April 17, 2011


The Naked Nielsens (Marty Kaplan, 04/14/11, HuffPo)

The metrics are wearing no clothes.

How would you react if you found out that the basis of your business model was bogus? That's the nightmare that the television industry is finally waking up to, and I bet that online media won't be far behind.

The TV business is built on advertising. Except for premium cable, the money that networks get for selling audiences' eyeballs to advertisers is the mother's milk of the industry. Networks set the price of ads on their shows using demographic information about the age and sex of those shows' viewers. And the company that pretty much has a monopoly on furnishing those metrics is Nielsen.

So a few weeks ago, at the Marriott Marquis in New York, it must have felt like pitchfork time when a respected TV network figure in charge of analyzing ratings, CBS Corp. Chief Research Officer David Poltrack, told the Advertising Research Foundation's annual convention that, um, age and sex don't matter.

Poltrack put a positive spin on his stunning admission: Look! We're working with Nielsen to come up with terrific new metrics that are way better than those lousy old demographics! But that cheery prospect may not have distracted the advertising and marketing executives in the room from ruing the hundreds of billions of dollars they've apparently thrown down the rat hole these past 35 years.

How lousy are age and sex for targeting ad buys? "Essentially invalid," said Poltrack. "There is no link, none, between the age of the specified demographic delivery of the campaign and the sales generated by that campaign." According to Ad Age, Nielsen executives at the convention reported that "ratings demographics by age and sex had a... 0.12 correlation with actual sales produced by exposure to TV ads, where 1.0 is complete correlation and 0 signals no relationship whatsoever." Zero-point-one-two! You'd do better using a Ouija board than Nielsen demos.

Whenever The Wife watches a sporting event she complains that men get all the good ads.

Posted by at April 17, 2011 6:47 AM

blog comments powered by Disqus