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By The Wall Street Journal

Media Firms, Advertisers Study Nielsen Alternative

A dozen major media companies, advertisers and ad agencies are banding together to find new ways of measuring television-viewing habits, a move that could create fresh competition for Nielsen Co.

Dubbed the Coalition for Innovative Media Measurement, the consortium plans to explore ways of using TV set-top boxes from cable and satellite companies and other tools to measure TV watching, according to people familiar with the matter. The effort aims to measure audiences across TV, the Web and mobile devices, the people said.

Media companies involved in the consortium include General Electric Co.'s NBC Universal, News Corp., Time Warner Inc., Viacom Inc., CBS Corp., Discovery Communications Inc. and Walt Disney Co., according to people familiar with the matter. News Corp. owns The Wall Street Journal.

The consortium's plan could be a shot across the bow of Nielsen, which has seen an increase in the number of challengers to its dominant position in the business of gauging the audiences commanded by TV shows. The coalition will explore options that include working with those competitors, creating a new competitor or even working with Nielsen as a data provider, some people familiar with the matter said.

The effort is still preliminary and wouldn't immediately create a replacement for Nielsen, people familiar with the matter said.

"We are not responding to something that's not yet announced," said Karen Gyimesi, a Nielsen spokeswoman.

Nielsen uses a panel of U.S. households to estimate how many people watch TV shows. Networks and advertisers then use the Nielsen data to set advertising rates. Nielsen charges both networks and advertisers for access to the data.

TV-network owners and ad agencies have long chafed at Nielsen's tight control over quantifying TV viewing. In the late 1990s, TV networks teamed up with advertising agencies and planned to spend tens of millions of dollars to launch a rival to Nielsen, dubbed Smart. That effort fizzled in part because of the high cost.

But network executives have continued to complain that Nielsen doesn't measure their audiences accurately. In May, Nielsen fanned those worries when it told networks that some people in Nielsen households hadn't been following instructions to push buttons that register who in a household is actually watching TV, possibly depressing its viewer estimates.

The new coalition is also an effort to address the growing use of the Web and mobile devices to watch TV, say people familiar with the matter. Nielsen and other firms track some of that activity, but network executives have argued that a lack of standardization has hindered their ability to make money on new ways their shows are being seen.

The plans were reported earlier by the Financial Times.

Advertisers in the group include Procter & Gamble Co., Unilever, Dell and AT&T Inc., people familiar with the matter said. Advertising firms including WPP PLC's GroupM and Publicis Groupe SA's Starcom Mediavest are also participating in the group, those people said.

NBC Universal has been one of central proponents of the coalition, say some people familiar with the matter. Jeff Zucker, the company's chief executive, reached out to major advertisers such Unilever and ad buying giants such as Starcom Mediavest earlier this year about a forming some sort of alliance to find a new ways to measure viewership across different media, some of these people say.

Last year, in a bid to promote its broadcasts of the Beijing Olympics, the company also cobbled together a group of measurement companies to tally the event's audience across various media, including video-on-demand, TV, cell phones and the Web.

"Management said to me we have to figure out a way to go beyond Nielsen to measure this stuff," Alan Wurtzel, NBC Universal's president of research and media development, said at the time.

The agreement to create the coalition itself has yet to be finalized, according to some people familiar with the matter. The companies had been set to announce it in early August, and a press release announcing the effort has been readied, these people said. But that plan has been delayed, in part as lawyers review the project for possible anti-trust or collusion concerns because so many competitors are involved, according to two people familiar with the matter.

Other people cited the difficulty in coordinating such a large number of participants as a reason for the delay.

Over the past few years, Nielsen's grip on the media-measurement business has loosened somewhat. Companies such as WPP's TNS Media Intelligence and TiVo Inc. have started offering advertisers and network more granular data on TV viewing by using data from cable set-top boxes. Some of the services can estimate how many people are watching in different parts of a commercial break.

Nielsen has responded by with its own new services. Last year, the company began offering a new service that uses information from cable set-top boxes in approximately 330,000 households in Los Angeles. It gets the data from cable operator Charter Communications Inc.

Nielsen is also using a test-bed of households to refine techniques for extending its TV ratings to cover at least some TV shows that are watched on the Web, executives said in an interview last month. The technology is separate from its existing services to measure traffic to Web sites and for online video.