TV’s most intense drama isn’t showing on any particular network and doesn’t stream on any specific screen. Even so, some of the industry’s most influential executives can’t stop talking about it.
Chances are no one will mention the series at next week’s sundry upfront gatherings, when TV companies will unveil dozens of new programs as part of an effort to win billions of ad dollars, but it is of critical importance to Disney, Comcast, Fox and many of the TV-reliant companies behind the presentations. For weeks, TV executives have been transfixed by seemingly endless episodes in which their own networks, upstart tech companies, Wall Street heavyweights and Madison Avenue stalwarts all try to figure out how to count media audiences in an era when many of them turn to streaming services to watch their favorite series. For decades, the companies have relied on Nielsen to determine how many people watched the Super Bowl or a midnight repeat of “The Golden Girls.” Now, as media habits change, the entire system is likely to be overhauled, and the networks are relying more heavily on Nielsen rivals, trying to gain more control over the process — before someone else does.
Billions of dollars are at stake, and the way the industry ends up solving the issue is likely to affect every advertiser from AT&T to Apple. TV networks want to make sure every viewer is counted so they can charge the highest rates possible. Measurement upstarts and their investors see a chance to generate new money; Nielsen, for example, secured $3.5 billion in revenue last year. And advertisers want to make sure they are spending more efficiently, putting money into media plans that reach people most likely to be interested in what they have to say. “Everyone has lost money,” David Zaslav, the CEO of the newly combined Warner Bros. Discovery, one of the largest TV companies in the sector, told investors last year. “You’re dealing with a very antiquated delivery system.”
Now, everyone is trying to build a new one. The networks have for months been working to loosen their relationship with Nielsen, the de facto arbiter of how many people watch anything on TV. In September, the measurement giant, which acknowledged struggling with its technology during the coronavirus pandemic, lost industry accreditation for its national ratings service. That sent many of the biggest media outlets out to craft new alliances with rivals who want to vie with Nielsen — companies with names like iSpot, VideoAmp, and comScore, all hoping to launch an “alternate currency” to the one Nielsen already provides. “Multi-currency measurement is here,” says Linda Yaccarino, NBCUnviersal’s chair of global advertising and partnerships. “It’s really about the advertisers and the agencies and their state of readiness to transact commercials at scale on those services.”
And yet, just like some of TV’s top properties — shows like “American Idol” or “Survivor” — it’s clear that not every contestant is going to survive. “We are not of the view that there will be transactions on five, six, seven, eight currencies,” says Bradley Gross, who oversees private-equity investing in the U.S. and Europe as a managing director at Goldman Sachs, which recently took a $325 million stake in iSpot. “We see less than a handful that will be meaningful around the table.”
The current hodgepodge of options is also likely to create more confusion. Over here: an alliance between NBCUniversal and iSpot. Over there: a new deal to test Paramount Global with VideoAmp. And some companies are also working with Nielsen, including Disney. “Is it sustainable? No,” says David Spencer, manager of emerging media and partnerships at General Motors, one of the nation’s largest advertisers. “We have to have a single source of measurement, because we can’t have five companies each telling us a different number.” Ad executives encourage the networks’ ambition, but caution them not to get ahead of themselves. “We still look at benchmarking and competitive spending,” says Chris Paul, vice president of digital marketing at Verizon. “We need something we can all agree on.”
Nielsen says it won’t be the one to exit the arena. The company is in the midst of a massive overhaul of its technology its CEO says will offer the most comprehensive — and accredited — count of viewers as they jump back and forth between screens. Nielsen is already testing a new system, known as Nielsen One, with industry giants including Google and Interpublic Group. David Kenny, the company’s CEO, believes Nielsen will still be part of the measurement mix during the 2022 upfront and whatever haggling sessions take place in years to come. “I think, even in this year and this upfront, we are the most thoroughly inspected and audited service out there. It works,” he says, acknowledging that the industry has “been pushing for a while, getting an easier way to look at the full arc of where people spend their time.”
TV executives, however, believe that Nielsen’s loss of accreditation means everything is up for grabs. The current system for measuring TV audiences relies on “C3” and “C7,” or the number of people watching commercials on linear TV up to three and up to seven days after they appear. But if tracking binge-watchers and cord-shavers requires something else, then Nielsen is “sunsetting C3 and C7, and there is no such thing as a status quo. Nielsen One is an alternate currency just like iSpot and VideoAmp are alternate currencies. It’s going to require that all our deals get re-based,” says John Halley, chief operating officer of advertising revenue at Paramount Global. Rather than waiting for Nielsen to implement its new technology in full, he says, “there is now a lot of urgency to understand what the other options are.”
