Nielsen Addresses Measurement Gap With ‘Biggest Change In a Decade’

Author

Michael Beach
November 19, 2020

Big news: Nielsen will start measuring addressable TV ads and combining them into a single measurement with linear.

Nielsen addressable partners include:
1) DirecTV
2) Dish
3) Vizio

Why this matters #1: Addressable TV advertising has been limited to 2 minutes per hour that local distributors (MVPD) are able to sell.  Another limiting factor around national addressable has been measurement since remaining impressions (non-addressable) still need to be sold.  Nielsen is sitting in a strong place to solve this.

Quote from Tracey Scheppach – CEO @ Matter More Media:
“This is probably the most exciting news we’ve heard in the last decade since C3. What Nielsen has done is expanded its panel to include smart TV and set-top box data. Now we can begin to do a few things, fully measure addressability, close the gap on capturing all the viewing data across all the platforms, and start incorporating targeting beyond age and gender.

I believe addressable television was not going to scale without the ability to light up national and linear inventory – that’s what’s been missing. That’s why we were sitting on a fairly large household footprint of around 60 million households but had a very low level of inventory actually enabled all because the MVPDs control it, and they’re two minutes. All in all, it equates to about 3% of linear TV inventory being addressable today.”

Why this matters #2: This is a true win-win that could turn TV advertising into a growth story.

What everyone wants:
1) Consumers – Fewer ads.
2) Advertisers – A higher return on ad spend (ROAS) with improved measurement.
3) Networks – A higher share of consumers’ time.  More money from advertisers.

Quote from Scott Brown – General Manager of Nielsen Audience Management @ Nielsen:
“This will be one of those grand scenarios where networks are happy, agencies are happy and ultimately the consumer gets a better experience down the line with ads that are more relevant to them.”

Big question #1: How many households are currently targetable through addressable advertising?

Total TV households in the U.S. (% of total) according to USIM/Mitch Oscar:
1) Addressable – ≈ 68.5M (56%)
2) Non-Addressable – ≈ 52.5M (44%)
3) Total – 121.0M

Big question #2: How big is the addressable TV ad market (excluding CTV) before this deal?

Addressable TV spend by year (YoY growth) according to eMarketer:
1) 2016 – $760M
2) 2017 – $970M (↑ 28%)
3) 2018 – $1.5B (↑ 51%)
4) 2019 – $2.0B (↑ 36%)
5) 2020P – $2.1B (↑ 5%)
6) 2021P – $2.9B (↑ 39%)
7) 2022P – $3.6B (↑ 26%)

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