Top Nielsen Executive Casts Doubt On Rentrak And Set-Top Data's Viability
The Data Wars got some fuel this week. The pole sitter acknowledged engines are revving behind it, but suggested they would blow a gasket.
If you’re Coke, you’re supposed to pretend Pepsi doesn’t exist, right? If Nielsen CFO Brian West would prefer to do the same with Rentrak, he was left with little choice Tuesday as an investor asked him about the emerging competitor.
But instead of offering up some banal response, he came back with some fire.
“I’m not losing clients as Rentrak signs them up… doesn’t bother me a bit,” West said.
Rentrak has made headway by inking deals with 150 local TV stations to use its set-top-box (STB) measurement process, which differs from Nielsen’s panel-based system. At Rentrak, a principal selling point is it culls data from tens of thousands of homes compared to Nielsen’s relatively small sample.
Much of Rentrak’s long-term value, however, will be determined by whether stations and agencies use its data as a currency -- rather than just a research tool. Nielsen's West cast doubt on that.
“Set-top box data on its own could be very interesting to inform a local market as an analytic tool … It’s not a proposition where there will be buying and selling,” he said.
At Rentrak, CEO Bill Livek said Tuesday a “big chunk” of stations are conducting business using the company’s ratings tools. The Columbus, Ohio market may be an example since Rentrak has relationships with multiple network-affiliated stations there.
There are a range of questions about the reliability of STB data that may slow its widespread adoption. An STB-based system might not capture all viewership in a market. It might fail to differentiate between when a box is left on, but no one is watching. It might not provide details on the demographics of viewers.
“It is by nature limited in its abilities and everybody knows that,” West said.
So, Nielsen has been working on a better mousetrap, which West said would offer “more stable measurement” than Rentrak or another STB-based provider because it would combine STB data with the traditional panel methods.
The "hybrid" Nielsen system is in an early phase of an accreditation process conducted by the Media Rating Council (MRC), which looks to give the industry assurances about reliability. Rentrak’s service is also moving through the MRC chain.
Which is where West offered a barbed take: “I don’t see it being accredited by the MRC.”
Rentrak believes it has an MRC-worthy system. It attaches demographics using Epsilon data and uses a world of algorithms to account for issues such as over-the-air viewing.
Rentrak CEO Livek can go negative, too, when prompted by investors. For the most part, though, he tries to be circumspect when speaking about Nielsen, usually suggesting there is room for more than one measurement system. “Like Moody’s and Standard & Poor’s,” he said Tuesday.
On Rentrak’s MRC prospects, he said: “I’m of the frame of mind, you don’t start a race unless you’re going to finish it.”
That doesn’t mean it won’t be a hilly track. In a Feb. 15 presentation, GroupM researcher Lyle Schwartz gave with an ABC executive, the pair noted the potholes with STB data.
Schwartz reiterated some Tuesday, but said there is opportunity for Rentrak or another STB data provider (such as Kantar or TiVo) to move into a currency phase. Recently, that happened when Rentrak and Nielsen were used jointly to offer guarantees in a deal between CNBC and Fidelity, which was cut by agency MPG.
But that was on a national level and Schwartz suggested a game-changer would come when agencies use Rentrak in both markets. “We really need a unified approach, so I can compare local and national,” he said.
Rentrak offers a national and local product that is similar and could facilitate that. Nielsen, however, has no plans to use STB data as part of its national sample.
In the meantime, Dave Boylan, who heads Post-Newsweek’s ABC affiliate in Miami, says Rentrak is helping drive revenues. His station has not done deals using the STB data as currency – some agencies are still plotting a course -- but the information has served to help generate new business.
Some sales representatives approach local businesses with the data, believing the information from tens of thousands of homes offers a compelling picture of what’s happening in the market. The station has created a video and detailed presentation explaining the Rentrak system.
Long a Nielsen critic, Boylan believes within a couple of years an alternate data provider (Rentrak, Kantar, TiVo, etc.) could serve as a currency and allow a large-market station to walk away from Nielsen.
“I think you will see it,” he said. “I believe stations are able to use Rentrak or other data in a way that will be credible, so the agencies will use it. And I think the more that happens, the more common it will be.”
A game of chicken could result, where it will take one station to go off Nielsen, before others follow. But Boylan said stations are frustrated enough with the small size of Nielsen’s sample and other deficiencies, a forward-thinking one may take the chance. Then again, if Nielsen’s better mousetrap emerges, confidence could be restored.
Several years ago, when the industry demanded a metric taking into account DVR-aided ad skipping, Nielsen responded and it became the national market's currency. GroupM’s Schwartz was deeply involved in pushing for that.
Could interest in STB data usher in a similar shift at a local level? “Things change every day," Schwartz said. "There are always ways to improve.”
The checkered flag is a long way down the road. Or is it?