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minute-by-minute data, that by definition is 15 times as much data. So, there's a heck of a lot more information around to manipulate, to organize, to run.

So I think your problem is not so much because there's something wrong with the research, but it's with the way in which the research is controlled and the way in which the data are released.

Ms. Pool: The reality is the networks and the stations are paying the freight on it. In the case of South America -- Brazil -- it's the agencies that are paying for the research, so there's more control. Would we be able to absorb the kind of money that the networks and the stations are paying? I doubt it. Our margins are narrow enough as they are. But, you're right, Brian, it's a bad business play, no question about it.

Mr. Gotlieb: But Jean, we are the source of the revenue that goes to the network who, in turn, pays for the research. So, I think we've got a circular thing going here. Brian, I'm going to disagree in one critical area -- I don't think the networks are the ones telling Nielsen not to provide minute-by-minute data. I think that Nielsen just can't provide minute-by-minute data because the data size is just so huge and because they're just in the process of constructing the data warehouse from which those extractions may one day take place.

Up until a few years ago, they just never contemplated having to do things like this and they're physically not able to do it. The mid-minute of the quarter hour was the reasonable compromise that everybody arrived at.

The more serious problem is the one that Jean did touch on, and that is that for local market broadcast we have no respondent level data at all because there are no people meters. There are household meters and diaries, but mostly diaries. So there is no way to get respondent-level data out of that kind of a system and that's a fundamental problem.

The horrifying thing here is that if we ever did get to a single unified U.S. sample, we would be looking at a people-meter sample of somewhere probably between 50,000 and 70,000 homes, or so the statisticians say. And if you think that we're in data overload now with mid-minute of the quarter hour, I can't imagine having to cope with minute-by-minute data across 50,000-to-70,000 people meters on 1,100-plus stations, 60 cable networks, 50 major syndicators each of whom run ad hoc programs.

Ms. Pool: 211 markets!

Mr. Gotlieb: 211 markets.

Ms. Pool: I quit.

Mr. Gotlieb: You know, there's just so much you can cope with.

AA: As we move forward, how much is the client going to demand?

Mr. Simm: You've hit on the key thing. The issue is what is the value returned for the client in this. We're at a point now where we're only starting in the U.S. to be able to communicate to the client what the value is in getting their hands on this data and of using it.

But, you know, it's very difficult for us to speculate at this point what technology can make happen and whether it's affordable or not until you really get down to what is the potential client-advertiser benefit.

Mr. Gotlieb: Yes, and it's important to understand that prior to this what most people used in the U.S. was a Nielsen [cumulative] study that was conducted in November 1989. I may not be thrilled with having to settle for a mid-minute of the quarter hour, but you give me a choice of that for current information or 9-year-old data, and it becomes a no-brainer.

AA: It was mentioned that we'll eventually get more extensive data for the local or spot market. There was a study released recently at an Advertising Research Foundation seminar claiming half the money spent on spot TV is wasted. Do you buy that conclusion?

Mr. Jacobs: I really don't know enough about the spot market but I do take the point that both Jean and Irwin have made about the spot market. I appreciate that. But I think you have to start somewhere. I remember someone telling me once the amount of data that would be involved in moving this sort of data around is minuscule compared to airline booking systems.

Mr. Gotlieb: It is a data issue.

Ms. Pool: Yes.

Mr. Jacobs: Is it?

Mr. Gotlieb: Yes. Nielsen is claiming the data warehouse it is building -- from a size viewpoint -- will be among the world's top 10 databases. They're talking about somewhere near two terabytes, which is a lot of zeros.

Ms. Pool: That's "tera"-ble.

AA: As optimizers become more prominent in the U.S. there's been a lot of talk that we're going to see more money moving to cable from broadcast. Fundamentally, does that make any sense to you, Irwin?

Mr. Gotlieb: It's hard to say. It depends on what the client's objectives are. It depends on where their activity has been in the past. We've seen situations where money has moved in one direction and other scenarios where it's moved in the opposite direction.

Anytime you talk about shifts like that you have to evaluate where you've been as the base, and I have yet to see two situations where the patterns repeat.

