Buyers, Sellers Survey the Research Battlefield

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New York -- Subscribers to Nielsen Media Research are
clearly hoping that the threat of ratings competition will make the research giant more
responsive to their needs.

Observers believe that Nielsen seems to be coming around,
amid some signs that other combatants may take to the research battlefield. But those new
rivals haven't yet drawn a line in the sand.

In a recent American Association of Advertising Agencies
(Four A's) magazine supplement, Larry Cole, executive vice president and U.S. media
director for Ogilvy & Mather, said of Nielsen, "They don't have enough
competition ... and this has become a problem ... particularly for the buyers of
media."

So far, Statistical Research Inc.'s Systems for
Measuring and Reporting Television (SMART) and Adcom Information Services Inc. have posed
little threat to the research behemoth. And a ratings-consortium notion floated last year
by the Four A's seems to be an even more distant blip on agency and media radar
screens.

Evidence that the ratings-research issue remains a hot
button could be seen in the Four A's media-conference agenda in February, which
featured a session called, "Media Measurement -- Still in Crisis." Among 700
agency media executives surveyed, the Four A's found that 56 percent offered the
lukewarm reply of having "some confidence" in Nielsen's national-ratings
service.

But that may not help SMART much: In the same survey, 62
percent had no opinion about SMART.

"We need better tools, faster," said Bob Igiel,
executive vice president of Young & Rubicam and The Media Edge, declining to get drawn
into the debate between Nielsen and SMART by saying that he had no thoughts on the latter.

More outspoken was Steve Grubbs, executive vice president
at BBDO Worldwide. "History has shown that Nielsen tends to react to our concerns
with much greater interest, rapidity and diligence when competition is in the
marketplace," he said.

To that extent, Grubbs said, the ad community is pleased
that SMART is out there. He called that venture "promising," although it remains
much smaller than Nielsen, as it is still only in the fledgling stages with its
Philadelphia laboratory.

Adcom is also limited for now to producing local ratings
for MediaOne in Jacksonville, Fla., from a 600-household sample. BBDO is among agencies
that have used the Adcom data to make buys there.

The accuracy of Nielsen's ratings is "an
important issue, but it involves perhaps a few tenths of a rating point, so it won't
have a dramatic impact on buying and selling," said Tom Winner, Wieden &
Kennedy's director of broadcast media.

Nielsen undoubtedly can improve the accuracy of its
numbers, Winner added, and it will probably do so faster with SMART as an impetus.

SRI late last month took a step toward becoming a national
challenger to Nielsen when it distributed a business plan to its current clients to
determine their interest in proceeding with a national SMART audience-measurement service.

"It's a business proposal for their
consideration," said George Hooper, SRI's director of administration.
"They're now evaluating that."

Tim Brooks, senior vice president of research for USA
Networks, has said that a national SMART service could not be fully up and running before
2000. Gale Metzger, SRI's president, has said that full implementation would be
preceded by a "two-year rollout" for SMART. Hooper concurred with that
timetable, but he added that if its customers don't make a decision by September, it
would mean a one-year delay.

SMART VS. NIELSEN

Nielsen officials have said that supporting an alternative
won't come cheap for subscribers. They estimated that it would cost SRI $100 million
to $120 million to take SMART national, plus another $80 million in yearly operating
costs. Before Fox Broadcasting and the cable networks signed on last summer, the "Big
3" broadcast networks had poured a combined $40 million into the SMART laboratory in
Philadelphia, other industry sources estimated.

Beyond the costs, critics pointed out that SRI has had its
share of technical difficulties just in starting up its 300-household Philadelphia
laboratory. After having promised in December that it would start churning out its initial
ratings data for subscribers in January, SRI had to delay that launch until April.

SRI did not begin sending SMART ratings to its 29 clients
until April 29, Hooper said. Those data covered only the SMART-encoded subscriber networks
-- the "Big 4" broadcasters, plus the Discovery Networks U.S. channels, ESPN,
Lifetime Television and USA Networks' channels -- he added. Researchers at the cable
networks were unreachable for comment at press time.

The 29 SMART clients include 15 ad agencies; nine
broadcasters, cable networks and syndicators; and five advertisers.

Earlier this year, Nielsen executives criticized SMART for
distorting ratings by having nonviewers log onto its meters. Mixing what Nielsen calls
"bystanders" with active viewers would swell the audience by as much as 12
percent, Nielsen contended.

Hooper said SRI has had no complaints from TV and cable
networks about combining viewers with "in-room" consumers. Indeed, only one
company objected to including bystanders -- an ad agency that Hooper did not identify.

MORE DEBATE

Meanwhile, several other research-related debates are under
way, some generating more heat than others. These include whether "sweeps"
ratings periods should be eliminated, and whether the current demographic breakouts should
be revised.

A sampling of agency opinion indicated that changing the
sweeps could happen by 1999 or 2000, but the demographic revision was not on the horizon.

Addressing an audience of broadcasters in January, CBS
Television president Leslie Moonves urged not only the elimination of the
"destructive" sweeps-ratings concept, but also changes in Nielsen's
traditional audience-demographic breakouts. The sweeps periods, used primarily by
broadcast-network affiliates to set local pricing, have spawned stunting -- an exercise in
"foolhardiness" that alienates viewers, Moonves contended.

Grubbs agreed, saying that the sweeps mentality causes
widespread stunting, particularly by the Big 4, so that their affiliates can "inflate
their rates." The programming and the resultant rates are thus atypical, he
complained -- before quickly adding, "Buyers, knowing that, make adjustments"
when they buy.

Winner, on the other hand, came down on the side of sweeps.

"We need a sweeps to measure every market. You
can't [measure] every market 52 weeks a year. Until they solve that, we need
sweeps," he said.

The Four A's last year proposed surveying the 211
markets on alternating 26 weeks, but other sources fretted about Nielsen's higher
costs -- and the resultant price increases for ratings subscribers. Then, in March, CBS
suggested a compromise "checkerboard" approach, involving three eight-week
survey periods.

The traditional demographic categories, Moonves added, may
also have "outlived their usefulness." With adults aged 35 to 54 due to
represent 40 percent of the U.S. population in 2000, and those 55-plus accounting for
another 29 percent, Moonves asked, "does it make any sense when the same value is
placed on an 18-year-old as on someone who is 49 ... [or] the system ... writes off people
when they turn 50 or 55?"

Critics pointed out that CBS typically skews oldest among
the broadcast networks, although some conceded that CBS' observations do seem less
self-serving now that the U.S. population has started trending noticeably older.

Still, Grubbs doubted that any changes in the traditional
demographic breakouts are in the cards for the foreseeable future.

"Our clients spend a tremendous amount tracking their
primary customers," he said, so they know how to best use the Nielsen data to match
their marketing objectives without overhauling the whole demographic system.

Nielsen's new openness has cheered subscribers.
Despite such periodic advances, however, agencies and media seemed to agree that the world
of media research will likely remain in some turmoil for the foreseeable future.

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