Plans to measure newer outlets, such as the Internet and iPods, and to better gauge viewers’ engagement during commercials, will require stations to make adjustments, just as that have to the Local People Meter.
Broadcasters are bracing for another round of changes in the way TV’s audience is measured, as Nielsen prepares to unveil plans for measuring new distribution outlets such as the Internet and iPods. The company is also expected to say that it’s working on better ways to measure viewers’ engagement with TV advertising, information that could affect the price advertisers pay for TV time.
“Our clients are telling us they want to measure the video wherever it is, whether it’s on the TV or on the PC. Our clients want us to measure it and bring that measurement into the currency they use for buying and selling,ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€šÃ‚Â¿ says Catherine Herkovic, senior vice president of sales and marketing for Nielsen Media Research.
The coming changes in ratings methodology could be initially hard on stations. Many in the top ten markets experienced real financial pain as a result of the switch from diaries to Local People Meters (LPMs). Having come on-line four years ago, Boston stations largely have acclimated to the new system, but stations in Dallas, Detroit and Atlanta are just getting used to them.
“Adjusting to LPMs is tough for the first year and a half, especially because you have no historical data to compare your new results to,” says Larry Wert, president and general manager of NBC’s WMAQ in Chicago. “Then it becomes the new currency.”
In addition to forcing financial adjustments, the LPM has also required station managers to take a good, hard look at their program line-ups.
“Our news is doing as well as it was pre-People Meters and our first-run prime is doing well,ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€šÃ‚Â¿ says Vinnie Manzi, vice president and general manager of Tribune-owned WLVI-TV in Cambridge, Mass. “But where we get hurt is when we repeat prime. People Meters are quite punishing [when we don’t have] first-run primetime programming.”
Stations in early-adopter markets—Boston, New York, Chicago, Los Angeles and San Francisco—often found that they had purchased syndicated programming based on assumptions that ratings would remain at a certain level throughout their run. The stations didn’t anticipate that changing to LPMs would drop their ratings as much as 20%, and when they did, profit projections were suddenly way off the mark.
“There’s been a major adjustment in ratings [due to the LPMs],” says WLVI’s Manzi. “Some of these shows ended up not being as profitable as we first anticipated, but we can’t go back and renegotiate with the syndicators.”
Despite the anguish involved in the change, however, most managers agree that LPMs are the most effective way available to measure station ratings.
“With LPMs, you know exactly where you are on a daily basis with important demographics and that allows advertisers to be more exacting about whom they are reaching,” says Dave Davis, president and general manager of ABC-owned WABC in New York City. “Whatever efficiencies or errors that the LPMs have, there’s no contest when you compare them to people trying to remember on a Wednesday what their family watched on Saturday in the diary. LPMs are better for the advertisers and therefore they are better for us.”
While big-city stations already have gone through the change, more markets should prepare to be measured by local people meters, says Alan Picozzi, vice president, director of research for Petry Media Corp. “I expect that sometime this year, Nielsen will say that they are rolling out LPMs in the next five to 10 markets,” he says.
That doesn’t mean just bracing for them, but seeing what programming on other stations has held up under LPMs and what has fallen apart, and then tweaking schedules accordingly.
Nielsen’s view is that more information is better for everyone. “The fact that the People Meter data is all electronic, offering measurement 365 days a year, and the larger sample sizes give the buyer more confidence in the data,” Herkovic says. “To that degree, it really helps the stations in their businesses. They can show their clients that TV is the best-measured medium. Having a better measurement gives advertisers more confidence.”
And ultimately, that should give stations more confidence as well.