• by David Goetzl  @dgoetzl, March 8, 2010

The advertising industry has a potential gold supply in front of it, but it will be some time before it breaks into Fort Knox. A new report examining how set-top-box (STB) data can improve TV metrics shows the immense possibilities, while calling on the industry to apply pressure to move the process along.

A principal roadblock may be lack of consistency among the companies that provide and process the data. That's slowing the delivery of actionable research that networks and agencies can benefit from, the report from the Council for Research Excellence (CRE) indicates.

Nonetheless, STB data is already offering a wealth of information that what the study labels as "aggregators" are selling.

Available data includes second-by-second tuning behavior and granular details on DVR "trick play." But aggregators are also capturing how people navigate with program guides and when a show is muted, while at least one is monitoring picture-in-picture viewing.

Even though STB data is more easily obtained at the household level, several aggregators are drilling down to determine demographic characteristics of individual viewers.

"There are no significant gaps in what is possible with current STB technology," the report says.

Pat Liguori, who heads research at the ABC station group and chairs the CRE set-top-box committee, likened the mother lode to what Nielsen made available for the first time last decade.

"If we thought the people meters provided a mountain of data, then this is like seven mountains," she said.

The CRE is an industry think tank funded by Nielsen, but operating independently. CRE chairman Mike Hess, the head researcher at Carat, would not reveal the cost of the study that was two years in the works.

Nielsen recently gave the CRE an additional $2.5 million in funding. Hess said it is unclear what the next step for the CRE will be.

Last fall, the Coalition for Innovative Media Measurement (CIMM), a separate industry initiative, embarked on STB research. Billed as a complement to the CRE, that group's plans appear to be less academic with the goal of launching some field tests.

Many CRE members who worked on the report are also part of CIMM, including MTV Networks' Colleen Fahey-Rush and GroupM's Lyle Schwartz.

The aggregators selling data listed in the CRE report include TNS, TRA, Nielsen, Rentrak and TiVo. Competitive pressure will prompt them to offer differentiated products, but the report calls for some uniformity to help researchers with analysis.

Examples could include agreements on what constitutes tune in -- some aggregators are using one-second intervals, others two. There is also inconsistency on how the collected data is edited. And there may need to be standards on how to protect consumer privacy.

The report advocates for an independent group like the Media Rating Council to get involved in quality assurance. Third-party verification "should be a prerequisite to buying this" data and eventually perhaps using it as currency, it says.

"Users should consider carefully what kind of data they really want from STBs, since providers ultimately will cater to the needs of their customers," the report says.

ABC's Liguori said a lack of standards seems to be a particular trouble spot when measuring local-market performance. If data is gathered and processed differently in Dallas and Philadelphia, for example, an apples-to-apples comparison could be challenging.

Another hurdle is likely to come as data is different within a single market. A range of cable, satellite and telco TV providers could operate there, but make the information from their boxes available in various formats.

"In markets with (Nielsen people meters), the criteria for crediting tune-in is all the same," Liguori said. "With the set-top boxes, we don't know that they are all the same."

For now, however, the report says the STB data presents a "Wild West," with "new players jockey(ing) for position in this fast-changing space."

The report notes that how the aggregators move forward with their products is largely in the hands of the networks and agencies. The deep-pocketed customers need to provide "market pressure," the report said.

They could nudge aggregators toward a model pursued by TRA, which looks to match viewing behavior with purchase results. Or, they may push them to offer a single service that includes data from homes served by cable, satellite and telco TV service, which Rentrak is promising.

CRE chairman Hess said the "potential bonanza" from STB data "could be further enhanced by broader industry-wide cooperation."

He was referring not just to advertising buyers and sellers, but the slew of companies throughout the data collection flow chart identified in the report. That path stretches from the STB owners through raw data collectors and onto the aggregators.

The three authors of the report -- Tim Brooks, former research head at Lifetime and USA; Jim Dennison, formerly with Arbitron; and Stu Gray, who led research at BBDO and NBC -- faced considerable hurdles getting companies at all stages to help them.

They invited 30 companies across the STB arena to participate in their surveys and promised them strict confidentiality. Potential participants were assured that Nielsen, which funds the CRE, would have no access to proprietary information. And the authors offered to sign non-disclosure agreements to persuade companies to break from secrecy.

But after much prodding, only 15 companies agreed to fill out questionnaires. The authors' frustration was palpable through pointed language in the report.

Some companies showed "suspicion of motives" and "lingering paranoia," they wrote. Others felt there was "nothing in it for them." And some thought publicity about STB data might worry the public -- maybe even legislators -- about issues of privacy.

Particularly unhelpful were the data owners or controllers of the boxes. The authors identified TiVo and 10 cable, satellite and telco owners. But only TiVo and the third-largest cable operator, Cox, agreed to participate. Among those not participating were DirecTV, which is selling data to TNS; AT&T, which is working with Rentrak; and Charter, whose data is being used by Nielsen and others.

With only TiVo and Cox on board, the authors omitted any information obtained from them in order to protect confidentiality.

CRE executives Hess and Liguori and the authors conducted multiple meetings with companies to try and persuade them to participate, but the process proved tough.

Even when some executives at companies saw the value in signing on, a measure of bureaucracy proved a blockade. "If one person in a room of 10 executives says no, we shouldn't do it, then that puts a chill across the room," Brooks said.

But Hess said the quality and usefulness of the final report would hopefully persuade companies to work with the CRE ahead. "Now that the report is actually out, people will believe in its value and help us going forward," he said.