Nielsen Holdings PLC (NLSN) Q4 2020 Earnings Call Transcript

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Nielsen Holdings PLC (NLSN)
Q4 2020 Earnings Call
Feb 25, 2021, 8:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Fourth Quarter and Full Year 2020 Nielsen Holdings Earnings Conference Call. [Operator Instructions] After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]

I'd now like to hand the conference over to Sara Gubins, Senior Vice President, Investor Relations and Treasury.

Sara Gubins -- Senior Vice President, Investor Relations & Treasury

Good morning, everyone. Thank you for joining us to discuss Nielsen's fourth quarter and full year 2020 financial performance. I'm joined by our CEO, David Kenny; and our CFO, Linda Zukauckas. Karthik Rao, our COO Media, will also be on the call for the Q&A portion. 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 our remarks and responses to your questions today may contain forward-looking statements, including those relating to the proposed transaction, 2021 guidance and the impact of COVID-19. Forward-looking statements inherently involve risks and uncertainties and only reflect our view as of today, February 25th, and we are under no obligation to update. Our actual results in future periods may differ materially from those currently expected because of a number of risks and uncertainties, including those identified in our disclosure filings and materials, such as our 10-K, 10-Q and 8-K reports and in subsequent reports filed with the SEC, including our 2020 Annual Report that we expect to file later today, 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. Reconciliations 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.com. For Q&A, as always, we ask you to limit yourself to one question, so that we 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 Kenny.

David Kenny -- Chief Executive Officer, Chief Diversity Officer

Thank you for joining our fourth quarter earnings call today. We'll cover our Q4 and 2020 results, but I want to spend most of my time today looking ahead at 2021. We have an exciting year ahead, with strong momentum built off solid execution in 2020. I hope that you were all able to attend our Investor Day in December, where we laid out a detailed plan to maximize shareholder value for the New Nielsen. We refer to the New Nielsen as what our company will look like pro forma after the pending sale of Connect. Following the sale, Nielsen will be the must-have data and analytics provider for the entire media ecosystem.

Let me remind you of the three key messages from Investor Day. First, we are focused on driving new growth from new solutions across all of our end markets and we are doing this globally. Second, we are undergoing a cultural shift with a growth-driven mindset. And third, we have a compelling financial model, reflective of a leading data and analytics company.

I'm going to lead off with the last point; our compelling financial model, as shown by the resiliency of our business in 2020 and our improving financial profile. Our guidance issued today is consistent with the preliminary 2021 outlook we provided at Investor Day. And our confidence in our ability to deliver this has only grown since December.

Linda will provide greater detail later in the call, but I want to review our 2021 outlook at a high level. We expect 3.5% to 4.5% organic revenue growth. We are laying the path to achieve our medium-term goal of mid single-digit organic revenue growth. We'll see margin expansion of 25 to 50 basis points, with 150 basis points of total margin expansion expected through 2023. And we expect free cash flow of $580 million to $630 million for the New Nielsen. We remain focused on achieving free cash flow conversion of 50%, which will help drive free cash flow above $800 million by 2023. And we are also forecasting adjusted EPS of $1.43 to $1.54.

And finally, our balance sheet will improve as we pay down approximately $2 billion of our debt from our agreement to sell Nielsen Connect to Advent International. We received shareholder approval for the sale at our special shareholder meeting in February, with 99% of the shareholders who voted voting in favor of the transaction. We are making good progress on the other necessary approvals and customary closing conditions, and we expect this transaction to close within the next 90 days.

Our confidence in our growth forecast starts with the strong foundation we laid in 2019 and 2020, including our cultural shift to a growth-driven mindset.

2020 was, obviously, a challenging year, given the global pandemic. But Nielsen adapted incredibly well. I am proud of all that we accomplished, and I want to thank each and every one of my Nielsen colleagues for their resilience, courage and focus. While our 2020 revenue was negatively impacted by the pandemic, we still delivered adjusted EBITDA and EPS within the pre-COVID initial guidance range we provided you at this time last year. And free cash flow was above the initial range. We achieved these results by quickly adapting and evolving throughout the organization, especially in the field, our call centers and our products. Importantly, our actions were not just temporary reactions to the COVID pandemic. We created permanent structural improvements by enacting our optimization plan midyear. We rationalized the product portfolio with a focus on essential higher-margin syndicated businesses. We also simplified the underlying technology and data science around two unique global platforms, one for audience and one for content, which will drive faster and bolder innovation in 2021 and beyond, taking advantage of the rapid media ecosystem evolution that has only accelerated over the past year. Finally, we strengthened our leadership team and our Board of Directors. Together, we are driving the cultural shift to a growth mindset across the entire organization, led by our diverse leadership team.

I want to add that our increased focus on diversity, equity and inclusion was essential to achieving our solid 2020 results. We focused on every member of the Nielsen team being able to feel safe and supported this year, and this helped our people show up in amazing ways. We have also focused on being an inclusive business, and we see great value from insisting that all of our partners share our accountability to diversity, equity and inclusion.

We've discussed our compelling financial model and our cultural transformation. Now, let me address the final key message from Investor Day. The New Nielsen is driving new growth from new solutions across all of our end markets worldwide. I'll walk you through our three essential solutions; Audience Measurement, Audience Outcomes and Gracenote Content Services.

Starting with Audience Measurement. In December, we announced the planned launch of Nielsen ONE, our new cross-media measurement solution. Nielsen ONE evolves the Nielsen ratings to a single measurement solution for both streaming and broadcast consumption. This is an enormous innovation for Nielsen and for the media industry. It's a transformative move that is critical to the future of the media ecosystem. The industry's critical need was validated by clients at our Nielsen ONE launch event, where industry leaders such as Unilever, MasterCard, NBC, Google and GroupM and others, discussed the need for a single currency across streaming and broadcast. If you weren't able to attend the virtual launch, I recommend watching the replay, which is available on our website. These and other companies are also actively involved now in the advisory committees for Nielsen ONE. We are starting up 2021 with clear proof points that we are advancing on our cross-media vision. At Investor Day, we laid out the roadmap for the major components of Nielsen ONE through 2022. We are delivering as planned on these interim milestones toward the Nielsen ONE launch today, and clients are already using our new capabilities.

