Nielsen NPX Primer and Remaining Questions:
What NPX Means for Networks, Agencies, and Advertisers
What NPX Means for Networks, Agencies, and Advertisers
Nielsen is a company in good-standing, but there are concerns about its latest sample expansion efforts. In particular, there is a controversial measurement technique it calls, "Viewer Assignment" -- an approach launched nearly a year ago but still under review by the industry.
This Primer provides context and a Q&A list intended to help media planners, buyers, and sellers tackle this issue. Questions have been provided herein to create an effective dialogue with Nielsen related to:
Wishing you good reading.
Nielsen 101:
Nielsen measures TV viewership of everyone in the United States -- approximately 325 million people. But Nielsen is unable to directly measure the viewing habits of every single individual because the population is too large and it would be cost-prohibitive to do so. Instead, Nielsen measures the viewing habits of a group of people selected to represent everyone -- actually, just the people who live in homes with at least one operable TV set or viewing monitor (which is nearly everyone in the United States). This group is called a sample.
Nielsen uses one national sample to measure TV viewership of everyone in the United States. It also uses many smaller samples to measure TV viewership of everyone locally across the country.
Note: Various techniques are used to collect, process, and report TV viewership.
Bigger is Often Better:
Television networks, advertising agencies, and advertisers prefer that Nielsen uses a large national sample rather than a small one. It helps the media industry better evaluate viewership of TV programs. With a large sample, the resulting data is generally more accurate and reliable. A large sample (compared to a small one) has a greater chance of accurately representing the U.S. television population.
Every now and then, Nielsen increases the size of its national sample. The latest effort was enacted nearly a year ago, effective December 28, 2015.
However, questions still remain. Some questions are listed in this Primer for networks, agencies, and advertisers to possibly consider.
Note: Nielsen's national sample is a multi-stage stratified area probability sample of U.S. housing units.
Nielsen NPX:
The latest effort (December 28, 2015) to expand the national sample was a special initiative called, NPX, which stands for “National Panel Expansion.”
Having followed through on its NPX initiative, Nielsen expanded the sample it uses to report national TV audiences by using some of its local samples. Specifically, these local samples are now pulling double-duty, meaning they are being used to help report local TV audiences, as well as national TV audiences.
Viewer Assignment:
Over the years, Nielsen used similar “double-duty” approaches to expand its national sample. But this latest initiative is different because Nielsen also changed its methodology regarding how some of its local samples are recruited and monitored.
In some markets, instead of recruiting actual people and measuring their viewing habits, Nielsen is algorithmically estimating who's watching television. Nielsen calls this technique, Viewer Assignment.
What is the impact on the national TV audience?
In addition to this question, there are a number of others the media industry may want to consider if they have not done so already:
Question:
Why did Nielsen decide to change how it measures TV viewership?
Answer:
There is likely more than one reason.
Expenses: While Nielsen attempts to measure TV viewing habits as accurately as possible, it also needs to manage expenses in doing so. While operating in this space, it's reasonable for Nielsen to determine how to make measurement more cost effective. Over the years, it has implemented a variety of different ways to measure TV viewership -- many of which currently operate together to make Nielsen’s TV service possible. In some instances, individuals are instructed to record their viewing information by filling out a paper diary. There are many additional costs associated with this method, such as figuring out the specifics of how to collect, process, and report the ensuing viewership data from all of these people. This in turn requires additional Nielsen staff, time, and resources, not to mention challenges associated with quality control of how the data is handled. In some local markets, Viewer Assignment is currently being used in place of the diary method. Since Viewer Assignment is driven by algorithms instead of people actively participating in a sample, this primer assumes Nielsen now has fewer expenses.
Modernize: For many years, the media industry expressed interest in having Nielsen modernize its local TV service by replacing the diaries. Although it is unclear if Nielsen's Viewer Assignment approach is more modern, it has allowed the research vendor to replace its diaries in approximately 45 local markets.
Competition: Rentrak (now comScore TV) and a number of other vendors have stepped up in attempt to meet demand from the media industry for a more modern TV measurement service. The pressure to compete and maintain its share of business may be another motivating factor why Nielsen changed some of its local measurements.
---
Question:
Does this change in methodology present any challenges?
Answer:
The new technique, Viewer Assignment, is not without controversy.
