CIMM Report Says Ad Industry Can Support ‘At Least Two’ Currency Providers

In the television business, you need currency to make money. And you need money to make currency. 

As long as you’re buying and selling eyeballs, you need someone to provide an accurate count. For decades, Nielsen has been the dominant measurement company, and its ratings have been the industry’s currency.

Like fans at a ballgame yelling at the umpire, TV executives often complain about Nielsen and long for an alternative.  For the past few years, it seemed possible that the availability of big data would give tech-savvy companies the ability to offer alternative currencies. 

A new report commissioned by the Coalition for Innovative Media Measurement concludes that the U.S. TV market should be able to support at least two national currency-grade TV measurement providers. 

But the authors of the study–Manish Bhatia and Josh Chasin, two industry experts–also lay out a number of challenges to establishing a durable Nielsen rival.

The report estimates that the current U.S. market for cross-platform video measurement is between $1.5 billion and $2 billion, with the majority being spent by programmers. 

That makes the U.S. the most expensive measurement market in the world by far. 

Assuming that a currency quality measure measurement service would require big TV datasets and a calibration panel, the report says that a basic or entry-level currency service might cost about $100 million per year. That would require revenues of about $135 million to $140 million in order to sustain operations with a 20% profit margin.

A more comprehensive and competitive currency-grade service might require revenues of closer to $250 million per year to maintain, the report says. Expanding the cost base to include a large proprietary measurement panel might add an additional $150 million to $250 million to the underlying costs.

That might sound like a lot, but with access to big data and the availability of third party panels, these costs are “less prohibitive than ever before,” the report says. 

“Given these costs and the available pool of revenue or spending by major TV networks, programmers and agencies, the U.S. market should be able to commercially support at least two national currency grade measurement solution providers and potentially more, with several caveats,” the report concludes.

Among the caveats are the the assumption that demand for ratings does not drop sharply. Also that a new measurement provider is able to match the product offerings of the incumbent and generate adjacent revenues.

The report examines Nielsen, with which any alternative measurement would have to compete. 

Nielsen, privately held, is able to fund a panel of 42,000 homes. The report’s authors estimate that costs $150 million to $250 million a year. That expense alone is above the total cost of providing an entry-level alternative service. 

Nielsen can afford to do that because it commands 80% to 90% of the TV measurement market, which would put its revenues at $1.2 billion to $1.8 billion. 

“Can other currency providers expand beyond their collective 10%-20% share of spend without engineering a panel of similar scope,” the authors ask. “Or will Nielsen’s panel spend continue to support the share of spend they command?”

The report notes that there are several factors that make it difficult for programmers and media buyers to change measurement providers even if a competitive alternative is available.

Measurement data is deeply embedded within the operational workflows of clients, in their media planning and buying systems, their financial models and historical trend series, which makes a switch, or accommodating a second service, a problem. 

Switching between currencies and providers is also complicated by multi-year contract terms. 

The authors found that many agencies claimed not to see a clear ROI in switching providers. The switching costs and complexity associated with a change in currency–new data sets, lack of historical data, trend breaks, new system training–are all factored into the vendor selection process and are widely perceived to be significant. 

And while one might presume that it would be financially worthwhile for programmers to switch to a measurement company that gives them bigger audiences, buyers would attempt to recalibrate prices on a cost-per-thousand viewers basis and keep spending levels the same. That means it would not create additional revenue.

According to the report, the measurement marketplace is likely to be challenged as ratings for linear TV continue to decline, reducing revenues.

On top of that, “the migration to streaming, which is inherently measurable at the server, is likely to reduce the willingness of networks and programmers to pay historical rates as the need for syndicated third-party counting is reduced (but not eliminated),” the report said. 

And let's not forget that the industry seems to be shifting from counting eyeballs to measuring outcomes and that artificial intelligence has the potential to turn everything upside down.

“While barriers to entry for currency-grade measurement remain high, recent developments – such as the availability of large-scale television datasets and third-party calibration panels – have meaningfully lowered costs and shortened payback periods,” said Jon Watts, managing director at CIMM. “However, the current distribution of investment does create commercial challenges for providers. As the measurement marketplace evolves, it’s critical that decisions about investment, competition, and standards are grounded in a clear understanding of the underlying economics. CIMM remains committed to fostering collaboration, transparency, and shared understanding across the industry.”

The report says that in order to create an environment that encourages competition and multiple currencies, companies in the industry should negotiate contracts with an eye toward a multi-currency marketplace. They should take a longer-term view of budgets and vendors. They should support the curation and development of shared assets, such as the Advertising Research Foundation’s DASH study. Finally they should use the industry leverage afforded by the Media Rating Council to drive governance and change behavior when a provider doesn’t meet standards.

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Gray Media, one of the biggest owners of local television stations, said it renewed its agreement with Nielsen to provide measurement in Gray’s 113 markets. 

Gray had dropped Nielsen in favor of Comscore in most of its markets from 2019 to 2022. Gray signed a multi-year arrangement for Comscore to provide cross platform measurement in late 2024.

“We are happy to renew our relationship with Nielsen for our linear and OTT program streams. As our viewership evolves, it is important that our measurement partners continue to innovate as well,” said Gray Media President and Co-CEO Pat LaPlatney. 

In addition to Gray’s local stations, Nielsen will provide measurement for Gray’s sports channels and streaming properties.

This collaboration will drive growth, positive business outcomes and the next era of innovation at the local TV level,” said Paul LeFort, managing director of Nielsen’s local TV client services. “We are very excited to be working with Gray Media as they continue to spearhead new ideas and a leadership first position in the industry.”

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Guideline said it named Steve Silver as chief product officer, Michael Laxineta as senior VP North American data and Vivian Herron as senior VP, of sales, North America brands and agencies.