Nielsen, the ANA and the 4As Still Can't Get Along Over Local Ratings

(MoneyWatch)  Following a holiday season hiatus, the Association of National Advertisers and the 4As (which represents the ad agency industry) are back to their squabbling with Nielsen over the local ratings that the measurement monolith provides. From what I can figure, the advertising community is spending way too much time focusing on a return to measurement business as usual, and not enough on how standard practice should shift in light of the fact that more and more of what we watch these days is time-shifted.

At the heart of the fracas is Nielsen's move -- which it has since delayed -- to omit its live data stream, representing only the ratings for TV shows as they are being watched, from the data it gives advertisers, in favor of a stream that would also include time-shifted viewing of programming during the 24 hours after a show originally aired, known as live-plus-same-day. Nielsen would also provide two other "plus" streams that also measure after-the-fact viewing. Nielsen still plans to make the shift early this year.

As is always the case when it comes to measurement data, there's a lot of fine print. In this case, it's that since the ratings, in either case, only measure the shows, and not the commercials, the advertising industry has come to the conclusion that the live-plus-same day ratings, and the other "plus" streams, are inherently flawed because DVR watchers are a commercial-skipping crowd. The stations obviously believe that's not necessarily the case. So who is right? This is where it gets interesting. It's not as clear as it sounds:

• According to a report last year by the DVR Institute, only about five to six percent of ads are skipped. While that number will undoubtedly rise as DVR penetration gets beyond what is now roughly a quarter of U.S. households, it still would tilt the scale in favor of a live-plus-same-day rating being more accurate than a live one.
• Of course, other studies have radically different results. A study done by Oliver Wyman researchers a year earlier said that 85 percent of all DVR owners skip three-quarters of the ads. Obviously, they can't both be right.

While the metric on which broadcast ad dollars are spent is the ratings of commercials, not the shows that surround them, it's much much harder to devise such a system for the fragmented local TV market. Therefore, what the parties in this battle should really be working on is some form of compromise. Even if some commercial viewership is lost to DVRs, it's not entirely lost; besides, even the best commercial ratings system might not always compensate for bathroom breaks during the ads. All the parties would do well to factor data from the "plus" streams into local station viewership. Otherwise, no matter how you slice it, local stations are losing revenue that is rightfully theirs.

Previous coverage of Nielsen and local stations at BNET Media:

• Media Agencies to Nielsen: We Really Want You to Change ... Kidding!
• Nielsen Grants Concession Over Local Ratings, But That Doesn't Mean the Controversy Is Over [Updated]