Nielsen faces challenge from Comcast, QVC

Mar 12, 2001  •  Post A Comment

Shopping network QVC and its majority owner, cable system operator Comcast Corp., are developing a TV audience measurement system that could pose the biggest challenge in years to VNU’s Nielsen Media Research. Research executives have voiced complaints for years about Nielsen’s virtual lock on TV ratings data. But they said the new service still has a number of flaws and faces significant hurdles in its bid to take on Nielsen.
The service is the first offering from a new interactive TV venture called Target T.V. Chuck Thomas, vice president of Target T.V., quietly approached potential clients-including agency, marketing and network research executives-at the Advertising Research Federation conference last week in New York.
Target T.V., a joint venture by QVC and Comcast, began deploying specially equipped digital set-top boxes in about 60,000 homes in Comcast’s Philadelphia cable service market late last year. It has since moved into Comcast’s Charleston, S.C., system and is preparing to distribute boxes in four more Comcast markets: Baltimore; Hartford, Conn.; New Haven, Conn.; and an unspecified West Coast system.
The company is also in discussions with non-Comcast cable operators for expansion into their markets. Ultimately, Target T.V. is looking to expand into at least 750,000 homes. Target T.V. is also preparing to test another service in Philadelphia and Charleston that will allow consumers to use remote controls to make purchases or request information about products advertised in commercials or during shopping shows.
Unlike past challenges to Nielsen, such as the SMART venture abandoned by Statistical Research Inc. in 1999, Target T.V. won’t depend on research revenue alone. The company plans to generate revenue from sales of targeted interactive advertising, home shopping services, surveys and games.
At least as measured by households and markets, Target T.V. is the biggest challenge to Nielsen in recent years. ADcom Information Services, whose investors include WPP Group, operates a cable measurement service in Dallas; Jacksonville, Fla.; and San Francisco, with panel sizes ranging from 600 to 1,000 or more.
Network and agency executives and media consultants, however, expressed skepticism that the new service could mount a serious challenge to Nielsen’s near monopoly anytime soon.
“It doesn’t collect persons viewing, and they aren’t necessarily giving a representative sample,” said Bruce Goerlich, senior vice president of media research at MediaVest Worldwide, New York.
Target T.V. is limited to digital set-top households, so it doesn’t account for non-cable users, or, for that matter, cable subscribers with analog set-top boxes.
“There’s little doubt who would benefit from any of these new systems … smaller cable networks,” said David Poltrack, executive vice president for research and planning for CBS. “The bigger problem is that the set-top users have more [viewing] choices than people who don’t.”
Network executives also point to basic structural problems. “None of these systems tell you who is viewing,” Mr. Poltrack said. “That said, there is some value in monitoring 60,000 people” as Target T.V. does in Philadelphia, “compared to Nielsen’s 5,000. At the very least there is opportunity to gain knowledge.”
Target T.V.’s ties to QVC and Comcast are also likely to be viewed dimly in the TV research community. Asked whether it matters that QVC owns the new operation, Mr. Poltrack said, “Certainly, that’s a problem.”
Mr. Thomas said Target T.V. is trying to address bias concerns by operating independently from its parents. But Jim Peacock, a former Arbitron executive who now operates the independent media consultancy Peacock Research, said Target T.V. data would probably have to be validated by third-party audits.
Mr. Thomas also said Target T.V. is working on a supplemental sampling system that could fill in individual viewership data and other gaps. The company is developing subset panels in each market that are representative of the broader population rather than just households with digital set-top boxes.
It would take considerable work before a system such as Target T.V. could become the basis for transactions, as Nielsen is now, said Erwin Ephron of media consulting firm Ephron Papazian and Ephron. But he said media buyers might still be able to use its detailed demographic and second-by-second channel-surfing data for spot buying opportunities.
Unlike Nielsen households that keep diaries or have sets equipped with People Meters, Target T.V. households are largely unaware their viewing is monitored, Mr. Thomas said. Target T.V. uses provisions in standard cable service contracts for Comcast and most other systems that allow collection of anonymous viewing data for research. Mr. Thomas said system safeguards prevent Target T.V. from identifying individual household viewing data.
To track channel surfing, Target T.V. reports so-called “clickstream” data in increments as small as five seconds. One analysis of Philadelphia households during last month’s Grammy Awards broadcast showed most viewers who strayed during commercial breaks headed to Fox’s “Temptation Island.”
Mr. Thomas acknowledged Target T.V. is far from having its business figured out and doesn’t even know what types of reports clients will prefer. Early relationships with a handful of select clients will be key in developing the service, he said.
Target T.V. may also consider a partnership with another marketing services company, he said. “Where we’re strong is in the technology side and the ability to produce that and deliver it. Where we are infants is in the ability to market it.”