It is hard to talk about the Ultimate Fighting Championship, Bellator MMA, Fox Sports 1 and Spike TV nowadays without talking about Nielsen ratings. Now, I am partly to blame, as part of my job here at TheMMAReport.com is to cover the Nielsen ratings.logo

Nevertheless, as much as the ratings are talked about, I think it is time to clarify some things on them and make the MMA fan a little more informed. I mean, if we are going to play the ratings game, lets make the playing field even.

For example, for starters, what is Nielsen? How are ratings even calculated? What exactly is a demographic and why does it matter to advertisers? What does a live+3 or live+5 number mean? What actually goes into a DVR number?

As you can see there are plenty of questions, that to be honest, the vast majority do not truly understand. I mean sure, people have heard the term Nielsen, but I bet most don’t know it’s a company that is focused on everything from studying consumers television habits to helping with brand advertising analysis for networks and advertisers. It should also be noted that Nielsen was originally started in the early 1900’s to track radio programming, but eventually got out of it, and until yesterday has just got back into it with its recent merger with Arbitron, Inc.

Anyway, lets make this easier, what is Nielsen? Simple, once the Arbitron merger is completed, they will be a company focused solely on both television and radio ratings for people willing to pay for their data and analysis. Yup, that is right, Nielsen ratings information and analysis are not free, so when you see them, remember, someone actually paid to get them. Ie; Fox and Spike TV.

Fox Sports 1Now, when it comes to television, how does Nielsen actually calculate the ratings? Well, that is somewhat confusing and controversial. Over the course of the last few decades this has been everything from actual viewer diaries (think pad and paper or online sheet), to set-top-box meters, to even time-shifted raw data from the cable companies and set-top makers like TiVo.

It should be noted though, when you see a preliminary viewership number of say 700,000 total viewers, like Bellator 100 from last week, that does not actually mean 700,000 people tuned in.  That is merely a calculated number via Nielsen’s cross section sample of people whether it was a diary or a set-top-box number. Nielsen really only has about 5,000 to 10,000 active set-top-meters running per week and about 50,000 to 100,000+ people filling out diaries in various markets (typically only around 50 or so markets).

So essentially, Nielsen is only capable of measuring a cross section sample of America, and they then break this out even further and from those raw numbers establish a sample rate that equates to total viewership, demographic rating and overall household ratings. Although, they do receive more accurate (arguably) DVR data as companies like TiVo records peoples viewing habits and submits them to Nielsen directly. This includes companies like Comcast as well.

Can you say controversial? Sure, but as a Nielsen home myself, I can tell you that at least they come and check on my “Audimeter” (device Nielsen uses for measurement) every once in a while.

Furthermore, starting on September 30th of this year, Nielsen has branched out it’s calculation algorithms to involve Twitter. Essentially, they are going to start tracking how television shows are doing on Twitter and be able to get networks and advertisers that much more information on second-screen viewership. The question is, we still don’t know how their algorithm is going to work with this one.

Nielsen also just recently announced as of last week that starting with next falls television season (2014), they will add calculation algorithms for tablet, smartphone and online television show viewing (think laptop/desktop), adding a tons more raw ratings data for networks and advertisers to feast over.

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Essentially, by this time next year, Nielsen will be able to calculate viewing habits of individuals watching television shows via generic set-top-box television, twitter, smart phones, tablets, computers, DVRs and basically any device that can stream content legally. The big question will be how truly accurate will it be, only time will tell I guess.

Now that we understand how the ratings are calculated a little bit more, let’s talk about what exactly is a demographic number and why do advertisers care about it. Well, for starters, as a Nielsen house I can tell you that part of my registration was that I had to give them my homes gender and age information. This way when they pull my viewing habits from my Audimeter, they can easily drop those habits into a demographic structure.

As you can imagine, this is exactly what advertisers want, need and pay for. For example, think about it Gatorade. Do you think they want to advertise on a show that has great ratings on females over 65 years old, like any jewelry show on QVC? I don’t think so. Gatorade wants to be putting advertisements on shows and television channels that focus on their core demographic, the demographic of people that are going to use their product, like the UFC and Bellator viewers on Fox and Spike TV for example.

Without Nielsen, Gatorade and the networks would really just have to guess where the Bellator New Logo #2audience lives.  This is obviously just one example, but you can apply this to almost every single show you watch on television, especially when we are talking about MMA. Think about it, how many times do to see advertisements on UFC programming for female feminine products? Exactly my point.

It should also be noted though, that it is not just the networks buying this research information from Nielsen. Often times companies like Gatorade also subscribe to the data, so that way they can see the real facts and find the networks and shows they should really be on. Once again, I have to stress, Nielsen ratings are not free, and advertisers are not stupid, they know where the market is heading and hopefully their analysis teams make the right decisions.

Lastly, we hear a lot about live+3 (5 or 7) and DVR numbers. Now, I can get into a very lengthy discussion about them, but let’s make this easier for everyone. Think about it like this.

DVR numbers come from the companies like TiVo and certain cable companies who record what you do with your DVR. Such as pausing or rewinding (even a 10-second rewind counts as a hit) during a live show or viewing a show after the fact. Nielsen used to take a long time to get this data, but now they are getting it (in some cases) so fast they they are including the numbers in the live viewership totals. Often times you will see this as live+same day.

Live+3 (5 or 7) simply means, live viewership data, plus 3 (5 or 7) days worth of DVR viewing from the air date.

It should also be noted that networks are now starting to factor DVR numbers and these delayed numbers into its estimates for the season.  Making the DVR and delayed numbers so much more lucrative, potentially.

Now, why do these matter and why do network like Fox and Spike TV like to talk and use them? Simple, it makes them look better! If you only scored 700,000 viewers, but with the live+3 hit over 800,000 viewers, isn’t the live+3 number better to use? Absolutely, especially when we are talking about advertising dollars.

Lastly, the point of this article besides teach you way more about Nielsen then you probably ever cared about, was to teach you all that arguing over 700,000 viewers versus 1.1 million viewers isn’t exactly 700,000 viewers versus 1.1 million viewers. The numbers are simply a cross sample of the world and does not exactly indicate success. Like I always say on TheMMAReport.com, all that matters is if you are tuning in and enjoying the fights.

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