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Nielsen, America’s leading TV-ratings firm, is having a Don Draper moment.
Yesterday, the ratings giant announced agreements with some of the largest players in pay-TV that will allow it to more precisely measure who is watching what.
The Punchline: it’s a big step in the direction of highly targeted television advertising-just like the ads Zuckerberg serves up.
Currently, Nielsen uses data gathered from willing panels of TV viewers affectionately dubbed “Nielsen households” to estimate viewing trends across the country by region, age group, etc. There are 100,000 people in Nielsen’s national TV panel.
Going forward, Nielsen will leverage new partnerships with AT&T’s DirecTV, Dish, and Vizio to analyze viewing habits on 55 million smart TVs and set-top boxes. The deal will effectively create millions of new Nielsen households, vastly improving the firm’s insights into America’s favorite pastime.
Analysts say it’s a boon for “addressable advertising,” which allows advertisers to target specific television audiences. Today, targeted advertising on U.S. television (think local car dealerships) is still only a $2 billion market – a far cry from the $70 billion spent annually on traditional TV ads.
Nielsen’s treasure trove of new viewer data will help scale addressable television in an age where advertisers have repositioned their wallets toward the targetable nature of online advertising.
The TV Is Watching
There’s nothing like seeing your third Geico commercial of the day – when you don’t own a car. Advocates of addressable advertising claim it will improve TV viewing by presenting commercials more relevant to a viewer’s interests.
But targeted advertising on the internet raised major privacy concerns as data on users’ purchases, locations and more got vacuumed up. And while data practices for digital TV are still in development, there have already been instances of dubious dealings:
- In 2015, Samsung’s fine print revealed its smart TVs captured private conversations and passed them on to third parties.
- And the FTC sued Vizio in 2017 for tracking customers’ watching habits on its TVs and selling that data without customer consent.
The Takeaway: Rick Welday of AT&T called the push toward addressable ads “a win for national TV networks, a win for integrity in measurement, and most importantly, a win for advertisers.” But for TV viewers? The jury’s still out.