- Nielsen under pressure to measure Web and delayed viewership
- CBS says `Limitless' premiere ratings would be 22% higher
“Empire,” Fox’s highest-rated TV show, drew an audience of 25 million to its season premiere this fall. Yet only about 20 million of those viewers officially counted.
The extra 5 million aren’t included in the three-day Nielsen ratings, which for some U.S. advertisers is all that matters. That may be about to change.
In the coming weeks, TV measurement firm Nielsen will give the industry a tool that counts a show’s total audience on television and online, including smartphones, for more than a month after it airs. Dozens of networks and advertisers will use that to negotiate potential adjustments to the Nielsen ratings, the standard for the $63 billion TV-advertising industry. Coming up with an agreement will be daunting, as some question whether Nielsen, which has been measuring TV viewers for more than six decades, is up to the task.
“The industry is somewhat skeptical,” said Rino Scanzoni, chief investment officer of WPP’s GroupM, one of the largest U.S. media buyers, in an interview. “Can Nielsen fully capture the audience and make everyone comfortable? That is the biggest hurdle.”
American media companies are pushing to make every viewer count to stem falling ratings that are driving down ad revenue. The online audience that isn’t being measured is made up largely of younger people, whom advertisers are eager to reach. Such changes may also redefine the success of shows, which get renewed or canceled based on ratings.
If ratings include online and delayed viewing, CBS Corp. says its audience for the premiere of crime drama “Limitless” would rise 22 percent, or by more than 1 million viewers. About 16 percent of the audience of TNT’s “Last Ship” and 27 percent of viewers for the season premiere of NBC’s “Blindspot” weren’t counted in the current Nielsen ratings, according to the two networks.
At Walt Disney Co.’s ESPN sports network, where 94 percent of the programming is watched live, counting online viewers on the WatchESPN app and apps provided by cable operators are “the two biggest opportunities,” said spokeswoman Amy Phillips. The WatchESPN app alone would lift ratings by about 2 percent on average, she said. During the 2014 World Cup, ESPN saw a 7 percent increase when WatchESPN viewership was counted, partly because some of the matches took place on weekday afternoons, Phillips said.
“Depending on how the ratings are defined, you’ll have relative winners and losers,” said Tim Nollen, an analyst at Macquarie Capital.
Since 2007, advertisers have been buying commercial time based on how many people tune in within three days. Recently, some have bought ads based on seven-day audiences. Those rules were created because, for instance, film studios don’t want to pay for an ad promoting a movie opening this weekend if viewers will watch it weeks later. Also, online audiences are measured differently, making it hard for marketers to compare their value with TV.
Thanks to new technology, timely ads can now be inserted into shows that are watched on-demand weeks later. And Nielsen says it can count TV and online viewing using the same metrics.
“Our objective is to measure across platforms in an apples-to-apples way,” Megan Clarken, Nielsen’s executive vice president for global product leadership, said in an interview.
Nielsen is under pressure to expand its measurement as other companies have encroached on its turf. In September, ComScore Inc., the Internet researcher, agreed to buy Rentrak Corp., creating a more formidable rival to Nielsen. WPP, the world’s largest ad agency, owns stakes in both companies. Cable giant Comcast Corp. has started licensing the data it collects on cable boxes to programmers and advertisers for targeted marketing.
Media companies have long blamed Nielsen’s inability to capture all of their viewers for weak ratings. Some have sought alternatives. Viacom Inc., home of Comedy Central and MTV, is selling more advertising based on data that doesn’t involve Nielsen ratings, Chief Executive Officer Philippe Dauman said last year. Comcast’s business news channel, CNBC, has said it will no longer use Nielsen to measure its audience and instead will use data from researcher Cogent Reports.
For now, Nielsen remains the industry standard. The firm, which tracks the viewing of about 25,000 homes to estimate a program’s nationwide audience, agrees that measure doesn’t catch all the ways that people watch programming today. Yet, it defends its methods and says it is providing the data that TV networks and advertisers have agreed upon.
To better measure online audiences, the company has asked TV networks to install software in their digital video players, websites and apps, and struck a deal with Facebook Inc. to anonymously collect demographic data on Facebook users watching shows online.
Many details still need to be worked out before all viewers are included. Some advertisers say online audiences should only count if they watch the same amount of commercials as TV viewers, while media executives worry that online viewers won’t tolerate as many ads.
Still, just about everyone agrees that change is necessary.
“There is a sense of urgency that now is the time to reassess the rules,” Nielsen’s Clarken said.