Warner Bros. Discovery The companies announced Tuesday that it has signed a deal with VideoAmp to measure its audience as an alternative data tool for advertisers.
The deal is a landmark for VideoAmp, an upstart ad measurement platform that has recently expanded its roster of clients ahead of this year’s payments in the spring, when TV networks are looking to secure long-term commitments from advertisers. Warner Bros. Discovery owns traditional TV networks and streaming services.
The deal also includes Warner Bros. It gives Discovery another set of data to present to advertisers at a time when the industry considers alternatives to Nielsen, the legacy measurement firm that has been put under the microscope as questions about its measurement panels have arisen during the Covid pandemic. Warner will use both Nielsen and VideoAmp.
Firms such as Nielsen and VideoAmp offer audience estimates and data that television networks and broadcasters use to sell advertising slots. Nielsen’s measurement system is based on a panel of approximately 40,000 households that allows them to track what they watch. VideoAmp bases its data on input from devices. Other competitors in the space include Comscore, as well as startups like iSpot.tv and Samba TV.
VideoAmp would not disclose the length of its deal with Warner, but founder and CEO Ross McCray told CNBC that its contracts with the media giant and others are long-term. Also works with VideoAmp Disneyrecently launched an ad-supported platform for Disney+ and TelevisaUnivision.
“Especially with Warner’s investment in streaming and having a portfolio of so many channels, WBD has a lot of opportunity,” McCray said. “We’ll let you properly package it as cross-platform,” to advertisers.
The merger between Discovery and Warner Media closed in 2022 to gather a portfolio of TV networks including Discovery Channel, TLC, TNT, TBS and others. The combined company plans to launch a revamped streaming platform in the spring, combining its Discovery+ program with Warner’s HBO Max.
The company has also been in the midst of cost-cutting as it grapples with a large debt load stemming from the merger. While WBD still uses Nielsen’s measurement services, the deal with VideoAmp gives it another data set and a more cost-effective, independent alternative for the future.
“Traditional media measurement doesn’t match how consumers engage with streaming and linear content. As a result, these audiences are undercounted and current metrics no longer accurately reflect their true advertising value,” said Andrea Zapata, head of ad sales at Warner. research, measurement and insights in one news release.
Nielsen’s lock on television audiences and ratings spanned decades. However, according to media reports, Nielsen’s metrics were scrutinized due to concerns about inaccuracies and irregularities in its measurement earlier in the pandemic.
Nielsen disclosed the undercount issues in 2020 and has since lost its accreditation with the Media Ratings Council, the industry body that audits the measurement process. According to recent reports, Nielsen’s status with the MRC has been terminated. Founded in 2014, VideoAmp also lacks MRC accreditation.
Despite these challenges, Nielsen remains the measurement giant in the room, working with all major media companies. Streamers also works with Nielsen. AmazonPrime TV uses Nielsen for its “Thursday Night Football” ratings. When Netflix launched its ad-supported tier last year, saying its programming will be rated by Nielsen starting in 2023.
This is an important moment for the media industry as cord cutting has accelerated recently and media companies want to make broadcasting profitable. As subscriber growth slowed in 2022, streaming services added affordable, ad-supported options.
According to Insider Intelligence, while roughly $60-70 billion is spent annually on linear TV advertising in the US, streaming ad revenue is steadily increasing. According to Insider Intelligence, streaming advertising revenue is expected to exceed $21 billion in 2023, up from $17 billion in 2022.
“We expect meaningful change because there is demand,” VideoAmp’s McCray said of the measurement industry.