Nielsen’s National Ratings Accreditation Suspended by Media Rating Council

Nielsen’s decades-old track record of measuring the TV business was dealt a serious blow Wednesday after an industry organization decided to suspend its backing of the company’s national ratings service and also cancel an agreed-upon hiatus for its support of Nielsen’s local TV efforts as well.

The suspension is the latest salvo in a months-long joust between TV networks and the company that has long tabulated its viewership, and is the latest sign of the desperate needs of the TV industry to find a new yardstick as its audiences light out for new digital territory. The TV networks, eager to demonstrate to Madison Avenue that they still have clout with viewers who are moving to streaming outlets, alleged earlier this year that Nielsen changed protocols during the coronavirus pandemic, resulting in an undercounting of the TV audience. While Nielsen has pledged to rectify the matter, the networks have not been satisfied.

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In May, the MRC determined Nielsen likely undercounted TV audiences in February of this year, and Nielsen indicated last month it intended to seek a hiatus for its national ratings so it could work to upgrade them with less public scrutiny. “We have become increasingly concerned with inaccuracies and irregularities in the data reported by Nielsen, and urged them to more quickly pivot their processes and practices to fix known issues,” Disney’s ad-sales unit said in a statement Wednesday.

Nielsen’s desire for such a pause, however, has been denied. “While we are disappointed that the situation has come to this, we believe these are the proper actions for the MRC to take at this time,” said George W. Ivie, executive director and CEO of the Media Rating Council, which holds measurement organizations to standards on behalf of the media sector. “MRC’s Board of Directors, which represents an extremely broad range of industry constituencies, and includes advertisers, agencies, and media companies of all types, is strongly unified in its positions on these matters. MRC stands committed in our willingness to work with Nielsen toward the goal of being able to restore accreditation to these important services at the earliest possible time, and it is our hope that Nielsen likewise will continue to engage with MRC and its clients in pursuit of that goal.”

The decision will affect Nielsen ratings starting in mid-September. While the company’s measurement will still be able to be utilized, it will, for an undetermined period of time, operate without a sort of “seal of approval” by the industry that uses it. And that could give advertisers and TV networks impetus to seek alternate means of counting their audiences. Already, NBCUniversal has said it is working to assemble a new coterie of groups that can tabulate viewers as they move from linear TV screens to streaming services and on-demand viewing.

“While we are disappointed with this outcome, the suspension will not impact the usability of our data. Nielsen remains the currency of choice for media companies, advertisers and agencies. We are committed to the audit process and during this pause in accreditation we will work with the MRC on resolving this suspension,” Nielsen said in a statement. “We will also take the opportunity to focus on innovating our core products and continue to deliver data that clients can rely on, ultimately creating a better media future for the entire industry.”

One TV industry advocate portrayed the decision “as a loud change-or-die challenge” for Nielsen. “In fact, all measurement and currency providers with big future aspirations in the video advertising sector must take the 2021 mandate for real transparency, full and deep audience capture, urgent innovation and rigorous verification as mission-critical for them all.,” said Sean Cunningham, CEO of the VAB, an industry organization that represents the TV networks to Madison Avenue. “Advertisers should expect to see more innovation in the next three years in video measurement and currency than what was achieved in the last 30 years, time has officially expired on friction and frustration.”

Both the TV networks and Nielsen are grappling with an increasingly complex issue: how to measure TV viewers who no longer rely on watching TV shows in traditional fashion? As more consumers migrate from linear TV experiences to on-demand binge sessions with their favorite streaming outlet, tracking them has become a tougher task. The remedy for this has been for media giants to cobble together new measurement techniques that show how much viewership they accumulate as TV fans move from one screen to another. A growing phalanx of data tools — set-top box patterns, shopping behavior, and web tracking — has allowed many of the networks to build proprietary measurement products that let advertisers such as AT&T, Pepsi, and General Motors find pockets of their most likely customers, whether they be high-income technophiles, soda guzzlers, or first-time car buyers. Because each media company has crafted its own system, however, Madison Avenue fears the industry’s unified structure, built atop Nielsen ratings, is crumbling.

Advertisers are considering different barometers of success as well. Nielsen’s main strength lies in determining how big the audience was for a particular commercial or show. But as crowds for media splinter around a dizzying array of new behaviors, size matter less. A new coterie of digitally-savvy marketers has expanded in recent years, and the group is interested in isolating their most likely customers and counting how many visits they make to a website or showroom, or how many movie tickets they purchase.

Finding a new measurement solution will likely require many different parties to come together. In 2007, media agencies and TV networks convened to change the type of Nielsen technology that was used so audience counts included up to three days’ worth of viewing. The new concept came in response to TV viewers using DVRs to skip past commercial breaks. In 2021, the challenges are even more severe.

“Measurement innovation requires us to collaboratively explore our options, evaluate multiple independent yardsticks, and expand the possibilities for our industry,” said Kelly Abcarian, executive vice president of measurement and impact for NBCUniversal’s advertising and partnerships unit. Getting media companies that typically vie with each other for audiences to come together and count them is likely to be an onerous task.

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