• by Joe Mandese  @mp_joemandese, May 19, 2008

George Ivie: The MRC was seeking to clearly document certain rules related to our auditing/accreditation process through the Voluntary Code of Conduct (VCOC). The VCOC contains guidance for participating measurement services and our members in the form of definitions of key MRC-related terms, general principles, interaction guidelines and many other details.

The need for the VCOC became clear during 2004 and 2005 when the MRC was interacting with the U.S. government related to the rollout of local people meter services by Nielsen. At that time, government representatives asked us many questions about how the MRC, its members and measurement services interact under various conditions. While we were able to answer these questions and our general process was documented, we realized that clearer documentation of some of these matters would be helpful. We committed to write the VCOC to the U.S. Senate Commerce Committee and the FTC during 2005, and a final draft was supplied to the U.S. Department of Justice in November 2005.

When we were formed in 1963, the U.S. Department of Justice reviewed and signed off on the processes and procedures of the Broadcast Rating Council (now called the Media Rating Council). At that time, the Department of Justice agreed to take no anti-trust action against the BRC or its members as long as we followed our documented processes in assessing and accrediting measurement services. When the VCOC was completed, we wanted to ensure that the code did not endanger that status. We therefore submitted the VCOC to Justice Department review.

In general, the Department of Justice does not undertake re-reviews of unchanged business processes, so they focused only on areas of the VCOC which were identified as new operating rules. The section of the VCOC related to conversion of "currency" services (which had not happened very often prior to recent years) was identified as new and therefore subject to Department of Justice review. Their recent conclusion to take no antitrust action was focused on this conversion language.

The Department of Justice review took over two years to complete, and was a very thorough look at the MRC process. We believe this review reaffirms our Industry role, in the context of the new VCOC, for the years to come.

MDN: Who has signed the voluntary code of conduct to date? More importantly, who has not?

Ivie: Now that the Department of Justice has indicated that it plans to take no antitrust actions when we implement the Voluntary Code of Conduct, we will be asking our board of directors and the measurement services that participate in our process to adopt the code. This process should be fairly uneventful, since almost all of our members and the measurement services had already provided an indication that the code was generally acceptable, shortly before it was submitted to the Department of Justice.

MDN: Weren't these steps in direct response to Nielsen's repeated nose-thumbing--its continual bypassing of the MRC process when launching or significantly modifying "currency" ratings services? And how realistically do you think this will rein them in?

Ivie: Nielsen participates fully and supports the MRC process and seeks MRC accreditation for products where accreditation is consistently requested by its individual customers. Additionally, when our organization was formed in the 1960s, Nielsen committed to participate in the accreditation process to the government. However, it is true that in the period leading up to the proposal of the VCOC Nielsen was implementing local people meter markets--for example, in Philadelphia--without completion of an MRC audit and committee review. Essentially, this did not allow the free marketplace to understand compliance with MRC minimum standards and the presence or absence of our accreditation prior to commercialization; this situation led to the currency conversion section of our VCOC.

I believe the MRC participating measurement services will comply with the VCOC. During development of the VCOC, we met many times and had a substantial dialogue with our members and measurement services to ensure there would be no surprises. We believe that compliance with the VCOC is one active method for measurement services to prevent government intervention in our industry. Currency provider positions have yet to be established for Internet, mobile and out-of-home media. MRC is not currently performing audits in these areas. It's important that I reaffirm: Participation in the entire MRC process is voluntary.

Specifically related to Nielsen, [CEO] Susan Whiting voiced support for the VCOC and the MRC accreditation process many times in testimony to the U.S. Senate. In the case of commercial ratings for television, the MRC has not interpreted this change as a currency conversion. However, the MRC and our members did seek accreditation of the components of the commercial ratings products with urgency, including the commercial identification processes supported by other divisions/services.

MDN: Without singling out any particular media ratings service, some big players seem to be pushing the envelope on accepted industry methodologies, especially data integration and so-called "fusion" products that might fall into the "buyer beware" category. What is the MRC's position, and role in helping the industry vet these services?

Ivie: Several years ago, the MRC developed a set of guidelines for interpreting how we will apply the MRC minimum standards in the audit/accreditation of a data-integration or fusion products. These guidelines are posted on our Web site at www.mediaratingcouncil.org. We are seeking to assess, audit and potentially accredit these integration or fusion products, especially as they relate to accredited measurement services. Even in the case where non-accredited products are used as a data source (for example, Nielsen Online, which is not yet accredited), we believe MRC involvement will be valuable to the industry because of the full disclosures, process verification and methodological study driven by the audit process. However, we don't think we can accredit an integration or fusion application unless the underlying data sources are accredited.

Bottom line: we are seeking volunteers.

MDN: What about Nielsen's unprecedented plans to test a new "integrated" TV and online methodology on its live national TV ratings sample this fall? Is that a problem? Have they been working with the MRC on the potential impact on the national TV ratings currency?

Ivie: Nielsen has committed to submit its TV/Internet integration test plan to MRC review, since it potentially impacts Nielsen's accredited national service.

While this test has received quite a bit of marketplace attention, approving such testing is a fairly common request of the MRC from the measurement services we work with (although such testing has not previously occurred in Nielsen's national service). In fact, the MRC has a specific section of the minimum standards that outlines the process of approval of "live" testing in accredited products. Obviously, the MRC seeks to understand the testing and ensure that the risk of distorting production audience estimates from such testing is minimized.

MDN: Where do things stand vis-a-vis auditing and accrediting Nielsen's Monitor-Plus service as an underpinning of its commercial ratings? And aren't we, in effect, operating without an accredited national TV ratings service where the C3 ratings are concerned?

Ivie: The components of the Monitor-Plus service that feed the national commercial ratings process have been submitted to MRC audit. These components only include identification of the presence of commercial seconds within a minute for each minute of programming. No specific marketer information has been audited, nor are "local" processes being audited. Also, the specific definition of a commercial is set by Nielsen and its customers. The MRC merely sees that this definition is being executed in a manner that meets MRC minimum standards and performance criteria. The accreditation process for C3 ratings, including the Monitor-Plus process, is ongoing.

MDN: What are the implications for the digital broadcast transition in February 2009? Nielsen already has laid out some steps, including an unprecedented rollback of the February sweep to March. But it also acknowledged that it's still working on a plan to deal with disruption and dislocation that might occur among a substantial part of the broadcast TV household universe.

Ivie: The MRC has established an internal task force to assist our members and measurement services to prepare for the digital transition. Our role is focused on seeking to ensure that measurement services maintain measurement and measurement quality during this transition. Our task force has met and will be seeking plans and actions from measurement services to further that role.

MDN: Where do things stand vis a vis online ratings services? What's the progress of the comScore and Nielsen Online audits, and might we see an accreditation of one or both of these services any time soon?

Ivie: Both comScore Media Metrix and Nielsen Online have been progressing through our audit process. Each organization is working through at a different pace based on resource availability and audit scope specifics. Additionally, we have established a research plan and we are working through research and methodological studies with both organizations (individually) to support and test the efficacy of certain unique processes that we haven't seen before.

These are complex and lengthy audits. We are less than halfway through the audit process for either organization. The MRC audit committees will play a significant role in assessing both the audit information and the research studies in the accreditation process. These are very interesting, learning and ground-breaking procedures for MRC. They are also significant investments for comScore and Nielsen.

These audits and study plans have been designed to allow the MRC to make accreditation decisions for each product, so this isn't only the world of "theory."

MDN: What about third-party Web analytics services like Quantcast, Alexa, Compete, Google Analytics, etc. Any developments there?

Ivie: To the extent these organizations intend to comply with IAB guidelines, MRC Standards and seek industry validation for their approaches, we would welcome audit/accreditation discussions. We have talked to a couple of these organizations.

MDN: Any other pressing online measurement issues?

Ivie: We are actively working with the IAB and the MRC accredited Internet publishers and ad servers to reconcile and understand why counting differences come about between various census-based Internet measurement approaches--specifically, ad-server versus publisher counts. We have plans to extend this to reconciling census versus sample-based counting differences (within sampling error margin), when the sample-based organizations (such as comScore and Nielsen Online) have progressed far enough through the accreditation process.

We are working to help educate our members about online measurement. We recently held a member education course on this subject, and we have two MRC staff papers on this topic posted on our Web site (see "Education" at www.mediaratingcouncil.org). Due to the demand for this type of information, we are considering a public release of our member education material in this area.

We are pursuing additional measurement guidelines with IAB in the areas of click measurement and audience reach measurement (i.e., "uniques," time spent and sessions).

MDN: Can you help clarify the role of the MRC vs. some other industry authorities that have undertaken the role of auditing and certifying various ratings or ratings-related products? The Interactive Advertising Bureau, The Audit Bureau of Circulations, and the BPA all have forms of auditing or certification that might confuse some people with the role of the MRC. Can you help clarify this?

Ivie: Most importantly, I'm not an expert in the operations of these organizations, so my answer may be incomplete.

