Editor’s Note: An EM piece that ran April 2, “Ad revenue count hurt by fuzzy logic,” focused on the fact that ad revenues reported by Nielsen Media Research’s Monitor-Plus and CMR, the two major research companies, for cable networks were in many instances significantly different. For example, the article noted that according to Nielsen, the Food Network brought in $39 million in ad revenues in the fourth quarter. CMR pegged those revenues at $11 million for the same time frame.
EM invited both CMR and Nielsen to write separate essays for us explaining why they thought there was such a disparity in the numbers reported by each service. CMR declined our offer, saying in part, “While an essay is certainly one way of communicating differentiations between Nielsen and CMR’s data collection processes, it is not a structured exercise that offers guidelines that would result in an effective apples-to-apples comparison for the marketplace.”
Here is the essay submitted by Nielsen:
In reading last week’s article on estimated cable network revenues reported by Nielsen’s Monitor-Plus and CMR, I was reminded of a scene from the classic film “Casablanca.” The report suggests that industry observers are “shocked, shocked” to find disparities between spending estimates reported by each of the industry’s most prominent competitive advertising reporting services. Is this a big story? Hardly. It would be far more remarkable were the totals identical. Why? Because they are estimates, not actuals, derived using different methodologies.
While we can’t vouch for the estimating techniques used by CMR, we can say that our techniques for estimating spending for both national and local television schedules are predicated on audience delivery. Given that the correlation between pricing and audience size has been (and continues to be) the cornerstone of the television economy for more than half a century, we believe this approach makes perfect sense.
Monitor-Plus provides a competitive advertising service, not a financial audit. Until the industry embraces universal compliance, where details of each distributor’s revenues are supplied to independent third parties, such as Nielsen, for reporting, available spending estimates are bound to be ambiguous.
Even were such compliance to become a reality, spending estimates reported for specific advertiser brands would continue to differ from actual spending levels-and for good reason. All negotiators are not created equal. As any veteran television buyer will attest, spending levels, lead time and prevailing market conditions can contribute to significant differences in prices paid by one advertiser vs. another, even if the same buyer is handling the negotiations for each. Announcements provided at no charge (e.g., make goods, audience deficiency units) further muddy the waters of syndicated spending analyses.
Informed industry observers have long recognized that while such spending estimates ought not be considered gospel, they are useful directionally. In our view, anyone associated with a syndicated reporting service choosing to characterize spending estimates as unambiguous is either uninformed-or less than truthful.
Far more important to customers than spending estimates are accurate reporting of brand/advertiser occurrences linked to audience estimates associated with each announcement. While spending estimates may be fraught with ambiguity, accurate reporting of audiences viewing these spots is where the rubber meets the road. From a brand manager’s perspective, knowing the exposure level achieved by a given competitor’s campaign has far greater relevance in the marketplace than whether the spending estimates reported differ from actuals by 10 percent or 20 percent.
Likewise, providing an accurate count of specific commercials linked to audience delivery supplies sellers with an accurate track of competitors’ inventory, bereft of the ambiguity unavoidably associated with syndicated spending estimates.
More widespread compliance with requests to supply accurate spending estimates to the industry for purposes of competitive reporting would be welcome. We remain pessimistic, however, that attaining such compliance universally is imminent. We believe that in the absence of such compliance, our techniques for estimating spending levels are the best available. That cable networks owned by Disney, Viacom, Discovery and Turner (to name a few) have long subscribed to Monitor-Plus provides ample evidence to support that claim.
Any competitive television monitoring service is only as good as its occurrence data. Noting commercial announcements and correctly identifying the appropriate brand for each commercial execution amounts to the “blocking and tackling” fundamentals of competitive television reporting.
Despite transforming technological changes in the data collection process implemented in the recent past, no independent comparative analysis of the two competing monitoring services has occurred in well over a decade (since the 1986 study administered by the American Association of Advertising Agencies).
We at Nielsen would welcome an update of this analysis as a means to assure industry participants that the underlying television competitive occurrence information crucial to their business needs is both accurate and actionable.#