Nielsen’s Local Ratings To Get Set-Top Boost

Nielsen is not promising to do away with the often-maligned diaries that it uses to count viewers and provide demographics information about viewers of TV stations outside the top 25 markets. But it hopes to make them better by incorporating set-top box data from Charter and DirecTV.

In this interview with TVNewsCheck Editor Harry A. Jessell, Steve Hasker, Nielsen’s president of media product leadership, talks about the ongoing effort to improve the “fidelity” and “consistency” of the ratings most stations use to sell advertising and well as Nielsen intention to stay above the fray over the best measure of local broadcasting — live-only or live-plus-same-day ratings.

An edited transcript:

What’s the plan for improving ratings for TV stations?

What we have done is strike a deal with Charter and DirecTV to incorporate their set-top box data into our local television audience measurement ratings. We have done a proof of concept with one of those data sources in three markets — a set meter market, an LPM market and a diary market to prove to the industry and to our clients and ourselves that we can incorporate set-top box data with our own electronic measurements to significantly enhance the fidelity of the ratings, the granularity of the ratings and the consistency and quality of the ratings in those markets.

We have taken that out to our clients, shared it with anyone who is interested and incorporated their feedback. So that’s our plan. We are investing a lot of time and energy and resources in terms of manpower and finances in incorporating that set-top box data. But we won’t do anything without the support of the industry and the MRC [Media Rating Council.] So, far be it from me to declare the date on which this will happen and what it will look like because that would be dismissive of our most important constituents here.

Can you give me any kind of a time frame on when we will see something concrete?

I can’t give you a specific date other than that we will be looking to incorporate the set-top box data from those sources into our local ratings in a larger number of markets in 2012, taking it out to our clients, helping them understand how they can use it and gauging their feedback.

What is the prospect for getting away from the diaries for demos?

There are other options for the demos. The one that we tested in the proof of concept was using the people-meter data. We have also done some research into using mobile and electronic demographic information; and last, but not least, we have done some research in incorporating some of the other demographic sources that we have.

So there are real alternatives that we have tested that we are getting increasingly comfortable with. What we haven’t done is productionalized it yet and gotten that in front of our clients, which is why I am hesitant to promise anything.

So you have two parallel paths here. One is to enhance the data that we have today with the set-top box data. The other is to look for an alternative means for collecting basic demo data in markets outside the top 25.

Yes. That’s right.

Could you just elaborate a little bit on the mobile and electronic technology you’re looking at?

We have done quite a lot of work in this space. We have an on-[mobile] device metering capability. We have very, very significant online metering capabilities. In deploying both of those technologies, we have large and robust panels in place today. So we would envisage being able to use both those panels and supplement them when necessary.

At the TVB conference in September, you stated emphatically that you would not be creating C3 [commercial, live-plus-three-day] ratings for local. Why not?

I stated emphatically that we don’t have any plans to do so. The reason is pretty simple. Our clients are not asking us to do it, firstly. Secondly,  we currently don’t have the capabilities to get the local television commercials encoded.

Some in the room thought that the underlying message was that the media agencies ought to adopt live-plus-same-day because C3 was just never going to happen. Was that your intention?

No. I think the question was, which was a better approximation of C3? Was it live or live-plus-same-day? As we get more and more data on that question, we will be very transparent and show it to all players in the industry. Today, the data is not declarative either way. We will show some third-quarter data as soon as it’s ready and then we will update it a couple of times in the forth quarter to show people what the relationship is between live and live-plus-same-day and how that compares to C3.

But, according to the people I talked to, the takeaway was that you were trying to send a message that because C3 isn’t happening media agencies should be looking at a live-plus-same day.

Today, we provide live and live-plus-same-day, and it’s up to the buyers and sellers of television advertising to figure out which one they want to use, which they’re currently doing.

About a year-and-a-half ago, you came out with live-plus-same-day and you offered that up as the one and only currency for local, but then you retreated. Was that because of the blowback from the media agencies?

We certainly went to the position that I think makes the most sense, which is to put both of the datastreams into the marketplace and allow the buyers and sellers to decide which ones they want to use.

So you’re going to be Switzerland in this whole thing and not endorse one over the other?

As a research firm, I don’t think we should be endorsing one over the other.

How is business among the local broadcasters? Nexstar a few years ago publicly decided it was going to try to get along without Nielsen. Has your station client base been eroding some?

Not in any significant way, no. We recognize that there’s a limit to the value of panel-only data, particularly as audiences fragment across channels and across viewing occasions and increasingly across devices. We recognize that the reach and granularity that comes from panel-only data gets close to or beyond its limit, which is why we’re so aggressively pursuing other data sources such as set-top box.

Rentrak has been going after stations with ratings based on set-top box data. Do you consider Rentrak and some of these other set-top box purveyors a serious threat to your business?

Rather than have me talk specifically about Rentrak, let me just make a few comments about set-top box data. The value of it is pretty obvious, which is that homes have set-top boxes, the infrastructure is in place to collect, transmit and process return path data. It has some value because it’s able to show viewing and audience behavior deep into the channel lineup. So in a very fragmented environment, it will pick up more and more of that viewing. So that’s very helpful.

But there are also a few problems with set-top box data, which to date has rendered it more of an analytic product rather than a ratings product and one of those is the absence of demographics. Another one of those is the fact that no single set-top box data provider is representative of the U.S. population or representative of one market in which they operate. Another is the fact that most Americans switch off the TV set, but not the set-top box, when they go to bed at night.

You’re right. My set-top box is on all the time.

So is mine. I think you and I are pretty much the same as everyone else. I don’t know many people who shut down a set-top box, particularly people who have a DVR capability because, if you turn off a set-top box, the DVR will turn itself off as well and you’re going to be very disappointed when you get home from work and you realize that your programs haven’t been recorded.

But there must be ways around that.

Right. Our measurement scientists have a number of ways that they have proven. In our proof of concept, we proved that we can use set-top box data to supplement and enhance the ratings and overcome those three pretty major impediments.