Ms. Pool: When you're using optimizers, there's a lot of judgment that's put into it in the form of factoring. If cost is your only issue, it could shift it right out of prime altogether and into other options. It really depends.

Cable, with its 0.71 rating, or whatever, is getting between 15% and 20% of the money now and that really is a defense because network pricing is escalating proportionately high.

The upfront looks like it'll be pretty soft. Does that mean because it's soft that cable might lose money this year as opposed to the last two years where they really made out nicely? Interesting. And if they continue to lose 6% of their audience every year, ABC will be a cable channel as well.

Mr. Simm: The optimizer provides clear insights for an advertiser to understand whether lower-rated programs deliver or not, and they can make judgments on that.

But as far as money moving from network to cable, I think there are issues over time, whether it's this year or next year or the year after, that have probably a larger bearing on that than do optimizers alone.

As a network's rating declines and cable ratings improve, all you can conclude today is that, frankly, our network friends have done an outstanding job selling their product and convincing clients it is of great value because they've had revenue growth against rating declines.

AA: Isn't that mostly a function of the eyeball argument? That the networks might get only 50% of the audience or 60% of the audience, but it's still a lot more than you're going to get on any one cable channel at any one time?

Ms. Pool: It's one of the few mass media left, and it's supply and demand. The demand is still there, the supply is down, so it means it's going to sell high.

Mr. Simm: But there is a point, I believe, where you pass a threshold benchmark. I don't know what that benchmark is but there are, I suspect, a significant number of programs in any daypart of network TV today that are significantly closer to whatever that benchmark is than what they were a year or two ago. It's a benchmark where the money on a judgment basis -- let alone with the use of an optimizer -- starts to flow significantly more freely than it does today across the choices.

Ms. Pool: Even though the networks are losing audience on a steady basis, there's no cable channels that are really picking up that audience. We're just building more channels, so it's . . .

Mr. Gotlieb: More fragmentation.

Ms. Pool: More fragmentation. One day in 2010, when everybody does a 1 rating, then they'll all be even, and it'll be much more negotiable and a lot more fun.

Mr. Gotlieb: If you take the trend lines for the last few years and you continue those forward, for the next few years cable will have a total share of viewing larger than what it has today, and so it will have to have some incremental revenues to support that share. At least in the near term, the networks will be the only source of blockbuster numbers.

Ms. Pool: Yes.

Mr. Gotlieb: And for those advertis-ers to whom that is important, the revenue will continue to flow.

Ms. Pool: Right.

AA: But isn't it in the client's interest to somehow encourage somebody to be a mass medium? If we look down and, as Jean says, in 20 years or 30 years everybody's got a one, is that necessarily in the advertiser's interest? It makes your job much harder.

Mr. Gotlieb: I think Jean said what she said more for effect than anything else. I don't think any of us believe that we're going to have a hundred channels each of them doing a 1 rating. If you look at the context that we have today, with the average home having 45, 50, 55 choices, whatever that number is of that array of choices, people consistently watch six or eight channels.

If you looked five years ago, they watched four to six channels consistently. If you fast forward to a day when we're in the 200-channel environment, I would speculate that perhaps 10 channels or maybe a dozen channels will hog the bulk of our viewing. It may not be the same 12 channels for each individual around the country, but you will still have probably six, eight, 10, whatever that number is, broadly targeted channels and you'll have a whole slew of highly targeted channels.

Ms. Pool: And both are good.

Mr. Gotlieb: And both are good. And so, even in 2005, you'll still be able to get your 5 rating and your 7 rating and maybe even your 10 rating. It's the 20 and 25 rating that may be in question.

Mr. Simm: Coming back to this point on fragmentation in general, to the extent that we have solid measurement available, to the extent that the numbers don't fall apart -- that we can't measure them accurately anymore and track viewership anymore -- fragmentation and increasing fragmentation continues to be a good thing for the advertiser.

Ms. Pool: Except it depends on the product you're advertising. If you're doing soap, the worst thing that could happen to the package-goods people is to lose a mass medium because everybody's buying soap.

Mr. Simm: I disagree. Each soap brand has a profile, a distinction psychographically and demographically, and again, to the ex-

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