To my knowledge, the Interactive Advertising Bureau does not perform auditing or certification. They do track organizations that are audited and that successfully achieve compliance with the IAB measurement guidelines through third-party auditors. Also, you may be aware that the MRC has partnered with IAB to assist in writing Internet measurement guidelines (ad-impressions, broadband video commercials, rich media and rich Internet applications have been released so far). We help facilitate and author the guidelines, and the IAB staff and IAB membership help challenge the completeness and technical accuracy of the guidelines. In this way the MRC provides multi-partite perspective into the measurement requirements. The IAB has played a very positive role in encouraging auditing and accountability in the interactive area.

I am aware of the ABC and BPA who serve the Industry in various audit capacities. These are sizable multi-partite audit organizations that have a long history of serving their members, similar to the MRC. I believe the MRC audit process is unique in that it involves close scrutiny from our members who are exposed to audit details and reports, attend audit review meetings and who participate in the actual accreditation decisions. Additionally, the MRC is required to use independent [certified public accounting] firms for the foundation of our audit process.

The MRC's focus has historically been on accrediting audience measurement products. However, for the Internet the MRC audits both audience measurement and census measurement products.

The MRC does not audit circulation of print vehicles. Both the ABC and BPA perform Internet audits of census measurement.

MDN: There's been a lot of activity in what might be called the "back office" of the media business: data processing systems that advertisers and agencies utilize to plan, buy, pay and post their advertising buys with media. Donovan Data Systems is reinventing its systems to deal with the shift from analog to digital media, and new players like MediaBank and Mediaplex are building new ones from scratch. Is there a role for the MRC in helping the industry assess these competing services?

Ivie: We have approached many of these organizations to submit to audit, and in fact a couple of these organizations have been audited and are now accredited (ACT1 and SNAP--see MRC Web site). Our view is that measurement service data is summarized, accumulated and sometimes modeled and changed by these organizations, and some components of the MRC process should be extended to major third-party processors. Obviously, these reporting organizations don't perform sampling or other measurement functions, so the full audit criteria would not apply.

Again--we are seeking volunteers.

Many measurement service-based audience data reporting tools, such as Maximi$er (Arbitron), MEMRI (MRI), Navigator (Nielsen), etc., have been audited and accredited.

MDN: Following an extensive auditing process, the MRC recently denied Arbitron accreditation for its portable people meter (PPM) ratings system. Is that the last word? What might be the next material development? And how does that impact Arbitron's ability to deploy the system?

Ivie: To be clear, Arbitron has achieved accreditation of its Houston PPM service for average quarter hour, monthly radio data and television time period (i.e., not program-specific) data. In New York and Philadelphia, the PPM services using the "radio first" methodology, Arbitron continues to actively seek accreditation, and these markets are being re-audited.

The MRC does not seek to block the implementation of new measurement technologies or methods. As noted in the VCOC--at minimum, a new currency product (replacing an existing accredited currency product) should have an audit, disclosure of impact data and MRC audit committee review prior to commercial deployment. The VCOC also states that the MRC prefers that accreditation is maintained on an uninterrupted basis in currency conversion situations because of the reliance placed on accreditation by the marketplace.

MDN: TNS Research recently unveiled a major deal to provide a "census"-based ratings service from 100,000 of DirecTV's digital set-top subscribers. Google has an agreement with EchoStar for similar data. TRA is working with cable operators. The cable industry, meanwhile, if formulating its own initiative: Project Canoe. Nielsen is dabbling with DigitalPlus. TiVo has an ongoing service. What's the future of census-based ratings, and what is the MRC's role in developing it?

Ivie: We already audit and accredit certain census measurements in the Internet. We stand prepared to work with these technologies in an accreditation process. This determination is in the hands of customers who can request the MRC's involvement and a commitment by these services to be audited.

MDN: What's the next most important thing you think the MRC will tackle?

Ivie: Here are a few items we see as "on-deck:"

We have our sights set on assisting the mobile and gaming industries to write measurement guidelines, similar to how we assisted the IAB for Internet metrics. We hope this will help set and demonstrate measurement quality in these areas. Also, we are seeking to get more involved in out-of-home audience measurements, including outdoor.

We are looking to promote a wider and deeper understanding of standard errors and the variability associated with audience measurements. We will be driving more focused attention by measurement services in this area in the coming months.

Last, but certainly not least, we have been actively seeking more marketer members of MRC. We believe these voices are valuable additions to strengthen the buyer-side share of voice in our process.