• by David Goetzl  @dgoetzl, September 13, 2012

It can be comical listening to Rentrak executives speak. They’re fanatical about not mentioning their competitor by name as if such an acknowledgment would mean some kind of surrender.

It seems the employee manual explicitly forbids it. During orientation, HR provides new hires with the benefits paperwork and then points them to a code of conduct about the few times the competitor’s moniker can be used.    

Witness Cathy Hetzel, a Rentrak division president overseeing local TV measurement. At an investor event this week, a question came about that competitor possibly acquiring similar data to Rentrak’s and posing a challenge.

“I don’t usually even mention Nielsen, but you mentioned them, so I’ll repeat the question,” she said. 

To Rentrackers, Nielsen is the “sample currency.”

In contrast, Rentrak executives tout their “census-based currency,” which they say has advantages in using set-top-box (STB) data; much larger panels; and advanced demographics that overlay purchase and other behavior patterns on top of viewing activity.

Whether the de facto company-avoidance policy is having an impact is debatable, but Rentrak has been an extraordinary success in just a few years. There are ample metrics as evidence, but perhaps most impressively it has simply stuck around.

History is littered with Nielsen challengers from Arbitron to a brilliant entrepreneur in Tampa who have dropped out of the TV measurement game. Nielsen can be acquisitive and history may show that the smart move would have been to buy Rentrak two years ago. That still might be a good way to go.

Rentrak executives will say they have no intention of overtaking Nielsen. They just want a lucrative seat at the table offering programmers and agencies a supplement or in some cases an alternative.

Truth be told, Rentrak is hardly a threat to Nielsen’s business writ large, where local TV is but a small part. And even in that sector, Nielsen can still rest easy. It may even be getting better.

Asked whether stations – where Rentrak has made the most headway with its TV metrics business – have shown reticence when considering Rentrak, Hetzel said: “It’s a process … I don’t think that we get resistance, but it’s more about a changing paradigm, where everyone says they want to be out in front and doing the latest and the coolest and they want to know what every single household and every single person is doing … I think they are embracing the advanced demographics piece of what (Rentrak is) doing.”

Rentrak has failed to persuade one of the Big Four networks to buy Rentrak data for their local stations. That would cause some Nielsen rumblings. Still, the company has deals with just about every other leading station group, including Tribune, Sinclair, Gannett and Hearst.

It isn’t providing its service to all of their stations, but it has an entrée and proving ground. Overall, it serves nearly 200 stations and is doing business with 43 groups.

Its strategy is to land one station in a market and get others to follow. In 25 markets, it has three or more station clients.

Though the art musuem has a "Power of Advertising" exhibit that sounds interesting, Springfield, Mo. is not exactly a metropolis. But it is one of three markets, where all the network affiliates are Rentrak customers. And Rentrak says since January, revenue is up 6% in the market, not including political dollars.

One of the principal Rentrak pitches is that the “sample currency” -- Nielsen! -- brings wide swings in viewership. Ratings for the late news on a Tuesday can be vastly different on Friday. The variance can be reduced, Rentrak executives say, by using a much larger panel.

Whether in response to Rentrak or market forces, Nielsen is moving to expand the sizes and incorporate the Rentrak cornerstone of STB data. Nielsen's new hybrid measurement service with STB and traditional panel data promises multiple upgrades, including reducing reliance on diaries in many markets.

Propelling the new offering is a code reader that is beginning to be installed en route to Nielsen's initial 20-market rollout. Its service will also offer a version of local-market advanced demographics, including using automotive purchasing data from the same source as Rentrak.

At a TVB event this week, a letter from Nielsen executive vice president Matt O’Grady was distributed reinforcing the coming changes. “We hear our clients’ needs loud and clear: improved ratings stability, cross-platform measurement and representative samples will drive more revenue towards local TV,” he wrote. “A win for all.”

In large and mid-size markets, Nielsen will effectively quadruple its sample size. Still, Rentrak maintains the expansion is hardly enough to offer the coveted sturdy ratings.

Hetzel offered a chart showing that even as the Nielsen panel in the Dallas market goes from 600 to 2,400, Rentrak works with 500,000-plus homes there. In Greenville, S.C., Nielsen's coming 1,920 will compare to Rentrak's 250,000-plus.

Of course, a person reading the chart would think Rentrak was competing against some entity named Sample Currency.