Each day of the Winter Olympics, NBC reports how many viewers watched the previous night’s coverage, and analysts and television executives attempt to divine what those numbers mean.
But NBC isn’t touting traditional Nielsen ratings, the television standard for decades. Instead, for prime-time viewing, the network primarily cites a recently created standard of its own making called total audience delivery, or TAD. It takes the ratings from the broadcast channel NBC and cable channels like NBCSN that are showing the Olympics and combines them with viewership across various streaming platforms to produce one number.
NBC’s number-crunching is only partly a marketing campaign. It is principally the latest attempt at a valid head count in an industry where no one seems to be able to measure the crowd. Viewers are spread too far and wide, no longer huddled around the TV.
NBC also used TAD during the Rio Olympics two years ago, but this is the first time it has sold advertising based on it. Guarantees to advertisers about how many people will watch commercials will be based on TAD, not Nielsen household ratings. As television audiences shrink, that is a big deal for the network, which says its national ad sales for the Winter Games recently passed $900 million. And NBC Universal has committed $8 billion for the media rights to the Olympics through 2032.
“Advertisers now recognize that a viewer is a viewer,” said Dan Lovinger, NBC Sports’ executive in charge of sales. He eschewed the idea that there is a fundamental difference between television and digital viewers. “What we are doing now is adding it all together and treating a viewer as a viewer.”
For decades Nielsen produced easy-to-compare measurements of how many people watched a program and what percentage of U.S. households they represented. But an exploding array of technologies — first TiVo and other digital video recorders, and now streaming players like Rokus, computers and phones — has fragmented viewing across dozens of different platforms, a large factor in the broad decline in television ratings.
With billions of dollars in commercial time at stake, content providers, and especially media companies that own expensive sports rights, have raced to keep up. Scripted programming can have a long shelf life and be sold over time in a variety of ways, but the vast majority of sports is watched live, which means broadcasters need to capture every viewer possible and figure out how to count them.
The catch is that they aren’t yet in agreement on how to do that.
“In order for the industry to move forward, we have to coalesce around a single-source approach,” said Cary Meyers, head of ESPN’s consumer-research division, where the network is working directly with Nielsen on a live audience metric that would be a different version of TAD.
NBC appears unwilling to take any chances with the Winter Games, particularly after facing an unexpected decline in traditional, or “linear,” TV ratings in Rio, when it had to offer free commercial time to advertisers to meet its ratings guarantees. Streaming surged during that period.
Linda Yaccarino, NBC Universal’s head of ad sales, has been a vocal critic of Nielsen in recent years, saying that the measurement company’s methods don’t accurately count all the new ways people are watching its shows. Network complaints have grown louder as the legacy media companies battle falling ratings and new competition for ad dollars from the likes of Facebook and Google’s YouTube.
Nielsen ratings for traditional television are based upon averaging every minute of viewing by a representative panel. NBC combines Nielsen’s measures for its television channels with Adobe’s measurement of streaming data to form TAD.
Advertising technology is changing constantly, and Nielsen has to carefully decide when a metric is ready for mainstream adoption. Megan Clarken, Nielsen’s president of U.S. media (and at one time an Olympic-qualifying high jumper), said that a decade ago, the company faced pressure to jump headlong into mobile measurement. If it had done so, Nielsen would have been pushing ultimately useless metrics to measure viewing on BlackBerry phones.
“What we do as a company is we watch for that activity, that evolution,” she said, “and what we aim to do is not be ahead of it, but be with it, and certainly not behind it.”
While analysts said it was smart of NBC to push its own metric for the games, it is also the right move for Nielsen to proceed carefully as it develops an industry standard for tracking viewers across a “dizzying array” of consumer devices in the digital world, said Dave Morgan, the founder and chief executive of Simulmedia.
“Everybody in the digital video industry is pretty much in agreement that 30 to 40 percent of the ad impressions that are delivered out there don’t really exist,” said Morgan, whose firm works with brands on targeted TV ads. “Yet nobody would say 30 to 40 percent of TV’s viewing audience doesn’t exist. So I think Nielsen is very, very afraid of going into a Wild West environment where it is wide open to fraud and bots.”
According to Nielsen, while measuring authentic digital viewing is difficult, it is no more difficult than doing so for television. But despite the ambiguity of the measuring sticks, advertisers don’t want to miss an opportunity to impress a mass audience over 17 days.
“You don’t necessarily want to sit on the sidelines because, ‘Hey — funky measurement,” said Gibbs Haljun, managing director of media investment at GroupM, the media-buying arm of WPP. “That sort of defeats the point of what they’re trying to do.”
While NBC sees a strong need for better measurement of nontelevision viewers, especially in sports, it won’t necessarily be rolling out TAD across the NBC universe. The Olympics are unique property, with thousands of hours of programming playing out on broadcast and cable channels, unlike a hit drama like “This Is Us,” which would never be shown across a broadcast and cable channel simultaneously.
The Olympics is the perfect petri dish for audience measurement, said NBC’s Lovinger. NBC’s traditional television ratings during the Rio Games were down 15 percent compared with the London Games four years earlier, and since the network had made separate linear and digital ratings guarantees for Rio, it was left “without the ability to manage delivery across the games,” Lovinger said.
“You look at the Olympics in Rio and you look at the kind of decline in linear television viewing and the supplement of digital viewing, either simultaneous or delayed, and it is obviously a material difference,” said David Cohen, president of North America at Magna Global, a major ad-buying firm.
So far, TAD seems to be doing its job. Across the first four nights of the Olympics, ratings for NBC only were down 15 percent from the comparable nights in Sochi four years ago. But the total audience was down just 7 percent. NBC said it is meeting its ratings guarantees and has begun selling extra ad inventory that it had held back in case of falling short.
Haljun said that the timing is right for NBC’s metric this year but doesn’t see it as a long-term solution.
“We’re at this weird point where people agree there needs to be a certified third-party number that’s comparable across networks,” Haljun said.
“But we’re in the early days of getting there,” he added. “People are doing different things and have disagreements on the best way to do this.”