Karthik Rao, head of Nielsen’s measurement unit, was named CEO of the company, replacing David Kenny, who managed the $16 billion sale of Nielsen to a private equity consortium.

Kenny was named executive chairman.

Rao’s job will be to maintain Nielsen's dominant position in the TV measurement business at a time when it is being challenged by a host of competitors using big data from millions of set-top boxes and smart TV’s to estimate audiences. 

Nielsen is working to incorporate big data into its measurement system, which historically has been based on a relatively small group of sample homes but no longer seems adequate to measure all of the ways viewers are consuming video.

Also Read: Nielsen Plans To Reduce Its Global Workforce by 9%

“We have spent the past five years engaged with Nielsen, and even more closely since the acquisition nearly a year ago,” said David Kerko, head of private equity at Elliott Investment Management LP, one of Nielsen’s new owners. “We have seen great progress already, and we want to thank David for all he has done to contribute to that success.

“Karthik is now the right leader for Nielsen, which is well-positioned to evolve with and support the media ecosystem as it undergoes a period of dramatic change,“ Kerko said. “Karthik’s expansive industry experience, deep client relationships, and proven track record make him ideally suited to manage this evolution and make Nielsen’s value stronger than ever.”

Also Read: Nielsen Tackled, Won’t Use Amazon Data In ‘Thursday Night Football’ Ratings, but It’s Only First Down

Nielsen restructured earlier this year, with Rao being named CEO of the Nielsen Audience Measurement business. He had been the company’s chief operating officer.

“Nielsen has been my home for most of my career, and I could not be more excited for this new opportunity,” Rao said.

“Providing our client partners, the ad industry, and content creators of all types, the most accurate information possible is our singular goal,“ he added. ”Nielsen invented measurement a century ago.  In that time, the way audiences consume content has fundamentally shifted many times over, and we are committed to continuing to partner with our customers to lead that change. 

“I am fortunate to work alongside the best in the business, around the world, as we address unprecedented times of transition in our business.  Together with our talented employees, I look forward to positioning Nielsen for the next century and beyond,” Rao said.

Kenny joined Nielsen as CEO in 2018.

“This is an exciting day for Nielsen and for me,“ Kenny said. “I have been fortunate to lead this company through some extraordinary times in the past five years, working alongside Karthik for much of it. As I transition to my new role and my operating responsibilities come to an end, I hand over leadership to someone with extensive experience in knowing what Nielsen does best, backed by the skills and understanding to position the company for a vibrant future.  He has my complete support and I wish him, and everyone at Nielsen, nothing but tremendous success.”

Nielsen CEO David Kenny’s total compensation for 2021 was $13.8 million, up 29% from the previous year, according to Nielsen’s proxy statement, released Tuesday.

Kenny took a paycut in 2020, a year in which the COVID-19 pandemic affected most businesses. Kenny received $12.9 million in compensation during 2019.

Nielsen last month agreed to be acquired by a group of private equity firms in a deal worth $16 billion.

Kenny got his raise as Nielsen went through a challenging year as it was found to have under-counted TV viewing during the pandemic and lost its accreditation from the Media Rating Council, opening the door to a group of new competitors.

In the proxy statement, Nielsen cited Kenny’s achievements for the year, including guiding the company to 4.9% revenue growth and 5.4% adjusted EBITDA growth. He also sold off Nielsen’s Global Connect business, and met product goals for CTV measurement and the alpha version of Nielsen One for advertisers, the part of the company's new cross-platform measurement system. ■

After losing the industry’s seal of approval, Nielsen CEO David Kenny is pushing back against the notion the video industry no longer needs a singular source of measurement and maintains that Nielsen is the best company to do the job.

Kenny on Thursday released an open letter to the industry and did a round of interviews, including talking to Broadcasting+Cable.

Also Read: Ad Industry Seeks Alternatives After Nielsen Loses Seal of Approval

In the letter, Kenny asserts that “Nielsen is the only media measurement company today that continually delivers the unbiased and comprehensive measurement data necessary to power a better media future for all.”

