How Will The Nielsen Change Impact Radio’s Revenue?

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One broadcaster we spoke with yesterday said Nielsen’s plan is extortion, mafia-like and violates anti-trust laws. He went on to say that a class-action lawsuit should be filed against the ratings firm and that’s being looked into. The RAB would not comment on the change, the NAB is not taking a position.

The broadcaster we spoke to Wednesday, who requested he remain anonymous, said Nielsen’s change will not provide buyers with accurate information on the radio industry as a whole and as a result the industry will lose millions of dollars in revenue. He tells Radio Ink buyers are already telling him they will no longer be able to buy radio because they will cannot post or justify why they buy radio.

Nielsen’s Brad Kelly says this is a change that the ratings firm has been working on for a long time, including gauging reaction from customers. He disagrees with the argument that agencies will not be able to do their job and buy radio as they have been. “For many of our larger agencies, they do get respondent level data. Our obligation is not necessarily to this complete unobstructed view of the marketplace but rather to our paying customers and shareholders. It doesn’t mean the agency can’t buy a non subscriber obviously they can but they can’t use the data to justify the buy to post off the buy after the fact. They are going to have to figure out other mechanisms to address that.”

Kelly also shared the reaction Nielsen received from broadcasters. He says it’s been neutral to positive to very positive. “I’m looking at 100 verbatims here and some of them are: It’s about time, Thank You, the guy across the street has been riding my coattails too long.

Kelly said his feedback from the agency side has been neutral to supportive. “They understand the business rationale behind this. For those that say this makes things more difficult, I say the alternative is market closures. Imagine how much more it will be to buy a market when it’s not rated. We believe this is the preferential alternative to more market closures. We are right sizing the economic sustainability of this model. Further the agencies have come to a realization that they’re actually paying more for the radio ratings than the non subscribers are. There’s something broken about that. The station that is benefited from the placement of the buy is paying less for the measurement of their station than the agency whose placing the buy. There’s a growing belief from agencies that non subscribers are going to need to step up.”

1 COMMENT

  1. Nielsen is of course correct. They offer a product and a lot of non-subscribing stations benefit from the data. In many cases, the economics of subscribing have not made sense for some radio stations. If a midsize station buys Nielsen for say $50,000 a year, will they get an additional $250-300,000 in business? Clearly, many think that doesn’t work.

    Radio is fighting with at least one hand behind our back – and that’s NOT Nielsen’s fault. We simply need a better way to aggregate audience data that make financial sense in all markets. I don’t know what that is…but this decision by Nielsen will accelerate that solution.

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