1 1 2 3 -------------------------------------------- x 4 COUNCIL FOR 5 RESEARCH EXCELLENCE 6 -------------------------------------------- x 7 8 Marriott East Side 9 525 Lexington Avenue 10 New York, New York 11 2:00 p.m. to 4:30 p.m. 12 13 14 REPORT TO COUNCIL 15 JUNE 28, 2006 16 17 18 19 REGENCY REPORTING, INC. 20 Certified Shorthand Reporters & Videographers 21 425 Eagle Rock Avenue 310 S. Juniper Street 22 Roseland, NJ 07068 Philadelphia, PA 19107 23 575 Madison Avenue 24 New York, NY 10022 25 www.regencyreporting.net 1-866-268-7866 2 1 A P P E A R A N C E S: 2 3 BOARD MEMBERS: 4 MARK KALINE, Chairperson (via telephone) 5 MELVA BENOIT (via telephone) 6 SHARI ANNE BRILL 7 TIM BROOKS 8 MICHELE BUSLIK 9 SUSAN CUCCINELLO 10 HENRY DeVAULT 11 PAUL DONATO 12 NANCY GALLAGHER 13 BRUCE GOERLICH 14 JEAN GOLDBERG 15 DAVID GUNZERATH 16 MIKE HESS 17 GEORGE IVIE 18 RICK KEILTY (via telephone) 19 PAT LIGUORI 20 JESSICA PANTANINI 21 CERIL SHAGRIN 22 HOWARD SHIMMEL 23 JONATHAN SIMS (via telephone) 24 STEVE STERNBERG 25 3 1 A P P E A R A N C E S (Continued): 2 3 IRA SUSSMAN 4 JACK WAKSHLAG 5 RICHARD ZACKON 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 4 1 P R O C E E D I N G S 2 June 28, 2006 3 2:00 o'clock p.m. 4 5 THE CHAIRMAN: Okay. Welcome 6 everybody. I want to apologize for not 7 being able to be there in person. As 8 you can imagine, the pre-4th of July 9 holiday festivities here at Ford are 10 wild and woolly, so my presence was 11 required here. 12 It is hard to believe about a 13 year ago we embarked on this journey, 14 and the council and I just wanted to 15 open things up by saying I've been 16 extremely impressed personally and 17 professionally at the team and the 18 manner in which this group has come 19 together to discuss, debate, sort out 20 various issues that are important to 21 both the research industry at large, as 22 well as television industry in 23 particular. 24 And I think we have accomplished 25 a lot, giving where we started and all 5 1 we had to accomplish in order to get 2 ourselves into a working organization 3 and one that is actually going to get 4 some work done. 5 I also want to take a couple 6 seconds and just commend Nielsen for 7 taking the initiative to set up the 8 research council. It is a bit of a new 9 paradigm that I think part of, you know, 10 maybe a new way of doing business that 11 other companies who have been watching 12 closely and may attempt to replicate at 13 some point in time. 14 But this has truly been a 15 partnership with Paul and Susan and 16 everybody else who has been involved. I 17 think your help has been greatly 18 appreciated by everybody on this 19 council, and hopefully together we'll 20 all be able to buy or sell our agency 21 client, you know, local, national, 22 whatever, we'll be able to, you know, 23 address some issues that are important 24 to all of our needs in terms of 25 bettering the research front for this 6 1 industry in particular. 2 So, we've got a pretty full 3 agenda today. I think some good topics 4 we'll revisit where the various 5 committees are on their projects, and 6 that's really all I had to start off the 7 meeting with in terms of my address. 8 But I'll turn it over now to either 9 Richard or Mike Hess and take it from 10 there. 11 MR. HESS: I would like to use my 12 prerogative as the next speaker since 13 Mark isn't going to say this about 14 himself, to thank Mark for his 15 chairmanship, leadership over the past 16 year of this committee. Thanks for the 17 feedback that you gave the committee. I 18 share your comments about the fact that 19 this has to be one of the best 20 committees I've ever worked on in terms 21 of people leaning forward and pitching 22 in, but at the same time that we want to 23 acknowledge your leadership for pulling 24 us together over this one year. 25 So congratulations, Mark. Hip, 7 1 hip, hooray, and all that. 2 (Applause.) 3 MR. ZACKON: Let the record show 4 general applause. 5 THE CHAIRMAN: And long distance 6 blushing. 7 MR. HESS: Going to the steering 8 committee business, I just have two 9 things to cover. One has to do with the 10 Council for Research Excellence bylaws. 11 By the way, can the telephone 12 group here me okay? I'm speaking right 13 into the mike. Does it sound okay? 14 MR. KEILTY: It is pretty good. 15 MR. HESS: I just got a copy of 16 the bylaws prior to this meeting who, in 17 turn, received them from the Nielsen 18 leaders a day or two ago. So you may 19 recall at the last meeting we had 20 already gotten input from the steering 21 committee. We showed them to the entire 22 council. So then the next step between 23 the last meeting and this one is to send 24 whatever changes we had directly to the 25 Nielsen lawyers. 8 1 They've done that. They are now 2 back to Richard and to me. The next 3 step at this point on those bylaws, I 4 will take them and pass them out in the 5 next few days or so to the steering 6 committee for your review. And then 7 whatever changes we might have to the 8 last of the changes will, in turn, go 9 back to the Nielsen lawyers. And then 10 what I hope to have back from the 11 Nielsen attorneys by way of our steering 12 committee is to be able to bring them to 13 our next meeting in a few months for, I 14 trust, final approval. 15 One more comment I would like to 16 make about that. I would like the 17 steering committee, and I will certainly 18 review this with the idea I know I'm 19 presenting before Paul talks today, but 20 given that Nielsen used to be about 21 television ratings, and that will be I'm 22 not going to steal Paul's thunder but 23 about follow the video or so. 24 I think we should review the 25 bylaws with an eye toward applicability 9 1 of the new set of activities that 2 Nielsen is going to stand for. So, by 3 implication, as we move into year two, 4 that may have implications on what we 5 consider the appropriate objectives of 6 the committee to be, as well. 7 So that's it for the bylaws. Any 8 comment about that? 9 Second, thank you, at the last 10 meeting you approved a couple of 11 criteria for keeping people on the 12 council, or the opposite, removing them 13 from the council if they were not 14 fulfilling the criteria that you 15 approved, which was really two parts 16 very straightforward. 17 One, you had to attend either in 18 person or by phone these meetings, the 19 one that you're at right now. So 20 Richard has put a checkmark after your 21 name if you're here or on the phone. 22 You have to attend three of the four. 23 And you had to participate in one of the 24 subcommittees. 25 So that is what was approved. 10 1 Richard and I have had discussions about 2 how many people were not fulfilling 3 those criteria and practice, came up 4 with nine members. Three of those 5 members voluntarily removed themselves 6 for a variety of reasons, and the other 7 six, Richard is in the process of 8 contacting right now. We just approved 9 those rules at the last meeting. 10 So, subsequently, I think the 11 role that we're suggesting is that 12 Richard contact them. I think you have 13 already talked to one and then one 14 individual is ready to, as Richard put 15 it, rock and roll, meaning she really 16 doesn't want to participate going 17 forward. 18 I think that that's -- that 19 should be a criteria for continued 20 acceptance, even though maybe she didn't 21 make the numbers for the past four 22 meetings, but going forward those will 23 be the criteria. And, Richard, you'll 24 get back to us on the other five, but 25 our thinking on this is that if people 11 1 are not interested or don't respond at 2 all and they're not meeting the 3 criteria, then we will have to remove 4 them because we want people to make this 5 an active committee. All those good 6 things that Mark said at the start are 7 only applicable if people actually 8 attend. 9 One other thing that will come up 10 a little later today that I want you to 11 start thinking about now but take into 12 account when you see the presentations 13 that are coming up, speaking of 14 committees, everybody is supposed to be 15 a member of the committee. If you are 16 not, then please pay attention to the 17 presentations that you see today and say 18 to yourself, maybe that's a committee I 19 would like to serve on. But then also, 20 as we move from year one into year two, 21 there is also going to be the 22 opportunity later in the meeting to 23 create new committees, that some of 24 these committees they will all continue, 25 but some are reaching some closure. 12 1 And so, if anyone is interested 2 in forming a new committee, I think the 3 practical rules we have are simply raise 4 your hand and say I'm interested and the 5 committee will discuss it. I think the 6 action item we had, you need at least 7 two people on a committee. So this is 8 the time to think about forming new 9 committees going forward. 10 That's all I have, those two 11 topics. 12 THE CHAIRMAN: Mike and Richard, 13 if there are advertisers on that short 14 list of people who haven't been involved 15 or whatever, I am happy to help you 16 guys, to help Richard, you know, contact 17 those folks, explain the situation, you 18 know, thank them for there first year, 19 but to give me an honest response as to 20 whether or not they can fit it into 21 their schedule to be a participant, an 22 active participant and in this council. 23 So the pressure is not on you 24 guys to do that or on Nielsen or anybody 25 else. So, you know, let me know how I 13 1 can help in that regard, Rick. 2 MR. ZACKON: Thanks, Mark. 3 MR. HESS: Thanks, Mark. 4 THE CHAIRMAN: I know a lot of 5 valuable advertisers, not a lot, but a 6 few who would give valuable input. And 7 we can't let a seat go unoccupied if 8 they're not going to be actively 9 engaged. 10 MR. ZACKON: Excellent. Thank 11 you. 12 A couple things before we get to 13 the committee. I want to acknowledge 14 Mike and Ceril and Tim and Ira who 15 presented at the Nielsen client meeting 16 which occurred the week following our 17 last meeting. I got very, very good 18 feedback. It was nice to get it from 19 Nielsen, but nicer to get it from 20 Nielsen's clients. They appreciated the 21 hard work that they represented of 22 everybody here doing. 23 There was a second meeting last 24 week in Washington on local cable, and 25 Ira stood there for Tim and Ceril and I 14 1 stood for his committee and we got the 2 same response. The work of this 3 committee is being noticed by our chief 4 state holder, which is the broad 5 committee of Nielsen clients. So on 6 their behalf, thank you for your work. 7 We have a transcript. We have a 8 court reporter who takes down every 9 word. And today I have looked at it on 10 the web. They give you a little 11 concordance of every word used by 12 everybody and how often. The most 13 commonly used word is "think." 14 I think the second one was 15 "jerk," but we don't have to go through 16 that. I have never seen that before. I 17 thought that was great. 18 So let's go through committee 19 reports and we'll start with our 20 nonresponse committee and Ceril Shagrin. 21 MS. SHAGRIN: We're making 22 progress. I had a meeting with Paul 23 Berokus and Bruce Neroski to review the 24 scope of the project and to make sure 25 that the Nielsen resources were going to 15 1 be made available, and I feel very 2 comfortable that that's true. The first 3 draft of the questionnaire has been 4 written and it was sent to Peter Miller 5 at Northwestern for his review. And 6 Paul and Peter Miller and I will spend 7 about three hours tomorrow on the 8 telephone going over incorporating his 9 comments and getting a second draft. 10 Once we have that, that draft 11 will go out to all the members of the 12 committee, and we'll have a conference 13 call to review it and try to work on the 14 final document. 15 We also have a meeting scheduled 16 with Bob Gross and some of his graduate 17 students. We're going to spend a day at 18 the University working with them, going 19 through the entire plan, the scope of 20 the plan and, first of all, getting any 21 suggestions from them in terms of things 22 we may have overlooked and also getting 23 from them insight as to how they can 24 help us interpret the data. 25 So a lot is happening. And the 16 1 members of my committee who I have sort 2 of given a little vacation to, that 3 vacation is soon ending. As soon as we 4 have the draft, we're going to get busy 5 again. 6 MR. ZACKON: That's an efficient 7 report. If I can ask a question, I 8 probably should have asked you 9 privately, Ceril, within the committee 10 here. I saw an early draft of that 11 questionnaire, I know you and Paul, I 12 think Perry Miller, are hard at work on 13 that. 14 Will the members of the council 15 have an opportunity to see that before 16 it gets too fixed for two purposes: 17 One, individuals may have some thoughts 18 about it, and, two, it struck me that 19 the Media Consumption Committee might 20 want to look at that since you're going 21 out in the field asking a number of 22 people about the usage. 23 MS. SHAGRIN: My thoughts and, of 24 course, the committee -- my committee 25 will concur or not concur, but as soon 17 1 as we have the next draft, the members 2 of the committee will all get that draft 3 so that we can get their insight and 4 their thoughts on it and then add that 5 to it. 6 Once we have that version, 7 because there's no sense sending five 8 versions to everybody, once we have that 9 version, we feel we're pretty close to a 10 final version, then we'll send it to 11 everybody to look at. 12 MR. ZACKON: And if people feel 13 so strongly, would you be open on your 14 committee to have other members? 15 MS. SHAGRIN: Absolutely. Send 16 me an e-mail and I'm glad to include you 17 on the call. 18 MR. GOERLICH: I'm raising my 19 hand for when you're done. 20 MS. SHAGRIN: If anyone wants to 21 sit in on the conference call, just let 22 me know. 23 MR. ZACKON: Can you hear Ceril 24 all right, people on the phone? 25 THE CHAIRMAN: A little softer, 18 1 but we can hear. 2 MR. ZACKON: Okay. 3 MR. GOERLICH: Just a quick 4 question, Ceril, since it has been a 5 while since the last meeting. 6 Can you recap exactly what the 7 purpose of that survey is for the group 8 because I, quite frankly, can't 9 remember? 10 MS. SHAGRIN: Well, the purpose 11 of the survey is to try to gather 12 information to help us understand why 13 people cooperate or don't cooperate, 14 because we're going to be using the same 15 survey with cooperators and 16 non-cooperators and people, when we get 17 to the diary, people who said yes and 18 then never sent in the diary. In the 19 metered sample people who agreed and 20 then dropped out and then didn't go 21 ahead with the installation. 