• by Wayne Friedman , September 11, 2009

Influential media agency executive GroupM's Rino Scanzoni says Nielsen Media Research is wrong to eliminate live-only program local ratings -- and he is ready to fight.

"We are very strongly opposed to it," says Scanzoni, who is chief investment officer, GroupM North America -- a media agency that controls about one-third of all TV advertising spending. "It is a significant step backwards to what clients are demanding, which is more accountability."

On Sept. 9, Nielsen issued a client communication saying it was eliminating live-only program ratings in the biggest TV markets -- those with local people meter and set meter -- and replacing it with live program-plus-same-day DVR playback ratings.

Nielsen says the move will make metrics more consistent with ratings in medium and smaller markets -- as well as resulting in a cost savings by eliminating a stream of data. The ratings company contends the effort was pushed by clients.

Scanzoni believes it came from TV stations' clients searching for an edge. Looking at comparative national numbers, live-plus-same-day program ratings generally are 4% to 7% higher than live-only ratings, he says. And since this includes DVR playback over that period, that means 60% to 70% of commercials are skipped.

"This will overestimate the audience, and we'll pay for audiences that we are not getting," he says. "All of our contracts are based on live-only. They are not based on a delayed basis. We would be paying for exposures that are not generating commercial exposures."

At issue are big national TV clients tht buy both national and local television. Those marketers have had commercial ratings on national TV networks -- commercial ratings plus three days of DVR playback (C3) -- for two years now. GroupM's Scanzoni was a key industry leader in pushing for the C3 national TV rating metric.

But commercial ratings don't exist with local TV stations, and Scanzoni says his clients have no way of comparing and analyzing media buys national and locally. Local commercial ratings are not expected anytime soon, according to Nielsen.

For some time now, Nielsen has been adding new streams of local TV data -- live plus seven days of DVR playback. More recently, it offered live program plus three days of DVR playback. These metrics have been virtually rejected by TV advertisers.

Scanzoni has no problem in adding more streams of data, just not eliminating the live-only stream that TV advertisers currently use to buy local TV. "I don't care how many streams they provide, but we must have live-only."

A Nielsen spokesman says the move to live-plus-same-day was an effort to seek a middle ground. "Some sellers of local television would still like three or seven days of playback added in; some agencies would still like zero playback added in."

He adds: "But the majority seems to favor the compromise of adding in same-day playback. It is true that some people skip commercials. But it's also true that there is substantial value in the large audience that plays back a program on the same day ... often minutes later."

Nielsen says local commercial ratings are a long ways off for all TV stations. But Scanzoni guesses it can be done at least in the LPM markets. Janice Finkel-Greene, executive vice president and director of futures and technology for Magna Insights, agrees that Nielsen could devise a way of determining commercial ratings.

Magna's Finkel-Greene agrees, in part, with Scanzoni: "This is not ideal; this is a compromise" -- especially since most agencies aren't using the new live program plus three days of DVR viewing (L3) local TV metric that Nielsen started in January.

But she is less concerned about seemingly tiny statistical variations. "I'm not convinced we should be worried about small differences with smaller [Nielsen] samples," she says. This includes the theoretical higher numbers that would be obtained with live program-plus-same-day ratings. "If an average rating is a 3.0 and it goes up to a 3.2 (on the high end) and a buyer can't maintain a rate," she notes, "it speaks mostly to negotiating skills. Does it not?"