CTV Measurement vs. Linear TV Measurement Explained
by Frankie Karrer
7 Min Read
The war of words between the broadcast trade group and the TV measurement firm is a fight over an outdated way of thinking
4 Min Read
If you haven’t been following the latest drama going down in the TV advertising world, we’ll get you up to speed real quick.
Nielsen, the biggest name in TV measurement, recently reported that ratings dropped for major broadcast and cable television networks. This would be a significant reversal of a major pandemic trend. TV saw an uptick in viewership over the past year as people were stuck at home. But as the world is reopening, they’re watching less.
At least that’s according to Nielsen.
The Video Advertising Bureau (VAB), which represents broadcast and cable networks, claims Nielsen’s data is incorrect. They say that Nielsen’s methodology, which relies on a combination of technology, surveys, and at-home visits became fundamentally flawed during the pandemic.
According to their own data, the VAB says that Nielsen’s inventory of households measuring TV usage dropped over 20% from 36,957 households in February 2020 to just 29,456 in February 2021. Nielsen also halted in-home visits, a major component of their system, due to safety concerns.
Nielsen of course denies their methodology is flawed or hampered, and refused to conduct a third party audit requested by the VAB. They already do an audit with the Media Rating Council (MRC), and that’s good enough.
“Our work with the MRC is ongoing and should serve the purpose of an independent audit,” Nielsen said. “Since VAB members are also MRC members, they should feel free to engage directly with the MRC.“ In other words—go talk to the MRC and leave us alone.
While the drama unfolds and strongly worded press releases are issued from both sides, the funny thing about it all is that this fight is over a system that’s not very good to begin with. We’ll get to that piece in a bit, but first let’s go into why the VAB is aggressively fighting Nielsen’s numbers.
The first half of the year sees major broadcasters put on their upfronts, which are major industry events where they sell TV ad inventory against their programming. There’s a lot of money at stake—upwards of $10B—though that number has dropped off last year due to the pandemic. To say broadcasters were eager to see that ad revenue start going back up is an understatement.
Ratings weigh heavy on the price advertisers are willing to pay. With Nielsen saying fewer folks are watching television, that’s a big problem. The VAB has about 10 billion reasons to challenge Nielsen’s numbers.
With all that said, the VAB is right to challenge Nielsen’s numbers. But it’s not because of the pandemic, it’s because Nielsen’s measurement is more of an educated guess than actual numbers.
The rise in streaming viewership and Connected TV (CTV) has had ripple effects when it comes to TV measurement. Unlike traditional linear TV, CTV is a digital-first medium—complete with digital metrics. That means publishers know exactly how many viewers they have.
The same goes for advertisers. Since it functions like a digital ad channel, it provides them with precise counts on everything from the number of ads served and completed, to the actions viewers take after seeing an ad. That includes site visits, conversions, and a host of other metrics.
That doesn’t bode well for the upfronts system of buying TV ad inventory. In fact, we don’t see much of a future for the upfronts in the coming years.
As the world migrates toward a streaming TV-first way of watching television, reliable ways to measure actual viewership and consumers actions will be commonplace. Nielsen’s methodology of guesstimation will likely fall by the wayside, replaced by one that is more concrete for both publishers and advertisers.
While the fight over today’s ratings is a one that’s worth fighting for broadcast and cable networks, it’s akin to rearranging deck chairs on the Titanic. The old ratings methodology is a sinking ship and it’s only a matter of time before it’s another relic of a bygone era in advertising.
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