DMA 116 becomes the first market where all the broadcast network affiliates have dropped the ratings service and replaced it with qualitative research and smart sales promotion. The stations say the new information, which includes lifestyle data about consumer shopping and spending habits, is far more useful, especially when pitching local advertisers.
Do TV stations really need Nielsen ratings to sell local ads?
From Peoria, Ill., the quintessential heartland market, comes a clear no.
The two commercial broadcasters that run all the major broadcast network affiliates in DMA 116 have dropped the service and replaced it with qualitative research and smart sales promotion.
Nexstar Broadcasting’s CBS affiliate WMBD, which also manages Fox affiliate WYZZ for Sinclair, jettisoned Nielsen three years ago as part of Nexstar’s group-wide decision to go without.
Then, making it unanimous in Peoria, Granite allowed its contract with Nielsen to lapse at the end of May. Granite owns NBC affiliate WEEK and manages ABC affiliate WHOI as well as MNT affiliate WAOE for other owners. WHOI carries CW on a digital subchannel.
“There are no longer any commercial stations in the market subscribing to Nielsen,” says Mark DeSantis, general manager of WEEK and its companion outlets, who attributes the move only partly to cost-cutting. “Obviously, the expense of Nielsen is significant. But there are other services out there, which supply qualitative as well as quantitative research.”
Nielsen confirmed that Peoria is now the only TV market other than the four smallest where it has no commercial broadcast TV subscribers.
Nielsen will keep gathering audience data in Peoria and providing it to its remaining clients, PBS station WTVP and the local cable operator, Comcast Spotlight, says Nielsen spokeswoman Karen Gyimesi.
“We hope that Granite will eventually return as a client,” she says. “Our TV diary service in Peoria is the most reasonably priced and most accurate measurement tool available today for a market of their size.
“Nielsen also provides our local clients with a better understanding of the demographics of the marketplace, as well as … enormous experience and expertise on how consumers use the Internet and mobile devices, and how much they spend on package goods,” Gyimesi says.
But WEEK’s DeSantis is unconvinced by such talk. Long the dominant news station in Peoria, “we’re already over-indexed for NBC,” he says. “Therefore, qualitative data is far more useful than quantitative data from Nielsen. It’s especially helpful when pitching local advertisers.”
According to DeSantis, WEEK and its sister stations now rely chiefly on data from Media Audit, which correlates the TV viewing and buying habits of local residents by surveying them.
“Media Audit has a much bigger sample than Nielsen,” DeSantis says. “They also ask a series of lifestyle questions about consumer shopping habits and predisposition to buy certain products.”
In addition to Media Audit, Granite uses Local Insight Media for research on viewers of news,” says DeSantis.
Media Audit has become the de facto standard in Peoria, DeSantis says. “Our main newspaper, The Peoria Journal Star, uses Media Audit to create sales promotions,” says DeSantis, “And so do our competitors at Nexstar/Sinclair.”
Indeed, they do, says WMBD-WYZZ General Manager Coby Cooper. “Media Audit goes to market each year with over 900 surveys compared to 600 for Nielsen. As a result, we get data that really drills down on local consumer purchases for the coming year.”
Cooper says he supplements the Media Audit data with that of Experian’s Simmons.
WMBD-WYZZ uses the qualitative data to create highly targeted proposals for specific clients. “We’ve had a lot of success with local retailers, especially furniture and electronics stores,” Cooper says. “Even in a difficult economy, these retailers are hungry to tie their advertising to fresh data about planned purchases.”
One successful promotion involves originating nightly WMBD-WYZZ newscasts from outlying towns. “This lets us work with local advertisers to support small communities, says Cooper. “We’ve grown from four communities to about 17 per year.”
Cooper traces his enthusiasm for such promotions to his background in creative services — and to a mandate from Nexstar CEO Perry Sook.
“Ideas are the new currency,” Sook says.
Sook tries to get his local sales teams to understand that customers are interested only in what makes their cash register ring.
“In 25 years of selling, I’ve never walked into a dealership with a winning ratings book and seen a client crash through the office furniture to buy airtime. What they do is say, ‘That’s nice, but I’ve got 20 trucks to sell this weekend.'”
According to Sook, Nexstar stations have been dropping Nielsen as their contracts have come up for renewal. “Some of our stations have not had Nielsen for over five years.”
Sook says that the combined cost of Nielsen ratings for all Nexstar stations “was in the several-million-dollar range.”
According to Sook, none of the Nexstar stations have suffered from the group’s decision. “We have not lost ground at any of the stations where we get audited for … our linear rank in billing or market revenue,” says Sook. “In fact, we’ve gained ground in most markets.”
At WEEK-WHOI, shifting focus from traditional ratings to consumer spending data “has been an amazing eye-opening experience for our account executives,” DeSantis says. “You can fashion that data into a presentation that shows that a target audience is watching a specific show.”
TV stations have long complained about the local Nielsen ratings, even those in large markets where electronic local people meters have replaced the much-maligned diaries, in which viewers must jot down what show they watch.
“I think Peoria’s got the right idea, says one veteran sales manager of a Los Angeles station, speaking on condition of anonymity. “How can it be that no young females watch Law & Order or CBS sitcoms?”
This same executive believes that traditional ratings are not a useful measure of smaller demographic groups. “Ad rates should be based on actual numbers of viewers. When you see fractional ratings like 0.2 or 0.3, it creates a psychological barrier for the client.”
Gyimesi says Nielsen tries to be responsive to the complaints. In Los Angeles, she says, it is increasing its sample size from 800 to 1,000 households.
“We are always making enhancements to our service, especially to improve representation of smaller demographics that may be more difficult to recruit,” she says.
But it remains to be seen whether Nielsen can enhance its services fast enough to meet the needs of stations increasingly focused on building new models for local sales.
“Right now, 80 percent of our business is local,” says Nexstar’s Sook. “In a couple of years, it will be 85 percent. We need to think of national business as gravy, but generating new local business across all platforms is the main course.
“If you’re not focused on making a living in your own market, you’re going to have a tough road.”