Nielsen says no to TV ratings audit

Nielsen has flatly rejected demands from major networks for an outside audit of its TV ratings for the past year amid complaints the measurement company has undercounted viewers during the pandemic lockdown period.

In what would appear to be a rebuke to demands that the TV-ratings giant submit its recent audience measurement to an independent review by consultant Ernst & Young, Nielsen said Friday that it already is examined regularly by the Media Rating Council. That industry organization has maintained media research standards for decades and its membership includes most major media companies, media buying agencies and many big advertisers such as Walgreens, Unilever and Procter & Gamble.

“Third party auditing has always been a vital part of serving as the industry currency and our products undergo a comprehensive audit process with the Media Rating Council on an annual basis. Nielsen’s existing MRC audit process exists to ensure confidence and trust in the audience estimates we produce,” Nielsen said in a statement Friday, adding: “Our work with the MRC, the independent body created for this very reason, is ongoing and should serve the purpose of an independent audit.”

The retort is the latest salvo in a growing battle between Nielsen and the TV networks that rely on Nielsen numbers as the currency for advertising deals.

The networks allege Nielsen changed protocols during the coronavirus pandemic that resulted in undercounting of the TV audience over the past year. The networks say Nielsen kept field agents from maintaining technology in individual homes of viewers who take part in Nielsen’s measurement process and, while including homes in its panel whose owners had relocated owing to pandemic conditions. While Nielsen has issued statements about how it handled the matter, the networks have not been satisfied.

Sean Cunningham, CEO of the VAB, an industry organization that represents the TV networks to the advertising industry, expressed displeasure Friday, noting that “Nielsen’s refusal to take any type of action, in the face of a research-backed request from its key industry stakeholders, is profoundly disappointing and a massive disservice to a TV marketplace that has had a stellar track record for collaboration and transparency.” He added: “This response — or lack thereof — denying a third-party evaluation of its COVID data is a glaring negative outlier from the market’s currency provider and partner.”’

On Wednesday, the VAB sent a letter to Nielsen demanding the company allow the new third-party auditor to “verify the accuracy of Nielsen’s outcomes data during the March 2020 – March 2021 time period. As part of the independent ‘outcomes’ audit process, the auditor will have the ability, autonomy and authority to create a recommendation that could include market-facing numerical adjustment factors.”

But Nielsen says the networks already have a means of grading its work. “Since VAB members are also MRC members, they should feel free to engage directly with the MRC. A single third party audit is the best approach for the industry and we will work closely with the MRC on all audit requests.”

That organization is in the midst of research on Nielsen’s efforts during the pandemic, George Ivie, CEO of the MRC, told Variety. The group is working with Nielsen to understand how any challenges to data collection, including maintaining Nielsen technology in homes, might have affected its work. “We don’t have the answer to that yet,” he said. “It’s a very complex piece of research.” MRC expects to complete its examination over the next several weeks, he adds, and will communicate its findings to both its members and to Nielsen.

The MRC could prove to be a critical factor in any potential resolution of the dispute. It’s one of the most venerable groups in the media and advertising industries, formed at the behest of the U.S. government in the wake of TV’s quiz-show scandals of the 1950s. The government wanted some kind of guarantee that TV ratings wouldn’t be manipulated, but at the same time, found audience measurements too niche to monitor itself. “We are pretty simple. We only do two things,” said Ivie. “We set standards for how media is measured, and then we conduct audits of companies that measure media to determine whether they are in compliance with our standards.”

The skirmish between the networks and Nielsen takes place as the industry prepares for its annual “upfront” sales session, when U.S. TV networks try to sell the bulk of their commercial inventory for their next programming cycle. Many advertisers build out placement of their clients’ commercials by “mirroring” audience levels from the prior year, and any perceived discrepancy in the 2020 numbers would give the networks cause for concern.

This isn’t the first public squabble  between the networks and Nielsen to surface in recent months. In July of last year, Nielsen reversed a last-minute decision to not implement a new measure of so-called “out of home” viewing — audiences watching TV in offices, bars, hotels and the like — even though the networks had sought it. Nielsen cited the pandemic’s effects on viewership in those venues as a reason to delay launch of the new system. The networks, which had already established ad deals with the new measurement involved, went ballistic, and even demanded a public apology. Media outlets and advertisers have increasingly found themselves at odds as new technology forces changes in the systems both sides have relied upon for decades. Variety