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Big Changes Coming in the Nielsen Ratings  

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Nielsen's Brave New World
Under pressure, ratings giant unveils futuristic gizmos to measure TV viewing By Joe Mandese Broadcasting & Cable 2/21/2005
Paul Donato has spent much of the past year passionately defending Nielsen's TV ratings against charges that they under-represent minority viewers in big cities. But it's what the chief research officer of Nielsen Media Research has not been talking about that really excites him. Donato, a 52-year-old lifelong number-cruncher, has been concentrating on the future of television itself and a myriad of science-fiction–worthy ways he plans to measure it.

The electronic gadgets and systems envisioned by Donato—“talking meters†and artificial intelligence—represent entirely new ways of thinking about how people view television. (Last Friday, Nielsen announced) it will spend $2.5 million to fund independent, third-party research as part of a consortium to develop better TV-rating methods. Nielsen researchers are expected to be involved, but the budget would not be controlled by Donato, who would continue to pursue Nielsen's own R&D efforts.

Changes Must Be Made Soon

Nielsen has to do something—fast. The 82-year-old ratings service, say a legion of critics, is a monopoly past its prime, a creaking giant about to be overwhelmed by new technologies. Viewers with digital video recorders, who skip ads as a rule, pose a threat, which Nielsen plans to counter with a new service counting DVR homes next year. Moreover, cable operators are moving increasingly to digital, on-demand programming.

Because of these fundamental changes in the way programming is distributed—and consumed—older, static forms of audience measurement are already obsolete in some ways. Nielsen's local people meters have only begun to replace what is acknowledged to be an antiquated form of TV-audience measurement: paper diaries.

“Media technology is moving at lightning speed, and you have to ask yourself if Nielsen is up to measuring it. I mean, it took them 10 years to develop the latest version of their meter,†says Brad Adgate, SVP/director of corporate research at Horizon Media, New York. “The problem is the lack of competition. The only time Nielsen moves fast to develop new technology is when there is competition in the marketplace. And right now, there doesn't seem to be any.â€

Cable operators have already discussed banding together to create a TV-ratings service based on a census of digital–set-top subscriber data, but they've yet to go public with it. Comcast led the charge and held discussions with Nielsen and Madison Avenue, but to date, there doesn't seem to be a consensus within the cable industry. Comcast is expected to unveil soon a new type of ratings service for VOD viewing, which could give advertisers a new way to reach audiences.

To stave off competition—and obsolescence—Nielsen has turned to its in-house Buck Rogers, Donato. Next month, he will unveil his vision for the future during a series of national and local client meetings across the country.

Talking People Meters?

One of the hottest new products is a talking meter, which Nielsen has begun installing in the homes of employees to study how the devices work, how people interact with them and whether they lead to better audience measurement.

Unlike Nielsen's current generation of people meters, on which flashing lights prompt viewers to register what they are viewing, the talking meters can literally hold a conversation with viewers, asking who they are, what they are watching and a few other things Nielsen might want to know about them.

“Why not?†says Donato. “Your phone can talk to you. Your car can talk to you. Why not a TV-ratings meter?†As Orwellian as that concept may sound, the talking meters are just one in a series of methods Nielsen is developing to measure how people watch TV. The research firm's conventional diary, meter or even its state-of-the-art people meter cannot keep pace with the evolution of the TV.

Donato began formulating Nielsen's plan for the future about three years ago, in a manifesto he dubbed the “Six Children of Nielsen,†which outlined a half dozen futuristic methods for measuring TV viewing. Those concepts became part of a working R&D program two years ago when Nielsen unveiled its “Meter¬Works†project, which Donato plans to tell clients about during next month's meetings.

