Audience measurement is undergoing a revolution as more and more connected video devices come to market, and legacy measurement company Nielsen Holdings PLC is caught right in the middle of the change.
As more data becomes available from a range of new connected set-top-boxes, smart TVs and mobile devices, Nielsen has had to adapt its measurement products. The company expanded its offerings to Total Audience Measurement to address the increase in digital video consumption. It partnered with set-top box providers and social media companies like Facebook Inc. to enhance its audience data. But change is hard, and Nielsen has had its share of critics along the way. It is also up against a growing field of startups angling for a piece of the cross-device measurement pie.
As the increase in over-the-air households and the shift to digital video continues to accelerate, representative data collection is becoming more challenging, said Nielsen Senior Vice President Kelly Abcarian during a panel discussion at SXSW, an annual event in Austin, Texas, that draws a range of media, technology and business executives to network and discuss cross-industry topics. The 30 million set-top box households Nielsen can access, combined with Nielsen's 40,000 proprietary tracking boxes, only represents about 36% of U.S. viewership — and because of technology discrepancies, those measurement systems often deliver conflicting data, Abcarian said.
For example, the 21st Century Fox Inc. program "Empire" is a resounding cross-cultural success, reaching 75% of multicultural audiences, but its reach has at times been overstated due to imperfections in the data, Abcarian said. When attempting to account for total viewership across measurement tools, adding return-path data measurements like those from smart TVs and connected set-top boxes, the show dropped from the 16th most viewed program to 38th.
Changes to Nielsen's measurement models are not taken lightly, Abcarian said. The company is spending "a lot of time" talking to its network partners who are no longer No. 1 in total audience ratings, she said, adding that relationship management is especially important in the changing ecosystem.
"Obviously, there are always winners and losers when you start to change data," Abcarian said.
While the company continues to push its Total Audience product to provide a more accurate view of viewership, the new metric has been slow to take hold in the market, weighing on Nielsen's financial results. Nielsen is in the midst of a strategic review that could result in the sale of part or all of the company.
The friction involved with an evolving video media space is natural and requires a considerable amount of relationship management, Abcarian told S&P Global Market Intelligence in an interview after the panel discussion. Asked about whether the evolving landscape and product changes contributed to Nielsen's strategic review, she said change takes time, and noted that this was not the first time the company has adjusted its measurement processes.
"It's not about being the legacy measurement company, it's about being the currency," Abcarian said in response to a question about the challenges it faces versus the measurement startups starting from scratch in the new ecosystem. Nielsen's measurements underpin the entire television advertising market, and changes to those models are not taken lightly, she said. In 2018, total U.S. TV advertising revenues came to $81.26 billion, including broadcast, cable and syndication revenue, according to Kagan, a media research group within S&P Global Market Intelligence.
Additional SXSW coverage:
SXSW: Venture capital looking for targeted enterprise AI opportunities
SXSW: Instagram founders recap on ads, authenticity with Facebook integration
SXSW: Instagram founders critical of sweeping antitrust regulation in tech
SXSW: 'Enormous' opportunity for bankers willing to embrace fintech
SXSW: Media, entertainment, enterprise, health, policy, and AI to bind them all