Nielsen, the legacy television measurement giant, has provided media companies, agencies, and brands with household media consumption, advertising performance, and audience insights through its “people-powered” panels and metering technology. Advertisers use these insights to measure ad performance and develop their targeted audience strategy. Nielsen had been the media analytics standard until disruption toppled the television industry. However, recent events call into question Nielsen’s measurement approach and ability to quickly meet market changes.
Where Did Nielsen Falter?
Nielsen’s contempt from advertisers, agencies, and media giants has been growing for years because of its chokehold on television measurement and the company’s efforts to stifle competition through lawsuits. But Nielsen’s current uphill battle resulted from two market forces:
- Nielsen was slow to improve its measurement solution to accommodate industry changes like shifts in consumer behaviors and the rise of emerging platforms.
- Nielsen had several massive miscalculations of its television performance metrics, which negatively impacted advertisers’ media investment decisions and deteriorated client trust.
Nielsen lacked the speed to improve its solution in time to account for rising content consumption across emerging channels like digital video, connected television (CTV), and over-the-top (OTT) television. Advertisers demanded the rich, deterministic household-level data generated from these emerging channels. Media measurement competitors started to emerge, and media giants, like Paramount and Fox, and multichannel video services (MVPDs), like Charter, were able to choose alternative media measurement partners. Nielsen couldn’t meet advertisers’ and media giants’ measurement demands.
Further, advertisers, media companies, and agencies started to notice measurement cracks in Nielsen’s once widely accepted television measurement approach. In 2021, Nielsen miscalculated out-of-home television viewing, impacting how advertisers selected audiences for media buying. This cost advertisers about $350 million in wasted media spend. Nielsen also confessed that between September 2020 and December 2020, out-of-home viewing hadn’t been reported for broadband-only homes. As a result, the Media Rating Council (MRC), an independent media measurement association, revoked Nielsen’s media measurement accreditation.
In the midst of this dramatically changing media ecosystem and slipups, it was no surprise that Nielsen was acquired for $16 billion by a private equity consortium. The company is attempting to address the market’s eroding trust with its new cross-platform measurement solution that leverages modernized measurement approaches, Nielsen ONE. But is it too little, too late? Eroding customer trust has big brands considering alternative measurement solutions. Media companies, like NBCUniversal, are forming their own certified measurement partner programs to ensure a holistic, deduplicated measurement approach across platforms.
Advertisers: Reevaluate Your Media Metrics And Measurement Partners
Nielsen’s struggles to keep pace with changes in the market and its measurement misfires have made one thing crystal clear: Advertisers must quickly pivot their media analytics strategy. First, advertisers need to ensure their approaches are accurate, representative, and using up-to-date data. Second, advertisers must upgrade their metrics, audience insights, and data-driven planning and ensure it supports an omnichannel advertising strategy.
To keep pace with the quickly changing media ecosystem and evolving media analytics solutions (as Nielsen works through its measurement blunders and slow response to market changes), advertisers can:
- Consider alternative media tracking and measurement solutions. While Nielsen ONE remains in the testing phase, advertisers should consider measurement competitors such as Comscore, LiveRamp, and VideoAmp. These vendors use household-level data or identity to track media consumption habits and ad views across platforms. This can help with behavior-based, data-driven media planning, flighting, and audience targeting strategy.
- Upgrade commonly used, often miscalculated media and audience metrics. Remember, your consumers are omnichannel. They stream videos on their laptops and watch their favorite shows on Hulu. So, your media measurement needs an upgrade. Look to your media data and measurement source for updated metrics like deduplicated audience reach, frequency, overlapping audiences, and more in-depth audience viewing habits, like popular content topics, across platforms. These metrics can help you identify which audiences overlap across platforms, which can influence your reach numbers and your ad frequency strategy.
- Test emerging metrics, like attention, to determine if they’re suitable proxies for ad performance. Some advertisers capture “attention” across digital assets by evaluating proxies, such as time-in-view. For television, vendors like TVision track TV ad attention by capturing opted-in customer data that tracks what people are watching, who’s in the room, and if/when they’re paying attention. They match that data with automatic content recognition (ACR) data on a second-by-second basis to measure how audiences pay attention to ads.
- Use outcome-based metrics to measure ad efficacy. Outcome-based metrics measure whether an ad drove the desired outcome or not. Usually, outcome-based metrics are associated with a sales conversion. However, an outcome metric could be conversion and brand metrics. All outcome-based metrics need to be well defined before an ad is launched, so you can successfully measure and manage the metric and ad spot.
Nielsen’s Next Step: Deploy Nielsen ONE Now
Since Nielsen is so entrenched in the media tracking and measurement ecosystem, it’s unlikely that advertisers and media companies will jump ship en masse. To stay in the game, Nielsen must amp up its development of Nielsen ONE, take it out of testing, and deploy it now. This will signal to the market the company’s tremendous effort to update its aging measurement solution. Further, Nielsen needs significant investment to improve its brand perception. Rebuilding client trust is paramount and will demonstrate Nielsen’s commitment to building a solution that meets the needs of modern marketers.
If you’re an existing Nielsen client, we urge you to review and test the new Nielsen ONE solution as soon as it’s available, as well as other competitive measurement solutions. Your future measurement partner should have a strong innovation budget that supports new techniques for media analytics, strategies to strengthen media partnerships, and a proven track record of developing timely solution enhancements that support the changing advertising ecosystem.
Forrester is launching more in-depth research on the topic of media analytics. Our first report (set to publish in Q2) introduces a new media analytics framework that advertisers can use as they shift to an omnichannel advertising strategy.
And if you’re puzzled by the ever-changing world of media analytics, measurement, and the ecosystem, please set up an inquiry or guidance session with me!