Artificial intelligence

As he prepared for the upcoming presentations, Donato previewed an early draft of the project's latest iteration, MeterWorks II, for B&C. “This is where we're at and what we're about to install in the field,†he says. “It's our roadmap to 2010.â€

He adds that Nielsen is in the process of developing or testing an array of new metering devices. Among them:
• Electronic “tags†capable of telling Nielsen who's in a room when a TV set is on.
• A super-secret “imaging†technology that would tell Nielsen if people are sitting in front of a TV set while a program is on.
• Inexpensive “mailable†meters that can be sent via the postal service, returned and reused.
• Arbitron's portable people meters, which can measure radio and, potentially, other media, in addition to TV.
Beyond these new products, Donato also is developing “systems†that would augment or even replace components of Nielsen's current research methods, including an approach that would “harvest†data from computer servers compiling TV-usage information from electronic programming guides, and another that would incorporate “heuristics,†or artificial intelligence that would make Nielsen's data-processing systems capable of learning whether people were cooperating with Nielsen's ratings research or not.

For example, talking meters could deliver immensely useful market research, says Donato. “It's 3:00 in the afternoon, and there's a 13-year-old boy turning on his TV. Should we ask who that is? Or should we assume it is him, especially if he is tuned to a channel that is consistent with what he normally watches? Or should we ask who he is if he tunes to something that is an unusual channel for him, like a soap opera?†Donato asks. Nielsen would incorporate the answers into its own judgment calls in finalizing ratings estimates.

Under Nielsen's current edit rules, if the 13-year-old boy didn't press his people-meter button, Nielsen would not credit any viewing on his TV set. If heuristics—which involve pattern recognition—were used, Donato says, a judgment call might be made to credit the 13-year-old with viewing based on his historical behavior. A talking meter could simply ask him, “Are you the 13-year-old boy who lives in this room, or are you a friend visiting after school?â€

The talking meter needs to be tested further, Donato says. “Is it going to be perceived as an invasion of privacy? Or is it going to be perceived as greatly simplifying things? We might find that young people love it but it spooks people 55-plus.†That in a microcosm, says Donato, is the future of audience measurement: different methods required for different audiences, even different markets.

Harvest data from program guides

No single silver bullet exists; Donato says Nielsen's plan is organic and evolving. “What we have is a line of sight on how to deal with the most significant potential changes that could occur in the viewing environment,†he says, wielding a chart he sketched on a legal pad. Called the “matrix,†the chart is a grid he uses to check off possible solutions for TV measurement in the array of markets Nielsen serves.

Next to “small markets,†Donato has checked off diaries and mailable meters. Next to midsize markets, he has mailable meters, heuristics, portable people meters, voice meters. Next to large markets, demographic markets and the national TV-ratings sample, he adds people meters, tags and imaging. One solution for all markets will be harvesting data from electronic program guides. “There are almost 40 markets with 100,000 households. Even by 2010, it's questionable whether a market with 100,000 households can be metered,†he says, “but even in a small market, if you can get server data from an interactive program guide, then you're in a position to significantly improve the quality of the data.â€

Donato says Nielsen is also still trying to crack some potential delivery systems, such as futuristic “in-home wireless†television, as well as TV distributed via Internet Protocol to PCs, cellphones and wireless devices.

Altering Nielsen's plans

The changes in the way TV is distributed, how it is consumed and how advertising fits into the equation will fundamentally alter Nielsen's plans for measurement. For example, says Donato, if television evolves into a free or premium video-on-demand marketplace in which consumers essentially craft their own programming schedules, “the actual concept of an individual program rating becomes less important.†Instead, Nielsen might offer a “a rating for the distribution mechanism that is serving up a large portion of the ads.â€

The biggest threat to Nielsen's future, say critics, isn't any new technology or the entry of a rival research company. It's Nielsen's clients. If the advertisers become irritated enough with Nielsen or lose confidence that the data is truly credible, they may simply stop using it to make business decisions, says Kate Sirkin, EVP/global research director, Starcom MediaVest Group. In the late '90s, some networks discussed backing a competitor, but the effort flopped.

Sirkin says advertisers and agencies already are developing far more sophisticated ways of measuring how consumers use media, including television, and those methods ultimately will lead them to plan their media choices better than they can with Nielsen ratings. And while TV advertising buys have historically been based on Nielsen's ratings results, she says, if agencies develop alternative methods that they are more confident in, they may simply stop using Nielsen's ratings altogether.

Nielsen has been criticized for introducing its innovation on its own timetable and occasionally without any input from clients. Nielsen recently anounced that it will begin reporting ratings for homes with digital video recorders, something it has been bypassing for years. While most clients would like to see Nielsen accurately measure DVR usage, its abrupt action without warning to clients left many miffed.