Our cross-media measurement solution has three fundamental principles at its core; resiliency, coverage and comparability. And we are making good progress across all three principals. Let me provide you some color. First, resiliency is built through more data sources. In Q4, we announced strategic data partnerships with Vizio, DirecTV and Dish to unlock addressable measurement. This builds on the existing relationships we have in place for local measurement, the return path data we ingest from Comcast Charter Dish and DirecTV. Of course, there is noise and biases in big data alone, which is why our gold-standard Nielsen panels are essential to clean and correct this data. We are strengthening our resiliency by upgrading our panel to include streaming meters and in advanced nanometer across the entire base. We recently met our initial goal of 10,000 streaming meters, and we expect to have streaming meters in 100% of panelists homes as we refresh the panel over the next 24 months or so.

Second, coverage. We are expanding our connected TV footprint, as we said we would, with the addition of YouTube, YouTube TV and Vizio, and we'll work to further this. We've also recently expanded coverage of streaming to include the viewing of movie releases that are directly available to consumers through streaming or MVPD platforms. For the first time, we released viewership data for WarnerMedia's HBO Max streaming platform for their blockbuster, Wonder Woman 1984.

The third principle, comparability, is enabled by all of our measurement solutions being built off a single Nielsen audience ID. This ID was built in 2020 and successfully tested in Q4 as planned. The idea allows us to de-duplicate metrics and ensure that we have one view of reach and frequency across both broadcast and streaming signals. In January of 2021, we implemented the new measurement methodology for digital ad ratings, which is our flagship digital offering. And I'm also proud to announce that we were recently recognized by the media industry with an Emmy Award for our technology innovation to measure video viewing across a multi-platform service. Technology that's core to Nielsen ONE.

And finally, I want to remind you that Nielsen ONE is a global vision. Any new markets, such as last year's wins in Denmark and Saudi Arabia, will be on the Nielsen ONE solution. And we will convert the rest of our markets over the next two to three years.

Let me turn to Plan/Optimize. This is where our two other essential solutions, Audience Outcomes and Gracenote Content Services, are housed. Given the portfolio rationalization we did in the 2020 optimization plan, we will now start referring to plan optimize as outcomes in content, which is more precisely descriptive of the remaining products and services. Starting with Audience Outcomes. We are one of the largest outcomes measurement providers in the media ecosystem globally, helping clients plan their cross-media spend and answer questions like, did the viewer visit the dealership or buy the product online. We already do this today, but we have the opportunity to accelerate outcomes growth with new clients, new syndicatable products built on a single platform and connecting our cross-media measurement to outcomes, which is a key, only at Nielsen, differentiator. A key element of our growth strategy is further expanding in verticals beyond consumer packaged goods, which are currently the vast majority of our advertiser clients, yet represent only 10% of the world's ad spend. We have recently organized our sales teams to better focus on end markets such as financial services, insurance, pharmaceuticals, automotive, retail, digital brands and technology. And this has already driven new client wins across these verticals. In fact, at Investor Day, we mentioned success with a number of leading brands such as Visa, Equifax, PetCo, Volkswagen and LVMH. We've expanded with LVMH to now include their Bulgari division and we've added new clients such as Spotify, Flipkart and others. These wins spanned both the U.S. and international markets. Our progress is underpinned by our technology transformation, which is helping to shorten turnaround time, bring on new clients faster and accelerate product innovation. Earlier this month, we announced our new ID resolution methodology for attribution, which enables advertisers and publishers to understand the entire consumer journey across platforms, better optimize their spend and prove the impact of advertising, even as cookies go away.

Finally, let me turn to Gracenote Content Services. As you may remember, Gracenote is the market leader in entertainment metadata. We power the consumer entertainment experience on a truly global basis. For example, Gracenote provides detailed information on movies and TV shows that you see on your cable program guides or discover on your streaming services. Gracenote also provides real-time sports scores statistics for the world's top leagues, events, teams and players to use in their audience experience. Gracenote is deployed in over 120 million cars worldwide, providing data through car entertainment systems. And Gracenote information on Artis & Sons powers music services and consumer electronics brands. Gracenote metadata is the de facto standard across the entertainment industry. Virtually, every consumer interacts with Gracenote metadata multiple times in any given day.

We are focused on three key growth opportunities for Gracenote Content Services. First, more audiences, content, markets and platforms means that there are more opportunities for our core Gracenote metadata services. We're growing our substantial base by adding new platforms, markets and content and increasing the capacity and speed of our ability to grow metadata. We have been building our global leadership position with key industry players such as Comcast, Samsung, Google and Liberty Global. Second, we're developing new solutions for new products across discovery, marketing and insights. For example, last week, we launched Gracenote Inclusion Analytics to accelerate diversity in content and enable clients to create more resident programming backed by our data-driven analytics. And third, we have a bold ambition for Gracenote. Gracenote can help studios leverage the Gracenote Content ID to attach a unique identifier to their content, which will serve to simplify and scale the distribution and discovery of content across the full range of channels and streaming services used by audiences today.

To sum up, we are excited about the opportunities ahead in 2021 and beyond. We have a compelling financial model. We are shifting our culture to that of a growth mindset, and we are executing on key initiatives to drive accelerating growth through new solutions and new clients. Building on our progress in 2020, we have confidence in our ability to deliver on the 2021 plan and to deliver our medium-term target. We are indeed a New Nielsen; strongly positioned for the future and ready to deliver enhanced value to our clients and to our shareholders.

I'm now happy to turn the call over to Linda to review the financials and provide greater detail on our 2021 guidance. Linda?

