• by Wayne Friedman , Joe Mandese  @mp_joemandese, December 16, 2009

Yielding to pressure from Madison Avenue, Nielsen Co. Wednesday announced a plan that would continue to make live-only local TV ratings data available, albeit for a little while longer.

The move is an apparent attempt to ameliorate concerns from big spot TV buying agencies -- especially Publicis' SMGX and WPP's GroupM -- that expressed outrage over Nielsen's original plan to phase live-only ratings out of its local TV measurement service beginning Jan. 1. Under the new plan, Nielsen said it would continue to make "live" audience data estimates for its local metered TV markets available to clients through March 31st, 2010, but would then discontinue them unless a consensus of its clients step forward before then and ask Nielsen to continue reporting the data on an ongoing basis.

But in a letter sent late Wednesday to clients, Nielsen clearly states an editorial point-of-view that it believes stripping live ratings data out of local TV ratings is a better approach than continuing to make them available on an ongoing basis, even though they have been the currency of the local TV advertising marketplace for more than half a century, and even though advertisers have deals based on them with local TV stations that run through 2010.

"It continues to be Nielsen's point of view, based on our analysis of viewing trends, that live-plus-same-day audience estimates are a better representation of individual day viewing than live-only-audience-estimates," Nielsen Senior Vice President-Director of Local Media Client Services Sabrina Crow writes in the letter, recapping the highlights of the research Nielsen conducted that led to its point-of-view. One thing Nielsen does not explain in its letter, is why it cannot continue to provide the live ratings on an ongoing basis via its modified approach.

Based on its modified plan, Nielsen said live ratings would continue to be removed from its "overnight" local TV ratings reports effective in January, but would continue to be available on a monthly basis via Nielsen's Total Viewing Sources reports. While not ideal from Madison Avenue's point-of-view, the monthly reports would at least enable agencies to "post" the performance of their local TV advertising buys based on live TV ratings delivery. That approach, however, would still be a big problem for advertisers and agencies that have time-sensitive campaigns or direct response campaigns that depend on adjusting their plans continuously to ensure they are delivering the proper audience reach during the flight of their campaigns.

Agency executives called the modified plan a good first step, but said they would continue to lobby Nielsen and local broadcasters to revert their decision, because they believe live TV ratings continue to be a key metric for determining commercial advertising exposure in a time-shifted viewing world where people fast-forward through commercials on DVRs.

GroupM's Chief Investment Officer Rino Scanzoni had many behind-the-scenes talks with many TV station executives -- including those at NBC Universal and the Television Bureau of Advertising -- attempting to change their point of view.

"Clients are not opposed to exposures they are getting; they are opposed to exposures they are not getting," said Scanzoni. "The live-only data stream is not a long-term solution. A better solution is going to a commercial ratings metric."

The decision was described as "progress" by SMGX chief John Muszynski, who said "it's not a battle won." He said SMGX and other agencies would continue to petition Nielsen and the local TV station community to preserve the long-term availability of live-only local TV ratings, because they are an important measure of local TV advertising exposure and the basis of many of the advertising deals they negotiate with local broadcasters.

Group M, SMGX, the American Association of Advertising Agencies, and the Association of National Advertisers have been pushing for Nielsen to abandon its decision to scrap the live local TV ratings, and GroupM's Rino Scanzoni has even threatened legal action. SMGX's Muszynski, meanwhile, has invited TV station executives to a summit to discuss how to resolve the issue in the best interest of advertisers who still want to know whether their TV commercials are being viewed in their local TV advertising buys.

While agency executives and advertisers have no problem with Nielsen adding the new live-plus-same-day stream of data, they did not want the removal of the live-only data stream. They said it would have given TV stations an instant -- and unfair -- bump in ratings, some say as high as a 10% improvement.

In addition, they complained that the elimination of live-only data would bring turmoil to many existing deals it has in place for its TV marketing clients -- deals based on live-only ratings.

Executives complained that substituting the extra DVR playback ratings data for the live-only ratings would significantly hurt their marketers' businesses. That's because DVR research has shown that viewers fast forward through commercial 75% of the time.

For their part, TV stations have pushed to get credit for DVR viewing like national TV outlets for a couple of years now. But unlike national TV outlets, these networks get it through C3 ratings -- commercial ratings plus three days of DVR playback. Media agencies have no problem with DVR playback, as long as it comes through the viewership of its commercials.

Ironically, Nielsen's decision will not be consistent for all U.S. television markets. Under the plan, Nielsen will continue to report "live" audience estimates for the smallest TV markets, which continue to be measured via paper diaries, which generally are not considered to be a very good method for estimating time-shifted TV viewing.