October 1, 2009
TV Ratings System Must Adapt To New Media
Internet and on-demand video has changed the way many people now watch television. It has also created new problems for the media industry, which for decades has relied on the Nielsen ratings to gauge the number of viewers, Reuters reported.
Industry heavyweights and analysts are calling for a new ratings system to keep up with the growing number of Americans that are watching more TV than ever -- an average of 151 hours a month.
Alan Wurtzel, president of research and media development at NBC Universal, which is 80-percent owned by General Electric, said at first there was a "crisis in measurement" due to the scarcity of data, but now content providers are "drowning in data."
The Conference Board/TNS showed that Hulu.com, which combines video from 150 broadcasters on a single platform, has seen its audience grow fourfold in the last year, even though only around 2 percent of television viewing is done on the Internet.
The Coalition for Innovative Media Measurement (CIMM) is made up of 15 of the biggest broadcast network companies, advertisers and media-buying agencies. It was formed this month to help improve audience metrics.
CIMM is a LLC composed of 15 voting members, from Unilever and Procter & Gamble to MTV Networks and the Omnicom Group Inc. Each has contributed $100,000 for a minimum two-year engagement.
The coalition is expected to seek two bids from ratings and data companies: one to conduct set-top box research, the other for cross-platform viewing.
More and more Americans are now accessing their favorite shows through set-top boxes provided by cable or satellite companies, due in part to the conversion to digital cable.
The increase has led to an explosion of new audience data from half a dozen companies that mine set-top boxes for viewer habits. Those companies say getting uniform data becomes that much more difficult when you factor in TiVo and video-on-demand systems with upcoming Internet video portals OnDemand Online by Comcast Corp or Time Warner Inc's TV Everywhere.
Alan Gould, a media analyst at Natixis Bleichroeder, said that with more than 500 channels, and linear and nonlinear viewership, they're far from the three networks that captivated 90 percent of the viewership 30 years ago.
However, it is the Nielsen ratings that still hold sway over the buying and selling of advertising. And Larry Gold, who publishes Inside Research, a newsletter on the market research industry, said major broadcast networks spend roughly $1 billion dollars every year to get ratings from Nielsen.
"It has control of the marketplace," he added.
This has caused Nielsen to make significant investments in acquisitions, infrastructure, and research that address the new ways people use media.
Susan Whiting, chairwoman of Nielsen Media Research, said they share all of the objectives of the leaders of CIMM, and they are interested in hearing more about their plans.
But Nielsen is partly to blame for the metrics lag, according to Tracey Scheppach, a senior vice president at SMG Exchange, an offshoot of CIMM member Starcom MediaVest.
She said that while audiences have fragmented, Nielsen's panel size has not kept up, and that has led to "dumbed down, inaccurate data".
One example being that broad audience categories such as women between the ages of 18-49 are hard to translate into targeted advertising.
Gould said there's bound to be a difference between an 18-year-old woman in Manhattan and a 49-year-old woman in some rural area.
"There has been no matching of consumer behavior with the ads," he added.
On the Net: