Rentrak Moves In on Nielsen

Make room, Nielsen. Rentrak’s set-top box data could be on the verge of becoming a second local TV currency alongside traditional ratings.

Starcom, in partnership with WMAQ-TV, NBC Universal’s owned-and-operated station in Chicago, is using Rentrak’s local measurement service as the agency prepares to launch U.S. Cellular’s fall campaign.

It will be the first time set-top box data will be used to plan and buy local TV time and the first indication that Rentrak is working its way into the marketplace and Nielsen turf. (The company’s TV Essentials service tracks data from 18 million STBs in AT&T U-verse and DISH Network households; later this year, the sample will be boosted by 3 million Charter Communications subs.)

Since launching late last year, Rentrak has made a lot of noise. The growing list of Rentrak TV station clients, currently at 42 stations in 23 markets, has been impressive, including cracking three top 10 markets in Atlanta, Dallas and Houston. In the last quarter alone, Rentrak added 17 stations in 10 markets, signing stations owned by groups such as Gannett, LIN TV and Sinclair Broadcast Group.

Though stations are lining up, there have been few signs the research service has actually affected TV transactions. “The data is new to us. We wanted to learn and experiment,” said Doug Lowe, evp of Meredith Broadcast, which signed for its stations in Atlanta and Hartford, Conn., last week.

Agencies have been slower to sign on, and until more do, some TV groups prefer to hold back. Both Zenith and MediaVest have used Rentrak’s national service to plan and buy the long-tail cable networks that often don’t show up in Nielsen’s ratings. Starcom may be breaking the ice.

“It’s progress versus perfection,” said Kevin Gallagher, evp, local activation director for Starcom, the only shop to use Rentrak locally. “We need to start somewhere. I don’t think one currency can do everything.”

Gallagher’s statement stirs up the age-old question in the ratings business: Will the industry support more than one currency? Since the late ’80s, the answer has been no. But now there’s a much more fragmented business and a stark difference between Rentrak, which offers a database currency, and Nielsen, which offers ratings based on a representative, albeit smaller, panel.

“We’re on the verge of a megatrend,” said Bill Livek, CEO of Rentrak. “Database currencies will be a lot more important in future years. You can adhere to an advertiser’s unique definition of the customer.”

In the case of Starcom and U.S. Cellular, Starcom is able to match up the client’s retail locations with precise geographic audiences. “I don’t care about a DMA rating if the client is in the Southwest suburbs,” Gallagher said. “Because of the granularity, it’s a closer look at the audience.”

Even with Rentrak’s huge datasets (as it likes to call its sample) of 100,000 or even 250,000 per market, there are still plenty of limitations to the data, leading many to conclude that using STB data is far from any practical use in the planning and buying of TV inventory.

“A sample of 100,000 STBs can have a much lower effective sample size,” said Pat Liguori, svp, research and electronic measurement for the ABC O&O TV stations and chair of the Council for Research Excellence’s STB committee. “People are talking about set-top box data as more accurate, yet you have to model geography, sample representativeness, over the air  and demographics. How is that an improvement?”

Working on integrating STB data within its local and national panels, Nielsen is betting the industry will gravitate toward a single currency that can be applied across multiple platforms. “People want to stick to a standard they can trust. The advertising transaction world is not comfortable with databases,” said Matt O’Grady, svp for Nielsen.

Others speculate that Nielsen will eventually come over to Rentrak’s view that the TV industry is headed for multiple currencies. Jason Helfstein of Oppenheimer goes so far as to suggest that Nielsen, post its pending IPO, will buy Rentrak. “For Nielsen to replicate Rentrak, it would take several years and $100 million dollars,” he estimated. “It’s not easy to replicate.”