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Nielsen: How Will the Company Maintain Its Commitments to Multiple Stakeholder Groups?

Nielsen: How Will the Company Maintain Its Commitments to Multiple Stakeholder Groups?

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Yale School of Management
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Nielsen's mission is to capture the television viewing habits of all Americans. That means surveying people no matter their location, income level, ethnic group, religious affiliation, or prejudices. It also required measuring people's habits no matter what other turmoil may be taking place, be it natural disaster, social upheaval, or massive technological change. The data Nielsen generated played a huge role in determining the media landscape. and the company saw its purpose as building "a better media future for all people."

Nielsen has been measuring audiences since radio was the primary form of mass communication and the company's data on the popularity of particular programs (ratings) have become the industry's standard. For more than 80 years, Nielsen ratings have determined the amount advertisers pay for hawking their wares during programs, determining which programs prosper and which are canceled. To be sure, the company has been criticized, generally by those entities whose programs lag in popularity and believe that "their" audience is not being determined properly. However, the company's measurements remain the primary instrument for describing viewership; so much so, that the entertainment and advertising industries refer to Nielsen ratings as "currency."

Nielsen's advantage over every other audience measurement service has always been its reliance on direct monitoring of audience behavior. Rather than telephone surveys or diaries that depend on a viewer's faulty recall, Nielsen installed recorders in a representative sample of homes across the country that tallied every program to which a person watched or listened. Besides a substantial investment in technology, this meant that Nielsen had to employ a considerable field force to cajole randomly identified households to participate in its national panel, maintain the machines, and replace the sample over time.

The events of 2020-21, however, challenged Nielsen's audience measurement business as it had never been challenged before. The Covid pandemic meant that Nielsen's field force could no longer visit the homes of current and prospective panelists. Machines were not serviced, and the panel could not be refreshed according to plan. Nielsen itself acknowledged that the ratings it was reporting might no longer be representative of the actual audience. Though major advertisers and networks continued to use Nielsen numbers to set ad rates, the Media Rating Council (MRC), a body constituted by the government to oversee ratings, suspended Nielsen's accreditation for the first time since its founding.

The pandemic occurred as another trend was coming to fruition. Streaming services, television content providers that served up their programming through computer lines (such as Netflix or YouTube), were gaining ascendency in the media landscape. Streamers relied on subscriptions and could measure the activities of all of their subscribers, rather than a sample. Audience measurement was entering the era of "big data." To increase its relevance to advertisers and programmers, Nielsen was set to create a new product, 'Nielsen ONE' that incorporated data from various streaming services with its own national panel. Merging the panel data with big data coming from various sources, Nielsen contended would allow clients to measure media trends and provide a more representative sample of this diverse country – a key competitive differentiator for Nielsen.

Nielsen also was concerned with equity among its diverse employee workforce. Particularly, membership representatives (MRs), the employees that convinced households to allow recorders to be installed in their homes, represented the backbone of Nielsen's operations. Being an MR meant getting randomly chosen households to open their doors and successful MRs received large bonuses for signing up their targeted households. How could Nielsen ensure that its diverse group of MRs were being equitably motivated and compensated in a country where not everyone embraced diversity?