22 We're going to be collecting 23 media information from them to try to 24 determine whether their media 25 consumption of the non-cooperators is 19 1 different than the cooperators. And 2 part of the work we're going to be doing 3 with Bob Gross and his graduate students 4 is to help us interpret the data, 5 because that's his expertise in terms of 6 understanding nonresponse. And, 7 hopefully, we're going to come up with 8 the end result but that this study is 9 not going to give us everything. 10 I'm sure it is going to be a 11 foul-up, but the end result is going to 12 tell us two things. How different are 13 the cooperators from the non-cooperators 14 in terms of their media consumption, and 15 then what are the triggers that will 16 help us turn non-cooperators into 17 cooperators. And the next step will be 18 to test that. 19 MR. IVIE: Ceril, can I add one 20 thing? 21 MS. SHAGRIN: Sure. 22 MR. IVIE: One of the most costly 23 parts of the test were going to be 24 trying to contact people that Nielsen 25 never contacted at all, and Ceril 20 1 mentioned people that dropped out or 2 never returned a diary, but also a 3 pretty intense effort and expensive 4 effort to try to get response to that 5 questionnaire from people that we never 6 even knew anything about. So that's 7 important. 8 MS. SHAGRIN: Thank you. I 9 forgot that. 10 MR. ZACKON: Okay. 11 Other questions about the 12 nonresponse? 13 Thank you, Ceril. 14 Marketplace practices. Ira 15 Susman. By the way, Ira has a 16 PowerPoint presentation and it was sent 17 out to the people on the phone so you 18 can view from home. 19 MR. SUSSMAN: The reason I did a 20 PowerPoint presentation is because I 21 don't know how to do anything else. Can 22 everybody hear me on the phone? 23 MS. BENOIT: Yes. 24 MR. SUSSMAN: The original plan, 25 just to review that real quick, was to 21 1 review current marketplace practices by 2 doing in depth interviews of media 3 professionals and identify questionable 4 practices and issues and possibly do a 5 field quantitative survey to see how in 6 depth that practice was in the industry. 7 Review those issues maybe with our 8 technical advisory panel and maybe do 9 some sort of analysis of that and come 10 up with some sort of report to the 11 industry. 12 So where are we? Our progress 13 report, we engaged a consultant who 14 performed interviews and accomplished 15 about 70 percent of those targeted 16 interviews of so far people at major 17 agencies and on the broadcast TV station 18 side. 19 The gentleman also attended a 20 Nielsen third-party processor summit 21 Nielsen meeting to kind of learn what 22 some of the issues within that arena 23 were. And we have remaining issues 24 which need to be done which we think 25 will be focused on local cable, 22 1 third-party processors and possibly an 2 auditor. 3 We're trying to understand the 4 full scope of the marketplace. We 5 received an interim report which I'll 6 give you now. First of all, interviews 7 with the right people are hard to get. 8 We had a whole list of people asked to 9 interview and I guess a lot were busy. 10 Some of them had to ask when an 11 important sweep book came up and up 12 fronts. So we're going to go back and 13 try to talk to them. 14 There was no consensus on how 15 audience estimates are generated. If 16 you talk to general people, buyer or 17 seller estimates are produced 18 differently and have no relation. What 19 is even scarier, they had no clue how 20 those people came to those numbers. 21 Yet, that's the number we have to 22 negotiate with. 23 Estimated rolling out to new 24 markets has a whole new flux issue with 25 how sellers are being put to task on 23 1 different levels of posting than they 2 ever were, and is that right or wrong. 3 We'll talk about that or look into it. 4 Users are vested in their side of 5 the business and they're not 6 knowledgeable about what goes on on the 7 other side of the desk. No more data 8 streams today, tomorrow, with what Paul 9 is going to talk about, keep growing, 10 new systems are needed to handle it and 11 we don't have they them. And I don't 12 think the systems are going to catch up 13 really. 14 Auditors are playing a larger 15 role in pushing all the data is used. 16 They're asking for the agencies on 17 behalf of their clients to be finer in 18 their accountability and the data may 19 not uphold that. 20 Furthermore, the diary has often 21 been pointed to as the problem. 22 Hopefully, that's going away. But 23 that's not going to be for a while. 24 Some understand issues with local 25 methodology. We talked to the user, 24 1 they used the numbers and don't 2 understand. They're confused with 3 meter/diary integration. All in the 4 same household. My household rating is 5 holding up but my demos are all over the 6 place. There is repeated concern over 7 the accuracy of the diary. Not a 8 surprise. Actual audience delivery 9 versus estimates of audience delivery. 10 The attitude is if you report it to two 11 decimal points, it must be accurate to 12 two decimals, that's what the number is. 13 A whole thing about education. 14 And so far these interviews have 15 been mostly local, all locally oriented. 16 That's where most of the many problems 17 are today. We need to address some 18 national issues, but there is a ton of 19 issues locally right now. Then the game 20 change. Nielsen announced A2/M2. I 21 think most of us have heard about it. 22 More data, more processing, electronic 23 measurement of all markets. Three more 24 LPM markets in the next three years. 25 By October 2007, which it's not 25 1 three years, it is pretty quick. 2 Fifteen in the next three years 3 supposedly. And then there is the 4 additional announcement of the 5 Commercial Minute MIT tape. More and 6 more data coming into the marketplace. 7 Buyers and sellers dealing with more 8 currency options. Not sure some of 9 these things are being currently and in 10 negotiation and should they or shouldn't 11 they be. Reporting and analysis tools 12 by third party processors are not 13 keeping up. 14 So what is our goal? Our goal is 15 to put the current business model into 16 perspective. Can it be fixed? Can we 17 interrupt what is happening and slow it 18 down and maybe create some new rules? 19 Identify the issues and develop some 20 sort of action plan. 21 So what we have done is a 22 situation analysis on a lot of these 23 little things we have heard, this is 24 just an example, it is hard to read. It 25 says ratings are not estimates but 26 1 absolute numbers. If it looks as if it 2 is this, it must be this. Environment, 3 large standard error built into these 4 numbers not observed. Most 5 practitioners are ignorant of it or 6 chose to ignore it. And we have kind of 7 listed out a couple possible actions 8 that might take place, including 9 education, a study to establish SE by 10 rating levels and market size and survey 11 type. Suggestions how to aggregate 12 that. And possibly increase local 13 sample sizes. 14 That's just one example what we 15 have done. If you click through, we 16 have done a number of different issues 17 and what we'll do, please read it at 18 your leisure, contribute your own 19 thoughts on some of the beliefs in the 20 marketplace. What the actual 21 environment is that they are working in 22 and then any possible actions that you 23 think might come out of that. 24 What we would like to do, we have 25 done three pages of this and there's -- 27 1 I am sure there's a ton more. Where I 2 think this committee has changed, we 3 thought that we could find out this is 4 how people do business and these are the 5 better practices and these are some of 6 the issues. I think what has changed, 7 there is a lot of little beliefs in the 8 marketplace that we operate on buy or 9 sell side of the desk, and wouldn't it 10 be great if we all kind of understood 11 where the other person is coming from, 12 where the data was coming from and, if 13 not, change the rules, maybe give some 14 guidelines. And by looking at each of 15 these, one way of doing this, by looking 16 at each of these marketplace beliefs and 17 looking at the actual environment and 18 then trying to do some sort of 19 mini-study or development of some sort 20 of guidelines. 21 So, finally, our next steps, 22 we're going to continue our interviews 23 and finish that up. The idea is to 24 raise awareness of key issues and maybe 25 through forums, press releases, other 28 1 venues. Maybe we have some sort of day 2 we bring people together to talk about 3 these things. Identify areas where 4 standardization is possible. 5 If it is necessary, cost 6 effective, we'll look at these issues. 7 Gather input within the industry. Set 8 standards, hire legal team and then go 9 far away. So that's what we have done 10 so far. 11 I think what we would like is 12 your participation and if anybody else 13 wants to volunteer and be part of this 14 and help with those grids and really 15 fill them out and, you know, make them 16 fuller and kind of create an action plan 17 for what this committee can do next. 18 Then we'll come back and say this is 19 what we want to do, this is what it will 20 cost, and then we'll approve. 21 MR. ZACKON: Thank you, Ira. 22 Comments or questions from the council 23 members? 24 MS. BRILL: This is Shari Brill 25 speaking. For those of you on the 29 1 phone, can you hear me? 2 THE CHAIRMAN: Sure can. 3 MS. BRILL: Good. I know that I 4 had once mentioned this issue and more 5 and more with all the different data 6 streams coming out and forgetting 7 reported by the press, I get 8 increasingly concerned about how that 9 information often gets misinterpreted, 10 misconstrued, maybe even mangled. It 11 usually causes a lot of difficulty and a 12 lot of frustration for those of us who 13 have to deal with the fallout. 14 And I know it wasn't addressed 15 really as part of this study because it 16 was about practices between buyer and 17 seller. But often what gets 18 misconstrued by the press often muddies 19 up that whole process, and I was 20 wondering as we move forward if that 21 could get taken into account. 22 MR. SUSSMAN: If I'm going to 23 answer that, I think it is against the 24 law, people, you put a leash on somebody 25 who is trying to make a story. 30 1 MS. BRILL: That might be a 2 start. 3 MR. SUSSMAN: People keep talking 4 to the press with their own point of 5 view. I don't know how to stop that. I 6 think it is a problem. You look at the 7 press and you see things that don't make 8 sense and muddies the water. I don't 9 know how you get there. 10 MR. STERNBERG: I think part of 11 the problem, the press doesn't 12 understand what we do. It might be a 13 good idea to have an educational series 14 to invite the press in to say this is 15 what it means, so they can't come back 16 and say this is what they thought they 17 meant. 18 MR. SUSSMAN: News is a different 19 thing. 20 MR. HESS: Let me expand on what 21 Ira said or let me redirect -- you have 22 a slide that included education. 23 MR. SUSSMAN: Yes. 24 MR. HESS: I think that's 25 probably vis a vis the press, including 31 1 this area, you can educate and draw out 2 what is true and we can dispel myths. 3 And if the press then chooses to slant 4 it in one way or another, that's up to 5 them. I do think that's exactly why 6 because of this issue and for other 7 reasons, why we put education in as a 8 primary action study. 9 MR. SUSSMAN: I'll pull press in 10 my next slide. 11 MR. IVIE: I thought the 12 presentation was fascinating because I 13 can see a lot of things that I have 14 experienced, too, and just thought -- 15 MR. ZACKON: Can you hear George 16 loud on the phone? 17 THE CHAIRMAN: Maybe louder. 18 MR. IVIE: I want to echo one 19 thing, that is, the third-party 20 processors out there and the fact that 21 they may be processing things 22 differently. It has been a goal of us 23 at the MRC to bring those organizations 24 to the table to be audited, and I think 25 that's an important goal. 32 1 I just want to express here it 2 wasn't in your slides. But talking 3 about standards and talking about making 4 processing consistent, an audit is an 5 excellent foundation to drive that 6 process forward. And I think it would 7 help the industry if those orientations 8 came from the table. 9 MR. SUSSMAN: That is correct. 10 There is a version on my desk. It has 11 auditors, MRC auditors, but that's a 12 long shot but agreed. 13 MR. ZACKON: Bruce, you have been 14 patient. 15 MR. GOERLICH: You are talking 16 about marketplace issues and you sort of 17 touched on the advertising, but I'm 18 wondering if any interviews are 19 occurring with advertisers and the end 20 user occurring with auditors, because 21 certainly all the players are 22 essentially responding to the 23 marketplace created by advertiser 24 demand. 25 And I'm wondering if there's any 33 1 focus on that or any plans to talk to 2 advertisers who are, I guess at this 3 point, you're focusing on local. 4 MR. SUSSMAN: We would love to. 5 THE CHAIRMAN: Could you repeat 6 that? 7 MR. SUSSMAN: The question was 8 are we planning to continue the process 9 of interviewing others such as 10 advertisers and/or auditors who are 11 involved in this whole negotiation 12 conversation. And the answer is yes, 13 there are advertisers even within this 14 council that I'm sure would raise their 15 hand to be talked to. 16 So, inadvertentness on our 17 slides, we had discussed that and we 18 need to include them, too. 19 THE CHAIRMAN: It may be helpful, 20 Ira, if you need, I could possibly 21 enlist the ANAs of doing a brief survey 22 of their television committee. 23 MR. SUSSMAN: Let's talk about 24 that and do it the best way we can. 25 Absolutely. 34 1 MR. ZACKON: Other questions for 2 Ira? 3 Henry. 4 MR. DeVAULT: Given the dynamic 5 nature of television at this particular 6 point and all the things that are 7 changing, how do you get to your end 8 goal here of wrapping this up, because 9 there seems like it is going to be 10 never-ending questions on your part? 11 MR. SUSSMAN: Until I retire. 12 MS. LIGUORI: And constantly 13 changing in the process. 14 MR. DeVAULT: Right. Because 15 some of the people that you interviewed, 16 let's say, a year ago, may have 17 different perspectives now, given the 18 fact that so much has changed, and next 19 year they'll change their position 20 again. 21 MR. SUSSMAN: And we talked to a 22 lot of people about issues in the diary 23 and supposedly that's going away. So 24 yes, the marketplace keeps changing. I 25 don't know how you put an end to it. I 35 1 think we have only just begun 2 investigating it. 3 Maybe there are certain basic 4 principles that when you look through 5 the grid that are more important than 6 might have more, regardless of 7 marketplace change, may just be a truth 8 that we can address and maybe not all 9 mythological, but more about education 10 and how marketplace just comes together. 11 I don't know how to answer that. I hope 12 there is an end. 13 MR. DeVAULT: Do you think it 14 would be advisable for you guys to 15 develop something that would be almost 16 like an annual survey of the industry 17 with the idea that certain people would 18 be interviewed consistently, so that you 19 could see how their attitudes or 20 opinions have changed over time, and 21 then you could also just get a general 22 sense of the various communities of how 23 they're reacting to different changes? 24 THE CHAIRMAN: Is there any way 25 to repeat that? 36 1 MR. DeVAULT: Not me. 2 MR. SUSSMAN: The question is: 3 Should we possibly do an annual survey 4 and see if their attitudes change over 5 time. 6 I don't see any problem with 7 that. I don't know what the 8 quantitative survey -- I think it might 9 be good to keep a score card of how 10 important certain issues are and if 11 they're becoming less important. 12 Pat or Michele. 13 MR. HESS: Could I take a shot at 14 that? 15 I feel like this first version 16 should really be -- should attain what 17 Ira said in his objectives. That it 18 will be a revision or, sorry, a 19 compilation that will take into account 20 mythologies, dispel them, place it on 21 firm ground. 22 But given the change that you 23 just pointed out, that's going to be 24 with us. I suspect this is an evergreen 25 committee. I don't know if there is a 37 1 survey, but some mechanism that says at 2 the end of the first year here is the 3 set of revisions that apply to 2007 and 4 another set of revisions that apply 5 later. 6 As long as the industry keeps 7 changing and based upon what Paul will 8 show us and what we know is coming down 9 the pike anyway in electronic measure 10 video, there will be a need for an 11 annual update for the truths, if you 12 will. 13 MS. PANTANINI: Would it be 14 helpful to replace what we educationally 15 place to understand how effective that's 16 been? 17 MS. LIGUORI: I think that this 18 is the first and it is kind of not as 19 concrete as the other studies that are 20 being done. So I think once we get this 21 behind us and we're more clear in how 22 we're going to manage the data, we know 23 more about the interview process and who 24 we can get and fine tune some of the 25 questions, it will be easier to do this, 38 1 whether it is annual or 18 months or as 2 required by changes within the industry. 3 But at this point we're kind of 4 paving our own road here. 5 MS. BUSLIK: I also would like to 6 see -- there was some very eye-opening 7 observations that we got from this 8 initial phase that I don't think any of 9 us expected. And that was the 10 difference, the real differences between 11 how the buyers and the sellers look at 12 the data, evaluate the data. 13 And I think if we can just make 14 that, you know, take one of the goals 15 and make that for this year and then 16 next year keep changing or adjusting it, 17 but I don't think the industry 18 understands how people come at the 19 numbers from two different perspectives. 20 MS. LIGUORI: To Michele's point, 21 one of the more interesting interviews I 22 think, in my opinion, anyway, was when 23 we had buyer and seller sitting 24 together. It is one thing to do a one 25 on one and have just the seller talking, 39 1 but in the process to interview the 2 seller, have the buying side comment and 3 then interview the buying side and have 4 the seller commenting; that's where you 5 begin to learn what the other side does 6 and appreciate it, and I thought that 7 was very helpful. 8 MR. WAKSHLAG: Do you have the 9 tape? 10 MS. LIGUORI: Yes. 11 MR. SUSSMAN: I find it very 12 intriguing and this is something as 13 complicated as nonresponse, it just 14 comes and goes. 15 MR. DONATO: Look at the press 16 this year. That's just the tip of the 17 iceberg when you start thinking about 18 the difference in the industry and 19 what's coming in the next couple of 20 years, that is a warning that we need to 21 figure out how a community, how to 22 establish. 23 MR. ZACKON: Ira, are you open to 24 more members on your committee? 25 MR. SUSSMAN: Sure. 40 1 MR. GOERLICH: I can't articulate 2 this very well, so I'll stumble. I 3 think the issue of currency is maybe an 4 opportunity for us to sort of look 5 outside the business perhaps to the 6 financial markets in how other 7 industries deal with a great amount of 8 data and are making financial decisions 9 on them, how do they manage it, how do 10 they estimate, because that's kind of 11 why I was asking the advertiser a 12 question which I think all of us want to 13 know the advertising need for more 14 regularity and more confidence that the 15 data that they're getting in the 16 marketplace relates ultimately to the 17 grand goals, and that certainly requires 18 striding towards more and more data, 19 more and more need for regularity. 20 And I think we might have an 21 opportunity to sort of look -- I'm not 22 sure where to look, whether it is Wall 23 Street or other areas that deal with a 24 mass amount of data, and do it fairly 25 effective, are also dealing to a certain 41 1 extent with estimates and just from a 2 management of data and a marketplace 3 approach, that might be something, I 4 don't know whether it is in the purview 5 of this group or not, that we might want 6 to consider. 7 MS. SHAGRIN: I do think we have 8 an opportunity now because we talk about 9 what should the currency be because, as 10 an industry, we sort of had a stable 11 here is what the currency is. And I can 12 remember when NTI went to people meters 13 and the numbers changed and everybody 14 talked about should the currency change, 15 and ultimately it stayed what it was. 16 Now this year, the whole argument 17 what should the currency be and we're 18 going to have that same argument be on 19 what should the currency be and how do 20 you define commercial minutes. So I 21 think there is an opportunity, I know it 22 expands the role of your committee, but 23 I do think there is an opportunity for 24 us to focus on or to address using 25 either Bruce's idea or other ideas, just 42 1 how do you determine what the currency 2 should be in terms of that because it is 3 going to change. 4 MR. DONATO: Some of this 5 requires research. Commercial minutes, 6 one minute of that commercial is 30 7 minutes of commercial minute. During 8 that minute, somebody -- it is our 9 responsibility to determine that because 10 to the extent it is an industry 11 decision, their research goes to a lot 12 of these decisions. 13 MR. HESS: One thought for later 14 could be, I have heard enough about 15 currency, I wonder if, Ira, is 16 everything in your presentation today 17 based on currency or related to 18 currency? Because if it is not, then 19 maybe an argument could be made that in 20 the committee section that's coming 21 later, that there actually be a currency 22 committee established. 23 MR. SUSSMAN: All of the data 24 that we looked at are different ways of 25 negotiating marketplace. 43 1 MR. HESS: So it is all about 2 that? 3 MR. SUSSMAN: I think one of the 4 issues, last lines all of the data 5 streams that people look at and the 6 different ways they're looking at it is 7 how they come to a currency number in 8 the marketplace. 9 So I think one of the bigger 10 issues with our industry versus 11 financials is dollar, is pretty much the 12 dollar or sales is pretty much sales. 13 We have audience estimates being created 14 from samples and at the very basic of 15 the number, it is not a number. It is 16 not a solid number. It is a range. And 17 as long as we're starting off with 18 loose, you know, it is really hard to -- 19 what we're trying to do is make that 20 more understandable. 21 I think that's one of the bigger 22 goals, to not find the currency. That 23 is a great thing I think the industry 24 has to work that out. But I think we 25 have basic issues with the fact that a 44 1 number is not a number. If it is says a 2 .2, it is not a .2. It is a .1 3 something to a .2 something. That's 4 what we're dealing with. 5 MR. ZACKON: George and then 6 Steve. 7 MR. IVIE: I just want to 8 advocate a position here of taking a few 9 simple steps, because there is a very 10 big committee with a lot of stuff going 11 on and, you know, I have been involved 12 in situations that are similar to that. 13 I think the situation about 14 giving an example -- I work a lot on the 15 IEP development internet guidelines and 16 standards, and it is hard to think of a 17 more dynamic environment than what's 18 going on there. And the metrix used 19 there, if you try to get your arms 20 around every single one and characterize 21 that and build usage standards and 22 guidelines, you never get the problem 23 captured, much less solve anything. 24 In that environment what we chose 25 to do is take a simple step, define an 45 1 ad infraction and measure it. Don't 2 worry about broadband, Clix, AJAX. Just 3 take a simple step. And that's a great 4 thing, because you don't know from that 5 point forward. You built on that, you 6 draw analogies to it, and as long as 7 that first step is high quality, then 8 that lasts for a long time. And that's 9 what I would ask you to consider, what 10 simple steps you can take to try to 11 standardize. 12 MR. DONATO: The -- 13 MR. SUSSMAN: Help us look at it 14 and help us, what goes first, and we'll 15 try to go at it. 16 MR. STERNBERG: I just wanted to 17 make one or two comments on currency. I 18 think we can talk about research until 19 we're blue in the face, but currency is 20 purely a business issue. It has nothing 21 to do with any research that we do. 22 I was heavily involved with the 23 broadcast networks and my management 24 comes to me and says we can't do this, 25 we have to do it this way, justify it 46 1 with the research. The networks come in 2 and say this is our point of view and 3 try to justify. 4 The currency is purely a business 5 issue. Whatever we come up in this room 6 with, advertisers are staying no, this 7 is the way you have to do it. That's 8 going to be our point of view. Network 9 management, and says this is the way we 10 have to do it. That's our point of 11 view. 12 It is nice to talk about, you 13 know, trying to come up with the 14 research, but you're not going to come 15 up with the research that is going to 16 say life plus seven is better than life, 17 because they're both exactly the same 18 currency and it is a business decision 19 as to whether you go with one versus the 20 other. 21 MR. ZACKON: Are we ready to move 22 on? Very good. 23 By the way, Mark, I realize 24 there's a home game in Detroit this 25 afternoon. You are in the office, 47 1 aren't you? 2 THE CHAIRMAN: Yes, I am in the 3 office. I don't want to put the end of 4 June jinx on the team, so I won't say 5 anything further, but they beat 6 Mr. Clemens last night. 7 MR. ZACKON: Shari Anne and 8 Steve, our media consumption and 9 engagement committee. 10 MS. BRILL: Hi. Good afternoon, 11 everyone. I would like to give you an 12 update on where our subcommittee is at 13 this time, specifically the media 14 consumption and engagement committee. 15 I want to thank everyone who has 16 been working with us for their great 17 work and painstaking effort for bringing 18 this together. 19 Late last fall we posted a 20 request for proposal on the Council for 21 Research Excellence website and also a 22 press release was sent out alerting any 23 potential supplier who would be 24 interested to submit a proposal on their 25 ideas or methodology for producing the 48 1 ultimate map of consumers media usage. 2 In summary we received about 12. 3 We liked 3 of the 12. Specifically, the 4 first one came from Ball State 5 University, and that study was to show 6 video exposure across a full range of 7 all different types of screens. The 8 methodology they were using was a 9 combination of telephone, diary and 10 direct observational research. 11 The second one that we liked came 12 from a joint proposal from IRG, Insight 13 Research Group, rather, and OTX, and 14 their study basically, to summarize, was 15 to look at consumer behaviors, attention 16 and emotion. And their methodology was 17 going to be a combination of ET graphic 18 research, focus group research and 19 on-line surveys. 20 The third one that we liked came 21 from Ohio State, which was a study of 22 simultaneous media usage. And their 23 methodology was a combination of 24 camcorders that were employed by 25 respondents within their own households, 49 1 plus diaries in the area of Columbus, 2 Ohio. 3 While we liked these 3 of the 12 4 and we wanted to move forward with them, 5 none of them really hit, came close to 6 really hitting the sweet spot. And Tim 7 Brooks came up with a really great idea, 8 if I had to modify our request for 9 proposal, and I would like him to 10 elaborate because it was his idea. 11 MR. BROOKS: Target on my back. 12 Actually, I think what we have talked 13 about is a committee is very ambitious, 14 but I think it could be a 15 ground-breaking study personally. I 16 think something of this scale and nature 17 and sophistication, if we can find the 18 right supplier, could be illuminated on 19 a lot of spots. It is a media map. 20 What we're thinking of at this 21 point, we're going back to the three 22 finalists, tell them, because they all 23 had something similar to this, 24 variations on this, to come back to us, 25 with a revised proposal. We're giving 50 1 them these guidelines in very general 2 terms. 3 We want an observational panel 4 study. We want a study of perhaps 500 5 homes or more. Those homes would be 6 segmented so that we would have tech 7 heavy homes as well as tech light homes 8 in them. A range of technology usage. 