08/08

It’s Time to Drop Nielsen’s PPM

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Aren’t you tired of PPM yet?

From Tom Taylor Now:

How many PPMs does Nielsen allow in one household? Answer – up to 16. Does that sound large? One current in-tab household has 13 meters, and nine of them belong to people under the age of 17. Nielsen likes stability on the panel, and this particular household has been in the sample for quite a while. Imagine replacing them when they leave after as much as a two-year tenure. That will require placement into multiple households to achieve 13 new meter-carriers, and it costs Nielsen money. But a couple of stations in Nielsen markets aren’t crazy about the possibility of one household with more than a dozen PPMs. We know that younger children can be influenced by the media behavior of their parents or older siblings, for instance. Subscribers aren’t allowed to know the identity of panel members.

This is one of those shockingly unfair and non-representative elements of PPM that broadcasters overlook far too easily.

According to 2015 data, the percentage of U.S. households containing 7 or more persons is a mere 1.39%. The fraction of households containing more than 10 must be tiny. So what is the possible logic in entertaining the made-up threshold of 16?

There can be only one: It’s a huge bounty for Nielsen to be able to park a large number of meters in a single household like this. It’s comparatively cheap to install and maintain them, and to any radio station subscriber 16 meters all in one household look just like 16 meters in 16 different households – unless you care about the accuracy of the results, of course.

And because these large households are so scarce, where they occur they will represent a HUGE proportion of the installed households in the zips they reside in, if not ALL of them.

I challenge you: Go to ANY one household in any one zip code and tell me if you think that accurately represents all households in that zip code. I dare you.

Now go to any one 16-person household and tell me if you think that accurately represents anything average or typical.

This doesn’t happen that often, Nielsen might say. But how often? You don’t know, do you? I’ll bet the average household size of a Nielsen panelist is larger than the average household size in America. Want to bet me?

And it’s not just about 16 or 10 or even 8.

The average household size in the US is 2.61 people. That means one of these 16-person outlier households is worth 6 times the value of an average household. These large households bias the results and dramatically increase volatility, thus reducing whatever precision or claim to accuracy you can possibly hope for. There is, simply, no statistically sound reason whatsoever why so many meters should be in any household, and if broadcasters have any sense they should demand a report on distribution of PPM by household size today.

Now Nielsen would argue that just because 16 meters are in one household they don’t consume the same kind of radio the same way at the same times. This is likely to be true. But what’s also true is that 16 meters in one household don’t represent average usage of anything, let alone radio. There will surely be halo behavior where one radio has the opportunity to influence up to 16 (!) meters at once, something which is the very definition of non-random.

And make no mistake, when you are running a household that contains 16 meters you are effectively a Nielsen employee and your first priority will be to keep your job with Nielsen, and that means maximizing cooperation and staying on the panel until Nielsen throws you out – if they ever do. That means Nielsen’s bribery, er, compensation will be your end-game, not going about your day and remembering to carry your meter(s). Thus, the so-called “passive” nature of measurement becomes a job in and of itself, and anything but passive. The PPM device for such a family becomes a time-card, and Nielsen is waiting to punch it.

When you are running a household that contains 16 meters you are effectively a @nielsen employee Click To Tweet

Nielsen: “When are you going on break today, Listener?”

PPM Panelist: “I am switching my break with one of the other 15 persons in my household, but I will listen overtime since you have incentivized me to do so, boss!”

This is a perversion of the ratings system, flat out. And it’s one of many reasons why Nielsen subscribers should be up in arms.

You know more about what’s in your cereal than you know about what’s in your PPM sample. Is that right?

You know more about what's in your cereal than you know about what's in your PPM sample. Click To Tweet

No wonder, then, this other headline from Tom Taylor:

Max Media drops Nielsen in Norfolk, will use the money to “make our products better.” GM Dave Paulus tells clients and agencies “this decision is one we’ve been discussing for many years, and it comes down to one simple issue – Return On Investment.” Dave explains “since the advent of PPM in this marketplace in 2008, the ratings have dwindled to the point where even the leading stations aren’t in a position to price their stations to match their market position. We began to ask ourselves why we are paying huge sums of money to support a service that ultimately (in our opinion) undermines our success as a company.” Paulus sees “a silver lining.” He vows to “diversify, make our products better, and free up dollars to market the stations.” He’s promising “a significant external marketing campaign.”

I think it’s time for many more broadcasters to drop Nielsen and make their products better.

Losing revenue to Pandora? How much money do you think they’re spending on Nielsen? Per capita, almost none.

Losing revenue to Facebook? They’re spending zip on Nielsen.

Increasingly, listeners will vote with their ears, not with their meters. They will watch their radio on YouTube, listen to their favorite station on Spotify, and tune in their favorite morning show on Snapchat. All the while broadcasters will be spending more and more of their precious brand-building resources on a platform which measures only a portion of listener attention, and only for a haphazard, chaotic selection of non-random and non-representative consumers.

Sounds like a great deal.

If you’re Nielsen.

Or one of their 16-person-household employees.

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