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AI, Audience Measurement & Media’s Future with Nielsen CEO Karthik Rao
00:29:03
This week on Next in Media, I sat down with Nielsen CEO Karthik Rao to get an inside look at the company’s transformation in a fast-evolving media landscape. From the explosive rise of YouTube on connected TVs to tackling fragmentation across platforms, Karthik breaks down how Nielsen is reinventing itself with big data, AI, and a mission to future-proof measurement.
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- [00:00]
A
AI is your best shot at bringing disparate worlds together. Like this whole excitement about AI. What changed? Right? Because machine learning existed, deep learning existed for decades. This is not about solving yesterday's problems. It's about future proofing where the industry is going, which is following the consumer. You have to normalize to common truths, right? Because these two things are very scarce time and people are the scarcest commodities on the planet. If the numbers aren't what people expect, expect, then people get mad. Coincidentally, when the numbers are higher than they expect, we don't get any compliments.
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B
And eventually Paramount will just buy all the media companies anyway and then there'll be just one. But this week on Nexon Media, I spoke with Karthik Rao. He's the CEO at Nielsen. But the company's very interesting, sometimes volatile year. We talked about how adopting big data has changed the company's capabilities and some of the growing pains along the way. Rao also caught me up on where things stand between Nielsen and its big media partners, many of whom like to challenge the researcher in public, as well as the company's plans to account for the exploding audience for creators. Let's get started. Hi, everybody. Welcome to Next to Media. I'm Mike Shields. My guest this week is Karthik Rao. He is the CEO of Nielsen. Hey Karthik, thanks for being here.
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A
Hey Mike, thanks for having me.
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B
Excited to talk to you. We talked a couple years ago and you were a CEO at Nielsen. Now you are the CEO of Nielsen, which is pretty impressive. Talk to me. Obviously there has been a lot going on over the last couple years. This huge transformation. You know, the Nielsen goes big day. Big data has been a big story. Give us like the. How is that gone? Where are things now? There's a lot, there's a lot of pieces there.
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A
Yeah, so. So yeah, when I talked to you last, we were working on a very big transformation for the company and the premise for that, Mike, was really around continuing to see this world of fragmentation taking place and really trying to future proof our product suite for where all this fragmentation was going to go. So the fragmentation was largely about by then, even then it existed. But largely this moved towards streaming from linear viewing. And then if you think about what happened after that was live streaming, which didn't materially exist until two years ago.
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B
In the area of sports, sports rights moving and more apps launching. It's becoming more and more over complicated today.
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A
And then you think about then what's happened then, even in the last two years, you think about what's happening with the way creators are moving, right, they're also starting to move beyond where they once began their journeys. So we saw this movie like, and where it was gonna go and it was gonna really amplify fragmentation and create more complexity. So what we really needed to do was revamp the product suite, many of the products, and I'll go over that in a second. But at least on the core measurement side, we wanted a platform that could sc, right? And so one was the technology and methodology and AI that was required to be able to do that. And then the second was, where do we start deploying it? Right? So the philosophy became everything at Nielsen needs to be big Data plus panel. Because we want for the future where, you know, capturing audiences are, we want the best of both those capabilities and the tech that underpins it all. So that was essentially the premise. And so we're very happy it got launched. And many parts continue to be audited. Some are accredited, but it gives us a platform to continue to move forward. So even in 2025, big data plus panel, as we call it, is sort of the currency of choice for this year's upfronts, if you will. 2025 is upfront. And it's a big shift because the world has operated for a long time purely on a panel based capability, right? And so, I mean, we're talking decades. So it's a big shift. And so now the journey is, okay, now quickly we bolted on adding live sports to it, right? So now you get it in one integrated suite. And I'm still only on the measurement side of things. And this company does a lot more than that. But then you can imagine, oh, okay, so you move to live streaming next. It could be on demand, it could be every other way in which you and me spend our time today, but all in one integrated platform. That's the journey that we've sort of beyond reasonable doubt, laid the foundation. And also in the marketplace with it.
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B
I mean, it feels like, you know, you go from a, and I'm simplifying this. A company that was built around a panel of 50,000 people or whatever to just like massive amounts of data from tons of sources. That's like a different company. Like, that's like a very different product, right? How, what is, like what's involved in trying to transition that?
