The news: YouTube is facing backlash from advertising agencies after it informed clients that it will move away from third-party measurement for co-viewing on connected TVs and instead trade based on its own measurements and surveys, Ad Age reports.

• The change will occur in January, though advertisers will still be able to negotiate based on Nielsen co-viewing data and Comscore co-viewing estimates. However, Nielsen told Ad Age it does not plan to incorporate Google’s co-viewing data into its own measurements.

What is co-viewing? Simply, co-viewing data is supposed to determine the number of people watching an ad on the same screen—think of a family on a couch watching one ad together. Co-viewing is a tough figure to decipher, often coming down to estimations driven by surveys.

• The figure is often represented by a multiplier added on top of “regular” impressions but is finicky due to variances across times of day, types of content, and other variables.
• Despite its elusive nature, co-viewing has become an increasingly important metric in the digital age, especially for platforms like YouTube, whose share of viewing on TV screens is rising.
• Older ad measurement methods like Nielsen’s set-top boxes that require consumers to input who is watching are somewhat effective at determining co-viewing numbers, but it’s harder to pin down the number for digital platforms like CTVs. YouTube has long used in-platform surveys as a factor in determining its co-viewing multiplier.

Why it matters: YouTube’s decision to trade based on its own data that isn’t verified by a third party is a dramatic move that confirms fears about the endgame of the fractured measurement landscape.

• After Nielsen lost its (now restored) accreditation in 2021, networks and streamers rapidly struck partnerships with various measurement competitors to have greater control over their metrics and to address a need for more robust data in the digital age.
• The change forced advertisers to become familiar with different tech stacks depending on which network they traded with, and it created concerns about transparency and accountability in an industry constantly fearful of fraud or incorrect metrics.
• Networks have tried to address those needs by forming a Joint Industry Committee (JIC) and even striking buy-side deals. But it hasn’t been easy: YouTube and others have refused to join the JIC, widening a rift between legacy networks and their digital competitors.

Our take: The move away from third-party currencies gives YouTube more power over its rates and data, but at the cost of advertiser trust.

• That trust is already on the rocks thanks to a major ad placement scandal that’s seen YouTube refund advertisers, but the company’s sheer size and hold on digital video give it room to throw its weight around. With so much. YouTube viewership occurring on CTVs, advertisers have little choice but to work with the video platform.