be available in time for a critical business period. Gilberti says the new measure isn’t meant for use in the industry’s next “upfront” market, when U.S. TV networks try to sell the bulk of their commercial inventory for the coming programing cycle. Instead, Nielsen will start gathering data for use in what is projected to be a new system of measurement that will work across linear and digital venues and is slated to debut in late 2022.
Nielsen’s effort likely sets it in a race with the media companies to see which side can develop a new working system in a timely manner. The networks are trying to build new measurement concepts tailored for modern audience behaviors, while Nielsen already has infrastructure the networks’ owners may not want to invest heavily in to launch. What’s more, both sides will need to have new efforts backed by the Media Rating Council, an industry organization that sets measurement standards, in order to win over skeptical marketing executives at top advertisers.
In the past, seismic changes to the way TV ratings are calculated have taken years to implement. To move from Nielsen’s program ratings to new “commercial ratings,” TV networks, advertisers and media agencies spent months debating the ins and outs of the maneuver before it became official in 2007 after NBCUniversal and WPP’s large GroupM buying operation struck a broad deal for $800 million in inventory. Since that time, many deals have been based on “C3,” or viewing of commercial breaks up to three days after their first airing.
In intervening years, however, commercial breaks have taken on new meaning for users who stream. Broadband video hubs like Hulu, Tubi, HBO Max and Peacock typically use fewer ads per hour, and often send specific ads to users based on their location and buying habits. In other words, the notion of a single viewer sitting through the same commercial break as every other person watching a particular video selection has quickly become relegated to the past.
Both Nielsen and the networks can agree on one thing: The migration of TV viewers from the traditional experience of watching shows in linear fashion to new digital behaviors is taking place faster than anyone can track. That’s forcing the entire industry to take on the unenviable task of fixing an airplane after it has already taken flight.