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A
Yeah, I mean, there's the big shift. There is, you know, the, the hard parts obviously are internally. You gotta move the culture of the company, you gotta advance the tech of the company, you gotta advance the use of AI in the company. You know, we bang out, you know, about 100 terabytes of data a day. Right. Like, and so to deal with this kind of scale, because everything we do.
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B
Mike, it's not just a bigger spreadsheet. Like, you gotta. You gotta put. You gotta, like, really be able to handle and process all this data in a very different way.
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A
Yeah. So that's one. And then you gotta add, you know, the methodologies, which are really important because, like, you need to have a common understanding and definition for, frankly, how to count eyeballs and to align different methodologies because everyone views it differently, and we're sort of the center of the universe, if you will, or the ecosystem. So then bringing an industry to coalesce around how this works and how you then will scale it to other areas. Right, right. So there's a culture dimension to it, which is all internal. There's a tech dimension, but there's also working with the marketplace and getting them on board for where this journey is going to go. This is not about solving yesterday's problems. It's about future proofing where the industry is going, which is following the consumer and being ready and being able to do it in a way that still is coherent, scalable, comparable, all the good old values, if you will, and then ultimately trust. Right, Right.
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B
Well, that's. How do you do that where you're. It's a historic tradition to yell at Nielsen about something. Right. And then everyone. There's all kinds of pressure, all these upstarts coming, everyone's. You probably feel like you gotta do this overnight, but you gotta get it right also.
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A
Yeah. I mean, this is something you and me, you know, even talked about a while back, which is, you know, everyone typically wants change, but they want it at a pace that they can handle it. And everyone's pace is different. Right. And so at the center of ultimately, what defines this company is trust, Mike. And. And so it's a very difficult thing to balance when you have different sets of expectations. But that's the. That's what Nielsen does, right. Is. Is try to coalesce an industry around bringing advancements and change, but getting the timing right and the comfort level right. And, you know, the way you think about comfort level typically, and some of these, you know, can tend to be frustrating for us or for clients. But the things to get right are, one, can you give them enough historical context with the new engine so that they can start to get comfortable?
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B
Because it's really hard to just throw a bazillion, use numbers at somebody with no contacts. Right. With no issues.
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A
Right. So can you create some level of historical context, A, B, which is something we're going to have to continually deal with, particularly in a world of AI, is explainability. Right. Can you explain it? And when you significantly explode the volume of data going in, it's not that easy to explain all the changes that take place. Right. And so we have to continuously wake up every day to. To instill trust by being able to explain it.
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B
Right.
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A
And then the third is, you know, people love in this industry the concept of traceability. When you work in the world of a panel, everyone can deconstruct a metric down to, you know, a panelist. That's the benefit that it provides for decades. Right? Now, suddenly when you talk about 75 million, you know, devices and 45 million homes and all this stuff, it's. No one can do that. Right. And so it raises the bar for us to help create this explainability, translatability, traceability concept and how to bring those two things together. So, look, we feel really proud about how far we have come in this journey and continuing to bring an industry along. But the important thing here is it is future proofing what we need to do. Because today, now, with what we have already done, the reason we're able to produce, you know, football ratings on streaming is because the rubric scales, and now you can scale it to many more things and really get this understanding of where the audience is going back and forth and get to see that in a truly, like, comprehensive way like never before.
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B
Okay. So you go through this, you know, huge journey, you get, you get the re accreditation, you're getting a lot of attention for the gauge, which is really eye opening for people. And then, like, what happened this, this, this past summer, the NFL, there was a little bit of a, you know, there's, there's always these, like, take. Someone takes something small and it blows up and, oh, my God, this didn't work. What happened there? And how do you, how do you kind of explain where things are headed?
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A
Yeah, sure. Like, typically, you know, to. To put it plainly, like three times. There are three contexts. Typically when, you know, Nielsen gets sort of pulled out in public, in the press or whatever number one is around the numbers itself. Right. If the numbers aren't what people expect, and mostly if they're lower, then people get mad. It's been historical for us. Coincidentally, when the numbers are higher than they expected, we don't get any compliments. But that's life. We got that. The second is around how we manage our roadmap so if you go to every client and say, hey, we're going to bring these new improvements to what we're doing, we're going to bring in some AI here, we're going to work on the panel here, we're going to work on a new approach for co viewing, which is trying to estimate how many people are across from a big screen, which is very unique to Nielsen because we have panels that provide us those inputs. There can be a range of improvements we want to bring and then the challenge is if you go and talk to 50 clients many a time, you'll get a lot of common things and sometimes you'll get totally very unique things. We don't care about that, we care about this. So as you saw in the article, that's probably the one area. And the good news is now we're on a joint roadmap again. Um, and for them it was co viewing and what improvements.