Linda Zukauckas -- Chief Financial Officer

Thank you, David. [Technical Issues] fourth quarter and full-year results reflect solid performance and financial metrics. Before I review the results, let me reflect on the meaningful accomplishments in 2020. First, when it became clear that COVID was going to have a global impact on our revenue, we focused on quickly adapting to ensure the continuity of our business processes and can mitigate potential impact. We also took swift action in late Q1 to lower cost by at least $200 million in 2020, including approximately $100 million in media. These were temporary cuts that do return this year. Our resilient business model and highly contracted business gave us visibility into 2020 despite the uncertainty of the pandemic, and we were able to continue to provide guidance and deliver strong results. Second, we began to execute the optimization plan announced in July, which includes $250 million of annualized run rate permanent cost savings in the second half of 2020 and beyond, split roughly evenly between Media and Connect. We executed well and realized about half of the savings in 2020, with the balance expected in 2021. The temporary cost cut and the optimization plan drove strong margin expansion in the second half of 2020, but will result in tougher comps for EBITDA and margin in the second half of 2021. Third, we were active in the debt markets in 2020, successfully refinancing approximately $3 billion of debt with five to 10-year maturity. We ended 2020 at 4.09 times net leverage, in line with our expectation. And finally, we announced the planned sell on Connect and a few weeks later, hosted an Investor Day. Given the February 11th shareholder approval of the sale, we will begin reporting Connect as a discontinued operation, beginning with the first quarter results. Today's 2020 commentary will cover Media and Connect, consistent with our prior reporting.

With that as a backdrop for what we accomplished in a busy 2020, let me now turn to our financial results. I'll start with Slide 6 to review the fourth quarter and full year 2020. We achieved or exceeded our revised 2020 guidance across all key measures. On a constant currency basis, revenue declined 1.8% in the fourth quarter and 2.3% for the full year, in line with our guidance of down 4% to 2%. On an organic basis, revenue declined 2% in the fourth quarter and 3.1% for the year. COVID continued to impact the fourth quarter, though at a slightly lesser pace than in the third quarter. Adjusted EBITDA for the fourth quarter was $560 million. And our adjusted EBITDA margin was 33.5%, up 458 basis points in constant currency. Full-year adjusted EBITDA was $1,882 million, up 2.7% constant currency. Our adjusted EBITDA was toward the high end of the original pre-COVID guidance we provided last February of $1,830 million to $1,910 million.

For the year, revenue was down $208 million, while costs were down $237 million, resulting an adjusted EBITDA margin of 29.9%. Margins were up 147 basis points on a constant currency basis, and toward the high end of the 29.5% to 30% guidance range. The temporary and permanent cost savings drove significant margin expansion in the second half of the year in both Media and Connect. Adjusted EPS for the fourth quarter was $0.53 compared to $0.41 in the fourth quarter of 2019, on higher EBITDA offset in part by higher taxes. Full-year adjusted EPS was a $1.67 compared to $1.80 in 2019, above our guidance range of $1.54 to $1.62. And compared to the prior year, the $1.67 adjusted EPS reflects higher EBITDA, lower interest expense and tax favorability, which was more than offset by higher depreciation and amortization. Our effective tax rate was 41% in the fourth quarter and 90% for the full year, albeit on low full-year pre-tax income of $74 million. And number of our tax call are more fixed than variable in nature and can therefore have an outsized impact on the tax rate when pre-tax results are low. Adjusting for the discrete items, our tax rate would have been approximately 33% in 2020 after also adjusting book income for the impairment charges. We incurred $131 million in impairment charges in Q4, related to the value of Connect trade name, and internally developed software, mostly related to Connect. We exclude these charges from adjusted EPS. We ended the year with $144 million of restructuring expenses, slightly below our forecast as we gained efficiencies on our restructuring plan.

Turning to free cash flow. We generated $598 million of free cash flow in 2020, up from $547 million in 2019 and above the high end of our initial pre-COVID guidance range of $580 million and our updated guidance range of $550 million. These results include $118 million of separation-related cash payments in 2020, which was lower than our prior expectation and some larger pension and tax payments shifted into 2021. Key drivers of the year-over-year free cash flow improvement include higher EBITDA, lower cash taxes, lower interest expense and lower capex, partially offset by higher restructuring in working capital. Despite the pandemic, cash collections remained solid throughout 2020.

Now, let's turn to the segment results. On Slide 7, I'll review the Media segment results, starting with the Q4 results on the left. Revenue for Q4 was $872 million, down 2.6% year-over-year on a constant currency basis or down 1.8% organic. While we continue to see ongoing impacts from COVID, performance in the quarter was ahead of our expectations. Audience Measurement revenue declined 0.2% constant currency and grew 0.2% on an organic basis. We continue to see pressure in local television and COVID-related pressure in sports and ad-hoc products.

Plan/Optimize revenue declined 8.1% constant currency in the fourth quarter, with organic revenue down 6.5%. This adjusted for exit and the Q4 '19 divestiture of our music business. COVID continued to impact sports, Gracenote Auto and short-cycle revenue. Despite the revenue decline, Media's Q4 adjusted EBITDA was $393 million, up 4% constant currency. Adjusted EBITDA margins of 45.1% were up 284 basis points in constant currency.

Moving to the right side of the page. Full-year revenue was down 2.3% constant currency, in line with the guidance range of down 3% to 2%. Organic revenue was down 1.7%. Audience Measurement revenue declined 0.5% with organic revenue down 0.3%. Plan/Optimize revenue declined 6.7% constant currency for the full year, with organic revenue down 5.2% [Technical Issues] $1,474 million on a constant currency basis [Technical Issues] 3.9% at 94 basis points year-over-year, supported by the temporary and permanent cost savings initiatives we discussed, offset in part by investments in growth initiatives.

Turning to Slide 8. I'll discuss high-level results for the Connect segment. Starting with Q4 results on the left side of the page. Fourth quarter revenue was $800 million, down 0.9% on a constant currency basis. Organic revenue was down 2.3%. Q4 adjusted EBITDA of $176 million was up 41.9% on a constant currency basis, margins of 22% were up an impressive 663 basis points constant currency. Moving to the right side of the page. Full-year revenue was down 2.4% constant currency, in line with the guidance range of down 4% to 2%. Organic revenue was down 4.7%. Adjusted EBITDA was $454 million, up 12.9% constant currency. Margins were 15.5%, up 210 basis points year-over-year.

