The fight between Nielsen and the Video Advertising Bureau continues to escalate, the latest being a claim by VAB that Nielsen cost member networks $700 million in lost revenue due to a second case of undercounting. VAB President-CEO Sean Cunningham now claims the total cost of Nielsen’s undercounting is “over $2 billion.”
Nielsen, which has lost its Media Rating Council accreditation for both national and local television ratings, continues to claim the undercounts had “minimal impact” on ratings.
Whatever the facts, the real issue is bigger than whether panel meters have been properly maintained. It’s bigger than either Nielsen or the VAB.
The real issue is that the very currency of television is in crisis.
To be properly monetized, advertising needs a common medium of exchange whose credibility is recognized by both buyers and sellers. For the past 70 years that currency for television has been Nielsen ratings. As multiplatform selling moves to the forefront and impressions become the new currency, Nielsen’s competency still matters because same system measures impressions. Questions about Nielsen’s accuracy do more than raise red flags, they put the value of television advertising at risk.
That risk is not a future worry, it is front and center right now.
After a very public solicitation for proposals from dozens of companies, NBC announced just two weeks ago it has partnered with a company called iSpot.tv to measure television and streaming audiences for the upcoming Olympics and the Super Bowl. Ad buying conglomerate Publicis Media is participating with several of its clients.
If NBC is this far along in the process, many other companies must be equally down the road to alternative systems, just less publicly.
Not only is the industry facing a potential wild west of measurement systems, but we must also consider a bigger transition about to take place that is even more complex than just accuracy in the number of people watching. That issue is attribution.
Simply measuring how many times a potential customer views an advertisement is no longer enough. Clients want to know customer reaction, engagement and — most importantly — action taken. By its nature, attribution is more difficult to measure, but it is also far more valuable. This is one of the reasons the addressability and two-way communication features of NextGen TV will be a game changer, greatly multiplying the potential value of commercial messages.
Since attribution is by nature a more complex sell, you might be asking why would a universal measurement system still matter? The answer goes back to common currency. Without a common currency there is no common value. To negotiate rates, buyers must be able to compare all proposals using the same standard, no matter how complex that standard may be. This is obviously equally true for sellers.
Looking at all of this from a practical point of view, the one company that should be creating future advertising currency is Nielsen, not just because of its television history, but because of its vast database in consumer goods and credit card purchases.
Could an assumption by Nielsen that the company will always be needed “no matter what” account for its public arrogance? If so, here is some breaking news: The industry is moving on.
Nielsen’s problem, of course, is its culture, which more insular than the Ming Dynasty. I know some very fine people who have worked at Nielsen, but glasnost is not a term I would use to describe their openness to criticism.
Perhaps I’m wrong. Maybe Nielsen has privately opened its systems and operations to work transparently with clients. Perhaps Nielsen is now listening with a willingness to make substantive change. Perhaps there really is a Santa Claus.
Here is what I do know: There are still plenty of broadcast companies that would open their arms to Nielsen if the company genuinely sought to put all its cards on the table and create true client partnerships, but one suspects that list grows shorter every day.
Although it will be very different from what we know now, the local media industry, led by leading multiplatform television stations, has a very bright future. Let’s hope Nielsen decides to be a part of it. If so, it had better start soon.
Hank Price is a media consultant. His second book, Leading Local Television, has become a standard text for television general managers. In a 30-year general management career, Price led TV stations for Hearst, CBS and Gannett, including WBBM Chicago, KARE Minneapolis, WVTM Birmingham, Ala., and both WXII and WFMY in Greensboro/Winston Salem, N.C. Earlier, he was a consultant with Frank N. Magid Associates. Price also spent 15 years as senior director of Northwestern University’s Media Management Center. He is currently director of leadership development for the School of Journalism and New Media at Ole Miss.
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