Nielsen is forgoing direct measurement of some of the actual people in its local samples. Instead of directly measuring them, Nielsen is using advanced probability techniques to estimate who is in front of the TV when it's on.
In an attempt to boost the national sample size, some of these people are used by Nielsen to contribute to the national sample.
This in turn affects the nationally projected TV audience. Presently, these estimates are now part of the national data.
Given the change in methodology, it's not uncommon for networks, agencies, and advertisers to flag the data denoting challenges of evaluating year to year changes in TV viewership.
Another challenge is recognizing the fundamental difference of the data media planners, buyers, and sellers now use to strategize. In theory, it may impact the rates set for advertisers.
While this is not the first time in Nielsen's history that it is producing data with the help of formulas, this is a much different scenario in that it is the first time Nielsen is forgoing direct measurement of actual people in the national sample to develop people viewing statistics. This is a significant change.
---
Question:
Do these changes offset the benefits of having a larger sample?
Answer:
Nielsen's statistical research team should be able to address this. Some outside of Nielsen could potentially raise the question that the sample may have been compromised in terms of its quality. Size is not the only thing that determines whether or not a sample is good or useful.
---
Question:
Is the sample really bigger?
Answer:
It can be argued that Nielsen's special NPX initiative only increases the number of households in the national sample. There is no increase in the number of participating people whose viewing habits are directly measured. Among those who happen to live in the extra sample of households, their true viewing habits are completely unknown from an empirically scientific perspective. So did the sample really expand in a way that can help business for the media industry? Possibly no.
---
Question:
To what extent do these changes affect the nationally projected TV audience?
Answer:
According to Nielsen, it's using 12,900 local "households" to pull double-duty for the purposes of increasing the national sample size.
To help us scope the impact based on generalizations among "people," if we are to assume an average TV household size of 2.5 (people per TV household), that means there may be approximately 32,250 people in Nielsen's national sample whose TV viewing habits are not being directly measured.
Before Nielsen makes adjustments to account for weighting and other criteria, these people appear to represent about 30% of Nielsen's gross sample of people. Networks, agencies, and advertisers may want to confirm the exact percentage with Nielsen.
---
Next Steps:
Nielsen is a company in good-standing and a leader in measurement. But there are concerns about its Viewer Assignment approach which is still under review by the Media Rating Council.
To maintain the industry's confidence, it may be helpful for Nielsen to be even more transparent by further quantifying and communicating how its Viewer Assignment approach impacts viewership, both locally and nationally.
It may be beneficial for media planners, buyers, and sellers to inquire further as well. These questions within the Primer may be a good starting point for the dialogue (or to continue the dialogue with Nielsen).
It’s in the industry’s best interests to learn how much national TV viewership for each network is affected by the changes Nielsen has made. Similar inquiries can be made regarding the accuracy of local data.
Advertisers may want to learn how much Viewer Assignment impacts the rates they pay to run advertising (out of pocket costs), the audience delivery guaranteed by the networks, and the negotiated CPM. In tandem, agencies may want to evaluate how Viewer Assignment impacts the size of media budgets and allocations, and how it may help or hurt the advertiser’s ROI.
When business decisions are made based on data, it's extremely important the data are accurate so there is confidence when conducting the business accordingly. Without accurate data, conclusions may be invalid and unreliable.
If you have any questions, please let me know.
Craig Jaffe | Founder | Craig Jaffe Research 360
Mobile: 914-966-9472 | Email: CraigJaffeResearch@gmail.com | Website: www.CraigJaffeResearch.com
Social Media: www.linkedin.com/in/CraigJaffeResearch | www.twitter.com/CraigJaffeR360
About Craig Jaffe Research & Analytics 360:
Craig Jaffe Research & Analytics 360 is a research and analytics consultancy that advises how consumer trends, behavioral shifts and attitudinal dynamics can be leveraged and monetized. The consultancy is hired to perform Analytics, Ad Sales Research, Program Research, and Consumer Insights. It utilizes a variety of resources -- such as Nielsen, MRI, comScore, and others -- and employs data science, research, and analytic techniques while working with media and marketing companies operating in the television, digital, and social marketplaces. Craig Jaffe Research 360 helps television networks and websites increase ad sales and audiences, and helps advertising and media agencies activate consumer purchase behavior.
