Nielsen’s Out-of-Home Measurement Error Cost TV Networks $700 Million, Study Says

VAB claims almost 400,000 people were left out of the primetime ratings every night from May-December of last year

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Nielsen’s out-of-home measurement gaffe was worse than the ratings company has presented it, according to a new study by the country’s major TV networks.

Last month, Nielsen admitted it had been undercounting its out-of-home audience for the past 16 months but that it had “no impact to minimal impact” on the final results. The Video Advertising Bureau, which represents the major TV networks, showed just how much that year-plus counting error cost.

It wasn’t “minimal,” says the VAB. According to a 22-page report, which you can view here, the measurement undercount will end up costing $700 million worth of ad time that networks were unable to sell to marketers.

“The only thing worse than Nielsen’s admitted error of sixty-five consecutive weeks of undercounting TV viewing was their claim of ‘no impact to minimal impact’ from that blunder. We now know that error is tracking towards 60 billion lost TV impressions and $700 million worth of TV ads that marketers couldn’t buy because of Nielsen’s second admitted case of 2020-2021 pervasive undercounting,” said Sean Cunningham, President and CEO, VAB.

In a statement to TheWrap, Nielsen responded: “We reviewed the information shared by the VAB today, and while we acknowledge the understatement in a portion of our National out-of-home audiences, we stand by our prior statements that the magnitude of the issue was very small for the majority of telecasts.”

The VAB report looked through 8 months (out of 16 total) of re-processed data from Nielsen between May and December of 2021. It found that more than $350 million worth ad time couldn’t be sold along with 30 billion in lost ad impressions. To put this in even more simple math: The VAB says that nearly 400,000 people were left out of the primetime ratings count each night.

The VAB estimates that the hard numbers it found will essentially be doubled when Nielsen re-processes the rest of the data.

Nielsen in December disclosed that a software error had led to a year-long undercount of out-of-home viewing, which measures viewing in bars, hotel rooms and offices. Nielsen’s rollout, which adds out-of-home numbers with their regular counting methods, had been celebrated by the industry and was seen as a way for networks to recoup some of those lost ad impressions as consumers migrated towards streaming and other digital platforms. This was especially important for networks that aired live sports, as out-of-home numbers are said to, on average, lift the overall viewership by around 10%.

Nielsen’s error, which had gone on since the rollout of out-of-home in late 2020, was just the latest in a long string of measurement screw-ups that has placed the company under siege.

“Nielsen’s last two admitted errors combined may have taken over two billion dollars’ worth of TV ads out of the 2020-2021 marketplace just as Nielsen was first denying and then downplaying it all. These combined Nielsen errors of wrong numbers and minimal disclosure need to serve as the opposite example of what the buy/sell multiscreen TV marketplace needs from its next set of currency providers, including Nielsen,” added Cunningham.