• by David Goetzl  @dgoetzl, June 26, 2012

After lengthy testing, Nielsen has a plan that would upend its measurement system for local markets by increasing sample sizes significantly, while also using set-top-box (STB) data and a new device known as a code reader.

The new system would bring daily ratings to the diary-only markets that now only receive ratings four times a year during sweeps periods. Ratings in those 150-plus markets would no longer be based on just diaries. Electronic measurement via the code reader and STB data would also be used as part of a hybrid methodology.

In diary-only markets, the new Nielsen system would effectively double the current sample size, according to a client memo distributed Tuesday.

In the remaining markets, which have local people meters (LPMs) or set meters, the sample sizes would effectively quadruple.

Nielsen data collection in all markets would be buttressed by the code reader, which Nielsen refers to as a “new proprietary home TV measurement technology,” with a “watermark-enabled capture device.”

Implementation for the new system is unclear. In each market, there will be a period of three to six months when the existing system will be offered alongside the new one for evaluation and comments.

Nielsen executive Pat Dineen, who has overseen the project, said the company is ready to flip the switch from a technological standpoint, but plans to only be as aggressive as clients want.

For example, stations might want to move deliberately in order to bolster their research capabilities to process the new data, particularly in diary-only markets. Stations may also have doubts about the viability of STB data. But Dineen said by mid-2013, the new system could be operating in markets using all three Nielsen measurement sources.    

“If our clients tell us we need to move faster and they’re accepting of the new technology, that will be a trigger that we need to move faster,” he said.

Nielsen’s STB methodology is moving through the Media Rating Council accreditation process. The MRC has revoked accreditation for Nielsen’s diary-only process. Dineen declined to comment on how the new system may affect efforts to obtain that again.

Stations in diary-only markets have been complaining to Nielsen for years that the pen-and-paper system is as current as “Gunsmoke.” Those begging for an overhaul may have gotten more grist from recent snafus involving May sweeps data, where there was trouble in printing the diaries correctly on Nielsen’s end.

In fact, stations in markets of all sizes have been arguing that sample sizes are far too small, bringing wild swings and unpredictability in ratings. A station executive might note it is ludicrous that if five people in a sample don’t watch “Jeopardy,” the rating inexplicably could come back as zero.

Many industry executives have called for Nielsen to integrate STB data, suggesting it can provide a more reliable solution. Nielsen competitor Rentrak has signed up a slew of stations to use its STB-based product. On Tuesday, the Sinclair group said it is jettisoning Nielsen to use Rentrak at several stations, including the CBS affiliates in Austin, West Palm Beach, Providence and Salt Lake City.

“Only Rentrak has proven that our information is stable and predictive, and it’s out there in the market today,” said Rentrak CEO Bill Livek.

In its client memo, Nielsen said its new system is aimed at providing data that is “representative, stable, consistent and able to capture the entire viewing audience.” Nielsen has showed reticence with using STB data only, arguing it does not cover homes using only over-the-air TV; does not provide sturdy demographic data; and might mistakenly count homes where the set-top box is on, but no one is watching. Thus, it has pushed for a hybrid approach with a panel informed by what’s also known as return-path data.

In its memo, Nielsen said its new system would provide “significant reduction in zero-rated periods and ratings variability.”  

“We’re clearly doing this to be a better service to our clients,” Dineen said.

TVB chief Steve Lanzano expressed cautious optimism, saying there must be ample time to evaluate the methodology, but “any initiative to increase the sample to reduce the variability and to get rid of zero cells that will make measurement better for local broadcasters is a good thing.”

Nielsen has acknowledged it has access to STB data from DirecTV and Charter Communications, but Dineen said it has arrangements in place to obtain it from a run of other providers.

The new system was designed not just to upgrade TV measurement, but to lay the groundwork for cross-platform measurement tracking online and mobile usage. Nielsen said it will measure “content as it moves across screens such as tablets and smartphones.”

Dineen said it was also crafted to allow for so-called single-source measurement that looks to match media consumption with actual purchase data.

Rentrak CEO Bill Livek said his company is doing that now -- matching TV viewing with automotive purchasing, for example. “We’re the iPhone in this space,” he said. “We’re doing it. We keep advancing with our product.”