Nielsen expects to make a little more money this year but isn’t ready to forecast when it will regain the industry accreditation for its TV-ratings service that it lost this summer.
That stay-tuned message dominated the earnings call Nielsen Holdings plc held Thursday morning after its announcement of third-quarter earnings that saw net income of $100 million on $882 million in revenue, yielding a net income per share of $0.32.
In its year-ago quarter, the New York firm recorded just $7 million in income on $836 million in revenue in the year-ago quarter.
On the earnings call, CEO David Kenny emphasized how Nielsen was pivoting to a streaming-video first TV industry, citing its own 2021 stats showing 37% of 18-54 Americans watched TV via streaming—versus 32% for cable and 19% for broadcast.
“The media industry is going through unprecedented change,” he said. “It is evident that media measurement will be dramatically different five years from now.”
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But in the short term, Nielsen has a different challenge: regaining the Media Rating Council accreditation that it lost in September after warnings from that New York group about eroding validity of its in-home measurements.
Kenny described that as a lingering side effect of the pandemic that only affected measuring traditional television (he emphasized that adjective in his phrasing).
“We made changes to adapt operationally,” the CEO said of Nielsen’s decision to cut back on in-home visits during the worst of the coronavirus pandemic, adding that the company accepted MRC’s “constructive criticism” of its communication of those changes.
“We believe in accreditation and fully support the audit process,” he said. “We will have more to share in the coming months.”
CFO Linda Zukauckas concurred, saying later that “Regaining accreditation is a top priority.”
She shared slightly raised forecasts for the full year; the company now expects adjusted earnings per share for 2021 to hit $1.65 to $1.70, versus an earlier predicted range of $1.54 to $1.61.
Nielsen executives spent more time on the call arguing for the continued validity of their reliance on in-home measurements done in a fairly small number of residences—Kenny said that they were once again in more than 40,000—against data coming such competing sources as the tracking software on streaming-media players.
“What we’re working on first is getting the panel back to the health it had prior to COVID,” said COO Karthik Rao during the Q&A period of the call.
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(LightShed Partners analyst Rich Greenfield scoffed at that in a Twitter thread accessorized with sarcastic GIFs, writing “No wonder Google's YouTube is crushing it on the big screen TV -- Nielsen not needed” and adding that “every partner we talk to calling them antiquated with bad/unreliable data.”)
Kenny urged listeners to look forward to the launch of the company’s Nielsen One cross-platform audience-measurement service, which he said will come in Q4 of 2022 and provide a “persons-level measurement that is representative of the entire U.S. population” that remote content-recognition techniques can’t offer.
“Big data alone might work for targeting and optimization, but it does not work for currency-grade measurement,” he said. “Advertisers want independent measurement.”
Kenny closed out the call by reminding everybody of the importance of those customers to Nielsen alongside the TV operators and channels it tracks.
“The advertisers and agencies have an enormous role in our economics,” he said. “We have to work with both sides on an equal basis.”