TV News in a Postmodern World

TV's Measurement Conundrum

by Terry L. Heaton
I played the 5-string banjo in a bluegrass band with my two brothers in the early 1960s. We were mighty good for a group of teenage boys from Grand Rapids, Michigan. We played on TV every Friday morning and at hootenannies all over the upper midwest. (A hootenanny, for those under 30, was a folk music gathering — usually outdoors — where people got together to celebrate the music and do what young people do.) I especially enjoyed playing in the coffee houses on college campuses back then. It was an appreciative audience, and we really connected with them. So it is with any band. How often have you heard the saying that there's nothing like playing in front of a live audience.

In a theatre, coffeehouse or festival, you know who your audience is, because you can see them and hear them. It creates a kind of connection that transcends senses, and whether you're up, down or indifferent, that connection produces a reason for being. It is to them and for them that you're performing.

In a similar way, the size and make-up of the audience is critical to the mass media/mass marketing world, for any top-down information or entertainment entity must know who is paying attention. It's how the Modernist world works. Value is determined by who is connecting, or more precisely, how many are connecting. The bigger the audience, the more money one can charge for the performance. Moreover, it's extremely important that the audience measurement data be provided by the media entity, for command and control in today's mass media world includes the ability to set one's own value, and that means having a say in how the audience is measured and reported.

All of that is changing. Disruptive innovations in media and technology are gutting the ability of institutions to set their own value, and it is an amazing thing to watch. This is at the core of what the RIAA (Recording Industry Association of America) is fighting for in its war with its own customers. It's a lesson in Postmodern economics, and — absent interference — the consumers will ultimately win. The RIAA thinks we should gladly pay $18 for a CD, which is mainly homogenized noise with one hit tune. Technology is allowing consumers to set the price of recorded music, which is now between 80-99 cents a song. More and more artists are selling their music directly to consumers via the Internet, and the RIAA is, well, screwed.

The same thing is happening in the world of television. The benchmark for TV ratings is the data provided by the Nielsen Media Research. They developed a system for measuring viewing in the early 1960s that served the industry well until recent complaints by advertisers. Arbitron used to provide an alternative to the Nielsen's, and that often meant very different outcomes, especially at the local level. TV stations had to "subscribe" to both services, because they would always show up better in one book than the other, and that, then, became the vehicle by which stations based their advertising rates. Arbitron dropped out of the business in 1993 to concentrate on radio stations, and Nielsen has monopolized the world of television ratings ever since.

Nielsen Ratings statistics are gathered in two ways: one is by extensive use of surveys (diaries), where viewers in various demographics are asked to report what television shows they watch at what times. The other is by the use of a limited number of Nielsen Meters, small computers hooked up to a television in a home, which electronically record its activities.

It's important to note that it is the TV industry, not the advertising industry, that foots the bill for Nielsen, because it plays a critical role in broadcasting's ability to set its own value. Nielsen charges ad agencies a token to receive full reports, but the sale of television advertising time has always been in the hands of TV station sales departments, who are armed with their spin on data that the station, in essence, pays Nielsen to provide.

But increasing pressure from the people who actually pay the bills — the advertisers — and new technologies provided by the Internet that offer a powerful bang for the advertising buck have put Nielsen on the defensive and the whole television industry on notice that the status quo isn't going to be around much longer.

Earlier this year, ad agency owner, Kathy Sharp, wrote a challenge to contemporaries in the form of an op-ed piece in Media Daily News, wherein she noted the blue smoke and mirrors of Nielsen.

For us, the industry dubbed the "Myth Makers" actually has depended on some very complex and intricate myths as we have built our multi-billion-dollar myth-making industry.

Did Nielsen ever offer more than a gross proxy for the real television audience? No, but that was okay, as long as that stand-in was big and growing (and the one with the most buying power). Were media planners ever blind to the implications of magazines inflating circulation numbers with cheap subscription drives? Even in the days of the two-martini lunch, everyone knew that the value of the impression had to decline. It's just that nobody much cared to do anything about it. Certainly, nobody from the agencies would; and even advertisers blithely ignored it because there was no alternative to TV other than print. Those four-color spreads were so beautiful.

The naked truth is that the foundation is not cracking — it was simply never there. It was just a series of shared beliefs, like a religion, or a culture. And, yeah, there was a basis for it — a methodology, even a rationale. But it wasn't reality.

These are breathtakingly honest words from a person who ought to know. Ms. Sharp went on to charge the advertising industry with living in denial and encouraged them to let consumers take the lead in determining the evolution of their industry. Moreover, she wrote, it's wrong to blame Nielsen for the current conundrum.
We all lived and thrived with the illusion together. It's callow of us to throw blame elsewhere now—just when "suddenly" the reality doesn't match our needs to justify the investment of millions of dollars in television advertising—that we begin to doubt its validity.
Instead, she encouraged everyone to look to the Internet as an advertising medium, because it is forced to live in reality every day. This is something advertisers are doing with regularity, as every recent accounting finds an unmistakable shift of advertising money from network TV to the Web. Reality, not myth, is where it's at these days.