How Nielsen's R&D might ultimately affect TV-audience measurement remains to be seen, but media buyers praise Nielsen for innovating. “Nielsen always gets beat up because people feel they are not looking into the future,†says Rob Frydlewicz, VP, research, at Carat Insight, New York. “They should be credited with looking ahead.â€
post #2 of 2
Thread Starter 
Will Stunts of Sweeps Month Sober Up?
By LORNE MANLY The New York Times February 28, 2005

For the Boston-area viewers of WCVB-TV, February in recent years has meant a chance to curl up in the front of the television set and enjoy hard-hitting special reports on the local news like "Teens and Tanning" and "Extreme Makeover for Your Hands." But this February, the wackier and more sensationalistic sweeps stunts are gone. Executives at WCVB credit the introduction of local people meters for the change. These remote-control-like devices replaced less advanced set-top boxes and the paper diaries that Nielsen Media Research, the arbiter of television ratings information, has used for years.

Under the old system, Nielsen has had families across the country fill out paper diaries with their individual viewing habits four times a year - in February, May, July and November. Once tabulated, the local network affiliates used the numbers to set their advertising rates until the next sweeps period. With people meters, television executives and advertisers now learn the next day not just how many people in the Boston area watched their shows the night before, but what type of people. The more than $60 billion a year in advertising that drives the television industry is bought and sold based on those figures - the numbers of men from 18 to 35, or women 25 to 54, for example. And with these numbers quickly available year-round, the incentive to inflate ratings with segments like "Killer Iced Tea" and "Shopping Carts: Germs That Kill" during sweeps months could dissipate or even disappear, according to some television and advertising executives.

"The stations are no longer doing these artificially designed and hyped special reports like "Salad Bars That Kill,' " said Paul La Camera, president and general manager of WCVB, an ABC affiliate owned by Hearst-Argyle Television. "There's no more of that in Boston, and it's wonderful."

But the golden age of local television journalism has not arrived just yet. Most of the country is hooked up to the old system as Nielsen has rolled out the local people meters in only the five largest markets, where the way the system has been introduced and the resulting ratings data have encountered criticism - some of it vociferous. And, as a glance at television this past month in New York, Los Angeles, Chicago and San Francisco demonstrates, old habits die hard. During a newscast earlier this month, KABC-TV in Los Angeles asked if a tsunami could happen locally. And for a "Doggie Makeovers" segment, WCBS-TV wondered if New Yorkers were going too far with plastic surgery for their pets.

Even when the local people meters reach critical mass, some industry executives caution that sweeps may not become an anachronism after all. "We won't see sweeps de-emphasized," said Tom Herwitz, president of station operations for the Fox Television Stations. "We will see the energy going into sweeps, and special programs and segments, being extended around the calendar year." Many television executives say they would be thrilled to be rid of sweeps and the sensational - and sometimes salacious - stunts they produce. "I think those are insults to anyone's intelligence," said Jeff Wald, news director of KTLA, the WB station in Los Angeles.

But the system underpinning the television business has long demanded a system like the sweeps. While advertisers have been able to get detailed demographic information daily on a national basis, finding out how many women 18 to 49 watched "Desperate Housewives" in Memphis or Sacramento can be much knottier. With so much money up for grabs - nearly $22.5 billion in local advertising last year, according to Nielsen Monitor-Plus - it surprises no one that local television executives began relying on specials and breathless news items to attract viewers during sweeps months. And because the networks, which own local stations themselves, want to keep their affiliates happy, they populate their schedules in sweeps months with reunion shows, lesbian kisses and shows like Fox's recent "Stars Without Makeup."

