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Business Observer Friday, Mar. 12, 2004 15 years ago

Data Debate

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A former Nielsen Media supervisor alleges in federal court that employees falsified data.

Data Debate

A former Nielsen Media supervisor alleges in federal court that employees falsified data.

By David R. Corder

Associate Editor

Every night electronic meters in about 5,100 U.S. homes transmit data about the television viewing habits of 13,000 men, women and children to the sprawling office campus Nielsen Media Research Inc. built last year in Oldsmar.

TV network executives and advertisers pay handsomely for the data produced by the New York-based company that employs about 1,600 workers in the Tampa Bay area. Networks rely on the data to decide which TV shows to air or cancel. Advertisers use it to decide where to allocate national and local TV advertising dollars.

Last year, advertisers spent about $42 billion on national and local advertising, according to the Television Bureau of Advertising, a nonprofit trade group. Nielsen Media's ratings influence a sizable portion of advertising spending.

In exchange, Nielsen Media reaps, perhaps, as much as $500 million a year in revenue, according to publicly available financials the company filed prior to its merger in 1999 with the European conglomerate, VNU. The company no longer makes public financial disclosures.

The reliability of Nielsen Media's ratings are of concern to the executives in charge of advertising dollars, say media experts. No one outside of Nielsen Media can attest to the accuracy of its data. No other company collects such information.

"It's still the only game in town," says Rue Ann Porter, a senior media planner at Sarasota-based Clarke Advertising & Public Relations Inc., one of the largest advertising agencies on the Gulf Coast. "It's the best thing we have at this point. They don't have any competition. It's a very expensive thing to do."

Questions over the reliability of the Nielsen Media data intensified publicly earlier this year when The Wall Street Journal reported on a dispute between network executives and Nielsen officials over the viewing habits of men aged 18-34, a key market for advertisers. Those executives doubted the reliability of data that showed a sharp decline last fall for that age group.

Further compounding such concerns are the accusations alleged by a former Nielsen Media data collections supervisor in a whistle-blower lawsuit filed in February in the U.S. District Court, Tampa. Catherine Ionata, a four-year employee, claims she alerted the company as early as November 2002 about employees falsifying Nielsen Media data. Nielsen officials fired Ionata in March 2003 in reaction to her persistent complaints.

Although unfamiliar with the federal complaint or its content, Anne Elliott, Nielsen Media vice president of communications, says she doubts whether anyone at the company would comment about the pending litigation. She also expressed a concern that GCBR would publish an article that would try to link what she called separate and unrelated issues.

Elliott disputed the concerns that CBS-TV and NBC-TV executives voiced in the Wall Street Journal article.

"If you look at the story and then the comments made by other clients, they did not seem to be as puzzled," she says. "We were able to explain a big part of what was going on there. It was not data error. We did incorporate a handful of changes to our methodology. We began weighting the data."

Nielsen Media analysts look at the sample data and compare it to universal estimates, Elliott says. For instance, data on men between 18-34 is weighted more heavily than for other demographic groups. "In our sample of men (age) 55-plus, it's weighted down," she says.

Then the analysts take into consideration other factors that influence the data, Elliott says. For instance, the 18-34 data now takes into consideration that Hispanics in that age group tend to watch less network programming.

"The other piece of the drop-offs that were a concern to many people was a difference of about 4 1/2 minutes in viewing time," she says. "We noticed an increase in video game usage. Some of our network clients, particularly young men, use media different. That's also 4 1/2 minutes across a week. That's probably not too difficult to accept, but to the broadcast networks this is a concern.

"We have devoted a tremendous amount of effort to explain to them how we can account for these differences," she says. "Simply through statistical studies and analysis we were able to account for the majority of that drop-off. A lot of our agency clients came out and said, 'This doesn't surprise us in the least.' "

Meantime, U.S. District Judge Richard A. Lazzara oversees the lawsuit that Clearwater attorney J. Robert McCormack of Persante & McCormack PA filed Feb. 6.

McCormack, who did not respond to repeated requests for comment, represented Ionata in a complaint first filed with the U.S. Equal Employment Opportunity Commission. As required by law, he secured a right to sue prior to filing the federal complaint.

Ionata claims she first acted in November 2002 on concerns from quality-control workers charged with ensuring the accuracy of the data. A few months later, she learned about alleged falsification of data. Ionata says she voiced her concerns to a human resource manager.

Following a routine Ernst & Young audit, Ionata says she discovered additional deficiencies attributed to the same employee accused of falsifying data.

"Plaintiff shared this information with her manager, but was told that certain quality analysts whom plaintiff supervised were 'too focused on quality,' " the lawsuit states.

Dissatisfied with management's response, Ionata continued to voice her concerns. "Plaintiff became dissatisfied with the manner in which the falsification of records was being ignored or 'swept under the carpet' and complained to several other individuals in management of defendant's company," the lawsuit states.

Later, Ionata says she learned that the employee accused of falsifying data not only tried to backdate the data but also tried to enlist the support of a quality-assurance worker to verify the work.

Not long afterward, Ionata says she met with a Nielsen Media senior vice president in an effort to resolve her concerns. Instead, the company put her on a performance improvement plan, sent her home and later fired her.

Although she seeks reinstatement, Ionata would accept 'front pay' if the court deems reinstatement as an inappropriate remedy. She also seeks back pay and an order enjoining the company from further acts of retaliation against other employees.

Because it is a recent filing, Nielsen attorneys have not yet answered the allegations.

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