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Nielsen begins installing code readers in local markets

Nielsen is upgrading its Nielsen Local Audience Ratings, the standard used by the local media advertising industry since the 1950s. The new system, which includes installing new technology in viewer homes, will eventually increase sample sizes and stability across all local markets.

Nielsen has begun installing a watermark-enabled capture device called the Nielsen Code Reader in homes in St. Louis and Charlotte, NC, and will begin soon in Dallas. The company plans to increase the sample sizes by employing a hybrid measurement methodology combining the code readers with its existing panels and complementary return path data (RPD), which comes back from a STB device, supplied by Nielsen.

The company said this hybrid approach also lays the groundwork for local online, tablet and mobile crossplatform measurement and integrated media/purchase analytics, as well as the transformation of the paper diary. It will provide broadcast stations and local cable with more granular and stable data for both programming and ad sales and enable agencies and advertisers to operate more efficiently.

Nielsen has presented its Local Audience Ratings plan to the Media Ratings Council (MRC) and is working closely with the MRC to meet the standards set by the industry.

“Our clients’ priorities are clear: improved ratings stability and crossplatform measurement,” said Matt O’Grady, Nielsen executive vice president and managing director of Local Media. “Nielsen will dramatically increase sample sizes while maintaining the critical principle of market representation. Additionally, Nielsen has developed market leading computer, tablet and smartphone meters to capture all viewers, all consumers and all segments. This will be the foundation for crossplatform measurement.”

Nielsen said it eventually plans to implement the new device in 20 introductory markets. After St. Louis, Charlotte and Dallas, the new system will go to five set meter markets: Nashville, TN; Greenville, NC; Birmingham, AL; Albuquerque, NM; and New Orleans.

About 60,000 of the code reader devices are being installed. Field workers will be doing panel recruitment and installations, requiring the hiring and training of the new workers.

The code readers use audio signals to identify programs and wireless technology to send the data to the company. Nielsen said their use will quadruple the effective size of the viewing sample in markets with local people meters (LPMs), which include St. Louis, Charlotte and Dallas. A quadrupling of the sample will also occur in markets with set meters.

“We are encouraged that Nielsen has announced its hybrid measurement improvements that hold the promise of an enhanced service,” said Jim Babb, executive vice president and chief operating officer for Bahakel Communications. “We believe that the substantial sample size increase anticipated will be a big improvement for stabilizing ratings. The new ‘code reader’ combined with set top box return path data are a promising strategy for increasing sample sizes.”

Nielsen said placing code readers in all 210 of its markets will take several years. Once the installation of code readers begins, however, the process will move fairly quickly, said O’Grady. It’s “plug and play … all it really requires is electricity” as the devices are placed within hearing distance of the television set.

The three initial markets were chosen in part because they have homes served by Charter Communications, the cable operator. Nielsen is already obtaining its STB data from Charter and DirecTV.

Nielsen’s local people meters, set meters and diaries will all remain in use. The company will use the various data systems to expand the size of its database for more effective ratings. Nielsen said the quadrupling in St. Louis, Charlotte and Dallas will boost the 600-household panel to 2400 in each.

The company's clients have been asking for larger panels to better reflect viewing behavior of audiences. In metered markets, Nielsen will have at least as many code readers as LPMs or set meters.

In St. Louis, the company has access to 60 percent of viewers. In Dallas, it has access to STB data covering 24 percent of TV homes. In Dallas, the panel could have about 1200 homes with code readers, compared to 600 in St. Louis. Clients will be able to preview the data by next summer.