What does it all mean? TV Ratings 101
August 2, 2013
MMA Payout had the opportunity to talk with Sean O’Neill, Vice President of Research at Spike TV to discuss the basics of ratings. While many report on ratings all the time, it’s rare that they are ever explained.
Thus, we did a “Ratings 101” with Mr. O’Neill to go over the basics and explain what executives and advertisers look at when talking about ratings. O’Neill has over 10 years of experience in television programming for Spike TV.
1. How are ratings determined?
“Nielsen is the only player in the game. What they do is that all the networks pay them a fee to determine the ratings,” explained O’Neill. “The ‘Nielsen Sample’ is a representative sample of the entire U.S.”
“There are ‘people meters’ attached to every TV in a Nielsen home. Viewers check in when in the room and the box records what’s being shown on the screen and that information is sent back to Nielsen and it uses that to formulate the ratings.” These meters are in just under 20,000 homes. One of the most valuable demographics that executives and advertisers look at is the 18-49 demographic. For various reasons, most notably spending habits, this demo is most sought after. There are 126.5 million adults in the 18-49 demo in U.S. TV households. The Nielsen Sample has approximately 21,500 adults in the 18-49 demographic.
“The ‘people meter’ started in 1987. It’s not the most ideal system but everyone agrees to use it as currency,” said O’Neill.
“Some have asked why not just have a cable box on the television and use that data,” stated O’Neill. “Tivos [as an example] can sell its data but don’t get demographic data.” As a result, the information would not benefit advertisers or television executives that want to pinpoint target demographics.
According to O’Neill, the approximately 20,000 homes that utilize Nielsen are picked based on geography, economics and other demographic factors as they are designed to be representative of the nation as a whole.
2. Can you explain what is meant by a “share”?
“Think of it as a pie chart,” explained O’Neill. “Say Spike was available in 100 homes. And say 3 out of 100 homes tuned into a show. It would receive a 3 share.”
“While the primary “currency” is the rating, looking at the share is useful looking at performance of a show. [As an example], there are more people watching November through January than from July through August. The share measurement takes this into account.”
3. What are the different types of measurement?
“There are the overnight ratings. Some call it the local rating,” O’Neill stated. “It’s received the first thing in the morning and it’s based on the 50 biggest cities.”
“The national rating which comes out later in the afternoon after the program changes quite a bit. It includes live viewership within the time period.”
“Live same day rating includes any playback between the time the program aired and 3:00 am that night.”
For Live plus 3 day ratings (also known as DVR +3 or C3) you would have to wait four days to know the ratings. O’Neill gave as an example, something that aired on Tuesday would not be known until Sunday morning. The ratings would encompass all viewing that occurred from the time slot of the program up until 3:00 am 3 days after the showing.
The “C3 rating” is the metric that the industry transacts upon. It is the metric that most advertising is bought and sold. Advertisers see value to it and networks want to monetize it. It’s the belief that ads are being seen within those 3 days.
6. Can you explain Adjustments and Overruns?
“Every channel has to submit program start and end times via interface on the web. If things run long, the channel adjusts the proper end time and that is accounted for by Neilsen.”
7. How do you measure online viewing?
“It’s a wild west,” O’Neill said of the quest to measure online viewing. “There are a number of companies that measure online activity,” added O’Neill, “When it’s on your web site you can tell unique visitors, streams and measure social media mention.”
But the issue, like obtaining data from Tivo, is the inability to obtain demographics. This comes up when addressing online advertising. There are pros and cons to online advertising as one can see from the lack of measurement tools. Some advertisers believe it adds value while others do not.
O’Neill stated that being able to measure online viewing is “the Holy Grail of measurement” “It’s a ways off. Ideally you will have one number.” O’Neill identified linear television, iPads and phones as the various platforms that the industry would like to harness to determine the number of people accessing the content at that time. “The goal is to get that number.”
8. How do you become a Nielsen family?
“Neilsen has a robust recruitment department. They’ll look at the demographics of certain areas. It will canvass and talk to you and get information and see if there’s something that fits. There’s some small compensation.”