AdCom defends cable ratings turf

Feb 4, 2002  •  Post A Comment

Bill Livek wakes up every morning with a singular focus in mind-to help advertisers and agencies reach their target audience. That’s not an easy task in a fragmented marketplace, but Mr. Livek contends that one of the most effective means to reach specific consumers is local cable.
Mr. Livek is the CEO of AdCom, which is based in Deerfield Beach, Fla., and measures local cable ratings by relying on household meters used by samples five to 10 times as large as Nielsen’s, he said. The company meters three markets-Dallas, San Francisco and Jacksonville, Fla.-and is in the process of adding Cleveland and Sacramento, Calif., to the mix. Mr. Livek took a break during the National Association of Television Program Executives convention to conduct a phone interview with Electronic Media. An edited transcript follows:
EM: How do you think local cable ad sales have been affected by the soft ad market?
Mr. Livek: Of course they’ve been affected. But if you do some homework and talk to some of the cable interconnect general managers, many of them are not up, but most of them are not down, either, compared with comparable [broadcast stations in the local market]. In a tough economy, advertisers who want to sell products-and they all do-continue to advertise, but they advertise more intelligently, and local cable will be the beneficiary-always.
EM: Arbitron has released some of the early results from its Portable People Meter test in the Philadelphia DMA, and that data shows that cable ratings double when the people meter is used, as opposed to the diary system, which AdCom uses. How will this test and future commercial deployments of the PPM affect AdCom’s viability?
Mr. Livek: The answer is: I question the PPM viability. AdCom has spent $45 million to develop and prove [our technology and methods]. Arbitron is just starting. At a minimum, they have to spend another $45 million. But put the economic argument aside. Arbitron is not discussing the fact that this is unlikely to be implemented on a mass scale.
EM: The test shows people wore it on average of 15 hours a day (the test included 250 people).
Mr. Livek: All companies learn that the definition of success is, do you have a sustainable system that can work for years in the market? AdCom has proven that. That’s why we continue to believe that AdCom is rapidly becoming the standard for local cable.
EM: Do you think there is room for Nielsen, Arbitron’s PPM and AdCom, and how do you see the pie being split up among the three of you?
Mr. Livek: Nielsen will continue to be the standard for broadcast television. AdCom will be the standard for local cable. Arbitron will continue to be the standard for radio, not in cable and not in TV. Agencies need to buy highly targeted TV. If you look at the top 25 media placement companies, 32 percent of them are using AdCom. An additional 55 percent have installed AdCom. A total of 87 percent of the dollars are being affected by AdCom. So we have penetrated the top 25 media specialist companies, like MindShare. … In all of the local markets, we are penetrating in the local and regional shops where, basically, the action really is.
EM: You’re continuing to grow and make a name for yourself, but you’re still clearly the David to Nielsen’s Goliath. How do you feel about that, and is it always going to be that way?
Mr. Livek: Nielsen solves a broadcast problem. It does not solve a local cable problem. As long as we wake up every morning as we do, completely obsessed with solving advertiser and agency problems, therefore we [are solving] local cable’s problems, and we will … continue to be successful.
EM: Where do you think you will be at the end of this year? How many more markets will you be in?
Mr. Livek: We can see the mega-trend in the next five years that we will be measuring the top 30 markets.
EM: Your contention is that past buying behavior is a more accurate predictor of future buying behavior than demographic data. Why and how do you use demographic data?
Mr. Livek: Someone who currently drives a BMW is more likely to buy another BMW or to buy a luxury European car. Therefore, people who currently own luxury European cars or BMWs are a better demographic than using males 25 to 54. Age and sex demographics will continue to have a place [especially for] companies like McDonald’s, which are mass marketers. That’s one of the reasons we have invited on our board of directors the former head of United States Media at McDonald’s, Mary Kay Eschbach.
EM: Why is it important to have a measurement system targeted for cable?
Mr. Livek: Because cable is different. Measuring something that is very efficient and very targeted is different from measuring mass population. Realistically, you can’t do both well. Nielsen has focused-and rightfully so-in broadcast, because that’s where the historical profits have been, and Nielsen has built an enormously profitable company, and it’s a great company for broadcast television. We are building the next great company for local cable, because it’s different.