‘People Meters’ : TV Does the Watching in New Ad Age

Before they settle back to enjoy “Miami Vice,” “60 Minutes” or “Dynasty,” 210 families in the Denver area first complete an unusual electronic survey for the research firm ScanAmerica.

A question mark appears on the television screen to remind viewers to indicate who is watching by pressing a button on a remote-control handset. Then a device, called a people meter, automatically sends each viewer’s age, sex and program choice over telephone lines to a computer data bank in Cincinnati.

In return for $400 a year and the chance to qualify for prizes, the participating families record not only their TV viewing preferences but their buying habits as well. Each time they return from shopping, family members report their purchases with a hand-held, code-scanning device like those used in supermarkets. That information also gets transmitted to Cincinnati, where it is sorted and sifted for advertisers who use it to evaluate the impact of their commercials.

After decades of trying to analyze buying and viewing habits through surveys, a brave new world of high-tech market research is emerging. New systems that combine sophisticated television audience-measurement devices with grocery sales data from scanning equipment are enabling advertisers to gauge the effectiveness of their messages.

New Research Tools

Several marketing research companies--armed with gadgetry such as people meters, product scanners and even ultrasound waves that count TV viewers--have begun introducing the controversial technology this year.

“With the advent of people meters, the television industry is taking a quantum leap forward,” said Robert L. McCann, senior vice president of marketing for ScanAmerica, a joint venture of Selling Areas-Marketing Inc. and Arbitron Ratings Co. “People meters help you target the audience that’s most interested in buying your product.”

Current audience-measuring methods--diaries filled out by 2,700 selected viewers and the well-known Nielsen TV meters that are placed in about 1,700 households--tell advertisers what is on the television screens but little about who is watching or for how long. What’s more, these ratings have become less accurate as alternative media such as cable, independent stations and VCRs have splintered the national viewing audience.

The new gadgets promise to yield insights into how well advertising works, or doesn’t work, at a time when sky-high marketing costs and competition for retail shelf space have dramatically raised the financial stakes for consumer product firms.

The devices can report, for example, not only how many people watch a particular television show but also whether the viewers of, say, “Search for Tomorrow” buy more spaghetti sauce than devotees of “All My Children.” (They do.)

“It’s the ultimate research tool,” Bob Schieffer, marketing research director for Adolph Coors Co., said of the new system.

The biggest suppliers in the new high-tech assault are ScanAmerica, Audits of Great Britain Television Research and Dun & Bradstreet’s A. C. Nielsen unit.

Plan for 21,000 Homes

These companies are hoping to install the electronic audience measurement devices, or people meters, in more than 21,000 U.S. homes by 1990.

Close behind them is a Seattle company that is seeking patent protection for a device that senses, through ultrasound waves, how many viewers are in front of the television set and whether any of them leave the room while the TV is on, according to industry sources. Nielsen already has a similar device, according to Nielsen promotion director Larry Frerk

Further away from development, according to CBS Vice President David Poltrack, are voice-recognition devices that could identify viewers and even transmit their psychological profiles by analyzing voice stress or any other indicators.

Old, New Questions Raised

The technology is addressing a crucial marketing question: What is the causal link between advertising and sales? Is it the number of times an advertisement is seen, an ad’s creative impact, or the position of an advertisement in a television broadcast, magazine or newspaper?

While the advertising community eagerly awaits the answers, however, some Americans are growing apprehensive about how the technology might affect their privacy.

“I think people are frightened about this, no question about it,” said Harold Kassarjian, a marketing professor at UCLA who is editor of the Journal of Consumer Research. “There’s a distrust of the system . . . (of) where the information’s going to end up.”

Proponents point out that no one is forced to participate. They add that marketers want to use the information not to exert Big Brother-like psychological control over Americans, but to learn how to serve them better.

“None of this stuff is being forced on anybody,” said Englewood, N. J., inventor Lee S. Weinblatt, who, with 14 patents for advertising evaluation devices, probably leads the high-tech invasion. Weinblatt, who is president of Pretesting Co. in Englewood, added: “It’s not like we are in people’s bedrooms spying on them.”

Privacy Is Concern

Still, even some industry officials have reservations about where the technology ultimately may lead.

Ultrasound systems that track viewers’ movements in front of the television set can raise the “issue of who’s watching who,” said ScanAmerica’s McCann. “I think with those systems, you start to cross the line into invasion of privacy.”

At the heart of both the Nielsen and Audits of Great Britain systems is a remote-control handset about the size of a pocket calculator, with eight special buttons. Each household member presses a pre-assigned button when he starts to watch television, and again when he stops. Nielsen said that it plans to install about 5,000 of these meters across the nation by the end of next year.

The Audits of Great Britain system, which aims to have about 6,000 meters in operation nationwide, can also monitor VCR use and any fast-forwarding during replay, to gauge the degree of channel-switching going on during commercials.

ScanAmerica’s system is similar, but it combines TV meters with a system that gathers data on product purchases. It is scheduled to be placed in 10,000 households by 1990.

Profound Impact Seen

Such a large data base will have a profound impact on an advertising community. Advertising psychology, which is still surprisingly dependent on creative and strategic hunches, will increasingly be influenced by the statistics the new gadgets supply.

Experts predict that the technology could lead to better commercials and more effective promotions. They say that it also should economize product-marketing at a time when the cost of introducing a major new brand has soared to more than $30 million, from about $10 million a decade ago.

Last year, for instance, the Swanson frozen foods unit of Campbell Soup Co. used scanning and television audience data from Information Resources Inc., a Chicago-based marketing research firm that was one of the first to use this kind of data. The company wanted to measure the impact of two advertising campaigns on frozen dinner sales.

Information Resources found that a more humorous spot, featuring a man preparing dinner for his girlfriend, increased sales 25% more than a second Swanson’s commercial did, said Gian Fulgoni, president of the research company.

Already, the technology is calling into question some long-held theories about the relationship between advertising spending and product sales: IRI says that preliminary data from tests it conducted in small cities suggest that, contrary to conventional wisdom, boosting advertising spending may not always produce more product sales.

“There’s going to be more and more pressure on advertising agencies to prove that advertisers are getting their money’s worth for what they are spending,” said Ron Kaatz, director of media concepts for J. Walter Thompson, one of the nation’s largest ad agencies.

Scanning and audience viewing data do more than just indicate what kinds of people watch particular shows, or which commercials and promotions work best.

Shelf Space to Gain

The data can help savvy companies wrestle more shelf space for their products from tight-fisted retailers, experts say. Fulgoni said that companies can persuade retailers not only by touting the sales potential of their products, but also by impressing store owners with the spending potential of their customers.

A paper towel maker, for instance, could argue that its customers spend more on grocery outings than, say, those who are shopping for frozen dinners.

The people meters also can track TV ratings minute by minute, instead of by the quarter hour.

For example, ScanAmerica has found that advertising in the first 15 minutes of “The Tonight Show” may be preferable, because the audience for the popular late-night program dwindles after Johnny Carson’s opening monologue. People meters also have shown that popular series such as “The Cosby Show” have a slightly smaller viewing audience than has been indicated by the current measuring system.

Such findings, predictably, have upset the networks, whose protests have caused the ratings services to agree to wait a year before placing full reliance on the people meter systems.

Accuracy Called Uncertain

“Just because it’s new technology doesn’t mean it’s better than the old,” said William Rubens, vice president of research at NBC. He echoed the concerns of his network colleagues in calling the new people meters “untested” and “possibly inaccurate.”

But major advertisers such as Procter & Gamble, General Foods and Campbell Soup say they have gathered much valuable information through the services.

Take the spaghetti sauce connection, for example. By correlating the viewing habits and grocery purchases of the test audience, Campbell discovered that “Search for Tomorrow” fans buy 27% more spaghetti sauce than average, while viewers of “All My Children” are just average consumers of spaghetti sauce.

An executive at Campbell, which makes Prego spaghetti sauce, said that if those figures had been available a decade ago, they would have strongly influenced the marketing campaign for Prego, which, together with Campbell’s Le Menu dinners, has generated more than $500 million in new business for Campbell.

“I can state categorically that we would have approached our TV advertisements differently were that information available to us,” said George D. Mahrlig, director of marketing research. “We have found that we can increase the delivery of (product) users by as much as 20%, simply by taking a regular media buy of network television and concentrating it in shows that have a high incidence of brand users.”

In other words, Campbell would have placed most of its Prego ads on shows that are popular with spaghetti sauce users.

“You take a dog food maker,” ScanAmerica’s McCann explained. “Only 30% of the people in the country buy dog food. If a TV program like the ‘Today’ show delivers a normal viewer profile, 70% of the viewers would not be interested in buying dog food. You might as well be throwing your money out in the street.”