Nielsen Begins Serious Shift To Modern Data Measurement

Nielsen belatedly acknowledges the value of data from multiple platforms. JL

Ben Sisario reports in the New York Times:

Despite Nielsen’s push into more expansive and detailed means of tracking consumers, it has faced steady criticism for outdated methods of measuring media ratings. In recent years, the company still relied on paper diaries to track television viewing, for example, and TV networks have said repeatedly that Nielsen’s ratings are unreliable.

Nielsen, a ratings and consumer-research company that has been struggling to adapt to a changing media landscape, announced Tuesday that it was buying Gracenote, a specialist in entertainment data, from Tribune Media for $560 million.

The deal highlights the importance that data plays in a range of entertainment media sources, including television and streaming music. Gracenote, which began in 1998 as CDDB, a system for identifying the CDs that users placed in their computers, has become one of the leading suppliers of information about the content that is used in online entertainment media.

Gracenote’s 12 million movie and television listings, and its catalog of 200 million music tracks, are used to recommend content to users, and the company says its technology is used in 75 million cars.

Nielsen, while best known for its television ratings, has become increasingly interested in tracking consumers not only through the shows they watch and the music they listen to but also through what they shop for.

When Adele’s hit album “25” was released, for example, Nielsen prepared a profile of the album’s typical fan: a college-educated woman, 25 to 44 years old, who watches “Family Guy” and visits Target and Victoria’s Secret stores.

Yet despite Nielsen’s push into more expansive and detailed means of tracking consumers, it has faced steady criticism for outdated methods of measuring media ratings. In recent years, the company still relied on paper diaries to track television viewing, for example, and TV networks have said repeatedly that Nielsen’s ratings are unreliable.

The deal’s finances reveal the increasing value of data. Tribune bought Gracenote three years ago for $170 million. Nielsen said that it would finance the deal through cash and debt and that the transaction was expected to close in the first quarter of 2017. Gracenote will continue to operate in its headquarters in Emeryville, Calif., as a unit of Nielsen, the companies announced.

Online music services, like Spotify and Pandora, have made a particularly strong push into data services, which let them create customized playlists for each user and sell targeted advertising.

In a statement, Nielsen said that incorporating Gracenote’s data would help it provide its clients with a deeper understanding of consumer behavior and “offer an unprecedented view of audience engagement from discovery to consumption.”

Karthik Rao, Nielsen’s president of expanded verticals, said, “Gracenote’s metadata and content recognition technology fuels the interfaces of the major video, music and in-car infotainment systems that consumers engage with every day.”