It's Like Deja Viewing Estimates All Over Again

I stopped keeping track of Nielsen stalking horse stories a long time ago. When I first started covering this business in the early 1980s, there was Arbitron (now, tellingly, part of Nielsen). Then there was AGB, R.D. Percy & Co., Arbitron again with its ScanAmerica “single-source” measurement play, then IAG (also now part of Nielsen), Arbitron again with its innovative portable people meters, ErinMedia, TiVo, TRA (now part of TiVo), Kantar Media -- and, of course, Rentrak. I probably left a few out, so feel free to add them to the comments section below this column, whose main point is that after 30 years of covering attempts by rivals to compete with Nielsen, I have grown cynical that the industry will ever support any real competition. That is, until now -- maybe.

In the end, all those Nielsen rivals failed to capture any appreciable market share for a variety of reasons. Some people cite their costs, but I think the main reason is that people simply don’t like complexity. And having more than one currency in a marketplace creates confusion. That was the problem when Nielsen and Arbitron competed in the local TV measurement business decades ago. It created friction between agencies and stations trying to do business when one or the other was either a “Nielsen” or an “Arbitron” shop.

A similar situation has been playing out in the digital audience measurement marketplace, where comScore was the clear currency, but where Nielsen has begun to make serious inroads -- largely, I believe, because of the complexity issue. Some people would like a simple way of hooking TV and digital audience estimates together, and Nielsen’s OXR -- and soon its mobile ratings -- are the best means of doing that, because Nielsen also owns the TV industry’s ratings currency.

At least in most markets. Unless Nielsen pulls some rabbit ears out of its hat, it looks like it won’t be the absolute currency in at least 18 major TV markets where Fox owns and operates TV stations. As of tonight, the Fox stations’ contract with Nielsen expires, and the stations will do business with national and local advertisers on the basis of Rentrak’s ratings.

How long that competitive dynamic will remain, I can’t say. But if history is any lesson, it may not be for long before Nielsen either caves on the economic terms of its negotiations, or capitulates on the methodological ones. Because the one thing history has proven, is that the only time Nielsen makes big concessions is when it faces a big competitive threat. Competition is what pushed it to embrace people meters, passive measurement techniques -- and begrudgingly, the kind of digital set-top data Rentrak and others are basing their business on. I say begrudgingly, because Nielsen hasn’t actually put a commercialized version of such a service into the market, partly because doing so would effectively level the playing field with other digital set-top-based audience estimators.

Don’t get me wrong. I’m not saying Nielsen doesn't innovate. I believe its research organization is committed to producing the best possible estimates it can within the framework it's dealt. I just think economics and other considerations are even stronger forces. Think about it, to Fox’s last big campaign against Nielsen: the one that culminated in hearings before Congress, to get Nielsen to address the under-representation of minority households in its ratings sample. So far, we’re not seeing Fox play that kind of hardball. Maybe because the company genuinely feels it doesn't have to, because the market will simply accept Rentrak estimates as an alternative form of currency. If that’s true, it's a far more serious threat to Nielsen -- and the thesis of this column may be entirely wrong.

Tags: nielsen, ratings, tv
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8 comments about "It's Like Deja Viewing Estimates All Over Again".
  1. Ed Papazian from Media Dynamics Inc , June 30, 2014 at 4:04 p.m.
    Interesting article, Joe. I have watched all of the challenges to Nielsen's supremacy you mentioned as well as a few that never rose to the surface. Without taking sides in each case, I think that Nielsen has withstood these challenges for a variety of reasons. Certainly it has bowed to the inevitable----such as the "people meters", which the agencies passionately insisted on. In other situations, Nielsen has made needed technical improvements when these were mandated due to outside or "competitive" pressures. One factor that is rarely mentioned is the ability of a research company to "service" an ongoing and complicated operation. This deals with a variety of past experience with specialized computer programming to handle the data, skilled staffs who keep the panel going, trained marketing and sales types who can interface with clients, etc. One of the unspoken fears among Nielsen clients is that were it dethroned, a new "supplier" would not be able to keep the data flowing and in reasonably good order as to reliability. Suppose a brand new service "won" the battle and took over. Even if it hired a lot of Nielsen people it would have to be off and running efficiently at the start----no major debacles nor failure to deliver the vital "spice"---if you remember the sci-fi novel and movie, "Dune" ---would be acceptable. While Nielsen is frustratingly slow to move, just about everyone who has dealt with this company----myself included-----respects its professionalism and proven expertise. That's one reason why getting a new supplier----for the TV ratings, at any rate------is a scary proposition for many clients.
  2. David Tice from GfK Media & Entertainment , June 30, 2014 at 4:11 p.m.
    Joe, don't forget the SMART system from Gale Metzger and SRI in the mid-late '90s.
  3. Nicholas Schiavone from Nicholas P. Schiavone, LLC , June 30, 2014 at 7:14 p.m.
    Ed, A wink is as good as a nod ... . Is it not? I hope you receive a nice basket of ripe fruit from Nielsen for that closing tribute in your commentary. Nothing could be more unwarranted. Your circuitous defense of the status quo explains why "it" will never get better than "this." Too bad. We all knew better and -- with rare exception like SRI's SMART -- did nothing about it. Joe is right. On all fronts and at all times, US advertising and media research seem to hold the copyright on déjà vu. (Apologies to Mr. Mandese for imposing my interpretation on his clever screed.) Now, onwards and upwards.
  4. Ed Papazian from Media Dynamics Inc , June 30, 2014 at 7:54 p.m.
    I see that your heated attack on myself and my response to it have been deleted. I think that's a good move by Media Post. Isn't there some way for you to simply disagree, if you must, but leave out the personal onslaughts? I have no problem debating any issue where there are contrary opinions but why make it personal? Regarding my "defense of the status quo", nothing could be farther from the truth. I'm all for change, as I note repeatedly in my publications. But I also try to be fair about it. Shall we move on?
  5. Nicholas Schiavone from Nicholas P. Schiavone, LLC , June 30, 2014 at 8:33 p.m.
    First, my friend, the expression is "further from the truth" NOT "farther." Secondly, I know of no case where MediaPost has ever deleted a comment that I have made. Thirdly, I am not heated or overheated when I write my comments. It's a "cool" process. I respect you and do not want to give offense to you -- or anyone else. Regrets. However, I am not responsible for your interpretations -- or misinterpretations. Yes. Let's move on. Onward and upwards.
  6. Ed Papazian from Media Dynamics Inc , June 30, 2014 at 9:22 p.m.
    Further, not farther----I'll try to remember that. Thanks, Nick. Shouldn't it be onward and upward? I sort of like upward and onward, myself.
  7. Nicholas Schiavone from Nicholas P. Schiavone, LLC , July 2, 2014 at 5:54 p.m.
    Dear Ed, My mistake. It's "onward and upward" or "onwards and upwards." I am not familiar with other formulations. Most importantly, I wish us both a weekend INDEPENDENT of formulations, confrontations and contrariness. Beyond that, I seek always to be respectful and shall work harder to convey same. Peace be with you and me. Sincerely, Nick
  8. Ed Papazian from Media Dynamics Inc , July 2, 2014 at 7:26 p.m.
    Thanks, Nick. Enjoy the holiday.