Facing tough competition and complaints from customers, Nielsen said it plans to dramatically increase the size of the sample it uses to measure TV viewership in local markets.
Nielsen also said its moves would build a foundation for cross-platform measurement of media on a local basis.
After years of operating as a monopoly, Nielsen's local ratings business has been challenged by Rentrak. Unlike Nielsen, which uses set-top meters and paper diaries from a sampling of viewers to extrapolate show many viewers are watching a station or program, Rentrak relies on data from a larger number of cable and satellite set-top boxes.
Last month, Sinclair Broadcast Group replaced Nielsen with Rentrak at four stations recently acquired from Four Points Media Group.
Rentrak says its local-TV measurement service has 165 station clients in 82 markets, up from 75 stations a year ago.
Nielsen says it will begin upgrading its local audience ratings in 20 introductory markets. It will employ a hybrid measurement methodology combining existing sample panels, new Code Reader technology and return path data from set top boxes.
Three of the markets to be upgraded in the fourth quarter -- St. Louis, Dallas and Charlotte -- use local people meters. Next to be upgraded are five set meter markets: Nashville, Greenville, Birmingham, Albuquerque and New Orleans. Nielsen says it will announce 12 diary markets to be upgraded shortly.
Nielsen says its upgrade effectively quadruples the sample size in local people meter and set meter markets and doubles the size in diary markets, resulting in more stable and projectable data.
"Our clients' priorities are clear: improved ratings stability and cross-platform measurement," Matt O'Grady, executive VP and managing director of Local Media at Nielsen, said in a statement. "Nielsen will dramatically increase sample sizes while maintaining the critical principle of market representation. Additionally, Nielsen has developed market leading computer, tablet, and smart phone meters to capture all viewers, all consumers, all segments. This will be the foundation for cross-platform measurement."
"We believe that the substantial sample size increase anticipated will be a big improvement for stabilizing ratings Jim Babb, executive VP and COO for Bahakel Communication said a part of Nielsen's announcement "The new ‘code reader' combined with set-top box return path data are a promising strategy for increasing sample sizes. We're pleased that Nielsen is taking the initiative both to improve its legacy TV ratings service while also investing in timely preparation for an emerging cross-platform media environment ahead."
"Nielsen's unique new metering technology, the code reader, shows true promise and will be a more reliable form of data collection than the current state of return path data, which has certain limitations in measuring viewers," Brad Adgate, senior VP and director of research at Horizon Media, added as part of Nielsen's announcement.
Nielsen says preliminary data will become available for the twenty introductory markets in 2013. All markets will have a parallel period of three to six months to evaluate, comment, and prepare for the new ratings while using the existing service. Rollouts across the 190 remaining markets are expected to be completed within approximately two years from gaining client acceptance in the introductory markets, according to Nielsen.