Nielsen acknowledged that the exclusion to-date of broadband-only households, which watch content online but do not have a pay TV service or antenna, has led to a gap and bias in measurement.
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The Media Rating Council has suspended accreditation for Nielsen Holdings PLC's national and local TV measurement services, opening the door for buyers and sellers to begin transacting business using different data sets.
Nielsen, which is facing scrutiny for under-counting TV viewing during the pandemic, previously sought 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, an industry organization whose membership includes most major media companies, elected to suspend accreditation not only for the national service, but also for Nielsen's local people meter and set meter market services. The accreditation process for those services had been on hiatus.
"While we are disappointed that the situation has come to this, we believe these are the proper actions for the MRC to take at this time," said MRC executive and CEO George Ivie in a statement, noting that the group's board of directors, representing media companies, advertisers and agencies, is unified it its position.
"MRC stands committed in our willingness to work with Nielsen toward the goal of being able to restore accreditation to these important services at the earliest possible time, and it is our hope that Nielsen likewise will continue to engage with MRC and its clients in pursuit of that goal," said Ivie.
Nielsen expressed disappointment with the outcome, but a spokesperson said the suspension "will not impact the usability of our data," adding that "Nielsen remains the currency of choice for media companies, advertisers and agencies."
The company said it is committed to the audit process and will work with MRC on resolving the suspension.
Video Advertising Bureau
Nielsen had come under fire from the Video Advertising Bureau, a trade organization representing the advertising sales departments of networks and distributors. The VAB pointed to the decline in Nielsen's overall sample size during the pandemic as the company limited field visits. In working with the measurement company, the MRC confirmed under-counting on national and local levels, based on audits of its February data.
Such shortfalls could have major transaction repercussions, the VAB said, with the financial impact potentially extending into the hundreds of millions of dollars on an annual basis.
The trade group had called for the Nielsen audit and asked the MRC to suspend the accreditation of Nielsen's national TV service.
VAB President and CEO Sean Cunningham in an interview called the suspension "a really important first step" for the market and acknowledgment that something was "fundamentally broken and needs to be fixed."
Cunningham did not comment on how long it might take for Nielsen to regain accreditation. He said one factor will be how much Nielsen takes this moment "to heart in showing us and not telling us. The speed will be based on whether their actions pertain to transparency, disclosure and partnership, versus a constant conveyor belt of promises."
Despite the suspension of its accreditation, Nielsen will remain in the conversation and the currency mix, according to Cunningham. However, the field will likely widen to four or five different companies that will provide points for negotiation as both sides look to "establish dialog about what combination of data gets to a truth set."
Cunningham said it has been an "anomaly" that such conversations have begun from a single point, and it is in the "marketplace's best interest for buyers and sellers to have choices."
NBCUniversal Media LLC has received submissions from more than 50 companies, including Nielsen, on ways to measure audiences and the effects of advertising messaging, following its request for proposals as it looks to establish "measurement independence." Comcast Corp.'s content arm said it will no longer rely on one partner or metric to determine the value of messaging within its content.
Nielsen will "continue to provide the most representative, reliable and robust audience measurement available, which the market can continue to trade on with confidence," Nielsen CEO David Kenny said in a Sept. 1 note sent to clients.
While working with the MRC, Kenny said it is critical for Nielsen to "continue building a media future that accurately measures and reflects the consumer cross-platform journey and keeps pace with rapid technological advancements."
His letter also outlined some key areas that the MRC cited that need remediation to restore accreditation of Nielsen's TV measurement. That included the panel size, which Kenny said has grown by 2,500 homes since March as workers returned to the field amid increased vaccination rates. He wrote that the company has further accelerated its panel recovery efforts to boost its sample size by 15% by the second quarter of 2023.
Kenny wrote that broadband-only homes are an important audience, accounting for nearly 30% of TV households in some local markets. Their exclusion to date means a gap and measurement bias, and the company is committing to integrate them in a responsible manner. Over the next few weeks, Nielsen will work with MRC to refine and audit universe estimates for weighting and sample controls. That, he said, will provide safeguards to ensure that broadband-only, cable and over-the-air homes are properly represented in the company's panel.