In November, viewers in the Cleveland area witnessed one of the more notable sweeps stunts. Sharon Reed, a news anchor for WOIO-TV, the CBS affiliate there, stripped for the cameras - and for art's sake. She had joined scores of others participating in an art installation by Spencer Tunick, an artist known for choreographing scenes of public nudity around the world. The event, however, had taken place months five months earlier, and the broadcast was held for the November sweeps. The news program that night drew 700,000 viewers for Ms. Reed, a record for the station. In Atlanta, Fred Powers, a reporter for the CBS affiliate WGCL-TV, has earned himself a reputation as the king of stunt reporters. In November, he played a suspect holding a police officer hostage as a SWAT demonstration team descended on him, live, during the news; he was shot three times in his bulletproof-vested chest. And in the February sweeps last year, as the Georgia State Patrol was about to give its officers stun guns, he had himself jolted with 50,000 volts from one such Taser. The ratings spiked, too.

Unsurprisingly, stations around the country decided to show their own reporters being stunned.
Local people meters could theoretically change all that, and some stations have begun adapting. At WCVB, the reporter doing special reports for sweeps month has joined two others on the 3 p.m.-to-11 p.m. shift, the better to report more timely news, said Coleen Marren, the station's news director. WNBC-TV in New York no longer dedicates producers to sweeps duty. And WABC-TV now allows its reporters to take vacations during its sweeps months, though the anchors are not quite so privileged - at least not yet.

The rollout of local people meters has been a bumpy one, exacerbating the friction between Nielsen and its clients while complicating the negotiating dance between the stations and advertisers. Broadcast stations in all five markets with local people meters at first see a drop-off in their viewing and increases for the cable networks, notably in Los Angeles. And groups of people - particularly younger viewers and black viewers - have apparently stopped watching broadcast television. The strange swings are causing havoc for television and ad executives. Suddenly, a marketer is reaching fewer of the people it wanted to reach with the same advertising purchase. Agencies are pushing the stations to adjust their rates accordingly. The television stations push back, trying to hold the line and arguing that their air time is just as valuable.

"It's not like all of a sudden, these people went away," said Paula A. Madison, president and general manager of KNBC in Los Angeles. "They didn't."

Some of the changes can be explained by differences in ratings methods. Under the diary method, Nielsen families often make their entries days after their viewing occurred, when recollections may not be precise. They can overstate their loyalty to particular shows or networks, perhaps writing that they watch reruns of "Friends" every weeknight rather than three times a week. And they may want to present their socially responsible face, which the diaries allow them to do in a way the people meters do not.

"Do you want to tell anyone who is judging you - which is what these are doing - that you are watching the Cartoon Network?" asked Kathy Crawford, local broadcast president for MindShare, a media-buying agency whose clients include American Express and Gillette.

Nielsen executives defend the switch to the new meters even as the Media Rating Council, a trade association that audits ratings services, has withheld full accreditation for the people-meter markets in New York, Chicago and Los Angeles. "People meters are reporting much more accurately," said Jack Oken, Nielsen's general manager for local services. Nielsen executives also say that while certain programs on stations may have lost black viewers, overall black viewing, including women, has slightly increased.

But some remain unimpressed with Nielsen's efforts and its explanations.

"Nielsen is a monopoly, and they have been acting like one," said Josh Lahey, campaign manager for the Don't Count Me Out Coalition. The coalition is made up of minority and other community activists and is backed financially and logistically by the News Corporation, whose Fox and UPN stations have been among the hardest hit by the ratings switchover. "People are leaving the system, and there's really no accounting for it."

As the controversy plays out - if Boston is any guide, the discrepancies will diminish as Nielsen tinkers with the system - and the people meters move into more markets, the pressure to toss off sweeps traditions will increase. But some executives expect the sweeps mentality to continue, even if in an altered state. There may not be the same extravaganzas and breathless special reports of today in sweeps months. And it is unlikely that the local stations or the networks could handle the demands of ramping up 52 weeks filled with original programs and sweeps stunts. But the retail calendar will make certain times of the year - the introduction of new cars in September and October, or the pre-Christmas push for marketers - a hospitable place to match must-see programming with increased advertising spending, said Fred Reynolds, president of the Viacom Television Stations Group.

Lew Leone, president and general manager of WCBS in New York, likens the sweeps, current and future, to the P.G.A. golf tournament; there may dozens of events but a few are infinitely more important than the others. "You're still playing on the tour every weekend," he said, "but there's a little more excitement for the majors, a little more preparation."
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