Last month, the Media Rating Council, in an historic move, suspended its accreditation of Nielsen’s National Ratings Service. Nielsen has been even more of an industry punching bag than usual since earlier in the year when the MRC confirmed industry complaints that Nielsen had been undercounting TV viewing because it wasn’t able to visit the Nielsen families that make up its panel because of the pandemic.

Before stripping Nielsen’s accreditation, the MRC noted that Nielsen’s National Television Service “had some deep-rooted, ongoing performance issues that have threatened its accreditation, many of which predated the well-documented COVID pandemic-related impacts to its panels.”

In his open letter (see below), Kenny acknowledged “we haven’t been perfect,” but said Nielsen is “hard at work returning our panels back to full strength, while at the same time continuing to build for the future with our upcoming Nielsen One capabilities.” As more and more consumption takes place on streaming platforms, Nielsen One promises to count all viewing in a consistent and comparable manner.

The letter also lays out some principles that should be important to the industry, ranging from inclusiveness to employing the best. 

Also Read: Contradicting Nielsen, Comscore Says TV Use Didn’t Fall in Pandemic

Kenny told B+C that he stood by his decision to stop home visits of the Nielsen panel homes by company personnel, even though it gave the company less control over the quality of its data.

He also disputed the notion becoming popular in the industry that it could be well served by multiple measurement companies measuring different aspects of the business, such as counting ad impressions or determining the impact of campaigns.

Kenny said that atomized systems haven’t worked before, citing the history of display and newspaper advertising. “Smart thinkers who look ahead a year or two will absolutely conclude there is a need for a single ground truth currency. That makes everybody stronger and it puts more truth in the system.”

Nielsen can’t take it for granted that it will be the provider of that truth. “We’re not entitled. We’re the currency of choice because we’re the thing that buyers and sellers can most agree on,” he said. Pointing to someone else’s analysis of the situation, he said: “Nielsen is the best company to replace Nielsen. We just need to get on with it.”

“We certainly expect to be reaccredited,” he added.

The Pandemic Problem

Kenny said that during the pandemic the company had been monitoring “flags and faults” in July 2020, but it was limited on what it could do until there were vaccines. The networks wanted a number to show how the changes in the panel were affecting viewership numbers and ratings, but that wasn’t possible to determine until Nielsen could validate what was happening in the sample homes.

“We went as fast as we could,” he said, finally coming up with an analysis for February and May with the MRC that showed undercounts of from 1% to 6%. 

“It’s not like we were sitting on something that we weren’t bringing forward. I think we were trying to find the best way to estimate it and keep panelists safe," he said.

Once the magnitude of the problem was determined, it’s not clear that heads rolled. “Some people have left for sure,” said Kenny, declining to name names.

Kenny said the current situation provided a moment in which the industry can question what it needs from measurement, and to figure out how to give advertisers, programmers and viewers what they have long wanted, which is a simple holistic metric that shows who watched and how long they watched..

“That’s a totally different conversation than looking backward at the COVID era,” he said.

Still that COVID performance still has some of Nielsen’s clients angry. Discovery CEO David Zaslav has publicly complained that Nielsen’s undercount cost Discovery money. Discovery is looking for ways to recoup some of those losses from Nielsen, according to sources. Discovery declined to comment and Kenny said he wouldn’t talk about any specific company. "But what I will tell you is we still produce very solid estimates and these were still used for trades. The upfronts were calculated on them and we’re making them better,” he said.

While Nielsen was under fire, Comcast’s NBCUniversal sent out more than 50 requests for proposal to data, measurement and analytics companies looking for ideas for creating an new independent measurement system that would not be beholden to Nielsen’s outdated approach or to a single vendor or metric. NBCU said that 80% of the companies that got RFPs participated in the process and that more companies contacted NBCU looking to be included. The NBCU process is being led by NBCU executive VP Kelly Abcarian, who left Nielsen earlier this year.

