Why the Video Advertising Bureau wants to strip Nielsen of its Media Ratings Council accreditation

Nielsen’s TV ratings and advertising measurement standards have long been one of the key measures of success. The MRC is a nonprofit organization responsible for assessing, auditing and accrediting audience rating services within the media industry and ensuring that such services are effective and reliable.

Pointing to shortcuts and workarounds that Nielsen implemented to deal with the challenges of Covid-19, the VAB petitioned the MRC in the form of a 10-page document filed on July 21. It alleges that Nielsen’s operations during the pandemic entailed ‘multiple major and persistent violations’ to the council’s minimum standards.

“The call to suspend accreditation is just as much about the future – if not more – than the past,” the VAB’s president and chief executive officer Sean Cunningham tells The Drum. “While many of the specific actions that led to this damage were about non-disclosure and non-visibility over a year-long period of time during Covid, it isn’t about being penalized for previous actions. It’s about the penalty that the industry could incur in the future.”

A firm under fire

In May of last year, the MRC conducted an audit that found Nielsen had been undercounting total television usage by adults aged 18-49 by up to 6% during February. After originally defending the accuracy and validity of its panel measurements, in May Nielsen admitted that some of its audience numbers were inaccurate due to a reduction in its in-home panel sizes, as well as operational issues associated with the pandemic.

The VAB then began investigating the issue in February of this year after various VAB members raised concerns to Nielsen throughout 2020. In the spring of this year, after conducting its own investigation, the VAB officially accused Nielsen of sustained underreporting. In a statement put out in May of this year, Cunningham said that “complications across maintenance, turnover and replenishment of Nielsen’s TV household panel lead to an exaggerated and inaccurate depiction of 2020 Covid TV usage declines”. In particular, he noted that these issues included a year-long suspension of in-home field servicing for households that belong to Nielsen panels – samples of users that represent larger groups and help Nielsen create a picture of viewership and usage data for millions of consumers – and procedural changes that compromised or hampered 2020 results for some 9,400 households.

In its July petition to the MRC, the VAB outlines specific evidence suggesting that Nielsen repeatedly violated five of the council’s minimum standards. Allegations include an ineffective continuity plan – pointing to Nielsen’s decision to suspend in-home servicing for a full year in response to the pandemic – and a failure to disclose to subscribers the fact that it changed panel methodologies. The VAB alleges this resulted in lost advertising dollars and inaccurate ad measurement.

The MRC says it is taking the matter seriously and investigating the allegations. “MRC has been actively pursuing the Nielsen issues, both with our TV Committee as a whole, as well as directly with Nielsen’s management, and we plan to meet with our TV Committee again in the near future to assess where the situation with Nielsen’s National Service currently stands,” an MRC spokesperson said in a statement. The MRC stresses that its accreditation process is based on CPA audits and independent compliance assessments of its standards. As it stands, Nielsen will remain accredited, though the MRC is facing mounting pressure to reevaluate its standing.

Nielsen said in a statement: “We are fully committed to returning to pre-Covid operations and are working closely with and through the MRC to address any outstanding issues and requests and are committed to their process concerning accreditation.”

The issue of accurate reporting and measurement

For media buyers, brands and other stakeholders invested in the accurate reporting of television use, viewership and more, the accusations against Nielsen, if true, hamper the ability to gain accurate insights into ad performance and diminish trust in standard means of measurement.

This is yet another measurement wrinkle in a landscape compounded by the proliferation of connected TV (CTV) and over-the-top (OTT) media. In May, Nielsen’s senior vice-president of product management Kimberly Gilberti spoke to The Drum about the challenges of effective ad measurement on CTV and OTT specifically. She said the company was aiming to ensure that “computation is being done in a way that is truly comparable” across channels with the launch of Nielsen One, its new cross-media measurement standard.

However, Nielsen’s methodologies have come under scrutiny for years – in particular, experts worry that the organization has not thoroughly updated its rating and ad measurement models for CTV and OTT, but has continued to rely on approaches, such as paneling, that may be better suited for traditional broadcast television.

Jason Fairchild, co-founder and chief executive at CTV platform tvScientific, is one such critic. He believes that the CTV ecosystem lacks highly reliable and accurate measurement solutions. “Today, the challenges specifically associated with CTV ad measurement largely stem from attempting to apply the legacy panel-based approach to a one-to-one medium. Singing a jingle from a TV ad may have been proof enough for marketers in the 1950s, but technology has evolved more than a little. The same is true with TV ad measurement – why use the panel-based measurement approach from the 1950s when superior, one-to-one technology exists now?” he says.

“With more viewers – 90m households – streaming content on smart TVs, advertisers are eager to embrace digital-like ad measurement that will make investments in TV advertising as measurable as search and social.”

So, what’s the solution?

With more precise measurement technologies, advertisers would be able to gain a more accurate picture of who is viewing their ads when, and how specific advertisements impact the behaviors of unique audience members.

The current measurement and reporting ecosystem needs an upgrade, says Tal Chalozin, co-founder and chief technology officer at adtech firm Innovid. “The VAB shines a light on the broader issue of a very complicated and fragmented TV universe that is hard, or even close to impossible, to measure in the way we used to measure in the past,” he says. “We are living in a period where there are more households watching connected TV than there are subscribers to the multi-channel bundle – for the first time ever. In measurement terms, that means that relying on a sample of the population [like Nielsen’s panels] in order to project the full nation is becoming impossible.”

New technological capabilities such as addressability, real-time placements and dynamic and personalized messaging are valuable tools that could help solve some of these challenges, Chalozin says. He also notes that the nature of CTV as an internet-connected ecosystem should enable real-time measurements.

The VAB’s Cunningham suggests that what’s needed is a more sophisticated solution that marries Nielsen’s panel-based approach with what’s called census-based reporting. In census-based reporting, data from a larger share of the full user population (compared to a smaller share, as is used in panels) is assessed to draw conclusions about broader consumer behavior patterns. “This is where the great disconnect is happening,” he says. “It was obviously exacerbated by some bad conduct during Covid, but what this is largely about is the unprecedented level of duress in using a panel of thousands to get a model and project and interpret the behavior of millions – as opposed to using a census panel of millions to count the behavior of millions.”

Cunningham believes that combining these approaches – and backing them with more stringent quality control and verification processes – is the key. Without being able to effectively verify the accuracy and precision of any piece of this puzzle, he says, “the whole thing is going to break.”

Ultimately, in calling for the suspension of Nielsen’s MRC accreditation, the VAB aims to protect the integrity of television and premium video reporting and protect the interests of marketers and other stakeholders, he says.

“What marketers want is the assurance that they are getting to the right customers and that their customers can be rightly counted in every conduit, every interface and every video screen – and that they can calculate on that knowledge and use that to increase sales,” Cunningham says. “[At the VAB] we use this data as a trading currency. But marketers want to think about it as sales currency. And the data has got to be that good. It’s got to be that accurate. And it’s got to do the job of not just counting, but truly understanding on a device-by-device and audience-by-audience basis.”

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