With Nielsen Under Scrutiny, NBCU Wants to Build New Measurement System

The TV industry has for decades relied on a single yardstick: Nielsen ratings. Now NBCUniversal has suggested it may have to accept multiple measurement benchmarks.

The Comcast-backed entertainment conglomerate says it’s in the midst of “assembling a full suite of interoperable measurement solutions that are as advanced, diverse, easy-to-use, and multi-platform as the ways people watch content” in a bid to fill in a significant gap that is expected to open as Nielsen, under tremendous industry scrutiny, seeks a hiatus for the industry’s accreditation of its national ratings service.

All of this happens as Nielsen has struggled to keep count of video consumers increasingly adopting new behaviors to connect to their favorite media. Nielsen earlier this month asked for the industry to suspend its backing of its ratings, allowing the company to accelerates its efforts to find new ways to measure consumers as they watch programs across a multitude of different screens. The Media Rating Council, a group that conducts audits of companies that measure media to determine whether they are in compliance with industry standards, has yet to rule publicly on the matter, which it began to consider last week.

NBCU issued a request for proposals on August 2 to more than fifty different companies, asking each to help “build a new measurement ecosystem for us that reflects the future.” Responses are due at the end of business Monday.

NBC’s move, while still in its early stages, threatens to upend the system upon which its business has run. TV advertisers have long set their rates based on Nielsen ratings of the audiences for specific shows. As more people watch their favorite dramas, comedies and, increasingly, sports, via streaming services and mobile video, however, Nielsen’s tabulations are less valuable than they once were. Advertisers increasingly want to know not only how many people watched a specific program, but the shopping habits and proclivities of those consumers as well. Those specifics are becoming easier to identify thanks to digital tracking and the splintering of audiences into smaller, more discrete groups around particular types of programming.

“The media and technology landscape has completely transformed over the last few years — yet measurement remains outdated,” said Kelly Abcarian, executive vice president of measurement and impact at NBCU’s advertising and partnerships unit, in a statement released Monday. “Why? Because the advertising industry has not adapted and it’s holding us back.”

Left unclear in the executive’s message is whether NBCUniversal hopes to build a new measurement system that is monitored and managed by a third party or one that NBCU provides itself. More simply put: Will NBCU submit its audience counts to an independent authority, or grade its own work for Madison Avenue? One of the challenges of some of the new titans of digital media, such as Facebook or Google, is that the consumer impressions they generate are tabulated not by a Nielsen or other independent monitor, but by the companies themselves. Such “walled gardens” have spurred more advertisers, including Procter & Gamble, one of the nation’s largest, to build out their own proprietary consumer data, and use that to construct ad deals with various media partners. As this practice becomes more widely adopted, it’s possible to envision a more chaotic media world in which advertisers craft bespoke deals with each media outlet they deal with, creating plenty of chatter, but no universal business language.

“P&G makes decisions involving billions of dollars on where to invest our media money. These are big bets so we need objective, validated measurement to be sure that we’re getting the viewability, audience, reach and frequency we pay for,” Procter & Gamble said in a statement provided in response to a Variety query about the MRC’s deliberations about Nielsen. “Therefore it’s imperative that we have an objective, impartial judge to perform this measurement.”

The industry has known about its measurement issues for years and, despite several notable efforts, has yet to coalesce around a new system for tabulating audiences. Meanwhile, entertainment companies are moving quickly to accommodate consumer shifts, such as making first-run movies available to subscribers of streaming venues or counting audiences for sporting events who watch them in bars or other so-called “out of home” venues. All of these create new scenarios that require a different methodology to measure audience response.

Meanwhile, Nielsen has run into headwinds. In May, the MRC determined Nielsen likely undercounted TV audiences in February of this year. The networks have alleged Nielsen changed protocols during the coronavirus pandemic that resulted in undercounting of the TV audience over the past year. The networks say Nielsen kept field agents from maintaining technology in individual homes of viewers who take part in Nielsen’s measurement process, while also including homes in its panel whose owners had relocated owing to pandemic conditions. While Nielsen has pledged to rectify the matter, the networks have not been satisfied.

NBCU has signaled its new measurement intent for months. In April, Krishan Bhatia, president and chief business officer of the company’s ad-sales division, told Variety: “If there is no off-the-shelf consensus” for how modern video viewers should be measured, says Krishan Bhatia, president and chief business officer of NBC­Universal’s ad-sales division, “we are going to continue to invest in creating our own.”

The company has already won two separate hiatus agreements from the MRC: one for its digital ratings and another for its local TV measures. A hiatus for national TV wouldn’t necessarily mean that TV ratings would cease, but simply that they would lose the “gold standard” backing they have as the industry’s choice. That opens the door for rivals to offer other forms of audience tabulation.

Rather than get bogged down in a process before the MRC, Nielsen believes its hiatus will free it to develop measures and pursue new ways to implement them that will result in a more comprehensive system for tabulating consumer interactions with media. Before it can get there, however, companies like NBCUniversal are clearly looking to build and establish their own.

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