9 Those homes would be tracked over a 10 period of time and we'll look for 11 proposals. It might be a year or six 12 months, something like that, to 13 determine what their usage and the 14 members of those families' usage of 15 those different kinds of media are, as 16 well as how that usage changes, as well 17 as how that interaction wanes or picks 18 up over the period of time. 19 There will be changes of media 20 during that time, of course, but the 21 important thing is not only to know a 22 point in time but to know a change, but 23 particularly to know if something is 24 really catching on. This phone, I'm 25 told, will show you video. I don't know 51 1 how to use it. Anybody who is a 2 teenager can tell me. 3 But there could be other things 4 like that coming along and we want to do 5 that. We would start with a pilot study 6 so that we would sort of vet this study 7 and make sure that we're asking the 8 right questions. 9 The observational technique, 10 we're open on that. It could be 11 something such as an observer who comes 12 into the home once a month who follows 13 people around and makes notes on what 14 they're doing. It could be something 15 like the virtual tag-along device, I 16 believe it is called Inside Research 17 Group, has which is a small device which 18 combines a camera with a messaging 19 system so you can ask people questions 20 during the day about what they're doing. 21 It could be a variety of 22 observational techniques, but we don't 23 want to rely on a survey of what did you 24 do. We'll have follow-up interviews to 25 this. As I say, very importantly, new 52 1 versus old hands in using media. 2 At the end of the day, assuming 3 it passes the trial period and goes into 4 the field as a regular test, we would 5 have progress reports to report back to 6 us and to you during the course of the 7 this, too. It could be open-ended or 8 closed-ended, but I think in mapping out 9 the use of different kinds of media 10 importantly how they interact with each 11 other. How they change over time in 12 terms of the new device syndrome and 13 does it hold up could give us a very 14 interesting picture of how, where the 15 video is that we need to follow. 16 MR. STERNBERG: I think that now 17 is the perfect time to do this type of 18 analysis because so many homes are just 19 now acquiring this type of new 20 technology. And I remember between the 21 first draft of our original RFP when way 22 back when and in the final draft we 23 added in iPod and a few other things 24 because they were beginning and we were 25 not talking about them the first time we 53 1 met as a committee. 2 MR. DONATO: I remember in the 3 1980s there was a lot of observation 4 work coming out of the UK, a lot of 5 presentations and a lot of work. They 6 did a lot of work. 7 MR. STERNBERG: I remember Jack 8 Wakshlag at the ARF presentation, the 9 difference between what people do when 10 you observe versus what they actually 11 say the next day. 12 MR. BROOKS: Yes. And do they 13 understand what they're reporting to you 14 if you ask them over the phone and 15 actually observe them? 16 MR. WAKSHLAG: I think the answer 17 is no, they don't, and they can't. You 18 can't ask somebody to make 40 phone 19 calls each day and ask her to estimate 20 how many phone calls or how many hours 21 of TV they watched. They just don't 22 know. I don't know. 23 Steven knows more about what 24 particular people watch on TV, what his 25 kid watches on TV, but even he can't 54 1 tell you exactly how much unless you put 2 a meter on. 3 So that is sort of my struggle 4 with the idea of asking people why, 5 because I'm not sure. But at least I 6 can get a snapshot of what the world is 7 like and a sample at one point in time. 8 I want to come back and see these people 9 four years from now or another sample 10 like them four years from now. I have a 11 solid base. That's where we start. 12 This is a good snapshot of what people 13 are doing in the world with all this 14 stuff now, and then we can come back in 15 four years to them or another group and 16 see what's changed. 17 We don't know or think we will 18 get all the answers to come out in one 19 survey. This is team one of the 20 multiple, you know, time sequence. 21 MR. HESS: I would like to ask 22 Shari, I think you're the one who 23 mentioned this, that it missed the sweet 24 spot. I was actually pretty impressed 25 at the work that, Jack, you quoted from 55 1 and I think Jim Spate also gave a lot of 2 presentation last week, specifically on 3 the work that one of your three want to 4 do, Ball State has been doing and that 5 stuff looked pretty good to me. Not 6 that I favor them in any way. 7 I didn't see the responses to the 8 RFP, but what is it that the group I 9 think as advanced as Ball State was 10 missing when you say missing the sweet 11 spot, I'm not sure I got that part. 12 MS. BRILL: It was just that as 13 what we have seen as an industry with 14 how technology has exploded and has 15 potential been embraced by the body of 16 consumers out there, we just felt that 17 there was more that we needed to look 18 at. It wasn't even so much that they 19 came up short. They actually, those 20 three really did a good job addressing 21 our proposal requests as they were 22 submitted. 23 It was just as through our 24 leverage with what's happening and 25 seeing what's out there this year, we 56 1 felt we needed to see more. As these 2 proposals came back, we started 3 realizing that there were more things 4 that we needed to see and we just want 5 to contact these companies with our 6 modifications and have them each report 7 back to us. 8 MR. STERNBERG: I think people 9 were responding to a fairly broad RFP 10 and it is not really that they didn't 11 hit the sweet spot. We weren't sure 12 what the sweet spot was. And now we see 13 the responses, okay, here is the sweet 14 spot and who can best do that. 15 MR. WAKSHLAG: I think we learned 16 from the proposal, and so it is a 17 process really like this part of what 18 you have got. We have some questions 19 about this other stuff and we are 20 essentially allowing three different 21 suppliers to exchange with us a little 22 more before we pick one. 23 MR. BROOKS: Also observational 24 and longitudinally. I don't think 25 either of those Ball State does. 57 1 They've done some good work and success 2 and insight, but perhaps maybe I missed 3 something. I don't know of anyone else 4 who has done that work. 5 MR. DONATO: No, I don't think 6 so. 7 MR. DeVAULT: The Ohio State 8 proposal was supposedly to be done in 9 Columbus. Do you guys have any 10 reservations about a local study as 11 compared to something that would be 12 broader based throughout the country? 13 MR. WAKSHLAG: Allstate is also 14 local. 15 MR. BROOKS: That was their 16 proposal. We're going back for a 17 proposal. Before they submit those 18 proposals, we'll have a call with them 19 in which we talk about what the 20 committee said and let them react to 21 that. It may not end up that way. I 22 suspect it would not. We would make 23 sure it was representative. 24 MS. GOLDBERG: Tim just touched 25 on something. They all had pieces that 58 1 were good. None of them had all of 2 them. So we collected all these pieces, 3 and in deference to them we said this is 4 what we would like you to touch upon. 5 Some did more, some did less. 6 National is one of them. The 7 next step is to chew on that and come 8 back with a more detailed proposal and 9 then come present to us. And we 10 thought, you know, an RPF submitting in 11 writing can go so far. We'll have a 12 meeting giving each company a fairly 13 definite time to present, an hour or two 14 hours, and not only to present the Q and 15 A, tell them what we would like in that 16 presentation, they come in fully 17 prepared and then we'll take it from 18 there. It was really that each of them 19 had pieces. We collected all these 20 pieces, send it back and revised it. 21 MR. WAKSHLAG: I'm not convinced 22 yet that the trade-offs, you know, a 23 nationally representative sample 24 observed over time is the only way to 25 go. We've got to look at the 59 1 trade-offs. We have to look at the 2 expense. 3 There was a reason they call it 4 Middletown and they have done Middletown 5 studies since the Thirties. And so 6 there is, in fact, a sample or a base to 7 look at, if you want to look how people 8 use newspapers in the Forties, it is 9 described and discussed in articles 10 using the measurement technology of the 11 time. 12 So I don't want to say -- I'm not 13 dismissing either way. It could be that 14 we asked the Ball State or the Ohio 15 State guys to say how much more would it 16 cost you to do it as a national study. 17 And they might say it is four times as 18 much, and then we have to figure out if 19 we want to spend it that way. 20 MR. STERNBERG: There was a 21 tremendous difference in the cost 22 proposal of some of these studies as it 23 is. If one became national, it might be 24 closer to some of the other proposal. 25 MS. SHAGRIN: It might be that 60 1 you sort of do a compromise because of 2 costs, since you say, okay, you can use 3 a local sample, but then you supplement 4 it with the types of homes that are not 5 available within that local geography in 6 terms of ethnic homes, in terms of older 7 homes, because sort of college 8 communities. But you see what's 9 available locally, and then to keep the 10 cost down, you sub-sample in other 11 geographies to get the homes that are 12 not in that geography. 13 MR. STERNBERG: Or we get Nielsen 14 to advance us next year's budget. 15 MR. ZACKON: Let us remember 16 Nielson already put up an initial 2.5. 17 MR. HESS: Richard, maybe not in 18 this part but later on in the business, 19 this last couple of comments, I think, 20 does make me think of a criterion for 21 spending the money, though. 22 It is fair to assume that we have 23 the extra 2.5. We know that, but is it 24 fair to assume that there's now a 25 blended $5 million, or is it that you 61 1 know the year one projects really can't 2 tell more than 2.5, and the 2.5 that 3 Nielsen gave us going forward is 4 actually new money for new projects. 5 MR. ZACKON: Well, the year is up 6 today. This is the year. So my sense 7 is that we'll have whatever is left over 8 of 2.5 to spend and we'll get more. 9 They will be blended. 10 MR. DONATO: It is not use it or 11 lose it. 12 MR. ZACKON: Otherwise, we would 13 have had better food here and somewhere 14 else. 15 MR. GUNZERATH: If the 16 respondents do come in to make actual 17 presentations, is that something that is 18 open to other members? 19 MS. BRILL: Absolutely. I was 20 going to get to that. 21 Now, I don't know necessarily if 22 we can have a meeting where everybody 23 can be physically present. It may 24 happen over a phone call. But either 25 way, however our meeting with these 62 1 potential suppliers occur, I am opening 2 it up to the full council. 3 Anyone who wants to participate, 4 listen in, is more than welcome. Just 5 send me an e-mail of your interest and 6 we'll contact you when these meetings 7 happen. 8 MR. STERNBERG: Don't we have a 9 budget to allow them to come and 10 present? 11 MS. BRILL: Maybe at the third 12 stage at a later time, I don't know, it 13 is also the logistics of getting the 14 committee members here and present. As 15 you look around the room today, a lot of 16 people aren't here. They are here by 17 phone. Sometimes telephone works best. 18 But whatever, you know, however, it 19 works out, I leave that completely open. 20 MR. BROOKS: I think we do want 21 to move this along. We want -- 22 technology is changing. We can't have 23 this study fielding some time in the 24 late. So we're perfectly willing and 25 eager to have others participate in 63 1 this. We'll figure out the mechanics to 2 do this. 3 MS. GOLDBERG: To that end, I 4 forget, my committee members, when we 5 submitted the revised RFP, what is the 6 time frame? 7 MR. ZACKON: We did not submit it 8 formally. I spoke to the three 9 finalists to let them know to do it. 10 MS. GOLDBERG: We do want to 11 expedite it. 12 MR. ZACKON: Are you in a 13 position at our next meeting, probably 14 three months, that you come back with a 15 formal recommendation for this council? 16 MS. BRILL: Yes, we have to. 17 Time is of the essence. 18 MR. ZACKON: Maybe sooner we can 19 vote and do it by phone. 20 MR. SHIMMEL: The media map 21 concept envision not only what is in 22 people's homes today, but what their 23 comprehension and interest is amongst 24 stuff they may not own. I think part of 25 this is to help us to get to what is the 64 1 next big device from an adoption 2 standpoint. 3 MR. WAKSHLAG: I hope we don't 4 just ask them what are you interested 5 in. 6 MR. SHIMMEL: No. 7 MR. WAKSHLAG: That's what I'm 8 afraid of. It depends on what these 9 guys come to us. 10 MS. SHAGRIN: When you go back in 11 six months, you'll see that. 12 MR. BROOKS: We can certainly 13 discuss that. The primary goal and 14 objective is to what is there, how do 15 they use it. However, exit interviews 16 or an interview asking them about others 17 what they may obtain in the future, talk 18 about that. 19 MR. STERNBERG: Observe going 20 on-line and observe with their iPod. 21 MR. GOERLICH: We're doing a lot 22 of work in the innovation area and we 23 will present our work to the client or 24 clients. We are in the middle of doing 25 a lot of work in the infusion of 65 1 innovation based on the academic work 2 that I have done in the past. We should 3 have some data in the very near future. 4 Once we work that through our 5 client base, I have no problem coming 6 and presenting that work to this group 7 and address specifically Jack's point 8 about how to predict and understand what 9 is the next technology. I'm more than 10 happy to do that. 11 MR. ZACKON: By the way, NSA 12 submitted a proposed monitoring usage 13 for whatever reason. If we're complete 14 with that, can we address some new 15 business? 16 Okay. There are three items of 17 new business. The first is election. 18 Our chair, Mark Kaline, agreed to step 19 up to be the chair for a year and the 20 year is up to date, in essence, over a 21 year. Mark has agreed, if the council 22 supports him, that he would do it for 23 another year. 24 We didn't get a chance to vote on 25 it. And on the other hand, if anyone 66 1 else wants to step up, present or by 2 phone, to be the chair for the coming 3 year, that's great, too, and will be 4 applauded and supported. 5 So the first piece is about 6 election, the second piece is about 7 membership, that some people are no 8 longer on the council. Betsy Frank is 9 no longer on the council. Riordan, John 10 Riordan has taken himself off the 11 council and Scott Gittlin. Scott has 12 taken himself off the council, and some 13 people may be asked to step down from 14 the council. 