• by David Goetzl  @dgoetzl, March 22, 2010

While controversy surrounds Nielsen's measurement in local markets, a company executive said set-top-box (STB) data could usher in a new era at the local level.

Due to technological hurdles, Nielsen currently does not offer commercial ratings or an ability to determine ad-skipping with DVRs there. But STB data -- which tracks second-by-second viewing -- could help Nielsen move forward with those metrics and others, according to Jeff Boehme, a senior vice president in the advanced TV field.

"We can expand our local market capabilities and maybe redefine local markets entirely," he said Monday at an annual Advertising Research Foundation event.

Alienating some advertisers, Nielsen has said it will make program ratings that encompass both live and same-day, time-shifted viewing its primary metric in local markets starting next month.

Frustrated GroupM executive Rino Scanzoni said that STB data may ultimately provide a sort of elixir for local measurement. "This is a business of inches," he said.

Rentrak and TiVo have moved more aggressively than Nielsen in marketing STB products for the local space. Rentrak has several station groups subscribing to its data. TiVo has not announced any clients for its service, which is available only for San Francisco, Orlando and Tucson.

But Boehme indicated that Nielsen can gain an advantage by combining its traditional data with STB information, allowing breakdowns at the demographic level. Rentrak, for example, is only offering data at a household level so far.

"We believe that the hybrid system of connecting set-top-box data with our panels is the right way to go," said Boehme, who worked in the local cable arena prior to Nielsen.

Using STB data as a "complement" applies to the set-top-box product Nielsen already has on the market for national networks. National Geographic Channel is the only publicly disclosed client. Data is culled from STBs in homes served by Charter cable in the Los Angeles area.

Google has a service using STB data collected from Dish Network, but melds Nielsen demographic information with it.

National Geographic Channel is among the approximately 90 Nielsen-rated networks. But Boehme said STB data can provide insight into viewing for the unrated ones.

About 92% of all U.S. viewing is tracked by Nielsen; the new data can help with the remaining 8%.

STB data can also help track addressable and interactive advertising. And it can provide granular data on specific commercials -- something advertisers are clamoring for.

"How about what your commercial rating was over time and whether or not your creative held up over that amount of time as well?" he said.

Nielsen has come up with about 12 different potential reasons why a single commercial may do better than another, ranging from pod position to programming genre it runs in.

Nonetheless, there are significant challenges to turning the process of collecting and analyzing STB data into a successful assembly line, many of which were highlighted in a recent Council for Research Excellence report.

Those include how to pinpoint those specific commercials; account for when a person turns off an STB; ensure privacy projection; grapple with much of the country not having an STB; and deal with the sheer expense of gathering and interpreting the data.

"There is a tremendous amount of cost to reclaim all of these data," he said.

Wayne Friedman contributed reporting for this story.