In a bid to develop a solution that will help advertisers focus their ads among various individual groups, Nielsen Holdings plc (NLSN - Free Report) recently partnered with CBS Corporation (CBS - Free Report) .
The solution will use frame-accurate video recognition technology and will bring Dynamic Ad Insertion (DAI) to live linear national broadcast television by leveraging Nielsen Gracenote ACR.
With the latest move, both companies are likely to benefit from the emerging concept of addressable advertising which targets ads among individuals based on behavioral and demographic attributes and not only on age and gender. Thus, it will create more value for advertisers as well as viewers.
This seems to be a win-win scenario for both companies. We believe Nielsen’s product portfolio will strengthen and client base will increase with the launch of this solution. This will boost the company’s top line.
Also, CBS’ advertiser base will improve by providing them insights on household behaviors using Gracenote ACR generated data.
Coming to the share price, shares of Nielsen have lost approximately 24.7% in the past 12 months, underperforming the industry’s gain of 27.2%.
Addressable Advertising Holds Promise
The concept of addressable advertising is gaining traction. Advertisers are focusing their ads on households that have preference for their products instead of showcasing the ad universally. This helps advertisers or brand to strengthen their customer base by improving their advertising effects.
According to data from a research firm, eMarketer, advertiser spending on targeted ads is expected to reach $3.04 billion by 2019.
Nielsen’s Gracenote is incorporated in several smart TVs and provides data on viewer’s taste behavior. Hence, the company is poised to reap benefits from the growing popularity of addressable advertising meaningful data.
Strong Product Portfolio & Partnerships — Key Catalyst
Strategic partnerships have been shaping Nielsen’s growth trajectory over the past few years with the support of its innovative product portfolio. Recently, the company launched Advanced Audience Forecasting tool that provides forecasts of TV audiences, defined by advanced audience segments to clients.
Further, the company introduced Connected Partner Program, which helps companies to connect their network, discover new connected partners and utilize the measurement data provided by Nielsen.
Earlier this year, Nielsen entered into a multi-year renewal agreement with Sinclair Broadcast Group (SBGI - Free Report) . This partnership will allow the Sinclair Broadcast to deploy Nielsen TV ratings in its business model.
Further, the company partnered with Tribune Media Company (TRCO - Free Report) for Nielsen TV ratings across Tribune's local television stations and digital subchannel network, Antenna TV.
Recently, Nielsen extended its partnership with Dollar General, post which, the latter will increase the use of Nielsen's insights and solutions. This will benefit the Buy segment of the company.
Additionally, the latest extension of the multi-year agreement between Nielsen and Del Monte Foods exhibits the strength of the company’s product portfolio which provides data and insights.
Currently, Nielsen carries a Zacks Rank #3 (Hold) which shows its potential to perform well in future with its expanding product portfolio and strengthening partnerships. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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