If NBCU Ditches Nielsen, What Must Come Next?
Media consumption and consumer purchase behavior have shifted significantly, and the experience of the pandemic has highlighted how dramatic these shifts have been. Against this landscape, the current measurement regime is deeply antiquated, a reality NBCUniversal dramatically called out this week.
That call out is urgent, as these traditional measurement approaches put NBCUniversal and other players at risk.
By taking measurement matters into its own hands, NBCUniversal can not only protect ad revenues, but also grow them. The rise of programmatic digital should be the trail guide: Advertisers want more targeting precision (audiences), better advertising options and transparency (controls) and more information about consumer behaviors and what they do after ad exposure (insights and personalization).
By focusing on these core areas of innovation, NBCUniversal and other players can ensure longer-term success by meeting the needs of large advertisers.
In terms of creating a new measurement system, it remains to be seen whether individual players like NBCU can pull this off on their own. Large advertisers want scale, efficiency and uniformity, and having to deal with many different measurement methods that lack common standards will be problematic in the long term.
In the short-term, if NBCU can deliver on audiences, controls, insights and personalization, it stands a chance to retain advertisers and possibly grow while the industry coalesces around new standards.
As NBCU looks to roll out a measurement system, it’s important to note the issues that Nielsen currently struggles with to effectively tap into the pain points. Nielsen’s current hurdles include emerging media and mobile device-based media consumption, and it has been shown to undercount audience size and impact in these areas. It also lacks core insights on consumer behaviors and more precise audience segmentation that advertisers want.
In many cases, advertiser sophistication on these fronts has greatly outgrown the measurement. And players like NBCU are stepping into the gap to try to offset the damage to their revenues.
The million-dollar question is how NBCU can integrate the shift in consumer behavior into its measurement system without violating privacy regulations and potential technology privacy restrictions (think Apple’s App Tracking Transparency, or “ATT”). Most consumers are not aware of how they are being tracked on their video devices (TVs, set top boxes, OTT streaming devices) and in many ways, there may be a privacy reckoning here that other digital devices and channels are going through right now.
Apple is setting the bar in terms of privacy transparency and controls, and the industry should be watching carefully because consumer privacy expectations are being set in the mobile space. Consumers won’t delineate mobile channels versus others; it’s all the same to them.
Brands that have been reliant on consumer tracking to measure marketing performance are now finding out how big of a problem that is. As the tracking picture goes dark, these brands are realizing that they no longer have reliable measurement and that the reads they get may not tell the whole story.
Fortunately, modern computing has given rise to innovations in traditional measurement techniques such as marketing mix modeling, and these approaches (which use no consumer tracking or personally identifiable information, or “PII”) can offer faster, more flexible measurement than ever before and offer a future-proof approach as privacy regulations and data-tracking issues continue to explode.
What does this all mean for NBCUniversal’s competitors? Should they look to develop an alternative measurement system of their own? Yes, it can make a lot of sense to develop their own measurement systems, although they might be better served to collaborate and partner with NBCU to gain more market adoption versus competing with different approaches that will prevent wider-spread advertiser acceptance.
Let’s see how this plays out.
Matt Voda is the CEO of OptiMine Software.