In 2021 it will be harder for non-paying Nielsen subscribers to get on a buy when ratings are being used. Non-subscribing radio stations have always been listed in the ratings, whether that radio station purchased the data or not. Agencies and buyers would see all the stations ranked in a market, and with a wink and a nod, the station would know where they ranked as well, and position itself in a buy.
Under Nielsen’s new Subscriber First initiative, non-subscribing stations will no longer be listed in summary data that the buyers see. They will still be listed in respondent level data, which is an upgrade in price from the summary data.
Nielsen Managing Director Brad Kelly tells Radio Ink there’s a fundamental belief at Nielson that people paying for the measurement of their industry should benefit from it, versus people who do not support the measurement of their industry. “This is effectively addressing the free rider syndrome that has gone on for too long. We believe it’s an issue of fairness. We’ve taken a number of steps in recent years to create a sharper distinction between subscribers and non-subscribers and how they’re depicted in the data and the benefits they receive from the data.”
Kelly goes on to say that this change is more than an issue of fairness, it’s an issue of economic sustainability. “I’m not going to whitewash that. This week we debuted the headphone adjustment factor. That’s something we’ve been working on and building to. It’s obviously a huge benefit to the industry, but it’s one of many. We have the multi-channel PPM encoding. We’ve got passive monitoring going on. We are monitoring the quality of the codes, alarms will go off in the station and Neilson if a code goes down which is new. A new software encoder that we are working on. These are pieces of hardware that we’re shipping to radio stations across the country with real significant costs. So stack that on top of the tremendous amount of money we are pouring into PPM markets to keep our KPI’s high.”
There’s also the added reality of how COVID has impacted every business in the Unite States. Nielsen was not exempt from the realities of the pandemic. The company had to lay off 3500 people and close 9 markets. Kelly says when you have this juxtaposition between the expectation of investing when clients are unwilling and frankly unable to continue to make those investments, something has to give. “There are really only two levers to pull. One is expense reduction which we have done in the form of market closures. That is the less appealing approach to addressing economics. It’s not good for the industry or Neilson but it’s an approach. We believe the Subscriber First initiative is the other approach. The ability to grow revenue because we hope that this new policy will encourage non-subscribers to step up and support the measurement of their industry. Through that we can continue to invest and innovate to keep the industry moving forward. If we’re wrong then we will have some tough decisions to make down the road, but at least for 2021 we are committing to no additional market closures.
When the change rolls out in 2021 there will be exemptions. All minority owned stations and non-profits will not be impacted. They will be pressed into the data with a single mention.
Kelly says the overall impact in the PPM markets will be minimal. He says in the PPM markets, 97% of the top 20 stations currently subscribe. “If you run a top 20 ranker and then do it again 48 times for the 48 PPM markets you have a list of 960 radio stations. After we apply this policy 21 stations will fall out. So 939 will continue to show either by virtue of the fact they already subscribe or they are part of the exempt group. That quantifies the size of the impact of this policy change.”
The changes will happen in three waves next year. PPM markets go first in January. The continuous diary measurement markets (51-100) go in April. The smallest diary markets in the Spring.
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