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Television networks’ embrace of digital distribution models has sparked much conjecture about the potential repercussions for advertisers, television stations and, of course, the networks themselves.
But one company that is an integral part of the television industry has been overlooked amid the upheaval: Nielsen Media Research, the ratings company whose audience measurements have for decades served as the benchmark for advertising-supported television.
Nielsen, with billions of advertising dollars riding on the accuracy of its measurements, has tended to move at a glacial pace when changing technology. It took more than a decade, for example, to switch from written diaries to electronic meters to track its sample families’ television diets.
But the medium’s fragmentation and its rapid migration to a variety of platforms – from iPods and computer screens to mobile phones – has called for a more nimble response, and is posing particular challenges.
“No one else is doing it faster than Nielsen at the moment but they have to rise to the challenge,” says Jack Wakshlag, chief research officer for Turner Broadcasting System. “Others are entering the measurement field, including start-up companies such as erinMedia.”
As more data become available on cable and digital satellite set-top boxes, Mr Wakshlag says there is also the risk that those companies could begin to mine the data to develop their own audience measures.
Next month, Nielsen will begin a critical test of its future when it launches a set of national television ratings that takes into account programmes replayed on digital video recorders, such as TiVo. The technical hurdles have been formidable. Nielsen once made do with devices that checked what channel a television dial was tuned to. Yet its systems were completely overwhelmed by digital video recorders, such as TiVo, which allow viewers to watch programmes when they please, and to skip past commercials.
Time-sensitive advertisers, such as film studios, want to know not only if a particular programme was replayed, but when, and whether or not the viewer skipped over their commercial.
To solve the problem, Nielsen invested more than $10m in a new system, and overhauled the way it collects data. First, the company convinced television stations to coat their signals with distinct audio and video signals at their broadcast source. Nielsen’s new Active/Passive Meter picks up the code when the television is playing, and then cross-checks it against a database of programming schedules.
“This is a big milestone for us,” says Sara Erichson, Nielsen’s general manager of national services. “It’s a very significant technical challenge.”
For all its effort, the reception has been lukewarm. Some media buyers, such as Magna Global, have already said they will ignore the new DVR measurements, largely out of scepticism that DVR viewers actually watch the commercials. That prompted the six US broadcast networks to fight back, holding a press conference on Wednesday and using Nielsen data to argue that DVRs led to increased television viewing and advertising exposure.
Such debates are likely to grow louder and more complex as Nielsen attempts to measure video-on-demand viewing next year, and eventually tackles iPods, mobile phones and other devices.
“Our job,” Ms Erichson says, “ is to follow the programming wherever it goes.”
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