Broadcasting Telecasting (Jan-Mar 1963)

Ratings majors sign FTC consent order PRIMARY EFFECT: RATINGS EXPLANATIONS WILL BE MORE DETAILED Three of broadcasting's top rating services — The Pulse Inc., A. C. Nielsen Co., and American Research Bureau — agreed last week to stop claiming that their findings are 100% accurate. The agreements are contained in consent orders accepted by the Federal Trade Commission. They followed six months of negotiations between the government agency and each of the three survey firms (At Deadline, Nov. 5; Closed Circuits, Oct. 8, July 30). Observers don't feel there'll be much change in rating reports; the principal result, they think, will be additional and more comprehensive explanatory notes in each of the rating reports issued by the services. The conclusion of the FTC investigation does not mean, however, that the rating services are free and clear. On Capitol Hill, the House Commerce Committee's regulatory agencies subcommittee is still undecided about what to do with its 14-month investigation of the radio-television rating industry. Reports have filtered through from time to time that House investigators have uncovered instances of hankypanky in broadcast research, although it has been stressed that they involve local research firms, none of the majors. The subcommittee is the successor to the Legislative Oversight unit which exposed payola and quiz show rigging. The subcommittee is understood to be still considering hearings in the 88th Congress. A decision on whether to go ahead with a formal congressional inquiry will undoubtedly be one of the items before the committee after Congress opens Jan. 9 (Wednesday). Not Admissions ■ In announcing the agreements last Thursday, the FTC noted they are for settlement purposes only and do not constitute admissions by the respondents that they have violated the law. Reactions from two of the three rating services, Nielsen and ARB were immediate. Nielsen — "The Nielsen portion of an intensive investigation of what we understand included the entire ratings industry ended quietly today when A. C. Nielsen Co. consented to a Federal Trade Commission order relating to its broadcast research services. We understand that FTC complaints were also directed or will be directed to other radio and television research firms. "The terms of the agreement affect the explanatory notes in Nielsen television and radio reports. The commis sion felt that a more complete disclosure of research details would insure against the possibility of misinterpretation on the part of people using Nielsen Reports. The agreement states that Nielsen's consent does not constitute an admission of wrong-doing on its part. "By way of illustration: Additions to Nielsen Report language will give added emphasis to the fact that the information provided constitutes estimates by Nielsen based on Nielsen sampling and methods; that reporting in terms of precise mathematical terms is subject to sampling and non-sampling error qualifications; that National Nielsen Ratings exclude samplings of the Mountain Time Zone. "We believe that the added detail and fuller explanation will aid in the interpretation and proper use of our reports." ARB— ". . . In ARB's opinion, although some parts of the order appear unnecessarily strict in their requirement for minute detail, the general sense and purpose are completely in line with ARB's own feeling on the subject, namely, that the most complete disclosure possible should be made to users of audience research as to the actual techniques and procedures employed in conducting the surveys and the accuracy thereof. "No changes in ARB's sampling procedures, field work or report processing are contemplated as a result of the order. Required modifications in the cover text of the reports and other explanatory material will be effected as soon as possible. "It has always been ARB's policy to welcome sound contributions resulting from responsible investigations of the methodology employed by the industry in producing television audience measurements, whether they be from clients, industry groups or governmental authorities." Latest Moves ■ The FTC orders last week are the latest indication of government interest over the past five years in survey firms dealing with radio and tv program ratings. Involved have been the Senate Commerce Committee and its chairman, Sen. Warren G. Magnuson (D-Wash.), and Sen. A. S. Mike Monroney (D-Okla.); on the House side, the House Commerce Committee and Rep. Oren Harris (D-Ark.), its chairman. The Senate committee held a one-day hearing on the rating services several years ago, and the testimony and other data were turned over to the FTC. From time to time Sen. Magnuson has urged FTC action, most recently when Paul Rand Dixon, FTC chairman appeared before the committee on his nomination to the FTC. Sen. Magnuson again urged action and Mr. Dixon promised to look into the subject. Three years ago the House Commerce Committee became interested in the subject and at the instigation of Chairman Harris asked the American Statistical Assn. to undertake an impartial study. This resulted in the Madow Report, submitted to the committee early in 1961 and named after the chairman of the ASA's special technical committee on broadcast ratings, Dr. William G. Madow of Stanford Research Institute (Broadcasting, March 27, 1961). The principal recommendation of the Madow Report was that the television industry establish an Office of Research Methodology. As to complaints that the procedures of the rating services are suspect, the ASA committee determined that "although there are important sources of error in the methods used by each rating service, the services seem to be estimating the ratings fairly well on the average." The committee warned, however, that the sheer number of rating estimates each service issues would lead to a number of errors. The committee also said that on balance the seven rating services studied are "doing a reasonably good technical piece of work for the purposes to be served." Errors in national sampling, the group said, tend to cancel each other out. The committee warned that the sampling techniques used by some of the services could cause significant errors in local ratings. Misleading Claims ■ All three rating services are charged in the FTC complaints with claiming that station and program ratings, and share-of-audience figures are accurate measurements resulting from error-free techniques. The FCC holds this is not so; that they are in fact only estimates. All three rating services are charged with representing that their measurements are based on probability samples. This is incorrect, the FTC said. The agency declared that Pulse and Nielsen represent, directly or by implication, that their program ratings are accurate to 1/10 of 1%, and ARB, to 1%. The FTC also said that Pulse claims its share of audience figures are 66 (GOVERNMENT) BROADCASTING, January 7, 1963