Rentrak, one of the potential rivals to Nielsen's dominance over the TV and video audience measurement business, is making some aggressive moves, including the launch of a local TV ratings business,
and the acquisition of a division of Nielsen that services the major Hollywood studios. The moves are the latest part of a transformation of Rentrak from a company that was originally created to track
the box office sales and homevideo rentals of movies, to one with designs on the entire video marketplace.
But the core of Rentrak's strategy, and the one that differentiates it from a host of
rivals - including TRA Analytics, TiVo, TNS, and others - all vying to compete with Nielsen. Like other companies aggregating census-level data from digital set-top television devices, Rentrak
believes there is an untapped market among advertisers, agencies, and media companies for research based on giant databases, as opposed to the relatively small, but projectable samples managed by
Nielsen. But the difference in Rentrak's approach is its ability and willingness to integrate its TV viewing data with a wide array of other databases that give new insights on who is watching TV
programming and advertising that goes well beyond the standard demographics offered by Nielsen Co.
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It's a classic approach developed by Rentrak CEO Bill Livek, who previously used it to help give
meaning to Nielsen's data when he ran Simmons Market Research Bureau, a major supplier of media planning and consumer targeting data to Madison Avenue. Back then, Livek struck a deal to integrate
Simmons data on a wide variety of consumer characteristics, including product purchases, lifestyles, and even political and religious orientation, with Nielsen's data on TV audiences to come up with a
new product, Behaviorgraphics, that advertisers and agencies could use to infer all sorts of TV viewing behaviors that were previously unknown.
Now Rentrak is trying the same approach in
reverse, says its chief research officer Bruce Goerlich, a long-time media research chief at some of Madison Avenue's biggest agencies. "We call it a database marketing approach to television audience
measurement," he explains.
Currently, Rentrak clients can analyze all of the digital set-top audience data being aggregated by Rentrak, including some 1.9 million households via AT&T's systems,
by any of the consumer product or lifestyle breaks offered by Simmons. But he says clients are free to integrate with any database, including many of Madison Avenue's most commonly used ones such as
MRI, Scarborough, or even a client's own proprietary database on its own customers.
Meanwhile, Rentrak announced a deal Monday that goes after what many consider to be a vulnerable Achilles heel
for Nielsen: Local TV audience measurement. Nielsen is currently at war with some of the biggest local TV media-buying shops, including WPP's GroupM and Publicis' SMGX, over its decision to
discontinue reporting live TV audience ratings beginning this January.
Since a number of their 2010 deals with TV stations are based on live-only audience guarantees, and because advertisers and
agencies are generally concerned that TV viewers zap many of the commercials they view when played back on DVRs, some of the agencies have been considering using digital set-top data from companies
like Rentrak, TiVo, TNS and TRA.
On Monday, Rentrak announced a deal with TV stations in Wichita, Kansas, to launch StationView Essentials, a new "analytical service" providing local TV audience
estimates based on digital set-top data. While eh deal initially involves Wichita broadcaster Sunflower Broadcasting, Rentrak noted that the new service provides viewing data from the top 100 TV
markets representing the largest anonymous household viewing database in the U.S.
Rentrak's Goerlich said the company only measures local TV markets if they can generate a sample of at least 5,000
households with at least 20% of zip codes covered inside the market. While there still are some questions about how projectable digital set-top data is to specific local markets, or to national TV
viewing, Goerlich said that the viewing patterns are relatively similar to those being generated via Nielsen's samples on the basis of audience "rankings." More importantly, he said the ability to
append the data with a wide variety of other databases, gives marketers and agencies the capability of targeting, tracking and posting TV audiences based on the criteria that means the most to them
and their brands, and that over time, those data will prove to generate better returns on media-buying investments.
This morning, Rentrak announced a deal to acquire Nielsen EDI from Nielsen Co.,
marking the latest asset divestiture by the world's largest media and marketing research company. Last week, Nielsen Co. announced the sale of many of its leading trade publications, including
Adweek, Billboard and The Hollywood Reporter.
The deal to acquire EDI, which is expected to close in the first quarter of 2010, will give Rentrak a dominant position in Hollywood
box office data, and one of the terms of the deal is that it has agreed to license the data back to Nielsen.