TELEVISION

The numbers game

A new technology shakes up the TV ratings

PAMELA YOUNG January 29 1990
TELEVISION

The numbers game

A new technology shakes up the TV ratings

PAMELA YOUNG January 29 1990

The numbers game

A new technology shakes up the TV ratings

TELEVISION

The book-sized box sitting on top of the television set could easily be overlooked, except for its glowing red and green lights. They signal the arrival in Canada of a push-button device that records the TV viewing of each individual in the home. But since it was introduced to U.S. homes more than two years ago, the so-called people meter has caused a radical upheaval in the TV industry. The device is the high-tech successor to the weekly written diary system that formed the core of the industry’s ratings bible since the I Love Lucy era. And it has yielded some surprising findings. In 1987, when North America’s most powerful ratings firm, the Chicago-based A. C. Nielsen Co., formally introduced people meters in the United States, the new technology showed that the prime-time audiences for some major U.S. network programs were substantially lower than previously thought. Now, nearly half a year after their introduction in Canada, people meters are confirming that, while overall

viewership is larger than the diaries indicated, channel-hopping by remote control is also more widespread. And that poses new challenges for program producers.

Broadcasters, along with advertising executives and their clients, still have reservations about the system’s accuracy. And the stakes are high: for broadcasters, a decline in ratings can translate into a smaller share of the advertising pie, which amounts to $31 billion annually in the United States and $1.3 billion in Canada. Still, people meters have at least exposed flaws in the diary system, which requires that participating families record their TV watching in a logbook. Said Keith McKerracher, president of the Institute of Canadian Advertising: “There has always been a knowledge that the diary is not a perfect medium for research. For many years, we envisioned something that would be more accurate than people’s memories.”

In particular, the people meters, which automatically keep track of viewers’ channel

changes, have revealed that viewers switch from program to program—a behavior popularly known as “zapping”— far more frequently than the diaries ever indicated. And viewers are more likely to zap in and out of some kinds of programs, such as sports and news. Said Peter Kretz, general manager of marketing and sales at CBC TV: “Actually, people meters show more people are watching news programming—but they’re watching for shorter periods of time.”

Meanwhile, even more sophisticated electronic ratings technology is under development, including a meter that can tell whether a viewer’s eyes are focused on the TV (page 65). But for now, the A.

C. Nielsen Co. of Canada Ltd. mails out 65,000 diaries twice a year across the country to gauge regional markets, and maintains the current generation of meters in 1,500 homes for nationally

broadcast shows (the U.S. division has 4,000 meters in

operation). The Canadian-based rival, BBM Bureau of Measurement, is planning to introduce a competitive network of 7,400 meters within the next two years.

Ratings households are chosen with the aid of national census and other data to reflect the country’s demographic makeup. Families receive a single $50 payment for agreeing to share their viewing preferences with Nielsen for about three years, compared with the weeklong periods for diary keepers. The data that the ratings companies collect allow them to estimate two key things: a show’s audience (the number of people who saw it) and its share (the percentage of the total number of viewers who were watching television at the time).

The diaries require participants to keep a written record of their TV watching. With the meters, each viewer enters an individually assigned code number on a hand-held remote control when he or she starts watching TV. When viewers leave the room, they must punch in their individual numbers again to signal that they are no longer watching. In the middle of each night, the meter automatically transmits the day’s data over the household telephone line to a computer at Nielsen’s Canadian headquarters in Markham, Ont., near Toronto. Speed is one of the new system’s great advantages. Under the diary method, it takes the service three weeks to collect and process the data for one week of viewing. Now, Nielsen can transmit people-meter data on prime-time programming to its clients within 36 hours of a show’s airing.

But so far, Nielsen uses the meters only to keep track of so-called network program-

ming—shows that air in all parts of Canada. But that programming attracts just 20 per cent of advertising spending; the other 80 per cent goes to local programming, which Nielsen still monitors with diaries. That breakdown reflects the fact that many advertisers prefer to aim at specific markets. And in response, Nielsen officials say that, by the end of 1991, they plan to begin switching over to people meters for regional ratings as well.

