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Total Audience Progress Report

Mitch Barns, Nielsen CEO
Mitch Barns, CEO

The following excerpt is taken from Nielsen CEO Mitch Barns’ prepared remarks during the company’s third-quarter 2015 earnings call.

As most of you know, our No. 1 priority is our Total Audience Measurement initiative. It involves a long list of difficult and complicated steps, many requiring innovation and all of them requiring great execution. Throughout 2015, we’ve executed on every single deliverable we laid out in our road map at the beginning of the year—22 out of 22 deliverables through the first three quarters of the year. Our teams have been working very hard, and I’m incredibly proud of them and the work they are doing.

When we talk about Total Audience Measurement, the most common question we get is: How and when does Total Audience get adopted as the new “currency”? Recall that while Nielsen does not by itself determine the currency, we do and we are playing an active role in the process to redefine the currency. I’ll comment on that in a moment, but first, I will walk you through the phases we are going through to get there.

We see it in four phases: 1) execute, 2) evaluate, 3) adopt and 4) transact. I’ll begin by defining each phase, and then I’ll follow that with an update on our progress for each phase.

First, execute. Measurement needs to cover the “Total Audience” across all screens and platforms—that means TV, digital and video on demand (VOD). It needs to measure audiences for both content and ads. It needs to be independent. Each of the measures also needs to be comparable on an apples-to-apples basis across those screens and platforms. And the measurement also needs to be able to de-duplicate the overlap in audiences reached by each of those platforms.

Second is evaluate. As we bring new measurement capabilities to the market, our clients need time to take a look and ask themselves, “What do the numbers look like? How will the new metrics fit with my business process? Can I use them for guarantees?”

Third is adopt. Once they’ve evaluated them, our clients then need to adopt the solutions we’ve introduced. In some cases, this might require action on their part to incorporate our software, tags or encoding.

And fourth, transact. Once our clients have adopted the new metrics, they use them to buy and sell within and across the Total Audience Measurement system.

So those are the four phases. Next, I’ll walk through our status and progress in each phase.

For the first phase, execute…As I mentioned earlier, throughout 2015, we’ve executed on every single deliverable we laid out in our road map at the beginning of the year—22 out of 22 deliverables. Digital Content Ratings, in fact, was the final piece of the “measurement grid” that we had to fill in. With the release of Digital Content Ratings to our U.S. clients this fall, we now have measurement capabilities available in-market covering all of the important sources of viewing: TV, digital and VOD for both ads and content. But of course, this is phase one.

For the second phase, evaluate, as we bring new capabilities to the market, we work with our clients every day to help them understand the data and, importantly, how they can use the data to run their business. Digital Content Ratings is the latest part of our measurement system moving through this phase.

Phase three—adopt. Lots of activity in this crucial phase, of course. Let’s take it piece by piece. Digital Ad Ratings, Digital Content Ratings and VOD are all in various stages of this phase.

  • First, Digital Ad Ratings. We’re steadily emerging as the standard of measurement for digital video ads. Nearly all of the top 25 U.S. advertisers are asking for guarantees based on our Digital Ad Ratings metric.
  • Beyond the U.S., our global Digital Ad Ratings footprint will cover 16 countries by year end. And that includes mobile; just last week, we announced six new countries added to our mobile coverage.
  • What about Google and Facebook? On our last earnings call, we shared that we were expanding our integration of Digital Ad Ratings in Google’s DoubleClick Bid Manager platform to seven new countries: France, Germany, Italy, Canada, Brazil, Australia and the U.K. This is just one of many things we do today with Google, which has grown to be one of our largest Watch clients. As for Facebook, last month, it launched its new video ad buying product that uses Nielsen’s Digital Ad Ratings for measurement of Facebook’s video ads.
  • Put it all together and it paints a picture of steadily increasing global marketplace adoption of Digital Ad Ratings.
  • Next, Digital Content Ratings. Our Beta was a success. Our software has been fully tested by our partners, and it’s now available to all clients. We continue to have strong engagement by clients across all segments of the media sector, many of whom participate in our ongoing Client Advisory Boards. We have implementation programs in progress with a growing number of major media players. This is a critical milestone that we established earlier in the year, and we met our goals. We are continuing to enroll more clients as we build toward syndicated reporting of Digital Content Ratings in the first part of 2016.
  • As for video on demand, the client roster continues to grow, especially for our signature-based measurement methodology. We are now measuring approximately 1,200 shows and more than 4,000 episodes, both up significantly since July.
  • To sum up, adoption of our Total Audience Measurement system is building; and it’s building because we’ve been executing, and the capabilities are real, here today, available to our clients. They are making progress on the work they need to do to fully take advantage of the new components. For example, look at CBS. It isalready seeing mobile and online viewing through its CBS All Access service show up as incremental points in the Nielsen Ratings.

That all leads us to the fourth phase, “Transact.” Once viewing is measured comparably across all screens and platforms and the metrics are adopted by clients, then they of course move to transact on those metrics. To do this most efficiently, and in order to accommodate as many business models as possible, the market needs to redefine the “currency” so that that comparable metrics are available across television and digital video and so more of the viewing we are measuring can be included in the so-called “currency ratings.” Our clients can—and in fact many already do—transact on each of the individual measures already available, but it will be more efficient if those individual metrics are brought together into one…a new, more broadly defined currency that represents more of the “Total Audience” across all screens and platforms, not just the viewing that fits into the rules that define C3 for television.

Over the past several months, we’ve had many one-on-one discussions with senior leaders of our clients regarding the need to redefine the “currency,” and those discussions have been productive.

Last week, we convened a meeting of players from across the industry—including a wide range of media owners and agencies—to continue these discussions. This was an important, positive and productive step.

Going forward, we’ll convene a series of additional multi-stakeholder meetings to continue the industry dialog, aiming to reach consensus on a new definition of the currency. The goal is to make enough progress for the industry to have a common framework to use for the 2016 Upfronts.

We feel great about our Total Audience Measurement strategy and the progress we’ve made this year, especially in this latest quarter. But there is more work to do. We’ll continue to execute and deliver on what the market needs. And we’ll continue to update you regularly on our progress, including at our upcoming Analyst Day in December.

For more information about our next steps toward Total Audience Measurement, check out this recent series from Adweek: