Q1 2021 Nielsen Holdings PLC Earnings Call
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Ladies and gentlemen, good morning, and a warm welcome to the key won the 2021 Nielsen Holdings Plc earnings Conference call. My name is Louisa and I'll be cooperating the school if you'd like to ask the question at the end of the presentation. Please press the.
One of the kind of Vinci patch.
I'm, sorry, but she's one of your life fabric Gubbins senior Vice President head of Investor Relations at Nielsen Sarah you may begin.
Good morning, everyone. Thank you for joining us to discuss Nielsen's first quarter 2021 financial performance I'm joined by our CEO, David Kenny and our CFO windows of cochlear <unk>.
Our CLO Karthik Rau well also beyond for the Q&A portion of the call.
A slide presentation that we'll use on this call is available under the events section of our Investor Relations website.
Before we begin I'd like to remind all of you that of remarks and responses to your questions. Today may contain forward looking statements, including those relating to our business plans and 2021 guidance.
The impact of COVID-19.
Forward looking statements inherently involve risks and uncertainties and only reflect our view as of today may six and we are under no obligation to update our actual results in future periods may differ materially from those currently expected because of the number of risks and uncertainties, including those identified in our disclosure filings and materials such.
Our 10-K, 10-Q, and 8-K report and in subsequent reports filed with the SEC, which are available on our website, we assume no obligation to update any forward looking statements, except as required by law.
On today's call. We will also refer to certain non-GAAP financial measures.
Conciliation of these non-GAAP financial measures to the most comparable GAAP measures are available in the earnings press release, which is available at the Investor Relations section of our website at Nielsen Dot com.
For Q&A as always we ask you limit yourself to one question. So there'll be can accommodate everyone feel free to join the queue again and if time remains we will call on you and now to start the call I'd like to turn it over to our CEO David King.
Good morning, Thank you for joining our first quarter earnings call today, we.
We delivered a solid first quarter building off the strong momentum and execution you saw from us in 2020, we.
We have the right leadership team in place.
Deep bench and we are building a track record of success.
In March we closed on the sale of global connect and we've now officially embark on the next new chapter as a new Nielsen.
Our uniquely positioned as the essential data measurement and analytics provider for the entire media ecosystem with a true.
By the new growth from new solutions across all of our end markets and we are doing this globally. We are undergoing a cultural shift with a growth driven mindset.
And we have a compelling financial model with an improving financial profile.
I am really excited about our clarity focus and alignment as we move forward with executing on our growth strategy.
Linda will review the financials in detail and I'll provide a high level look before I review the business highlights.
We're very pleased with our first quarter performance revenue grew one 3% year over year on a constant currency basis or two 3% organic.
Our adjusted EBITDA margins expanded over 600 basis points, our adjusted EPS of <unk> 47 increased from 36 in the prior year and free cash flow was $115 million.
From the first quarter of 2020.
Our teams are executing well.
Across the organization are employees of rallied.
So rewarding to see all of our hard work and perseverance over the last couple of years begin to pay off.
From a macro perspective, we are starting to see some economies and spending gradually open up as pandemic restrictions ease although this varies greatly by market.
The pandemic is still prevalent.
Our colleagues in hard hit areas, such as India, and Brazil are top of mind right now.
We continue to prioritize the safety and wellness of both colleagues.
As we do with all of our colleagues.
I want to once again, thank our employees for the resilience and dedication they've shown since the start of the global pandemic. This is the team I'm proud to lead and proud to be of part of.
Looking ahead, we remain confident in our ability to deliver on our 2021 growth plan and we are raising key elements of our 2021 guidance.
Now let me walk you through the progress we are making in driving growth across our three essential solutions audience measurement audience outcomes and Gracenote content services.
Across the board our product led strategy has been an important driver of our growth we are adding new clients and markets, while also bringing more services and value to existing clients.
Starting with the audience measurement.
Nielsen one is at the forefront of our strategic priorities, we are committed to providing a single cross media currency to the media industry in the United States and our markets around the world.
Since our launch of announcement in December 2020, we've made good progress on the product our.
Our client commitments.
And with industry engagement.
We have great engagement with advertisers agencies platforms and networks in the Nielsen when committees around both technical implementation.
And business and currency changes.
The currency evolution is important to both media buyers and sellers.
We're working with the advertising associations, such as the DNA or association of National advertisers and Debbie USA. The World Federation of advertisers on their long term cross media initiatives.
We are also working across the ecosystem with broadcasters and leading digital players should meet advertiser requirements.
And we're focused on ensuring that clients see the value of our innovative solutions both today.
And in the future.
Let me now share some specific audience measurement milestones hit during Q1, starting with client renewals.
We are encouraged by renewals in Q1 across both broadcast and digital pure plays with multiyear commitments and price escalators.
Our commitment to full coverage resilience and comparable cross media measurement will serve the industry well as it evolves.
We launched our identity resolution system in January.
As we announced in March our strategic alliance with Roku substantially expands our footprint of smart Tvs and other devices.
Now nearing $101 million in total.
As part of the alliance, our AD and content measurement products will also be integrated into the Roku platform.
Last month, we announced the launch of Nielsen streaming video ratings, which provides unique visibility into total viewership and advanced the audience demographic insights at the platform level alongside linear TV ratings.
Demand has been strong with seven out of our top 10 clients already signed up.
Combined with Nielsen as find content ratings, which provide ratings at the program level, we now deliver comprehensive streaming performance metrics across program platform and streaming of category.
We are working across our clients to embed Nielsen more easily into their buying and selling workflows.
A big first step was Relaunching and tower, our measurement portal as an easier to use cloud based interface.
We've also made good progress with always on digital measurement, which is a significant step towards true comparable cross media measurement.
Across the digital linear and addressable TV.
Our recent alliance with Roku will include always on measurement.
There has been some recent press about how the COVID-19 pandemic impacted viewing habits, and the resulting ratings.
Let me help frame this for you.
Without a doubt the pandemic affected audience behavior, new content production flowed sports were sidelined for a while and then had abbreviated and overlapping schedules streaming platforms accelerated massively beyond the pre COVID-19 trends.
We were able to perform most of our field work remotely throughout the pandemic by CDC and state guidelines prevented us from entering panelist homes.
Either to sign up new panelists or maintain existing homes.
As with any change or disruptive event, such as extreme weather in the past we've recorded our changes.
With the media rating council or MRC and committed to assessing the full impact of the changes as soon as possible.
However.
The pandemic has lasted longer than anyone anticipated.
We only were able to recently restore full in home maintenance for the vast majority of communities in recent weeks.
We are continuing to work with the MRC to make sure we had validated data to fully assess any impact.
Our panel remains robust and representative and the integrity of our ratings estimates remains high.
I also want to be clear net our panels are foundational to audience measurement.
Panels combined with big data enable us to provide the media industry with a comprehensive and representative view of consumer media behavior at the person level with.
With panels as the key truth set.
As a part of our broader Nielsen one strategy, we're continuing to invest in and grow our panel.
And continue to incorporate big data to make our measurement deeper and richer.
Let me turn to audience outcomes, where we serve as one of the largest the outcome measurement providers in the media ecosystem globally.
We have a broad array of solutions within outcomes and continue to make progress on integrating our portfolio.
The simplification will help to improve our go to market approach to clients across publisher platform advertisers and agencies.
We continue to grow our business with advertisers across new verticals.
In the U S and globally.
A recent wins include the Dell WWE E J&J, Florida Blue and Hasbro.
In April we launched Nielsen market lift a campaign outcomes measurement tool built on scalable cloud native platform.
The global launch cover 37 markets, enabling clients around the globe to quickly evaluate the effectiveness and efficiency of marketing campaigns.
And we're growing with leading digital players, including Spotify as we mentioned last quarter in April we expanded our relationship with Twitter.
Longstanding audience measurement clients to help their video advertisers do more robust pre and post campaign planning maximize the AD effectiveness and deliver campaign results with increased speed and agility.
Finally, gracenote content services group.
<unk> is the global leader in entertainment metadata and.
And we are making good progress on our strategy as publishers and Mvpds around the world recognize the increased value of our content solutions.
We are developing new solutions to address market needs on a global basis, particularly as content and streaming platforms continue to grow creating more competition for audiences.
For example, we recently launched a new service.
Personalized imagery, which allows linear and streaming TV providers to dynamically display program images that resonate with individual dealers based on their preferences and previous consumption.
It's a valuable tool that drive engagement and enables clients to maximize viewership on their platforms.
I look forward to sharing additional new Gracenote products later this year.
Before I sum up I want to note that in March we appointed Saundra assumes Williams as Chief diversity Officer.
You may recall that this is the role I previously held as we work to make the new Nielsen a truly diverse business.
Diversity equity and inclusion are crucial to the success of our business and it remains a top personal priority for me.
For the leadership team.
And for the Nielsen Board.
<unk> been a great partner since joining Nielsen in January 2020, and I am confident that her leadership wisdom and experience.
The only accelerate our progress.
To close with the connect sale behind US This marks our first quarter as the new Nielsen singularly focused on the media ecosystem.
We have made significant progress in modernizing our technology and data science, which drive scale and efficiency throughout the organization.
And we are driving growth from new solutions across all of our end markets and we are benefiting from the cultural transformation driven by a growth mindset.
We have a compelling financial model and our focus on driving improvement across key metrics.
Our solid first quarter reflects the strong execution by our teams globally.
And we are excited about the opportunities ahead.
We have confidence in our ability to deliver on our 2021 plan.
And our medium term targets.
I'll now turn the call over to Linda to review the financials.
Thank you David and good morning, everyone before I discuss our Q1 results I want to spend a moment on the connect sale and resulting debt Paydown. We closed on the sale of connect on March debt, we used $2 3 billion of the $2 4 billion of net sales proceeds to pay off.
Our 2021, and 2022 bonds as well as $1 3 billion of term loan debt due in 2023 and 2025.
The transaction also strengthened our balance sheet by lowering pension and other liabilities by approximately $200 million.
Although these liability the sale proceeds and the related gain on sale are preliminary and subject to change as we finalize the transaction accounting later in the year.
As a result of the sale effective this quarter connect is reported as a discontinued operation for all periods presented.
My remarks today will focus on the new Nielsen, which represents our results pro forma for the connect sale and as of the two 3 billion debt Paydown.
At the beginning of 2020 this approach helps with prior year comparisons and it's consistent with how we handled investor day in December and our 2021 guidance.
Turning to the first quarter as David highlighted we are pleased with our Q1 of the result, which reflects solid performance and a nice start to the year.
I'll start with slide seven which summarizes our first quarter revenue performance.
Revenue for Q1 was $863 million up one 3% year over year on a constant currency basis or up two 3% organic.
Adjusted for exits related to the 2020 optimization plan.
On a reported basis revenue grew two 5%, which includes an FX benefit of 120 basis points, we saw strength in both the U S and international markets. We were pleased to see quarterly growth trends continue to improve following the COVID-19 dislocation the effects.
The of COVID-19 continue to lessen the we did still see some ongoing impact in the first quarter.
Audience measurement revenue grew one 9% constant currency and two 3% on an organic basis.
Growth was solid across the board and especially strong in digital measurement.
Also pleased to see pressures and local subsiding.
Outcomes and content revenue declined 4% constant currency with organic revenue up two 2% the <unk>.
Uneven return of live sports due to COVID-19 continued to play out in Q1, but we did see some improving trends and short cycle revenue as well as solid growth in content.
The right side of the page shows the revenue for the past five quarters as well as constant currency and organic revenue growth rates.
As you can see the growth trend improved nicely in Q1, following the impact of COVID-19 over the last few quarters.
Turning now to slide eight adjusted EBITDA was $388 million up 19% year over year on a reported basis or up 18, 3% on a constant currency basis.
Revenue was up $21 million compared to the first quarter of 2020 and costs were down $41 million year over year, resulting in margin expansion of 646 basis points on a constant currency basis, and adjusted EBITDA margins of 45%.
On the right side of the page, we show adjusted EBITDA and margins over the last five quarters on of new Nielsen basis.
As a reminder, we took swift actions in late Q1 last year and cut temporary costs by approximately $100 million.
These temporary cost returned more meaningfully in the second quarter and will continue to ramp as this year of progressive.
We also began to implement the restructuring our optimization plan in the third quarter of last year. So the incremental year over year benefit is more pronounced in the first half of this year versus the second half.
Adjusted EPS was <unk> 47.
As compared to 36 in Q1 'twenty.
This was driven by higher EBITDA and slightly lower depreciation and amortization.
Net in part by higher taxes.
Our effective tax rate was 35, 5% in the first quarter, which included a $16 million discrete item as we revalued, our net deferred tax liabilities to reflect the new Nielsen tax profile in the absence of connect.
This discrete item is added back to adjusted net income, resulting in a normalized first quarter tax rate of approximately 26%. We continue to expect an estimated tax rate of 26% to 28% for the full year, excluding discrete items free.
Free cash flow was $115 million, which compares to $22 million in Q1 2020.
Key drivers of the year over year improvement include higher EBITDA, one time costs in the prior year and lower Capex, which was largely timing driven we continue to expect capex to be relatively flat for the year.
And now I'll discuss our updated 2021 guidance on slide 10.
With connect and discontinued operations treatment finalized we of rounded out the pro forma amounts here on slide 10 to include 2020, adjusted EPS and updated free cash flow.
And in the appendix on slide 20, we've recast our 2020 P&L by quarter on a continuing operations basis. So you can see the impact of connect as a discontinued operation.
And then on slide 21, we are providing quarterly new Nielsen adjusted EPS for 2020.
Today, we are raising element of our 2021 guidance following the strong first quarter results we.
We are increasing our adjusted EBIT of guidance range by $10 million, which results in a range of $1 $470 million to $1 billion $490 million with margins in the 42 in the quarter to 42, 5% range, which compares to 2020 pro forma standard.
The loan margins of 42%.
As we discussed last quarter, our 2021 EBITDA forecast reflects the approximately $60 million benefit of the optimization plan this year and the underlying efficiency of the business, partially offset by the return this year of approximately $100 million of COVID-19 temporary cost cuts.
Made last year as well as incremental growth investments at <unk>.
<unk> EPS is now expected to be in the range of $1 47 to $1 58 up <unk> <unk> from our prior guidance range. This compares to $1 45, and 2020 pro forma for the new Nielsen.
This higher adjusted EPS range is driven by the adjusted EBIT guidance range of $10 million plus another $10 million of the lower debt cost, mostly due to the higher debt paydown than initially contemplated.
We are raising our free cash flow guidance by $15 million to a range of 595% to $645 million.
As a reminder, adjusted EBITDA adjusted EPS and free cash flow guidance ranges do not include the impact of onetime separation related costs, which Nielsen bears under the connect sale agreement.
These cash costs are forecast to be $220 million to $240 million. This year with approximately 134 million incurred in Q1 the van.
The majority of these costs are included in discontinued operation. This.
This is the last year of any meaningful separation related cash costs.
For revenue, we continue to forecast three 5% took four 5% organic growth with significant improvements in both audience measurement and outcomes of content and we forecast constant currency growth of 2% to 3%.
Organic revenue growth adjusted for the impact of business and market exits.
And now I will provide some commentary on how we see the balance of the year playing out we continue to expect revenue growth to be faster in the second half of the year than in the first half recall that we began to see more significant impacts of COVID-19 beginning in the second quarter of 2020.
In addition, we expect the benefit of our growth initiatives to ramp as the year progresses.
We continue to expect year over year margin expansion in the first half of the year driven by the strong margin expansion in Q1 as I noted earlier temporary costs are returning this year, which impacts margins beginning in the second quarter and we began to implement the optimization plan in the third quarter of last.
Sure.
As a result, the second half faces a more challenging comparison and we continue to expect year over year margin contraction in the second half of the year.
Beyond these results and our outlook we were pleased that following the connect cell Moody's revised its outlook on Nielsen from negative to positive and S&P took us on credit watch negative. We ended Q1 with 377 times net debt leverage on the new Nielsen basis. This is the.
First time, our net debt leverage has been below four times since 2017, and we're progressing well to hit our three to three five times net debt leverage target.
To wrap up we are pleased with our first quarter results and remain confident in our ability to execute on the new Nielsen growth story and deliver results in line with the full year guidance. The updated today and now I'll turn it back to Sarah for the Q&A session.
Thanks, Linda with that let's turn to Q&A, operator can you open up the line correct.
Thank you, ladies and gentlemen, if you'd like to Austin Nielsen management team of question. Please press star one on your telephone keypad now, but the parent to ask a question. Please ensure your line is unmated nicely. Please note there will be a brief pause for questions of being participant.
Our first question comes from Tim Sullivan from BMO. Your line is open. Please go ahead.
Hey, good morning, everyone.
I'll try to keep it quick and keep it to one question for David.
One of my favorite slides from the Investor day deck was that audience measurement product roadmap slide and it looks like you've checked the boxes on a few of the first half items that were on Theyre already included the identity solutions of more connected television coverage.
The number of things always odd adds measurement segment of TV measurement addressable measurement coming up in the second half David.
Any of those you want to update your views on the either timing of enthusiasm.
Love to share more of that that to start.
Yes, Thank you Dan.
And we published the roadmap to.
To be as transparent as it couldnt be accountable.
I have to say I.
I was confident in December.
As confident of that a little more today, it's been encouraging the progress that we've made it's been I think of real progress on the team to see the power of debt.
Data platform and the data science that makes it all comparable.
The other thing that I feel really good about is the amount of industry engagement as I mentioned for some time the.
The <unk> have had cross media measurement Count's forces.
We're engaging with them and making sure that their requirements.
And in addition agencies advertisers networks and platforms have all committed people to join US on regular committee meetings there are six of.
Subcommittee to make sure of the industry is ready for that so I feel like we're delivering but more importantly, I think the industry is engaged and wants to move in this direction.
Thanks, David.
Thanks for the question Dan.
Thank you very much.
Our next question comes from Tim Nolan from Macquarie.
Your line is open. Please go ahead.
Alright, Thanks, a lot of question for David as well.
The broader industry question actually it drops a little bit David on your background at on the advertising side and that is the.
The TV Upfronts and the digital new fronts are upon US right now and I Wonder if you could give us your perspective on how the market looks this year not in terms of its growth or anything, but just the nielsen's role in the evolving use of Nielsen measurement tools for connected TV for combined linear and digital sales that the <unk>.
It works of doing just a few of any broad thoughts on nielsen's role in the upfront this year that'd be great. Thanks.
Thank you Tim.
It's a really interesting year for an upfront right because we know that there were so many things that were unusual about 2020 that you can't completely use 'twenty as the basis for 'twenty, one you've got to you've got to I think look back but you've also got to look forward because so many things were launched an innovated <unk>.
Even in the last 90 days and so I think the whole industry is trying to.
The figure that out and we are actively engaged what I would say is that the role of Nielsen is broader.
So on the new front side.
From Georgetown from Goldman Sachs. The line with Ah U Penn. Please go ahead George.
Alright. Thanks, Good morning, you talked about progress with the your Nielsen the one initiative over the past quarter can you talk about key next steps that you are looking to do with that of our outstanding and when you might expect the financial but in the fifth to begin to accrue from the rule out of the of someone.
Certainly the on the second question of financial benefits I, I think that Nielsen one helped us with coupons [laughter] to the free we had some really important renewables as I mentioned in my remarks, and as always we have multiyear contracts of clients. They do involve.
You know pricing and price escalators over the course of those multiyear contracts and so in the house the road. The Nielsen one was clear and it enabled those who were signing up with US for the next phase to have a roadmap that they believed in and could of line their business models with so it's not like theirs.
Suddenly of new product.
Nielsen one is the migration of a number of audience measure of their products into a new product and everybody who's the subscribing to those is making a longer term commitments are agreeing to pricing and I think we're judging pricing and places to get at all comparable as well across the digital and linear measurement.
And and so I think we'll we'll just continue to see benefit and it will compound the way of subscription business dies in terms of milestones of it must be committed to its the roadmap. We lay on it Investor day I think we're we're very keen to get too addressable in the metric and to be able to serve the address of our market.
So that's next connected T V is coming on strong local of course help with that but there are there are others as well that are being integrated and.
I think we are also really focused on the buy side as I said to make sure we're embedded and work towards we're making real progress and be easier to use and that's important because I I think the other part of Nielsen one with all the data we're gonna provide it's gonna allow many more of decisions can be made at the front line and.
Of getting all of the the media buyers and planners in advertisers and agencies.
To find it's easier to work with and and to connect to all of the tools. They are using is also helping so that's that's where we are and again I think the industry engagement and making sure. We of industry Association of the line. We're working closely with the MRC, making sure accreditation can work all of that right on progress and I think it will.
Renew to report progress virtually every quarter for the next couple of years on this roadmap.
Very helpful. Thank you.
And data as we've been combining big data and panel together.
So I feel certainly our estimates are really the best in the market and will continue to be so I will always be seeking additional partners to make sure that we can make that as robust as possible I don't think theres anything we have to have beyond what we have but I think our net.
That doesn't mean, we're not going to keep working to improve our resiliency.
As Nielsen one rolls out and the industry is going to continue the fragment and so as you get to more fragmentation you do want to make sure you've got as much data as possible. So that you can be really as precise as you can not only on on big.
Properties, but also on niche properties as well.
Alright.
Just a small follow up.
Besides for the data partnerships another key figures that Nielsen. The line is integrated behind the firewall of the large digital publishers is that all done now or are there still kind of large integration beyond firewall has to be done.
Okay.
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The out into the things that question. So if you could give tony are thinking.
Yeah sure of good morning, Tony and thanks for the question.
If we just step back a little bit and and we think about all of the elements of our guidance.
We definitely spent a lot of time thinking true that because of the strength of the corridor and what I would say is you know first and foremost we're confident about the revenue Guy, which we did not change the strength of the quarter, though did give us confidence to raise the.
EBITDA arrange by the 10 million as you note and you know there are a lot of moving parts and with COVID-19 last year. It makes for a really complicated analysis, a little bit of noise with the connect divestiture as well, but you know we analyzed all of that.
And we thought that given that EBITDA was a little bit of of <unk> ahead of our expectations.
But yeah. There are some things that we have to be mindful of in the balance of the year. So if we think about this queue to last year was the the quarter that we saw the impacts of COVID-19 from a revenue perspective.
You know I would also point out that we will see the return of the temporary Cos and those will start to ramp up more significantly in the current quarter because of this time last year that we were really starting to take those costs out then also total.
<unk> and the balance of the year, you're going to see our investments and growth initiatives, which are going to ramp.
And so when you think about all of that.
In addition to the optimization plan, which we implemented in the second half of the of last year. Obviously, the the optimization plan served us very well in the first quarter with the margin expansion that you noted, but we will start to laugh the impacts the benefits of the optimization plan as we get into the second half of.
Of the year. So it makes for quite a bit of an even the as we think about the revenue in relation to expand its through out the the balance of the year, but you know stepping back from at all it's in line with what we expected and all reflected in our guidance.
I think we'll evolve that you're you're you're trying to work towards there's so much growth. There do you would you rather have something that's more variable of nature to just sort of.
Flex February the commercial relationship with the growth in their impressions in revenue is there some sort of hybrid you mentioned, even in the quarter renewals with digital customer. So I'm just wondering how you are evolving those commercial relationships.
As that.
The those relationships mature thanks.
Yeah.
Thank you God I will take that question because I I spent a lot of time on the.
Our client on that topic with the whole movement to Nielsen one is telling the industry that we believe the audience is the audience.
Whether she's engaged on the screen platform or broadcast platform.
And that everybody is going to be more of a hybrid so that means there really should be one model and the model is closer to the historical model we've had.
With the with the linear players, which are now all digital player to help out and so I think we're we certainly been working with the the the digital players on multiyear of relationships and we had been successful there in some really important places and pricing that is.
Comparable to for the value of.
They're gonna compete or.
With everybody else.
At that price and then the pricing from Nielsen needs to be the same as well and so it's multi year the escalator tied the value.
Of course with every client we also look at their volume and scale.
Sales. So we we do certainly makes them arguments about the future growth.
With our digital player, but I would say, we're going to be better off to serve the industry on a level playing field.
With the very similar term.
Standard contracts standard pricing as a subscription business.
And I think we.
I hear Ya about you leave some of the explosion of the upside perhaps.
But I think the the flip side of what the industry needs and particularly keep in mind.
Third of the buyers as much as of the sellers here having comparability.
Having full coverage of meaning of this all of the same and having resiliency really does he put it all on the same of form of the same terms.
That makes sense. Thank you David.
Okay. Thanks for the question is a good one.
Thank you very much as a reminder of anything gentlemen, if you'd like to ask the Nelson management team of question. Please pastime one I can kind of think T patch of a pack of ask a question. Please ensure your line is unleashes Nike me. Please night there'll be a short pulse of our question of up in the back to September of eat.
Our next question comes from cast me of that from but it seems kind of had the line of thinking.
Yeah. Thank you I guess of follow up on that last one and the potential march toward parity and the one price for everybody methodology.
This is this might be a foggy memory and it's over the years old, but I think at one point the.
The Nielsen T. The audience measurement revenue equated to somewhere around two per cent of add spend the digital was like 1% of premium digital video I'd spend correct me, if I'm incorrect, but just how wide does that gap Romanian and.
It does sound like you think there's an opportunity to get a parody correct.
Yeah. Thank you. Thank you, Jeff and we look at the multiple factors here that the that would be one because they were looking at our value to the salaries NR value to the buyers here I would say, it's it's closing and in particular.
Their ratings matter our premium scheduled video so.
Think of you.
Searches search and that's the different play, but as as we're moving to really any of the one for all of video we are getting in the video space.
Just something that I think is.
Certainly far more comparable in in the very tight range, whether that'd be a screaming signal or a linear signal.
Thank you.
Thank you for your question and the next question comes from must be thrown 10 securities. The line of Saint <unk> police kind of hat.
Yeah, Yeah, good morning, going David the morning, Linda maybe a question on the road true exchange that close back in April for the advanced video at at the the question is I guess the can you talk a little bit about the net impact to your revenue and EBITDA of this year how material of or.
Not that is and then more importantly, just maybe talk a little bit about how important that deal is for the.
The the data that kind of feeds into the Nielsen, one or or adoption, because you're having the the day that the measure it always on on the on the Roku platform trying to the to to kind of sense of the the impact of of the P&L, but the more poor late at the strategic of Orange, where it's more of the because it's drive the adoption or because it really.
Does beef up the date of for for Nielsen one thanks.
So thank you listen I'm gonna like Karthik answered the strategic question. He he spent a lot of time I personally getting that in place and now I'm, making sure we get full value of of it in the way the execute.
The the financial of of what we both of them is pretty minimal, which is but I I'll, let Linda actually answer your financial question directly after the carpet cause I think to understand of the strategy of I'll help you understand the financial the car.
Okay.
The.
Yeah of nice David the.
It's showing the see the answer is both of which is it's not just about the.
The data.
Of the critical component because it helps us measure better the always on nature.
The partnership is really important to drive adoption look like the rookies rate of growth day has been tested.
And the impact in the rest of the spaces is tremendous so.
Pardon me the watch the more importantly, validate everything we're doing the Nielsen one.
Foundational he's about more adoption with more of their clients. It's so the simple answer is yeah. It is about data of as well, but we love. This relationship also be COVID-19 guys adoption for the new one kind of tools and capability of across all the users.
Oh are you in the.
Okay, great Yeah from a financial perspective, the revenue I would say was is the effectively any of the guidance now and but this was more strategic than it was financial so there is a small a small red.
The new impact on the salad, but overall, we consider it to be on the guidance range of that we share of of this morning the.
The financially just not that much of an impact and no impact on our organic properly.
Okay.
I think I think we can take the next question.
Thank you very much next question comes from the <unk> crime out of <unk> research and he's gonna have to put checking the line is eitan.
Thanks, very much question for David and once the Linda as well David one of the big issues, that's coming up and the C. T V is some.
Accusations of really thoughts of dramatic levels of fraud, and and you know around some of the challenges. The early challenges of measurements and do you have a lot of newer entrants looking at view ability of measurement. There is this of fraud aspect of C. T V or sort of a ascertaining the quality of C. T V impression of something.
And if you plan to address alongside of the traditional measurement and my question for Linda is now that you have a standalone media business and you know the.
The worst of of the separation the headaches might be behind you would you look to give us some improve disclosure. So we can sort of measure your R&D standard your product development and separate from your S. G&A. The way, we would with with a lot of all the companies that are in the sort of digital measurements space and to get a better handle on on what costs and what efforts.
It's sort of of being put into product development of Nielsen one over the next couple of years, thanks very much.
The and things of of the question I'm I'm actually gonna let.
Karthik also step in here because you spend a lot of time on our our design of of the connected television measure net and.
<unk> kind of think this is why we are so we're box to have the combination of big data, we get from a lot of platforms, including connecting T V platform and the importance of validating that with a very robust.
Panel of sample because I I think you know there have been just challenges for anyone who just try to use the day to do to the average your audience measurement and it is important to do both on the other hand, there's also some specific things that others are doing.
The new companies were formed you're totally around visibility of your ability and you know part of what we're doing it also making this more interoperable as opposed to sort of having to launch you got a net are you ability standard. So we do think it's important we do think we we can work with the other I don't think we have to be in all of these cases dirt.
<unk> I think we're the fundamental Pat from the audience measurement and we will connect with the others to help make that work cause it kind of if you Wanna go any deeper on that cause I know you put a lot of work I I the internet.
<unk>.
Yeah. So I'll just highlight one of the things you mentioned because the.
It's really important to understand how we integrate directly with the C. T V player I think that's the way it all begin.
Eventually when when the measurement of P. T V goes into the entire ecosystem. So that the measurement is available across all the steps of the value chain. We will obviously pay a lot more of a day just like the digital will pay a lot more true.
System of attention to things like Bill will the frog.
The important complementary metrics just like in in getting the digital and I think our starting point of direct integrations with the C V V players.
Not not about being connected into the intermediaries. So this way are starting point aggregates measurement of all is starting at the tourist one that's the way actually Boulevard. So this is an orange, but as of the industry and as of more ecosystem players the great growth opportunity at.
Large.
That that's gonna be an area, where it then from view of ability all of the capabilities are gonna be afforded Bulldogs.
HM.
And kind of any do you Wanna take the the other question.
Sure. Yeah look we are expanding our disclosures and you'll see where that even what we put out today is more singularly focused on the new Nielsen and on media and we'll look to improve from there, but I think the best day of allergy of Richard would be to go back to some of <unk> carpet talked of.
<unk>.
At Investor Day, and he shared Directionally some of how we're thinking about growth versus sustain as we look at our Capex investments now of.
<unk> you know, there's a lot in the thought process from and R&D perspective, but even as we went through our strategic planning process last year, we really focused on what the return is going to be an investment. So we're continuing to introduce more of <unk> rigor and refine the.
That process, but if I just go back to some of the trends that karthik share that M. Doster day for 2020, we're kind of looking Directionally at 70 525 relationship of growth versus let's say sustain investments as we think about our cat backs.
And in 2021 word dialing that up significantly will be looking at more of of 40 60 relationship as we think about growth of our assist the stage and then as we discussed that Investor day, we're looking to have that relationship be more of a 50 50 relationship I 2023.
You know what what's interesting to see playing out here is the convergence between linear and digital and that influences the way in which we are investing and we made very clear at Investor day that our current priority is and backing and single platform investing of nail.
And one and so suffice it to say the lion's share of our current investments are being directed there and we are significantly dialing up that investment in order to be where our customers and clients are in order to support the the continued convergence that that'll give you a field.
Directionally as far as the breaking it out in the future. We'll continue to of staff that but don't expect anything in the next 90 days or six months.
Okay. Thank you.
Sure.
Thank you for your question Hey of pants, we have many set of questions. So 100 per se, but the favorite Kenny of the team for any kind of my marks.
Hey, listen thank you all for joining the call today I was so happy to share. The continued progress that we're making across all three of our essential solutions.
I'm really proud of of the fact, we delivered on our plan in the first quarter and I want you to know how much confidence we have in our plan for the rest of the year. We look forward to updating your next time and I. Appreciate your continued support.
Thank you.
Hey, you think gentleman that concludes today's cool. Thank you very much because of the management team for joining you may now disconnect on line, how can not be day.
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