A fascinating interview with Paul Donato who led research at Nielsen for over 17 years and, before that, was one of the co-founders of Kantar Media.  Come discover all about media currencies and why the evolution of common currencies is so challenging!  

A fascinating interview with Paul Donato who led research at Nielsen for over 17 years and, before that, was one of the co-founders of Kantar Media. Currently, Paul serves as Chief Research Officer at the Advertising Research Foundation. Come discover all about media currencies and why the evolution of common currencies is so challenging… and the strengths and limitations of big data (ACR vs. Set Top Box) vs panel data.

Transcript:

Duane:[00:00:00] Legends of Media Research is a podcast series featuring interviews with the Media Industry’s leading researchers, where we go behind the scenes, sharing stories from their greatest achievements and challenges. Brought to you by MediaScience, the leader in Media and Advertising Innovation Research.

Stay tuned at the end of the podcast for more information about MediaScience, but for now, I’m your host, MediaScience CEO, Dr. Duane Varan.

Welcome to another exciting episode of Legends of Media Research. We’ve got a great episode for you. Today we’re gonna be talking to Paul Donato, who was the former Chief Research Officer at Nielsen.

But this might come as a surprise for a lot of you. He was also one of the co-founders of Kantar, so there’s a lot of exciting adventures you’re gonna hear about in today’s episode. Paul, welcome to Legends of Media Research. [00:01:00]

Paul: Thank you for having me. Good to be here.

Duane:Yeah. Paul, people don’t know this about you, but you’re a real adventurer. [laughs]

People think of you as like a geeky researcher, but actually you’re a yachty, you’re a pilot, you fly, you’re a rock climber. [laughs] You have a lot of adventures.

Paul: I was a rock climber. I was a rock climber. I actually joined a rock gym about six years ago and decided I’m way too old for this now. I can’t do this anymore.

[Daune laughs]

Duane: Well, in your youth, in your youth, you were a rock climber. In fact, you kind of, when you finished your grad school, that’s what you did for a while, right?

Paul: That’s what I did. I got married in The Gunks at the new Pearl site. Peeled off of 5’9’’ one day, wound up 30 stitches in my jaw.

Then actually that’s why we’re speaking. That peeling off of 5’9’’ and having to stop rock climbing for six months. I wound up going back to grad school and the rest is history. That’s why I’m in this industry.

Duane: People also don’t know that, you know, you’re talking about going back to grad school.[00:02:00]

That’s because you don’t have one master’s degree, but you have two master’s degrees. [laughter]

Paul: One, you kind of get by default on your way to a PhD, which I never finished. So that one was an easy one.

Duane: And what were your…

Paul: And both in social science. Both are… one is quantitative, the other one is more theoretical.
But if you think about what my career is, it’s really applied sociology. Measuring, you know, social behavior, measuring television, measuring print.

Duane: So, you got your degrees, plural. [laughs] And then you eventually, you know, started this career in the industry. Where did you get your first job? Kind of like in the industry.

Paul: So I was working in the psychiatry department for a pretty well known psychiatrist, Dr. Richard Green, and a coworker of mine just finished his PhD in Stat, Roland Sungs, some of the old timers. Will remember him ‘cause I wound up eventually hiring Roland and I had a ton of respect for Roland. He was just super [00:03:00] smart and he started working at Arbitron.

I don’t know how that happened, but one day he asked me, “do you want to go get a job?”, and everybody said, “you’ll never finish your PhD if you do this”. But I wanted to do it and I wanted, you know, I thought that Roland was kind of, you know, a smart guy and I wanted to work with Roland, so that’s what I did.

I left and went to Arbitron for a couple years, and the rest is… Here I am now, at the ARF. [laughs]

Duane: This was in the era where, I mean, I guess Arbitron was a heavy radio currency at the time, but was this when they were moving into TV as well? Or does that later?

Paul: They– absolutely. Yeah, absolutely.

They were, there were two– they didn’t have a national TV service. They did try to, you know, launch with the passive people meter a national service, but that didn’t really work. But they actually introduced meters to local market measurement, step meters to local market measurement. And then Nielsen followed.

So some of the old timers in the industry, especially from agencies, will remember having to do Arbitron Nielsen [00:04:00] comparagraphs in terms of the services that they were offered. So local television very much was a duopoly, not a monopoly.

