While radio (or “audio” if you prefer) has not seen any substantial improvements or changes in the measurement system in years (the last Nielsen PPM markets went live at the end of 2010), television (or “video” if you prefer) has been working with competitive services for some time now.
If you missed the big TV ratings news of the past week, there was a major announcement. The Media Rating Council (MRC) granted accreditation to Nielsen’s “Big Data + Panel” national TV measurement, an industry first. Karthik Rao, Nielsen’s CEO, stated “The accreditation of Nielsen’s Big Data + Panel is a landmark moment for TV ratings, as it will forever change audience measurement”. While this sounds like the usual PR-devised blather, Rao is right.
Only a handful of people in the radio business work with the MRC process. I represented Clear Channel (now iHeart) in the late ‘90s and Cumulus during my tenure there. When I was part of Arbitron, I presented to the MRC Radio Committee many times. George Ivie, MRC’s Executive Director/CEO, is a friend and one of the best people around.
Several radio groups are MRC members, specifically iHeart, Audacy, Cox, Cumulus, Hubbard, SBS, and Urban One. Industry groups with radio interests are also members including the NAB, RAB, and the Radio Research Consortium on behalf of noncommercial stations.
I’ll save an explanation of the MRC process for a future column, but this accreditation announcement is a huge deal. Consider how the national TV ratings system evolved. If you’re around my demo, you remember three networks (ABC, CBS, and NBC) and public broadcasting. That was national television in the United States for many years. A prime-time program needed about a 20 rating to survive. If you don’t know, a 20 rating meant that 20 percent of all the households in America were watching that program at the same time. Not a 20 share, but a 20 rating!
A random Facebook post appeared in my feed recently quoting Bing Crosby about his TV show in the mid ‘60s. He said it failed because the ratings were poor as the show couldn’t do much better than a 14 rating. Today, the Super Bowl can beat that as well as presidential election results. Nothing else can touch a 14 rating and yet, the program failed.
“Big data” is the savior. For TV, that means cable boxes, satellite boxes, and smart TVs, all sending data back with information about viewing with millions and millions of data points (Nielsen claims to have 45 million homes and 75 million devices). The problem is that while Nielsen or its competitors can get their hands on the data, they have very little idea of who, if anyone, is viewing (perhaps the family dog is watching Dog TV). The viewing must be “modeled” in some fashion to add demographic and other information to make it useful to advertisers.
Big data is wonderful because it can include viewers watching programming with very small audiences, whether broadcast, cable, or streaming. Think about it this way: if 100,000 people 18+ in the United States watch a program, that sounds like a lot, but when the base is around 260 million, it’s nothing. There is no way that a survey can deal with small numbers like that and be representative.
Enter the Nielsen national panel which consists of around 42,000 homes and just over 100,000 people. Nielsen recruits and maintains the panel and while some may quibble, it is projectable to the US population. The panel is used to “adjust” the big data, assigning demographic information and correcting for biases. And yes, it’s a very complicated process. If you’re wondering, the answer is also “yes” as to whether PPM is included.
Now that I’ve used 600+ words to describe television measurement in a radio trade press website, how does this news affect our medium? If I try to spin it positively, this is a big deal for Nielsen and may put the company back in the driver’s seat in the competition for national TV ratings supremacy, which means money.
Perhaps some of the future profits can be spent improving the radio/audio service beyond changing the quarter hour measure from five minutes to three. Perhaps Nielsen will finally move ahead and integrate radio data with Nielsen One, their cross-platform service. Or perhaps Nielsen will focus on big data for radio, admittedly with limited options, but DTS AutoStage is headed in that direction and the automotive OEMs and some startups have data as well. Perhaps…
Did you know that Nielsen has expanded the PPM sample to the entire continental US? The national television panel can now handle out-of-home viewing in 48 states and DC effective today, January 27. And radio paid for PPM’s development.
Nielsen makes a lot of money from the radio service. Without any serious competition, there is little need to invest in improvements unless the subscribers push back.
While there may be no serious competitors today, there is always the option to go without ratings. Is the ROI for Nielsen still there? Once Nielsen finishes congratulating themselves on a major breakthrough, let’s hope the company turns its attention to improving the radio/audio service, sooner rather than later.
Let’s meet again next week.
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