Also Read: More Firms Ask To Join NBCU's Measurement Business Review

“Accreditation is important, but innovation is imperative. We certainly hope Nielsen begins to restore trust and update their service," Abcarian said. "But only with more trusted partnerships and multiple yardsticks can our industry build a reliable, comprehensive, and interoperable measurement system that accurately reflects today’s audiences.”

Nielsen was one of the companies that participated. Kenny said that when a company like NBCU wants to talk about measurement, “we’re going to show up. I’m not going to decline that.”

But Kenny also had some criticism of NBCU’s activity.

“There’s a big difference between analytics and measurement,” he said. “It’s important that we understand how many people did you reach and how often did you reach them and put analytics above that,” he said. 

“We are going to be very vocal on behalf of the industry. That we measure [00:07:48] everybody. That we've got good standards. You know, you can talk about measurement Independence, but I think it's really important to talk about independent measurement,” he said. “Any individual company establishing how they'd like it to work, and cherry-picking measures? That's not necessarily going to be the right answer.”

Kenny said the conversation had to involve both buyers and sellers, agencies and platforms. “We can’t have a one-sided discussion of measurement,” he said.

Some buyers aren’t satisfied with Nielsen either. “OMG supports the intended outcome of the MRC’s decision –  reliable and meaningful measurement,” said Megan Pagliuca, chief activation officer for Omnicom Media Group North America. 

“Given the gaps in cross screen measurement that have existed for some time, OMG has been providing clients co-mingled observed data sets derived from ACR and Set Top Box data as a complement to our work with Nielsen. We will be testing alternative currencies, starting with VideoAmp and at the same time providing feedback to Nielsen on product development,” Pagliuca said.

Since May, Nielsen stock has steadily slid from $28 a share in May to close at $20.84 on Wednesday, but Kenny insists that “our core investors absolutely believe in our direction.” The sale of non-media businesses including Nielsen IQ have strengthened the company’s balance sheet, enabling Nielsen to invest more and move faster to improve its measurement products.

“Of course this noise from the beginning of the VAB complaints makes some investors on the margin nervous,” Kenny said. “I have absolute confidence that the stock is going to rise as we continue to execute. If we keep delivering for the clients, for the market, for the industry, the stock will follow.”

Looking Ahead

Kenny noted that consumers are turning increasingly to streaming and that media companies are changing their businesses to capitalize on the trend.

“If you're going to sell streaming and broadcast together, or and screaming or linear together. You need to make sure you've got a common metric and I think we've got the roadmap to do that. We need to stay on that,” he said. 

He noted that some people criticize Nielsen for moving too slowly and others criticized it for moving too quickly. “I think we're going to have to be on the side of moving more quickly and bring the industry along,” Kenny said. 

Despite the changes in the industry, Nielsen’s process will continue to include its panels, which are difficult and expensive to maintain.

Kenny notes that while the panels are important, it’s not the sole source of data Nielsen employees.

It also incorporates cable return path data. Earlier this year, it made a deal with Roku that includes data. It also is working with Vizio and other smart TV set makers to get Automatic Content Recognition (ACR) viewing information.

That ACR data becomes more important in a streaming world in which 40% of people have cut the cord. 

“In certain demographics, the majority of people don't even have a cable subscription so by definition, they're watching on demand. By definition, they're not using a schedule anymore. So you need more data to deal with that randomness, which we have,” he said.

But relying on big data alone doesn’t alone doesn’t provide an accurate picture.

“Those who have tried to do that without physical validation have made errors over time,” Kenny noted. 

“It’s the same reason that you still have satellites and weather balloons to do weather models. It's the same reason you can't launch autonomous cars until they have literally millions of miles on real roads,” he said. “I think relying solely on models. And inferential data is, you know, it's a huge risk to the industry over time and we've seen this in other fields.”

Kenny also said Nielsen will be using artificial intelligence and machine learning to enhance its products. The company will let clients know how those technologies are being used in order to remain transparent, he noted.

Ultimately, Nielsen will be able to deliver measure that produce a single reach and frequency across streaming and broadcast. “That will be really helpful to understand how that’s different and that might change the way they invest,” he said.