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B
So was it like a disagreement of methodology or was it a problem? Is it just something that's growing pains?
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A
No, it was about, frankly, it was about when we are going to like bring it. That was more like it. When are we going to. So it's literally a roadmap item, like when are you guys going to like do this and how fast can you do it? And so we've been talking about that back and forth and we obviously want to make sure we're doing it right. We want to make sure we're not compromising on other things we're trying to do. So anyway, so the good news is we found a way now and to call it out, like right after the NFL and others went on and talked great things about all the innovations we're bringing to the marketplace. And.
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B
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A
Yeah, so, so I, I didn't, I didn't get to the third one.
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B
Oh, sorry. Number one first.
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A
Yeah, number one is about the numbers itself, right?
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B
Yep.
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A
And the second is around agreement alignment on roadmap. Are we working on everybody's most important thing which we should be doing. Do it all at the same time and can we do it in a coherent way? And the third is. Yes, exactly what you called out, which is we work in the media industry. I mean you're seeing even what's playing out right now. Like people are negotiating carriage deals and the press is a way to do that. It's not my favorite part of negotiating contracts and renewals. But I will call out since, since the one we had earlier in the year. Since then we've not had like we upped, re upped with Warner, as you know, and that went without any.
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B
Like nobody has dropped you and all the new guys are using you. That's which seems to be a pretty good endorsement.
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A
Yeah, we'll take it. Look, we gotta keep executing, keep improving. But here's the thing, Mike. People immediately associate Nielsen with within quotes, the ratings. Right. If you take a step back and look at the breadth of what we do as a company. Right. Ratings are important. It's one of the things we do. But we enable discovery experiences with the gracenote metadata and that has its own AI journey and it's a really amazing thing. Then we help with all kinds of planning. Like our planning tools are like embedded in all the agencies.
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B
Yeah, people don't think about that.
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A
Yeah, the planning tools. So you may have heard of capabilities like Scarborough or Nielsen media impact. There's an entire like very important part of the process. Like you don't get to anything without a real thoughtful planning exercise for buyers and sellers. Right. Then you get into obviously the role of activation. So we have a marketing cloud, we have other capabilities there that enable really using data to really play a big role in the ad tech ecosystem for impressions to be reached. Right. We play a role there. Then you get into measurement, then you get into outcomes. So the outcomes marketplace. So there's a whole range of things that the company does and I think that for us, you know, is that breadth of portfolio and how interconnected it is. And you know, each of these have strengths in streaming now each of these have strengths in broadcasting cable and you know, each of these have strengths in audio. So all these things sort of compound to why when you go back into a, you know, in your new renewal, it's not just about like who's counting my shows? Yeah, yeah. There's a whole bunch of things that, that become sort of an enterprise use case, if you will. That's the way I would characterize it. That's the power of the platform is that like it's an enterprise use case. Yeah. Even though everyone just thinks it's about the ratings.
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B
Right, right. Who's going to numbers am I using? Given that that's, you know, that you're less understood but really integral role with planning activation. How do you think about, you know, on the pure digital side of things like AI buying has really taken off platforms like Google and Pinterest hasn't really happened in TV yet, but you gotta wonder if it's coming. Do you think about that and what role you might play there if there's an automated.
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A
Yeah, I, I, I think, I think it's really important because AI is, is the one thing that is your best shot at bringing disparate worlds together.
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B
Right.
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A
At the most basic level. Right. Like this whole excitement about AI, what changed? Right. Because machine learning existed, deep learning existed for decades. I mean we used all those things, right. Like content recognition existed. So what changed? What fundamentally changed was two things. Number one, the ability for models to take structured and unstructured data, which is, this is the groundbreaking thing, right. Like you can take conversations and numbers and suddenly like the magic is totally different and then the ability for it to self learn as you keep pumping more data into it. So that makes me particularly optimistic because it tells you that if you can bring a structured and unstructured world together, then you can also think of how that applies to many other contexts like linear TV buying versus digital TV buying.
