Nielsen Set to Let ClientsSample New System

Ratings giant hopes little black boxes hold key to fixing LPM troubles
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Nielsen is well along on an innovative upgrade in three markets of its local audience ratings system. The upgrade reportedly quadruples the market sample size it measures. The company is poised to give partner stations a peek at how its code readers—the smartphone- size boxes that are central to the new system—are working out.

While station clients have complained about Nielsen’s local people meters (LPMs) since their 2003 debut, local TV executives are cautiously optimistic the ratings upgrades will offer a clearer picture of how many people are actually watching a given show.

“It’s our hope that the sample becomes more stable,” said Mark Pimentel, president and general manager at Belo’s KMOV St. Louis. “It’s stations’ wish, and Nielsen’s stated goal, that these will cut out the fluctuations that occur.”

Nielsen announced its plans to install code readers last summer. The LPM markets of St. Louis, Dallas and Charlotte are the three test DMAs, with 1,200 code readers added to the existing 600 local people meters in each; set-top box data is the third component of the hybrid ratings. Those markets will be followed by the metered markets Nashville, Greenville (S.C.), Birmingham, Albuquerque and New Orleans at an unspecified date, followed by a dozen diary markets.

Nielsen plans to eventually roll out code readers in the remaining metered U.S. TV markets.

The readers are installed inside a home and pick up audio signals— “watermarks,” according to Nielsen—in the program content; data from the signals is then transmitted back to Nielsen. By marrying existing LPM data with code reader and set-top box data, Nielsen said it can offer a much clearer and more stable picture of what’s being watched.

“The objective is to dramatically increase the sample size and address the stability of the sample,” said Matt O’Grady, executive VP and managing director of local media at Nielsen. “We’re also building a foundation for measuring cross-platform viewing.”

O’Grady said Nielsen will share data from the code reader deployment with station clients in the test markets between April and June.

While grumbling about Nielsen is as old as the ratings service itself, station-level vitriol climbed to a feverish level when the LPMs were rolled out; one veteran general manager likened the ratings drop to going from Fahrenheit temperature readings to Celsius. Spencer Koch, VP and general manager at KTVI-KPLR St. Louis, said ratings suffered a 20-25% decline when LPMs came on board in the market in 2009. “We’re always hopeful for more sample,” Koch said of the code readers.

The rollout comes as Nielsen is getting increased competition from Rentrak, which has 214 stations signed up for its StationView Essentials ratings, compiled from set-top box data. But despite station managers’ concerns about their cost and reliability, Nielsen ratings remain the currency in which TV time is bought and sold.

Nielsen made news late last month with word that it plans to expand the realm of measured TV viewing to include, among other devices, laptops and iPads, starting this fall. Steve Lanzano, president and CEO of the trade association TVB (and former COO at ad agency MPG U.S.) called it “welcome news” for broadcasters. “Accurate audience measurement—wherever and whenever viewers are accessing programming— has always been a fundamental factor in valuing TV’s reach,” Lanzano said in a statement last week.

Nielsen hopes its code reader rollout is similarly embraced. The company has submitted the technology to the Media Ratings Council for review; a rep from the accreditation outfit said an audit is under way.

Concerns exist on the station side, including the cost of the code readers, which clients will absorb. Comments a Nielsen rep: “With more stable ratings and local insights and analytics, our clients will also be able to price their inventory in a more competitive way.”

Stations like the expanded sample size but note that deals are done based on demographic ratings. “A larger household sample smoothes out the ups and downs and daily swings,” said Joe Pomilla, president and GM of WSOC Charlotte. “But we need demographic data to reflect what goes on in the marketplace. It’s a step in the right direction, but I’m not completely sold.”

Nielsen said it can compute demographic data by employing “statistical probability based on known viewing” to "gure out who in the sample home is watching what. The station leaders are curious to see if Nielsen can pull off the tricky math. “We’ll test the data as the year goes on and see how it goes,” said Pimentel. “Show me it’s better and show me it makes the sample size more stable, and then I’ll buy into it.”

E-mail comments to mmalone@nbmedia.com and follow him on Twitter: @BCMikeMalone

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