How did the simple act of counting TV viewers become so controversial? David Kenny thinks he knows.
The CEO of Nielsen has been under fire for months, ever since some of his company’s biggest customers — the nation’s TV networks — began to complain about how Nielsen tabulated viewers during the coronavirus pandemic. They are still complaining. And Nielsen faces a host of upstart rivals with whom the networks are striking new measurement deals. But Kenny says he isn’t letting their maneuvering get in the way of Nielsen’s future.
“Yes, it’s noisier,” he acknowledges.
More clamor could erupt during the “upfront,” when U.S. TV networks try to sell the bulk of their commercial inventory for their next cycle of programming. Nielsen’s measure of how many people see programs and commercial breaks has long undergirded these sales talks, but in 2022, Nielsen finds itself without industry accreditation, which it lost in September. Now it faces the very real prospect that some of its competitors could take some of its business. Some of the networks are likely to tout their use of so-called “alternate currencies” to Madison Avenue. Already, one prominent media buyer, Horizon Media, an independent Madison Avenue media agency that works for big-spending clients like Berkshire Hathaway’s Geico and Anheuser-Busch InBev’s Corona, said it intends to commit to using new currencies in “up to 15% of its deals.”
Even so, Kenny is betting that Nielsen will be around after the upfront this year, and next year as well — even if the traditional TV audiences the company measures start to fade. “People will still care about reach and frequency “ in the future, he says, but they will look for it with more precise expression. “We don’t have to do reach and frequency by age and gender. We can do it by income level. We can do it by geographic cuts.” He suspects advertisers will start to look at share of audience over an entire day, rather than just a smaller daypart. Big live events, he says, will probably still have traditional ratings for some time to come.
“I’m very sure” advertisers continue to value Nielsen, he says, and if they do, media outlets who court them will have to keep Nielsen in mind.
Still, the level of rancor between the two sides has elevated decidedly in recent months. Nielsen and the TV networks once seemed to go together like peanut butter and jelly. On some recent days, they’ve seemed about as likely a combination as peanut butter and mayonnaise.
The networks have long wrung their hands over Nielsen. No one, after all, loves the professor who grades the term paper or final essay. But things seemed to hit a new bump in 2018, when CBS delayed renewal of its contract with Nielsen, citing a plethora of rival measurement services and Nielsen’s slow progress to finding ways to count audiences watching video on smartphones and other digital screens. The feud had all the cadences heard more typically in a contract breakdown between a cable distributor and a major network.
Other strains in the Nielsen-TV relationship became visible before the start of the 2020-2021 TV season when Nielsen said it wanted to delay implementation of a new service that would include so-called “out of home” audiences in its broader tally of TV viewing. The networks had been anticipating the measure would add to their ratings, as it would capture viewing in hotels, bars, and offices. The networks protested, and Nielsen relented.
If any Nielsen executive should understand its clients, it ought to be Kenny. He once ran the company that owned Weather Channel, and helped build a digital-media agency called Digitas, which he then sold to French advertising giant Publicis Groupe. So he knows the pressures programmers are under, as well as those advertisers face.
“I do have a sense of urgency to move forward. I think we have to be current on the audience. I think Nielsen has been a little slow,” he says, but he counters that the networks who complain about how Nielsen measures often get upset when it moves quickly to change how it works.
The networks may have to face a reckoning about their place in the new media world, he says, where their once healthy dominance could ebb. More people are moving to what he calls “unscheduled” programming, compared with the “scheduled” fare that has made the TV networks so much money in the past. Nielsen will have to measure everything from time spent with YouTube, to attention paid to “creator” venues like Tik Tok or Twitch — and the networks are likely to see their share of engagement with consumers decrease. “There is going to be noise from people who would like to keep it to scheduled TV,” he says, but more media executives have to understand that consumer habits are changing irrevocably. “’As seen on TV’ meant something” to a different generation of consumers, Kenny adds. “Not so much anymore.”
He thinks Nielsen’s longstanding ties to advertisers and the infrastructure it already has in place will keep it in the mix. “In the end, I think if you’ve got the best measure of the audience, and you can audit it and people can bet money on it, and count on it, you do find your way to the end, and so I’m willing to take a little bit of the noise.” He notes that he’s received emails of complaint from network representatives only to see their words distributed to the press before he can even acknowledge receiving them. Of one recent missive, he says, “I read it in Leak Herald before I opened my email….That’s unusual.”
He wants to defuse such efforts. “What I have to be careful of is to not let it work. If I don’t let it work, it will stop.”
Nielsen still has critics, however, and the networks remain at a heightened level of concern. “There’s a true jump ball for the future” when it comes to the industry’s audience measurement, says Sean Cunningham, CEO of the VAB, an industry organization that represents the TV networks to the advertising community that has been a frequent critic of Nielsen in recent months. He believes the traction gained in recent months by Nielsen rivals adds new competition to the mix and forces all the companies to work harder. “We’ve gone from single to multiple when we are talking about currency, and we will never go back,” he says, acknowledging that Nielsen is likely to continue to hold significant influence. “We are not rooting against Nielsen here at all,” he adds. “We just want them to get it right.”
Kenny thinks Nielsen will. He believes the company will win back accreditation from the Media Rating Council (the MRC has said it’s not likely to consider the question until the end of the third quarter at the earliest), and is poised to start implementing a new cross-media measurement system, Nielsen One, this year. Disney, Publicis Media and Google are among the companies helping to test it, and Fox recently expended its work with Nielsen to help it monitor audiences on Tubi, its ad-supported streaming-video outlet. Meanwhile, Nielsen is poised to go private, backed by the activist investor Elliott Management as well as Brookfield Asset Management, an arrangement Kenny says will allow him to focus more intently on the company’s business and try to accelerate its progress.
Elliott and Brookfield did not respond to a query seeking comment.
Kenny also believes Nielsen has an edge over the upstarts. Nielsen measures a broader swath of consumers than some of its competitors, he says. Some of the new companies rely more heavily on Automatic Content Recognition data from smart TVs, which tends to skew more heavily toward white, high-income consumers who have easy access to the internet and credit cards. And yet, he notes, the industry is full of “advertisers who want to reach everybody. There are stores and banks that serve everybody.”
Some media companies are demanding the measurement upstarts keep the overall market in mind, not just those who can lean into new technology more quickly. The new measurement companies “need to make sure” their data “includes everybody,” says Donna Speciale, president of U.S. ad sales and marketing at TelevisaUnivision, the large Spanish-language media outlet. “You can’t do holistic marketing if the data you use is not representative of the market.”
These are the sorts of debates Kenny would prefer to have. He’s eager to have Nielsen measure all kinds of consumer interactions with video and entertainment, because advertisers and programmers will grapple with many new types of audience behavior in years to come, including, he notes, the “metaverse.” “I’m kind of hoping to turn up the noise on that,” he says, “because I honestly believe it serves the industry. People need to start making decisions based on what the audience is doing, not on the economics of who wins and loses.”