Nielsen Media Research and Arbitron Ratings have altered plans for the test of a highly anticipated but very pricey new return-on-investment tool known as Project Apollo. For the first time, the ratings companies, who are partnering on the proposed service, are now pitching broadcast and cable networks, radio networks and program syndicators to join the project and support it financially. Until now, distributors said, they had largely been excluded from the project, originally designed solely for marketers.
The reason for the expanded recruitment? “To get more money,” says David Poltrack, evp, research and planning, CBS. While many ad/marketing and media researchers think highly of the project, it’s expensive, and after more than a year of trying to drum up business, the ratings companies say they have signed just one marketer—Procter & Gamble, who helped create the project. An Arbitron rep said last week that others are close to signing. He confirmed that the media companies were being invited to join the test, as did Nielsen.
In addition, the ratings companies want to ensure that as many viewing and listening sources as possible are captured in the test of the project, now set to start Jan. 1, 2006. For that to happen, networks have to encode their programs with audio signals that can be picked by Arbitron’s portable people meter (PPM), which is the device being used to collect viewing and listening data for the test. (Nielsen’s Homescan technology will be deployed to collect purchase information).
To encourage participation by the networks, Nielsen and Arbitron are proposing two levels of involvement, according to documents obtained by Adweek that outline the ratings companies’ pitch to the networks. In exchange for simply encoding their programs so the PPM can read them, the media participants would receive reams of data from the test. And for a fee of $350,000, media sellers would also get a seat on the Apollo Advisory Client Council, where they would help shape the scope and parameters of the service.
When Nielsen (owned by Adweek’s parent company, VNU) and Arbitron first announced plans in May 2004 for the new service that would marry TV and radio audience ratings with consumer product purchasing data, advertisers hailed the proposal as a major breakthrough, potentially, on the ROI metrics front. But when the measurement companies revealed the price tag—$100 million to get the service up and running, more than half of which they expected marketers to put up—the industry quickly determined it was a breakthrough they could do without, sources said. Instead, marketers proposed a scaled-back test that would demonstrate the return on the new ROI tool before investing fully.
Broadcasting and cable networks say Project Apollo has potential value, but they are still reviewing whether or not to ante up dollars for a seat at the table. CBS’s Poltrack said the project has the potential to be as effective an ROI tool for ad sellers as marketers. It could also be a “great learning experience,” to the extent that it “gives us a chance to work in a planning context with marketers and learn more about how they look at the media,” he said.
Poltrack also said the project would have greater value to the network if multiple categories of advertisers participate, especially those with growth potential.
As an enticement, the initial sign-up cost for marketers has been lowered from $1 million-plus to $350,000. But that’s just for the test. Higher subscription fees would be incurred if the service goes to market. Whether that happens depends on industry acceptance after the test results are analyzed. Data will start to be available in April of next year.
Nielsen and Arbitron hope the test will prove Apollo’s worth as an ROI tool and that the reduced cost to participate will drum up greater interest. The size of the consumer panel whose viewing and spending habits will be tracked has been reduced to 5,000 homes. If the service goes forward, the panel would be expanded in phases to 30,000 homes.
And while researchers see the possible benefits of Apollo, there are potential pitfalls. “Panel members are being asked to do an awful lot,” said Tim Brooks, evp of research at Lifetime Television. First, they’re tethered all day to a PPM, a pager-like device. They also have to scan the UPCs of their store purchases with a wand-like device. In addition, they may have to fill out online surveys so that purchases of non-packaged goods, such as cars, appliances, possibly even movie tickets, can be tracked.
But Brooks said he applauded the decision to invite the networks to participate. Lifetime will, at a minimum, encode its programs for the test. He said the network is still evaluating whether to join at the $350,000 level. “There’s still a lot of back and forth” on some of the details involving participation, he said.
In recent presentations to broadcast and cable networks, the ratings companies argued that media advertising is losing share of marketing dollars. Sources said the ratings companies claim that from 1993 to 2004, TV and radio advertising’s share of total U.S. marketing expenditures has decreased 18 percent to $178 billion. At the same time, they asserted, dollars earmarked for consumer promotions have increased 29 percent to $288 billion, while trade marketing and trade promotion expenditures have climbed more than 50 percent to $546 billion.
Advertising agencies aren’t participating directly in the project in the sense of signing up and plunking down fees for data. “But we are involved to the extent that our clients ask us what we think of it,” said Bruce Goerlich, evp, director of strategic resources at Publicis Groupe’s Zenith Media.
Without getting into specific recommendations, he said of the project: “There’s a general sense that the world has changed. With the focus on ROI, it makes a lot of strategic sense. I’m hoping they’re successful.”
The value of such data becomes more valuable over time, he added. “The longer people are on the panel, the more purchases they report, the more informative the service becomes, because you’re better able to draw causal relationships,” he said. But to get to that point could take three or four years, he said. “It takes time and money.”
Ratings Companies Turn To Nets To Fund ROI Tool
