With Metrics War Looming, Pity The Video Advertiser

We’ve all heard the quote from the department store owner who complained that half of his advertising dollars were wasted, but he didn’t know which half. Today, an advertiser can choose from about a dozen different video measurement services, all of which claim they can tell who’s watching and when.

Nielsen, the granddaddy of ratings services, started out measuring radio audiences in the 1920s. The company switched to television in the 1950s. When there were only a handful of video viewing options and a limited number of screens in a household, the company’s combination of technology and paper diaries from a select number of households made sense.

Today’s consumers have a plethora of viewing options including TVs, tablets, smartphones and other devices accessing over-the-air (OTA), cable/multichannel video programming distributors (MVPDs) and streaming/over-the-top (OTT). Choices can include both linear offerings and on-demand content.

Given all this complexity, it’s reasonable to question whether Nielsen’s sample size of 42,000 homes, which have a total estimated 120,000 televisions, can accurately represent the actual viewing experiences of 122.4 million U.S. television households when inhabitants have access to so many different devices.

Video ad measurement fidelity questions really came to the forefront during the early part of the COVID-19 pandemic. The commonly accepted understanding that people were staying home and watching more television wasn’t being reflected in Nielsen’s numbers. After repeatedly denying problems with its measurements, Nielsen admitted that viewership, both in homes and in public spaces, had been undercounted for about a year.

The media industry complained that these problems cost it billions of dollars in ad revenues. Media company representatives further asked the Media Rating Council (MRC) to take away Nielsen’s television ratings accreditation. The MRC suspended the accreditation effective Sept. 13, 2021.

The measurement question becomes more complicated when one contemplates the fairly recent and marked shift in U.S. viewing audience habits. The availability of on-demand content from a variety of sources means that fewer households are watching live or linear content.

Multiple sources have been reporting on consumers’ shift to connected TV (CTV) and other on-demand video content. In late May, research company eMarketer projected that 140 million “users” would watch ad-supported video-on-demand (AVOD) in 2022. That’s an 8.6% year-over-year increase. Additionally, they forecast that two-thirds of the U.S. population will watch CTV content this year, a 14-percentage point increase in just five years.

The longer-term outlook is for digital viewing hours to surpass those for linear. Again, according to eMarketer, total time spent with television has fallen by one hour and 30 minutes in the last decade. Additionally, it forecasts that the average adult will spend more time watching digital, rather than linear, video by 2024. Most important to TVNewsCheck readers is that the company predicts digital video ad spending will surpass that for TV this year, forecasting $76.20 billion in digital ad spend vs. $68.35 billion for TV.

The company expects digital ad numbers to continue to grow through 2026, while TV’s dollars will be dropping. This, they say, is because marketers are getting ahead of viewership trends and “digital also provides a better opportunity for marketers in terms of audience targeting and tracking.”

So, there’s the rub for television ratings services. Traditionally, Nielsen measurements were for the average audience for all commercial minutes during a program. They are now working with a company called Extreme Reach to measure viewership of individual ads. This is one step toward a new ratings system called Nielsen One, which Nielsen wants to be fully operational by late 2024.

But digital video ads are measured differently. On top of that, advertisers want to go beyond viewership to outcomes; did the viewer go to the website or purchase the product? And they want measurements that make it easy to compare pricing and results for various video advertising buys.

Nielsen promises that its Nielsen One product will combine its audience panel solution with big data acquired from a number of sources. The result will be a complete cross-media measurement solution.

The problem is that ad-supported video networks are unwilling to wait for Nielsen. At the beginning of the year, Paramount announced that it was be using metrics from VideoAmp. In conjunction with the TV Upfronts, Discovery announced that Edo would provide its measurement “currency.” Also related to the Upfronts, NBCUniversal confirmed that it would be using measurement partner iSpot.tv and Scripps Networks said it had chosen TVision because that service most accurately captured viewership data for its portfolio of channels.

All of these solutions, plus others including Comscore, Media Monitors, 605, TVSquared and more, have made arrangements to incorporate data from selected groups of set-top boxes and connected televisions. Most tout their strengths in data management, in “deduplication.” Some include data acquired from other sources (such as the census and purchased lists), representative viewer panels, and/or purport to measure viewer actions taken in response to the ads.

One thing that I found interesting is that, of all the solutions listed, the only one with current MRC accreditation is Media Monitors. Further, in addition to Nielsen, which reapplied for accreditation after resolving its methodology problems, only Comscore and iSpot.tv are currently under review with the service.

Clearly this situation is not sustainable. In addition to there being a legitimate question about the number of video measurements services that can survive, this can only lead to a war of metrics. It’s in the best interest of both the advertiser and the video time seller to each select the solution that gives them the best price.

Pity the network ad sales executive.

Former president and CEO of the Media Financial Management Association and its BCCA subsidiary, Mary M. Collins is a change agent, entrepreneur and senior management executive. She can be reached at [email protected].