And the reality for TV is that people just aren't watching commercials anymore. Research by TiVo, the DVR pioneer, shows that 70% of users zap through commercials using the technology offered to them. It's an issue of time. Nearly one-third of prime time is taken by commercials and promotional announcements. Those who don't have the luxury of killing the commercials use commercial breaks to channel surf — sometimes coming back to the original program, sometimes not. You can also call Aunt Mary, use the bathroom, or make a sandwich during the 3-minute (or more) interruption. The response to this has been to place products within the programs or to clutter the screen with those annoying pop-up animations that promote upcoming programs.

This has not gone unnoticed at Nielsen. The company has struck a deal with TiVo to provide ratings for what it calls "time-shifted programming." The plan is to report that data one week later, which effectively kills the idea of overnight ratings. The concept isn't going over very well with television executives and even less so with advertising agencies, who smell another myth in the making.

What the ad industry really wants is minute-by-minute data, and that's the last thing the networks really want to see. Nielsen meters already are capable of providing such data, but it dares not go near it. Jim Meskauskas, Chief Strategic Officer of Underscore Marketing in New York, writes in a MediaPost article, "Why Nielsen Should Be Making New Friends Or Shaking In Its Boots," that the value of minute-by-minute data would revolutionize television advertising.

Agencies are right to ask Nielsen to provide minute-by-minute ratings. It's what smart media planning has always wanted and deserved but, until now, been unable to get at and ultimately resigned to receiving less. So in the mean time, agencies like Starcom are providing themselves with this information. Nielsen better hope agencies don't get too used to that.

It is no surprise that Nielsen is going to stall on providing this level of information. As many of you know, Nielsen has as much to gain from maintaining the status quo in television ratings methodology as do the networks. After all, the networks pay more for Nielsen ratings data than all advertising agencies do combined.

Neither Nielsen nor the networks, want us to open the door on minute-by-minute ratings and let in that cool breeze. No one in the room is wearing any clothes after all.

Such data IS available in the Internet advertising paradigm, and it's one of the reasons advertisers are moving their money there. The ability of the Net to target very specific users and engage them with creative ads is light years beyond what television has ever been able to provide. Bigger isn't better in the new world. What's better is the ability to find people predisposed to certain products.

I enjoy a British Tabloid called The Register and read it online daily. They recently carried a cute story about Dasani water, a product of Coca-Cola. On the page — right next to the story — appeared a Google ad for companies that deal in Coca-Cola products. During the holiday season, I was reading an article on the Website of the Cleveland Plain Dealer. At the bottom of the page was an ad for the Nashville Rescue Mission. I live in Nashville. These are the types of things about contextual advertising that have the ad industry moving dollars to the Internet.

The Net will never entirely render television advertising obsolete. TV — especially at the local level — is still the best way for advertisers to reach a mass audience. But if it is to continue in that role, TV has to change its perspective, and it begins with listening to viewers. When people say there are too many commercials, we ought to hear what they're saying. When people say a commercial break is an invitation to channel surf, we ought to be listening. When people tell us they don't have time to devote an hour a night to commercial interruptions, we ought to pay attention. Cutting back the number of spots may seem suicidal in the short run, but it could have a long-term, positive impact on viewers and the advertisers themselves. Should advertisers pay a premium for this? I think they should — and would. The enemy is what's happening on the minute-to-minute level, and attacking that — not running from it — is the best hope for the future.

Where we can, we need to take advantage of the enormous resource of the Internet. A recent Magid survey found that offline brand does indeed matter online, especially with news organizations. We should be exploiting that brand to its fullest and reaping the advertising rewards in so doing.

It's easy to look at Nielsen and call them the enemy, but they're really not. They've done an outstanding job with what they've had to work with over the years, and we owe them a lot. However, their diary methodology is 50 years old. It was created to measure what happens with an individual television set in the home, and that's still a valid way of calculating use. The problem is that when the methodology was written, the only thing coming to that TV set was network and local television. Not so anymore. It's used for cable, DVDs, video games, the Internet, and TiVos. Nielsen looks at such and calls that a set "not in use." But the viewers are saying that the set is, indeed, in use, and we need to listen. We need to, because it's the only way to make that audience connection with them.

When we do, we'll know what to do about it. That's the beauty of being right there in front of your audience. The feedback is immediate and constant, and a remarkable oneness is accomplished when both are tuned into each other. No myths. Just reality. And damned enjoyable at that.