Now, let's turn to the outlook and 2021 guidance on Slide 10. As David discussed, we provided a preliminary outlook for 2021 at our Investor Day in December. Today, we are updating the 2020 pro forma for the New Nielsen and reiterating the key elements of the preliminary outlook with 2021 guidance. As I mentioned, with shareholder approval of the sale, Connect moves into discontinued operation. So, the guidance I'll discuss reflects the New Nielsen, as we characterized it at our Investor Day. We continue to expect a return to organic revenue growth in 2021 compared to a decline of 1.7% for organic revenue in 2020. We forecast 3.5% to 4.5% organic revenue growth, with significant improvements in both Audience Measurement and Outcomes and Content, which is how we'll refer to Plan/Optimize on a go-forward basis, as David mentioned. We forecast constant currency revenue growth of 2% to 3%, improving from a decline of 2.3% in 2020. Organic revenue growth adjust for the impact of the business and market exits we announced with our 2020 optimization plan. These are expected to have an approximately 150 basis point impact on 2021 revenue growth. We forecast adjusted EBITDA of $1,460 million to $1,480 million as compared to pro forma 2020 adjusted EBITDA of $1,411 million. This represents margins of 42.25% to 42.5% or 25 to 50 basis points of expansion for 2020 pro forma stand-alone margins of 42%.

As we discussed at Investor Day, this reflects the $60 million benefit of the optimization plan to 2021 EBITDA and the underlying efficiency of the business, partially offset by the return in 2021 of approximately $100 million of COVID temporary cuts made in 2020 as well as incremental growth investment. Adjusted EPS is expected to be in the range of $1.43 to $1.54 compared to a $1.67 we earned in 2020 for the company as a whole. We will provide a reconciliation of adjusted EPS for 2020 after the discontinued operations accounting is finalized and the sales have closed.

We have included related underlying guidance assumptions in the appendix, as well as adjusted EBITDA and adjusted EPS reconciliation, which should help with modeling 2021. there are a number of items that are significantly positive for the New Nielsen. For example, we forecast an estimated tax rate of 26% to 28% excluding discrete items, with a greater geographic exposure to the US. We also forecast restructuring expense of $25 million to $35 million, which is significantly lower than historical Nielsen levels. We expect to continue to de-lever with net debt leverage of 3.7 to 3.8 times by the end of 2021. This will lower our net interest expense to a forecasted $295 million to $305 million in 2021 versus $369 million in 2020. And finally, our 2020 pro forma free cash flow was $555 million. While this remains preliminary and subject to change, as we finalize discontinued operations treatment, it's a strong outcome, $25 million higher than our Investor Day estimate. We continue to expect free cash flow of $580 million to $630 million in 2021, excluding separation-related costs and the impact of Connect through the close.

As discussed at Investor Day, we are focused on achieving 50% cash conversion in 2023 and double-digit compound annual free cash flow growth over the next three years. This free cash flow guidance does not include the impact of Connect, which typically experiences negative free cash flow in the first quarter of each year. As a reminder, adjusted EBITDA, adjusted EPS and free cash flow guidance ranges do not include the impact of one-time separation related costs, which Nielsen beared under the Connect sale agreement. These costs will generally be included in discontinued operations, effective with our Q1 reporting. And 2021 is the last year of meaningful separation-related costs. As I mentioned earlier, certain separation-related cost planned for 2020 were deferred into early 2021. So, our estimate for such costs in 2021 is now a range of $220 million to $240 million. There is some interplay between these costs and the net proceeds on the sale of Connect, and it's worth noting that the removal of the related liabilities strengthened the balance sheet of the New Nielsen.

So, that's our overall 2021 guidance. And now, I want to give you some context on how we see the year playing out from a timing perspective. We expect revenue growth to be faster in the second half of 2021 than in the first half, when it trends below our annual growth rate in the first quarter. Recall that we began to see more significant impact of COVID beginning in the second quarter of 2020. In addition, we expect the benefit of new growth initiative to ramp as the year progresses. On the New Nielsen basis, we expect year-over-year margin expansion in the first half of the year, with particularly strong margin expansion in Q1. The second half phase is a more challenging comparison, and we expect year-over-year margin contractions in the second half. We began to implement the optimization plan in the third quarter of 2020 so that incremental year-over-year benefit is more pronounced in the first half versus the second half and we will see temporary cost return in April and later months of 2021. In the [Indecipherable], we've included a quarterly reconciliation of operating income to adjusted EBITDA on a pro forma New Nielsen basis for 2020.

To wrap up, I'm very proud of the team's work during a difficult 2020, reacting and adapting to the pandemic. In 2021, we are laser-focused on the New Nielsen growth story. We have confidence in our path forward and are optimistic about the future of the New Nielsen.

And with that, I'll turn it back to Sara for the Q&A session.

Sara Gubins -- Senior Vice President, Investor Relations & Treasury

Thanks, Linda. With that, let's turn to Q&A. Operator, can you open up the lines?

Questions and Answers:

Operator

[Operator Instructions] Our first question comes from Toni Kaplan from Morgan Stanley. Please go ahead.

Toni Kaplan -- Morgan Stanley -- Analyst

Thank you. Following the Investor Day, the question I have been thinking about the most is how Outcomes and Content get to mid-to-high single digits, just given what we've seen out of Plan/Optimize over the last few years. And I understand the drivers sort of expanding beyond CPG and launching new products, and you mentioned a number of new client wins outside of the CPG area, which is great. But maybe it would be helpful to hear more about the go-to-market strategy within these new markets. Is the sales strategy very different versus going after a CPG client? Do you need to ramp up the sales force to reach these new industries and the small advertiser market? Where you able to do this effectively with technology and your existing sales force? Thank you.

