The role of media measurement “currencies”
Historically the advertising market has been the basis for powerful, decades‐long monopolies in audience measurement: Firms such as the Nielsen Company, Arbitron, and the Audit Bureau of Circulations provide the “currency” that buyers and sellers of media use to set ad rates based on the size and quality of the audience being reached.2measurement has been plagued by controversy over methodology and business practices. Consider Nielsen’s eponymous TV ratings, the undisputed currency of both broadcast and cable television. As early as 1963, doubts about the accuracy and fairness of broadcast ratings led to a series of Congressional hearings. One contemporary account summed up the findings this way: “The hearings suggested that the illusion of exact accuracy was necessary to the ratings industry in order to heighten the confidence of their clients in the validity of the data they sell. This myth was sustained by the practice of reporting audience ratings down to the decimal point, even when the sampling tolerances ranged over several percentage points. It was reinforced by keeping as a closely guarded secret the elaborate weighting procedures which were used to translate interviews into published projections of audience size. It was manifested in the monolithic self‐assurance with which the statistical uncertainties of survey data were transformed into beautiful, solid, clean‐looking bar charts.”3Nielsen’s weekly ratings have enjoyed a half‐century reign despite any number of critiques leveled against the system since then: that selfreported viewer “diaries” are unreliable; that the household panel has been too small; that the panel undercounts out‐of‐home viewers, for instance in college dorms; that the panel undercounts minorities; and most gravely, that the panel is not a truly random statistical sample of US households.4the decades — such as increasing the size of its panel and deploying automated measurement technologies — suggest that these critiques have carried some weight. It is a long‐appreciated irony of media measurement that accuracy matters less than consensus. A media executive may have little faith in the formula used to infer the radio choices of millions of commuters, or in the “pass‐along” multiple that transforms a small newspaper circulation into a much wider assumed readership; these doubts don’t matter much as long as no competitor is seen to benefit. As an ABC executive put it in a 1992 PBS documentary about flaws in Nielsenʹs methodology, “Everybodyʹs dealing off the same deck.”5The history of radio, television, and print strongly supports the conclusion that buyers and sellers of media invariably anoint a single, third‐party “currency” for counting audiences. This may be a messy process — for instance, Arbitron originally formed in 1949 (as the American Research Bureau) to track television viewing, and competed with Nielsen for decades before finally conceding defeat in 1993. Nevertheless, Nielsen led its rival throughout that period, and only became stronger as fewer and fewer clients were willing to subscribe to more than one ratings firm. Similarly, Arbitron has faced a number of challengers in ranking radio audiences (including Nielsen, which launched the first radio ratings service in 1942 and re‐entered the business last year) but has dominated the industry for four decades. Each firm has also weathered profound change in its industry, for instance the growth of cable TV in the 1980s, and the dramatic consolidation of radio after 1996. At first glance, print media seem to offer an exception, with two measurement firms maintaining competing currencies. However, each firm dominates a different segment of the print landscape: The Audit Bureau of Circulations, founded in 1914, is the audience currency among newspapers while BPA Worldwide, founded in 1931 as Controlled Circulation Audit, has much deeper support in the magazine industry and overseas.