The Storm Over Nielsen’s People Meters

Jul 15, 2004

By Thomas Tseng

This week, Senate Commerce committee hearings are slated to investigate Nielsen Media Research’s controversial new ratings measurement system known as Local People Meters (LPM). This set-top, black box technology, designed to replace the decades-old pen-and-paper diary system used to track TV ratings, was introduced earlier this summer in New York, and was recently rolled out in Los Angeles.

Eventually, LPMs are scheduled to become the broadcast ratings standard; to be used for establishing advertising rates and wielding the audience numbers that will make or break TV programs.

While this upgrade in measuring TV viewing should represent a significant improvement over the imprecise, memory-driven diary methodology of the past, LPMs have, instead, unleashed a firestorm of controversy and challenges for Nielsen Media Research.

The reason? According to Nielsen’s critics, the system undercounts minority households.

With $60 billion in advertising revenue at stake, a number of broadcasters have openly expressed their skepticism with the new technology and have asked Nielsen to delay the LPM rollout until it can be further scrutinized. When Nielsen refused, some broadcasters went on the attack, none with more ferocity than Rupert Murdoch’s News Corp. Ltd and Spanish broadcasting giant, Univision Communications.

News Corp. has sponsored the political organizing efforts of Don’t Count Us Out. The coalition some call News Corp.’s faux grassroots facade has launched a $2 – $5 million media assault in newspaper advertising, TV ads, and negative telemarketing as a way of galvanizing minority public opinion against the new system, while simultaneously tapping into News Corp’s political influence among legislators and politicians to berate the TV ratings provider.

Meanwhile, Univision has attempted, and failed, to sue Nielsen by obtaining a court injunction to block the LPM rollout. A suit claiming that Nielsen has defamed the Spanish-language network among its own advertisers is still pending.

Moderator’s Comment: How are growing minority populations affecting consumer and retail marketing? Do current audience
measurement systems provide marketers with accurate data to properly target media dollars?

While all this acrimony is now moving from the public eye into the halls of the Senate, the grand fuss over this new LPM technology has obscured a much
broader, more fundamental issue that forward-looking marketers should pay heed to: the growing importance of ethnic consumers in the American marketing landscape.

As a media conglomerate driven by the dictates of the marketplace, Rupert Murdoch’s News Corp. is not particularly well-known for supporting grassroots,
charitable efforts. Yet, it does realize that its broadcast subsidiaries and media holdings – including Fox, UPN, DirectTV, and others – now depend even more on an emerging minority
TV audience, particularly with programs like UPN’s The Parkers and One On One.

Properly counting minority households used to be confined to academicians, government analysts, and census bean counters. No longer. Ethnic markets continue
to grow at rates far greater than the general population and are beginning to command greater attention in the consumer marketplace – including broadcast media.

Hence, whereas the representation of minority households was once a civil rights issue, it now has major business ramifications. It’s a business decision
that every marketer has to make in their calculus.

Thomas Tseng- Moderator

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