Nielsen, the unofficial king of U.S. TV measurement, is at risk of losing its throne. Sellers in the advertising industry have lost faith in Nielsen’s data, which is supposed to provide a universal currency for pricing ads. Since 2021, networks including NBCUniversal, ViacomCBS, WarnerMedia and Univision have been exploring alternatives. And on Aug. 9, news broke that the Video Advertising Bureau (VAB) and Association of National Advertisers (ABA), membership organizations that serve marketers, are in talks to develop their own Nielsen-size viewership panel.
Nielsen swung back on Aug. 10, touting its national panel of 42,000 households and disclosing for the first time that its streaming meter panel now reaches 21,000 households. Still, that won’t deter competitors from attempting to topple Nielsen from its perch as the dominant measurement service. And arguably none is better positioned to do so than London-based Kantar Group, the emperor of international TV measurement.
Though coy about its plan for the U.S., Kantar has sniped at Nielsen previously, stating, “We understand the pain points advertisers and broadcasters are experiencing in the U.S. and their unmet needs for measurement.” Whether or not Kantar decides to target the U.S. market, hypothesizing how it would do so is a path to understanding how TV measurement needs to evolve. One way or another, Nielsen must prepare for challengers.
What this is really about
The backdrop to Nielsen’s decline is the inexorable transition from linear TV to streaming on connected TV (CTV). As eMarketer reports, linear TV accounted for 71% of U.S. video advertising spend in 2020. It fell to 62% in 2021 and is projected to land at 57% this year. Budgets are following viewers to CTV, which is projected to grow from 11% of spend in 2020 to 18% in 2022.
Because Nielsen’s measurement system is overly dependent on linear TV panels, publishers and advertisers are increasingly in the dark. Who actually sits in front of the CTV, tablet, phone or computer when their ad plays (sometimes, no one)? How many times are they reaching that same person? What impact do these ads have?
There’s broad skepticism that Nielsen can answer these questions. Nielsen ONE, the company’s forthcoming “cross-media” measurement tool, is an apropos name — Nielsen has just one shot to get it right.
Recall that the Media Rating Council (MRC) stripped Nielsen of its accreditation in September 2021. That didn’t stop the TV industry from continuing to use Nielsen data to price ads since neither Comscore nor more distant contenders — Innovid, VideoAmp and iSpot.tv — provide a viable alternative yet.
Whereas Nielsen has doubled down on panels, these contenders have, in my opinion, swung too far in the opposite direction, depending heavily on digital metrics to measure audiences. But what if a company could find the golden mean between panels and metrics?
The dark horse
While it seems implausible for a European tech company to conquer American TV advertising, Kantar should not be underestimated. It has been building up both capabilities — panels and metrics — beyond the insulated U.S. market.
The private equity firm Bain Capital, which in 2019 bought a 60% stake in Kantar for $3.1 billion, seems to be supportive of Kantar’s recent acquisition spree. Since June 2021, Kantar has acquired MeMo2, Numerator, Blackwood Seven and Qmee. This lineup suggests that Kantar takes seriously the challenges of cross-media measurement, audience targeting, attribution and consumers insight.
Nielsen, not to be confused with its acquisitions-happy spinout, NielsenIQ, has been slower on M&A. The company’s July 2021 acquisition of TVTY, a TV attribution and ad monitoring provider, is its only purchase since 2015. Like Kantar, though, Nielsen will have a serious private equity backing pending the completion of its $16 billion takeover led by Evergreen Coast Capital, a subsidiary of Elliot Investment Management, and Brookfield Business Partners. If they perceive Kantar as a threat to their investment, M&A competition between the two companies will become inevitable.
Nielsen and Kantar both recognize that TV advertising must become more like social media advertising: a channel where ad targeting is extremely precise, impressions are easily counted and the causal chain from ad to purchase is, in theory, more traceable.
For either Nielsen or Kantar to win U.S. TV measurement, each would need three things:
CTV data that can bridge analytics from the linear world to multi-device streaming
Panels that keep the analytics honest
Artificial intelligence or machine learning-driven analytics that can verify viewer identities and link panel and CTV data to sales, brand awareness and other business outcomes
The trouble with evaluating potential acquisitions — and the TV measurement industry more broadly — is the firewall of meaningless jargon that makes the workings of these companies impenetrable. With that blind spot acknowledged, if you run Kantar or Nielsen, how do you begin to tick these boxes?
Nielsen should aim to gain credibility in CTV and cross-media measurement first. Samba TV is appealing with its claims to access 24 smart TV brands covering 46 million TV devices and 26 million commercials per month. Importantly, Samba TV recently aborted an IPO, and its investors probably want an alternative liquidity event. Conviva, the streaming-only analytics provider with 500 million unique viewers, 4 billion “sensors” in apps and 3 trillion events logged daily could be another good option.
Kantar could spark an all-out war for TV measurement by acquiring Comscore. With a digestible $200 million market cap (as of writing), Comscore is an especially appealing target because Kantar needs a beachhead in U.S. TV paneling.
Nielsen, like any king, benefits from inertia. It’s easier to keep the throne than take it. But Nielsen’s bad press and lofty claims about Nielsen ONE have, deservedly, attracted scrutiny. The attitude for most of the industry is to not believe it until they see it.
Kantar, on the other hand, has no track record in U.S. TV measurement. It’s free of expectations. As many an immigrant to the U.S. can attest, not having a heritage or legacy can be an advantage, especially when a legacy player is under scrutiny. But Kantar can’t wait long, as the window to preempt Nielsen ONE won’t last long.
I’ll close on a peaceful note. If any company — Nielsen, Kantar or another upstart — manages to get cross-media measurement right, it’s a win for American TV and society. The accurate measurement of TV ads is vital to supporting institutions that both inform and entertain the public. A transparent, efficient ad market will ensure that the content makers have a viable business model.
Nielsen may yet continue its long, profitable rein. But if Nielsen’s critics are signaling anything, it is that Nielsen should expect war, not peace, in the foreseeable future.
Domenic Venuto joined Progress Partners, a full-service merchant bank providing M&A, capital raising and SPAC advisory services for emerging tech and media companies, in December 2020. The Chief Operations Officer’s previous roles scaling technology, product, agency, publisher and adtech businesses, gives him a unique and valuable 360-degree view of the media, marketing, advertising and content sector.