AnalyticsAnalyzing Customer DataNielsen Schmielsen

Nielsen Schmielsen

Meet the Nielsen family. Demographic accuracy on par with the Cleavers, the Bradys, the Mertzes, and the Ricardos.

Two weeks ago,” Fluffing the Numbers” addressed methods broadcast television networks use to enhance ratings and manipulate their audiences’ demographic profiles during sweeps. These methods convince marketers to spend ad dollars on TV, thereby reducing budgets available to interactive advertising. One area I didn’t cover in that column was the method Nielsen Media Research uses to measure audience rating and demographics.

Everyone is at least familiar with the idea of the Nielsen family. These are individuals who, at some point, agreed to have Nielsen meters connected to their primary TV sets at home. The Nielsen meter makes a record of when the television is turned on and which programs it’s tuned to. Individual Nielsen family records are cobbled together by Nielsen and extrapolated to deliver the Nielsen ratings that tell us how many households across the nation tuned in to a specific TV program. Nielsen ratings are the industry gold standard, constantly referenced to determine TV ad rates.

Problems With Nielsen’s Meter Method

It would seem Nielsen has a method in place that effectively measures national aggregate TV program viewership. Well, when I was in college, a group of my friends rented a beach house in northern New Jersey. They were surfers and figured the best way to catch early waves was to drive to the shore the night before and crash in a house. Made sense at the time. Anyway, the house they rented had a Nielsen meter, so they left the TV on. All the time. Twenty-four/seven, whether they were there or not, Nielsen thought someone was watching that TV. To skew the data further, my friends tuned to the likes of home shopping channels, PBS stations, and religious networks. Granted, this is a sample size of one. The point is, the Nielsen meter is far from perfect.

A more significant problem with the Nielsen meter is it covers a limited portion of the country. A recent Electronic Media (EM) article pointed out in 155 TV markets, Nielsen viewer data is collected only by paper diary. That’s right, paper. The kind of paper diary I used to sneak into my sister’s room to read after she left for school.

EM points out those 155 TV markets represent 30 percent of U.S. TV households and several billion dollars in ad revenues. I’m gobsmacked. Marketers spend literally billions of dollars and put their jobs and reputations on the line based on research collected from paper diaries. These are subject to, as cited by EM, inaccurate recall, diary-keeper fatigue, and TV program branding.

Hmm, what did I watch last night? I’m writing on Friday, so yesterday was Thursday. That’s must-see TV night! I did watch some of “Friends” and most of “ER.” I’ll just jot down those two shows down in my paper diary. I switched over to “Survivor” at the end to see who would get voted off the island, but I only watched five minutes. So that doesn’t really count. The Big East basketball tournament was on. I did catch bits and pieces of that, but I was zapping around with the remote. So that doesn’t really count, either. I’ll just stick with “Friends” and “ER.”

Anyone see something wrong here?

The last Nielsen meter problem I’ll point out is it fails to identify the demographics of individuals watching the television. We know the TV was tuned to “Friends,” but we don’t know if it was the 66-year-old grandmother or the 14-year-old granddaughter who watched. That obviously makes a big difference to advertisers. So the highly technical method Nielsen employs to compensate for the problem is that good, old reliable paper diary. Nielsen must be a paper-diary-company shareholder.

During quarterly sweeps, Nielsen meter household members are asked to keep paper diaries. Each person’s paper diary is supposed to indicate what programs she personally watched, each and every day. The diaries are used to project demographic viewer profiles during non-sweeps periods.

These diaries are, of course, subject to the same biases referenced above. Worse, EM points out some important demographic populations, including younger viewers, African-Americans, and Hispanics, are less likely to participate in the diary system. We may be missing great big chunks of data that could paint a very different picture of who’s exposed to TV advertising.

Nielsen’s People Meter

Last year, Nielsen introduced a people meter in the Boston market to supercede the paper diary demographic measurement method. The people meter attaches to the Nielsen meter. When an individual turns on the TV or enters the room while it’s already on, he’s supposed to identify himself to the people meter via a keypad. When he turns off the TV or leaves the room, he’s supposed to sign out.

The people meter’s success rate is debatable. A number of local broadcast affiliates boycotted the Boston rollout. Nielsen announced plans in February to introduce the people meter to the top 10 media markets over the next three years, representing 30 percent of U.S. TV households.

We’re supposed to wait until 2006 for a system to reach a mere 30 percent of the country? What is this, a CRM implementation? Seriously, this seems like a ridiculous amount of time for a system that’s in obvious need of repair (if not a complete overhaul). The end result still fails to measure what America’s heartland watches, unless you believe the top 10 media markets accurately reflect Peoria, IL’s viewing habits.

It seems to me marketers should seek alternatives to traditional TV advertising. Why do they willingly support TV? Networks openly admit they manipulate programming to inflate ratings and skew audience demographic profiles. Why do marketers accept the arcane methodology that measures the size and demographics of people exposed to their advertising?

Interactive advertising is hardly a perfect vehicle, but it offers some significant advantages over the ludicrous system that has a death grip on corporate America’s advertising budgets.

Many of you noticed ClickZ newsletters changed recently. Executive Editor Rebecca Lieb gives you a quick rundown.

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