CBS CBS Corp

By Alexandra Bruell 

Comscore Inc.'s new deal with TV station owner Nexstar Media Group Inc. is the latest sign the ad industry is warming to alternative TV currencies.

For decades, Nielsen Holdings' TV viewing data has underpinned the vast bulk of transactions between media companies and advertisers. But recent events, including ComScore's inroads in local TV and Nielsen's ongoing contract dispute with CBS Corp., point to intensifying competition.

To be sure, ad buyers want more options, not a switch from one dominant player to another, and Nielsen won't be dislodged from the top spot any time soon, according to industry executives.

But as traditional audiences scatter, pressure for better metrics is giving media companies -- as well as Comscore, Nielsen's main rival -- new traction against TV's kingmaker.

The deal with Nexstar, announced Thursday, makes Comscore the sole TV ratings provider for Nexstar stations in 97 out of 100 markets, including Nashville, Indianapolis and Hartford, up from 51 exclusive markets before.

Comscore also recently struck deals for expanded relationships with Gray Television and E.W. Scripps Co.

"Since we just launched this new arrangement, we're starting to bring those [Comscore] currencies to buyers," said Frank Friedman, VP of local media consumer engagement at Scripps and a former media agency executive at Publicis Groupe. "We're seeing the evolution of buyer and seller and taking a hard look at how we transact and the currency that undergirds what we do."

Comscore has increased its contracts with station groups in the U.S. by 20% year-over-year going into 2019, according to the company, including an increase in exclusive contracts.

CBS standoff

Meanwhile, as Comscore gains ground at the local level, Nielsen is sparring with CBS over the terms of a deal to replace a contract that ended on Dec. 31.

CBS, which had been paying Nielsen for a bundle of products, including local and national ratings, doesn't want to pay Nielsen's proposed rates for its local ratings product, among others, according to people familiar with the matter.

Media buyers are broadly hoping for a rapprochement, as access to Nielsen's CBS data for both the media buyer and seller makes it easier for them to choose and purchase TV ads. But the drama has some buyers wondering whether Comscore's currency, which they are increasingly using at the local level, could also serve as an alternative at the national level.

"The greater utilization and comfort with Comscore ratings data increases the possibility of broader use in the national TV marketplace, " said Ed Gaffney, managing partner and director of implementation research at WPP PLC ad-buying giant GroupM.

Mr. Gaffney said GroupM increasingly has been using Comscore data, while many local stations are also turning to Comscore ratings in negotiations with ad buyers. WPP has a stake in Comscore.

Nielsen remains the currency of choice in transactions between ad buyers and national TV networks, and many station groups with Comscore contracts still use Nielsen in large markets.

"The industry relies on Nielsen's accredited measurement to underpin more than $130 billion in advertising that is transacted each year," said a Nielsen spokesman in a statement. The spokesman emphasized that Nielsen measures viewers down to the "persons-level."

Different metrics

Unlike Nielsen's, Comscore's main currency isn't based on a panel of individuals who represent chosen demographics. Rather, it has used data from devices such as set-top boxes to determine what different profiles of household -- households with women aged 18 to 49, for example -- are watching on TV.

Comscore's product is in some cases seen as more appealing for local stations, in part because its methodology tends to reflect more positively on their performance, media executives said.

Nielsen is working on an updated currency that uses information gleaned from set-top boxes and other data as well as its panel. The product has been introduced in some small markets, but a wider rollout that was planned for 2018 has been delayed, a person familiar with the matter said.

"There's a lack of confidence in the [Neilsen's] new methodology and inconsistency as it reflects on our markets," said Bob Smith, chief operating officer of Gray Television. Gray recently expanded its relationship with Comscore and some of its stations exclusively use Comscore, but the company still works with Nielsen in some large markets, Mr. Smith said.

The fight over the measurement pie is intensifying in a period of transition at both companies. Both Comscore and Nielsen appointed ambitious new CEOs last year. Comscore is seeking to move past years of accounting irregularities, while Nielsen has come under investor pressure to sell assets.

For advertisers who want an improved way of accurately gauging TV and video viewership across platforms, a key question is which of the two companies will invest faster in new products and infrastructure.

"We want competition, and we want the competition to push both Nielsen and Comscore and potentially others into getting us the measurement we need," said Jane Clarke, chief executive at the Coalition for Innovation in Media Measurement. "You will definitely see some proposed new currencies in the coming years."

Write to Alexandra Bruell at alexandra.bruell@wsj.com

(END) Dow Jones Newswires

January 10, 2019 10:33 ET (15:33 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.