Zenith On Rentrak Move: Nielsen Is ‘Flawed’

Zenith Media today became the first national media buying agency to replace the Nielsen ratings that local TV buyers and sellers have negotiated with for generations in favor of using data from relative upstart Rentrak, a move that may signal an overhaul in the $16 billion spot TV ad market.

Zenith will use Rentrak for its local TV buys and will share that data with TV stations that don’t currently subscribe to Rentrak. Zenith is making the move away from Nielsen’s diary-based measurement to Rentrak’s passive TV viewing measurement from 14.5 million homes and 27 million set-top boxes, which provide demographic data on TV viewing as well as consumer characteristics.

“This is driven by a strong dissatisfaction with the current state of local TV [audience] measurement,” says Rob Jayson, chief data officer at Zenith. “There have been slow, incremental movements [at Nielsen] but on a system that is fundamentally flawed.”

He says that Rentrak’s data is more reliable than Nielsen’s local TV data, which in part is measured using diaries that require people to remember what they watched on TV.

“The fundamental of any trading business is the ability to trust that you’re getting what you pay for,” says Jayson. “We don’t have that.

“Rentrak is so much better because it has a huge user base,” he says. “That gives us a stable measurement. And, on top of that, in the future, we will be able to add in data like information on new car buyers and cell phone switchers. All that is possible with a giant sample size and specific household data.”

Rentrak is also considerably less expensive than Nielsen data, he says. Zenith for now will subscribe to both Rentrak and Nielsen data for an unspecified transition period.

“You have to realize how big we are,” says Bruce Goerlich, chief research officer at Rentrak. “We are on 14.5 million set-top boxes. We are in 98.8% of residential ZIP codes in the country.

“What that allows us to do is report our numbers on a very stable basis. Second, that enables us to get much more granular. And, third, it allows us to integrate other databases, which we call advanced demographics. So, you can look at what people own and create models of what they will probably buy.”

Nielsen did not respond to phone calls.

Rentrak has been making bold moves into Nielsen’s local TV business the past few years, including with some 350 TV stations signed on. That includes all the major network affiliates’ station groups, most recently with some of NBC Owned Television Stations signing on in August.