Duane: Yeah. What were those years that Arbitron like?

Paul: Well, this would’ve been in the eighties.

The sales meetings would have pictures of people in hot tubs together. [laughs] This was sort of the phase transition from the madmen years to where we are now, where things just are not done anymore. So it was very competitive. Nielsen had turned very competitive. We don’t have sales meetings like that anymore, and I was new to the industry, so I’m not sure that I was sort of all of that aware.

I remember my first ARF conference was in 1983. I was at Arbitron, and those were the days where those conferences had about– Mike Naples was chairman, had about 1500 people in the major conference. There were no other conferences around basically there– now everything is so far augmented, I mean…

The ARF is competing with Qualtrics of all things, you know, [00:05:00] for confidence, attendance. But back then, ARF was the place and the only place, and so it’s kind of fun to sort of finish up a career here.

 

Duane: Yeah. And what did you do when you were at Arbitron?

Paul: My job title was Senior Statistician.

This was– it was the waiting project basically, and jack knife for application, so estimating variances of numbers. I remember my first public presentation to the New York Station’s Ratings Committee. And then head of the, what was called, the EMRC, the Electronic Media Ratings Council, now the MRC. John Dimming was the head who then subsequently would become CEO of Nielsen.

And basically what we had to do was to represent to the New York and other television stations that we had done the science behind the waiting procedures that Arbitron was about to implement. In the old days, some of the more purists, kind of crazy idea, thought waiting was to make up for a bad sample. [00:06:00] I mean, that’s just insane.

I mean, that’s just, you know, being– talk about stuck in the mud. I mean, any qualified statistician understands that waiting is a bonafide way of correcting for, not perfectly, but to some extent correcting for biases that exist in samples. Actually, I was at Nielsen when we introduced waiting for the national panel.

Duane: So you ended up leaving Arbitron and going to Simmons, which was really more on the Prince side of the world. How did that happen?

Paul: Actually, there was a short interlude at a company called RD Percy. Roger’s still a very good friend of mine, and that was the day when there were four people meter services competing in the US. There was AGB, there was Arbitron, there was Nielsen, and then RD, the smallest of them.

Percy closed. We were about to be bought by McGraw Hill. That didn’t happen, but McGraw Hill did hire me as a consultant. I worked for Kenny Clark, who is head of strategy research and a good part of McGraw [00:07:00] Hill. And then eventually I just got a call from then the CEO of Simmons, Ellen Cohen. So I sort of was somewhere in the print industry at McGraw Hill and then went over as president of the syndicated division of Simmons, which was the Big Simmons study.

[music]

Simmons and MRI– MRI I was a newcomer. Simmons was the established writing service through the book. The big issue in the industry, what the differences between ‘through the book’ and ‘recent reading’. So ‘through the book’, you actually have copies of the magazines, not the entire magazine, but their stripped down issues.

Maybe fifteen pages of a magazine and it’s all personal interview and you ask people to go through the magazine and ask them whether they’ve read this particular issue of the magazine as opposed to recent reading, which is what we have now, which is to ask whether you’ve read any issue of the publication within the last publishing period.

So weekly, within the last week, a monthly, within the last [00:08:00] month. And as you can tell, recent reading is a much faster methodology, and you– recent reading has visual aids, it has logo cards that you shuffle through. But it’s a much faster methodology than actually having people look at a copy of the magazine, even though the magazine is stripped down to about 10 pages.

So the Hallmark studies, seminal studies back then was Dick Lysaker doing work on ‘recent reading’ versus ‘through the book’ and ‘recent reading’ really had the advantage of being able to measure many, many more magazines. And that ultimately is what hurt Simmons as a currency. They just— ‘through the book’, was just so much more of a time intensive.

I think it was a much better methodology, but it was so much more of a time intensive methodology. It couldn’t handle the hundreds of magazines that needed to be measured the way an MRI could. And now Simmons and MRI are one company.

[music]

Duane: And then you transitioned to audits and surveys, which was– I guess people wouldn’t know audits and [00:09:00] surveys these days. They’re no longer around, right?

Paul: No. It was acquired by GFK. Old timers, well, don’t sell luck. He started audits and surveys. He started his career as a 19 year old physicist working for the Manhattan Project.