At the heart of the matter are changes in who watches TV and how they do it. In a different era, when dramas like “Dynasty” and “Dallas” and comedies such as “Happy Days” ruled the airwaves, advertisers could be assured that an ad placed on CBS or ABC would be seen by millions of people all at once. In 2022, with viewers able to pick what they want to watch at any hour and choosing among traditional TV, on-demand streaming, video games and creator-generated material, even the most charming ad typically meets fewer eyeballs. To generate sufficient impressions among audiences, then, advertisers often have to run their commercials again and again.
“The current measurement system does not allow marketers to understand how often an ad reaches a person. That can lead to over-frequency, with the ad hitting the same person 30 or 40 times in the same and on average shorter time frame,” says Nathalie Bordes, executive vice president of measurement at the Association of National Advertisers, an influential industry organization. “That person gets aggravated, and that person says, ‘I’m going to use an ad blocker,’ or ‘I’m going to escape to an ad-free environment,’ and this is something we cannot risk. Once that person moves to ad-free, getting them back is really, really hard.”
One of the challenges the networks face in devising a new audience yardstick? Advertisers would prefer to use the same one in every instance, rather than working with one combination of technologies over here and another one over there. And besides, should the TV networks selling the ads also be the ones to tell advertisers how the commercials performed? “We think third party verification is critical,” say Verizon’s Paul. “It’s nothing personal to any media outlet, but we don’t let anyone grade their own homework.”
Until the industry decides upon a new standard, advertisers are left to experiment with everything, just to make sure they are familiar with any service that could make it to the finish line. “We have a number of different companies that are either getting into the advanced measurement space or trying to salvage their audience measurement situation,” says one media-buying executive. “No one knows whether any of those companies or Nielsen’s new product is going to deliver.”
Little wonder, then, that some players keep on using Nielsen. Fox recently expanded its work with Nielsen to have it keep tabs on Tubi, its ad-supported video streamer. And Publicis Media is working with Disney to test Nielsen One. “The one thing we all had with Nielsen was that it was a standard for the industry,” says Donna Speciale, president of U.S. ad sales and marketing for TelevisaUnivision, the Spanish-language broadcaster. “Advertisers won’t be able to do specific measurement deals with every media company that aren’t comparable to others, “They can’t do their marketing plans that way. It’s going to have to get to a point where there’s some type of agreement within the industry and we are so not there yet,” she adds. “We are going to have to take it all and merge it all together to get to the best of the best.”
The ANA is running a “cross media measurement” research initiative that includes advertisers such as Unilever, Procter & Gamble, General Motors, Walgreens, L’Oréal, Verizon and PepsiCo, as well as Google, Facebook, Amazon and TikTok. The Video Advertising Bureau, which represents the TV network to the advertising industry, and the 4As, an organization that represents the advertising agencies, are also on board. This group may be the one to devise a unified standard.
No single entity is likely to provide the ultimate solution, says Bordes, but everyone ought to contribute to a broader system. “There is a lot of hype around the fact that Nielsen lost its accreditation, but overall media measurement is not easy. Anyone who comes in and says that they’ve got it solved easily I would challenge, and say, ‘Have you truly?’” she says. “This stuff is hard.” The ad executives definitely want a say in the process. After all, it’s their money. “We all need to work together to get there,” says GM’s Spencer.
The networks hope the measurement alliances they have struck this year will result in new deals and help keep money coming in. If advertisers like it, perhaps that can grow. Some clients have already begun to “peel off” a small percentage of their budgets to test new technologies, suggests Ross McCray, founder of VideoAmp, which may give them confidence to do more next year. And Horizon Media, an influential media buying agency, has said it intends to spend up to 15% of its clients’ upfront budgets on deals with new measures as their basis.
Even before the measurement debate can be settled, Madison Avenue is ready to move on to the next best thing.
There’s also a push to reach past measuring how many people see a commercial and determine instead how many people act after seeing one. Perhaps one consumer buys a ticket to a movie or another visits a web site or car dealership. Executives believe more of the industry could move to value such “attribution” over sheer viewing impressions. Both Nielsen and its rivals could play some part in that as well.
The only thing that’s clear right now is the outlook remains foggy, leaving executives like Jon Steinlauf, U.S. advertising sales officer at Warner Bros. Discovery to try a little bit of everything to keep Madison Avenue interested. “I don’t think there’s a clear answer for what the future will be,” he says. For now, at least, this TV drama is ending on an expected note: a cliffhanger.