Thursday, May 4, 2017

What is Nielsen thinking?

By Don Keith
For those who do not know, Nielsen is the company that dominates ratings measurement for television and radio. (They bought Arbitron several years ago, assuring both traditional media would be owned, lock, stock and barrel, by a single entity.)  And also know that accurate viewer and listener data is crucial, not only for stations, cable and satellite companies, advertisers, and program providers, but for consumers as well.  The shows you watch, the formats you hear, are determined by viewer and listener data. Heads roll based on minor swings in "the numbers." Careers are upended if a show drops in ratings or a personality on the radio does not beat the competition. But the products you are able to buy and how you hear about them is also determined by how successfully advertisers can reach their target audience.

All that explanation is to set up what I think is a major glitch in how Nielsen is trying to make their data more reliable. For TV, most rating info comes from a set-top box in each home, attached to TVs, that automatically measure what people watch. A bunch more viewing is measured by volunteers who keep a paper diary and write down what they see and when.  Something similar happens with radio. In bigger cities, a group of people volunteer to carry a small, beeper-like device that keeps track of what the person is hearing from radios. But a sizable number of towns still rely on the outmoded paper diary.  How "Twentieth Century!"

The problem is that these methodologies are expensive and it is becoming more and more difficult to recruit people willing to install the box on their TVs, carry the little meter, or, worse, write down all they see and listen to in a one-week diary. That is especially true of younger people, a valuable target audience to many marketers.

Data is more important than ever, and especially to under-siege media like over-the-air radio and TV, yet it is becoming more and more difficult for Nielsen to provide accurate information.  So what does Nielsen do?

They go out and spend over half a billion dollars to buy a company that has technology to gather data about radio listening in cars, unbeknownst to the car's owner and/or operator. I won't even go into the concerns I have about the privacy violations of such a scheme. I'm just amazed that the company is spending so much on something that will only duplicate the capabilities of the existing technology they already own, the little beeper-like device they picked up when they bought Arbitron.

I don't know all the ramifications, or the impetus for them to do the deal, but seems to me that Nielsen could have spent that half billion bucks on recruiting more folks to carry their beeper--which, by the way, measures radio and TV--and on increasing economy of scale in manufacturing the devices while improving that technology. And moving more markets away from the diary methodology.

But what is another half billion? Heads roll, careers end, products are not able to be properly marketed. But nobody can go to the other ratings provider.

There isn't one.