This Primer provides context and a Q&A list intended to help media planners, buyers, and sellers tackle this issue. Questions have been provided herein to create an effective dialogue with Nielsen related to:
- Accuracy of TV viewership (national and local)
- Rates paid by advertisers to run advertising
- Audience guarantees by the networks
- Negotiated CPMs
- Size and allocations of media budgets
- Changes in advertising ROI
Wishing you good reading.
Nielsen 101:
Nielsen measures TV viewership of everyone in the United States -- approximately 325 million people. But Nielsen is unable to directly measure the viewing habits of every single individual because the population is too large and it would be cost-prohibitive to do so. Instead, Nielsen measures the viewing habits of a group of people selected to represent everyone -- actually, just the people who live in homes with at least one operable TV set or viewing monitor (which is nearly everyone in the United States). This group is called a sample.
Nielsen uses one national sample to measure TV viewership of everyone in the United States. It also uses many smaller samples to measure TV viewership of everyone locally across the country.
Note: Various techniques are used to collect, process, and report TV viewership.
Bigger is Often Better:
Television networks, advertising agencies, and advertisers prefer that Nielsen uses a large national sample rather than a small one. It helps the media industry better evaluate viewership of TV programs. With a large sample, the resulting data is generally more accurate and reliable. A large sample (compared to a small one) has a greater chance of accurately representing the U.S. television population.
Every now and then, Nielsen increases the size of its national sample. The latest effort was enacted nearly a year ago, effective December 28, 2015.
However, questions still remain. Some questions are listed in this Primer for networks, agencies, and advertisers to possibly consider.
Note: Nielsen's national sample is a multi-stage stratified area probability sample of U.S. housing units.
Nielsen NPX:
The latest effort (December 28, 2015) to expand the national sample was a special initiative called, NPX, which stands for “National Panel Expansion.”
Having followed through on its NPX initiative, Nielsen expanded the sample it uses to report national TV audiences by using some of its local samples. Specifically, these local samples are now pulling double-duty, meaning they are being used to help report local TV audiences, as well as national TV audiences.
Viewer Assignment:
Over the years, Nielsen used similar “double-duty” approaches to expand its national sample. But this latest initiative is different because Nielsen also changed its methodology regarding how some of its local samples are recruited and monitored.
In some markets, instead of recruiting actual people and measuring their viewing habits, Nielsen is algorithmically estimating who's watching television. Nielsen calls this technique, Viewer Assignment.
What is the impact on the national TV audience?
In addition to this question, there are a number of others the media industry may want to consider if they have not done so already:
Question:
Why did Nielsen decide to change how it measures TV viewership?
Answer:
There is likely more than one reason.
Expenses: While Nielsen attempts to measure TV viewing habits as accurately as possible, it also needs to manage expenses in doing so. While operating in this space, it's reasonable for Nielsen to determine how to make measurement more cost effective. Over the years, it has implemented a variety of different ways to measure TV viewership -- many of which currently operate together to make Nielsen’s TV service possible. In some instances, individuals are instructed to record their viewing information by filling out a paper diary. There are many additional costs associated with this method, such as figuring out the specifics of how to collect, process, and report the ensuing viewership data from all of these people. This in turn requires additional Nielsen staff, time, and resources, not to mention challenges associated with quality control of how the data is handled. In some local markets, Viewer Assignment is currently being used in place of the diary method. Since Viewer Assignment is driven by algorithms instead of people actively participating in a sample, this primer assumes Nielsen now has fewer expenses.
Modernize: For many years, the media industry expressed interest in having Nielsen modernize its local TV service by replacing the diaries. Although it is unclear if Nielsen's Viewer Assignment approach is more modern, it has allowed the research vendor to replace its diaries in approximately 45 local markets.
Competition: Rentrak (now comScore TV) and a number of other vendors have stepped up in attempt to meet demand from the media industry for a more modern TV measurement service. The pressure to compete and maintain its share of business may be another motivating factor why Nielsen changed some of its local measurements.
---
Question:
Does this change in methodology present any challenges?
Answer:
The new technique, Viewer Assignment, is not without controversy.
Nielsen is forgoing direct measurement of some of the actual people in its local samples. Instead of directly measuring them, Nielsen is using advanced probability techniques to estimate who is in front of the TV when it's on.
In an attempt to boost the national sample size, some of these people are used by Nielsen to contribute to the national sample.
This in turn affects the nationally projected TV audience. Presently, these estimates are now part of the national data.
