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October 2, 2009

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New media raise need for new ad data

THE explosion of ways people watch television is confounding the media industry, which has relied for decades on the Nielsen ratings but now must adapt to the realities of the Internet and on-demand video.

Americans are watching more TV than ever - an average of 151 hours a month - on more networks and in increasingly diverse ways. Industry heavyweights and analysts are calling for a new ratings system to keep up.

At first there was a "crisis in measurement" due to the scarcity of data, said Alan Wurtzel, president of research and media development at NBC Universal, which is 80 percent owned by General Electric Co.

But now, he said, content providers are "drowning in data."

Broadcasters, content providers and advertisers including consumer products giants Unilever and Procter & Gamble Co are all trying to adapt.

"In the past one-and-a-half years there has been a geometric increase in consumers' access to the Internet for video, and the metrics market has not kept up," Wurtzel said.

Though little more than 2 percent of television viewing is done on the Internet,, which combines video from 150 broadcasters on a single platform, has seen its audience grow fourfold in the last year, according to The Conference Board/TNS. Hulu is a joint venture owned by media giants NBC, News Corp and The Walt Disney Co.

This month, 15 of the biggest broadcast network companies, advertisers and media-buying agencies formed the Coalition for Innovative Media Measurement to help improve audience metrics.

CIMM is a limited liability company with 15 voting members, from Unilever and Procter & Gamble to MTV Networks. Each has contributed US$100,000 for a minimum two-year engagement.

CIMM is expected to seek two bids from ratings and data companies: one to conduct set-top box research, the other for cross-platform viewing.

But Nielsen ratings still hold sway over the buying and selling of advertising.

Major broadcast networks spend roughly US$1 billion dollars every year to get ratings from Nielsen, estimates Larry Gold, who publishes Inside Research, a newsletter on the market research industry.

"It has control of the marketplace," he said.

This is an often-heard gripe against Nielsen, which says it has made significant investments in acquisitions, infrastructure, and research that address the new ways people use media.

As for CIMM, Susan Whiting, chairwoman of Nielsen Media Research, said, "We share all of the objectives of the leaders of the coalition, and we are interested in hearing more about their plans."


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