David Kenny -- Chief Executive Officer, Chief Diversity Officer

Thank you, Toni. It's a great set of questions. And we did build this bottom up. So, let me take the two parts separately. In outcomes, yes, we absolutely are taking a more vertical approach. So, we've got a team solely focused on advertisers and I think they've done a great job, building those vertical teams with vertical understanding. We've also brought in a new Head of Marketing and Communications, and Jamie is building her team to make sure we're doing good lead generation into that team. I do think over time, some of what we do in Outcomes can be bought directly online. It won't take a big sales effort. To be clear, we're not done with that yet, but we're also looking at sort of channel expansion. And I don't forecast it, but we are certainly investing to make sure. Content side. Again, I think we've got a big ambition around the studios. And so, we've got an added effort for those as well. Inclusion analytics was a good launch. I think it was a sort of analysis that clients need right now and we're getting good take rate on that. It's also getting us to a lot of new discussions, with a broader set of the whole sort of content supply chain. So, yeah, we are absolutely expanding our sales coverage, but not anything that's outside what's in the forecast.

Operator

Our next question comes from Jeff Meuler from Baird. Please go ahead.

Jeffrey Meuler -- Baird -- Analyst

Yeah. Thank you. Good morning. So, I guess on the -- the surface-level revenue growth should be better, but you're also competing against some foregone revenue due to COVID that is getting less bad. But there is obviously a lot going on, but need to surface. So, I guess, just would love some additional commentary on the underlying improvement. So, what core revenue streams are you seeing trend improvement and beyond the foregone revenue COVID comp? Maybe some more details on which new capabilities are gaining traction, or where pipe looks particularly good for the bill that you expect to revenue into the second half from the products? Thanks.

David Kenny -- Chief Executive Officer, Chief Diversity Officer

Yeah. And some of that, Jeff, I think is also product improvement. So, let me talk about demand and then I'll let Karthik talk a little bit about some of the additional product enhancements that come through the year, which also give us greater confidence, as we're accelerating. And [Indecipherable] you're totally right, 2020 is an odd comp. And I think Linda did her best to kind of explain the ins and outs on that. I would say on audience measurement, it's very solid. We are seeing more demand from the digital side, and I think more digital players are wanting to participate in the big ecosystem. So, I think the Digital Ad Ratings, having it relaunched on a New Nielsen idea, is then very reassuring. So, we're seeing good demand there. And from some of our traditional clients, we're seeing them expand the relationships, as digital becomes a bigger part of their business as well. So, very -- and it is -- we're 80% contracted going into the year. Audience measurement is a little higher than that. So, a very steady base.

On the Outcomes side, as I just answered to Toni, we are seeing a lot of demand across various advertising categories, and I think it's been good to be out in the market on that. I think everybody is expecting privacy laws will continue to rollout, that will cause cookies to get deprecated. Folks are looking for new answers, and our ability to resolve identity and do better outcomes measurement is really helping people do targeting and scale. So, that's important to a lot of different advertising categories.

And then on the content side, I would say, early days, but we're building good relationships with the studios. On the other side, the platforms, all want to improve their experience and the metadata we provide really does help the consumer wave through just unbelievable libraries of content to find what she's interested in. So, it's got a growing demand, because I think the move to streaming has just raised the game for people wanting to do good user experiences and good recommendation engines.

Karthik, if you want to comment a little bit on couple of the key product milestones that are also driving demand, that would be helpful. Thanks.

Karthik Rao -- Chief Operating Officer, Nielsen Global Media

So, thanks, David. Just a couple of things. One, just to remind everyone that we did launch our digital measurement on time, as we said in Investor Day. So, that continues to ramp globally again. So, this is Digital Ad Ratings. We've got a whole bunch of Connected TV measurement capabilities launching toward the end of the first half and that had -- that creates a tailwind, again, going into the second half of the year. As you've seen, we have launched identity as the underpinning for the new attribution capability. So, there is a lot of things that are getting on to the Nielsen platform, as we execute. But more importantly, they are also monetizable and therefore, connected to our revenue plan and the pacing of the revenue plan. So, a lot of exciting stuff coming up, obviously, not just since the January launch, but also throughout the year. Every quarter, we've got a series of capabilities that are all monetizable, as we build up toward Nielsen ONE outcomes and a Gracenote Content Solutions vision. Thank you.

Operator

Our next question comes from Andrew Steinerman from JPMorgan. Please go ahead.

Andrew Steinerman -- JPMorgan -- Analyst

Hi, it's Andrew. I actually have two questions. First one is, how much of your opex and capex at the New Nielsen is now being spent on the R&D of new products or existing and new products, and how does that compare to the past? And David, you mentioned that Nielsen ONE is now being used by some clients now. I thought the Nielsen ONE product was going to be fully available in '22, fully transitioned by fall of '24. So, with the clients that are using Nielsen ONE now, can we expect guarantees to spring upfront based on Nielsen ONE?

David Kenny -- Chief Executive Officer, Chief Diversity Officer

Good. I'll come back on the second question. Linda should answer the first.

Linda Zukauckas -- Chief Financial Officer

Sure. Yeah. So, thanks, Andrew. As we think about capex and how these prioritize those investments to ensure we're focused on growth, I would estimate that it's about 40% in 2021. And that was arrived at after we went through a different process this past year. And we ensured that we were prioritizing for the benefit of growth initiatives. And so, as we looked at how we were giving up the pipe, that increased about 25% in 2020, as a result of a more rigorous process that we went through. Over time, we do expect capex to moderate, but the amount that we are directing to growth initiatives in 2021 is 40% and, again, up about 25% from what the like amount would have been in 2020.

David Kenny -- Chief Executive Officer, Chief Diversity Officer

And coming back to the first question, and I appreciate you wanting clarity, all the modules of Nielsen ONE do roll out over '21 and '22. And that roadmap has been clear. And then certainly, I think it's '22 before you get to the point that it's going to be a full and simple currency. So, I think in terms of rating upfront contracts, that may be '22 versus '21. However, components are getting the US right now in Q1 and certainly in May, as people kind of make commitments for the next year. When I said they're using the capabilities, I would say, as Karthik just said, they're clearly using the new generation of digital ad ratings. And that, being on the Nielsen ID, does allow some reconciliation. They're also clearly using some of the reporting to be able to better understand behavior across broadcast and streaming together. Streaming video ratings are out and people are using those, and Connected TV and addressable is being used and continuing to get deployed among more folks. So, the components are there and people are using those components. There is more components to come in the second half, including mobile, including more big data in National TV, including sub-minute, which is really important. So, we'll continue to report every quarter, as the modules rollout and they get adoption. But in terms of a full currency swap, I think that's something that will start in '22, when all the components are coming on life.

