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US television viewership data set for historic changes with enhanced out-of-home reporting

A scene from Super Bowl LIV in February. The National Football League's title game saw a 13 per cent lift in viewership with the inclusion of out-of-home viewership, data that now will be included as part of Nielsen Media Research ratings reports. (Getty Images)

  • Effort to measure and report viewership in settings such as bars, restaurants, and airports has been years in development
  • Sports programming set to receive audience lifts of 5-to-20 per cent
  • Ratings boosts set to impact advertising sales, future rights cycles

For about as long there has been television and a television business, there have been complaints about ratings, and more specifically, Nielsen, the predominant source of ratings data in the United States.

But this month, a long-debated source of alleged audience undercounting, out-of-home viewership, becomes an official part of reported Nielsen national viewership data and fully integrated into those reports, a move that promises to render significant impacts upon the entire American sports industry.

“This is a big deal for sports,” tweeted Mike Mulvihill, Fox Sports executive vice-president and head of strategy. “Basically from the day I started at Fox [in 1995] the two things that were often talked about as potential game-changers for sports TV were legal gambling and out-of-home ratings. Now they’re both here.

“We know from the preliminary data that the [out-of-home] sports audience is younger, more female, and more diverse than the in-home audience. Will that change how sports are valued? We’re already seeing a huge impact to local [Major League Baseball] viewing among young people.”

Nielsen’s move to include the out-of-home viewership data already has actively been in the works for more than a year. And for several years, many major US sports leagues and media networks have conducted their own private workarounds by individually commissioning their own supplemental research in an attempt to get at the additional viewership occurring in bars, restaurants, gyms, offices, airports, and other communal settings, but not showing up in prior ratings reports.

But with the broader viewership data now set to be included at the front end and in widely distributed ratings reports, the sports industry is set to receive a sizable collective lift. 

Though the ongoing Covid-19 pandemic currently blunts the full impact of out-of-home viewership significantly, the general industry consensus is that many regular season sports events in the US are due on average for a 5-to-10 per-cent viewership increase with the additional data. Major events such as the National Football League’s Super Bowl and the National Collegiate Athletic Association’s March Madness could see even greater boosts into double-digit percentages, and approaching 20 per cent.

Super Bowl LIV in February, for example, received a 13-per-cent bump when out-of-home viewership numbers were released more than a week after initial ratings reports for the NFL’s title game.

A collective run of similar viewership increases could, in turn, lead to greater valuations for certain properties’ overall media rights as they come up for bid in future negotiation cycles.

“Most major properties are already building in out-of-home into their internal valuation models, and have been for some time. But this is still a huge, really important development, will have fundamental impacts on how we all conduct our business, and for us specifically, will allow us to fact-check our assumptions and our models,” says Daniel Cohen, Octagon senior vice-president and head of the agency’s global media rights consulting division.

“Getting us all closer to better industry standard numbers up front is undoubtedly a good thing,” Cohen says.

David Kenny, chief executive officer of Nielsen Holdings Plc. The media measurement agency is now including out-of-home viewership data in its national television ratings reports, a move set to levy sizable impacts upon the entire sports industry. (Paul Miller/Bloomberg via Getty Images)

Drawn-out process

Nielsen, after years of industry debate, network advocacy for change, and internal planning, announced in September 2019 it would at last begin broad measurement and reporting of out-of-home viewership in September 2020. But the process to actually get that additional counting was still far easier said than done.

The out-of-home viewership is broadly measured using a Portable People Meter, a pager-like device with beacons that can detect encoded audio signals in programming and advertising. The technology was developed primarily by Arbitron, the radio measurement agency Nielsen acquired in 2013.

But simply applying that radio audience measurement methodology to television was not immediately workable for several reasons, requiring several more years of testing and development, in turn amplifying complaints of Nielsen’s alleged slow pace of innovation. Among the chief issues Nielsen needed to sort through was reconciling guest viewing in others’ homes, which was already part of Nielsen’s national television sampling, and not have that activity double counted. 

More recently, Nielsen in July announced plans to delay the rollout of the out-of-home measurement due to the ongoing Covid-19 pandemic to an unspecified date. The television industry reacted immediately and bitterly, having already sold many advertising packages to brands for the fourth quarter of this year, in part involving key sports programming such as the NFL, based on the expectation of the additional ratings data being in place. 

And in the face of that broad backlash from their primary customers, Nielsen quickly reversed its plans and reinstated the prior September timetable for distributing out-of-home measurement.

“After speaking with many clients and learning more about your specific agreements for the upcoming season, it became clear that we had misunderstood the extent to which upfront deals have been already agreed to using out-of-home metrics,” said David Kenny, Nielsen chief executive and chief diversity officer, upon the reversal.

“Going forward, we are committed to ensuring a more complete, inclusive, and transparent process as the currency evolves with changing consumer behavior,” Kenny said.

And with that fuller picture of viewership patterns, industry executives expect not only ratings lifts, but also revenue boosts for network advertising sales executives, particularly around non-prime-time inventory.

“I think there’s an even greater impact from this for brands and the network sales executives,” Cohen says. “When the network executives turn the [sports] inventory over to their sales teams, they will now have the additional tools to be more aggressive on pricing and have the information to back that up.”

Stephen Master, head of Master Media Advisors, and previously head of Nielsen’s sports practice, agrees. But the Covid-19 pandemic, however, still delays the full impact of the additional data until at least some time in 2021.

“There is certainly going to be lift right away. But initial impact will still be somewhat muted,” Master says. “Unfortunately this is probably the worst year to introduce this given that people aren’t leaving their homes as much and not going to crowded bars and not going to their offices. This is obviously such a weird year. So it’ll be very interesting to see the full lifts once we get back to a normal situation.”

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