15 So that needs to be decided and 16 we may not decide it here. I think the 17 steering committee might want to address 18 that is how we replace people. These 19 aren't necessarily lifelong seats, and 20 so that needs to be discussed. 21 And then third is some additional 22 committees. When the steering committee 23 met, there were a number of other areas 24 they suggested we look at. Some people 25 approached me. They might be interested 67 1 in leading groups in those other areas. 2 We also have another two and a 3 half million dollars working with other 4 issues. 5 Those are the three pieces of 6 business. I think the most urgent one 7 is a chair for this council. Does 8 someone want to put forth a name for 9 someone to chair the council? 10 MS. LIGUORI: Mark Kaline. 11 Second. 12 MR. ZACKON: The balloons are 13 falling down from the ceiling. 14 THE CHAIRMAN: If nominated, I 15 will run. 16 MR. ZACKON: Anyone else willing 17 to step up or would like also to 18 nominate a name? 19 MS. BRILL: I just wanted to add 20 a comment. I don't think we need to 21 have term limits. If you want to do 22 this in perpetuity. 23 MR. BROOKS: Don't square him 24 off. 25 MR. ZACKON: Do I take it by 68 1 acclamation Mark Kaline is our chair for 2 the coming year? 3 THE CHAIRMAN: Thanks. Thanks. 4 Thanks. Thanks. Thanks. 5 (Applause.) 6 MR. ZACKON: Now you should 7 really be blushing. 8 THE CHAIRMAN: I am really 9 blushing. Thank you very much. Thank 10 you, everybody. 11 MR. ZACKON: The next area of 12 membership we don't need to come to a 13 choice here, I think Paul will review 14 the bylaws, but it would be valuable to 15 hear people's thoughts going forward. 16 If we remember how this council was 17 created, Nielsen selected names trying 18 to provide level of expertise and 19 representation in different industry 20 segments. 21 And now as the council is 22 ongoing, how are the choices made. Is 23 it Nielsen choices? Does the council 24 choose the replacement? Is there some 25 combined effort? I would like to open 69 1 the floor for thoughts about replacing 2 members who have either chosen to leave 3 or members who are not participating or 4 invited to leave and like that. 5 MS. BUSLIK: I may have the wrong 6 idea here. Every meeting with Nielsen 7 presented in open quorum they mentioned 8 this committee, and I believe has asked 9 for volunteers to join it. And I 10 remember, I think that if someone 11 doesn't step up, I don't want to -- I 12 don't think you get the best if you go 13 to someone and say here is a committee, 14 come join it. I would like to see who 15 volunteers. 16 MR. ZACKON: Actually, we have 17 not invited people to be members of this 18 council. We have invited members, 19 people to serve on the various 20 committees as working committee people 21 but not voting council seats. 22 MS. BUSLIK: Oh. 23 MR. ZACKON: On the other hand, 24 there is a community of people who have 25 stepped up to those committees and have 70 1 expressed interest in participating, so 2 that is a likely group to look at. 3 MS. LIGUORI: I think we have to 4 think long and hard about the rules or 5 how membership is selected. One of the 6 things that I have heard, and it kind of 7 makes my skin crawl, is that because 8 Nielson selected us, that we must be 9 some sort of puppet of Nielsen. The CRE 10 Nielsen funds and Nielsen picked the 11 members. So I'm not suggesting we pick 12 them or Nielsen picks them. I just 13 think we need to seriously keep that in 14 mind when we discuss this. 15 MR. ZACKON: Good point. 16 MR. BROOKS: First of all, we 17 need to monitor the membership in terms 18 of representing the different segments 19 in the industry. I'm not sure how that 20 is being done right now. I believe 21 there's some structure necessary. 22 MR. DONATO: Give some thought to 23 it and we tried to make sure there was a 24 balance between all segments of the 25 industry. And, Pat, if what you say is 71 1 true, then certainly one way to address 2 it is to have you as the membership 3 going forward, and I think you would 4 agree the concept we originally had in 5 mind, everybody is representative of 6 everyone. Sol was the only expert that 7 we could find. We didn't replace Sol. 8 We could find someone who could 9 represent the accommodation committee. 10 MR. BROOKS: I would suggest 11 perhaps this follows the steering 12 committee. 13 MR. HESS: It is covered in the 14 bylaws, so they would have to be 15 modified. 16 MR. ZACKON: The bylaws are not a 17 given at this point. They are a topic 18 of consideration. 19 MR. HESS: One guideline, for 20 example, there is a specific line in 21 here -- again, we can strike this or 22 modify, limited to 40 members. So 23 that's the start which must be one 24 senior research or other executives of 25 current Nielsen Media Research, NMR 72 1 clients. That's one criteria of the 2 group. 3 Second, representatives of media 4 research industry organizations. And, 5 third, such other members as may be 6 granted membership in the council in 7 accordance with the terms of the bylaws. 8 MR. BROOKS: What I would suggest 9 is you think about a more formalized 10 structure saying that there should be 11 some representation. Advertisers, 12 agencies, of television media companies, 13 broadcast cable, whatever the breakdown 14 is. 15 MR. ZACKON: National versus 16 local. 17 MR. BROOKS: National versus 18 local. So that when seats become 19 vacant, if that puts us short in an 20 important area, we look to recruit 21 somebody who is appropriate to that area 22 one way or the other. 23 MS. GOLDBERG: I do remember that 24 when Nielsen's initial intent was to 25 have a fair and equitable representation 73 1 of all the businesses. We need to 2 maintain that balance and not open a 3 seat and see who is raising their hand. 4 MR. HESS: It does say under 5 admission of members, "New members may 6 be admitted to the council upon the 7 approval of the majority of members in 8 accordance with the terms of these 9 bylaws." 10 MR. DONATO: I remember having 11 this conversation. We had to select 12 additional to put it together. We felt 13 that you would take it over and the 14 steering committee would essentially 15 decide. 16 MR. WAKSHLAG: The question is, 17 members are individuals or do they 18 represent the company? 19 MR. ZACKON: I would say they 20 represent the organization. 21 MS. LIGUORI: In order to keep it 22 balanced. 23 MR. DONATO: There's no 24 individual that I think is a client of a 25 company. 74 1 MS. LIGUORI: They represent a 2 business. 3 MR. WAKSHLAG: I understand that. 4 MS. GOLDBERG: I'm not 5 representing a company. 6 MR. WAKSHLAG: I sent someone in 7 my absence. 8 MR. ZACKON: We said no 9 replacements at meetings. That was an 10 agreement. With an exception we set up 11 very early with Bruce and Kate because 12 they were both approached, they were 13 grandfathered and grandmothered. 14 MR. SHIMMEL: The bylaws are 15 written now your company owns the seat, 16 you don't own the seat. So if you were 17 to go to another company, you're not 18 automatically granted. 19 MR. WAKSHLAG: All I'm saying, is 20 that what you want? Or do you want -- 21 or do you want companies or are you 22 picking people? 23 MS. GOLDBERG: That's why I'm 24 saying business. If I went to Warner 25 Brothers but still representing the 75 1 syndicated business, that shouldn't 2 change. It is not the company, it is 3 the business. 4 MR. WAKSHLAG: I send a director 5 in my stead on a regular basis. 6 MS. GOLDBERG: That is a 7 different issue. 8 MR. WAKSHLAG: That's the issue 9 I'm really raising. 10 MR. HESS: It does say in the 11 second long part of Section 1, I think 12 that addresses this, if there is a 13 change in employment status, then it is 14 the organization that stays with the 15 committee as opposed to the person. 16 MR. ZACKON: Our most immediate 17 question is Betsy Frank left MTV 18 networks and Colleen Faheyrush is a 19 likely replacement for, but we need to 20 establish that procedure. 21 MR. IVIE: And she asked to be on 22 our committee. 23 MR. WAKSHLAG: The real question 24 is whether I can send someone who works 25 for me or if I have to be here. 76 1 MR. SUSSMAN: You can replace 2 yourself on the council permanently. 3 MR. WAKSHLAG: I can send someone 4 who works for me and say you're the 5 member without asking the council's 6 permission? 7 MR. ZACKON: I would say that's 8 to be determined, but our agreement so 9 far is that you wouldn't send someone to 10 a meeting to replace you. That's the 11 only thing agreed to. 12 MR. WAKSHLAG: I have agreed to 13 that, which is why I'm here. 14 MS. PANTANINI: Do we define 15 meetings as committee meetings and 16 council meetings or other only council 17 meetings? 18 MR. KEILTY: Council meetings. 19 MR. BROOKS: I think we don't 20 want chair warmers here. It needs to be 21 someone senior enough in the 22 organization to truly represent them. 23 MS. LIGUORI: The whole point was 24 in not allowing replacements is to have 25 continuity so that we're not 77 1 backtracking all the time for the people 2 who may be as experienced that just 3 weren't here. 4 So that was the point in not 5 having, not allowing replacements. I 6 agree with Tim that we ought to have 7 some sort of allocation by type of 8 business and whomever gets plugged in to 9 there, gets plugged in, rather than 10 people seats. I think to keep the 11 balance you need to have that and 12 whether you draw up a chart with empty 13 slots. 14 MR. ZACKON: Are you implying 15 that people's point of view may change 16 if they go to a different company? I'm 17 shocked. 18 MS. LIGUORI: No. I'm just 19 saying that in order to keep the 20 balance. I mean, if I all of a sudden 21 went somewhere else, so be it. 22 MR. GOERLICH: I think it is 23 difficult to sort of address this in the 24 ad hoc session. So what I would 25 certainly advise -- I hate to say 78 1 that -- to create a committee, I think 2 as the steering committee to 3 specifically come back with 4 recommendations, here is what the bylaws 5 say, here is what we recommend, or there 6 should be a membership committee created 7 that would then manage membership on an 8 ongoing basis. 9 MR. HESS: I think we could do 10 this as a steering committee issue 11 because we were going to do the bylaws 12 unless there is a strong desire for 13 that. 14 MR. GOERLICH: I would recommend 15 doing this in a couple of organizations 16 that in the bylaws a membership is 17 created. A membership committee be 18 created, that there be a formal process 19 of seeking an application and perhaps 20 nominations from this group, to meet 21 specific criteria. 22 I would differ slightly in when 23 someone changes an organization, I think 24 resign but then be eligible to be 25 reelected by this group so if the group 79 1 desires. I have been in an organization 2 where I change jobs when I was chairman 3 of ARF and I was carried over. I think 4 that was useful, quite frankly. 5 So I would just recommend that a 6 formal process be put in front of this 7 group. The steering committee is going 8 to do that and I recommend the steering 9 committee to address this after we 10 agree. 11 MR. ZACKON: If I can suggest, it 12 would be great if at the next meeting 13 new members were present. In other 14 words, people who served here for a year 15 and things happen, and at the next 16 meeting we should see people if we come 17 to a process. 18 MS. GOLDBERG: So we have seats 19 to fill? 20 MR. ZACKON: We have three. 21 MR. IVIE: At least three. 22 MR. WAKSHLAG: There are 23 mechanisms for people to step down if 24 they become inactive. 25 MR. ZACKON: The mechanism is 80 1 right now I engage them in a 2 conversation, and what I have done is my 3 tendency is towards a degree of 4 forgiveness. If they're serious about 5 play, let's have them. If they're not 6 willing to go forward and honor the 7 conditions, we're going to ask them to 8 step down. 9 MR. IVIE: Just before we leave 10 this issue, I just want to throw out a 11 question. Would we want to look toward 12 the new Nielsen initiatives to see if we 13 want to perhaps expand the breadth of 14 this committee. Nielsen and integration 15 ratings and part of their efforts, would 16 we be considering any net ratings 17 clients in addition to this committee or 18 people with internet expertise above and 19 beyond the specific expertise. It is 20 just a question. 21 MR. ZACKON: It is a good 22 question. 23 MR. HESS: We can take that. It 24 says 40 members. Maybe as part of the 25 total review, for example, right now I 81 1 thought very useful discussion was to 2 actually come up with specific types of 3 industries or types of stake holders. 4 And I think even though you guys did it 5 but it is not explicitly stated. It 6 sounds like there's energy for that. 7 MR. BROOKS: You should also talk 8 to George. I know the MRC has gone 9 through this. 10 MR. ZACKON: If we can have one 11 conversation -- excuse me -- our 12 reporter will be pleased. 13 MR. BROOKS: Those two 14 organizations have dealt with this 15 issue. 16 MR. HESS: We'll look at sizing 17 and look at nomenclature. And then I 18 think also, Bruce. I believe you're 19 pointing forward even though the 20 steering committee -- one of your 21 points, even though the steering 22 committee will review this document and 23 come back with a recommendation, 24 nevertheless, one of the points under 25 that forward action is to consider the 82 1 creation of a committee, a membership 2 committee. So it is the steering 3 committee's job now, but we'll review 4 the creation of the membership 5 committee. 6 One thing, Richard, I hope this 7 is not out of order, we're having an 8 extended discussion, it might be good 9 for me to get the steering committee 10 chair a sense of this group about one 11 line in here that says, "Each membership 12 shall be for a period of two years." So 13 that means we're basically kind of 14 seeing ourselves phased out. 15 MR. ZACKON: It is renewable. 16 MR. HESS: Do I need a sense of 17 this council going forward about that 18 line or is the renewability of it enough 19 for when we renew this document? I 20 think I'm trying to get a sense, do most 21 people like to continue. 22 MR. ZACKON: Open your next 23 steering committee. Let the council 24 know and anybody that wants to 25 participate in that conversation can 83 1 comment. 2 MR. HESS: Will do. 3 MR. ZACKON: I stepped over 4 something. Before we go to new 5 committees, we did not elect a vice 6 chairman. So it is time to select a 7 vice chairman, as well. 8 So I would like to open the floor 9 and the phone to nomination, 10 self-nominations for vice chair. Right 11 now Larry Bobo, who attended the first 12 meeting, a professor at Stanford, is our 13 vice chair. I have called him several 14 times and I have not heard back from 15 Larry. We could vote him in again, but 16 I would like to open -- he's right now 17 still formally on the council. I would 18 like to open the floor for nominations 19 for vice chair who would fill in for 20 Mark were the need to arise. 21 MS. GOLDBERG: So he's one of our 22 40 seats? 23 MR. ZACKON: Yes. There are six 24 people I spoke to about participation 25 issues. 84 1 MR. HESS: And steering committee 2 chair, I'm willing to stand for running 3 for vice chair. 4 MR. ZACKON: Thank you, Mike. Do 5 we have a second for Mike Hess? 6 (All second.) 7 MR. ZACKON: Is there someone who 8 wants to nominate or self-nominate for 9 vice chair? 10 MR. WAKSHLAG: I would like to 11 nominate Mike Hess. 12 MR. ZACKON: Let the record 13 reflect that Jack Wakshlag was in 14 agreement with the speaker. I guess it 15 is by acclamation. 16 Is it by acclamation? 17 (All yes.) 18 MR. HESS: My blush is in person. 19 Thank you. 20 MR. ZACKON: Mike, thank you for 21 who you have been to this council for 22 the past year. Good for you. 23 The final piece of new business 24 is about committees and other areas of 25 research. Before we begin that 85 1 conversation, just let me read the list 2 that the steering committee originally 3 came up with, and that's almost a year 4 ago, that was in a different industry 5 back then. Mindful of the issues, the 6 areas, steering committee came up with 7 media consumption and emerging 8 technologies, and those two came 9 together on our current committee. 10 Nonresponse, for which we have a 11 current committee. Commercial impact, 12 local measurement. Property use of 13 capital which is our capital committee. 14 Complete measurement, which I took to 15 mean broader than just television. 16 Subgroups, demographic subgroups of the 17 viewing university. Independent 18 university estimates study, which is 19 universe estimates. New metrix and 20 reporting. Other sample issues. 21 Measurement technology. Modeling, which 22 in the conversation, modeling and fuse. 23 Fusion now being part of that 24 conversation. And last one is out of 25 the box research ideas. 86 1 MR. KEILTY: This is Rick. 2 MR. ZACKON: You have the floor. 3 MR. KEILTY: I didn't hear the 4 last comment. 5 MR. ZACKON: Out of the box 6 research ideas. You almost had yourself 7 nominated for a committee. 8 MR. KEILTY: Timing can be 9 everything. Thank you, Richard. 10 MR. ZACKON: Sure. Those are the 11 topic areas already brought forth. 12 There's no reason, if people feel 13 strongly about it, my sense, without 14 clear bylaws, if someone wants to create 15 a committee and there's one other person 16 who wants to speak with them, there's no 17 reason not to engage that group in some 18 productive work, but it is up to the 19 council to proceed. 20 MS. GALLAGHER: I think the 21 University test, I'm very interested in 22 trying to determine a good way to get 23 media related universe estimates, how 24 many homes out there have HDTV sets as 25 opposed to regular hooked up TV sets. 87 1 If they bought the tuner. How many 2 broadcast digital. How many homes can 3 receive all the emerging technologies. 4 Because we really don't have any sort of 5 usable data out there, not just the 6 numbers, but who owns these things. 7 MR. ZACKON: You're proposing 8 universe numbers? 9 MS. GALLAGHER: Yes. 10 MR. BROOKS: I must admit, you 11 asked me some time ago if I would pursue 12 a committee like that. Nancy stepped up 13 to the plate. I would like to ask if 14 she would be willing to. 15 MS. GALLAGHER: Only if you'll be 16 with me. 17 MR. BROOKS: I will be a member 18 along with anyone else. 19 MR. ZACKON: Is there anyone who 20 wants to join Nancy and Tim? George 21 Ivie and Dave. 22 MR. IVIE: I think one issue I 23 see with this initiative that might be 24 broader than just a Nielsen initiative. 25 Nancy expounded upon the television 88 1 aspects with this, but there are some 2 issues similar in the internet 3 environment and other media. And I 4 wonder if you know this piece that comes 5 from the CRE, you know, might be just a 6 portion of the larger initiative and 7 whether Nielsen would be willing to 8 position it like that. 9 That's something I was thinking 10 about not in this committee formal, but 11 I would definitely serve on this 12 committee at any time. 13 MR. ZACKON: That would be a 14 valuable conversation to have at that 15 first meeting of this new committee. 16 Nancy, are you agreeing to chair 17 that committee? 18 MS. GALLAGHER: I guess so. 19 MR. ZACKON: Sarah, Ceril, 20 Jessica, Michele are volunteering also. 21 The reminder of people not on a 22 committee or people reviewing the 23 transcript, please note that everyone is 24 required to be on some committee. It 25 sounds like you might have some members 89 1 there. 2 Congratulations. We have 3 universe estimates. Universe estimates 4 committee. And see what it comes up to 5 as it is charged. 6 MR. DONATO: Your statement, 7 ethnic things that have application with 8 other rating services, for example. 9 MR. IVIE: In order for something 10 like who has access to the internet and 11 what methods. Other Nielsen rating 12 services or other rating services in 13 general. So I think there might be, to 14 give you an example, I talked to 15 Arbitron about this issue. I know it is 16 a bad name to mention, but they're very 17 interested in something like that. 18 They probably have money to put 19 behind that so it might not be new. The 20 question is can we do that. 21 MR. DONATO: We had similar 22 conversations with Arbitron. Case in 23 point, New Orleans. We were going to be 24 presenting what we were doing in New 25 Orleans and we were both in a situation 90 1 where there are no real universes. 2 MR. ZACKON: Are there other 3 possible areas of interest that someone 4 would like to step up and suggest as a 5 working committee? And this is not our 6 last opportunity. Basically, at each 7 council meeting we have an opportunity 8 to create new committees, but if not, we 9 can move on. 10 MR. HESS: I just have one more 11 committee thing. You mentioned John 12 Riordan resigned. That means he was on 13 the steering committee. We could use at 14 least one more member of the steering 15 committee. You don't have to volunteer 16 now, great if you do; but, otherwise, 17 call me later. 18 MS. LIGUORI: I volunteer. 19 MR. ZACKON: For the steering 20 committee? 21 MS. LIGUORI: Yes. 22 MR. ZACKON: Great. I was 23 thinking about who to invite to speak 24 among our technical advisory for this 25 group because we have been in the 91 1 process of doing that. It occurred to 2 me the announcement of Nielsen's anyhow, 3 anyway. 4 MR. DONATO: Anywhere. 5 MR. ZACKON: Sorry. It is tough 6 to remember. Anything. 7 MR. DONATO: Anyhow has far too 8 many A's. 9 MR. ZACKON: I thought it would 10 be an opportunity for Paul to do a 11 research take on the issues there, not a 12 business take, and invited him to come 13 and speak with us. 14 MR. DONATO: I can relocate. 15 THE CHAIRMAN: As long as it is 16 near a mike. 17 MR. DONATO: I'll try to get us 18 through this in a half hour. I know 19 people had different levels of exposure 20 to this. Almost certainly everyone in 21 this room has read something about 22 Anytime Anywhere Media Measurement. I 23 think George made an interesting point 24 before in that when Richard asked me to 25 kind of walk you through the elements of 92 1 it, my thinking was not that it was 2 going to radically change anything that 3 you were doing, given the fact that we 4 said that ratings will change over the 5 next five years. 6 Did it make sense to at least 7 cover all the bullet points and figure 8 out whether you would do anything 9 differently, either inviting somebody 10 else to be part of this council or even 11 some of the research projects that you 12 might be considering, would you tweak 13 them a little bit given the changes that 14 we're going to make. With the interest 15 of getting us out of here pretty 16 quickly, I'm going to ask Howard to do 17 the slides. 18 Let's start with -- actually. 19 There is no biggest change here. I 20 think they're all pretty big. Basically 21 introducing electronic measurement in 22 all local markets targeted by 2011. 23 That's obviously a big announcement. 24 There is a number of technical issues 25 that we have to address, a number of 93 1 financial issues that we have to 2 address. I'll talk a little bit more, I 3 think in a subsequent slide about what 4 our thinking is. But, obviously, it is 5 very sort of structured introduction 6 with what we feel is the best 7 measurement that we can implement, given 8 whatever market's ability to support 9 that might be. 10 So, for example, as you know, 11 11 through 25 is regular people meters. 12 Attached to the TV set we continue to 13 feel that when it comes to inviting 14 commercial audiences and a lot of the 15 fine granularity stuff that we're asking 16 to provide, the closer you get that 17 meter to the TV set, the more accurate 18 it is. 19 If you attach it to the audio 20 portion of the TV set, it is most 21 accurate because -- I'll sound research 22 here -- it is not a statistical process. 23 Attach the media to the audio ports and 24 every code that comes out, you get the 25 code. Every time you try to take a 94 1 signature, you get a nearly perfect 2 signature, something that can go against 3 a monitoring site. 4 As soon as you separate the 5 monitor from the TV set, it is no longer 6 true. The statistical nature. One out 7 of two codes. One out of three codes. 8 The signatures one out of two or three 9 are good. It depends how far away from 10 the television set you are and how much 11 ambient noise there is. 12 That said, so attaching a meter 13 to a TV set is what we're using right 14 now. It is more expensive and you'll 15 see as we go into smaller markets some 16 of the costing solutions were how do we 17 make installation simpler. We'll see 18 that basically introducing A/P3.0 11-25 19 is the same drill as the other markets 20 we have been in. I don't think there's 21 anything to change. No new members, no 22 new research studies. 23 3.0 is to the user, looks 24 identical. It is a people meter 25 interface and, indeed, it would be -- 95 1 you would be recruited by a membership 2 rep. The difference is, I have to say 3 there are techy people and people 4 people. Our field reps are the techy 5 people and they have soldering arms and 6 things like that. You don't need a 3.0. 7 You plug it into the wall, into an 8 electrical outlet. You need a phone 9 jack and plug it into the adapter. It 10 greatly simplifies. It is a people 11 meter identical to the ones used in 12 markets 1 through 25, so all the 13 coaching and training issues are the 14 same as they exist in markets 1 through 15 25. 16 And, again, I don't know if that 17 would change anything. I don't think in 18 terms of a household are people more 19 likely to move the meter around that 20 just plug in the wall meter. It is 21 simpler. It is not like so attached to 22 the TV set as the regular A/P meters. I 23 don't think so. 24 MR. GOERLICH: To ask a technical 25 question, what consideration have you 96 1 given for leveraging the national 2 sample, those local markets better 3 outside of the topic. 4 MR. DONATO: Top 25. Obviously, 5 in the top 25 it is exactly the same 6 meter, so there's we consider what 7 sample was already there. I think we 8 left our options open. 9 It is 10 but as we move down to 10 25, for example, whatever the market is, 11 there will be some national meters there 12 and they would be the identical meters 13 and identical procedures. I believe we 14 kept our options open with respect to 26 15 through 60. That's in part because 16 people haven't seen any data that goes 17 to sort of how this is tuning as opposed 18 to A/P 2.0 or 2.5. So we're not relying 19 on the existing national sample in those 20 markets. 21 That said, we all look at the 22 comparison data. If it is identical, we 23 can make a decision to go with larger 24 samples or reduce costs by using 25 existing people meters. But we are 97 1 prepared to have those as being separate 2 stand-alone, not integrated. We know at 3 first we need to demonstrate the 4 consistency between the meters. 5 MR. GOERLICH: I guess that's 6 what I'm questioning is whether or not 7 you could actually have a mixed sample 8 in a local market. I'm not necessarily 9 saying the consistency is bad, but 10 consistency in all minds, I'm just 11 wondering if you're open. 12 MR. DONATO: We left it open. It 13 is the kind of thing this is producing 14 the same data. This is crazy not to use 15 these meters. That's what we'll come 16 back and say, crazy not to use these 17 meters. If there are differences, and 18 we agree there is some element, if there 19 are differences, then we come back and 20 look at the differences and decide 21 should we keep them separate. 22 MR. GOERLICH: When you look at 23 the differences, are you looking at what 24 happens when you blend? 25 MR. DONATO: Right. 98 1 MR. GOERLICH: In fact, you know, 2 East Waco, Texas, that you've got five 3 people meter households, there could, in 4 fact, those be blended in with another 5 panel. What would the impact be rather 6 than simply throwing them out. 7 MR. DONATO: Right. 8 MR. GOERLICH: Not just the 9 different impact when they're blended. 10 MS. SHAGRIN: And the local 11 market and year-round. 12 MR. GOERLICH: Impact on the 13 local market is the issue. 14 MR. DONATO: Does it get national 15 by markets 11 through 25? We have 16 national samples in 20,000, 22,000, 17 23,000 plus. To the extent that we're 18 successful using data and independent 19 grading it, the national sample at the 20 end of five years is a different space 21 in terms of liability and, hopefully, 22 the local markets will benefit from 23 that. 24 MR. GUNZERATH: Are you looking 25 at longer panel tenures as you get down 99 1 to the smaller ones? 2 MR. DONATO: We'll look at all 3 things. Right now we're of the mind 4 that if the people meter coaching and 5 training but impressing as long as that 6 is all the same, it would be the same 7 field period, two years. 