In the media world, there was some big news earlier this month when CBS announced they would be using Rentrak's ratings data as "currency" in their new TV buys. This was quite a boost for the company that up until now was a distant second to ratings company behemoth Nielsen who seemed to be unstoppable in it's growth having acquired radio data company Arbitron last year.
Why this matters? Ratings (also known as data) are an essential component to the television and radio buying process. It's basically research that we all - networks, stations, agencies and advertisers - reference to access value to the spots we are purchasing. It also is a key factor in determining whether a show (new or old) gets renewed for another season as it is a reflection of their audience size. So this research is important for a lot of different reasons. But it's not perfectly collected by Nielsen with limited sample sizes in many DMAs across the country, as well as dated methodologies in how the research is collected. Another drawback is that it has gotten quite expensive for agencies and stations, especially as of late. Rentrak seems to have an answer to many of these limitations with more qualitative research, and passive research collection - connected to cable and satellite boxes vs. diary submissions. Now we realize no method can perfectly reflect an audience - and we should mention that we'd not explored Rentrak's pricing at all. But as with any market, when competition is introduced it makes everyone better - and we're hopeful that that is what happens here.
Honestly, among the media buyers here, Rentrak was at best a laughing stock because we never really heard of them; and at worst an annoyance because we only heard about them when it was from a station that did not subscribe to Nielsen, further complicating our buying process. But this news of one of the most successful broadcast networks endorsing Rentrak with a huge deal definitely legitimizes the company. We think this can only help our industry as both research companies improve to better compete for our business and better serve the advertisers and networks with more quality research.
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