Nielsen on Friday scrambled to placate network executives who’d been bushwhacked by the company’s decision to delay a long-awaited fall ratings upgrade, but ad sales bosses this evening are still fuming. Insiders say Nielsen’s short-sightedness will likely result in long-term ramifications for the measurement service, for which broadcasters pay as much as $100 million per year.
After catching a lot of heat for its decision to hold off on including out-of-home deliveries in its fall TV ratings, Nielsen on Friday reversed course. The company, which marshals the currency against which $71 billion in TV advertising is priced and guaranteed, began reaching out to clients this afternoon to inform them that they’ve had a change of heart; as such, the viewership captured in bars, restaurants, gyms and other out-of-home venues will be integrated into the standard linear data in time for the start of the 2020–21 broadcast season.
The speed with which Nielsen altered course tells you everything you need to know about the hammering it took from network sales execs in the wake of yesterday’s revelation. Broadcasters were incensed by the unilateral decision to sideline the OOH data, a move that promised to make an already challenging upfront marketplace even more stressful for the supply side.
Network insiders today confirmed to Sportico that Nielsen’s switcheroo would have wreaked havoc on many of the fall sports ad deals, nearly all of which have been negotiated against the OOH-bolstered currency. Removing the bonus eyeballs tracked beyond the bounds of the traditional couch-lock linear TV ratings would have docked the overall NFL deliveries for CBS, NBC and Fox by as much as 10%.
If a ratings haircut weren’t troubling enough (especially in this economy), Nielsen’s 180º turn promised to send buyers and sellers back to the table to renegotiate advance advertising commitments that had included the OOH guarantees. With the 2020 NFL season set to kick off exactly one month from now, the very last thing the rights-holders wanted to do was waste valuable time on rewriting the terms of their existing ad contracts.
Network insiders said that Nielsen’s short-sightedness will likely result in long-term ramifications for the measurement service, for which broadcasters pay as much as $100 million per year. The company’s seeming inability to follow through on its most ambitious product launches—a so-called “total audience” measurement scheme designed to integrate digital-video ratings with standard TV impressions was delayed by more than three years—has complicated its dealings with a number of national broadcast and cable networks. Back in 2015, CNBC decoupled itself from the Nielsen measurement scheme, which it said did not accurately measure its market-hours audience of high-roller investors, C-suite executives and floor traders.
More recently, CBS at the start of 2019 announced that it would not renew its expired ratings contract with Nielsen, citing a lackluster approach to the measurement of nontraditional platform usage. After an 11-day standoff, the two sides came to an agreement on a new deal.
As Nielsen CEO David Kenny fielded numerous calls from some very heated network higher-ups, many of whom said they felt blindsided by Thursday’s announcement, he tried to explain that the decision reflected the disruptive impact the coronavirus pandemic has had on the out-of-home market. With bars, restaurants and gyms remaining off-limits to tens of millions of Americans, to forge ahead with the integration of the OOH and linear TV data no longer seemed viable.
But the unexpected nature of the edict only exacerbated the situation. The prospect of having to renegotiate NFL ad deals worth hundreds of millions of dollars infuriated network sales execs, and they let Kenny have it. More than one unsatisfied customer intimated that they would begin exploring alternatives to the Nielsen monopoly, adding that a shift to a measurement system fed by multiple data compilers is long overdue.
A chastened Kenny earlier today reached out to apologize to Nielsen’s network customers, and followed up on his personal conversations with an email that was sent out Friday afternoon.
“After speaking with many clients and learning more about your specific agreements for the upcoming season, it became clear that we had misunderstood the extent to which upfront deals have already been agreed to using out-of-home metrics,” Kenny wrote. “Given the circumstances, we recognize that a delay would cause greater disruption to the industry than maintaining our original plan. I also believe Nielsen needs to deliver on our promises, so that you can transact with trust and confidence. Therefore, Nielsen will move forward with the integration of out-of-home TV viewing into the national TV currency measurement starting in September 2020, as originally planned.”
TV ad sales execs have elephant’s memories. For those who found themselves caught off-guard by Nielsen’s OOH gaffe, today’s good-faith efforts may prove insufficient.