Editorial: Ratings broken? Demand better

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The ratings system must be retooled for the next generation of TV. It will require support from networks, which pay much of the cost for ratings research, and from media agencies, which get paid to work the ratings numbers for clients. But the market won't get the stronger metrics it needs until advertisers demand improvements and are willing to help foot the bill.

Nielsen Media Research has defined and divined ratings since the dawn of TV, giving ad buyers and sellers a currency to translate audience size into dollars. It's a thankless task: Networks extol their programming acumen when ratings go up and blame Nielsen's faulty research when ratings go down.

Some tension is good. Buyers and sellers complain about Nielsen's market domination, but neither suggests it has a bias toward network or advertiser. Nielsen appears to be a fair, ethical and independent researcher.

But TV is undergoing a redefinition that's changing how users watch and interact with it and how advertisers reach those users. The ratings system needs to be retooled for this new era. The industry must have a serious discussion to answer the central research question: What are the best solutions to measure the return on investment of money marketers spend on TV?

Nielsen's last would-be rival, Smart, aborted its rollout in 1999 in part because advertisers wouldn't join networks in paying for the startup. Stakes are far higher this time. Advertisers must be willing to pay if good alternatives emerge. And advertisers must champion the cause, for agencies and media have little incentive to change if the end customer isn't demanding it.

Nielsen may well have the answer. But strong industry support for alternatives will lead to the best solutions: A rival could invent tools to redefine ratings; Nielsen could feel pressure to work harder and faster on innovation. Competition is a good thing.

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