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B
All these things that are hard to mesh right now can theoretically be more meshable.
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A
100%. That is a hundred percent. It's actually well said because that's been historically the problem because workflows are different. Right, right. And nobody wants to rewrite platforms, rewrite software. It's like spending money on yesterday's problem. Right. But with AI you could basically stitch those two things together as long as you have the right data to power it.
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B
Right, right, right.
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A
That's our thesis and that's what we talk to clients about, is you can actually bring disparate worlds together in workflows that you couldn't before. But you need to be using the right data to power the actual agents or the LLM to be able to do those tasks. I'm very encouraged because look, there's also a data driven linear has existed which is basically trying to create advanced audiences as existed, which is effectively trying to take the linear world and make it much more addressable, if you think about it that way. So there's enough of a stack, if you will, in the ecosystem to do that. And the digital always grew up with that stack. Right. And so now with AI, can these two things actually talk to each other? So any company that owns linear assets, plus streaming assets or anything that's digital, there's a new journey here which is going to unlock a lot of value and we want to definitely be part of that.
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B
You know that's like, that could be game changing if the future that we think is coming comes to fruition. I want to ask you about a big story has been the in the gauge. The YouTube numbers have kind of blown people away the last couple years. Now of course there's so much more excitement about creators. I guess that's a two part question. Talk to me about what you've seen on this YouTube growth. Has it been hard to actually get people to accept how big that is on television? And then what do you guys want to do with creators and try and help brands figure out where to put them in mix and things like that?
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A
No, it's a great question, right? I think, yes. A lot of folks struggle with looking at the YouTube numbers because it's been this sort of constant from 9% to 10% to 11% to 12%. It's sort of this thing, it can't.
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B
Be real, isn't it? It really is.
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A
Yeah. Yeah. So what's changed is a couple of things. Right. And I'll just talk about perceptions that people have had for a long time. The two biggest ones are, number one, YouTube is really just a mobile thing. Right?
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B
Right.
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A
That used to be historically it. Second, YouTube really is about short form stuff. Right, right. And then the third is YouTube is just really about democratizing content creation. Right. And all those things turned out to be untrue. A big chunk of YouTube viewing is on a big screen, including with multiple people, like across the screen. It's not just like the way we all, you know, started using YouTube, which is on our mobile devices, which was just me. Now it's multiple people. The content is much more long form. They have a huge amount of. And this is pretty evidence, right? You know, when a platform has a lot of long form viewing, when the ad loads go up.
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B
Yeah.
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A
And if you notice on YouTube, the ad loads have gone up, it looks.
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B
A lot longer sessions, like, you know, tv, like kind of viewing.
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A
Exactly. So I think people now are fully finally understanding the power of the platform is that it is big screen, it is longer form, it works really well and scales to that. And ultimately the content itself, if you just look at how the proliferation happened with creators, millions of them, it's highly produced content. Right. And it may or may not be all the things that you or me are interested in, but there's enough people that are very interested in like cooking or, you know, which hotels are we staying in. Like, it's very well produced. And so what we're hearing from creators directly and we're spending a lot of time on this now is, hey, we kind of grew up in this world like a startup, but now we're getting industrial startups.
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B
They're professionalizing.
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A
Yeah, yeah. And we're not totally sure, like, we know how to be relevant to the broader media ecosystem, which has a workflow question, it has a data question, it has an economics question. And if you don't answer all these three questions, then it becomes difficult for them to travel between platforms, to travel outside of the content that they grew up creating because they want to create new types of content. So all of their travel directions, strategically, it comes down to workflows, data, standardization. Right. And so, so those are the conversations we're having and very, very excited with, you know, all the stuff we're working on. I'd say much to come in 2026 around that.
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B
Coming back to the, the original conversation, the stuff that you always get known for. How do you sum up? Like where are we in the currency war? As if they still exist. And what's going on with the, with the whole JIC initiative. That got a lot of noise and now I don't hear about it.
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A
Look, currencies are in the eye of the beholder, right? And the thing that most People don't recognize is historically, the decision about a transaction between a buyer and seller has not just been on Nielsen data, there have been other things used before. It's always existed.
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B
Sure.
