• by Joe Mandese  @mp_joemandese, July 7, 2005

In what is shaping up to be an especially vicious campaign to dislodge Nielsen's TV ratings monopoly, upstart erinMedia Wednesday published an analysis of Nielsen's own data, which suggests its research methods are "systematically flawed." The analysis follows an antitrust suit erinMedia filed against Nielsen on June 16, which alleges that Nielsen's business practices have been anticompetitive and have stymied the development of better methods of TV audience measurement. Nielsen called the analysis a publicity stunt and said the suit is "meritless," but erinMedia's actions threaten to drag out some of Nielsen's dirtiest laundry.

While Nielsen has yet to respond to the suit, which was filed in the U.S. District Court for the Middle District of Florida, the TV ratings giant is expected to file a motion to dismiss it by Aug. 3. If the court denies that motion, erinMedia plans to expose many of Nielsen's most questionable business practices and research methods through the legal process of discovery, in which lawyers prepare for a trial.

Meanwhile, erinMedia has stepped up the PR campaign, releasing a study it claims exposes "inherent flaws" in Nielsen's methods. Ironically, erinMedia is using data that was released by Nielsen itself in an effort to demonstrate the superiority of its new, controversial local people meter system.

The data, which was made public by Nielsen on June 23rd, compared African American audience estimates from its new people meter system in Washington, DC, with estimates from its older set meter/diary system. Not surprisingly, the two systems show dramatically different ratings estimates. According to erinMedia's analysis, the data revealed an average discrepancy "in excess of 40 percent" between ratings of the top 30 shows among African Americans in the market during the period measured (April 28 to May 25).

The Nielsen data "unwittingly reveals, with 99% certainty, that at least one set of data, if not both, is systemically flawed," stated Frank Foster, president of erinMedia. "The two measurement systems are simply not pointing to the same viewing picture and it is highly unlikely that both data sets accurately represent how African Americans view television in Washington, D.C."

For their part, Nielsen executives do not refute that the two ratings systems are producing different ratings results. In fact, they say that is the whole point of introducing local people meters, which they claim are more accurate than older methods.

"If there weren't any differences what was the point of brining in a new measurement tool," acknowledged a Nielsen spokeswoman.

The problem, says erinMedia executives, is that Nielsen is only deploying the local people meters in seven markets, leaving the other 200-plus television markets dependent on even more antiquated methods of audience measurement.

Nielsen says this is a function of economics and that it simply would be too expensive to use people meters to measure every local market, though it is developing new methods such as a "mailable" electronic diary that it says may be a partial solution.

But erinMedia counters that Nielsen is simply using its marketplace leverage to stall the development of better research methods, including the kind being developed by erinMedia, which uses actual TV usage data derived from cable, satellite and other digital set-top devices.

"I don't think there's any dispute that diaries tends to overstate ratings. That's the main reason why we're bringing local people meters into the local markets," said Nielsen's spokeswoman, adding that Nielsen is also trying to develop a ratings system based on digital set-top data.

"We've said publicly that we are working with Comcast and Time Warner and that we're trying to see how their set-top data would complement what we are doing currently," she said, adding, "But the set-top boxes only give you a piece of the puzzle. They don't give you the demographics that buyers are looking for and they don't measure every household or every television within a household."