In a recent Barrett Media column, Andy Bloom raised the question of whether stations need Nielsen anymore. If you didn’t read it, you should because he raised some good questions, and it would prove that cross-promotion truly works!
I’ve made a living working with ratings for most of my career and in years, that’s well beyond 30. Not only did I work for Arbitron and then Nielsen, I also spent a couple of years with Birch/Scarborough, a long ago competitor to Arbitron. When I worked in group positions with Clear Channel (the pre-iHeart days) and Cumulus, I spent much of my time working with ratings data as well as my time at the National Association of Broadcasters. My point is to make sure you understand where my thoughts are coming from.
The industry needs audience measurement. Call it ratings or whatever you want, we need to understand the composition of our audiences. Whether it’s the sheer volume of listeners, their demographics, “qualitative” aspects, or where or how they are listening, we need to know. I would argue that this information is even more important today with all the media competition attempting to take up part of each individual’s day.
As I see it, the problem is cost/benefit. Nielsen subscribers may find that the service is the second biggest expense in their operation. If not, it’s a major cost, but is the value there? What is the ROI for Nielsen?
Andy made reference to the news that Meruelo Media in Los Angeles dropped Nielsen Audio and then reached a deal to resubscribe a short time later. Meruelo has some major stations in the market and as the number two population market and typically the number one radio revenue market, a lot of business comes through agencies using the data.
While I haven’t been around the buy/sell process that much, there are two problems inherent in dropping Nielsen. One is that your stations will no longer appear in the summary data set which is what the agencies are typically working with for buys. If you don’t show up, it’s hard for agencies to justify a buy as Meruelo Media apparently discovered rather quickly.
Meanwhile, your reps may know what the numbers are, but they can’t say anything. Nielsen fiercely protects their copyright (and Arbitron was very good at this as well) and if you’re caught “pirating” the data, the result will be very expensive. Simply put, it’s an exposure.
There is an exception to the “no show” rules. Minority and female-owned stations that don’t subscribe will be in the summary data set with some conditions. I’m not sure that I agree with that policy, but you can find it in the Description of Methodology and judge for yourself.
Nielsen Audio is essentially a monopoly. Yes, Mike Gould at Eastlan will be happy to measure your market, but your decision is most likely a binary choice, yes or no to Nielsen.
Perhaps you can go the route of Ed Levine at Galaxy Media in Syracuse and Utica. Andy’s column covered his conversations with Ed who bailed on Arbitron many years ago (he was on the Arbitron Advisory Council at the time he dropped his subscription!) and has never looked back. He’s been successful without Nielsen, but you have to consider that Ed is a local hands-on operator, doing local radio the way it should be done. And while Galaxy is not a Nielsen subscriber, they may be subscribing to Eastlan which measures both Syracuse and Utica.
Rather than suggest that you stick with Nielsen or drop it, here are some questions to consider if you have any input into the decision:
- If you dropped Nielsen, what would you do with the “found money?” Hire more sellers? More “live and local” talent? More promotions and marketing? Take it to the bottom line?
- Can you estimate how much business you might lose? Would you make up that business at good rates?
- Can you control your sellers so that they don’t use data you didn’t pay for, in other words, avoiding a call from a Nielsen attorney? Whether you subscribe or not, you’ll likely see the data in some form and know how your stations performed.
- Would your programmer(s) be able to make good decisions? Can they create other sources of information? How do you measure their success without Nielsen?
All of the above is pretty cut and dried. Here’s the big question: at what point does Nielsen change the system to cut their costs and cut the prices paid by subscribers, in other words, a new equilibrium? Sure, Nielsen is planning an online version of the diary, but are there other options?
Nielsen has a lot of competition in the video marketplace today and you can bet that prices are declining based on competition. Without serious competition, radio pays. It’s simple economics, but if enough clusters/groups drop the service, at some point, Nielsen will say “Ouch.”
Maybe Nielsen will work with the industry to come up with a 21st-century system that provides most of what we have today for less money. If not Nielsen, then someone else should jump in and the industry should support them.
Any takers?
Let’s meet again next week.
