• by Joe Mandese  @mp_joemandese, February 22, 2005

Nielsen's plan to bankroll a $2.5 million fund for researching and developing new methodological research on TV audience measurement (MDN Feb. 18) got mixed reactions from some customers and other stakeholders it was intended to sway. While the announcement--part of a multifaceted response to a variety of Nielsen criticisms outlined in an eight-page letter sent by Nielsen CEO Susan Whiting to clients on Friday--does acknowledge the need for ongoing, independent R&D, it raised questions about how Nielsen's funding might influence a process that the media and advertising industries had been developing on their own.

In fact, some skeptical observers believe Nielsen's proposal was made in direct response to a consortium that has been initiated by members of the Media Rating Council, which has already met twice, and which has grown to include the involvement of the American Association of Advertising Agencies (AAAA), the Association of National Advertisers (ANA), and leading ad trade bureaus like the Cabletelevision Advertising Bureau.

"The latest meeting proposed the structure of it," George Ivie, executive director and CEO of the MRC, told MDN, adding: "We concluded that ratings services like Nielsen should be involved, but not just Nielsen. We plan to approach Arbitron, and Scarborough, and [Mediamark Research Inc.], and other people. They have some of the best researchers in our business, and we'd like to get them involved."

Ivie, who proposed the idea of a consortium, said it would operate independently of the MRC, although the MRC would work closely with the organization, which eventually is expected to have its own, independent management structure.

Most importantly, he said it needs to operate autonomously, and "independent of any one ratings service."

He said the goal would be to include representatives of other media--including print, radio, and outdoor --as well as to conduct methodological research on other media, and that the Advertising Research Foundation would be invited to play a role. The ARF was created by the AAAA and the ANA with a charter to foster best practices in advertising research.

Asked how Nielsen's funding might play a role in the initiative, Ivie said: "I think we would welcome something like that, as long as Nielsen wasn't directing the activity."

Nielsen's exact intentions were not clear from the letter issued by Whiting, but executives familiar with Nielsen's plan said the goal would be to allocate some Nielsen staff researchers to be dedicated to the initiative, and to work independently of Nielsen Chief Research Officer Paul Donato's internal R&D efforts.

Exactly how the funding would work also wasn't clear. Whiting said Nielsen is creating a $2.5 million fund for independent R&D, but did not indicate how that money would be allocated and dispersed, and who would control its spending--or whether it might be used to back the consortium, or even if it was designed to draw attention away from it.

"This fund, which is incremental to our normal R&D investments, will be focused on methodological research," she wrote. "We will ask a small group of clients representing different industry segments to serve with us on a steering committee that will direct the spending over the course of a year. Once we and our clients have evaluated the success of this initiative during the first year, we will determine the size of the fund on an ongoing basis."

While Nielsen's funding would likely be tempting for an industry that is always scraping for primary and syndicated research budgets--much less methodological ones--some stakeholders said it would be critical that Nielsen not have any control over the process. "It would be like having the fox guarding the chicken coop," said one Nielsen customer.

"The American people can't count on an unregulated monopoly to police itself. Real reform and oversight is needed in the television ratings system," Cynthia Jasso-Rotunno, executive director of Don't Count Us Out, stated on Friday, adding: "Today's announcement demonstrates that Nielsen has accepted that, but they also need to accept that they are not the ones to do it."