Coke was probably represented about 30 or 40% of its revenues. We did worldwide tracking for Coke. Basically, if you ask, you know, people top of mind, awareness of the soft drink, sort of a change in half of a percentage point could be translated into what would happen in sales in that country. And so I was hired to go to audits and surveys to open up a media business.

And you once asked, sort of, maybe this is kind of a seminal point in my career, but it was the roaring nineties in Latin America, economies were stabilizing except Mexico in the ‘94 crash. But we gave them a big loan and they’ve managed to repay it in two years. So there was a lot of optimism about Latin America and for the US cables.

This was [00:10:00] a continent which had two languages. Relative homogeneity, one religion, far more homogeneous than many other regions in the world. And so cables were very bullish in terms of launching their Latin American networks. And they needed research. They needed research that would sort of, you know, serve as a method for understanding across all the countries in Latin America, what the audience was and what the demographic composition was.

And we did that, we started that at arts and surveys went at first by the name of Lat Tap, Latin American, something or other, and then moved to Tap LA and these were all organizations of cable networks who felt that it was all in their mutual interest to have research that properly represented cables in Latin America.

And then that led to my consulting for what was then the largest rating service in research company in [00:11:00] Latin America, both out of Brazil. And so I became the chief technical officer for a boat. People will laugh ‘cause they don’t think of me as a chief technical officer, but I was, I don’t know. [laughs]

And we competed against Nielsen. We beat Nielsen. Nielsen eventually assumed an 11% stake in IBOPE and closed down shop in Latin America. And IBOPE continues to be the premier research in rating service in Latin America.

Duane: So just going back, Paul, when you were at IBOPE, this was as part of your duties in your audits and surveys position? Is that right?

Paul: Yeah, it’s a little controversial ‘cause it was as part of my duties as audits and surveys. Then I co-founded with Richard Sellman and Andy Brown, Kantar Media, and I moved over to Kantar Media, but the cables weren’t to continue the relationship with me. And so all of that work and Kantar Media’s WPP bought a large [00:12:00] minority, but controlling share of IBOPE. And so then I wound up serving on the board of IBOPE and continued my relationship..

Duane: [laughs] This is pretty complicated. Were working with IBOPE as part of your audits and service, and then you were working at IBOPE as part of your Kantar duties.

Paul: You know, we had a good relationship with the cables and they followed me to Kantar. And so then at Kantar…

Duane: [laughs] Did you speak Spanish? Did you speak Spanish, Pau?

Paul: Poorly. Just global. Mi español no es muy bueno, necesito más estudios. I would start every presentation with that and then quickly transfer to English. [laughs] And most of the people in the business world in South America speak English. So it’s actually more taxis that you needed to speak Spanish for, than most business meetings that you’re in. [Daune laughs] And I– most South Americans can sort of, kind of speak Portuguese.

I mean, they can speak to Brazilians. I never could do Portuguese very well at all. [00:13:00] I mean, it just, I could kind of get by in Spanish, but–

Duane: [laughs] voce fala pouco portugues. [laughs]

Paul: My God. Anyway. It was a lot of fun. It was the roaring nineties and the cable shows in Argentina, Coronados, I mean, they were like car shows from the sixties.

I mean, they, in every way. It was a lot of fun. And then when I went to Kantar, you know, it was a British company. And so, you know, kind of the empire, the world was still their empire. And so, you know, that’s the way they looked at things. And so it just, you know, every workday ended somewhere in a pub, in some country, in the world.

I think, as I told you, I’d been to Ireland five times only for business, and every meeting was in a pub. [laughs]

[music]

Duane: I mean, how did the whole co-founding of Kantar come about? There were three of you, right? Who were the co-founders?]

Paul: Richard Sellman, myself [00:14:00] and Andy Brown. I think I left first to go to Nielsen. Then Richard would leave and Andy became CEO. There was an SMR conference in Edinburgh and Phil Bernard, who was chairman of, I believe Kantar overall, met me there and asked me would I be interested in joining WPP. And, you know, we talked a little bit about South America and IBOPE and he let me know that there’s an interest in South America. So I said yeah. You know, there were a couple of MRBs, so Simmons used to be called Simmons Market Research Bureau.

BMRB is British Market Research Bureau. IMRB was Indian Market Research Bureau. A number of the– they’ve all probably changed their names except BMRB, still has its name, but it was a collection of companies, not all of which were owned by WPP, [00:15:00] but they were, they were kind of cousin companies.

They went with the same name. They offered the same kind of product. Basically a multimedia survey and in Britain it was called TGI, Target Group Index, same as MRI Survey, MRI Simmons Survey. And what we did at Kantar was basically extend those, we developed them in about 10 countries in Latin America.

We developed them throughout Asia. And I think they’re probably about 40 different countries in which there’s a TGI study right now. Since we started it, it’s grown. It was a few hundred million in revenue and I don’t know what the numbers are today, but I’m sure it’s probably close to a billion dollars in revenue today.

[music]

Duane: What was it like in those early days at Kantar?

Paul: Fun. [chuckles] Yeah, I mean, it was a lot of fun. You know, I was a lot younger. There was a lot of travel. [00:16:00] We were building things. It was a lot of fun. It was somewhat exotic. And even like the US cables, they would be 35 year olds working for a cable company, offered a position as CEO of a Latin American cable network.

They were young enough to deal with that kind of travel. It was career building. You know, it was a time where there was a lot of optimism that Latin America was gonna grow and really could serve as a very homogeneous market.

Duane: But of course, you know, Kantar being WPP owned, did that create problems for you all as you came to market in terms of, you know, the other ad conglomerates?

Paul: People actually raised that issue somehow or another because, you know, WPP was one of the biggest advertising holding companies in the world, if not the biggest at the time. And they had research companies that basically were producing ratings throughout the world. And so occasionally it was raised.

But especially back then, it was a much [00:17:00] small community. This is pre-Facebook, pre-Google, it was a television community. There were a couple hundred people that you had to know. And so, you know, the community is much larger now. I mean, the community is now made up of Qualtrics and Facebook and Google and all the ad tech companies, it’s too big to know everybody in the community.

Whereas back then you could probably know everybody and therefore you were kind of trading on personal reputations as opposed to… nobody thought of us as WPP. People thought of us as Paul or Richard or Andy, or people thought of Saul Doc as Saul. You know, Saul was the physicist Manhattan Project, and therefore his numbers must be good.

[music]

Duane: And then you left Kantar to join Nielsen. How did that happen?

Paul: That was a hard decision ‘cause I really liked Kantar. Arguably Kantar was the most fun place I’ve ever worked. It was just an enjoyable job, [00:18:00] but I had a lot of respect for the then CEO John Demling. He was in the back of the room on my very first industry presentation on August 23rd, 1983, and…

Duane: Remember the date. [chuckles]

Paul: I remember the date. You know, there was, it was funny ‘cause there was a lot of anxiety going into it. And then when we did this presentation, it was a great presentation. We just, all of a sudden people thought there were some smart people at Arbitron, so it was good. But John called, and you know, I was traveling very heavily.

I had a young daughter. I was on the road almost all the time, which is hard. And I thought that this would be, you know, much more domestic and there would be a lot less travel. And it’s also really one of the premier jobs for a researcher in the industry. So I thought, you know, it’s time to go to Mother Nielsen.

It’s part of the way Wall Streeters used to talk about Merrill Lynch. They used to call Merrill Lynch, Mother [00:19:00] Merrill. Everybody on Wall Street has worked for Mother Merrill at one point in their career. Probably not, not so much today, but probably Wall Street was more like the TV industry back then where you knew people, you knew everybody was in the industry.

Duane: And you stepped into the Chief Research Officer role? [chuckles]

Paul: I did, yeah. And back in the day. It was primarily media, but that would grow to worldwide and consumer and media. I mean, it was a little bit of on-the-job training in terms of consumer, but it all worked well and things, you know, 17 years.

Duane: So Paul, when you joined Nielsen, of course you had your national people meters in place, but you were doing local ratings with local diaries. Isn’t that right?

Paul: That correct. In the major markets, there were set meters that told you whether the TV set was on and what it was tuned to, but the person’s data came from diaries. And then in…

Duane: So just for the benefit of the audience, let’s explain that this is people like having a [00:20:00] little diary and keeping track of what shows they watched and using that data then to kind of estimate what the audience’s behavior was.

