Jan 18, 2022 - Economy

TV networks overhaul measurement system amid streaming surge

Illustration of a hand measuring a play button

Illustration: Sarah Grillo/Axios

After years of griping about Nielsen's outdated measurement practices, media giants are finally beginning to test ways to assess viewership ahead of the 2022 TV season.

Why it matters: The pandemic-driven shift to streaming forced TV companies to find new measurement alternatives faster than expected. Consumers stand to benefit from new standards, which aim to make ads and content more relevant.

Driving the news: In a watershed moment for the media industry, NBCUniversal said Thursday it struck a deal with a new measurement company, iSpot.tv, to test an alternative standard during the Olympics and Super Bowl.

  • "We are ready to support multiple vendors, but we think it's important to start with one to work with clients," said Kelly Abcarian, executive vice president of measurement and impact at NBCU's ad sales unit.
  • Nielsen did not return an immediate request for comment.

How it works: iSpot.tv is one of dozens of vendors across six categories that NBCU is evaluating for potential partners.

  • NBCU is first looking at vendors, including Nielsen, that count how many people watch programs and view ads.
  • From there, it will evaluate other potential partners that measure things like whether ads were seen by the right people and whether they were effective in delivering business outcomes.
  • Because ad-buying agencies are still wrestling with the best way to incorporate multiple vendors in their buying systems, it's likely that only a few vendors will be selected by each company, at least in the beginning.

Be smart: iSpot.tv was selected by NBCU first because of its speed and broad data set. While Nielsen relies on a panel of tens of thousands of homes to measure TV viewership, vendors like iSpot rely on relationships with smart TV providers to deliver viewership data in near-real time from tens of millions of people.

  • "I think the reality is that the panel does not have anywhere near the power and control that it once did," said David Levy, CEO of OpenAP, an advanced TV ad company.

Between the lines: NBCU is not the only company testing new vendors.

  • WarnerMedia is in the early stages of looking for its own set of alternative measurement partners. iSpot.tv, along with Comscore and newcomer VideoAmp have been selected as early test partners.
  • ViacomCBS announced a new partnership with VideoAmp last year.

Yes, but: Every major TV network is testing these new partnerships, even if they haven't officially announced them yet, per Jane Clarke, CEO of Coalition for Innovative Media Measurement.

The big picture: For decades, Nielsen has been the ubiquitous authority in TV measurement, but the digital era has introduced new measurement problems, like ad fraud, that need solving and it's impossible for one firm to address them all.

  • "Having more competition and quality options is important," said Levy. "Each of these new vendors that are coming to the space have different data and different methodologies for taking that data and producing great measurement results."
  • Nielsen has worked to modernize aspects of its rating system by introducing Nielsen One, a cross-platform measurement standard that measures streaming. But networks have become impatient. In May Nielsen admitted to undercounting viewership during the pandemic, following a major audit.

Bottom line: "There’s a need for a new measurement right now and there's not really a lot of companies that have what it takes to really do it," said Sean Muller, founder & CEO of iSpot.tv, Inc.

What's next: The Media Rating Council (MRC), the de-facto watchdog for the industry, will audit these new vendors once their products and services are fully baked. "MRC will play a very important role but maybe not immediately," Clarke said.

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