Amid accusations of underreporting, Nielsen requests its own MRC accreditation suspension

What happened:

● Nielsen announced that it has “proactively initiated the accreditation hiatus process for our National TV ratings service with the Media Rating Council,” in a statement today.

● The news comes after the VAB petitioned the MRC to strip Nielsen of its accreditation in the form of a 10-page document outlining evidence that the firm violated at least five of the MRC’s minimum standards.

● "After months of Nielsen’s very public insistence that there was nothing wrong with their ratings data, but now facing a slam-dunk VAB case for accreditation suspension, Nielsen has essentially announced, ‘You can’t fire me, I quit,’ just hours before the MRC suspension vote process is activated," the VAB's chief executive Sean Cunningham said in a statement today. "What cannot be evaded or dodged is the level of all-industry intervention coming to Nielsen with a mandate of change-or-die transparency needed for going forward with any real credibility. The VAB will be pursuing the case for radical Nielsen change with more voracity than ever.”

● The VAB has accused Nielsen of operational issues and chronic underreporting during the pandemic. In a statement published this spring, Cunningham claimed that maintenance complications led to an “exaggerated and inaccurate depiction of 2020 Covid TV usage declines.” Specifically, he pointed to a year-long suspension of field servicing for households belonging to Nielsen panels – samples of users that represent larger groups and help Nielsen gain insight into viewership and usage data for millions of users. Cunningham said that the issues led to inaccurate reporting for nearly 10,000 homes.

● Nielsen admitted in May of this year that some of its audience data was inaccurate due to a reduction in the size of in-home panel sizes and operational issues created by the pandemic. In its statement today, the company said, “As it relates to the panels, which continue to be a core element of our measurement, we remain focused on recovering our panels for the future. Since March, we’ve been working diligently to get our panel back up to full strength by increasing panel size, improving demographic representation and addressing panel maintenance. We’re applying key learnings from the last 18 months and are actively making adjustments to our field operations that will inform our processes as we prepare for possible impact from surging COVID-19 variants, while also diligently ensuring the health and safety of our panel homes and people.”

● Nielsen said that it is taking a hiatus to focus on the auditing process — but says it is “confident in the integrity of [its] data and measurement.” The company says its audits will not interfere with its other efforts, which include the optimization of its National TV offering using big data sources and the development of its new Nielsen One product, which aims to establish a common currency for cross-media measurement.

Why it matters:

● To date, Nielsen has been the premier authority on TV ratings and video ad measurement. The suspension of its MRC accreditation is disruptive to its reputation and may spur distrust in the established means of video advertising measurement.

● There are broader concerns that Nielsen’s panel-based approach to measurement is at best limited in its precision — especially when it comes to understanding metrics like attribution in the complex landscape of connected television (CTV) and over-the-top (OTT) media. The VAB’s Cunningham suggests that panel-based approaches should be combined with more granular census-based reporting. He previously told The Drum, “This is largely about 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.”

● Another proposed solution to the current limitations of television and premium video measurement involves leveraging real-time tools to get an accurate gauge of user behavior on the individual level. "The industry needs to wake up and realize that the legacy measurement companies measure proxies for what actually matters: results. If direct results can be measured on a one-to-one basis [measuring] ad-to-outcome, why invest in panel-based proxies that lack clarity and trust?" says Jason Fairchild, cofounder and chief executive officer of CTV platform tvScientific.

● And some believe that Nielsen’s decision could open the door to a better future for the industry at large. “This puts a spotlight on the challenges and technical complexities inherent throughout the changing CTV landscape,” says Scott Young, cofounder and chief product officer at streaming media ad platform Transmit. “It's exciting because it opens the door for a new wave of technology, innovation and standards for industry wide audience validation and measurement."

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