What will be of Nielsen after its US$16bn buyout?

Earlier this week, Nielsen agreed to sell the company to a consortium of private equity firms for about US$16 billion including the assumption of debt. Its board of directors voted unanimously for the proposal this time after a previous offer was rejected. 

This acquisition can be thought of as a saving grace for Nielsen which has faced headwinds in recent years when streaming took off and is currently in debt. Having always been viewed as the gold standard for TV measurement, the company expanded its coverage to include streaming data from CTV just this year. Separately, its accreditation to measure national and local TV in the US was also suspended by the Media Rating Council (MRC) last September after it undercounted national TV household viewership during the pandemic.

R3's co-founder and principal, ShuFen Goh, told MARKETING-INTERACTIVE that the recent acquisition is an opportunity to invest significantly in extending that expectation of robust and independent data collection and state of the art data analysis to all channels, including digital and streaming TV, to deliver independent and comprehensive consumer insights across all potential consumer touchpoints. "The industry will be looking with interest at how Nielsen will be able to secure the trust of the industry in how it will be gathering, handling, and processing consumer data and how the fair market value of that will be determined," she explained.

Likewise, a former media industry veteran who spoke to MARKETING-INTERACTIVE on condition of anonymity said the private equity fund infusion will be meaningful as the investment would lead to accelerated transformation within Nielsen. In fact, the investors "will be impatient with status quo", he said. Founded in 1923, the legacy company will be forced to innovate and not be limited in its R&D or talent infusion.

On the flip side, the journey wouldn't exactly be fully smooth sailing for Nielsen if the business is "too clunky and unwieldy". The industry player added:

There is a possibility of dismantling the business and hiving it off for the investors to recoup their investment.

Nonetheless, this is a great opportunity for Nielsen to build future-ready solutions for audience measurements without being encumbered by its legacy business. 

Two years ago, Nielsen spun off its global connect business to private equity firm Advent International for US$2.7 billion to reduce its debt load to provide greater financial flexibility to execute its growth strategy and expand Nielsen's role in the global media marketplace. Nielsen Global Connect offers retailers with data and insights to turn market observations into business decisions and is now known as Nielsen IQ.

While Goh and the industry player remain somewhat optimistic about the acquisition, Lotame's COO, Mike Woosley, said the latest acquisition "ratifies Nielsen's continuing steady decline". Citing examples such as the divestment of NielsenIQ, losing the MRC media accreditation, and Nielsen's stock price "[languishing] for most of a decade", Woosley said that operationally, Nielsen has "consistently failed to execute, drafting on its long legacy of market dominance in the face of a US media industry too disorganised to switch horses".

"For Lotame, there is a wide perception that the product is now less accurate than the system we use it to benchmark, creating chaos with marketers, customers, and other partners," Woosley said. In fact, major networks are also frustrated with Nielsen.

In January, NBCUniversal inked a multi-year deal with TV measurement company iSpot.tv to improve on its measurement. NBCU's plans to rely solely on Nielsen changed last August when it issued proposals to over 50 companies seeking help to "build a new measurement ecosystem for [the company] that reflects the future", Variety reported.

ISpot.tv currently supports NBCUniversal's audience verification initiatives for both ads and program ratings. Through the partnership, NBCU gains access to real-time airing data for linear, streaming and time-shifted viewing, and receive comprehensive reports on a next-day basis that include metrics such as verified ad impressions, reach and frequency, linear and streaming overlap and incrementality.

Lotame's Woosley said that Nielsen "will be further dissected and plumped by private equity investors to go public with a balance sheet weaker yet". "The current crop of investors will look to play with house money only on an asset well past its prime time," he added.

Photo courtesy: 123RF

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