Operator

Our next question comes from George Tong from Goldman Sachs. Please go ahead.

George Tong -- Goldman Sachs -- Analyst

Hi, thanks. Good morning. Organic growth in Audience Measurement improved in the quarter, despite local TV pressure and COVID impact. Can you discuss how client conversations in Audience Measurement have evolved since the start of the year?

David Kenny -- Chief Executive Officer, Chief Diversity Officer

Glad to take that, George. So, I think the good news is that everybody felt Audience Measurement was as important or more important as they were working through COVID. So, certainly, everybody was looking at their cost structure rate. We had discussions, but I think, at the end of the day, the value of the Nielsen data to operating businesses remained where it was and certainly, pricing remained as it was escalators. And we even had negotiations last year continued. So, I think really solid. I think there has been a growing enthusiasm around the roadmap on Nielsen ONE in getting really tangible, what's available when. Keep in mind, right now, we're signing MSAs that might be for several years into the future. And the discussion has been more forward-looking about how our clients' business models are evolving and how our measurement is evolving with them.

Similarly on the demand side, on the advertisers and agencies, I think there has been a lot of focus across the economy and being more effective and more efficient. And there, I think there is certainly also enthusiasm for a more simple and scalable approach to measurement, but having the Audience Measurement connect to the Outcomes measurement off from a shared Nielsen ID, getting to the single platform, has really generated a lot of energy for the subscriptions we'll see on the buying side of the ad market as well.

Thanks for the question.

Operator

Our next question comes from Tim Nollen from Macquarie. Please go ahead.

Tim Nollen -- Macquarie -- Analyst

Thanks. Good timing, because my question was about the ID that you've been talking about a couple of times now. My question is, you have an announcement from yesterday, talking about this ID thing system. And I was just wondering if you could explain a little bit more how your ID functions, how it speaks to the other IDs that are out there such as the Trade Desk Unified ID 2.0, which is much more an industry effort now, and just to be clear that these are all thinkable, these are all compatible and that your ID is fully fungible with clients' workflows? Thanks.

David Kenny -- Chief Executive Officer, Chief Diversity Officer

Thank you, Tim. What a great question. And it's why we have Karthik on the call. So, Karthik?

Karthik Rao -- Chief Operating Officer, Nielsen Global Media

Yeah. So, a couple of things. The first is, our ID backbone is extensively for the purpose of the measurement, not targeting. And there is a difference between those two. Targeting is about scale. For measurement, it's about getting the persistency and consistency of the demos, because you can have different campaigns with different outcomes, their own age and gender in example. So, our ID system is exclusively built for that. It leverages, obviously, the Nielsen panel and the valuations are really good. And so, the key for us is, we're trying to connect everything ultimately from a disclosure perspective to a person. And so, if you eliminate the role of cookies, we work directly with the things, essentially where you can then collect advertiser information and then plunge back into our ID platform, so have it again connecting back to a person. So, the trick here is, cookies collect -- used to collect a whole bunch of different attributes. We're only collecting the attributes that help at sign a person to this and take away for the devices against that. And so, it all builds it back to a person. That's the sort of starting point, with real privacy-safe attributes for that person. And then, you can break it down for whatever device underpins that user. And so, the trick for us here, is the more pervasive this gets in the industry and that's why we're partnered with a few players here, that helps ease of use and it really accelerates the industry to live without cookies, going into the next chapter of digital. So, we're super excited about this and obviously, super excited that more of our capabilities are getting on to using the ID, not just reach a frequency which is audience measurement, but also moving toward outcomes through yesterday's attribution announcement.

Operator

Our next question comes from Dan Salmon from BMO Capital Markets. Please go ahead.

Dan Salmon -- BMO Capital Markets -- Analyst

Good morning, everyone. So, David, I think this is ultimately kind of a question about how you sell your products these days, but also how your products are evolving at the same time. And maybe a part for you and maybe a part for Karthik, but what I really want to ask is about sort of the next three to six months. And -- Usually, the upfront/NewFront season was typically a time where Nielsen was educating the market on product iterations. I know if I go back and look at your product roadmap from the Investor Day, it still looks like we've got some things coming in that sort of period, specifically on the highlighted mobile a moment ago. At the same time, the importance of the upfront is changing and evolving and other issues, like for example, what Apple is going to sort of rollout here in March and how that may affect some of the changes in your products and the evolution of the products or, for example, what's going on with Chrome in the privacy sandbox. So, again, what I'm kind of asking about is, how you sell and also how you adjust to what you're learning about how the ecosystem is evolving at the same time? Thanks.

David Kenny -- Chief Executive Officer, Chief Diversity Officer

Listen, Dan, thanks for that. And to be clear, I think, everything from being geared around upfronts is probably going to shift. I think that both -- Both buyers and sellers, I think, are having more constant conversations. I think there are still points at which people will make commitments and we'll support that, but we certainly have already adapted to more of an always-on engagement process here to help folks move forward. So, in terms of the next three to six months and certainly throughout '21, I would say, we're starting with real clear product roadmaps that new capabilities are needed and they're coming to the market. And I think that's had a very increased level of engagement with individual advertisers, individual agencies, individual platforms and individual networks, but also collectively with the industry as a whole. So, certainly, working with the MRC on how we're going to accredit all of that and make sure there is audit trails, which is important and which need to be rethought, because you're measuring more things and you're doing -- you're using new methods, but also with the World Federation of Advertisers, the Association of National Advertisers on their measurement teams and them joining the Nielsen ONE team, engaging with the agencies through the Four Ace and its counterparts around the world and certainly, sort of engaging with all the publishers and platforms. And I think as the whole market is adapting to a very different audience behavior, and certainly audience has discovered lots of new ways to access content during the pandemic and that was going to stick. So, I think our helping everybody see what we're seeing, see the total market and not just their own platforms, is helping folks make bigger decisions. So, that increases our value we're engaged with those and that also opens new selling opportunities, because we're finding needs that we -- people didn't even know that we could solve. Particularly on the Outcomes side, I think the demand is growing, as folks are really looking at how they're going to adapt to a world where you may not have all the same data, as you said. You mentioned Apple, but on any browser or any mobile device, you're not going to necessarily have the same data you had before. Having Nielsen be able to federate and sync up all those ideas, really helps them maintain control of their business.

