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Nielsen Idea Proposal (NLSN)

Nielsen Idea Proposal (NLSN)
 

Is there a credible threat to Nielsen’s stranglehold on the TV ad buying process?

 

Report Available: October 19, 2017

 

Blueshift’s initial research found growing unhappiness with NLSN as the sole provider of TV ratings, yet little traction for any alternatives. SCOR’s cross-platform measurement concept holds some appeal, while major broadcasters continue their search for better methods, including a consortium of media behemoths. NLSN is not standing still, promoting its Total Audience platform and trying to improve its out-of-home and digital measurements.

 

Observations

  1. There has long been an undercurrent of dissatisfaction with NLSN’s panel-based system for measuring TV audiences. The volume of such complaints from broadcasters and other content owners has only grown in recent years with the rise of streaming video, time-shifting DVRs and other new ways of watching shows and movies. Still, no one has been able to dislodge NLSN’s ratings as the standard currency for buying and selling TV advertising, allowing the company to command premium pricing and lock customers into long-term contracts. NLSN’s revenues from its Watch segment hit $821 million in Q2, up more than 10% year-over-year.
  2. There is no shortage of efforts underway to use other data sets to capture information about TV watchers. SCOR, a firm that made its mark tracking online advertising, burst into the TV market with its 2016 acquisition of Rentrak. Rentrak, which uses set-top box data from pay-TV operators to measure viewership of local TV broadcasts, has taken significant share from NLSN’s local TV business, but SCOR has its eye on the much-bigger national TV market. It has been developing a content ratings system that combines its online monitoring expertise with set-top box data and now a router-based system for tracking streaming viewership. Though the concept has some promise, SCOR has been wrapped up in an accounting scandal that forced it off the NASDAQ exchange, with the internal turmoil likely to be unresolved until at least next spring.
  3. Meanwhile, three of the biggest national media companies – FOX, TWX’s Turner, and VIA – have teamed up to create a system of targeted advertising on their TV networks. The consortium, called OpenAP, is using various data sets – including information from NLSN and SCOR – to try to give marketers a fuller picture of their audiences. In another shot across NLSN’s bow during this year’s “upfronts” – the annual gathering of TV and advertising executives – CMCSA’s NBC and Fox both announced deals with Moat to measure on-demand viewing. Moat, which was acquired by ORCL in April, already is a leading provider of digital advertising analytics.
  4. NLSN, while clinging steadfastly to its panel-based system, has been trying to modernize and address complaints about its ratings. The company has been gradually rolling out its Total Audience Measurement platform, aimed at capturing viewership outside of traditional, linear TV; it has signed new deals with DIS’s ABC and TWX’s Turner to try to measure out-of-home TV viewing; it has added FB, Hulu and GOOG/GOOGL’s YouTube to its digital ratings; and it has grudgingly started using set-top box data from pay-TV providers to supplement its panels.
  5. Sources in Blueshift’s May 18 report said neither SCOR nor NLSN has hit on an accurate method for measuring TV audiences across devices and platforms, but SCOR ultimately may have the smarter approach. However, SCOR is far from having proven it can execute its strategy and the lion’s share of TV ad dollars still goes to traditional, linear programming, meaning NLSN’s industry relationships and well-entrenched processes for ad buying remain huge obstacles for any challenger. Blueshift’s Jan. 6, 2016, report concluded that an explosion of new consumer data could undercut the relevance of NLSN’s TV ratings and chip away at the company’s influence, even if its role as the key provider of national audience measurement is safe for the foreseeable future.

 

Is there any credible threat to NLSN’s near-monopoly as the currency for TV ad buying? Are broadcasters gaining any leverage in contract negotiations that could hurt NLSN’s pricing power? What will TV measurement look like in three to five years and how will that affect NLSN? How much advertising was bought/sold at this year’s upfronts without relying on NLSN’s ratings? Are any alternative systems gaining traction, such as SCOR or OpenAP? To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: TV networks/studios, Advertisers/agencies, Pay-TV operators/content distributors, and Data analytics firms/industry specialists.

 

Companies: Nielsen N.V. (NLSN), Alphabet Inc. (GOOG/GOOGL), Comcast Corp. (CMCSA), ComScore Inc. (SCOR), Facebook Inc. (FB), Time Warner Inc. (TWX), Twenty-First Century Fox Inc. (FOX), Viacom Inc. (VIA), Walt Disney Co. (DIS)

 

Research Begins: September 25, 2017