News

Life After SMART Means Nielsen

6/06/1999 8:00 PM Eastern

In the wake of SMART's shutdown, industry executives
began to realize that any future improvements in national television and cable ratings
will have to be done in association with Nielsen Media Research.

In biting the dust, Statistical Research Inc.'s SMART
(Systems for Measuring and Reporting Television) has joined several past failed attempts
to compete with Nielsen.

AGB Research, Arbitron Co.'s "ScanAmerica"
and R.D. Percy Co. were earlier "roadkill," as SRI president Gale Metzger
described them.

Instead of looking for another researcher to take on the
ratings giant, Tim Brooks, senior vice president of research at USA Networks Inc., said
the advertising community may now sing a different tune. It may revisit a long-dormant
plan to form an industry commission to oversee TV ratings, as is done in the United
Kingdom.

The American Association of Advertising Agencies (Four
A's) floated such a ratings-consortium plan in 1997, but it never got beyond the
talking stages.

But Steve McGowan, vice president of research at Discovery
Networks U.S., seemed to doubt that scenario last week. Moreover, when asked if the
organization might revive that idea following SMART's folding, a Four A's
spokeswoman said last week, "There's nothing new to say on that."

Various cable and advertising executives had cautioned
nearly two years ago that the consortium notion might not amount to an alternative to
Nielsen in any case. Since there would be a bidding process, they pointed out, Nielsen
could end up as the winning bidder.

"We're always interested in having another set of
[ratings] data" for comparison purposes, McGowan said. But SMART was "structured
with the broadcast networks, and then the cable networks, bearing the brunt of the
costs," rather than the advertising community. "That's just the economics
of the U.S. marketplace," he added.

TV and cable executives have not been alone in griping
about Nielsen. The Four A's spokeswoman observed, "Ad agencies have been
frustrated with Nielsen. There needs to be improved methodology."

For now, McGowan, expressing optimism, said, "Nielsen
is showing some movement in its current meter-sample size and in [preparing for] the next
wave of measurement" for the age of convergence. "They are moving ahead" --
in part to offset the former competitive threat from SMART -- and he added that he hoped
Nielsen would continue to make progress "without having [that] outside
incentive."

On the local ratings front, National Cable Communications
CEO Tom Olson said last week that he hoped the Four A's would play a role in pressing
for improved local measurement. Nielsen is currently facing a challenge in that field from
ADcom Information Services Inc.

However, ADcom has not signed any additional MSOs since
Tele-Communications Inc. (now AT&T Broadband & Internet Services) committed for
two of its major markets last fall (San Francisco and Dallas); MediaOne Group has used
ADcom data in Jacksonville, Fla., for about two years.

ADcom (in which Arbitron holds a stake) hopes to eventually
roll out its local ratings to the top 30 DMAs.

March