Thursday, April 18, 2024

Nielsen is Not Going Anywhere

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As the year ended, so did deals between various companies, including CBS and Nielsen! Which meant a bit of public negotiation between the two entities.

Per reports, CBS was prepared to turn to alternative measurement services, such as Comscore, if they couldn’t come to agreement. CBS took issue with Nielsen “continu[ing] to use their market power to bundle disparate services and raise prices for services that don’t sufficiently address ongoing changes in the industry.”

Understandably, CBS doesn’t want to spend money on products and services they don’t need. Letting the contract expire seemed to signal that they were serious about dropping Nielsen.

Of course the news had people who pay attention to ratings and therefore advertising news in a tizzy.

Hypothetical Havoc

What if CBS actually did drop Nielsen? What if it wasn’t just a public negotiation? How would this impact the other big networks?

If CBS takes the lead and drops Nielsen, would the other networks feel empowered to do the same? If they did, who would decide what makes a success? Would there be a new target demo to account for the age of people who actually watch TV live? Considering the median age of viewers who watched the first night of 2018-2019’s season was 60.1, I doubt it. The youngest skewing, by the way, was 56. Even The CW is at 45 compared to 32 in 2016-2017.

With a new target demo, would advertisers and networks continue to depend on C3/C7 ratings, the currency that actually matters?

[As explained by Anthony Crupi in this article about last fall’s numbers, C3 is a blend of average commercial ratings with three days of time-shifted viewing, providing “the best approximation of actual ad deliveries,” around since 2007. It’s a compromise for the networks that want credit for DVR plays and advertiser who only care about viewers who see their ads. And it was meant to be replaced with something better later…]

Even if all five networks did drop Nielsen, what would fill the void? No other single entity exists that could swoop in and handle all the broadcast and cable networks. Rentrak and TiVo are competitors in the US, with Kantar, GfK, and Ipsos as competitors overseas. (Nielsen covers all broadcast and cable TV.)

None of these questions actually matter, because to no one’s surprise, CBS and Nielsen came to a new agreement (financials undisclosed) on the 11th.

Receding Ratings

But, all the hand-wringing about Nielsen reflects the larger issue that networks and advertisers have. Even in 2007 when C3/C7 went into effect, three days of DVR viewing wasn’t enough to bring the ratings back up to 2006 levels. Even then, viewing was down 9% from 2006, a number all too familiar. After all, ratings have dipped every year!

See 2018’s C3 report, where a 22% decline in adults 18-49 from 2016 wins the networks the ability to say they’ve got the lowest ratings than ever before. Even CBS, which uses 25-54 as its metric for ad sales, saw a 34% drop in two years.

So really, nothing has changed in the 11 years between the intro of C3/C7 and with the constant addition of media to distract the target demo, the ratings will continue dropping.

Now there’s an argument to make about how people hate advertising and how to fix that. Except, the shows we all watch and care about cost money to make, money that comes from advertising sales. Since making the American public care about ads isn’t happening, what to do?

I have no idea since I’m not an advertising specialist, but I think ABC should fix the problem they created. (Mostly joking.) In the 60s, when ABC couldn’t compete with CBS and NBC, execs convinced Nielsen to measure audience segments broken up by age. They would then advertise certain cars to certain age groups and this actually led to why we have a September premiere month. ABC set all of its series premieres in 1962 to air in September! Thanks, ABC.

At the end of the day, without a concerted effort to figure out something new, Nielsen will continue to rule the roost, advertisers will want more viewers, and networks will be stuck. Still, I can’t see networks and advertisers being happy with a 1.04 demo average across the Big 4 in scripted, and whatever the respective C3/C7 data is for the same. Of course, the averages are higher when live/event programming, sports, and reality shows are added, but then FOX wins because football.

Who knows, maybe when the scripted average dips below 1.0, something drastic will occur. Until then, business continues as it has for over a decade.

Images courtesy of CBS and Nielsen Corporation

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