Tue, Nov 20, 2001 page19

• Nielsen keeps its rating up

  The appointment of a new chairperson is the most obvious manifestation of change at the television ratings operation. It is also investigating technology to stay abreast of the times and improve its accuracy

  • By Jim Rutenberg / NY TIMES NEWS SERVICE
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  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.

  

  The ascension of Nielsen Media Research's new chief executive Susan Whiting, above, comes as new technology is making it harder to measure what television viewers are watching and Nielsen's main measuring system is increasingly viewed as anachronistic.

  PHOTO: NY TIMES

  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.

  Traditional Nielsen "people meter" boxes, which count what family members in a sample household are watching, were not devised to measure programming viewed using personal digital video recorders.

  So, Whiting said, Nielsen has begun to strike software deals allowing it to communicate with the new devices and detect what programs or commercials people watch, and when.

  The complications go beyond software issues. Nielsen and its clients are trying to figure out how people who watch a program through a personal digital video recorder days after it was originally shown should be counted in audience figures. If Warner Brothers, for instance, has bought commercial time on NBC's Friends on a Thursday night to promote the weekend opening of a film, should someone who watches that episode on a TiVo recorder two weeks later be counted in the audience that Warner Brothers has bought -- even if it is too late for that commercial to do any good?

  "The question really is: How do buyers and sellers of commercials want to count commercial time?" Whiting said. "Do they want to count it if it's a week after, or two weeks after?"

  Other issues go directly to the core of what Nielsen does. It is under increasing pressure from networks and sponsors to devise a more accurate system for counting audiences in general.

  Network executives say the current system, though widely considered the only viable one available, is flawed. (How flawed, it seems, tends to depend on how well that network is doing in the Nielsen ratings.)

  David F. Poltrack, head of research at CBS, said the national Nielsen audience sample of 5,100 households, which is supposed to represent television habits in the nation's 105 million homes with television, was greatly skewed. Over two-years, each family member in a participating household is asked to press a button upon entering or leaving a room where television is being watched. About half the families approached by Nielsen generally agree to participate, the company said. But those who do participate, Poltrack said, are likely to make different viewing choices than those who do not.

  "The system, as it's currently constructed, assumes viewing patterns of noncooperators are the same as the viewing patterns of the cooperators," Poltrack said. Such an assumption, he said, is "almost certainly wrong."

  Wurtzel of NBC said there was no guarantee that participants were diligent about logging in and out of the Nielsen machines. That was not considered as much of a problem in past years as it is now.

  "I think the problem is that in the past, when the pie got sliced in big chunks, it didn't matter when you were off," Wurtzel said. Now, networks like WB and UPN sell advertisers on very specific audiences -- boys 12 to 17, for example. "Today, people are making decisions based on a tenth of a point," he said, "so the accuracy has become far more important."

  Nielsen says it is closing in on ways around this problem. For instance, the company is testing a pager-sized device in conjunction with Arbitron, the radio measurement service, that records what people watch or listen to by reading codes embedded in a program's audio tracks. Participants need only keep the devices with them. The system can also detect what people watch or listen to when they leave their homes -- in offices or sports clubs -- something that Nielsen cannot do now.

  Even while trying to improve, Nielsen says its current data system is more than adequately accurate.

  "When we tell CBS that X millions of men 18 to 49 are watching Everybody Loves Raymond, that's a very good estimate," Dimling said. Still, he said, "we have a commitment to do everything we can to improve the quality of the data we provide." And Whiting is the right person to lead Nielsen through the vast changes that television is about to face, he said.

  Network executives and television analysts agree. "Every transition is an opportunity for a new administration to come in and look at things with fresh eyes," Wurtzel said. "I'm hoping that Susan will do that."
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