Every so often, audience research gets interesting and captures the attention of the industry. Right now, the attention is on video and its components (broadcast television, cable, streaming, etc…). What we’re really seeing is that capitalism works, in other words, competition is good for the marketplace. Nielsen is being challenged by numerous ratings competitors, all of which are trying to measure some aspect of video.
Meanwhile, the users of the data have come together to form a Joint Industry Committee (JIC). You’ve probably not heard of a JIC before, but these are common in other countries that don’t have the same antitrust laws we have in the US. In a JIC, a committee of data users (content providers, agencies, advertisers) requests bids for one service to be the official measurement for a medium for a period of years.
It’s a monopsony (one buyer, multiple sellers), the opposite of a monopoly. Monopsony is one of those words you can throw around to attempt to sound intellectual if you’re of that bent. In the past, there hasn’t been a US JIC because it was assumed it would run afoul of antitrust laws. The US government tends to look askance at monopolies, or in this case, a monopsony, which could be interpreted as an attempt by a group of competitors to fix prices.
Nonetheless, buyers and sellers in the video industry have formed what they call a Joint Industry Committee and rather than trying to anoint one service, are in the process of setting criteria for multiple suppliers/vendors who want to work with the committee. Recently, the committee put out a release adding some detail about requirements for cross-platform currencies. If you’re not aware, cross-platform simply means measuring people as they use multiple media and platforms, for example, streaming and online (websites). It’s not easy to do. Just think about your own media usage: how many different platforms do you use in a day? A week? How can advertisers best reach you without overspending?
To my way of thinking, the JIC is a good idea, but two pieces are missing. One is Nielsen, which has chosen to pass on participating. Their response letter to the committee cited “fundamental legal, operational, and scientific issues”.
Meanwhile, there are plenty of smaller companies and startups that want to be part of the JIC’s process, but Nielsen will not be involved, at least for now. The other missing piece is a medium called “radio”. Substitute “audio” if you wish, but once again, the medium is not part of the discussion.
Our industry cheerleaders talk about the incredible reach of radio/audio, which, if you believe Nielsen, is true. The audiences, while declining over the years, continue to be big, and audio still has a “bright shiny object” in podcasts, which agencies and the trade press love, even if some of the sheen is starting to tarnish a bit. Yet when new measurement entrants come along, it’s for online and video.
It’s been nearly ten years since Nielsen closed on the acquisition of Arbitron. To paraphrase a major highlight of Ronald Reagan’s successful 1980 campaign against Jimmy Carter, you should ask yourself with respect to our radio ratings system: “Are you better off than you were ten years ago?” For most people in the business, that answer is probably a resounding “no”.
As I’ve said to colleagues in the industry, Nielsen sees radio as a cash register. While there is no doubt that data collection costs have risen, Nielsen has been able to do more with less. If you’re interested in profitability, you can look at the old Arbitron financial results (it was a public company) and make a few assumptions. The business is very profitable.
Are there competitors today? Eastlan is still in business measuring a number of small markets. Mike Gould has wisely carved out a niche by staying “below the radar” with respect to Nielsen. However, if Eastlan ever attempted to take on Nielsen directly, it would be a case of “poking the bear”.
History reminds us of former competitors. I was at Birch/Scarborough when the plug was pulled in late 1991. Kurt Hanson tried to make a go with Accuratings after Birch’s demise. Pre-Arbitron acquisition, Nielsen was coaxed into the radio measurement business by Cumulus. After a couple of years, that effort ended.
Recently, a Canadian startup, StatsRadio, tried to enter the fray. Last I heard, they were out. In the meantime, Nielsen Audio earns monopoly profits with what is often an inferior product and little innovation. Keep in mind that the last big audio measurement innovation, PPM, was first announced in the ‘90s and went into use over 15 years ago.
If you question this assertion, review the history of Nielsen ONE, the company’s new cross-platform service. It was first announced in a press release on December 8, 2020. Let’s use a very simple version of a research technique called content analysis. Looking at keywords in the release, we find the following:
Video: 8 times
TV: 13 times
Watch: 1 time
Cross-media: 14 times
Viewer: 1 time
Digital: 10 times
CTV: 12 times
Radio: 0 times
Audio: 0 times
Admittedly, Nielsen ONE is positioned as a national service, but wouldn’t it have made just a bit of sense to have mentioned audio in the initial release? Isn’t audio a platform? Doesn’t national radio exist? Even if the plans weren’t there, smart public relations would throw a bone to radio and the millions it brings to Nielsen’s bottom line by using the word once or twice without a reference to any specific commitment.
It took Nielsen almost 2½ years before Catherine Herkovic, Nielsen’s EVP and Managing Director of Local TV/Audio, speaking at an NAB panel in April, mentioned radio in the context of Nielsen ONE. She said they had a “well laid-out plan for audio” as part of Nielsen ONE.
Perhaps it’s time for the industry to get together as one (lowercase, not Nielsen ONE) and entice new competitors. iHeart tried this on its own a few years back. I read their RFP at the time and was not surprised when it went nowhere. While iHeart is by far the biggest operator in the space, speaking as one industry makes more sense. Whether you call it radio or audio, it’s time for the industry to consider a JIC.
Let’s meet again next week.
