SMART DEMISE MARKS SETBACK FOR NETS, SHOPS: AD EXECS BEMOAN LACK OF VIABLE NIELSEN RIVAL AS SRI SHUTTERS UNIT

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Statistical Research Inc. killed a national rollout of Smart, the TV measurement service that was to take on Nielsen Media Research, due to a lack of funds.

"It's a setback of major proportions, especially if one thinks, like I do, that there's a major problem with the information we're getting from Nielsen," said Allen Banks, exec VP-North American media director at Saatchi & Saatchi, New York. "It's very troubling for our industry."

'THE STORY OF THE YEAR'

Westfield, N.J.-based SRI had been working with Andersen Consulting in trying to come up with a viable funding plan, asking ABC, CBS, NBC and Fox for $12 million each to get Smart rolled out. But the networks passed.

"It's the story of the year," said Alan Wurtzel, president-NBC research and media development, referring to Smart's decision not to move forward. "If this didn't go, I don't see another entity challenging Nielsen in our lifetime."

That seems ironic, considering that NBC is said to have been the linchpin for a Smart rollout.

"NBC had been the most vocal supporter of Smart, both publicly and behind the scenes," said one network manager. "When they decided not to go ahead, the entire plan collapsed."

But Mr. Wurtzel, who joined NBC four weeks ago from ABC, where he was a Smart supporter, said, "We at NBC vastly underestimated the complexity of the business model."

At CBS, it was clear Mel Karmazin, CEO of CBS Corp., would only green light a Smart investment if the other networks were in and he thought it was a viable.

"In the end, when David Poltrack [CBS' exec VP-planning and research] went to Mel and Mel asked him, 'In 2002, when our Nielsen contract is up, can we switch to Smart and do business with the advertising community based on this system and not Nielsen?' Dave wasn't able to say, 'Yes,' " according to a CBS insider.

Mr. Poltrack declined to comment on that. However, he did say, "The fact is the advertising community has now declared that they'll be satisfied with an adequate measurement system. There's no commitment to getting the best television measurement system, which you can only get through competition."

He also bristled at the suggestion the networks are to blame.

"The networks put in $30 million to get Smart as far as it did. And every signal we got along the way was that if Smart was to be dominantly funded by the major broadcast networks it would be treated as suspect."

TAKING RESPONSIBILITY

Indeed, as another network executive put it, "Advertisers spend $60 billion a year on TV advertising. . . . If you had $60 billion in a bank, would you then tell the bank it's their responsibility to get the best interest rate? Or would you take responsibility for that yourself? If there's anyone to blame here, it's the advertisers."

Giles Lundberg, Fox TV's senior VP-research and marketing, said there is still something to be learned from Smart.

"The biggest tragedy is if we didn't take the tools we've gotten from Smart, which are eloquent in their simplicity, and somehow implement them," Mr. Lundberg said.

But not everyone was unhappy about Smart's demise.

"While we commend SRI's search for an alternative, our concern had always been that their methodology was basically the same as Nielsen's," said David Marans, senior partner, director of U.S. media research and resources at J. Walter Thompson Co., New York. "I've spent two years trying to get advertisers to spend more on research. But I couldn't endorse Smart."

Said Joanne Burke, managing director at Carat Insight, New York: "If we're going to fund a competitor to Nielsen, let's make it something new, not me-too."

"If we had an alternative system that agencies and advertisers would fund. . . it would have to be something that would link to sales effectiveness, and I think that's exactly what's going to happen in five years," said Kate Lynch, VP-media research director at Starcom Worldwide, Chicago. "We'll be looking at direct response from cable set-top boxes. But it will be proprietary data to a

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