8 We are working on tags. I'll 9 talk a little bit about tags. Once we 10 were capable of introducing passive 11 persons measurement, we would definitely 12 consider going to, I don't think three 13 years but five years, if we could make 14 those meters. I don't think we'll ever 15 have a perfectly passive meter. There 16 is no perfect. You have to do 17 something. You have to do something. 18 You have to wear it. 19 Also have living remote in a 20 household is really nice from time to 21 time, validation that you're wearing 22 something, and allows us to put prompts 23 that require you to answer questions or 24 validation techniques. I don't think 25 that would be a pure passive meter, but 100 1 some kind of passive meter, and we would 2 consider that at the end of three years. 3 MR. DeVAULT: With the exception 4 of the LPM and also the other 5 initiatives that you're going to 6 discuss, when do you anticipate that you 7 will have some sort of waiting formula 8 that we can start to review? 9 MR. DONATO: Say how would we 10 weight differently because we're in 11 smaller markets? 12 MR. DeVAULT: Are you -- how are 13 you going to weight everything together 14 that you're doing on the various 15 platforms? 16 When do we get an opportunity to 17 see it? 18 MR. DONATO: There are two kinds 19 of questions there. How do we weight 20 together 11 through 25 local markets. 21 And right now we're thinking essentially 22 the same as we 1 through 10. When we 23 actually get into some of the analysis, 24 we may discover because of the 25 demographic representation of the 101 1 market, that requires us to rethink 2 that. I think 11 through 25 is pretty 3 consistent with 1 through 10. I would 4 say 25 through 60, it depends actually 5 on whether we are combining them or not. 6 We don't know. We really don't 7 know if we would combine those or not. 8 It really depends on whether the 9 community feels that is one measurement 10 system or two separate measurement 11 systems. If we did chose to combine 26 12 through 60, the people meter part of it 13 is identical. The training is 14 identical. So it purely would be about 15 sample sizes in those markets. 16 I don't know if we actually 17 published anything statistically 18 officially on sample sizes, no matter 19 what the size of the market is, finite 20 sample size that you can use. So we're 21 thinking 5 or 600 households is a small 22 as you can really go in any people meter 23 market. Even though the 60 market may 24 be 1/100th the size of the largest 600 25 household market. 102 1 We still have some more work in 2 terms of selecting sample size and costs 3 and all of these things intertwine 4 together. In terms of weighting things 5 together, I'm talking about, out of home 6 and everything else. Why don't I try to 7 make sure I capture your answer rather 8 than -- 9 MR. WAKSHLAG: The current meter 10 is not wired to anything. 11 MR. DONATO: Yes, it is. 12 MS. GOLDBERG: Fiber optic cable. 13 MR. DONATO: The 26 through 60 14 will not. 11 through 25 are the same as 15 the current A/P meter. 25 through 60 is 16 easy to install, plug it in the wall. 17 This is a shorter version. 18 MS. GOLDBERG: You have all the 19 detail there. 20 MR. IVIE: Before you leave this 21 slide, I want to make you aware, you 22 mentioned a while ago that you think in 23 the LPM environment no real research 24 because it is not a new thing. I still 25 tend to get questions, I got one as 103 1 recently as last Friday, from people who 2 make inquiry about do folks really push 3 buttons, expressing skepticism about 4 that and how it can be improved. 5 MR. DONATO: I didn't mean to 6 imply that that wasn't necessary. When 7 I said no new research because we're 8 going into 11 through 25 with the same 9 old A/P meters, I don't see how that 10 changes what your focus is. You have 11 that issue with markets 1 through 10. 12 MR. IVIE: My suggestion is 13 Nielsen has done a lot of that work in 14 that area already. I'm aware it is 15 publicized enough. 16 MR. DONATO: Howard and I were, 17 before this meeting, were on a call 18 about doing coincidental validation 19 during this call. So whatever we 20 produced up to this point, we're going 21 to produce much more and we think on an 22 ongoing basis. 23 MR. IVIE: I think that would be 24 a good idea. 25 MR. DONATO: Okay. We'll go to 104 1 the next slide. Then we go to markets 2 61 through 125 which are currently 3 diary-only markets. 4 The first sand box testing that 5 we do this year, which would be probably 6 around August, September, is this meter. 7 It is very similar to the Nielsen light 8 tuning meter that I described for 9 markets 26 through 60, and it is a very 10 small audio-based tuning meter, but it 11 is battery powered. The battery lasts 12 35 days, four weeks, plus 70 DVR. It is 13 mailable. It is entirely signatures. I 14 think it is entirely signatures. We 15 have a lot of datas, signatures versus 16 codes, and we're very comfortable with 17 going entirely signatures, especially 18 where we are replacing a diary-only 19 market. 20 It is a tuning meter only and the 21 plan is it is sort of three levels of 22 measurement. The fastest way to 23 introduce this is to provide some kind 24 of a log for whether people are in the 25 room or not. We don't need to know what 105 1 you're tuned to. We need to know if 2 you're in the same room as the TV set. 3 That's the fastest way to introduce it. 4 The next fastest way to introduce 5 it is not to use what a tag is but to 6 give -- either give a room kind of like 7 an electronic remote which you click 8 yourself when you're in the room and 9 click yourself out, basically an 10 electronic room one for each room or 11 also testing giving people their own 12 and, therefore, the buttons would 13 indicate which room. The home has four 14 TVs, the buttons would be labeled for 15 each of the four TVs. 16 We're testing both forms and we 17 think we're probably going to start this 18 with a log for each TV set. But if we 19 get some early data back that says that 20 these, you know, electronic logs work, 21 then we'll really expedite that and come 22 out of the gate with an electronic log 23 rather than paper. It says parallel 24 track for tag research. 25 Some -- I know some companies in 106 1 the world are using tags. I know we 2 have been studying them for years and 3 years. We have used them for 4 validation. Many people know. We have 5 used them in homes. We will be using 6 them in some of our own homes. The 7 validation of the tags we have used 8 requires pretty intrusive installations, 9 so those are not tags that we would use 10 in our regular panels. 11 I'll make fun of -- it is a radar 12 dome to the wall of each room. It is 13 too intrusive to use with our regular 14 panels. The versions of the tags that 15 we're looking at, IR is the simplest and 16 easiest, which, you know when you have a 17 remote control and buried in the cables 18 it doesn't click. IR doesn't go through 19 walls or couches and we have done enough 20 testing to know there has to be some big 21 bridging walls. So we are concerned 22 about IR only. 23 The other technology, ultrasound, 24 for example, they don't have that 25 problem. You can smother an ultrasound 107 1 tag underneath you on the couch and 2 communicates with the TV. The problem, 3 it goes through the walls. You have the 4 problem with any portable based meter. 5 You go in a different room and it is 6 picked up. The current engineering 7 thinking is two technologies in one tag, 8 and that allows you to kind of 9 triangulate where the person is and that 10 we think is probably the first viable 11 tech that we would introduce. 12 So bottom line, once we get down 13 to the smaller markets and actually 14 technology, tag technology, once it 15 works, we'll go back to retrofit. Our 16 people will go back and probably not 17 take the remote away. We'll give 18 everybody tags and then wean them off 19 the remote and on to the tags. 20 Quite frankly, I think we're 21 going to leave the remotes in those 22 households as validation and a way to 23 communicate with the panels from time to 24 time. I think that is an important part 25 in the future, your way to communicate 108 1 with the panels while you're watching 2 TV, as opposed to just doing call-backs 3 on the telephone. 4 So that gets us to market 125. 5 Now we're into tiny marks and the bottom 6 line is, you know, our reference to 7 their models, we did enough work with 8 them to know how good VPH models are. 9 The reason we didn't move ahead were the 10 limitation for VPHS models from regional 11 or national and applying it to a set 12 tuning data. 13 The problem is exactly the 14 problem that we face here. In a 15 broadcast market, let's say market 150, 16 so much of the revenue in that market is 17 about this broadcast news versus that 18 broadcast news. And if you don't have 19 some kind of measurement directly from 20 that market, I don't know how, you know, 21 the best modeling in the world, I don't 22 know how you discriminate between those 23 two broadcast news. You don't. We know 24 for even the tiniest markets that we 25 need to have some form of electronic 109 1 measurement within that market. 2 Maybe that's an annual kind of 3 sweep where, you know, at no one point 4 in time we have enough sample to record 5 it, but it is an annual distribution of, 6 say, like the mailable meters to that 7 market where over the course of the year 8 we have large enough data that we can 9 get better VPHs or better set tuning 10 instruments versus these tiny markets. 11 We combine them with regional VPHs. We 12 have set-top box data. Set-top box 13 data, right now you have to divide your 14 audience into that which was viewed on 15 digital set-top boxes with a back 16 channel, about 10 percent of all TVs out 17 there, versus everything else. And you 18 have to know what TV set was viewed, 19 which was our problem with any form of 20 personal form metering. 21 You can't populate digital 22 set-top box data because you never know 23 if it was on a digital set-top boxes TV. 24 It makes more accurate data for 25 10 percent. It will grow. Right now it 110 1 is only 10 percent and maybe three years 2 it will be up to 20, 25 percent of all 3 TVs. It is not what people have said 4 what it is. This is where we have the 5 much work. 6 MS. GOLDBERG: That lowers our 7 proceed data because this day in age the 8 10 percent, it is one digital TV in the 9 home. So the family might or might not 10 be gathering around that set. 11 MR. DONATO: Right. Don't forget 12 the digital box-set has no digital data 13 whatsoever. I think as we came out with 14 VPM, we knew when it came to digital 15 set-top boxes that if we go one 16 measurement, that is a personal portable 17 meter, we don't know how it would 18 properly integrated that with a digital 19 set-top box data. 20 Having said that, if a market has 21 a decent penetration in the industry, it 22 can tighten up the measurement for 10, 23 20, 30 percent. And to get electronic 24 measurement in local markets, the good 25 news is the comparison, this is all 111 1 talks about how does it compare to what 2 we currently have with the diary. The 3 comparison is against the diary. The 4 diaries get more and more challenge in 5 this year, two or three, and we're going 6 to have use multiple data sources to 7 produce it on a feasible basis. 8 I probably shouldn't say this, 9 this has many, many markets for where 10 the economics in the market don't even 11 support a diary. 40 markets, 100,000 12 households. How much TV revenue. A 13 hundred thousand households support 14 broadcast station. We will, A, just be 15 creative in terms of how we do it, and 16 in each market we'll attempt to show 17 that it -- we can get it more accurate 18 than we have with the diary. 19 So that moves us to out-of-home 20 viewing. There are three ways of 21 measuring out of home. Currently 22 discussed in this country one is an MP3 23 picks up codes. Cell phone, not all of 24 them are adapted. A flip phone turns 25 off the microphone, but I think I have 112 1 heard the numbers are 20 to 25 percent 2 of the cell phones out there could be 3 adopted with software to basically take 4 an audio snapshot every 30 seconds. 5 Maybe that's too much. Maybe not 6 25 percent. And we are currently 7 developing, first of all, talking to 8 lots of people. We are currently 9 developing our own cell phone meter. We 10 have prototypes that have been employed 11 in households for a while, for over a 12 year. I currently find it interesting 13 on the radio side to hear the debate 14 codes and dedicated versus cell phone. 15 The pervasion of cell phone says 16 the cell phone has a functionality, 17 therefore, everybody carries it. You're 18 giving these guys a high-powered phone 19 which is different -- I got this new 20 phone, it has stereo speakers and has 21 everything, and that group could change 22 their media behavior. We're keeping an 23 open mind versus the cell phone. We're 24 testing them and talking to people who 25 currently have cell phone meters out 113 1 there right now, without possibly doing 2 something with them. 3 Then mainly the MP3 recorder, 4 which if you talk to the engineers, 5 that's the one they seem to like. It is 6 smaller, lighter, can be programmed to 7 take an audio snapshot at whatever 8 interval. You can shut it down with 30 9 seconds, as long as the battery lasts. 10 The battery life is six months to a year 11 on some of these devices. And the only 12 thing, it has no function and, 13 therefore, it is purely about 14 methodology. 15 Can we coach and train people to 16 pick this up and to carry it as a key 17 fob outside of the house. They are 18 looking at multiple form factors for it, 19 so I don't know if they'll ever make 20 jewelry out of it, but they're trying. 21 Not earrings, but looking at multiple 22 form functions factors for this. 23 And as the data suggests, the 24 feeling is these things will be in the 25 sandbox before the end of this year. We 114 1 will be, by late next year, launching 2 what we call field tests. Sandbox is 3 not projectable. Get it out there fast 4 and give you chance to look at the data. 5 The field test is Nielsen New 6 England tests. We go to our field tests 7 next year, we will have made a decision 8 on which forms we're using. And those 9 results, I think they'll be projectable. 10 You'll have some sense of what -- this 11 will give you numbers as a consequence. 12 We'll treat it like extended home. 13 We'll try to recruit the whole panel. 