IN MULTICHANNEL WORLD, DIARIES GO DINOSAUR ROUTE: SAN ANTONIO TEST GIVES LOCAL AUDIENCE MEASUREMENT A POSITIVE DIRECTION, AND AN ADVERTISER BOOST

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All eyes will be on San Antonio this May, as Time Warner's Cable Advertising of San Antonio will experiment with a greatly expanded ratings diary sample in hopes of raising the visibility of local cable viewership.

If successful, expanded sample sizes may become a stop-gap measure as ratings services such as Nielsen Marketing Research begin a much-anticipated transition to local People Meters or other electronic measurement systems.

QUELL AN ARGUMENT

More importantly, better ratings may put to rest ongoing arguments from local cable stations-and agency media buyers-that the lack of accurate research on the demographics of cable's audience has prevented advertisers from buying more local cable.

"We know the current diary system is bankrupt and broken," says Jon Sims, head of research for Cabletelevision Advertising Bureau. "We have to cleanse the system of the diaries and use electronic gathering instruments, like People Meters."

Diaries are no longer the serving of purpose of many advertisers, agrees Caroline Riby, VP-media director, Saatchi & Saatchi Business Communications, Roch-ester, N.Y.

In San Antonio, the expanded sample size will triple to 4,400 from 1,500 the number of demographic diaries in the market. At issue, says Susan Whiting, general manager-national services, Nielsen Media Research, is how best to provide ongoing demographic measurements in a multichannel world.

"This isn't just a cable issue because what we're really talking about is audience fragmentation. And as audience sizes get smaller, you need an audience measurement tool that can accurately reflect demographic ratings," she says. "We feel the best technology is our People Meters. It works on a national level, but at the local level, there are other constituencies involved."

NO AGREEMENT

Those participants include local broadcast affiliates, cable operators, programmers and agencies, and currently, no one can agree on a single system. "It's up to the marketplace to decide," says Ms. Whiting. "We're heading in the direction of installing People Meters in local markets. But it's expensive, and not all customers agree on how to do it and even if they want it."

Yet installing local People Meters, which Nielsen currently deploys to track demographic data on national TV viewership only, would eliminate the need for the diaries, which many critics contend are incomplete and inaccurately filled out.

Even with possible non-compliance from participants, however, CASA expects just having an increased diary panel will give its demographics numbers a 30% boost, based on results from a similar increased-diary test that Nielsen conducted in Milwaukee in 1995.

For local audience measurement, Nielsen currently uses a set-tuning device, which records whether the TV set is on, what time it's on and what channel it's tuned to (or whether the set is being used for other purposes, like a VCR). The problem is, there's no demographic data about who's actually watching. For that purpose, another sample panel in each of 210 DMAs is expected to fill out diaries.

COOPERATION SLIPS

Response rates and cooperation has declined-with some media buyers reporting that cooperation rates have fallen into the low 20s in cities like Miami and Laredo, Tex., and that the measurement of demographics leaves tremendous gaps of 40% to 50%. Now companies such as Procter & Gamble Co. and Warner-Lambert Co. have begun pushing hard for the deployment of local People Meters. P&G, for one, significantly cut back its spot-TV ad spending until it gets more accurate local audience data.

For some media executives, it's not so much a question of more accurate ratings for cable, but improving TV ratings overall.

"We're talking about the universe of TV," says Allen Banks, exec VP-executive media director, Saatchi & Saatchi North America, New York. "I'm not so much interested in improving only local cable ratings, but achieving the best possible ratings, period.

ONE PACKAGE

"To separate local cable ratings from all other television viewing is not a definitive assessment of what people are watching. The audience is watching television, and we should look at television as all one package."

Karen Richman, senior VP-director of local broadcast, Grey Advertising's Mediacom, New York, agrees the entire ratings system itself should be improved. "We know the ratings, period, are bad," she says. "But cable allows you to do things that over-the-air broadcast doesn't, like geodemographic targeting."

Buying cable today is too much a "leap of faith," contends Donna Mercer, VP-media director of Howard Merrell & Partners, Raleigh, N.C.

But long-term, she says, it may not really matter what actual ratings are at an individual cable station. "Cable continues to garner a larger share of the viewing audience, and with so many choices, there are plenty of advertising opportunities."

Still, large operators, like Time Warner, which last year struck a seven-year corporate deal with Nielsen for all of its cable operations to work on local cable ratings research, believe the effort to improve local ratings measurements will pay off with increased advertiser interest.

Larry Zipin, VP-ad sales for Time Warner Cable, says he and Nielsen are exploring a number of ways to deliver better data for local cable. These include using digital set-tops to gather raw viewership data; significantly increasing diaries in certain markets, like San Antonio; expanding household meters to new markets, and deploying People Meters in selected markets.

"I don't know if there's anyone in the media business today who doesn't frankly admit there are problems with the system," he says. "Given that, there are short-term measures we can take, like the increased diary sample, that may be more representative of cable's footprint in the market."

TRUE VALUE SOUGHT

Improving the ratings, says Mr. Zipin, is necessary because "local research represents the true value of local channels." Time Warner, he notes, has a vested interest because it has launched a number of local and regional news channels, and more are in the works. To sell them at a full premium to advertisers, the company needs accurate demographic information on local viewership.

AT&T Corp. and MediaOne aren't waiting for Nielsen to roll out either People Meters nor an expanded diary panel. Both companies are working with AdCom, which is producing local-cable ratings in Jacksonville, Fla., for MediaOne, and later this year will begin measuring local ratings in San Francisco through 1,556 meters and place meters in 929 homes in Dallas for AT&T.

However, it's noteworthy the Adcom measurements will provide age and sex demographic data, as well as household ratings, using set meters and diaries. "Just increasing the size of the sample will tremendously increase the reliability of the data," says Jerry Machovina, exec VP-advertising sales, AT&T Broadband & Internet Services (formerly known as TCI). "Yes, they're using diaries, but we think they'll be able to improve upon the system."

MUST REPORT VIEWERSHIP

The goal, says Mr. Machovina, is to report what the actual viewership is. "We don't expect to see a threefold increase in viewership, we just want to report what viewers are really watching."

Mr. Machovina acknowledges the cable industry needs to spend more than the 1% to 2% of revenues traditionally allocated to ratings measurement. "If we really want better measurements, we need to spend more like the 10% to 15% that the broadcast networks do on audience research," he says. "Until AdCom came along, there hadn't been a provider we felt would give us the type of data we believe necessary."

Still, "I'm confident advertisers will spend once we can provide better ratings," he says. "Only about 15% of our business is national spot; the other 85% is local. One of the reasons our national business is so small is we haven't had the audience data. I don't know that we'll ever get to the 45/55 split that the broadcast networks do, but I think we can raise our national spot 10 to 15 points."

The question remains as to whether advertisers and agencies, presented with better ratings data, will be prepared to pour more of their media budgets into cable.

"I would say yes, because it's worth advertising on cable for more than just the ratings," says Scott Munz, director of media, RC Brands. "I've never thought cable was a bad buy to begin with and always try to buy some for its targeting

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