• by David Goetzl  @dgoetzl, October 12, 2012

Nielsen’s new local TV measurement system looks to boost the ad market. It might give the jobs market at least a little bump, too.

This week, Nielsen began installing new technology that is a cornerstone in its efforts to transform ratings in local markets. The “code reader” is making its way into homes in St. Louis and Charlotte, while coming soon to Dallas.

Over time, some 60,000 of the devices will have to be plugged in with field workers doing panel recruitment and installations, necessitating hiring and training.

“Nielsen’s good for the economy,” said Matt O’Grady, the company’s managing director of local media, who wasn't being too flip.

The code reader, which uses audio signals to identify programs, will help quadruple the effective size of the Nielsen sample in markets with local people maters (LPMs) – which include St. Louis, Charlotte and Dallas. A quadrupling will also occur in markets with set meters, where installation will begin in five of them soon. Laying groundwork in all 210 markets – which include those using diaries, where there will be a panel doubling -- will be a multi-year process.

O’Grady said, however, once the installation gets going it moves pretty quickly through a market.  It’s sort of “plug and play … all it really requires is electricity” as the devices are placed within earshot of a TV set.

The code readers, which send data to Nielsen using wireless technology, join return-path data (commonly known as set-top-box data) in providing additional tools in gathering ratings information. (On the jobs front, Nielsen may need to hire more analysts to claw through all the data flowing back to it.)

The three initial LPM markets were chosen in part because they have homes served by cable operator Charter Communications. Nielsen is obtaining its set-top-box (STB) data from Charter and DirecTV, though it hopes to add other sources.

Its legacy local people meters, set meters and diaries aren’t going away, but will become one of three ratings streams that Nielsen says will help it expand panel sizes and increase ratings soundness. The quadrupling in St. Louis, Charlotte and Dallas will boost the 600-household panel to 2,400 in each, for example.

Many clients have been lobbying or several years for larger panels to better reflect viewing behavior and for Nielsen to take STB data from the lab to the living room.

In metered markets, Nielsen will have at least as many code readers as LPMs or set meters. But, the number of code readers will vary widely depending on how much STB data Nielsen has access to. The less STB data, the more code readers.

In Dallas, Nielsen has access to STB data covering 24% of TV homes. In St. Louis, it has access to 60%. So, in Dallas, the panel could have about 1,200 homes with code readers, compared to 600 in St. Louis.

By next summer, clients will be able to evaluate preview data from the new system that’s packaged similarly to what the ultimate product will look like, offering them a chance to “understand it on a wide scale,” O’Grady said. Some preliminary findings will be made available starting in the late winter -- what O’Grady referred to as “alpha data.” (More employment news: TV stations may have to ultimately bolster their research teams to work with the data mass.)

Nielsen would like to receive accreditation from the Media Rating Council (MRC) for its code reader and processing methods for STB data before launching the new ratings service. But if client demand is intense and the MRC review process takes a while, would Nielsen launch the service while continuing to pursue the MRC credential?

“It depends on what the data looks like and the acceptance in the market, so I can’t answer that emphatically,” O’Grady said of the possible parallel track.

(Nielsen took that dual path with its C3 ratings in the national TV market several years back.)

The installations that began this week come after testing in the Northeast and Florida, which came after so many other steps in engineering, data validation and processing, manufacturing, etc. One issue was trying to make the new system compatible with processing systems such as Mediaocean and STRATA.

“When you introduce a change you have to make sure you don’t upset the ecosystem,” O’Grady said

Some in the local TV business might say that wouldn't be a bad thing on some fronts.