Author Topic: NLSN - Nielsen  (Read 4264 times)




Grossbaum

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Re: NLSN - Nielsen
« Reply #12 on: September 11, 2019, 01:10:00 PM »
I've been interested in NLSN due to the strategic review process they announced and are expected to conclude by the time they have their Q3 conference call.

From the Q2 Call: David Kenny: "Let me start with the strategic review. We expect to conclude the review by the time we report our third quarter and we look forward to sharing the outcome with you then, if not earlier. The Board and management are working as quickly as we can to conclude."

My thought was if they could sell the "Buy" segment or the whole Company, you'd get a good return from here and if there was no action to conclude the strategic review you'd be protected somewhat by the current valuation (~13x P/E; ~13.0x EV/EBIT; ~9.2x EV/EBITDA).

That is generally still what I'm thinking.

I just wanted to post a comment from Discovery's B of A conference presentation today. I thought it sounded really negative towards NLSN's Watch business. It is just a small anecdote, so I wouldn't want to overreact, but perhaps I should be looking more critically at the Watch segment.

Also, perhaps it doesn't matter if you're just hoping to get your return in the stock from the strategic review catalyst (whatever comes of it in the next month of so).

Quote from the Conference today:
Jessica Jean Reif Ehrlich Let's shift gears and talk about advertising in the U.S. You, recently this week, announced a new relationship with 605, Kristin Dolan's company that provides comprehensive television data analytics. Can you give us any color on how 605 can help your advertising efforts?

Gunnar Wiedenfels Sure. We have a lot of respect for what Kristin has built there. And I mean, to answer that question, I actually -- I want to take a step back and talk about the state of measurement and data in the industry because it's a -- I mean I would say that the industry has really lost a decade from lack of innovation and it was extremely interesting to look at that sort of -- with my perspective, coming from Germany, you're moving to that #1 TV market of the world, just to find out that in 2018, Nielsen is still using paper diaries for measurement. I mean, it's...

Jessica Jean Reif Ehrlich It's incredible.

Gunnar Wiedenfels Yes, it's absolutely incredible. But as with so many things, a huge issue, I think, can be turned into a huge opportunity. And I will say that data-driven advertising is probably the single largest opportunity we have for TV advertising in general, especially for Discovery.

As you know, we're -- in terms of CPMs in the traditional ecosystem, we're somewhat in the lower end, especially compared with broadcast. And the opportunities that are lying ahead in terms of utilizing data, well beyond panel-based measurement, forget that. I think that's going to become very irrelevant over the next couple of years.

But to get to the 605 partnership that we just announced, together with Kristin's company, we're able to combine data from 40 million TV households through set-top box data, with a lot of additional data sources that they have lined up, to be able to look at attribution across the entire funnel, from the very beginning to the sales impact at the end of the funnel, which is something that historically hasn't been possible. And it's going to give us the opportunity to prove to our advertising clients the real value of TV advertising all the way through the funnel, which is an incredibly powerful tool that we haven't had previously.

We're also obviously part of [ Project Or ] working on targeting in the linear TV signal with our TV Everywhere products, which have grown by almost 10x over the past 2.5 years in terms of reach and video views. We're already getting much better monetization through dynamic ad insertion, et cetera, et cetera.

So there's huge potential. And for us, we've essentially moved on. Those are the kind of partnerships that we're looking at now. The Nielsen business case for many of our networks really isn't there anymore. We've already decided to stop rating some of our smaller networks because it just -- it doesn't make sense anymore.

glorysk87

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Re: NLSN - Nielsen
« Reply #13 on: September 11, 2019, 01:50:56 PM »
Wouldn't pay too much attention to that anecdote. That's been the standard complaint about Nielsen for years - I've heard or read it dozens of times now.

First - paper diaries exist, but only in a limited way and only to measure local TV markets. Most NLSN measurement occurs using their PeopleMeters and other devices.

Second - despite paper diaries being pretty antiquated, they actually remain quite an accurate method of measurement.

That said, they have not been able to shift their business quickly enough to meet the demands of a rapidly changing ecosystem. I bought them a few years back and it remains my biggest losing position of my career. I do still think they're a very high quality company, but I'm not sure how much faith I have left in their ability to right the ship. I substantially decreased the size of my position last year.

Grossbaum

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Re: NLSN - Nielsen
« Reply #14 on: September 11, 2019, 02:32:20 PM »
I see, thanks.

I'm also wondering about this part of his comment:

Gunnar Wiedenfels ...And the opportunities that are lying ahead in terms of utilizing data, well beyond panel-based measurement, forget that. I think that's going to become very irrelevant over the next couple of years.

My impression is that the Watch Segment is primarily a Panel based system. That is they use a statistically relevant sample of people to represent the larger universe. Maybe his comment is hyperbole. Or maybe Nielsen still has products that would be relevant beyond panel based measurement?

https://www.visualiq.com/about/blog/what-is-a-nielsen-panel

glorysk87

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Re: NLSN - Nielsen
« Reply #15 on: September 11, 2019, 06:28:52 PM »
I see, thanks.

I'm also wondering about this part of his comment:

Gunnar Wiedenfels ...And the opportunities that are lying ahead in terms of utilizing data, well beyond panel-based measurement, forget that. I think that's going to become very irrelevant over the next couple of years.

My impression is that the Watch Segment is primarily a Panel based system. That is they use a statistically relevant sample of people to represent the larger universe. Maybe his comment is hyperbole. Or maybe Nielsen still has products that would be relevant beyond panel based measurement?

https://www.visualiq.com/about/blog/what-is-a-nielsen-panel

Panel based measurement is, so far, the best way to measure a population accurately in a statistically significant way.

There are plenty of other data-based methods of measuring audience viewing, but to my understanding they have issues that prevent them from getting truly accurate measurements.

ACR data is typically discussed most frequently as the "future of TV measurement" but from my conversations with people in the industry, it can't really be relied upon for accurate measurement. First, it is recorded from the cable box, and anyone with a cable box knows that it can stay on even when you shut your TV off. So there are large swaths of time where ACR would report a program being watched when the TV is actually off and no one is around. I haven't heard of a decent solution for this so far.  Second, ACR data doesn't do a good job reporting demographic data of the viewers. It might be able to tell when the cable box is on and a program is running, but it doesn't actually know who is watching.

There have been attempts to create panels using peoples' mobile devices to listen for audio watermarks, but so far these have not been entirely accurate either. People tend to leave their phones elsewhere when they watch, or other forms of data interference.

At least, this was the case as of about 12-18 months ago. I haven't spent much time keeping updated on the industry since significantly reducing our position.