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. Last Updated: 07/27/2016

New Approach to Television Ratings System




A new player has entered the market for compiling television ratings surveys, adding to competition as the advertising market prepares for a major reform of its approach to ratings.


The German company GfK is the largest market research company in Europe and the fourth largest in the world, and has begun compiling media ratings on a weekly basis. Its first report is due to be published the first week of February. Four months ago, GfK bought a controlling stake in Russian media research company Media Mar.


GfK's entry into the market comes as the television industry is poised to switch from a system of competing and often contradictory viewer ratings to one common shared system. GfK and its main competitors in television ratings - Russian Research and Gallup - are competing in a tender to provide this research for a new joint industry body.


The introduction of a joint system follows accusations by some research companies that their competitors are manipulating figures to favor some television broadcasters.


Ratings are after all crucial. In 1997, producers spent an estimated $460 million on television advertising although the financial crisis this year has cut revenues by over 50 percent. A difference of just 1 percent in a television channel's rating is equivalent to millions of dollars in revenue for the two sales houses - Premier SV and Video International - that have in the past monopolized sales of television airtime.


To try to ensure fair play industry participants have banded together to form a Joint Industrial Committee, which should be registered as a legal entity later this month. The still unofficial JIC has already called for bids on a tender to compile ratings that are due in by Jan. 15. The winner is due to be announced Feb. 15.


As all the major advertisers, producers, sales houses and broadcasters are participating in JIC, it is hoped that no one company can manipulate the figures to its own advantage. In addition the JIC has brought in an independent consultant from Britain to make sure the proposed methods of measuring ratings will produce realistic figures.


GfK joins three other players in vying for the contract. Russian Research has the largest diary panel and is currently the industry standard. But according to an article last week in the Russian magazine Profile, Video International claims that by Jan. 1 next year Gallup Media will take its place.


Gallup Media has been building up a network of "people meters" over the last six months. An electronic form of collecting viewer habits, the people meters are in some ways an improvement over Russian Research's less accurate diaries filled in by a panel of viewers. But at the moment, Gallup Media's meters only cover 12 large cities, whereas Russian Research panelists are in 25 large cities.


Russian Research's director Nick North said his company is currently cooperating with Gallup Media and that their data supplements Gallup's. Both Russian Research and Gallup Media are bidding for the JIC tender separately.


GfK bought a 70 percent stake in Media Mar at the beginning of August to form GfK Media. Media Mar is the media research subsidiary of the All Russia Center for Public Opinion, or VTsIOM, which was set up during the Soviet era to conduct state-ordered public opinion research.


In preparation for their bid for JIC tender, GfK Media has already finished its establishment survey and began recruiting panel members last week. The sample will include 2,000 households in over 250 population centers, including over 90 large cities.


Acknowleding that people meters are more accurate than diary panels, GfK Media's director Sergei Belokpytov explains the choice of diaries by saying they allow extra coverage. "People meters and diaries are only the tools for measuring. People meters are effective but Gallup only covers 12 cities which is not representative of the whole Russian population."


Belokpytov went on to say that if JIC guarantees 60 percent of the installation and running costs of people meters then its parent company, GfK GmbH, is willing to make the investment that they estimate to be approximately $7 million a year over the next five years.


According to GfK, Premier SV, which sells advertising on ORT television, has already bought a year's subscription.


GfK, set up in Germany in 1925, has been expanding in Europe rapidly since 1980 and has been moving quickly into Eastern Europe over the last few years.


Both GfK and VTsIOM continue to conduct market and public opinion research. But as part of their deal, both have agreed to leave all media research activity to the GfK Media joint venture.