MRC Advocates Voluntary Code

Aug 8, 2005  •  Post A Comment

George Ivie, executive director and CEO of the Media Rating Council, faces a tall order on a tight deadline: Get the research professionals who for years now have been on opposing sides of a costly battle over ratings measurement to sign a voluntary code of conduct by Oct. 15.

“Now the rubber meets the road,” Mr. Ivie told TelevisionWeek.

If New York-based Mr. Ivie can’t get everyone to sign, he hopes at least to sort out where the various parties stand so he can revise the agreement to reach a consensus. He would also like to show the House and Senate that research companies like Nielsen Media Research and their station, network and advertiser clients can figure out how to do business fairly without government intervention.

Measures were recently introduced in both the Senate and the House that would give the MRC power of enforcement-The Fairness, Accuracy, Inclusiveness and Responsiveness in Ratings Act, or FAIR Ratings Act, in the Senate and the Television Viewer Protection Act of 2005 in the House. Industry agreement on the voluntary code, however, would make such legislation unnecessary, insiders say.

The MRC, made up of representatives from advertisers, broadcasters and cable networks, has the power to discipline members but cannot discipline measurement services, since they are not members. Getting Nielsen and other research companies to sign off on the voluntary code would give the organization power to enforce the rules agreed upon in the code. The rules would apply to both MRC members and the research companies.

Before any further debate takes place on Capitol Hill, Mr. Ivie said, he would like to go back to Congress with “good progress to report” on the status of the code.

“What I’d like to know is whether [media] organizations are really supportive. Everybody has expressed support. But we’ve got to work out the language. We’ve got to make the compromises that the [MRC] board sees fit,” said Mr. Ivie, who was a partner at Ernst & Young before joining the MRC in 2000. At Ernst & Young he served as the lead representative and adviser to the MRC, according to the Web site for the Advertising Research Foundation. Mr. Ivie is on the ARF’s board of directors.

“This way we know who’s in. We know who’s out,” he said. “We know whether they sign off or not before any of this stuff comes up, so we can go back [to Capitol Hill] with a strong message.”

That’s likely to be easier said than done, even for Mr. Ivie, whose background includes more than 20 years’ experience in media research auditing and consulting. At Ernst & Young he conducted all MRC audits and interacted with MRC management and member organizations, according to arfsite.org.

The parties who have been doing battle over ratings methods are fully entrenched. Since Nielsen’s rollout of Local People Meters in Boston in 2002, several of the research company’s clients have made a noisy play for requiring accreditation of the new LPM samples by the MRC before the results would be made standard. Nielsen has consistently resisted such pressure

What’s more, even if Mr. Ivie does come up with a code that everyone can agree on-including how and when LPM samples are accredited and whether such accreditation is necessary for Nielsen to start using the new samples’ numbers-Nielsen insists the code then must be submitted for governmental approval. The MRC disagrees with Nielsen on that point.

Among the voluntary MRC code’s proposed stipulations are disciplinary actions and sanctions for measurement services that “have willfully disregarded or repeatedly violated the terms” of the voluntary code, according to an eight-page draft of the code obtained by TelevisionWeek. (A full transcript of the code appears on TVWeek.com.) The proposed measures include referral “to the appropriate federal agency.”

The MRC was born in 1964 at the urging of Congress and with special permission from the Justice Department.

Nielsen, the only company that collects TV viewership data nationally, insists that because of the mandate under which the MRC was formed, any procedural changes, such as those proposed in the code, must be reviewed by either the Justice Department or the Federal Trade Commission before they are enacted.

“I don’t think so,” Mr. Ivie said. “But if a ratings service believes it should go through further review, that would be their responsibility. We don’t submit our own code of conduct to Justice Department review. Our board determines our procedures. Keep in mind our board is representative of all the customers of Nielsen-we’re talking about Nielsen a lot, but this is all ratings services.

“Unless you do something blatantly full of antitrust concerns, or unfair or biased, your customers should carry the day, I think. This is a voluntary code of conduct. If somebody wants to have somebody else take a look at it, they should submit it, not us.”

“We dispute that,” said Nielsen Senior VP of Communications Jack Loftus. “All of our customers are not members of the MRC. We do believe that any change in procedures would affect the [original] consent decree, and therefore after we all agree we need to submit it to the government for a normal business review.

“If we all agree to this voluntary code of conduct, the next step is to submit it to the Justice Department or the FTC. And we expect to do that, after everybody agrees and just before we have the march up Pennsylvania Avenue.”

Mr. Ivie said the heated debate over the balance of power between Nielsen and the MRC has its roots in Boston, where Nielsen launched the first LPM service in 2002 but did not receive accreditation for the service for another nine months.

A Different Pattern

Nielsen has argued that it traditionally has launched first and received accreditation later. But Mr. Ivie said the difference is that the MRC has become familiar with the patterns in the paper diary-meter systems Nielsen had installed in more than 50 markets, seven of which have now been converted to meters-only LPM markets. LPM services are scheduled to be launched in three more cities by early next year.

“Our board, after the Boston experience, sent some documents to Nielsen that basically said, ‘Hey, it would be our preference that you get future LPMs audited and accredited based in what we saw in Boston,'” Mr. Ivie said.

Mr. Loftus said Nielsen “never got official notice that the procedure had changed. We never got anything like that. Had we received that, I think we probably would have gone right to the government with that.”

Mr. Ivie remains optimistic about reaching a consensus with the code. He said that in all the discussion leading up to and including the Senate Commerce Committee hearing on July 27, “The debate is not about whether the MRC is any good. The debate is centered on what kind of power should be instilled in the MRC to really enforce its findings. There is a big win in that.”

Mr. Loftus has said Nielsen “is going to work through the MRC to get a voluntary code.”

Other media-measurement companies who favor a voluntary code include Mediamark Research and Arbitron.

Nielsen Media Research has said it won’t launch any more of its Local People Meter services until they have been audited, a step that is preliminary to accreditation by the MRC.

The passage of the voluntary conduct code that deals with “support of the accreditation process” refers mostly to accreditation. It does not mention audits, but it does say, “At minimum, disclosure of impact data as required by MRC Minimum Standards and completion of an audit and MRC committee review prior to commercialization of a replacement currency product is critical to this process.”

So the Nielsen promise to seek audits before LPM rollout is “a win for the MRC and the marketplace,” Mr. Ivie said.

“We have always been a strong supporter of the MRC,” Arbitron spokesman Thom Mocarsky said. He added that a test being done with Nielsen is already being audited, and Ar
bitron’s goal is to have it accredited at launch. Mr. Mocarsky said Arbitron thinks the oversight process should be “collaborative” and recognize that “We are the research experts.”

Mr. Ivie said the MRC continues to consider the status of Nielsen’s LPM services in New York, Los Angeles and Chicago, which have not earned full accreditation. (Boston and San Francisco are accredited. Washington and Philadelphia are not.)

Mr. Ivie also said an audit has begun for the Nielsen Hispanic Television Index, which measures viewing of Spanish-language programming from households within the national People Meter sample.

Voluntary Code of Conduct/Media Rating Council, Inc.