Given the change in methodology, it's not uncommon for networks, agencies, and advertisers to flag the data denoting challenges of evaluating year to year changes in TV viewership.
Another challenge is recognizing the fundamental difference of the data media planners, buyers, and sellers now use to strategize. In theory, it may impact the rates set for advertisers.
While this is not the first time in Nielsen's history that it is producing data with the help of formulas, this is a much different scenario in that it is the first time Nielsen is forgoing direct measurement of actual people in the national sample to develop people viewing statistics. This is a significant change.
---
Question:
Do these changes offset the benefits of having a larger sample?
Answer:
Nielsen's statistical research team should be able to address this. Some outside of Nielsen could potentially raise the question that the sample may have been compromised in terms of its quality. Size is not the only thing that determines whether or not a sample is good or useful.
---
Question:
Is the sample really bigger?
Answer:
It can be argued that Nielsen's special NPX initiative only increases the number of households in the national sample. There is no increase in the number of participating people whose viewing habits are directly measured. Among those who happen to live in the extra sample of households, their true viewing habits are completely unknown from an empirically scientific perspective. So did the sample really expand in a way that can help business for the media industry? Possibly no.
---
Question:
To what extent do these changes affect the nationally projected TV audience?
Answer:
According to Nielsen, it's using 12,900 local "households" to pull double-duty for the purposes of increasing the national sample size.
To help us scope the impact based on generalizations among "people," if we are to assume an average TV household size of 2.5 (people per TV household), that means there may be approximately 32,250 people in Nielsen's national sample whose TV viewing habits are not being directly measured.
Before Nielsen makes adjustments to account for weighting and other criteria, these people appear to represent about 30% of Nielsen's gross sample of people. Networks, agencies, and advertisers may want to confirm the exact percentage with Nielsen.
---
Next Steps:
Nielsen is a company in good-standing and a leader in measurement. But there are concerns about its Viewer Assignment approach which is still under review by the Media Rating Council.
To maintain the industry's confidence, it may be helpful for Nielsen to be even more transparent by further quantifying and communicating how its Viewer Assignment approach impacts viewership, both locally and nationally.
It may be beneficial for media planners, buyers, and sellers to inquire further as well. These questions within the Primer may be a good starting point for the dialogue (or to continue the dialogue with Nielsen).
It’s in the industry’s best interests to learn how much national TV viewership for each network is affected by the changes Nielsen has made. Similar inquiries can be made regarding the accuracy of local data.
Advertisers may want to learn how much Viewer Assignment impacts the rates they pay to run advertising (out of pocket costs), the audience delivery guaranteed by the networks, and the negotiated CPM. In tandem, agencies may want to evaluate how Viewer Assignment impacts the size of media budgets and allocations, and how it may help or hurt the advertiser’s ROI.
When business decisions are made based on data, it's extremely important the data are accurate so there is confidence when conducting the business accordingly. Without accurate data, conclusions may be invalid and unreliable.
If you have any questions, please let me know.
Craig Jaffe | Founder | Craig Jaffe Research 360
Mobile: 914-966-9472 | Email: CraigJaffeResearch@gmail.com | Website: www.CraigJaffeResearch.com
Social Media: www.linkedin.com/in/CraigJaffeResearch | www.twitter.com/CraigJaffeR360
About Craig Jaffe Research & Analytics 360:
Craig Jaffe Research & Analytics 360 is a research and analytics consultancy that advises how consumer trends, behavioral shifts and attitudinal dynamics can be leveraged and monetized. The consultancy is hired to perform Analytics, Ad Sales Research, Program Research, and Consumer Insights. It utilizes a variety of resources -- such as Nielsen, MRI, comScore, and others -- and employs data science, research, and analytic techniques while working with media and marketing companies operating in the television, digital, and social marketplaces. Craig Jaffe Research 360 helps television networks and websites increase ad sales and audiences, and helps advertising and media agencies activate consumer purchase behavior.
Email: CraigJaffeResearch@gmail | Website: www.CraigJaffeResearch.com
Social: www.linkedin.com/in/CraigJaffeResearch www.twitter.com/CraigJaffeR360
Phone: 914-966-9472
Social: www.linkedin.com/in/CraigJaffeResearch www.twitter.com/CraigJaffeR360
Phone: 914-966-9472
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