Paul: That’s right. It’s a one week diary, basically a paper instrument that you’re asked to fill out whenever you’re watching TV. And you were supposed to fill it out coincident with your viewing. Realistically, people tended to fill it out like, you know, towards the last two days of diary-keeping week.

The nature of the diary is such that it heavily favored stripped programming. Programming that occurs five days a week. And that is very characteristic of where local broadcasters make most of their money. Half their revenues come from the news periods because they own all the inventory during local news.

And what happens in a diary is, especially when people are not filling it out every day, is they feel like they watch the five o’clock news four days a week. They feel like it, but in reality they watch [00:21:00] it three days a week. So when you introduce a methodology like people meters where you actually have to press a button whenever you’re watching TV, and therefore it’s really recording coincident to the behavior, what happens is there’s a change of, call it 25 or 33%.

You’re not watching four days a week. You’re watching three days a week. That’s where they make half of their revenues. And so the impact on local television stations was really enormous.

Duane: And those local surveys, you know, you talked about news, but pretty much they favor the local stations in almost every way because most of their shows are syndicated shows, you know, so it’s the same show every day.

And so the same problem with news, of course, would be there, as you say, with strip programs, you know, with programs that we’re on every day.

Paul: You’re absolutely right. Like they own the city like six to eight. They absolutely own all the advertising inventory. And that’s where so much of that and the morning programming also, the morning news programming and [00:22:00] that’s where a large bulk of their revenues came from.

And one unnamed network decided to go political in its fight against the introduction of people meters arguing that it didn’t fairly represent minority populations. And the next thing you know, I mean, I believe this is during the Gulf, I remember saying to myself, this is during the Gulf War, and I’m in Washington explaining to Senator Schumer how a people meter works compared to how a diary works and why the numbers correctly changed.

And so we wound up doing two Senate subcommittee hearings. One Congressional subcommittee hearing. By the way, there was one of the guys who called this hearing, I forget his name, but he was a senator from Montana who the New York Times would call the most corrupt senator in Washington at the time.
This was… [laughter] And so what was his name? But all I know is he, the Times called him the most corrupt senator in Washington, and he’s the one [00:23:00] that this network got to call a Senate subcommittee hearing. [Duane laughs] We were like, well, this is something we’ve never done before. You know, all of a sudden now Nielsen started pulling together advisory groups, representing senior leaders in the multicultural world.

You know, many of whom were either ministers or leaders or celebrities, but all of whom were very influential in the multicultural world, and we just got very much more sophisticated in terms of dealing with issues like that and dealing with politics and politicians. For the first couple of years at Nielsen, I spent probably two days a week in Washington.

I remember spending a lot of time with Xavier Becerra, who’s now on President Biden’s cabinet, who is then head of the Hispanic Caucus. Very nice guy, very understanding. I remember my first meeting with then Senator Clinton’s aid, Umma, and after about 20 minutes, she said, “this is a commercial dispute, isn’t [00:24:00] it?”

And we said, “yes”. And she’s a smart woman. She’s in the press now quite a bit, but she dismissed the whole thing after 20 minutes meeting with us. So that’s what we did. We spent two days a week in Washington just walking in the halls talking to congressperson, senators, you know, about what this was all about.
And that, yes, we understand that this was tough for stations to handle, but it does represent a more accurate measurement.

[music]

Duane: Paul, there’s constantly talk in the market about new currencies. People are always quick to hope or aspire to something being a new currency. Currencies are fairly complex beasts, though, to get off the ground. Maybe you could talk a little bit, you know, based on your experience about currencies, and especially common currencies.

Paul: Sure. So I started my career, there were two currencies in local. There’s Arbitron and Nielsen. And many of the old timers remember doing comparagraphs about the two services. And the, you know, the nature– I guess most economists would say a currency [00:25:00] is, hate to use the word but a natural monopoly because it’s sort of an agreed upon valuation both the buyer and seller agrees upon.

This is a little bit different. Arbitron and Nielsen were doing exactly the same thing, producing just pure audience ratings. A lot of the new currencies started out as people doing attribution. In fact, many of them only really were evaluating ads, not programs, and then discovered they had data.

