Subject Of Confusion

by Joe Mandese, May 31, 2007, 10:30 PM

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As you read this, legions of third-party processors are loading Nielsen's new commercial minute ratings data into various analytical systems that, in the days to come, will begin spitting out reports, trends, insights, and a variety of trade press headlines showing how the audiences of TV advertising compare to those of the programs of various networks. Brace yourself. It's going to be a bumpy ride. It's a ride, of course, that's going to take place just as advertisers and agencies are supposed to be spending billions of dollars to place hundreds of thousands of spots, across thousands of hours of programming on nearly 100 television networks and syndication outfits. And the amazing thing is that, at this point, nobody knows exactly what they will be guaranteeing those buys on.

I've covered the network television marketplace for more than a quarter of a century, but I find myself looking on this year's upfront in an almost existential manner, asking myself, "How in the world did we end up with this mess?"

A fresh batch of un-audited, unaccredited ratings data being dumped on the market, even as debate continues to fester over the methods being used to generate it. Ordinarily, the marketplace likes to have a year's worth of evaluation data before it adopts a new currency. And that's pretty much been Nielsen's protocol in the past. But for some reason it has abandoned that process. In fact, the most notable thing about Nielsen's official announcement about the release of its new average commercial minute ratings Thursday wasn't what was in it, but what was missing from it. What was missing, was the words "evaluation" or "test." The press release and client notice issued by Nielsen implied the data was good to go, even though it will be at least July before the Media Rating Council conducts a physical audit of the system, and it won't be until August that its auditor Ernst & Young issues a report on its findings. Given the way such audits are typically reviewed and voted on, it's likely that Nielsen's new commercial ratings system may not be accredited until late fall or early December.

But even without that critical stamp of industry approval, Nielsen has essentially said the marketplace will rule on the validity of its commercial ratings as currency data. "Our clients will determine which of these data streams they want to use for negotiating the buying and selling of advertising and whether it be for the upcoming television season or the following one," Nielsen Executive Vice President-Client Services Sara Erichson stated as part of Nielsen's official announcement.

The problem with that logic is that different clients will make different determinations on the validity and application of the new, untested ratings data. And for reasons I cannot fathom, Nielsen seems to think this is a good thing.

"The jury is out and it will stay out for some time," Nielsen CEO David Calhoun told Wall Street analysts during the company's first quarter earnings call the other day. "It will be a subject of confusion all year long," he added. I don't want to read into what message Calhoun was trying to send to Wall Street by acknowledging that, but I suppose the implication was that a confused TV ratings marketplace is a good thing for Nielsen's investors if it means Nielsen's clients will have to purchase multiple streams of data.

It's clearly not a good thing for the TV marketplace. It means more uncertainty than ever before. Uncertainty over what's the basis of sales. And uncertainty over the validity and the stability of the data used as the bases of those sales.

This is something I hadn't thought a lot about until a couple of weeks ago when Tim Brooks, the soon-to-be-retiring research chief at Lifetime Television, pointed out to me that the TV industry has never gone into an upfront marketplace with this much untested data, and that it could lead to an unprecedented situation next year when people try posting those advertising buys. If the data is proven faulty, who compensates who for what?

But the biggest question, I suppose, is that given all these uncertainties, why the rush? Why the push to unleash un-audited, unaccredited data on the cusp of multibillion dollar advertising marketplace?

Editor's Note: The May 25th entry to the TV Board ("Memorial Day") stated that Turner Broadcasting research executive Michael Propper was retiring. A Turner spokesman denies that Propper has any plans to retire in the near future.

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