NDTV’s strong lawsuit against TAM and the people who control it (Nielsen & Kantar) exposes manipulations that are calamitous for the entire market research fraternity. And it also begs a question oft repeated by us – why does Nielsen, in particular, find itself in the ignominious limelight so consistently?
David Ogilvy gifted us with many gems of advice, and one of them went thus, “Advertising people who ignore research are as dangerous as generals who ignore decodes of enemy signals.” Such is the importance of research in the marketing world, since it is the starting point of the marketing philosophy of ‘sense and respond’. While timely and accurate research is essential to effective advertising, it is also extremely important for media planners to ensure that a communication reaches the right target audience and makes the desired impact. Conversely, incompetent market research is equally dangerous, and MR companies have to stay on their toes to keep their research results in tune with reality. But what about market research that is manipulated, and that too, by the best in the business?
The latter is the basic context of NDTV’s recent lawsuit filed in the Supreme Court of the State of New York. The news channel has alleged that TAM ratings have been deliberately manipulated in India over the years to report a lower market share for NDTV. This, in turn, has led to losses, which are “not less than $810 million” over the past 8 years. Matters have worsened to the extent that NDTV is now seeking at least $1 billion in damages from Nielsen as well as Kantar, which jointly operate TAM ratings in India.
Nielsen is certainly no stranger to criticism over its research practices. The data released by the company for the FMCG sector is a case in point. For the quarter ending June 2012, seven of the listed FMCG giants reported an average value sales growth of 19.28% as compared to Nielsen’s estimate of 17.6%. Even more significant discrepancies were found in the data across categories and companies (as reported in a leading national daily). Nielsen has maintained that it brings out a retail audit and it is technically wrong to compare it to actual quarterly results, but FMCG players have been critical of Nielsen’s research reports over time. Unilever CEO Paul Polman has claimed in the media that Nielsen is not very accurate with their numbers.
It’s not restricted to FMCG players. A spokesperson with a consumer durables firm speaks on condition of anonymity, “We had problems with Nielsen data on our market share since they had largely ignored the regions where major infrastructure development is happening.” Once Nielsen addressed these issues, the particular player’s market share more than tripled! A radio industry official also admitted to B&E that he was unhappy with RAM readings. He cites the example of Radio One, which turned from Hindi to English in January this year. But its market share (as per RAM) remained just about the same, which is quite improbable with such a shift in audiences.
TAM ratings themselves have largely failed to find favour with the TV industry. But the case document filed by NDTV is a Pandora’s box of sorts, which goes beyond research competence to make shocking allegations of deliberate manipulation of TAM data for commercial gains & steadfast resistance by the ratings agency to make amends. At the very outset, the case document alleges that the core reason why Nielsen is neglecting customers is the fact that it is now controlled by PE players like KKR and The Blackstone Group. Since these groups have short term gains in mind and want to cash out quickly, Nielsen is allegedly looking at cost control and cost avoidance measures; the most common being “refusal to increase sample sizes” and not adapting to local conditions in countries like India and the Philippines. A committee report in 2010 indicated that the sample size of 8150 for TAM and 6000 for aMap was grossly inadequate for a market with 129 million TV watching households. An e-mail request for interaction sent to the Nielsen India office for this story went unanswered.
David Ogilvy gifted us with many gems of advice, and one of them went thus, “Advertising people who ignore research are as dangerous as generals who ignore decodes of enemy signals.” Such is the importance of research in the marketing world, since it is the starting point of the marketing philosophy of ‘sense and respond’. While timely and accurate research is essential to effective advertising, it is also extremely important for media planners to ensure that a communication reaches the right target audience and makes the desired impact. Conversely, incompetent market research is equally dangerous, and MR companies have to stay on their toes to keep their research results in tune with reality. But what about market research that is manipulated, and that too, by the best in the business?
The latter is the basic context of NDTV’s recent lawsuit filed in the Supreme Court of the State of New York. The news channel has alleged that TAM ratings have been deliberately manipulated in India over the years to report a lower market share for NDTV. This, in turn, has led to losses, which are “not less than $810 million” over the past 8 years. Matters have worsened to the extent that NDTV is now seeking at least $1 billion in damages from Nielsen as well as Kantar, which jointly operate TAM ratings in India.
Nielsen is certainly no stranger to criticism over its research practices. The data released by the company for the FMCG sector is a case in point. For the quarter ending June 2012, seven of the listed FMCG giants reported an average value sales growth of 19.28% as compared to Nielsen’s estimate of 17.6%. Even more significant discrepancies were found in the data across categories and companies (as reported in a leading national daily). Nielsen has maintained that it brings out a retail audit and it is technically wrong to compare it to actual quarterly results, but FMCG players have been critical of Nielsen’s research reports over time. Unilever CEO Paul Polman has claimed in the media that Nielsen is not very accurate with their numbers.
It’s not restricted to FMCG players. A spokesperson with a consumer durables firm speaks on condition of anonymity, “We had problems with Nielsen data on our market share since they had largely ignored the regions where major infrastructure development is happening.” Once Nielsen addressed these issues, the particular player’s market share more than tripled! A radio industry official also admitted to B&E that he was unhappy with RAM readings. He cites the example of Radio One, which turned from Hindi to English in January this year. But its market share (as per RAM) remained just about the same, which is quite improbable with such a shift in audiences.
TAM ratings themselves have largely failed to find favour with the TV industry. But the case document filed by NDTV is a Pandora’s box of sorts, which goes beyond research competence to make shocking allegations of deliberate manipulation of TAM data for commercial gains & steadfast resistance by the ratings agency to make amends. At the very outset, the case document alleges that the core reason why Nielsen is neglecting customers is the fact that it is now controlled by PE players like KKR and The Blackstone Group. Since these groups have short term gains in mind and want to cash out quickly, Nielsen is allegedly looking at cost control and cost avoidance measures; the most common being “refusal to increase sample sizes” and not adapting to local conditions in countries like India and the Philippines. A committee report in 2010 indicated that the sample size of 8150 for TAM and 6000 for aMap was grossly inadequate for a market with 129 million TV watching households. An e-mail request for interaction sent to the Nielsen India office for this story went unanswered.
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