John Dimling helped navigate Nielsen Media Research through 16 years of seismic shifts in television while maintaining its dominance in assessing how many people are watching which programs. But Dimling's challenges in managing this cornerstone of the US$60 billion TV advertising industry seem mild compared with what his successor will confront.
Nielsen was to announce yesterday that Dimling will step aside in January as chairman and chief executive, to be replaced by his second-in-command, Susan Whiting, president and chief operating officer, it will be more than just an expected orderly changing of the guard.
Whiting's ascension comes as an onslaught of new technology is making it harder to accurately measure who is watching what. And Nielsen's main measuring system, still largely based on family television watching behavior that prevailed 15 years ago, before the age of cable and the Internet, is increasingly viewed as anachronistic.
How Whiting proceeds will not only determine the fate of Nielsen, a US$600 million revenue generator for its corporate parent, the Dutch media conglomerate VNU, but also how TV sponsors decide to spend their advertising budgets.
"Anybody trying to measure media today faces a really daunting challenge," said Alan Wurtzel, the executive in charge of audience research at NBC. "I worry that the technology will outstrip Nielsen's ability to measure it."
The challenges for Whiting say as much about her company as they do about where television is expected to go in the next five years. And although Nielsen's TV audience measurement system is considered the most reliable available, it was originally devised for a three-network television landscape that no longer exists.
In short, the efforts of media companies to attract audiences on cable and the Internet have vastly complicated how to measure those audiences, the basis for the prices charged to advertisers. It means that Nielsen must offer more refined ways to count people, industry executives and analysts said.
That is not to say Nielsen has not taken major steps to change with the times. During his tenure, Dimling, 63, helped Nielsen move beyond a point ratings system -- in which each ratings point represented 1 percent of the households with television -- to one that also counts numbers of people and demographic categories important to advertisers. Nielsen has spent US$200 million on a series of projects preparing for television's conversion to digital broadcasting.
"My challenge is continuing to build the company through difficult technical changes," Whiting said. She began working at Nielsen 23 years ago in its executive training program. She has spent much of her time dealing with changes in television, notably serving on the team that developed the Nielsen measurement system for cable. She also oversaw the development of software that allowed for minute-by-minute audience analyses.
All this, she said, has helped her prepare.
But even the advent of cable pales in comparison with the latest technological changes. Consider personal digital video recorders offered by services like TiVo, Microsoft's UltimateTV and SonicBlue, the maker of the ReplayTV. These devices record hours of TV programs digitally, making it easy for viewers to skip through commercials quickly. Though relatively few people now have them -- perhaps 500,000, according to industry estimates -- their use is expected to grow as prices drop and as more television and cable box manufacturers include them as standard features.
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