Media agencies are none too happy about Nielsen’s recent decision to yank its live local TV ratings beginning in January and replace them with estimates that embed time-shifted viewing from DVRs as the new local TV ad currency.
Agencies including GroupM and SMG are reportedly especially upset by the decision, because live audience ratings have been the basis of their negotiations with stations, and they have many deals extending into next year based on them.
RBR-TVBR got some off the record opinion from the buying-research community, and on the record from Nielsen, NBCU and Hearst:
“The decision they made really throws a wrench into the works. I’m furious. If you are unable to report two sets (Live and Live + Same Day) of overnights then you should have no business switching to Live + Same Day. Because if you switch to Live + Same Day you are declaring that the de facto currency – and that is up to each individual organization to decide,” was the complaint from the agency side.
We asked Nielsen spokesperson Gary Holmes to respond: “Going back to last June met extensively with hundreds of clients to discuss this issue and the clear signal from the industry as a whole was that live plus same data ratings better reflected the reality of how people watch television. We also received a very strong message that the local television industry did not want more data – that the amount of ratings data they are receiving now is the outer limit of what they can process and use.”
Nielsen can still report Live, but it will be placed in the system’s custom media toolbox. A buyer mentioned that if they want individual day ratings on Live, they may be charged extra (weekly-level data is included in the regular subscription).
Holmes disagreed: “We are offering the Live data for free – no charge to any local Nielsen client. Once a week we are posting an excel file that includes a live vs. live same day comparison so that clients can see the difference between the two streams and act accordingly.”
Just adding in DVR numbers was not acceptable on the national side, that’s why we have commercial minute ratings. “We would not accept pure time-shifted ratings because we know people fast-forward,” said a buyer.
However, Holmes notes that they are currently incapable of providing local commercial minutes because they cannot identify commercial minutes on cable systems, which vary from head-end to head-end.
And to add more to the mix, they are average quarter hour numbers, so at the very least, agencies say, you should be doing an average minute. “You have local people meters. They are also being used in the national people meter sample. So if they can calibrate them to report out average minute as part of national, I do not accept any argument as to why they needed the AQH in their respective local people meter market. The argument that I get is, ‘Well, we have to have a consistent method across markets..’ Well, if I’m buying New York, then it doesn’t matter that Peoria is diary-only and they have to go AQH…And they get the full quarter-hour credit for watching for 5 minutes or more. So you’re adding in DVR and 63% of all DVR playback occurs within the same day of the linear telecast. So they’re getting nearly two-thirds of DVR playback by just moving to live + same day. That’s a lot of credit without being able to account for the commercial fast-forwarding.”
“All that we want is the right measurement, I don’t think it’s one or the other,” NBC Local Media President of Commercial Operations/Platform Development Frank Comerford tells RBR-TVBR. “We’re trying to get as close to correct as possible. At one point one of our streams was Live + 7. Everyone realized that is not really a currency everybody wants to use. And Live + 3 — we don’t have commercial ratings which the network does (which would be great), but Nielsen can’t provide it. So the system…the way it works is that if you stop your TV for 24 seconds, you lose the day of ratings. And really, that’s not fair either. So we’re just looking for the most accurate measurement…and we think this is is pretty accurate. We’re just trying to do what’s right. I don’t want to exaggerate viewership and and i don’t want to underestimate it.”
Indeed, you have to be as realistic as you can as to the way television is consumed in today’s viewing environment. The DVR is a factor. If you don’t account for it on some level, you’re missing a lot of people. “But at the same time,” said a buyer, “you’re just adding things on—you’re decreasing accountability, not improving it.”
Comerford noted that he has spoken with numerous agency personnel and they have acknowledged that Live alone is not a correct measurement currency as well: “There is value besides live. One thing we should really remember is these are all estimates. Until we have a much bigger set top box sample, it’s going to be hard. This is a very difficult subject.”
Added Kathleen Keefe, SVP, Broadcast, Hearst Television: “Local television is the single most powerful advertising platform available anywhere in the United States. Live only ratings seriously understate the actual audience for both the programs and the commercials that air within these programs. Live plus same day ratings are much more reflective of actual viewing according to Nielsen’s own research, presented to the entire local community back in July.”
Now on the national TV marketplace, Nielsen makes more streams of data available to buyers and sellers, even though the standard currency for national is C3 (live average minute commercial ratings, + three days of time-shifted viewing) Why can’t they do the same with local going forward? “They say they have to produce all of this data for LPM markets and the infrastructure doesn’t have the capacity to do streams side-by-side. Well, then build it,” said one researcher.
“Again, the most important factor in this decision was that the majority of our clients do not want two data streams for the same day,” stressed Holmes. “They wanted the clarity of one data stream.”
The stations are Nielsen’s biggest client base, and some think that had a lot of influence in Nielsen’s decision. The stations want the biggest number possible to sell with. “And if we insist on staying with Live, they’re going to probably hit us up with CPP, and it will go up,” noted a buyer.
Indeed, many agencies fear these new numbers are going to raise local rates some 3%-5%. Comerford has his doubts on that: “It’s a liquid marketplace. The pricing is an agreement based on estimates. So this is not our intention. We’re looking for the right answer. Nielsen gave everybody months to talk this over–both diary and LPM markets. On the local point of view, Alan Wurtzel (NBCU President/TV Research and Media Development) and I talked about his today–this is not a scheme to raise prices. We’ve got enough other issues on the table. Supply and demand determines the marketplace. The threat of ‘Well, we’ll take the money out of the marketplace’ doesn’t make sense. You’ve got to do what’s right for your customers. And if it sells goods and services, that’s the right thing. We’re not really selling rating points.”
So what is the end result of this? What will the agencies do next to counter? “Maybe we should have a class action suit, but maybe that’s considered a collusion. I just feel that they’re caving in to the stations, who would not have any money if it weren’t for their advertisers. It’s not good to bite the hand that’s been feeding you.”
RBR-TVBR observation: Nielsen will be speaking to the AAAAs Media Policy Committee this Wednesday on the issue (11/18). A letter is likely to come out on this from the AAAAs, but they will likely word it with care. As mentioned above, if all the agencies come out in unison and throw out an ultimatum, it could be grounds for an antitrust case. Worse-case scenario for local TV: more dollars will go to local digital.