While ratings are extremely important to broadcasters and advertisers, they alone do not determine the rates that sponsors pay for TV commercial time. Another significant factor is the level of competition among advertisers seeking TV spots—which fluctuates from month to month. Rates for a particular time slot may increase in the spring or fall—traditionally busy advertising months for both broadcasting and print—even if the ratings for that time slot drop. Ann Boden, senior vicepresident and national media director of Toronto-based McKim Advertising, stressed that simple “supply and demand” is a key factor in determining ad rates.

People meters have become an integral part of the ratings industry. But when Nielsen introduced the devices to U.S. homes in 1987, American networks fought them bitterly. For years, ABC, CBS and NBC had been losing ground in the ratings war to other television options— including pay TV, local stations and video cassette tapes—and test data suggested that the new technology would indicate an even greater erosion of their audience. But, in the end, the networks’ desire for ratings information proved stronger than their animosity towards the meters, and they signed on. Erratic early results indicated a prime-time ratings drop of approximately 10 per cent for each of the U.S. networks. And in January, 1988, network executives claimed that they had collectively lost as much as $58 million in advertising revenues as a result of what they described as errors in the people-meter system. But by the end of the

1987-1988 season, the ratings drop for each network proved to be only a few percentage points.

In Canada, the transition to people meters has been comparatively smooth. In fact, the new system is generally finding bigger audiences than the diaries indicated, sometimes by

NIELSEN’S TOP 10

For the week of Dec. 18-24 (the latest available statistics)

1 The Cosby Show (CTC)

2 A Different World (CTV)

3 Rosean ne, 9:00 p.m.* (CTV)

4 Hockey Night in Canada (CBC)

5 Matlock (CTV)

6 Unsolved Mysteries (CTV)

7 Murphy Brown (CTV)

8 Rosean ne, 9:30 p.m. (CTV)

9 National News (CBC)

10 Designing Women (CBC)

* On Dec. 19, CTV aired two episodes of Rosean ne back to back

a dramatic margin. A comparison between the diary average for overall prime-time viewing in September, 1988, and the corresponding metered number for 1989 indicates a jump of 11 per cent for men and a decline of one per cent for women. Both CBC and CTV report substantial increases in late-night and other nonprime-time periods.

However, not all of the news has been positive. Under the diary system, people who watched only part of a show often showed that they had watched it all—even though the diary

is broken into quarter-hour segments. But the people meters check to see which channel is on every 2.7 seconds. As a result, they show that, on certain nights, the audience for CBC’s The Journal—at any given moment— has been as much as 20 per cent smaller than previously thought, due to the high incidence of zapping.

In the meantime, BBM, a nonprofit industry co-operative—and onetime collaborator with Nielsen on a proposed people-meter system— has invested more than $3 million in a new, Canadian-designed meter. BBM now monitors Canadian viewing habits with the diary system in various markets. But, with its own meters in place across Canada by 1992, it expects to be able to provide valuable data on 26 individual markets. Some industry executives say that BBM’S ambitious scheme is doomed. Said Katherine Butler, manager of research at CTV: “There is no other country in the world that has two national metered services. If the United States can’t afford it, how will Canada?” But others, including McKim Advertising’s Boden, predict that BBM may succeed simply because advertisers’ demand for regional market figures is so high.

At the moment, the people meter remains a useful, but far from perfect, tool. Perhaps its greatest liability is the human factor. Declared Ted Thorn, vice-president and general manager of media services for A. C. Nielsen of Canada: “I don’t think we can say with any great feeling of certainty that everyone presses the button every time they leave the room.” Still, electronic metering already makes the diaries look primitive. Said the CBC’s Kretz: “If the diaries were ever looked at as closely from a research standpoint as the people meters are being looked at now, we would find horror stories.” For now, people meters have become the industry’s best resource in its obsession with watching TV watchers.

PAMELA YOUNG