Despite the myriad troubles faced by Nielsen Holdings PLC and rising competition in the measurement market, Wall Street analysts still expect the industry leader to play a prominent role during upcoming upfront negotiations.
During the upfront, content providers look to sell linear and digital schedules to media agencies and their clients ahead of the upcoming TV season. Nielsen's measurement of national and local TV viewing has long served as a currency between media sellers and buyers. More recently, Nielsen has faced criticism for allowing its panel sizes to shrink during the pandemic, allegedly resulting in viewership declines and hundreds of millions in lost ad transactions. Beyond that, buyers and sellers argue Nielsen has been slow to integrate data that reflects the rise of digital and streaming viewing.
As a result, media companies, including Warner Media LLC and Paramount Global, have been testing alternate currencies from Comscore Inc. and VideoAmp Inc. for buying and selling advertising. NBCUniversal Media LLC, in particular, has been advocating for change, recently saying it planned to conduct upfront transactions for the 2022-23 TV season based on measurement data from iSpot.tv Inc.
Nevertheless, Nielsen is expected to retain a prime seat at negotiating tables during upfront discussions, according to analysts.
"Despite the headlines, none of the large ad holding companies have even hinted at bailing on Nielsen and they are the ultimate arbiters in video measurement," Doug Arthur, an analyst at Craig Huber Associates, wrote in a recent note.
Having other companies assume enhanced measurement positions will keep Nielsen "on its toes," Truist analyst Matthew Thornton said in an interview. However, it will be "easier said than done" to get all media buyers to agree on a new currency.
Asked if Nielsen data will still be a major player during the upcoming upfront negotiations, Thornton said: "That's very much the consensus."
Without referencing Nielsen, Kelly Abcarian, NBCU executive vice president of measurement and impact for advertising and partnerships, told S&P Global Market Intelligence that the company would remain flexible in working with companies its clients are comfortable with.
One hurdle Nielsen faces is its ongoing accreditation suspension from the Media Rating Council. Nielsen had been seeking a hiatus for accreditation of its national service while it looked to implement Nielsen One, a new system that aims to integrate linear and digital watching. Instead, the MRC elected to suspend accreditation for the national service and also for Nielsen's local people meter and set meter market services.
Nielsen has committed to the audit process and resolving the suspension. Last week, MRC said its audit of Nielsen's national and local ratings services would likely extend through the third quarter, after upfront negotiations have traditionally concluded.
In the meantime, Nielsen is currently testing the first iteration of Nielsen One, its integrated, cross-viewership platform, with Walt Disney Co. and MAGNA. The product is scheduled to arrive by year-end and then, following wide client assessment, become Nielsen's new standard in 2024.
It has also agreed to be taken private by a group led by Elliott Management Corp. affiliate Evergreen Coast Capital Corp. and Brookfield Business Partners LP. The $28-per-share offer values Nielsen at about $10 billion, or $16 billion including debt.
Elliott and Brookfield believe that Nielsen will remain "the gold standard for audience measurement as it executes on the Nielsen One roadmap."
