Warner Bros. Discovery signs audience measurement deal with startup Nielsen rival VideoAmp

Warner Bros. Discovery has signed a deal with VideoAmp to measure its audience as an alternative means of data for advertisers, the companies announced Tuesday. 

The contract is a significant moment for VideoAmp, a startup advertising measurement platform that has recently been growing its list of clients ahead of this year’s upfronts in spring, when TV networks look to secure long-term commitments from advertisers. Warner Bros. Discovery owns traditional TV networks and streaming services.

The deal also gives Warner Bros. Discovery another data set to provide to advertisers at a time when the industry is considering alternatives to legacy measurement firm Nielsen, which was put under the microscope during the Covid pandemic when questions arose regarding its measurement panels. Warner will be using both Nielsen and VideoAmp.

Firms like Nielsen and VideoAmp offer audience estimates and data that TV networks and streamers use to sell slots for commercials. Nielsen’s measurement system is based on a panel of approximately 40,000 households that allow it to track what they watch. VideoAmp bases its data on log-in information from devices. Other competitors in the space include Comscore, as well as startups like iSpot.tv and Samba TV. 

VideoAmp wouldn’t provide the length of its contract with Warner, but founder and CEO Ross McCray told CNBC its deals with the media giant and others are for the long term. VideoAmp also works with Disney, which recently launched the ad-supported platform for Disney+, as well as TelevisaUnivision. 

“Especially with Warner’s investment in streaming and having a portfolio of so many channels, WBD has so much opportunity,” said McCray. “We are going to properly allow you to package it as a cross platform” to advertisers. 

The merger between Discovery and Warner Media closed in 2022, amassing a portfolio of TV networks including the Discovery Channel, TLC, TNT, TBS and others. The merged company plans to roll out a revamped streaming platform in the spring, combining its Discovery+ with Warner’s HBO Max. 

The company has also been in the midst of cost-cutting as it contends with a hefty debt load stemming from the merger. While WBD will still be using Nielsen’s measurement services, the deal with VideoAmp gives it another data set, and the possibility of a more cost-efficient, stand-alone alternative for the future.

“Traditional media measurement has not kept pace with how consumers are engaging with streaming and linear content. As a result, these audiences have been undercounted and current measures no longer accurately reflect their true advertising value,” said Andrea Zapata, Warner’s head of ad sales research, measurement and insights, in a news release. 

Nielsen’s lock on TV viewership and ratings has spanned decades. However, Nielsen’s metrics came under scrutiny as concerns mounted earlier in the pandemic regarding inaccuracies and irregularities in its measurement, according to media reports.

Nielsen disclosed undercounting issues in 2020, and has since lost its accreditation with the Media Rating Council, the industry body that verifies the measurement process. Nielsen’s status with the MRC remains suspended, according to recent reports. VideoAmp, which was founded in 2014, doesn’t have accreditation from the MRC, either.

Despite these issues, Nielsen remains the measurement giant in the room working with all major media companies. Streamers work with Nielsen, too. Amazon‘s Prime TV uses Nielsen for its “Thursday Night Football” ratings. When Netflix launched its ad-supported tier last year, it said its programming would be rated by Nielsen, beginning some time in 2023. 

This is a pivotal moment for the media industry, as cord cutting accelerated recently and media companies look to make streaming profitable. Streaming services have added cost-efficient, ad-supported options as subscriber growth slowed down in 2022. 

While there’s about $60 billion to $70 billion spent annually on U.S. linear TV advertising, according to Insider Intelligence, streaming ad revenue is steadily growing. Ad revenue for streaming services is expected to exceed $21 billion in 2023, up from nearly $17 billion in 2022, according to Insider Intelligence.

“We’re expecting meaningful change because the demand is there,” VideoAmp’s McCray said of the measurement industry.