Sunday, September 22, 2013

$1.3 Billion Is A Lot Of Money

With the approval of Nielsen's takeover of Arbitron, it's dubious that anyone thinks that broadcaster costs are going down anytime soon.

So, since it's fait accompli, let's at least inventory what I hope we all get for the money.

First, thanks to Wired's Tom Valderbilt, some history:
In the years after its founding in Chicago in 1923, the A.C. Nielsen Company thrived, thanks to a commitment to math and technology. While its competitors called random households and asked them what they happened to be listening to on the radio at that moment, Nielsen developed more sophisticated sampling methods. Rather than rely solely on self-reporting, Nielsen employed a device called the Audimeter that used photographic tape to automatically record listening activity. When television arrived, Nielsen used similar meters for viewing—although they were supplemented with paper diaries. But by the late 1950s, Nielsen sat comfortably atop the media-ratings industry. It had few competitors, and since television habits remained static, it had little reason to keep innovating.

Under the terms of the FTC’s approval, as Variety Digital Editor Todd Spangler reports Nielsen must continue to support Project Blueprint, the cross-platform project measuring TV, radio, PC, mobile and tablet engagement that ESPN has been working on with Arbitron and comScore, so perhaps Nielsen CEO David Calhoun's statement (“We are looking forward to providing all of the benefits of the combined company to our new clients in the radio industry and their advertisers, driving incremental value for them as well as our shareholders.”) means that we will all be getting more for the money, better, more reliable data to reflect a more mobile media world.
  • Will Nielsen households increase from 25,000 to 75,000 (the national PPM radio panel) at no additional cost to current subscribers?
  • Will the increased sample size permit cross-media usage measurement like BBM Canada has been doing since they implemented PPM in 2009, displacing Nielsen's TV measurement?
  • Will sample weighting decrease, increasing reliability?
  • Will PPM be extended to all TV markets now measured by Nielsen so that radio in those markets gets PPM data at no additional cost?

Skeptics abound, so all eyes will be on Nielsen, starting, perhaps this week, at AdWeek 2013.

After a late 2008 announcement that 50 Cumulus markets were to be measured by Nielsen and a revelation 18 months later that Cumulus CEO Lou Dickey was pleased with the results, the industry never actually saw that public release of the data which was promised, first in June of that year, then later in August and then ultimately Cumulus did not renew their deal with Neilsen, so you'll pardon me if I am fearful.

In February 2010 at Country Radio Seminar, Clear Channel Senior VP/Research Jess Hanson and I attempted to get representatives of the two ratings giants to "take the gloves off," but it turned into a gentle confrontation as then-CEO of Arbitron, Michael Skarzynski ended up a no-show, replaced by the able fencer Dr. Ed Cohen, but Nielsen Media Research's managing director for North America Lorraine Hadfield was ill-equipped to talk competing methodologies with the experienced researcher and stuck to her talking points, meaning that what was billed as a barn-burner actually turned into a good session to catch a nap, which is probably the way both of them had hoped it would be.

Ultimately, as Wired's Vanderbilt wrote, if I may adapt and paraphrase him a bit: "It all adds up to a potentially thrilling new era for radio, television and new media, one that values shows that spark conversations, not just those that hook us for 30 minutes (for TV and just 11 PPM minutes for radio). The stakes are high: Get it right and great programming will continue to thrive. Get it wrong and both the $70 billion television industry and the $16 billion radio business will be in jeopardy—along with your favorite radio station, personality and TV show."

Hopefully, Neilsen makes the most of their huge investment in the future of all U.S. media ratings by improving the value of what they deliver to clients and media buyers .. and wastes no time in doing so.

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