The Rating Game

By Coco Masters

Nielsen Media Research is the gold standard in ratings for television programming and the backbone of more than $60 billion in TV advertising. CEO Susan Whiting has a courtside seat to epic change, as the industry tries to fit into the era of iPods, TiVos and instant messaging. She spoke with TIME'S COCO MASTERS about her need to know what you watch, for how long, on what--and, now, what you've bought.

TIME: Are ratings still important?

SUSAN WHITING: Definitely. Doing it well is even more important with the change in how TV can be viewed on your computer, your video iPod, video on demand or time-shifted through your DVR or your TiVo. Advertisers need even more information on how you're using television differently.

TIME: How does Nielsen handle the contentious relationship between advertisers and media companies?

SW: That's the toughest part of the business because we have different clients sometimes asking for different things. We try to understand what the best measurement will be and work through that with clients. It's a constant negotiation.

TIME: Does the current advertising model still work?

SW: I think so. But advertisers are asking for more qualitative information. They're asking how engaged the audience is in the programming. They're asking for more frequent measures of the audience and for commercials' ratings.

TIME: How can Nielsen keep up?

SW: Technology is our friend. Many companies now create pieces of technology that we can use so we don't have to develop all of it ourselves. The bigger challenge is understanding what an advertiser will need, how clients will use the information, and how they will put a value on an ad as the ad goes from the TV to the PC to the video iPod to somewhere else.

TIME: What products does Nielsen have for local television markets?

SW: We're testing a mailable reader, a very thin, hard box about the size of a large postcard. We could mail that to you to put on your TV, and you could mail it back. It would be an efficient way of collecting information. We're testing it among employees, and we'll have a market test with clients this summer. We've had an ongoing test with Arbitron [which does ratings research for radio] for a device called a PPM [portable people meter]. It looks like a little pager, and you wear it, and it would allow us to measure television differently than we do today.

TIME: What about measuring cell-phone and iPod use?

SW: Everywhere you are walking, the PPM can pick up on the audio. But for iPods, we can either measure what you download from your PC--and even how often you're using it at your PC--or put in a little attachment that would go onto the headset. For cell phones, we would probably use a software application. We have them working in our labs now.

TIME: Have you decided on a joint venture with Arbitron, which would allow you to use the PPM for television?

SW: We're planning to make a decision in the first quarter for the option to use the PPM to measure TV.

TIME: How will you analyze so much data?

SW: [Clients] will probably get separate reports for the regular overnight ratings, the video-on-demand audience, the iPod audience, the Internet and DVR audiences.

TIME: What's the holy grail of ratings?

SW: The combination of what media were you exposed to and therefore what products you bought.

TIME: How close is Nielsen to that?

SW: In Project Apollo, people scan all their product purchases and also have a PPM that keeps track of what media they're exposed to. In the same group of households, we're looking at both things. The test should continue through the summer.

TIME: What do you think the future of advertising will look like?

SW: Some clients say that commercials will get shorter, down to five seconds, and longer, to grab your attention--not your typical 30-second commercial. They're doing more product placement in programming. They might sponsor the whole show without any traditional ads. How [content] gets distributed and how advertising might get wrapped around it--we'll see a lot of experiments and a lot of change.

TIME: Will television ever become obsolete?

SW: It will evolve. People still seem to want the entertainment and relaxation value of TV, but competition for screens is already happening.