Is Nielsen’s prime time over? Buy renews questions on merchandise and long-term worth

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This week’s information in regards to the buy of TV-ratings large Nielsen is spotlighting ongoing issues with its merchandise and elevating questions in regards to the firm’s worth. 

What occurred. On Tuesday, Nielsen introduced it was promoting itself to a consortium led by Elliott Administration Corp.’s private-equity arm and Brookfield Asset Administration Inc. for about $10 billion. That’s near Nielsen’s present market cap, however that’s based mostly on a inventory worth up greater than 20% since information of the deal broke. The consortium’s supply of $28 per share is a 60% premium over the earlier worth. The group will even be taking over the corporate’s $5.7 billion in debt, bringing the deal’s complete value to about $16 billion. Final yr Nielsen reported $894 million in income and a 23.94% internet revenue margin

“It’s exceptional nevertheless that this can be a 60% premium to Nielsen’s latest inventory worth,” mentioned Todd Krizelman, CEO and co-founder of MediaRadar. “This suggests the longer term purchaser has some very particular path to enhance efficiency, or maybe to interrupt up the corporate additional to unlock worth.”

The issue … half 1. Nielsen’s main product is TV scores and there are critical issues in regards to the reliability of these numbers. Final April a commerce group representing the key tv networks mentioned Nielsen undercounted TV viewers throughout the pandemic as a result of technicians weren’t in a position to get into panelists’ properties to repair gadgets. The Media Rankings Council, which enforces measurement requirements in media, confirmed this. In Could Nielsen reported it had been undercounting out-of-home viewership because the earlier December, blaming a software program error. 4 months later, the scores council suspended Nielsen’s accreditation. 


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Whereas networks have lengthy complained about Nielsen’s scores, they’ve had to make use of them as a result of there wasn’t one other supply. That is starting to vary. Not too long ago, NBCUniversal lately introduced it’s transferring to iSpot.television for nationwide scores.

Even with out the accuracy issues, ongoing traits in viewership have made Nielsen’s scores much less priceless. Since 2011 main community broadcast scores have dropped greater than 80%, in keeping with SpoilerTV. Additional, the cord-cutting pattern continues apace. The share of Individuals who say they watch tv through cable or satellite tv for pc has plunged from 76% in 2015 to 56% final yr, in keeping with a Pew survey.

The issue … part2. The criticism of Nielsen’s digital scores is even harsher than for its TV numbers.

“On the digital facet, Fb canceled its partnership with Nielsen round digital advert score early final yr,” Mike Woosley, COO for knowledge options firm Lotame mentioned in an announcement. “For the reason that cancellation — for over a yr — Nielsen hasn’t been in a position to clarify to Lotame how its product labored. For Lotame, there’s a extensive notion that the product is now much less correct than the system we use it to benchmark, creating chaos with entrepreneurs, clients, and different companions.” 

Nielsen, Elliot Administration and Brookfield Asset Administration all failed to answer requests for feedback.

Why we care. Whereas conventional TV viewership is declining it continues to be a really vital a part of the promoting ecosystem. Inaccurate scores are an enormous drawback that have to be addressed. Additional, due to Nielsen’s standing, its points solid a shadow on different firms.


About The Writer

Constantine von Hoffman is managing editor of MarTech. A veteran journalist, Con has coated enterprise, finance, advertising and marketing and tech for CBSNews.com, Brandweek, CMO, and Inc. He has been metropolis editor of the Boston Herald, information producer at NPR, and has written for Harvard Enterprise Assessment, Boston Journal, Sierra, and lots of different publications. He has additionally been an expert slapstick comedian, given talks at anime and gaming conventions on the whole lot from My Neighbor Totoro to the historical past of cube and boardgames, and is writer of the magical realist novel John Henry the Revelator. He lives in Boston together with his spouse, Jennifer, and both too many or too few canines.

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