Here is the text of the Open Letter:

Media measurement must work for everyone

By David Kenny, CEO, Nielsen 

A healthy media industry requires measurement integrity — reliable, accurate, unbiased and inclusive media measurement that works for everyone, and measures everybody, everywhere. Advertisers and marketers require independent, cross-platform, deduplicated measurement to build plans that drive outcomes and optimize for ROI. Comparability is key, as marketers navigate, strategize and execute across proliferating platforms.

As a leader in measurement for decades and the currency of choice today, we understand this acutely. We also understand that we need to move faster in advancing our measurement because the audience itself is moving faster.

That’s why we’re transforming and improving the services we provide, to ensure we’re better leveraging the best of science, tech, data and human insight. And we will work directly with the industry to ensure we’re delivering the most accurate measurement of the audience.

In our view, an effective measurement system must do the following: 

Ensure inclusion and representation. One of the reasons a robust panel is so critical is to ensure big data is validated and fully inclusive and representative of the country's evolving demographics. Leveraging U.S. census data and probability sampling, our panels allow us to accurately represent the evolving face of America as big data alone is known to under-represent multicultural communities as well as misrepresent media behavior across all platforms. We are working to continuously improve our methodology by leveraging the latest metering technology so our sample keeps pace with the changing demography, all while ensuring and respecting privacy. 

Enable true comparability across all platforms and deduplicate audiences. The media ecosystem is becoming more fragmented and viewers are distributing their attention across more and more platforms. A single, de-duplicated cross-media metric will dramatically simplify measurement, significantly reduce media waste for advertisers and greatly benefit both consumers and the industry in the long-term. Nielsen’s July 2021 The Gauge report revealed that streaming accounted for 28% of viewers’ total time watching TV. In addition, we know over 40% of all homes in the U.S. rely on streaming or an Over-The-Air signal to view content. 

Utilize the most advanced data science. True measurement integrity requires pushing ourselves to embrace the latest technological capabilities, including big data, cloud computing and artificial intelligence, to build entirely new and forward-looking forms of measurement. We will build unprecedented measurement capabilities with transparent and explainable AI models built off validated data inputs. 

Deliver wholly unbiased results. For a thriving media ecosystem that works for all parties, the primary measurement cannot come from self-interested parties who are measuring themselves. History has shown that it doesn’t work. What does work is having a fully independent and unbiased organization audited against the above standards providing an objective accounting of the audience creating a level playing field for all parties across both the Buy and Sell sides of our industry. 

Evolve and audit measurement standards. We believe in the establishment of and adherence to rigorous measurement standards that reflect current audience realities and platform capabilities. In addition to evolving measurement standards of big data with panels, Nielsen supports MRC Cross Platform standards for video as well as World Federation of Advertisers and Association of National Advertisers proposals. As advertisers continue to raise the bar, Nielsen will respond. Nielsen One is designed to be responsive to and fully supportive of the industry’s cross media measurement standards as well as adaptive to future iterations. 

Nielsen is the only media measurement company today that continually delivers the unbiased and comprehensive measurement data necessary to power a better media future for all. We are driven to meet the needs of the industry we measure, and believe our combination of individual-level household panel insights and big data is unique and critical. 

We haven’t been perfect. We were slow to explain how the health and safety-related measures we took led to a reduction of our panel size. We have increased the frequency and openness of our communications and will share future developments in a more timely and transparent manner. We have and will continue to respond to the MRC and our clients on areas we can improve, as their audiences are changing at a rapid pace. We hear and sincerely value this feedback. 

Today, we’re hard at work returning our panels back to full strength, while at the same time continuing to build for the future with our upcoming Nielsen One capabilities. This change will help us better deliver on true measurement integrity, which will benefit the entire industry and, ultimately, the audience we all serve. 

We remain dedicated to serving the needs of the industry and are committed to ensuring the most robust media measurement available. We look forward to sharing these developments on an accelerated timeline.

