"On TV & Video" is a column exploring opportunities and challenges in advanced TV and video.
Today's column is by Jo Kinsella, President, TVSquared.
Since the dawn of TV, Nielsen ratings have been the gold standard for marketers. They measured the percentage of a group (e.g., women aged 18-49) or households in a particular designated market area (DMA) that tuned in to a program. If you wanted to reach a specific cohort, you asked Nielsen which show offered the highest-rating ad breaks, and that’s where you placed your TV budget.
It was a simpler time. For years, families gathered at a set time and place to watch TV. Our lives revolved around appointment TV, and if you weren’t home when the show aired, you missed it.
Fast-forward to today, and “watching TV” is a totally different beast – one where Nielsen and its ratings simply can’t keep up.
Seismic Changes > Old-School Practices
New technologies have upended the old TV paradigm. People are now free to watch both new content and reruns of their favorite shows wherever, however and whenever they want. This freedom has essentially obliterated appointment TV and, as a result, Nielsen’s ratings.
The Video Advertising Bureau’s callout to Nielsen regarding its undercounting during COVID-19, the MRC’s suspension of Nielsen’s national ratings accreditation and NBCU’s recent initiative to change the currency game have dominated headlines. We must move away from legacy infrastructure and adopt new practices and technology that takes into account a more complete TV universe. Relying on an old-school TV company to play a critical role in a new-school world will never work.
One reason we’ve seen such slow change in Nielsen’s upheaval is due to large media companies being locked into multiyear contracts. As those time out, there’s a growing focus on currency and an overall industry push to update antiquated practices and adapt them for a converged TV world.
How we missed the mark
Nielsen’s reign has been long-standing, but it has held that position with the support of the TV ecosystem. After all, advertisers love their “gold standards.” No one has ever been fired for buying time on highly rated shows, and who doesn’t love the upfronts and all the glitz and glamor that surround them? Content providers were keen to keep Nielsen if their shows received high ratings, too.
The question is, how much did we really know about ratings? It shouldn’t have taken the VAB asking for an audit and a loss of MRC accreditation for this question to be raised. Transparency across all platforms and devices has to be the new normal.
Ratings give you an indication if people saw your ad but little else. (And the accuracy of them is up for debate.) They don’t provide insight into optimal reach and frequency across households, or tell you how an ad performed within a specific program, such as if a viewer saw it and then took action. Rarely do the top-performing shows align with the top-rated ones.
The complex customer journey we find ourselves in today is even more reason why ratings are no longer relevant. They don’t take into account a cross-platform, cross-media, cross-screen universe where TV can be consumed on any device, nor do they provide insights beyond just reach based on simple demographics like age and gender.
Today, the buy- and sell-sides need unduplicated unique reach, outcomes and audiences in a transparent and always-on way. At the touch of a button, measurement should serve up metrics and optimization opportunities that enable companies to trade in the right way.
And although Nielsen has made some moves toward capturing a more holistic picture of total TV time with streaming ratings, its panel still only covers a small proportion of TV viewing when you take into account the highly fragmented linear, streaming and addressable landscape.
What really went wrong is that, as an industry, we took the word of a single company – Nielsen – even as new devices and channels for TV consumption accelerated. It’s just what we knew.
What’s next for TV?
Viewers now have access to more premium video content than ever before and so many ways to watch it. We are living in a golden age of content, and it’s critical that we get things right in order to preserve and continue to grow the power of TV.
To do that, we can have no more “Nielsens,” where we base an entire industry on a single set of metrics that can’t easily adapt to change. TV is far too diverse and dynamic to support that anymore.
The recent issues surrounding Nielsen have also been a driving force for greater industry-wide collaboration, jointly tackling the hard work of building an accurate way to reflect how all types of people watch TV.
I am optimistic to see collaborative efforts through organizations like the VAB and IAB, the TV Data Initiative, Go Addressable and others, which are coming together to break down silos, establish new technology standards and enhanced data practices and, ultimately, support better measurement across the converged TV landscape.
TV’s opportunity has never been greater than it is right now, and the right set of metrics and appropriate currencies will benefit all. Together, we are creating and will continue to create the change needed to build the best TV ecosystem.