They had set up box data or automatic content recognition, Visio data, that could serve as a measurement of audience. So this is a little bit different in that many of them are still providing those other services like attribution. I don’t know where all of this will go. I will say, as an example, NBC was successful probably 12 years ago offering as a secondary guarantee IAG data, if you remember that company. But IAG did [00:26:00] telephone research on yesterday viewing and whether or not you remembered the ads. So it was ad awareness that was basically a secondary currency. It didn’t affect Nielsen or use of Nielsen at all, or use of Comscore at all.

And of course today, realistically, you could say that we have a duopoly, Comscore and Nielsen, and then there are a number of other secondary currencies that started more on the attribution side. It’s pretty hard to predict the future, you know, it’d be easier if the services were offering exactly the same as Nielsen and nothing but the same as Nielsen, but very often they’re offering additional advertising services, so…

Duane: And I guess what makes it so complex is the fact that, you know, that this idea that there has to be mutual agreement on the value exchange that you know for it to truly be a common currency, both parties kind of have to [00:27:00] agree that the measure is measuring what you think it’s measuring and not measuring something else, and it makes it hard for there to be multiple currencies, certainly for the same, you know, in the same arena because there the numbers often won’t match and so it just creates a lot of confusion in the marketplace when you have multiple currencies. And so that tends to gravitate the market to a single common currency.

Paul: That was the problem with Arbitron and Nielsen in that a station would buy and use whichever one they look better in.

And it was, it became a problem for agencies. So, you know, you’re absolutely right. I guess, as I said, the difference here is they’re not identical services and in some ways a service that’s providing attribution in being able to say that they’re estimate of the audience size is reasonably consistent with what the primary currency is, is a validation of their attribution mark at the same time. [00:28:00]

[music]

Duane: Was it hard for you in all those years at Nielsen? I mean, you know, as this quasi natural monopoly, you know, people constantly dis Nielsen. I mean, it’s a constant refrain. You know, you weren’t always the most popular guy in the room. [laughs] What was that like for you in your career?

Paul: It was okay. I’m– Steve Poltrack, very kindly said that there were two Nielsens. There was Paul Donato’s Nielsen, and then there was Nielsen, and so… [Duane laughs] I mean, that was a very kind statement for him to make. Yeah, I remember during the height of the people meter wars. This was almost bizarre. It was a meeting of the MRC.

There were about 45 people in the room and they had a chair in the middle of the room and it was like a whole big circle of people, 45 people, and then a chair. And I’m sitting in a chair in the middle [laughs] of the room and I just looked visually, this seems very, very strange.

Duane: Did they pass out tomatoes? [laughs]

Paul: I don’t, [00:29:00] [laughs] you know, I don’t know. I think you need to be able to, you know, understand you are putting out numbers that affect people’s bonuses and so it just comes with the territory and you can’t react, you can’t go over the deep end, you have to realize that you’re having consequence in people’s lives, then you do the best you can.

And so it was, it was fine. It was, I don’t know, I– during the people meet awards, I don’t know if you spoke about this, but you know, Nielsen did, I think, a really good job of inviting advisors, senior leaders from multicultural communities. And so I got to meet a lot of people that I never would’ve met otherwise.

And you know, for a quantitative sociologist, it was very enriching to sort of have all of these experiences and meet all of these people who otherwise I probably never would’ve met. I did a lot of whistle stopping in a lot of local markets, trying to explain [00:30:00] how we measure television and why we believe we are representing all demographics.

[music]

Duane: You know, I think a lot of TV networks just Nielsen and wanted an alternative. I remember, you know, talking to a senior C-suite leader at one of the networks, and they wanted to find the Head of Research and they were asking for my opinion about who would be good. And I said, ‘well, tell me what you’re looking for’.

And the number one criteria was, ‘we want somebody who’ll get us off Nielsen’. And I was like, ‘why do you want that? [laughs] What is it that motivates that need?’ And they’re like, ‘we pay them too much’. And I was like, ‘okay, but do you realize that if there are any inefficiencies in this, it actually works to your benefit? And that if– that the alternative is gonna be worse for you than it’s gonna be for anybody else?’

[laughs]

Paul: Yeah, it’s kind of funny. People come to me and ask me what does it cost to build a rating service? And I’ve gotten two questions in the last couple of weeks. What would it cost to actually [00:31:00] build a field organization?

