ComScore merger forms part of WPP’s grand data plan, but how will it affect relationships with rival holding groups?
Digital measurement company ComScore yesterday (30 September) announced it is to merge with Rentrak Corporation – an outfit that touts its ability to measure set top box viewership habits – in a deal which many say makes it a serious contender with rival measurement outfit (and some would say industry incumbent) Nielsen. The Drum's digital editor Ronan Shields asks how this is likely to affect its relationships outside of the WPP fold.
The deal, a stock-for-stock merger, is expected to close in 2016, and it values Rentrak at $827m – comScore is estimated to be around the $1.7bn mark – with ComScore’s sitting CEO Serge Matta to continue as chief exec of the newly formed entity.
A comScore release explains the rationale behind the deal as thus: “Together, comScore’s industry-leading digital audience and advertising solutions, combined with Rentrak’s census-based worldwide movie and video-on-demand measurement, and its massive and passive TV measurement offerings, will provide a more complete picture of the way people consume media today and in the future.”
This makes sense, especially when eMarketers forecasts from multiple firms which indicate that mobile devices’ share of overall media spend is set to overtake TV in 2016.
Not mentioned in the press release was WPP’s not insignificant stake in both companies. In late 2014, WPP’s GroupM plus Kantar Media, its media analytics and analytics business, struck a deal that saw it acquire 16.7 per cent of Rentrak stock. This was later followed by a deal in February of this year that saw WPP take its ownership in comScore up to the 15 to 20 per cent mark.
Add to this subsequent investments in cross-screen analytics service BIScience, plus the formation of the WPP-Adobe data alliance, and it is clear just how much digital and data is at the core of the holding group’s strategy.
Speaking recently at Dmexco, WPP chief Sir Martin Sorrell proudly told attendees about the above, adding that approximately $5bn of its annual revenue comes from media, a further $5bn from data, with digital generating roughly $6bn per year.
During his address he further went on to criticise Facebook’s viewability measurement, adding that major clients have cited it as a concern when shifting media budgets from more conventional channels.
He further added: “The hurdles in measurement – why do we invest in companies like Rentrak, and ComScore – because we believe the measurement model needs to be changed. That the traditional model by Nielsen in the US is not efficient.”
Hence, the media has been eager to play up the ‘comScore v Nielsen’ angle, and this is unquestionably the target in WPP’s sights, as it aims to build an end-to-end ad tech solution to clients in its ongoing arms race with online players such as Facebook and Google.
Additionally, WPP, which last year extended its stake in ad tech powerhouse (plus vocal Facebook and Google critic) AppNexus to 15 per cent, sees its lack of reliance on the aforementioned web giants as a key point-of-difference when it comes to differentiating itself from other holding groups.
However, in the immediate aftermath of the deal, Sir Martin went on record to discuss how the relationship between AppNexus and WPP put rival agency network at risk of disintermediation, and that their attempts to broker deals with the ad tech outfit were likely to be barred.
However, industry sources these claims put senior management in a bind when it came to maintaining good relationships with the rival agency networks, all of which are still hugely important to the operations of AppNexus, with questions of neutrality being raised.
And indeed, the newly-formed comScore is likely to face similar levels of scrutiny when it comes to its relationships with the likes of Havas Media, Omnicom, Publicis Network, etc., as WPP will own 16 per cent of the measurement giant, with the option to take this to 20 per cent.
For despite WPP still holding only a minority stake in comScore, it is still likely to raise any questions from any responsible member of the rival agency networks.
Numerous sources approached by The Drum have welcomed the move, as the need for improved cross-screen measurement is clear, but again, it is only natural for questions to be raised. As long as this remains, as such parties outside of the WPP web likely to stick with Nielsen’s metrics?