The marriage of survey data and census measurement is something Nielsen has talked about before for its audio business. The objective is to augment admittedly small panel sample sizes with so-called big data to provide a more granular view of listening than the current methodologies of PPM panels and diary surveys can provide. Based on comments made by CEO David Kenny on its third quarter earnings call, Nielsen now appears to be taking a step in that direction.
During the Q&A portion of Thursday’s call, Kenny was asked by Tim Nollen, an analyst with Macquarie Capital, about the company’s plans to integrate more big data into its media measurement mix. “One of the criticisms of Nielsen has always been that you – to exaggerate the point, people say that you define the media industry terms based on the small household panel, which you extrapolate,” Nollen said. “But you do have access to a lot of big data that you then run through the panel. So, my question is, can you talk a little bit more about how this setup compares with some of the other competitors out there in terms of the scope, the size, the availability, the access to that data that you have?”
Kenny began by addressing how Nielsen uses big data to help measure linear television. “The best big data there for television is return path data, which, of course, we have from our partnerships with the satellite folks and with cable on the local side.” Kenny then flipped the script to audio, saying that Nielsen is in talks with carmakers about harvesting data collected by sensors from in-vehicle audio consumption. “On the audio side, that would come from connected cars, which is something we're in discussion with the auto manufacturers on.”
Kenny went on to explain how Nielsen’s approach to big data is to “validate that data with the panel, because there are errors in it.” Nielsen’s secret sauce, so to speak, is to overlay big data on top of its panel measurement. “So, I would say, we add to it with the panel. I think we make it better as a result than just using it in a raw form.”
There were other brief mentions of audio in the hour-long call, which, apart from financials, focused on TV, digital, advertising “outcomes” and its forthcoming Nielsen One cross-media measurement service.
“Our objective is full coverage across all audio and video media, and we already have the broadest coverage in the industry,” Kenny boasted. “We have full coverage in national and local broadcast and audio and a leading position in digital, which includes streaming services across both ads and content.” He also spoke about renewing “important contracts” in the audio space. Demonstrating that audio is a significant revenue contributor to Nielsen, Kenny said about 26% of its revenues come from “local players, audio and video.”
Solid Q3 Performance
Overall, Nielsen turned in a solid third quarter performance with total revenues up 5.5% to $882 million from $836 million in the prior year period. Audience measurement, which now delivers three of every four dollars Nielsen books, rose 3.9% to $637 million, up from $613 million. The company saw strength in its national and digital measurement services along with growth in local measurement products. Nielsen didn’t break out its audio division revenues.
Outcomes & Content experienced a bigger upward trajectory. The unit, which includes ROI and campaign effectiveness research along with the Gracenote metadata division, saw revenues shoot up 9.9% to $245 million from $223 million one year ago. Growth drivers included improving trends in short-cycle revenue, growth in content, and a recovery in the company’s sports business.
As millions of Americans cut the cord and flock to streaming video providers, Nielsen and other measurement providers are struggling to keep pace with what are fundamental changes in the media ecosystem.Nielsen’s solution is its much-vaunted Nielsen One cross-media measurement system. While it won’t roll out until fourth quarter 2022, Kenny said the company is making “strong progress” on developing the system, which will use comparable metrics across streaming and TV. “We have a clear timeline leading up to the launch in the fourth quarter of 2022, and we are delivering on interim milestones as planned,” Kenny said. “We believe that Nielsen is the only company positioned to deliver effectively on the promise of representative, currency-grade cross-platform measurement that is essential to the industry."