Buyers Pushing Nielsen Data for Web Video and YouTube Won’t Play Ball

Small publishers taking it on the chin as they deal with OCR challenges

Following the NewFronts, the battle lines in Web video are being drawn, and YouTube might be on the wrong side.

After several years of testing, clients and their agencies are eager to buy video inventory that is guaranteed against particular audience demographics, just like they’ve been doing with TV for decades. The biggest ad agency holding companies are convalescing around Nielsen’s Online Campaign Ratings data or comScore's Validated Campaign Essentials (VCE) as their preferred currency in Web video, according to multiple buyers and sellers. As are top marketers like Procter and Gamble.

“We were in beta mode, and now we’re trying to use it for as many campaigns as possible,” said Donnie Williams, chief media officer at Horizon. “We are leaning into OCR. I want to buy video on audience guarantees.”

“There is a lot of demand in the market for this,” added a top video player.

That’s not always good news for Web publishers, which typically have to significantly overdeliver impressions just to meet client goals. It may be not such good news for YouTube, which is refusing to sell inventory in this fashion.

GroupM is one of the big agencies that supports the use of Nielsen OCR. “YouTube is definitely losing out on revenue by not accepting OCR,” said Vik Kathuria, GroupM/MediaCom managing partner.

But even publishers that accept OCR or comScore's VCE are losing out on some cash, say sellers. That’s because the products are imperfect at best. In most cases, buyers and sellers accept upfront that only a percentage of impressions will be guaranteed to reach a particular demo.

Beyond that base level limitation lies an even bigger challenge. Despite digital media’s reputation, Web publishers can’t simply sell guaranteed impressions that will 100 percent reach women 18-49. Rather, they can deliver a campaign that is estimated to reach a large portion of that group using Nielsen or comScore data. And then wait to hear from Nielsen or comScore days later to see how they're doing, buyers and seller say. That's more than ironic for a publishing industry that has oriented itself around precise audience buying and real-time optimization.

“This is not real time at all,” said a publisher.

But the demand certainly is. And to hear publishers tell it, the burden is on them to handle the labor, implementation and the lost revenue from wasteful impressions as OCR and VCE gain traction.

“Publishers have to overdeliver significantly to deliver against OCR and they lack the tools to understand their audience,” said Brian Kane, COO of Liverail, a Web video tech platform. “In order to deliver even 80 percent of a [purchased] audience they deliver many more than needed.”

That can really hurt some smaller sites, which lack scale in video ("they are really struggling with this," said a seller). And that dynamic can also drive up CPMs, say sellers, as as much as 40 percent of a campaign can go to waste.

"Without a doubt, we’re seeing increased market demand for compliance, especially with our larger agency holding company partners,” said Andrew Budkofsky, evp of sales and partnerships at Break Media. "The challenge will be for fair value to be given to the targeted audience in digital video and original content. TV buyers pay fair value CPMs for targeted audiences on TV. The same needs to hold true for digital video.”

Nielsen and comScore are pledging to continue to improve their product offerings. Sellers argue that these firm need to make an adjustment fast. “They’re not product companies by nature, and you feel it," said a seller.

Still, Nielsen and comScore are the best the industry has for now, particularly as it angles for TV dollars (also ironic: Nielsen—a laggard when it comes to Web metrics—appears to be losing ground in this battle to comScore, which was born as a Web researcher, in part because of its alliance with Facebook. Plus, TV centric agencies in particular are pushing Nielsen, say insiders). ComScore tells a different story; it claims that 22 of the 25 brands are using VCE, including P&G.

“They both have very different approaches,” said one seller. “It’s sort of battle of the panels.”

“I think we're living in a world of imperfect metrics,” said Adam Shlachter, svp of media, Digitas. “Look at TV ratings. If OCR/VCE are a way of creating consistency against how we evaluate, negotiate and track the digital video space, those that don't align with those metrics will suffer somewhat.”

In other words, YouTube may miss out. Parent company Google believes it has a better way of measuring Web videos. And with a billion users, it certainly has some clout. Plus, Google has long had designs on competing with Nielsen and comScore.

"We know buyers want meaningful measurement, which is why we're investing broadly in brand-friendly metrics like Active View, which just received MRC accreditation, and Active GRP, which we started testing last year," said a Google spokesperson. "We'll continue to explore new measurement options for brands as well."

One theory on why Google won’t play ball on OCR is Nielsen and Facebook’s relationship. That’s Horizon's Williams’ take on situation. Google declined to comment on this matter.

Regardless, as upfront/NewFront deals play out, it’s going to be worth watching who bends and who doesn’t, and what sort of fallout occurs. Said one seller: “This year and next will be interesting, and it will be painful.”