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A
Like for instance, a buyer and seller might negotiate that they want the KPI to be footfall. Right. You have to have driven that much footfall and that's the basis of the transaction. So outcomes is one and people have different kind of outcome. Or it should be brand affinity metrics on top of reach. Right. So they've always existed. So for me it was like you should use whatever you want to use as long as it all tells you two things at the bare minimum. Number one, it should not say that there's more than 24 hours a day. Right, right. That would not be a good thing. Number two, if it's about the US it should not say that there's 450 million people in America. If things don't normalize to the two truths about humanity in any given country, then you're sort of misleading yourselves and that's going to create value erosion and destruction anyway. Right. You can criticize Nielsen for whether our numbers should be higher or lower or whatnot, but if everyone gets used to, well, there's 450Americans and like 28 hours a day, like that's.
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B
Something's wrong there.
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A
Yeah. So multiple currencies or whatever, alternate currencies, these truths should always be the same. You have to normalize to common truths. Right. Because these two things are very scarce time and people are the scarcest commodities on the planet. And with regard to the jic, look, I think they've also. What is it now, two years since it got launched? I think.
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B
Sounds like it. I think that's right.
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A
Yeah. I mean, a lot of the original.
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B
Members are not even there anymore, which is kind of tricky.
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A
Yeah. I think the journey. And I'm, you know, I don't spend a lot of time on this in full disclosure, but I think the last things that I remember was trying to create standardization for how to produce streaming data. Yeah. You know, for use. For everyone to use. Yeah. And that's great. That may be solving a problem for folks who don't know how to use work with streaming data. Like we're integrated into all the streamers, basically all of them. So that requires being aligned on privacy, being aligned on the tech and the clean room integrations, being aligned on how much data should actually go back and forth because each company has their own views on privacy. If you're in California, you have a Very different view than in some other states. Right. So we've accomplished all this and we're turnkey. We work with basically every single one of them. So I'm not sure for us it helps a lot more. But I get it if there's other folks that want to do something with streaming data, like, yeah, it could help.
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B
I mean, eventually Paramount will just buy all the media companies anyway and then there'll be just one player. Last thing I want to ask you about is the podcasting. That's obviously been a red hot medium. It's, you know, it's, it's imperfect in the way that it's hard to track people when they listen on other devices and stuff. But now there's way more viewership of podcasting on YouTube and TV. What are you guys doing there? And then how is my podcast doing? Yeah.
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A
So we are literally going to build a system to measure you, Mike. And the reason I'm saying that is because, look, we've gotten started. I think you know that. And it's mostly in the planning context because at least we have to start somewhere. Right. But I feel like this is an area where there's a few questions we need to answer. I don't believe it's a data problem. We have capabilities to do it. I think where we're going to need to take a leadership position in helping the industry is how do you think about video versus audio? Right. Because like the conversation you and me just had at, at the top of the hour is that if it wasn't a screen, we weren't on screen. Is that an audio podcast? And just because we are on screen, is that a video podcast?
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B
And it's different behaviors, different budgets or structures. All kinds of things.
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A
Exactly. So to me, I think that's the area where it's. Whatever we build has to scale to the different business models. And I think that's where we're going to be investing time because I think that's really. It's a very unique medium. Right. Because. Because the format. This one's. Yeah. And it's simple if everyone can align. But that's where Nielsen typically has to do his thing with. How do we get enough critical mass? So we can agree that there are times when podcasting is an audio only format, even though it is on a screen. And there are times when it's a video format depending on what it is. And how do we get to some level of alignment around it to help the industry, like make progress? Because there's a lot of podcasting and there should be. You know, the economics of podcasting at large should continue to improve, and this is where we can help or help play a role in that.
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B
It's simple. If we all just align. That's like kind of. You just kind of summed up the entire industry there. Good luck with that, Karthik. Awesome conversation. Let's do this again. Thanks so much for your time here.
- [28:46]
A
No, no, my pleasure. Thanks again, Mike. It's great catching up.
- [28:49]
B
A big thanks to my guest this week, Nielsen's Karthik Rao, and my partners at Elemental TV and Sabio. If you like this week's episode, please take a moment to rate and leave a review. We have lots more to bring you, so please hit that subscribe button. We'll see you next time for more what's next in media. Thanks for listening.