Nielsen is often criticized for its shortcomings in measuring TV audiences and set-top-box data has been promoted by some as a way to get more accurate viewing information. But in a new research report, analyst Todd Juenger of Sanford C. Bernstein points out the problems with set-top-box data and says it's unsuitable for creating a currency for buying and selling advertising.
Juenger is uniquely suited to make this argument because he spent five years selling set-top-box measurement while at TiVo. Rentrak now is a top competitor to Nielsen using set-top box data.
His main point is the set-top-box data measures only the programming cable, satellite and telcos deliver.
"Which means no OTT, no mobile, no tablets, no SVOD, not even VOD (Rentrak uses server data, not STB data, to capture VOD). Viewer migration to those platforms is the real measurement crisis — and STB cannot help. But Nielsen can," Juenger says in a new report. "Nielsen's answers are far from perfect, but they are by far the best available. While it's easy to criticize Nielsen, it's equally impossible to point to anyone (anywhere in the world) who is doing it better."
Juenger says that the main problem with Nielsen is the size of its panel. While statistically sound for measuring national TV, it isn't big enough to get good numbers for small networks and local markets. It is also subject to biases resulting from trying to form a representative sample and the rate at which panelist obey Nielsen's rules.
Set-top box data has other problems, Juenger says. It's not representative of the total population, it doesn't measure who in the room is watching, it often doesn't register whether the TV set is on or off, or whether the viewer has switched to an alternate device, like a Roku box.
Set top-box data also includes no over-the-air homes, which represent 10% to 15% of TV households.
At this point, not all cable operators provide set-top-box data to research companies like Rentrak. That too creates issues, particularly when carriage negotiations result in blackouts.
"In Rentrak's dataset, Fox News Channel audiences are 'zero' in Dish households, which represent a much bigger percentage of Rentrak's data than US population. So without any intervention, the national audience for Fox News Channel, as reported by a STB measurer that relies heavily on Dish, would be lower than it should be," Juenger says. "And the blackout on Fox News Channel doesn't only impact viewership of Fox News Channel. Many of those viewers are likely watching some other network instead, so once again, unless adjusted, many other networks will have reported viewership that is artificially high."
"We believe the increased complexity and fragmentation of consumer media consumption ultimately benefits Nielsen, because we see no other entity with the wherewithal to holistically track consumer media (and purchase) behavior," Juenger says.