So, short answer is we're selling and we're selling with more conversations, and then that's opening the door to more opportunities and more value.

Operator

Our next question comes from Matthew Thornton from SunTrust. Please go ahead.

Matthew Thornton -- SunTrust Robinson Humphrey -- Analyst

Hey. Good morning, everybody. Thanks for taking the questions. I wanted to hit on -- And maybe this is for you, David, I wanted to hit on kind of two areas that we don't talk a lot about actually. That's local and in Audio. So, when you think about the medium-term outlook, maybe just starting with local, it's been under pressure. Should we think of that as a pocket of revenue that's in decline and being offset elsewhere? And within there, maybe you could also just help us think about, one of your competitors obviously just brought in some new capital, some new partners. They tend to be going after that market fairly aggressively. I was just kind of -- Again, maybe you could size and just tell us how you're thinking about that business? And then similarly, on Audio, again, if you can size and just help us how to think about that in that medium-term outlook again? Does that decline or do you have plans to address digital and/or podcast in a more aggressive way? Any color there would be great. Thanks so much.

David Kenny -- Chief Executive Officer, Chief Diversity Officer

Yeah. So, listen, if I go back to Investor Day, we specifically broke out local in local TV and local radio. So, they are both local businesses. Obviously, in auto audio, there is a growing streaming component as well. And I think the local television side is also finding sort of the digital extension of their brands and we're helping them with that. In the core, as we said, I think, on Investor Day, local is returning to flat. And the reason we see it returning to flat is that we have seen price stability, we have seen continued adoption and quite honestly, I think we've seen validation that while there are other ways to measure local, they're not all accredited, they're not all rigorous, that's not using the same rating system and the same panel validation, which is, I think, differential. And so, in larger DMAs, where the money is. I think, that the Nielsen value proposition is super strong. And the same for Audio. And even though Audio certainly had to deal with the pandemic and the fact that people were not in their cars as much, I think they all found that Nielsen was pretty important to protecting their value. So, that said, I would model it flat. It's certainly not growing at the rate of the rest of the business. And within that, there is also gives and takes. Stronger players that have more ambitious agendas around digital are using Nielsen more. We're also seeing folks begin to use us on the attribution side, in terms of being able to show the return on investment. We've done that with sort of market analysis in Audio for a while. One of the recent wins is Spotify. And I think Spotify figuring out how to actually do more attribution office platform is indicative of where all the sort of new streaming audio players need to be.

So, there is certainly opportunity, but I do want just be transparent. But in aggregate, we think that part of our business will be flat in '21 and probably '22 as well.

Operator

Our next question comes from Doug Arthur from Huber Research. Please go ahead.

Doug Arthur -- Huber Research Partners -- Analyst

Yeah, thanks. Linda, you provided some pretty helpful schedules in the back, the appendix. I'm just looking at Page 22, which is the New Nielsen pro forma. I'm just looking at sort of your fourth quarter breakdown versus the breakdown on Page 20. So, I guess, the assumption is Page 20 is old Co.; Page 22 is new Co and has had a fully loaded EBITDA number with the revised pro forma corporate for the new company on Page 22?

Linda Zukauckas -- Chief Financial Officer

It is, Doug. Yeah, you got it right. It's what we're referring to as the New Nielsen, which we started putting that presentation out there on a full-year basis at Investor Day. And this is the quarterly representation that we thought would be helpful to all you guys as you think about modeling out 2021, with the backdrop of 2020 was a very interesting year not only because of COVID but also because of our optimization plan and our temporary cost saves. So, it makes for a bit more of a challenging year from a comp perspective. And so, that's why we also try to get some color on that, recognizing our guide is a full-year guide.

Operator

Our next question comes from Surinder Thind from Jefferies. Please go ahead.

Surinder Thind -- Jefferies -- Analyst

Thank you. Just a big-picture question on the addressable TV. Obviously, this past year, there is a number of beta testing that was done. Can you provide us with a status update in terms of where we are in that churn in terms of adoption in 2021, and maybe what needs to happen from here to have it more formally adopted?

David Kenny -- Chief Executive Officer, Chief Diversity Officer

Yeah. There has been good progress, and we've been involved with -- in measuring a lot of the different datas. And as you heard earlier, with Vizio and Direct and Dish coming on, it's been -- there has been an exciting moment. So, we certainly see volume building on that.

Karthik, maybe you comment a little bit on sort of the milestones we've seen in the last couple of quarters and what we're expecting in the next couple of quarters in '21? We certainly see this scaling up, Surinder.

Karthik Rao -- Chief Operating Officer, Nielsen Global Media

Yeah. I -- So, again, going back to -- When we think of coverage, it's a really important component. The most exciting things that get lit up toward the middle of the year are all the connected TV integrations, and we covered who they are at Investor Day. So, I won't go through that. But the reason this is important is because it creates new monetization capabilities for all of that inventory. It's a very rapidly growing space. And this is new for Nielsen. And obviously, all of these progress came to us because we believe in what we are doing from an overall Nielsen ONE roadmap. So, that's exciting. And then, there is also all the other addressable components. So, think of all addressable on MVPD and cable. That inventory, again, you could argue for a long time has been out there for Nielsen to measure and include into the overall linear TV rating system. So, that's on the docket as well. So, these are just a few, but there is a whole bunch of, I'd say, innovations built off of the consistent Nielsen ONE methodology that will continue to play through over the next couple of years.

