In this edition of BIA Advisory Services’ Vantage Points series, Brad Adgate, Media Consultant & Forbes Contributor, pens his views on the current audience measurement situation.
The Vantage Point series taps the perspectives of various lookout points from around the local media and tech sectors. Email us to discuss a topic for consideration.
Looking back at the evolution of audience measurement, I am struck by the lack of innovation and competition. The two are related. Competition brings about three things: greater innovation, better service and a more affordable cost.
It was not until 1987 that Nielsen finally replaced TV diaries with people meters. AGB had introduced people meters in the U.S. forcing Nielsen to upgrade. The biggest beneficiaries were the cable networks whose household penetration reached 50% that year, people meters provided them usable ratings to compete with broadcast. Since then, besides a few potential competitors easily written off, the people meter panel remained the only source for TV ratings as the sample gradually grew from 2,000 to 40,000 households.
A lot has happened since 1987, the emergence of addressable advertising, connected TV, on-demand viewing, streaming video and other forms of video entertainment and advertising opportunities. By and large, measuring audiences remained unchanged, the industry was content with the status quo.
This ratings complacency ended with the pandemic. With stay-at-home orders in place, TV networks noted Nielsen ratings and usage dropped, defying conventional wisdom, resulting in a significant loss of revenue. There were several reasons cited for the drop-off including; field representatives’ inability to visit households to ensure participation and some panelists had moved to their secondary (safer) homes not in the panel. At the same time, rival audience measurement providers such as Comscore which relies on return-path data reported no ratings declines.
Previously, when ratings were questioned, the issue was short-lived, primarily because there was no other competitor. This time it’s different, the ratings issue has escalated lasting now for six months with no sign of abating. The VAB, a group consisting of prominent programmers, asked the Media Rating Council to suspend Nielsen’s accreditation. After canvassing its Board of Directors, the MRC complied.
Another difference is the potential competition. NBCU issued an RFP to 50+ audience measurement/ad tech companies with the goal to find a new methodology. A majority of companies participating in the RFP are ad tech corporations as well as Nielsen and Comscore. Another difference is the lack of leadership from research executives of networks and ad agencies. In previous complaints about ratings, it had been the research departments who interact with Nielsen daily that were the most vocal. This time the VAB took the lead with research executives mostly silent.
While initially the ratings issue dealt with the underreporting of panels, soon afterwards, it became clear that panels, as the primary source for audience measurement, has become inadequate in a fragmented, multiplatform video landscape. Even Nielsen had announced plans to measure streaming and digital media by rebuilding their existing audience measurement system. By consensus, industry leaders said an overhaul is long overdue.
With nonlinear video viewing growing, the next generation of audience measurement is still up in the air. In all likelihood, it will require large data sets from smart TVs, and return path data, requiring collaboration from consumer electronic companies and MVPDs. Also required is the cooperation from all major digital media providers for usable cross platform and deduplication measurement.
If panels remain, the samples will need to be bolstered significantly to measure fragmented audiences from individual program/ad exposure. The ability to measure the impact of an ad campaign on sales and attentiveness measurement would also be beneficial. The result would put linear and nonlinear video on equal footing.
In the future, audience measurement providers will rely on licensed data from set-top boxes from MVPDs, automated content recognition from smart TVs and “walled gardens” from digital media among other potential sources. It will require full industry support, a significant amount of funding and transparency needed for MRC accreditation whose industry role will grow in significance. Unlike the past, there could be several audience measurement providers, this will offer something different; greater innovation, better service and affordable costs. We’ll see.
Get more insights from Brad Adgate on BIA’s local video marketplace webinar, which examines the paradigm shifts around audience building, targeting, activation and attribution.
Brad Adgate, is a media consultant and Forbes contributor writing weekly covering the media and advertising industry. Among his most recent articles include; For Nielsen Ratings Complaints & Potential Competitors Is Nothing New. He can be reached via email or on LinkedIn.