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What's your business model?

110799

How does Nielsen make money?

Nielsen splits its revenue into two categories: what people are watching and what they're buying

Innovation series by Steven Loeb
September 1, 2017
Short URL: http://vator.tv/n/4a12

When you say Nielsen, most people will automatically think of television ratings, and the Nielsen Families who give information about what they're watching. While TV ratings are the company’s flagship product, Nielsen is much more than just a source for unearthing how many people are watching The Big Bang Theory every week.

Founded in 1923, Nielsen is much more than that. It measures a whole host of activities, both physical and digital, including sales information in the retail space, revenue optimization, music sales, audio metrics and digital ad measurements. Nielsen's Total Audience Measurement is a suite of tools that allows media companies and agencies to plan, activate and measure across devices providing comprehensive measurement and a complete picture of content and campaigns. Additionally, Nielsen's Marketing Cloud allows advertisers, agencies and media companies to personalize their digital advertising, and for Fast Moving Consumer Goods (FMCG) retailers, Nielsen's Connected System enables them to more efficiently align their resources around the right data and technology. 

"Across continents and industries, Nielsen measures activity and engagement at every consumer touch point—from TV screens to smartphones, from viral videos to shopping carts. More importantly, measurement in any specific area is just the beginning," the company says.

"With such a vast range of data at our fingertips, we can easily merge cross-industry intelligence to provide deeper insight into current markets—insight that sheds light on significant opportunities for growth. And this is Nielsen’s distinguishing attribute—the ability to illuminate deep consumer insights for faster, smarter, better decisions to help your business grow."

Nielsen makes its money by selling its data, as well as its services, which include analytics, consulting, and reporting. There are no set rates for how much the company charges; it depends on the country, service, and the scope of the project.

When reporting its revenue, Nielsen splits it into two categories: Watch and Buy.

The Watch segment provides media and advertising clients with information on how to best reach people with their ads by providing them with what people are watching, when they watch and how often they watch.

In the second quarter of this year, revenues from the Watch segment totaled $821 million, or just below 50 percent of the $1.644 billion Nielsen’s total revenue. That represented an increase of 10.3 percent year-to-year. Breaking it down further, audience measurement of video and text accounted for $567 million, while audio was $123 million and marketing effectiveness took in $83 million.

While the Watch category tells advertisers where to place their ads, the Buy segment is about the other side of the equation, giving advertisers information to on when people buy, how often they buy, how much they spend and what they're in the market to purchase. Advertisers can select consumers by category, brand and behaviors across purchase verticals that include auto, financial, retail, restaurant, travel and technology.

Revenues within the Buy segment were slightly larger than those for Watch in Q2, with $823 million, but that numbers was down 3.4 percent year-to-year.

Buy revenue is broken down further into developed markets, which saw $510 million in revenue for Nielsen, and emerging markets, with $296 million.

(Image source: twitter.com)

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