Operator

Our next question comes from Todd Juenger from Sanford Bernstein. Please go ahead.

Todd Juenger -- Sanford Bernstein -- Analyst

Hello. Good morning, everybody. I'd like to go back, if I could, to discussion that was under way a little bit earlier, kind of on the timing of Nielsen ONE, and really in two different ways. Karthik, I was hoping maybe from you. Listen, we're all been conditioned to live in sort of a instant gratification world. When us and investors think about timelines out to '22 and '24, it sorts of begs the question, that seems like a lot of years. And so, we know there's a lot going on, a lot you need to deliver and a lot that your customers need in terms of seeing the data and seeing concurrent history of data. So, they can make guarantees on it. I just wonder if there's anything you're contemplating that could do some of that in parallel or speed up that timeline, which gets to the other part of the question, maybe more for David or Karthik, which is, the world isn't going to stop in the meantime. So, what's the risk that publishers and advertisers between now and then just find a way to do their business? And if that gets ingrained and by the time Nielsen ONE gets there, people would have moved on. Any thoughts? Appreciate it. Thanks.

David Kenny -- Chief Executive Officer, Chief Diversity Officer

Karthik, why don't you start?

Karthik Rao -- Chief Operating Officer, Nielsen Global Media

Yeah. Thanks, Todd. I think one of the main reason our roadmap is not a wait-and-see and designed around launching constituent. So, one thing, for example, is if you think about what's the most important piece in the end for Nielsen ONE, is to have a set of consistent comparable metrics. Right? And so, everything we're doing on Connected TV, digital, you name it, is all built off of this vision to get to a consistent metric. And on the linear side, the most important piece there is to really address the P3 currency, which is an average commercial minute. Right? So, we're revamping the entire system to be able to get P3 to be also, as David say, equivalency as digitally. So, by seconds, not by minutes. Right? So, these two things are happening at the same time and we want to start putting data out for what sub-minute information looks like on linear, so that the market starts to understand what it is to look at a currency that used to be ads and pods in just as one thing. We're going to start with split that out, get people comfortable with the granularity so that as we keep building toward driving consistency across metrics, people are familiar. The biggest change is obviously going to be in the linear side. Right? Like, that's no surprise, because it's the sort of oldest metric on the table. So, putting data out that separates sub ad to content and also what does the granularity look like, how does that affect the method, that would really help the market understand. So, when we start putting all the pieces together, at the end of sort of 2022, so that the market can start to see it, everyone's sort of familiar with what to expect. It is a ramp here, but there is again monetizable component built with a consistent [Indecipherable] vision toward this comparable cross-media set of metrics ultimately. So, that's the plan, Todd.

Operator

Our next question comes from Richard Kramer from Arete Research. Please go ahead.

Richard Kramer -- Arete Research -- Analyst

Thanks very much. Just a quick one for David. I mean, as you see the market moving more and more in App and you think about mobile as a larger portion and indeed, sitting largely behind a series of walled gardens, what do you think the challenges are to having Nielsen at our measure of that activity that seems to be rising? And then a quick one for Linda, could you just let us know what the impairment was in Q4, whether that was on Connect or the Media side? Thanks.

David Kenny -- Chief Executive Officer, Chief Diversity Officer

Sure. Yeah. On the mobile question, I think everybody is trying to figure out. I think, for us, getting in front of it with the wall gardens as well as with the publishers to help understand how our identity platform for measurement, not for targeting, can be used in a privacy-friendly way, I think, is helping. I think also our panel is extraordinarily valuable and having the panelists agree to ways we can measure through SDK and mobile makes a difference. And your question is kind of a US question. I would say, in certain parts of the world, like India, it's -- we're already largely mobile. So, I think we're absolutely finding ways to do measurement. And again, it's not the same as doing precise targeting. And I think we're able to satisfy everybody that we can do that in a safe and audience-friendly way. And I think it's going to be more important than ever to have our measurement when some of the other things are not going to work the way they did, when perhaps things were more open around ID than they're going to be in the future.

Linda, you want to take the impairment question?

Linda Zukauckas -- Chief Financial Officer

Sure. Yeah. Richard, it was about $130 million and mostly related to the Connect trade name. And then beyond that, there was also some software development impairment that we took, also mostly related to Connect, I think a little bit of Media in that as well, but total -- just $131 million is the total on it.

Operator

This concludes the Q&A portion of our call. And I would like to turn it back to David Kenny for closing remarks.

David Kenny -- Chief Executive Officer, Chief Diversity Officer

Hey. Thanks, everybody, for joining the call this morning. As I'm sure you're hearing, it's an exciting time for the New Nielsen and we are super thrilled about the next chapter, as a media-focused growth company. We've got a great team, we've got a clear strategy in place, we've got execution to focus on, but NVR. And we believe that will allow us to deliver our growth for our clients and also enhance value for our shareholders.

Again, I really appreciate your continued support and I look forward to sharing our progress all year with you. Have a good day.

Operator

[Operator Closing Remarks]

Duration: 70 minutes

Call participants:

Sara Gubins -- Senior Vice President, Investor Relations & Treasury

David Kenny -- Chief Executive Officer, Chief Diversity Officer

Linda Zukauckas -- Chief Financial Officer

Karthik Rao -- Chief Operating Officer, Nielsen Global Media

Toni Kaplan -- Morgan Stanley -- Analyst

Jeffrey Meuler -- Baird -- Analyst

Andrew Steinerman -- JPMorgan -- Analyst

George Tong -- Goldman Sachs -- Analyst

Tim Nollen -- Macquarie -- Analyst

Dan Salmon -- BMO Capital Markets -- Analyst

Matthew Thornton -- SunTrust Robinson Humphrey -- Analyst

Doug Arthur -- Huber Research Partners -- Analyst

Surinder Thind -- Jefferies -- Analyst

Todd Juenger -- Sanford Bernstein -- Analyst

Richard Kramer -- Arete Research -- Analyst

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