Nielsen Sets Expectations for New TV Ratings System

Big Changes in TV Ratings Expected in 2024

The United States’ top TV-rating organization has announced a timeline for some changes to its current ratings system. Over the next four years Nielsen (NLSN) will replace its TV rating system with a metric that takes digital streaming into consideration. The new metric could alter the way TV and digital video ads are bought and sold.

The Nielsen ratings are widely known as the gold standard for measuring TV, radio, and newspaper audiences. Since the 1920s Nielsen has tracked the media people consume and provided companies with insights into how consumers behave and what they buy. The company measures the total audience, average audience, and cumulative audience for television shows. Implementing the new ratings system will be a significant feat because of the current system’s history and widespread usage.

Every year advertisers spend over $60 billion on television advertisements and more than $10 billion more on ads that appear on digital platforms. The shift will require buy-in from TV network executives, tech companies, and advertisers.

Behind the New Metrics

By 2024 advertisers should be able to compare viewership on an ad that runs during a regular television show and the same ad on YouTube (GOOGL). To do that Nielsen will need to change its audience panels to differentiate between television viewers and those who watch from their phones, computers, and other digital devices.

Nielsen also plans to measure television viewership in the same way advertisers currently measure digital advertisements. Nielsen currently measures and reports on the average number of viewers who watch all commercials during a television broadcast. With the new metrics Nielsen plans to measure each advertisement’s viewership individually.

An Industry at the Breaking Point

Ultimately Nielsen plans to standardize the way ads are bought and sold across television and digital media. According to Nielsen executives, the current rating system was not able to function properly in a media ecosystem that includes both streaming services and traditional television.

While the new system will require time, testing, and increased reporting from ad buyers and sellers, Nielsen says it will have significant advantages over the current system. Nielsen plans to offer previews of the new data starting next year. In the fourth quarter of 2022 it plans to sign agreements with ad sellers and buyers. By the beginning of the fall 2024 TV season, it expects to have the new system fully in place.

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