As big data becomes more pervasive in the advertising and media worlds, Nielsen is under pressure from its radio clients to integrate large datasets into its measurement methodologies to improve the stability and granularity of its ratings. Clients are also anxious to see next generation PPMs get in the field and improvements made to the decades-old diary system. At the same time, Nielsen has been working to get better radio data flowing into the complex marketing mix models that help determine how billions of ad dollars are spent. The measurement giant has also been developing other media planning tools and leveraging its relationships with advertisers to illuminate radio's value to large brand marketers and agencies. To get up to speed with these and other issues and initiatives, Inside Radio spoke with Nielsen Audio managing director Brad Kelly, who oversees all U.S. radio sales and account management; and with senior VP, group sales director John Snyder, who has held numerous positions at Arbitron and Nielsen during the past 23 years. An edited transcript follows.
At last week’s NAB Show, radio research execs urged Nielsen to move faster to incorporate big data into its radio ratings. What is the timetable for integrating Gracenote and/or other big data into radio measurement?
BK: Big data integration is a key element to Nielsen’s strategy across the entire organization. But audio is trickier in that, unlike TV with set top box data, we don’t have an infrastructure in place that we can leverage today and press into service. Big data represents a really interesting opportunity to supplement our panel data. But big data is messy –it has holes in it and isn’t representative of the entire marketplace. So you need a truth set, a panel that’s calibrated to the marketplace and is geographically and demographically and ethnically representative. It’s a harmonization of the big data and the panels and the samples that we currently have that we think is the end game. Collectively it gives you greater stability in the numbers, better granularity to drill down and get more discrete level information, and the ability to connect the data with all these other sources. So we’re in but with audio it’s a little further out on the calendar. Yes, we’ve got Gracenote and our hope and expectation is that we can leverage the 110 million cars that have Gracenote integrated into the operating system of their entertainment stack. The ability to extract data and to potentially incorporate PPM software as part of that operating system represents a huge opportunity. However that's not a next week or next month proposition. This requires the participation of the automakers and takes into account the development cycle. If we were able to pull it off today, these cars would roll off the assembly line in 3-5 years. We know that some of the connected cars are collecting this information but a relationship needs to be established and economics figured out to pull that data from the connected cars. We’re pursuing it, were committed to it but it would be disingenuous to say we have a date on the calendar.
Broadcasters want you to move faster on this. Gracenote, which you own, is already in cars and collecting data.
JS: A lot of it depends on other parties. We can do all the development we want but if we can’t strike a deal with the OEMs, then we’re not there. And if Gracenote doesn’t get into a more representative set of cars, that’s going to delay us. There are things beyond our control that need to happen for us to move forward. That's one reason why it’s so hard to give a date.
At the NAB Show, iHeartMedia’s Michele Madansky chastised Nielsen for using a PPM device that “looks like a 1970s pager.” Why is it taking Nielsen so long to roll out new wearable meters?
BK: They require testing. We have active working prototypes that we’re conducting larger scale testing on in 2018.You want to do it right, you want to make sure that this new step in the evolution of the meter is doing what you need it to do and the compliance is there. Then you need to take the types of data you’re getting from the wearable meters and lay it side by side with the legacy PPM data and look for similarities and differences. And if there are differences, you have to get to the why. You can't just throw it into the field – it has the potential to be disruptive. The marketplace expects us to do this smartly and methodically and we’re committed to it. And this is not a radio-only solution. Part of the reason Nielsen acquired Arbitron is because of the technology. Here's chance to leverage these wearables to integrate the separate radio [PPM] panel and TV [LPM and set top meters] panels, which would have huge implications for sample size. What we would do is install wearables in these television households and they would wirelessly, through Bluetooth, connect to the other technologies to show that, for example, Viewer One has entered the room. So compliance all of a sudden goes up. It’s not just applying to the TV piece of what Nielsen does. It’s a PPM so it’s simultaneously picking up radio listenership. Now I’m leveraging the fact that I’ve got these additional panelists out here and have significantly supplemented the PPM sample size. So we’re taking two separate panels, one for TV and one for radio, and we’re integrating the two for larger sample sizes for both, which is pretty cool and exciting.
What is the timeframe for that and how large a sample size increase are you talking about for radio?
BK: Larger scale testing in 2018 is what we’re looking at and 2019 is when we expect to get into the nitty gritty of the differences between the data collected from the legacy PPMs and the new wearables, along with an impact analysis. Assuming everything goes as we expect, we begin to integrate the wearables with a 2020 target date. Our goal is to leverage Nielsen's local TV and audio panelists by connecting our currently separate measurements. PPM wearables can be the key to what links them together. We are doing the work this year to design these new devices and do further lab and friends and family testing.
What is Nielsen doing to get better radio data into the marketing mix models that determine how billions of ad dollars are spent?