And they come out, is it 25 or $50 million? And it’s way more than that. It’s in the hundreds of millions of dollars. I mean, maybe 200 million, maybe. It’s– people don’t know what it actually costs to run an operation like that. And so if they think that it costs 25 million dollars to run a field organization, then you probably feel like you’re paying way, way, way too much.

And I don’t know what Nielsen publishes, you know, publicly, I know field reported to me 15 years ago and I know what my budgets were and, and it wasn’t 25 million dollars.
[music]

Duane: Paul, where’s this all going?

Paul: I don’t know. [chuckles] I wish I did. It’s a different environment in that, and you know, as I mentioned, all the other currencies are currency plus. I think sort of, you know, our grounding thought ought to be the ANAWFA call for what it takes [00:32:00] to do cross-platform. You know, if you look at some of the interviews that came out of com, cross-platform is like the number one issue on the buy side’s mind.

Buy side spends as much money with Google and Facebook as they do with television or almost as much. So television is the 70 billion dollar enterprise. Google and Facebook combined are probably close to 70 billion dollars. There’s no integration of data of what people are exposed to on Facebook, Google, and traditional television, and the winner in all of this will be someone who really gets cross-platform correct. I think that’s where it’s going.

It doesn’t mean that if you’ve got 30 million set top box Invisio households that you’re not gonna make, I don’t know if there’s gonna be nine multiple currencies or eight multiple currencies, but I think as long as you’ve got something differentiating, like attribution and something like that, that there will be additional… and I don’t know if currency is the right word.[00:33:00]

IAG wasn’t a currency, but IAG people made guarantees based on IAG. So it was currency like. And I think that’s where the two or three, you know, additional currencies will make it. And I think, you know, Comscore, Nielsen, whoever gets cross-platform right, is gonna have a huge advantage.

[music]

Duane: The other thing that came along towards the end of your career at Nielsen of course, you know, was the whole big data era. People saying, ‘why should we go with a company like Nielsen, which is, you know, measuring, 10,000 plus? Instead, why don’t we go with companies that are measuring millions plus?’

What was the advent of big data like for you at Nielsen?

Paul: Well, you know, Nielsen has always been called a fast follower. They weren’t the first with people meters. But they were fast followers with people meters. They certainly weren’t the first with big data. They’re trying to follow fast right now. The other thing is that a lot of, you know, the MVPD had a rate card that had [00:34:00] two prices.

There was the Nielsen price and there was everybody else’s price, and they knew that everybody else couldn’t afford a 10th of what Nielsen might be able to afford. I was working with big data 10 years ago. We had direct– I forget who the director of DISH data was 10 years ago, and it never made it into the currency. I don’t know why.

You know, I mean, well, I left Nielsen five years ago, but obviously Big Data is part of their plans right now. They are, I guess they are, they just published for, not for currency, but for evaluation, not for transaction, their first big data and obviously have plans of integrating it as part of the currency, and that’s what the WFA plan calls for.

A bonafide panel, which Nielsen has probably the highest quality panel out there. And then big data. And big data is biased. Use the panel to correct for biases in big data. Panels don’t have the sa– it’s not possible to have the sample size capable of [00:35:00] dealing with today’s fragmentation, but that’s where you use big data, so…

You tamp down the variants with big data. You correct for biases with panels. The reason we need a panel is there’s a pretty big debate over whether set top box data or ACR data is like Vizio data. It’s smart TV data, automatic content recognition, so Vizio knows, you know, what stations you’re tuned to, what networks you’re tuned to.

There’s a big debate over which one is more accurate. There are limitations to both with respect to set top box data. You know, if you have a Frontier, if you have Comcast, it’s a limited geographic footprint and therefore you’re– it comes with the biases associated with a limited geography and all the demographics and consumer trends that go with that.

Also, set top box data. Typically, it’s not uncommon for the set top box to be on but the TV set is off. I’ve heard people who are using it say that they wind up [00:36:00] tossing 50% of the tuning minutes because if there’s been no channel change or no activity coming across for over two hours, they’re assuming that the set top box is on, but the TV set is off.

ACR Vizio data as an example. And there’s some others. I think LG is about to provide its data to some of the new currencies. Is also limited in that Samsung is the largest OEM. I don’t believe Samsung shares its data. 30% of the TV sets out there are Samsung. Samsung has its own ED network. About 15% of the TVs out there are Vizio.

