by Dave Zornow
Published in Cable Avails magazine, October 1993
Today, the media plan for a new product or service may include broadcast TV, cable, or direct mail to reach prospective buyers. In the near future, the dividing lines on the media planner's flowchart may begin to blur as interactive cable merges the targeting ability of direct mail with the sight, sound and motion of television. Both buyer and seller will require new research tools to evaluate the effectiveness of this hybrid media.
"In the future, we may not care what programs people watch as long as their household has the right characteristics," says Anne Benvenuto, Vice President Director of Media Services at Time Buying Services. "Using historical product purchase data to digitally insert and reach likely consumers may be a better way to target consumers than using demos or programs."
What role will ratings have as the numbers of viewing choices proliferate? New basic cable, premium and PPV viewing options will increase ratings fragmentation. A successful interactive business may further erode viewing levels, requiring a change to the historical definitions of 'network,' 'daypart' and 'mass reach vehicle.' "It's OK for the ratings to get lower," says Benvenuto, "but they need to be better qualified. Agencies will have to evolve from evaluating with a cost-per-thousand viewer to a cost-per-thousand prospect and a cost-per-thousand customer."
The ideal place way to measure cable is to use the existing plant to poll set-top converters to find out which channel a household is watching. In 1980, the QUBE system in Columbus, Ohio used their pre-fiber and non-multiplexed coaxial cables to monitor viewing and create local ratings. "The amount of raw data QUBE produced was overwhelming," says Tom Neville, Vice President of Research for SET Pay Per View and former research director at QUBE. "This was before the days of Lotus 1-2-3, so we needed an army of temps with calculators working for six weeks to complete a one week comprehensive viewing study." Neville says that some of this data was used to support ad sales, although local cable advertising was still in its infancy. Some advertisers were skeptical of the cable census provided by QUBE because they were uncomfortable using anything but the "gold standard of Nielsen." Neville says the biggest problem facing system ad reps during the early days of QUBE was selling the value of cable advertising.
KBL-TV in San Antonio is among a handful of systems that have built on the QUBE experience to create system-based local ratings. Zenith's Z-view system and proprietary software let KBL capture viewer responses to added-value advertising offers, trivia contests and viewer opinions during electronic town meetings. The "Star Response" system can also report what the 100,000 Z-view equipped subscribers are watching. Bill Carleton, corporate manager for Star Response, uses the system to generate ratings for ad insertable channels. CNBC is one believer in the new technology: they've just entered an agreement with KBL to receive ratings for CNBC programs among interactive KBL viewers.
Cable-based ratings systems don't have the same depth and breadth of the Arbitron and Nielsen local market reports. KBL's system can't calculate shares because the cable system HUT (total households using television) can't be quantified; KBL's headend software doesn't measure cable-ready sets TV that do not use a Z-view converter. And demographics -- derived from respondents pushing buttons or keeping diaries -- are not generally available either.
Richard Guire, Chief Operating Office of Adcom Information Services, proposes a solution that capitalizes on the strengths of the existing cable infrastructure and the technology used to build addressable converters. "Local cable is simply not served by the current system -- system operators need ratings tools to compete for local advertising," says Guire. Adcom proposes wiring up portions of ADIs and DMAs represented by MSOs with a large market share. Using addressable technology, Guire says Adcom can build a better household meter at a lower cost than the ratings services. The Adcom meter uses the existing cable plant to download instructions to each meter and standard phone lines to send results back to Adcom. Although this approach doesn't offer the complete census of a polling system like KBL, Adcom is promising significant increases in sample size over the ratings services. In a top 20 market where Arbitron and Nielsen install about 300 meters for all TV HHs, Adcom says they will install 2400 meters to cover just cable households. Larger samples will create cable ratings with higher statistical reliability.
Does the second birth of two-way technology mean that the ratings services will soon lose their grip on the audience measurement business? Both buyer and seller agree there will always be a role, but it may be a changing one. "The fact that we have this information doesn't necessarily mean that it replaces Arbitron and Nielsen," says Larry Zippin, Vice President Corporate Ad Sales at Time-Warner. "The ratings services' have a rich file of reports which may not need to be recreated by others. If everything Nielsen and Arbitron did was based on 100% accurate transaction data, I think a lot of the criticism they get would go away." Time Buying Services' Benvenuto aggrees. "There's still a role for these services because agencies will want a third party to verify and quantify the viewing." How will the rating services keep pace in the age of digital delivery? "Nielsen needs to put their passive people meter chip in Jerrold's box," she says.
Benvenuto predicts that interactive cable can be a successful business with only 30% TV HH penetration. What effect will time shifting, ordering movies on demand and using other interactive services have on broadcast and cable HUTs (homes-using-television) if almost a third of all TV HHs are actively interactive? "There will always be networks, says Benvenuto, "but the local affiliate is in danger of becoming extinct." Maybe not. But it's food for thought about a media future very different from the one in which we work today. ##
Dave Zornow is President/TNG Research, a media research consultancy and applications development company that works with media sellers and research providers.
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