Media measurement giants are under fire and they're betting on digital marketing talent to win over clients
- Nielsen just hired ex-IBM exec David Kenny as CEO after Comscore brought on 360i chairman Bryan Wiener as its chief executive earlier this year.
- Clients hope the CEOs will bring a customer-centric approach to companies that traditionally have been research-focused.
- Ultimately, these new CEOs need to solve the mess that is TV measurement as viewing gets more fragmented.
- At stake is the future of TV ad revenue.
The media measurement giants Nielsen and Comscore have hired big shots from the digital agency and marketing worlds to help them restore the business' credibility and solve the messy TV measurement problem.
Nielsen just hired ex-IBM exec David Kenny, who succeeded Mitch Barns, a 20-year vet of Nielsen. And in April, Comscore named 360i chairman Bryan Wiener to be its chief executive, succeeding its cofounder Gian Fulgoni.
Ad buyers and sellers expressed hope to Business Insider that, as experienced digital practitioners, Kenny and Wiener would speak their language and bring a more customer-centric culture to companies that historically have been research-driven. Agencies in particular hope they'll get more of a hearing with the measurement companies who make more of their money from media sellers than agencies.
"We're really hopeful, because David and Brian used data in their previous lives," said Ed Gaffney, managing partner, director of implementation research at GroupM. "They know how we feel about it. They should have a better handle on what's required."
"You've got two people who are very experienced at making advertising work, not justifications," said Dave Morgan, founder and CEO of Simulmedia.
Measurement companies face business as well as culture challenges
The new hires come at a time when faith in TV and online measurement is waning. The TV industry is grappling with how to measure viewership when it's splintered across networks' own platforms and a growing number of streaming services like Hulu, Roku, and YouTube. NBCUniversal, for one, says half its viewing happens on platforms other than linear TV.
Nielsen, which measures TV viewing as well as consumer products purchases, has struggled to keep up with changing viewing and buying habits. Its stock has plunged and it's reviewing its options under activist shareholder pressure. It's rolled out Total Content Ratings, which counts unduplicated video viewing across platforms and devices, and said earlier this year that 35 networks were using it. But agencies and networks want more.
"There has never been a more important time for measurement and analytics around media and to have a trusted intermediary," Kenny told The Wall Street Journal at the time of his hiring. There is also a "great need for advertisers to better understand where they are spending their money and what is working and what is not," he said.
Read more: NBCUniversal is betting on its homegrown measurement approach to defend its TV ad business
Comscore, which tracks digital publishing and ads, as well as local TV and film performance, has its own problems. Media sellers have long accused Comscore of undercounting their audience. Buyers are finding other ways of counting online audiences like MRI, and marketers increasingly care about outcome-based campaigns, not whether it reached a given audience. Wiener also inherits a firm recovering from accounting irregularities, which led to an SEC investigation and costly reauditing.
Wiener is aware of Comscore's need for change. He's been on an extensive listening tour with buyers and sellers. Comscore in September launched Campaign Ratings with about a dozen companies including ABC, Fox, and ESPN. Campaign Ratings provides cross-platform measurement of unduplicated TV audiences across linear, OTT, desktop, mobile but is in limited release.
"Historically, Comscore has been an inside-out company," Wiener told Business Insider. "We want to be a company where we start with the consumer."
A $70 billion TV industry is at stake
Along with the product, the companies' legacy practices are seen as out of step with clients' needs.
Nielsen is bogged down by legacy TV ratings processes that are costly to fix, while in digital, you can get measurement results instantaneously, said Jane Clarke, CEO and managing director of the industry trade group, Coalition for Innovative Media Measurement. "I think Nielsen just needs a technology upgrade," she said.
"Sales directors and station managers, they think they pay too much money and don't accurately measure the audience," said Brad Adgate, an independent media consultant and former research director at Comcast and Horizon Media. "It's service, it's methodological. It's, 'I need to get this to my client,' and there might be a lag time."
At stake is nothing less than the future of the $70 billion TV industry itself with cord-cutting and the appeal of streaming services less cluttered with ads.
"We can kill the golden goose - linear TV - if we continue to not respect consumers' time and attention by just blasting stuff at them," Gaffney said. "We've got to figure out what's the right ad load, get true waste out of the system. Measurement is critical to doing that."