BK: There is an opportunity to leverage the totality of Nielsen for the betterment of radio. The listening data is actively being worked into all of these advanced analytics that are critically important to these big advertisers. We’re in beta right now for the next evolution of rolling radio data through the models. We have greater market coverage now, we’re beyond just the PPM markets to 72 monitored markets. There’s a level of granularity that we need to plug into these models to detect cause and effect relationships as a brand shifts budgets and allocations. So if a marketer moved X number of dollars into radio, the goal is to show how that moved the needle, how many units are we moving off the shelf as a result of this. Assuming that everything checks out, we are very close to putting this new data through the models. That’s not to say you will get instant adoption. The modelers have to begin to utilize this information and incorporate it into their decision-making process, integrating it into the well-established, multi-tiered models that they’ve been relying on for a long time. And that requires education.
Nielsen Media Impact (NMI) is the media planning system that Nielsen offers to agencies and advertisers. To date it includes TV, smartphone, tablet, computer, video streaming, magazine, cinema and digital place-based media, but no radio. Is that about to change?
BK: This is something we’ve been working on for the last couple of years and we’ve got a light at the end of the tunnel. NMI measures cross media analysis. So if I’m running a TV campaign and a radio campaign, what is the incremental additional reach lift that I can expect as a result of shifting my dollars between media. This is an important planning tool that the big brands use to answer the question, “What did I get for the dollars I’m spending? If I’m speculatively shifting money into radio, how much did I move the needle in terms of reach?” This gets back to the promise of Nielsen, the fact that it’s all under one tent. We have all of the data sources and the ability to knit them together into a broader mosaic of media consumption and how it’s impacting products moving off the shelf. We have local market NMI coming out this summer in 25 markets. On a market-by-market level, you’ll be able to see the incremental additional reach coming from radio. Later in the year it will be rolled out on a national scale. The reason these tools haven’t been out there before is because there hasn’t been the demand on the buy side with these big consumer packaged goods companies that utilize these tools – or on the sell side. But now the environment is changing. Budgets are shifting and these big advertisers, these billion dollar brands, are starting to expect from radio the kind of answers they’ve been getting from TV for a while.
JS: As these advertiser budgets change, so do our priorities. Some of the frustration with [the rollout of] wearable meters is we took a lot of the resources off other projects to go work on these initiatives because there were immediate dollars for radio here. We are trying to keep our resources in line with what we think is most important for radio. And we don’t think there’s any doubt that this is critical for radio and that’s why we have put everything we have behind it immediately.
What is Nielsen doing to leverage its relationships with advertisers and agencies to better advocate on behalf of the radio industry?
BK: It’s not enough to put the insights and new tools out there and hope that the marketplace will make use of these them. Educating the marketplace is an important piece of what we’re doing. We’ve had a series of meeting with these big advertisers and they’re embracing it. They’re hungry for more information. I’m very fortunate that I do have access to these big advertisers and they are opening their doors, they’re interested in hearing what we have to say.
JS: And they want their agencies to hear what we have to say. So in addition to the advertisers we’re visiting, it’s also their agencies and hearing what they need as well.
BK: Each one of these meetings opens additional doors. These big national agencies are saying, I want to see exactly what my client is seeing. The week before last, we elbowed our way onto a quarterly Nielsen conference call held by our buy side counterparts with 100 client business partners and their account teams, who call on the world’s largest advertisers. Like everyone else, they’re looking for what’s new, what’s different so they can be a resource to their clients. And we were the featured speakers talking about audio – what’s happening, what’s new, where we are with the radio data flowing through the marketing mix models and integrating the radio data into advanced analytics.
The market dynamic is changing. Some of the issues with digital have people thinking about what else they should we be looking at that gives them the accountability they’re looking for and a better feeling that their brands are being placed in an appropriate family-friendly environment. And now we can point to radio as an opportunity to fill these needs. The response has been extremely positive. And now we also have a small army of folks on the Nielsen Buy side that are carrying the message out there. There is a shiny newness about audio and radio and we’re riding that wave. You’ve got parabolic growth of voice assistants. Podcasting is super-hot right now. Streaming is cool and it’s in. It’s all coming together under the banner of audio and the advertisers are saying it’s worth a fresh look. I know were making a difference. It’s a really interesting, cool time and Nielsen is sitting at the crossroads of this stuff. We have that vantage point between the media side and the buy side and the ability to connect them and create those conversations.
JS: The fragmentation in other media is also a benefit to radio. As television continues to break down, the reach that can still be delivered by radio is definitely catching attention. The other issue that is helping radio is a little bit of follow the leader thinking. So people are now looking at Procter & Gamble and the millions being spent on radio and saying, “What do they know? What have they caught on to that we might be missing?” You are seeing other packaged goods companies and other advertisers that have not been on radio for quite a while starting to spend again. Were really encouraged by what we’re seeing.
BK: It’s not as if any of these advertisers, at any point, concluded there was something wrong with radio. It just sort of fell out of their consciousness. So now were reintroducing it to them. And they’re engaging, they’re very open to it. I don’t think we can say that any one thing is making the difference. But collectively the winds are now blowing favorably in our direction. It’s a cool time to be in radio.