• by Wayne Friedman , January 12, 2006

TV ratings upstart erinMedia Wednesday filed its second lawsuit against Nielsen Media Research, this one charging the TV ratings giant with false advertising claims made in a series of trade print advertisements placed last fall in which Nielsen claimed to "count" all of the millions of U.S. TV viewers, even though its ratings are based on a sample of only tens of thousands of households.

"It's just wrong," said Frank Maggio, chairman of erinMedia, ReacTV, and a new company Maggio Media Research that he launched on Wednesday (see related story in today's MediaDailyNews). "I just want to meet the person that sat there when that ad crossed their desk. That is so irresponsible--and so false. This case is a lot easier to prove. Counting is not a euphemism."

The suit, filed in a Florida court, follows an antitrust suit also filed in Florida last year by erinMedia and ReacTV filed against Nielsen. Nielsen appealed that suit, and managed to get ReacTV's - a developer of interactive TV programming services - thrown out. But a judge ruled erinMedia's claims have enough merit to proceed and the two companies are expected to begin the process of "discovery" soon, in which depositions will be made, and new information about Nielsen's methods and procedures may be made public.

Maggio said he expects the false advertising claim to be resolved relatively quickly, though the antitrust suit will likely be drawn out.

The Nielsen ads that are the subject of the false advertising and unfair trade practices claims, shows a picture in three parts: a half-face photo of a man, another half-face photo of woman, and a third piece of someone's hand on a TV remote, which was intended to show Nielsen's efforts to fairly count all TV viewers of all races. The text of the ad says: "We're not all on the same channel, isn't that great. Thousands of shows... millions of different viewers... Nielsen counts them all."

Maggio says the word "count" is wrong, since Nielsen uses its nearly 10,000 household national TV panel to estimate TV measurement. In a statement Maggio made earlier in the day in conjunction with the filing of the lawsuit, he said: "In reality it is erinMedia, and not Nielsen, that can literally count millions of Americans, but the Nielsen monopoly has kept our technology from being adopted by the TV industry."

Maggio wants Nielsen to retract the print ad, and added: "We are going to be on the patrol for other stuff."

In November, in response to an earlier anti-trust lawsuit by erinMedia against Nielsen, a U.S. District Court denied a motion by Nielsen to dismiss that case.

Maggio has, for a long time, complained that his company--which has technology to measure TV viewership through set-top boxes--has been unable to compete because of Nielsen's anti-competitive business practices.

United States District Court Judge Susan C. Bucklew wrote in the fall that: "The court finds that, at a minimum [erinMedia's] complaint contains enough facts that [Nielsen] can properly identify the two elements required to state a claim for monopolization."

Executives at erinMedia plan to collect data from cable systems representing about 60 percent of the U.S. TV population, while Nielsen's "national" sample collects data from only about 9,000 households. Nielsen plans to add to that sample.

Analysts believe that an actual trial might reveal some of Nielsen's proprietary research methods and practices that have been hidden from its customers and the public.