Advertisers today have other options
Nielsen and Comscore are still the entrenched incumbents when it comes to media measurement, but there are challenges to their dominance. Google and Facebook have actual data and at far greater scale than the predictive data of the measurement companies. And as DSPs became the central hub for digital media buying, measuring success and the outcomes of the campaign have become more top of mind than audience validation, said Jay Friedman, president at Goodway Group.
"Marketers know that hitting a demo, i.e., age 25-54, is not actually effective in any medium, it's just the best we have in linear broadcast," Friedman said. "Many marketers are smart to ask themselves, what is the value in getting this information from a measurement company in predictive form when I can get it from a DSP in actual form?"
Nielsen still owns national TV measurement thanks to its panel data that's unrivaled. But Comscore is trying to make inroads in local TV measurement, buying TV and movies measurement firm Rentrak earlier this year.
Then there are various other TV data companies like Samba TV, Alfonso TV and Data Plus Math that are pitching the ability to help marketers make buying decisions. None has the nationally representative footprint and data coming directly from the networks that Nielsen does, Clarke said, though Nielsen in October sued Samba TV, alleging patent infringement, suggesting it's not ignoring the threat either. Integral Ad Science, flush with backing from a new private equity owner, is talking about getting into TV measurement.
"It's become more competitive than ever," Adgate said. "Nielsen and Comscore have may not necessarily lose their contracts but [agencies] will use other services and eat into their revenue."
As long as there's a tremendous amount of money being spent on TV, the market will need Nielsen to measure it, but observers think that'll change. OTT and addressable TV is growing. Advertisers are spending more with the walled gardens and blockchain companies, and others are starting to offer auditing and verification. Some media companies including NBCUniversal and ABC are even hatching homegrown solutions.
"There are a lot of people who are nipping around the edges," said Jonathan Steuer, chief research officer at Omnicom Media Group. "You can imagine a world where you don't need third-party verification."
The incumbents have time and resources on their side
But replicating the national footprint measured by Nielsen and Comscore is expensive, and agencies still prefer to make buying decisions based on a neutral third-party, which bodes well for the incumbents.
"Measurement is the single greatest challenge we have in the business today as the market continues to fragment and splinter with platform and consumer patterns," David Cohen, president of Magna North America, said. "It's becoming harder and harder and the pressure is on to develop solutions to allow us on the marketing side to fully evaluate the options we have. In the absence of an industry solution, people are coming up with their own to fill the void. It's not great because it's difficult to evaluate things on an apples-to-apples basis."
The question is whether changes at the top of the measurement firms will be enough, given the scope of the challenges. The industry wants them to do more to measure co-viewing, where multiple people are watching streaming TV on one device. They also want to know more about who's seeing their ads and that the audiences being counted are unduplicated across devices. Finally, the measurement services will need buy-in from buyers and sellers who can have conflicting agendas. Sellers want their audience to look as big as possible, while buyers want to make sure the audience isn't inflated and is the right one for their client.
The measurement companies are defending their product offerings.
In a statement, Kelly Abcarian, SVP of product leadership at Nielsen, said the company provides a host of successful ratings solutions that let clients look at their audiences and ads across services and devices. "Because we measure actual people, not devices, Nielsen is the only measurement provider that is capable of accurate cross-platform measurement," she wrote.
Wiener touted that Campaign Ratings was brought to market in under 90 days, faster than Comscore's typical product rollout. But he stressed that the product still hasn't launched commercially and will need time to gain acceptance from buyers and sellers. "It's too early to have that 'victory' interview," he said. "Adoption is the question. It just needs more time in the market."
Steuer said he's met with Wiener during his listening tour and that he's asking a lot of questions, but wondered about Comscore and Nielsen's ability to follow through on the feedback they get. "How long it takes to get the answers and build an organization to act on them is an open question," he said.
To others, the larger question is whether the measurement companies will keep supporting an industry status quo that's incentivized to sell as many ad impressions as possible, knowing that consumers are avoiding ads.
"Measurement companies need a healthy, ad-supported television business, and that business is under immense pressure from the measurement standards in place, which encourage quality over quantity and ultimately lead to a worse consumer experience," said David Levy, EVP of strategy and operations at Fox Networks Group. "There needs to be more investment in measurement standards that push for efficient use of consumer time and attention and ultimately drive a more healthy and sustainable ad-supported television model."