Nielsen Moves the Goalposts: What New Ratings Mean for Sports Marketing

Nielsen ratings have always been the currency by which television establishes value to rights holders that ultimately sell advertising to sponsors. In simple terms, ratings represent a numerical expression of audience size, which is broken down into categories like households, gender, and age segments. This is done alphanumerically. For instance, A18-34 means…adults between the ages of 18 and 34 / F35-54 is women between the ages of 35 and 54.

 

Ratings are expressed numerically. A rating point describes 1% of the specific demographic group. So, a 2.4 rating for M35-54 means that 2.4% of the men between the ages of 35-54 in a given DMA (Designated Market Area) viewed a particular televised show. Nielsen ratings can be expressed by DMA or nationally.

 

Share is defined as the percentage of audience viewing a particular show as expressed against the number actively using their television sets. This number will always be higher than the actual rating. For example, let’s say a show that is broadcast in a DMA of 100,000 homes with 40,000 of those homes watching TV achieves 10,000 viewers. This would be a 10 rating and a 25 share.

 

Non-linear TV is more impression-based, which makes sense based on the nature of how it is consumed. An impression counts each time an ad is displayed on a viewer’s screen. One ad equals one impression. Programs that air on non-linear TV can also be calculated in the ratings number.

 

For marketers, ratings, impressions, and share are the primary basis for evaluating the deliverable value of a particular show. The system works equally for sports as it does for ‘regular’ television. Ratings are the most important metric in sports as these events are primarily consumed live regardless of whether you are viewing it on a linear or non-linear platform.

 

NIELSEN IS CHANGING THE WAY RATINGS ARE CALCULATED

 

For decades, the system for measuring television audiences remained unchanged and, candidly, widely panned for either under-reporting or over-reporting ratings data. Nielsen took a lot of heat for using dated, limited, and cumbersome methods for calculating audiences. In 2018, Nielsen ceased using paper diaries and converted their audience measurement tools to automated, electronic methods. This change included RPD (Return Path Data) from cable companies, ACR (Account Content Recognition) from smart TV’s, and LPM’s (Local People Meters) and Set Meters placed directly in the home.

 

As television continues to change, the stakes for getting viewership numbers right have never been more important.

 

No one would argue that Nielsen’s digital means of measurement provided a more accurate assessment of television viewership. The continuing evolution of television as a platform for video consumption lent itself to include data from apps serving video on cellphones, tablets, and other devices as well as viewership that takes place out of home.

 

It’s important to emphasize that ratings measurements are based on statistics drawn from sample audiences. Historically, this has been a huge issue logistically for a company that must distribute its measurement efforts across a multitude of markets with variant demographics. The complexity and enormity of what Nielsen is responsible for measuring is truly staggering to contemplate.

 

WHAT ARE THE RECENT CHANGES THAT NIELSEN IS IMPLEMENTING?

 

Out-of-home viewership reporting has been an issue for sports programming for the 30 years I’ve been involved in the industry. Sports is unique in that it is a preeminent programming choice for bars, restaurants, hotels, gyms and airports. It is extremely valuable content as there are significant audiences watching sports programming outside of their home, and until recently, these audiences were not calculated in the ratings.

 

Wearable technology and co-viewing efforts have provided Nielsen with a significant improvement in measuring viewership out of the home. It is one of the more significant changes that has resulted in so many sporting events reporting ‘record viewership’ this past season.

 

If you’d like to learn more about how Nielsen has improved its out-of-home viewership measurement capabilities, here is a great article on that topic written by Nielsen’s chatbot.

 

Streaming represents yet another wrinkle in viewership measurement that Nielsen has addressed. Today’s sports media rights are now divided. Games can be viewed on networks, cable channels, and non-linear platforms. Nielsen now incorporates first-party data from certain streaming platforms for live sporting events. This improves Nielsen’s ability to calculate viewership on sports programming that is simulcast across platforms.

 

They now have a more complete estimate of a given audience, regardless of how the programming is aired.

 

Yet another improvement in calculating audiences for televised sports events relates to numbers released the next day, with a more comprehensive and widely accepted number (Big Data + Panel) coming out 2-3 days later. Nielsen calls the first number ‘preliminary data’ and the second number is treated as final figures that the network or team will go to market with. Nielsen updated its ratings policy to reflect that distinction beginning with the 2025 television and football seasons.

 

HOW DOES ALL THIS IMPACT BRANDS THAT INVEST IN SPORTS?

 

I have a relatively convoluted opinion on the recent developments regarding Nielsen ratings as they pertain to sports viewership. In one real sense, greater accuracy coming from improved methodology is always good. Having worked in the TV sports industry, I feel pretty good about these long-awaited improvements.

 

The professionals who sell these assets will most certainly point to the higher numbers without necessarily getting into details on why or how every single sports event seems to be reporting record viewership. Remember, ratings are the currency by which they value their product. Higher ratings are an opportunity for teams, leagues, networks, and events.

 

Higher ratings also result in higher rates. Remember that you must be certain that whoever you are buying these assets from is, in fact, delivering the ratings that are being reported. To clarify, if Nielsen is reporting numbers that include devices or platforms and your ad is not running on those devices or platforms, it’s misleading to assume that your campaign achieved the reported rating.
Sports have already benefited immensely from the changes in television consumption habits. The very nature of how it’s consumed (LIVE) has real value to advertisers. Sports also enjoy large and relatively diverse audiences. A more comprehensive system of measuring audiences can certainly strengthen the value of investing in live sports.

 

Higher ratings equate to higher revenue. Nielsen’s enhanced reporting will result in more revenue from rights holders and advertisers. It’s obvious that the higher the ratings, the more valuable that sports programming becomes.

 

All of these changes do not eliminate some of the challenges sports marketers face when evaluating proposals from teams, networks, or sporting events. Today’s sports ecosystem often forces fans to engage multiple platforms when watching a particular league or team. It’s hard to say that a statistical number is truly accurate. That being said, Nielsen’s improvements (expanded out-of-home, first-party streaming data) are an opportunity for the sports industry to grow yet again, or better stated, even more.

Ed has bought, sold, and consulted on sports sponsorships for over 30 years. If you’re looking to learn more about how you can make your sponsorship investment more impactful or if you’d like Ed to review your partnership efforts, contact him at ed.olsen@linedrivesportsmarketing.com or call his cell at 602.284.6722