WHY CAN'T WE COUNT? 2/3

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AA: Doesn't Barry have a point?

One of the problems is that Nielsen serves a lot of constituencies.

Mr. Poltrack: And I understand that. That is, again, the problem with the system. Why would we expect a TV station with limited resources in market No. 85 -- that currently has a system that is biased in its favor -- to make the integrity-oriented decision to pay significantly more for a different measurement system?

That it is necessary [for that to occur] for our industry to move forward is a real problem. The station shouldn't be expected to do something that's not in its best interest, and Nielsen shouldn't be expected to do something that's not in its best interest. But, collectively, in our best interest, getting rid of the diary-based measurement system is definitely something that we all would like to see happen.

So the question is the economics; how do we put together the situation that allows us to do that? In this particular case -- local measurement -- cable TV operators offer us some opportunity. At least there you can point to a constituency that has an economic reason to do it.

AA: On the local measurement angle, and sweeps, it seemed that CBS CEO Mel Karmazin at the 4A's was putting the onus on the agencies, saying if you guys aren't happy with this local measurement system, don't use it. Is that realistic?

Mr. Poltrack: You can develop a system that says we're going to take the sweeps ratings and the network ratings for 52 weeks, and we're going to downgrade all your numbers. If you run a contest, we're going to take 10% off all your numbers. Then, all of a sudden, the incentive to maintain that system goes away. Or at least is diminished.

AA: David Marans, your agency runs a big spot operation. Do you like that idea?

Mr. Marans: The research company is supposed to be the universal provider. It's a little alarming that I would have to, therefore, work on all these other adjustments -- which we do, and others do. Has it come to that? They're supposed to provide the currency.

Ms. Lynch: It has come to that. We as a group of agencies and media specialists should be doing that as part of the 4A's and part of those kind of organizations. If we do it with a collective voice, that might lead to more change down the line.

Mr. Marans: I want to say that we're having second thoughts about local market People Meters. The incredibly low but viable ratings for more and more vehicles is making us have to think more about the sample size. Do I really want to have 300 homes in Buffalo with a People Meter? With low ratings you must have a larger sample size.

AA: And economically it's not feasible to put huge sample sizes in the local markets?

Mr. Marans: With People Meters? As the pricing currently seems to be? No.

AA: So then if you're moving off that position, what would you like to see?

Mr. Marans: I don't want to say this -- we applaud Nielsen for putting more set meters in more markets, it's been accelerating -- and I think it's a very valuable addition to the research.

AA: But on the other hand, you opened up by saying the diary system is just a disaster.

Mr. Marans: Yes.

AA: So where do you go? If you're moving away from local People Meters, and you don't like diaries, where are you?

Mr. Marans: Well, if we had the absolute answer to that, you'd be interviewing us about a new research organization, which has not been created, called dot-com.

Ms. Lynch: I agree. People Meters, long term, in a world with fragmenting audiences and more viewing choices, are not going to be an economically viable option. But the set meter with some degree of modeling -- of other data about demographic audience, different programs -- has got to really be the route forward.

Mr. Marans: Agreed.

AA: David Marans, although you've been critical of Nielsen, I know you've only been lukewarm about a potential competitor, Smartcx from Statistical Research Inc.

Mr. Marans: There are other organizations out there, other than Smart, to tackle some of these issues. We're talking to people at Adcom. We're talking to people at TCI. There are other organizations that exist. There's a slight flurry of activity. With convergence, my goodness, we may have five or six people at our door.

The reason we've been hostile to Smart is that we believe it's "me too" technology. The People Meter, and the cost of an infrastructure, and the talent involved in replicating that service are extraordinary. Where is the sales staff going to come from, where are the engineers going to come from? I'd rather leapfrog ahead if you're going have a rival to Nielsen, and use very different technology.

AA: So it's not the technology for the new millennium, in your opinion?

Mr. Marans: Nielsen currently isn't, and if that isn't, why should we sign with someone who's doing the same thing?

Ms. Lynch: What I liked about Smart is its software and access to the data. That was one of the reasons I'm heavily supportive of it. I also like the idea of competition. But I also agree with David. As we move forward five years, I don't believe we're going to be looking at traditional TV panel measurement -- we're going to be looking at more universal measurement using cable TV set-top boxes.

AA: David Poltrack, CBS has been intimately involved in the funding of Smart thus far. Is this a system that even before it rolls out -- if it rolls out -- is obsolete?

Mr. Poltrack: There are two roles that Smart plays. The first is the competitive role. The second one is that it can end up being a better system. Now, we don't know at this point in time whether it'll end up being a better system. But it is a competitive system.

The fact is that the Nielsen People Meter agenda was basically accelerated when AGB came on board. And the Nielsen N-Power initiative started and was accelerated when SRI introduced its Smart software. That's the value of competition.

I agree with David that it would be nice if we could invest this money in a system that's more designed to carry us for the next 20 years, and does deal with things like addressability, which are going to be a major part of our future. And it doesn't at this point in time. But, if you get two organizations up and running, trying to build a system for the future, you're more likely to end up with a system for the future than if you have one system, one company in a monopoly position trying to build that system.

Mr. Cook: Let me bring it back to something that Kate said before, which was that she wanted us to be more helpful in providing information that really helps her do her business. She mentioned commercial audience measurement is more than a chore right now. With diaries it probably isn't very meaningful measurement.

Ms. Lynch: For sure.

Mr. Cook: People do not attend to their measurement task that much, when they're paying attention to TV or the rest of their life. You do need different kinds of tools to get data you should trust at that level of time-resolution. One of the reasons we don't report very much about commercial audiences is because our data collection tools aren't designed to measure commercial audiences. But if that's important to you, ring in and we'll work on it.

Mr. Marans: I'm sorry, but I don't buy that.

Ms. Lynch: The big issue on commercial audiences is getting the people to turn over during the breaks. The amount of variation between programs, and between times of day and between networks of the tune out during the commercial breaks is enormous. It's incredible that billions of dollars are traded in this country that don't reflect that.

Mr. Marans: I concur. One of the reasons we pushed for the passive meter was so we'd be able to see what the eyes on the set were during the commercial breaks. The buyers have a slightly different agenda than the sellers in terms of what's important to us. We're not in the programming business, the networks are; we're not in the local TV business, the networks are.

I don't really care what the rating is for "ER," nor if it's on cable, or syndication, or a broadcast network. I want to know, for a target audience that we've selected, how many of them are viewing the Taurus or the Listerine commercial during the break. And, ideally, what influence the commercial has on them. When we're talking about age and sex, the data we get now is very rudimentary. It's almost laughable.

AA: So how far away from getting this information are we?

Ms. Lynch: A lot of people are starting to model based on Zip Codes, Spectra, Prism kind of data, and then apply that data.

Mr. Poltrack: Along those lines, I think the Simmons MasterCard thing is really very interesting. Simmons has got an arrangement with MasterCard, where they are going to get a tremendous amount of product usage information from . . .

Ms. Lynch: . . . a census of all MasterCard owners and the transaction database, and then merging that with . . .

Mr. Poltrack: . . . the Simmons database. That kind of information can tell us a lot more about which TV programs are better for a particular advertiser than the age and sex of the people watching.

AA: Once you have that with the Simmons data, how does it translate to the way you advertise on a particular TV show and so forth?

Ms. Lynch: You could use all TCI subscribers with some modeling, some ability to add demographic information or people viewing. An ID code for each person. So you've got a census of TCI subscribers viewing data, you've got all the credit cards that they own, and then you've got some kind of another mixed media survey as well.

AA: So would you know that I live in a certain household and I have a MasterCard? How does that work?

Ms. Lynch: I wouldn't know your name, but I'd have an ability to reach you through TV via TCI.

AA: So you would know that someone in that household, that TCI household, has a MasterCard?

Ms. Lynch: Yes. And I'd know your viewing habits. In my dream world you would be sticking your credit card into your TV, or there'd be some kind of a key card or an ID that showed you were watching, and you were buying things.

AA: What are you going to know from this Simmons/MasterCard project?

Mr. Poltrack: Simmons has very rudimentary TV data. So, what you would know from Simmons is this person is a "Touched By an Angel" viewer, and this viewer has this purchase profile vs. automobile sales.

But the weakness in this particular case -- is the weakness of the viewing data you're getting out of the Simmons data bank. But there are a lot these things that are coming forward like Direct TV. Direct TV is addressable. Direct TV can tell me a lot of things about the people who are watching my programming on Direct TV that I don't know about the people who are watching them over the air, or the people who are even watching them on cable. There are beginning to be a series of players that have large enough bases of viewers with addressability that can allow the kind of things that Kate's talking about to take place in the near term future.

But all of these things are going to involve some degree of modeling, because you're going to have a lot of information about certain people, and virtually no information about other people. So how do you model the haves and the have nots?

Mr. Cook: I'm not against modeling. I think modeling to relate purchase transactions to media behavior is important and necessary. It's probably adding a lot of value to the media information. It isn't changing the currency of the media information. Modeling to get the currency makes the currency model dependent. That's where I think we have to be careful going that way -- I'm not saying it's impossible -- but we have to go very cautiously.

Mr. Poltrack: But you're also talking about a universal currency. One of the things about adult 18-49, adults 25-54, was basically, it created a universal currency for the advertising marketplace. There is really no universal currency.

If I am an advertiser and I have a hot product in a hot category -- if I'm right now trying to establish an e-commerce Internet site -- I'm a lot different than a brand of household cleanser in a rather mature marketplace. The whole valuation of the medium is totally different for me. One currency will never effectively cover both situations.

Mr. Cook: There are lots of ways to come to a determination of what the CPM for "Touched By an Angel" should be. You want to bring in a lot of information about the demographics and maybe beyond that you want to bring in information about purchase behavior.

Mr. Marans: To add a philosophical note here, my question is can we do business right now the way we've been doing it? Can we purchase time nationally, and in cable, and syndication? Yes, we can and we do. The question is do we have the resolve to move to the next level where we want to be and need to be? There seems to be scant resolve or negligent resolve in local TV stations to do anything. And one of the things we've suggested down at the 4A's in New Orleans is it's time the agency buying community get together -- and the letters are going out -- to spend about the next year figuring out through this plethora of options where we agree we can take a stand to do something about it.

AA: So, is this leading to a joint industry committee? The U.K. model type of thing?

Ms. Lynch: Illegal in this country.

AA: Well, I don't know if it is illegal.

Mr. Marans: I didn't say joint industry committee. I just say that the 4A's has committees -- research, spot buying, national buying and policy committees -- that can discuss issues so that if . . .

Ms. Lynch: So you can brief the Nielsen . . .

Mr. Marans: Exactly. I'm just saying I would like to get our houses in order by having, for example, spot people talk and say, 'Hey, you know, if you change the business this way, we'd better prepare to do this.' And to have the media director say, 'Hey, if the research people on the agency side want to do this, then we're going to have to spend this type of money.' I would like to do a situation analysis over the next year.

AA: So what comes out of this a year later, David? Just another position paper that everybody ignores?

Mr. Marans: First of all, I think it's important that we get out of our own bedrooms, where we talk to ourselves -- at Thompson, at Y&R, at Ogilvy, at Starcom USA -- and speak together and see if we can find out what's in the air.

Ms. Lynch: About what's important.

Mr. Marans: What's important.

AA: Does this not go on in the 4A's various committees now? Isn't it supposed to?

Mr. Marans: I'm suggesting a little more joint effort so that the spot people and the national broadcast people are in the room together. We can do it. I would like Nielsen to hear a voice -- a unified voice from us -- instead of 17 different positions on the 12 different issues we've discussed thus far.

AA: And then what happens at the end of the year? OK, so there's a unified voice, and so someone writes it up as a paper, and then? Nielsen says, 'OK, that's fine,' and they ignore it and everybody keeps doing their own business.

Mr. Marans: The past is not necessarily a prologue for the future. I want to be an optimist.

Ms. Lynch: I think that the world we're living in is changing. In five years there are going to be five media buying shops, and we're going to need to either work together and have better tools and better data, or we're going to be competing ferociously against each other. And it's whoever is able to deliver better product back to the client who's going to win. And that's going to involve working with the AdCom people, the TCI people; working with Nielsen to build a new tool or database for the Simmons people. But I think maybe in the short term joining in together as an industry will achieve some of the things that we need.

Mr. Marans: I want for us to focus a little more clearly on things together. And, as Kate said earlier on, we'd like to have some tools from the audience research providers so we can do that.

AA: But we have had lots of delays by Nielsen in getting tools to you. For example, Dart, now called N-Power, has been subject to extensive delays, and, at the time of this roundtable, it doesn't look like it will be out in April either. Barry, what's going on?

Mr. Cook: We have a lot of people working on it, they're bright people, it's a tough project. We have an enormous amount of data and we want to provide access to the data in a way that the customers have asked us for. And we're very disappointed that the delays have come because we didn't want them.

AA: Is that explanation satisfactory to you guys?

Mr. Marans: No, and I'll tell you why I was disappointed. I found it very odd that as soon as Smart became a more viable option, the more you heard about Dart.

Mr. Poltrack: The frustration is that Smart came up with a system similar to the European system that basically cost you nothing on top of the base subscription rate. Nielsen introduced a system that costs you a huge amount of money on top of the base subscription rate -- and they haven't delivered it. So it's not like they haven't delivered something that they were pressured to provide. They've built a model that basically is an economic model where they're going to make money on this system. They're charging a lot of money for this system, and they still haven't provided it. That just adds to the frustration.

Mr. Cook: If we gave it away -- but didn't provide it -- you'd say 'they're not serious because they know they're not going to make any money from it.'

Ms. Lynch: I actually don't have a problem with paying for it.

Mr. Cook: I have a problem with not providing it.

Ms. Lynch: I can't wait to get it.

Mr. Poltrack: We were the first ones to sign up, Barry. We signed up, we're paying. The level of frustration is just magnified by the fact that we're looking and we're saying, 'well, if all these people are signing up there's got to be a lot of money there.' Yet it doesn't seem to be getting done.

Mr. Poltrack: Also, there's another aspect of this, which is when an organization misses deadline, after deadline, after deadline in terms of providing something, you begin to wonder about how reliable the product is going to be once it's there. it's a question of management control. If it's so difficult to mount, what is the maintenance going to be like? and how much faith can you have in the product once you actually get it? That's the other thing that's a little frightening.

Ms. Lynch: I'm totally optimistic, and hoping that, because of the delays, it's going to be a very stable, solid product.

Mr. Cook: Our plan is to get it right and then release it, really. Not to delay

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