We invite you to learn more about how we are building the future of audience measurement with measurement integrity at Nielsen.com/measurementintegrity.

Under pressure from clients who felt blindsided, Nielsen will include out-of-home viewing in its national ratings starting in September as originally planned.

On Thursday, Nielsen told clients that it was delaying adding out-of-home viewing to ratings because of complications caused by the COVID-19 pandemic.

“We regret any disruption we may have caused you, your customers, and the market this week. Going forward, we are committed to ensuring a more complete, inclusive, and transparent process as the currency evolves with changing consumer behavior,” Nielsen CEO David Kenny said in a letter sent to clients late Friday.

TV networks had been counting on selling those extra viewers to advertisers--especially in sports programming--and complained.

ViacomCBS called the Wednesday decision “unacceptable and unjustifiable” and VAB, the industry trade group representing the biggest TV ad sellers, sent an "urgent" letter to Kenny imploring the measurement company to integrate the out-of-home data "without delay."

In his letter Friday, Kenny said that “after speaking with many clients and learning more about your specific agreements for the upcoming season, it became clear that we had misunderstood the extent to which upfront deals have already been agreed to using out-of-home metrics. Given the circumstances, we recognize that a delay would cause greater disruption to the industry than maintaining our original plan.”

The VAB expressed relief that Nielsen moves quickly to resolve what could have been a problem in the middle of an already chaotic upfront market.

“While gratified by the speed with which Nielsen reversed their postponement plan, it was crystal clear that a quick reversal was Nielsen’s only viable option,” said VAB CEO Sean Cunningham. “Marketers are deep into planning and activation discussions with their multiscreen TV ad sales partners, the last thing advertisers need in 2020 is an unnecessary step backwards from a currency provider, the TV industry’s solidarity in always pushing for innovation made sure that potential delay was eliminated quickly.”

Here is the text of Kenny's letter:

At Nielsen, we take pride in providing the market with transparent metrics that our clients can use to transact with confidence.

Earlier this week we communicated a delay to our plans to integrate out-of-home audiences into the National TV currency this fall. Our concern was about consumer behavior, and not the Nielsen methodology. While out-of-home audiences have been impacted by the COVID-19 pandemic, our methodology is strong and the data is reflective of consumer behavior.

That said, after speaking with many clients and learning more about your specific agreements for the upcoming season, it became clear that we had misunderstood the extent to which upfront deals have already been agreed to using out-of-home metrics. Given the circumstances, we recognize that a delay would cause greater disruption to the industry than maintaining our original plan. I also believe Nielsen needs to deliver on our promises, so that you can transact with trust and confidence. Therefore, Nielsen will move forward with the integration of out-of-home TV viewing into the National TV currency measurement starting in September 2020, as originally planned. We will also provide additional data on out-of-home behavior to help you interpret behavior shifts during the pandemic.

We regret any disruption we may have caused you, your customers, and the market this week. Going forward, we are committed to ensuring a more complete, inclusive, and transparent process as the currency evolves with changing consumer behavior.

Respectfully yours,

David Kenny CEO and Chief Diversity Officer Nielsen

Top executives at Nielsen are taking pay cuts through the COVID-19 crisis.

CEO David Kenny has agreed to a 30% cut in cash compensation that is effective May 1 through Sept. 30. Cash compensation includes salary and annual incentive payment.

Last year, Kenny took home $1.3 million in salary, a bonus of $2.5 million and non-equity incentive plan compensation of $2 million. His total compensation was $12.9 million.

Also agreeing to a 30% reduction is David Rawlinson, CEO of Nielsen’s Global Connect unit.

Nielsen’s CFO, chief legal and corporate affairs officer, chief human resources officer and corporate controller have agreed to reductions of 20% in total cash compensation.

Other members of the senior leadership team have agreed to reduce their cash compensation by up to 20%.

Each of the company’s independent directors has agreed to reduce their cash compensation by up to 30%.

Senior executives have agreed to give up their salaries and other compensation at media companies including Comcast and The Walt Disney Co.