Advertisers will plunk down about $8.5 billion to the three major television networks - ABC, CBS and NBC - for commercial time during 1987. At the same time, ``people meters,'' which represent the latest in technological gadgetry for measuring audience size, are introducing new uncertainties about how many viewers are actually watching network programs these days.
With billions of dollars in sales at stake, TV advertisers are more than ever concerned about results. So who's watching what - and which network has the biggest audiences - is of paramount importance to the network executives.
It ends up being a gigantic numbers game in which the way the audience size and composition are determined - and the validity of the numbers - can be crucial.
For more than 35 years, A.C. Nielsen Company (now owned by Dun & Bradstreet Corporation) has measured network audiences. In September, Nielsen plans to convert its diary-based Nielsen Television Index to ``people meters'' located in a national sample of 2,000 households. Nielsen has been testing these meters on a national basis for the past three years and plans to expand the number of households measured to 4,000 by September 1988.
The people meter is an electronic device that viewers in designated households activate as they begin and finish watching television. It's a more accurate technique than the diary for measuring national audience composition, according to William S. Hamill, executive vice-president of Nielsen Media Research.
``The diary worked well in simpler times with fewer viewing choices,'' Mr. Hamill says, ``but in today's complex video world of broadcast network programming, independent stations, cable, and VCR, the typical diary keeper finds it hard to record accurately all the household viewing activity.''
With people meters, household members simply indicate their presence in front of the television set and their viewing choices are recorded automatically.
Actually, Nielsen had planned to inaugurate its people meter service a year ago but held off at the request of the three networks, which felt there were some unresolved reporting problems with the new method. When the first people meter audience reports began coming in this spring for the season just ending, their worst fears were confirmed.
The three networks' combined rating had slipped three precious percentage points, and some executives were quick to blame people meter reporting errors for the drop. But not Barry Cook, managing director for special media research at NBC.
``One thing for sure, people meters are not affecting the actual size of the audience,'' he says. ``The real audience is still out there watching. Maybe there's a decrease in audience or maybe it points to an audience being missed. People meter reporting is not free of errors.''
John A. Dimling, senior vice-president of Nielsen Media Research, acknowledges there will be some upheaval during the current transition from diary reporting to people meters.
``It's obvious that momentous changes are going to take place next fall,'' he says, ``changes that will profoundly affect the television networks, advertising agencies, advertisers, syndicators, and cable networks.''
As for the reported drop in the networks' audience share for this season, Mr. Dimling says, ``I have no reason to believe there will be a change in audience sizes as we increase our sample size.''
In this period of television audience erosion and reporting changeover, one thing is certain. Nielsen can no longer view TV audience measurement as its exclusive preserve.
AGB Television Research Inc. has emerged as a strong competitor. Calling itself the ``PeopleMeter Service,'' this British-based firm claims to be the first to develop people meters and been testing them in the Boston market since 1984. Abroad, AGB has been nosing Nielsen out to become Europe's largest media-research company.
Already AGB has signed up eight large advertising agencies in the United States. Together, these agencies purchase 40 percent of the commercial time on national television, along with the CBS network.
David F. Poltrack, vice-president of research for the CBS Broadcast Group, indicates there were two reasons why his network signed on with AGB. ``We wanted to make sure there was a competitive environment for audience rating services and that there was network involvement with AGB's development.'' He confirmed that CBS and the other two networks had not yet signed on with Nielsen for the upcoming season.
ABC, which showed one of the biggest audience losses for last season (5 percent), was one of the first and loudest to complain about the Nielsen numbers and late last year canceled the service.
``We very clearly sent them a message about the quality of the existing service,'' says Marvin S. Mord, vice-president of marketing and research services at Capital Cities/ABC. He feels that efforts are now being made to improve that service, but it's unlikely that ABC will sign with either Nielsen or AGB for more than a year at this point.