Nielsen broadcast tv ratings had errors for 7 months, software blamed, ABC network benefited-NY Times

10/10/14, "TV Ratings by Nielsen Had Errors for Months," Bill Carter, Emily Steel

"Nielsen, the television research firm, acknowledged on Friday that it had been reporting inaccurate ratings for the broadcast networks for the last seven months, a mistake that raises questions about the company’s increasingly criticized system for measuring TV audiences.

The error wound up benefiting one network, ABC, while negatively affecting the others, according to people briefed on the problem. In a telephone call with reporters, Nielsen executives would not confirm that it had resulted in added viewers for ABC, saying they could not discuss individual clients.

An ABC executive confirmed that the error had improved the network’s ratings. As for Nielsen, its executives played down the discrepancy in viewing totals, saying they fell between 0.1 percent and 0.25 percent of the viewing totals.

But it remained unclear how the mistake would affect the billions of advertising dollars based on Nielsen’s ratings, as well as the company’s reputation. And several television and advertising executives expressed degrees of anger and incredulity at both the incorrect ratings and the amount of time — seven months — it had taken to discover the problem.

“These ratings are the currency of the business,” said Alan Wurtzel, who heads research at NBC. “Any time that currency is under suspicion it’s a concern.”

Lyle Schwartz, a managing partner in charge of research at WPP’s GroupM, the world’s largest media buying group, said it was a credibility issue for Nielsen. “You look at Nielsen as the gold standard for currency,” Mr. Schwartz said. “When you introduce these errors on systems that were working fine in the past, you start looking at the numbers a little bit closer to see if there is anything else occurring that we haven’t identified yet.”

Nielsen has long reigned as the main source that the entertainment industry uses to measure TV audiences, and its ratings are the currency on which nearly $70 billion in advertising dollars are traded each year in the United States.

The company has come under increased pressure in recent years as television and advertising executives have called its methodology antiquated and questioned its ability to measure the ways people watch television today, whether on a traditional TV set in the living room or on a mobile phone on the fly. A range of outsiders, including Rentrak and comScore, are challenging Nielsen’s dominance by introducing methods to track TV viewing in the digital age.

Brian Wieser, a media analyst with Pivotal Research, said Nielsen was struggling on multiple fronts. 

“You’ve got a ‘death of TV’ fear in general, you have the Rentrak competitiveness issue, and you have the quality and integrity of the data issue,” Mr. Wieser said.

“Any one of those three things could come up at any time,” he added, “but for those to hit you all at the same time, wow.”

Network shows are judged by small fractions of ratings points and perceptions of a show’s success or failure are often determined by whether the show gained or lost as little as a tenth of a point. In one example that will surely be raised, ABC News made headlines this last week by surpassing NBC News’s evening broadcast for the first time in six years. NBC will undoubtedly question those results now, especially because it has noted for months that ABC began closing the ratings gap in April — or one month after the pro-ABC error affected Nielsen’s system.

Even if the ABC gains were entirely legitimate, they now have a shadow over them. ABC issued a statement on Friday saying that despite the error, the network was confident that it would maintain the ratings momentum that its programming has seen in the opening weeks of the new television season.

The Nielsen executives Pat McDonough and Steve Hasker said repeatedly in their news conference on Friday that the incorrect ratings — which had affected every program on ABC, not just the ones in prime time — fell “well within the tolerance of statistical error.” They said any changes in numbers or the rankings of programs would be largely insignificant and would be corrected when Nielsen issues new ratings on Monday.

But in a statement sent to clients, the company said, “In the vast majority of cases the impact is small, but in a handful of cases the impact is more material.”

The Nielsen executives emphasized that ABC had nothing to do with the incorrect ratings and blamed a new software program that was introduced in March. The mistakes affected something called “all other tuning,” an arcane part of the measurement of broadcast ratings (cable network ratings are unaffected).

Mr. Hasker said in the phone call on Friday that the company had first detected the discrepancy itself, a point challenged by several executives at the broadcast networks.

The error was most noticeable in changes in reported ratings between the first available numbers — which arrive each morning — and the more complete “fast national” numbers, which arrive in the late afternoon. Network executives, including those at ABC, began to notice this fall that ABC’s programs were frequently showing improvement in the second daily accounting — something that usually happens only with the biggest hit shows.

CBS, for example, detected on the first night of the new television season that ABC’s “Dancing with the Stars,” a show that has been in decline for years, got a bump up in the ratings in the afternoon rankings, even though two big ABC-affiliated stations had not even carried the show the previous night.

After examining its records, Nielsen said it had found the software flaw and traced it back to March. The reason it was detected only recently, Mr. Hasker said, was because of the heightened attention to the flood of original programs in the new television season.

Nielsen says it intends to recalibrate its ratings starting only from Aug. 18, not all the way back to March 2, when the error was introduced to the system, Ms. McDonough said. If specific clients ask for detailed breakdowns for discrepancies during the earlier months, Nielsen will work with them, Ms. McDonough said.

Mr. Wurtzel said NBC would press Nielsen for more information. “I’m asking for it,” he said. “How do we ever begin to do any kind of tracking or historical analysis if you can’t get accurate data?” Advertising clients are also likely to have difficult questions for Nielsen.

Kate Sirkin, executive vice president of global research at the Publicis Groupe’s Starcom MediaVest Group, said a big issue for advertisers was that it had taken so long for Nielsen to alert them to the problem. “The big concern on our part is that this happened, and it has happened for months, and nobody noticed,” Ms. Sirkin said. “That is scary because we pay millions of dollars for Nielsen to do this complicated thing, but that is what their job is.”"

"A version of this article appears in print on October 11, 2014, on page B1 of the New York edition."...

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