Is the U.S. JIC an end-run around the
MRC and does it break the industry’s agreement with the U.S. Congress? Let’s compare the two organizations.
The MRC (Media Rating Council) is a non-profit,
self-regulatory body, established at the request of Congress. It's funded by members that include TV networks, ad agencies and advertisers.
In 1963 and 1964 there were congressional
hearings to regulate the TV and radio industries including the purpose and accuracy of audience research. The process resulted in a progress report to the 89th Congress of the United States.
The hearings were held by a special subcommittee and are commonly referred to as the Harris Committee Hearings on Broadcast Ratings.
After extensive investigation over
three days of testimony it was determined that industry self-regulation -- including independent audits of ratings services -- was preferable to government intervention.
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This
resulted in the formation of an industry-funded organization to review and accredit audience-rating services called the Broadcast Rating Council; what we now call the Media Rating Council or MRC.
At that time, the MRC proposed industry self-regulation procedures that were reviewed by the U.S. Justice Department.
The committee deemed it necessary that the MRC
activities include, but were not limited to the following:
The establishment and administration of Minimum Standards for
rating operations
The accreditation of rating services on the basis of information submitted by such services; and
Auditing, through independent CPA firms, of the activities or the rating services.
In a nutshell,
the MRC is what was required by the US Congress to avoid governmental regulation.
The JIC (joint industry committee), on the other hand, wasn’t established due to governmental
actions, it was started shortly after Nielsen ran into problems related to audience measurement during the recent COVID-19 pandemic.
The JIC is led by OpenAP on behalf of a
partnership that includes TV networks and ad agencies. There are no advertisers. OpenAP is a for-profit business owned by the TV networks. Its primary products are ad targeting and media
measurement, an obvious conflict of interest.
The MRC was put in place to provide industry standards, the JIC was stood up to create competition by making it easier for new research
companies to do business.
The JIC paves a way around the MRC and renders government-imposed requirements moot. New alt-research companies can now claim industry certification as
opposed to MRC accreditation.
When you consider the direction of media measurement towards big data, industry standards and oversight are more important than ever. Big data
isn’t valid without tuning and bad actors could tune the data up or down for business reasons.
Let’s hypothetically say that a new alt-research company starts up a media
research business with a massive sample of TV set-top box and smart TV data. We’ll call it Company B and call the legacy provider Company A. Company B knows that the TV networks pay for most of
the cost of measurement and as a result should be a priority for the company. Company B then decides to tune the data to be a little bit higher than Company A’s data. Too much would seem
inaccurate, but a little would play into what the TV networks believe to be true anyway.
Company B now becomes a more attractive measurement provider to the part of the media
industry that pays the most money. It’s not an actual increase in audiences, it’s a manufactured increase to win business.
MRC accreditation would likely prevent
the above scenario from ever happening and protect advertisers from paying higher costs due to contrived currency results.
It’s true that the MRC auditing process
couldn’t protect the industry from the underreporting that happened during the pandemic, and it’s not funded to a level that makes it possible to move very quickly as it relates to
accrediting new media research businesses. However, it is independent, not-for-profit, very thorough and provides what is required by our U.S. Congress to keep the industry from government
regulation.
Rather than going around the MRC, the industry should be reaching out to Congress to discuss its concerns. The JIC was never part of the original agreement.
In 2005 there were more Congressional hearings to discuss The Fair Ratings Act when Nielsen was being accused of undercounting minorities. In his opening statements, Hon. Conrad Burns, U.S.
Senator from Montana, made the comment “But I wonder what happens to voluntary cooperation once things get tough, or once Congress is not paying attention, as we are today.”
That’s an easy one, when things get tough and Congress isn’t paying attention, the industry does an end-around of what Congress originally decided.