Nielsen. Just saying that name in the sports business industry causes many, from CEOs to account executives, to cringe.
No matter what discipline of sports business we work in, we’ve all heard complaints from colleagues or business associates about Nielsen and its system of measuring television ratings and viewership. But how many of us have actually seen Nielsen boxes in action at a home? During a live sporting event?
Earlier this year, I saw firsthand the system that determines the flow of an estimated $40 billion per year in our industry, as I was in a Nielsen home during NBC’s telecast of Super Bowl XLVI.
A close friend of more than 20 years — call him Zack — invited us to his house for a Super Bowl party. I vaguely remember when Zack first told me he’d become a Nielsen household, but I’d forgotten until we got to his home.
We flew in Saturday night and stayed with Zack, so I got to see the boxes before the craziness of the party on Sunday. Attached to each TV was a Nielsen box. There were eight “viewer” buttons on the box. The first five buttons were coded with names of everyone in Zack’s family; the remaining three buttons were for guests.
Zack “keyed” us in to the Nielsen system before other guests arrived. (My daughter and younger son accompanied me on the trip.) We went to the TV in the great room, and Zack pressed the buttons for his family. Then he pressed a guest button, hit male and entered my age (50). He moved to the next guest buttons and did same for my daughter (11) and son (10). The eight spots on the box attached to that TV were now full. (Note: We “guests” are not in the coveted 18-49 demographic.)
 |
Under-reporting of ratings, viewership at parties and in homes is worrisome for the TV industry.
Photo by: AP IMAGES
|
Later, as local guests arrived, Zack went to the TV in the den and did the same, adding three new guests to the three open spots on that Nielsen box. So as Nielsen now knew it, 11 total people were watching television in his home.
By kickoff, about 30 people of both sexes, various ages and diverse ethnicities were at the party, representing a little microcosm of America. And that’s when the first issue hit me: As far as Nielsen was concerned there were 11 people watching TV, not 30. We all know under-reporting occurs in sports bars, college dorms, etc., but almost three times as many people were watching in this one Nielsen-monitored house than Nielsen was actually recording.
Later, I noticed the Nielsen box blinking and called Zack over to ask why. He told me it does that every 45 minutes or so and he has to hit a “reset/OK” button to resume recording data. Why? He said it was to keep people from turning the TV on, walking away and leaving the box on for hours or falling asleep and leaving the box on, thus providing false data to Nielsen.
Here’s where the second issue occurred: How long had the box been blinking before I noticed and called Zack over? Two minutes? Twenty minutes? I have no idea.
Could it be that for however long the light was blinking, NBC’s Super Bowl XLVI telecast received no ratings credit from this box? This made me wonder about the box on the den TV. I ran in there to see that box blinking. How long? No clue. I was obsessed now and ran back and forth between the TVs every so often to make sure a box wasn’t blinking. I already knew NBC was getting short-changed on viewership with under-reporting the total number of people at the party and wanted to see if the network was being penalized even further on the rating.
On our way to the airport Monday for our flight home, a third issue hit me: What if the party had been at my house instead, and Zack and his family had flown in? NBC’s entire Super Bowl telecast would have received zero credit from Zack’s Nielsen-monitored house, even as he and his whole family were still watching the game.
The percentage of U.S. homes that are part of Nielsen’s sample is 20,000 homes out of 110 million homes. That’s 0.018 percent. Since Nielsen then extrapolates out from that percentage to represent the entire United States, a loss of even one Nielsen home could noticeably skew the rating and viewership downward. And who’s to say if any of the three issues raised here didn’t happen in any of the other Nielsen-monitored homes?
What do we do? I’m no statistician or CTO, but if I can see three significant questions in one day, common sense says this system needs improvement and greater transparency.
A possible solution
Today’s set-top boxes used by cable providers, satellite operators and telcos have the ability to record data in homes better than any Nielsen box. Privacy and competitive business issues prevent the data from being used for “Nielsen-type” purposes. Why not let the distributors offer their subscribers the choice of “opting in.” An opt-in would allow the data to be used for ratings and viewership purposes. Like the small compensation Nielsen gives homes for the right to acquire its data, the distributors could offer a small reduction in the monthly bill for those who choose to opt-in.
There are roughly 100 million homes in the U.S. who have a form of pay television. A 1 percent opt-in percentage would provide a sampling of 1 million homes, a group 50 times larger than the current Nielsen sampling. And, to ensure a representative sample of the population, the distributors would verify the demographic makeup of a home before officially accepting an opt-in. An industry clearinghouse could be created, aggregating, analyzing and supplying the data to all interested parties, effectively creating a viable and competitive alternative to Nielsen.
I’m not claiming this is the answer. I’m just amazed, from seeing firsthand, at the flaws in the current system.
Vince Wladika is the former senior vice president, communications for Fox Sports and current principal of VMW Communications. Follow him on Twitter @TVvInce.