Vizio is a less expensive television and therefore has biases associated with the demographics. And that’s also a smart TV, which means when you turn the TV set on, you also have Netflix icons on your screen and Amazon Prime icons on your screen. And therefore, you know, how do you measure? How viewing on [00:37:00] that television is different from, you know, an eight year old Sony TV, which is not a smart TV, and that’s where a panel is necessary.

What big data does bring is stability. In that once you have millions of households and the typical new currency has anywhere from about 10 to about 30 million. I think Comscore actually has the most, they have about 35 million households, which started with Rentrak.

And all the others are kind of catching up. Almost everybody has Vizio through Inscape, which is a business that Vizio set up to basically sell its data, to process and sell its data. So most of those companies have about 20 million households. I think it’s kind of funny when people talk about Nielsen’s response rate of 30%, and you know, 30% is not where it used to be.

You know, it used to be in the forties, but if you have 20 million households, you’re dealing with de facto of 15% response rate. And so, [00:38:00] there needs to be mechanisms for correcting biases and panels, and there needs to be mechanisms for correcting biases and big data sets.

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Duane: So, Paul, you left Nielsen, you retired from Nielsen. How did you end up back in the industry at the ARF?

Paul: Scott and I have a mutual friend, Manana. And Manana used to be Chief Legal Officer at Nielsen. Then she left Nielsen and went to work for an investment bank in Washington. And when I left Nielsen, Manana called me and said, ‘do you know Scott’s CEO at ARF?’

And I go back probably 30 years with Scott. I mean, I worked for Scott when he was at Time Warner doing the research around full service network. And I don’t know whether I called Scott or he called me, but it was our mutual friend who put us in touch with each other. And [00:39:00] this is now the second longest job I’ve had. Nielsen, number one, 17 years. I’m almost five years at the ARF, which is the second longest job I’ve ever held.

Duane: Well, what’s your job at the ARF been like for you?

Paul: It’s great. I’m actually more in the middle of the industry than I was at Nielsen ‘cause I have far more interaction. I have about the same amount of interaction with media, but I have far more interaction with agencies, former interaction with advertisers and on the consumer side.
At Nielsen, I started out in Nielsen Media Research, but then when the company’s combined with AC Nielsen I head medium consumer globally, and so I drove a background in consumer and this really kind of gave me a chance to get back into consumer.

[music]

Duane: What’s next in the Paul Donato story?

Paul: No idea. Absolutely no, [laughs] absolutely no idea. It’s funny ‘cause we have this new study, this dash study, and I’m getting criticized from, I [00:40:00] think, some of the networks on the study. Why? Because my numbers are too close to Nielsen’s numbers in terms of penetration of Ford Bandon.

I think it’s funny. [laughs] I’m back in the fray again, actually. I remember when I went to Simmons. ED-H had a headline: “Back Into The Fray”, describing going to Simmons and the fray with magazine research. So I feel like I’m back in the fray, even though, you know, the ARF likes to think of itself as Switzerland.

Duane: Now we always close the show with a question, which is, if you were giving advice to, you know, this new generation of researchers, what would your advice be?

Paul: Data science isn’t everything. Data science is really important. Get a quantitative background, know how to program in Python. But if you really wanna get ahead, you gotta be a subject matter expert.

And there’s a lot of data scientists that don’t think that and don’t know that. And we do benchmark studies. And actually in terms [00:41:00] of, I forget, it’s not a net promoter score, but in terms of the industry’s perception of data science versus traditional research, is that traditional research is slightly more valuable because data science has a harder time actually relating to the questions themselves.

Not to say it’s not enormously important in an age of big data. It is. Get a quantitative background. But if you really want to get ahead, you’re gonna have to be a subject matter expert.

[music]

 

Duane: Well, thanks again, Paul Donato. What a career. [chuckles]

Paul: My, my pleasure. It’s been a good ride. [chuckles]

Duane: A good ride indeed. So thanks again, Paul, and thank you, the audience, for joining us today. Remember to tell your friends and colleagues about us and don’t forget to subscribe or follow this podcast so you don’t miss any of our exciting episodes.

And stick around at the end of the podcast or learn more about [00:42:00] MediaScience. [music] I’m your host, MediaScience CEO, Dr. Duane Varan, thanking you for joining us today and looking forward to joining you again next time on Legends of Media Research.

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