14 Not everybody will do it. We will not 15 let the panel degrade. We get 16 50 percent, then we will move ahead and 17 we're already starting to working on 18 modeling procedures to model it up to 19 everybody else. 20 We expect it to be 80 percent 21 bump in the numbers. We know that it is 22 not 8 percent of us. All of us do 23 80 percent of our minutes out of our 24 home. There is fewer people, fewer than 25 8 percent who watch a lot of TV at work, 115 1 out of home and that's -- any questions 2 on that? 3 We're testing. We know we are 4 still in discussion with Arbitron. We 5 have asked Arbitron for a license for 6 VPM. We are still in discussion. So as 7 far as we're concerned, we are keeping 8 our option open to use all potential 9 equipment. And after the sandbox we'll 10 have our own experiences on whether 11 people are more likely to carry cell 12 phones or little pendants with MP3 13 players and how good cell phone work in 14 nonengineering households. They work 15 very well in engineering households. 16 Portable. 17 MR. BROOKS: You see the 18 measurement in our home is as a separate 19 thing, not the same device? 20 MR. DONATO: It is not the same 21 device. That is a very important 22 theoretical conclusion when we made the 23 announcement of PPM. When you mount a 24 meter on a person and it is audio based, 25 there's no way to stop the sound in the 116 1 room. And anybody can do an experiment. 2 Walk around the house at night with a 3 couple TVs on. If you can hear it, 4 you're in the audience. 5 That was a significant proportion 6 of the differences that people were 7 seeing. Understanding for a radio 8 development, we think it is absolutely 9 fine. Radio is an audio media and, 10 indeed, the optimization of that meter 11 to hear things through pocketbooks. 12 Went in people's pockets. If you carry 13 a microphone, stick a microphone in your 14 pocket and walk around the block, the 15 microphone is hearing the engineering. 16 They're talking about giving people 17 leisure suits, nylon clothing. 18 MR. BROOKS: So it is the 19 challenge. 20 MR. DONATO: The same challenges 21 in or out of home. If there is a TV on 22 in the next room and in a public place 23 and I hear it, I am in the audience. 24 Which is why I think the cross platform 25 style of engagement, how effective is 117 1 that from advertising. How effective is 2 to go to cell phones. Cross platform 3 engagement is probably going to be the 4 most important form of engagement the 5 industry will look in the years forward. 6 It tells the industry how to use the 7 various devices through the course of 8 the day. 9 What advertising is effective. 10 There's nothing that say the same 11 creative shrunk down to an inch and a 12 half by two is going to be effective. 13 MS. LIGUORI: Does having 14 whatever the name of the meter is that's 15 not connected to the set, does that 16 break through video codes? 17 MR. DONATO: For any portable 18 meter, because it excludes the 19 possibility of video codes. There's no 20 way to get a portable meter to pick up a 21 video code, not connected to something. 22 MR. IVIE: Has Nielsen ever 23 considered a trigger, I mean, I feel 24 strange about abandoning the concept of 25 training with one device. Has Nielsen 118 1 ever considered something like that 2 trigger being in the household that can 3 indicate to the meter when you're in the 4 home, when you went and applied a 5 different set of rules than when you're 6 out of the home it doesn't meet that 7 trigger, to try to optimize the device? 8 MR. DONATO: Yes. I think 9 especially you're talking about meters 10 in every market in the country and now 11 you're talking about meters in some 12 cases that are being mailed. I think we 13 have certain flexibility moving forward. 14 And we always said that if we could take 15 PPM and limit it to some approximation 16 of whether you're in the room or not, 17 that that was a reasonable way to go. 18 The problem with PPM is that was 19 not necessarily a reasonable way to go 20 with respect to radio, if you had the 21 same set of rules. The meter 22 sensitivity was logical for television. 23 Get in the car and drive with the 24 windows open, you never get any radio 25 audiences whatsoever. That was the 119 1 difficulty there. And we always said 2 that there was a potential for like a 3 tag. If we get the out-of-home meters 4 cheap enough, why not call a tag and add 5 a home meter. That way they only have 6 to wear one thing in and out of the 7 home. 8 That is the long-term vision, 9 which is that we have a feeling that 10 between here and there, the simple tag 11 that will communicate and tell the meter 12 you're in the room is a short-term way 13 of getting more passive in-home 14 measurement. And I would say the next 15 generation after that would be -- the 16 only thing like cell phones is GPS, also 17 studying the GPS, whether you're in home 18 or out. 19 So we're very open. These are 20 the devices that we think we can get 21 installed and in place within the next 22 couple of years. And during that time 23 what we're doing is after that kind of 24 research, can we monitor the tag in a 25 goal meter and then there is only one 120 1 device. 2 MR. IVIE: I wasn't advocating 3 your use of PPM. 4 MR. DONATO: It is not PPM. It 5 is all the same. Audio-based personal 6 meters and, therefore, they all have 7 exactly the same issues associated with 8 it. The only thing unique about PPM, 9 you're trying to make something for 10 radio and TV. Perhaps the proper 11 setting on the dial for radio was way 12 too high receptive for TV. Electronic, 13 sorry. Portable media like cell phones, 14 like video iPods, I think we call this 15 the solo meters. 16 MR. STERNBERG: I have a 17 question. I know we're talking about 18 all this new technology and iPods. We 19 are not even close to being on the TiVo 20 work. The best majority is using VCRs 21 and Nielsen continues -- you're talking 22 about improving measurement, at the same 23 time you're refusing to take out 24 recording out of the measurement. 25 I find that very strange. I find 121 1 it stranger that there's not an uproar 2 from the industry about this. 3 MR. GOERLICH: We can take it 4 out. There are tags in all the mid 5 tapes to strip it out. It gets typed 6 back to the currency issue. What we 7 need to do is have a very large shovel 8 and go to the networks and wham them in 9 the face and say we're not going to pay 10 for it anymore. We cannot take it out. 11 MR. STERNBERG: Nielsen must take 12 it out. 13 MR. GOERLICH: I can take it out. 14 MR. STERNBERG: Let me finish. 15 Because the knit tapes are meaningless 16 when it comes to the term currency. If 17 Nielsen takes out VCR recording, that 18 will be the currency. It will never 19 happen otherwise. There's no leverage 20 to put on the networks. It is 21 absolutely impossible. 22 We brought it up during this and 23 the attitude was, we'll take off all 24 your advertising. It will never happen. 25 The idea that Nielsen is sitting here 122 1 and saying, well, we're never going to 2 take that, they basically said that. It 3 is not a priority, even though the 4 A's 4 broken the letter saying it is operating 5 and leaving it in there. And the 6 most -- the most liberal projection that 7 I have seen is like 2011, 40 percent of 8 the country will have DVRs and 9 60 percent still using VCRs. I don't 10 understand how Nielsen can still say -- 11 MR. DONATO: The last time at the 12 4 A's what we said in response to this 13 after we did the DVR research was to do 14 VCR to estimate the impact of this. 15 That's where we left it with 4 A's. I 16 will say the sense I got from the broad 17 industry, and you're not going to like 18 this, was that with all the other things 19 going on, to focus on capturing all the 20 new individual media. Lots of meetings 21 with senior clients but follow the video 22 wasn't our word. It was their words. 23 MR. STERNBERG: I realize that. 24 But a lot of people don't understand, 25 and we don't have to talk about this, is 123 1 that most advertisers until very 2 recently have no idea that VCRs were, 3 most buyers had no idea VCRs -- 4 MR. DONATO: Well -- 5 MR. STERNBERG: The 4 A's sent 6 Nielsen a letter saying it was a top 7 priority, so if you need to come back to 8 us. And the industry said it is not a 9 top priority. I don't understand. 10 MR. ZACKON: I'm going to step 11 in. It is not an unimportant 12 conversation and I invite you to 13 continue the conversation, but I think 14 this venue is not going to allow for 15 resolution. 16 MR. DONATO: I'm running over my 17 time. Steve and I can continue the 18 conversation after. I understand what 19 you're saying. Solo meters three months 20 ago, I think I indicated that we felt 21 probably the best solution for measuring 22 video exposure on cell phones and video 23 iPods was the cell phone meter. 24 The engineers are very -- a 25 little less strong with that statement. 124 1 That's because a number of these devices 2 under measured through software meters. 3 The rate at cell phone technology 4 changes, it is not like you produce a 5 meter. Every time we come across a 6 another new cell phone, which they 7 populate every month, there's never not 8 a new cell phone coming out, we have to 9 develop an additional software meter. 10 Unless we do like a panel, we do video 11 iPods, that's it. We do the three or 12 four biggest cell phones. People do 13 monitor the advertising and programming 14 on cell phones. We don't think that is 15 a solution. We know we can't ask you to 16 carry one cell phone to measure and 17 another cell phone for something else. 18 They tried to develop in-line 19 inserts, small jacks that you plug into 20 your audio, not like a virtual reality 21 helmet or anything like that. It is a 22 small jack into the audio cord, you plug 23 in your ear plugs and blue tooth. It 24 pulls the blue tooth out of the air 25 waves. And those are still under 125 1 development. 2 We have software meters already 3 developed. In fact, the bottom bullet 4 talks about 400 household iPod panels 5 currently in the process of recruiting. 6 We recruited 200 already and that's the 7 software meter on those iPods. We don't 8 know what the long-term solution is with 9 iPod meters. We continue to pursue 10 both. The engineers, the in-line insert 11 is the solution for it. We'll begin 12 asking people much of the stages that 13 work home technology report. We have a 14 home tech report we issue quarterly. It 15 currently does not go into the detail on 16 this equipment necessary for you to 17 understand the size of the universe that 18 could actually deliver video segments. 19 We are going to revise that 20 before the end of this year, so it will 21 be able to provide information necessary 22 to understand the size of this technical 23 universe. Secondly, we don't ask these 24 kinds of questions of our current 25 panelists. We're getting into the 126 1 second quarter of this year and we'll 2 begin asking the panel equipment 3 questions necessary to know whether the 4 devices, the cell phones, are capable of 5 delivering the video content. 6 And then the next slide. The 7 bottom line, it is people are more 8 interested not in getting currency for 9 cell phones but knowing who's using it 10 for what so they can form their business 11 plans. So that's what we're focusing. 12 MR. GOERLICH: My suggestion, at 13 the next meeting or some meeting you 14 bring these devices and show them. 15 MR. DONATO: We'll do that and 16 bring the engineer and do the whole show 17 and tell. 18 MR. DeVAULT: Quick question. 19 The measurement of portable media 20 devices, is the game plan to study them 21 and to evaluate them but not to put them 22 into the currency at this point? 23 MR. DONATO: No. The game plan 24 is to study them to provide you with 25 data on ownership rights in the sample. 127 1 Because if you think about it, asking 2 somebody does your cell phone, you know, 3 play video, people don't know the answer 4 to those questions. People know about 5 half the functionality of their cell 6 phones. So collect that data from our 7 panel. We think they'll give an 8 accurate representation because it is 9 the membership reps who evaluate the 10 model number on the phone and clarify 11 what it can and cannot do based on that 12 model number. 13 At the same time, test the 14 meters, field test the meters, provide 15 the data. But right now everybody is 16 doing download subscription on this, so 17 we don't know whether it should be 18 collected as part of the regular panel 19 and into the regular numbers or 20 measurement as a separate stand-alone 21 study. 22 We are keeping the options open 23 and we'll make that decision in 24 conjunction with the industry. We'll 25 provide the test data and know where the 128 1 business plans lead them. And they can 2 give us feedback on whether or not to 3 collect them. 4 Don't forget internet. It is one 5 more thing we're collecting from the 6 panelists. There is a point which we 7 can't ask the panels to do any more. 8 Cell phones do it as a separate 9 stand-alone panel and that's good enough 10 for where this business is going. On 11 the other hand, if cell phones become 12 the magazine of the future, what you 13 read when you're on the train, then 14 people have a different attitude towards 15 it and want us to find a way to make it 16 into the ratings. 17 MS. LIGUORI: Do you have any 18 sense of what kind of cooperation? A 19 cell phone is very personal and the idea 20 of handing it over to the membership -- 21 MR. DONATO: Listening. 22 MS. LIGUORI: Exactly. I don't 23 know what they're doing to my cell phone 24 or putting on. Do you have any sense? 25 MR. DONATO: Video iPods was 129 1 pretty good. I think it was pretty 2 good. I forget the response rates. 3 They were kind of in the zone for the 4 video iPods. That's all those people 5 have done, video iPods monitoring 6 through the software. The thinking of 7 some of the tests, recruit a household, 8 do the standard recruitment, and go back 9 and make the first call three or four 10 weeks later. We say, by the way, there 11 is an additional incentive if you allow 12 us to measure your cell phones or the 13 internet or out of home, there is an 14 additional incentive. 15 The first one we're testing is 16 probably internet. We need data on 17 internet data. If you change the slide. 18 So I'm going to not take you 19 through the merits of net ratings. We 20 think it is the best data. It has a 21 concentric mode. We get the university 22 and the panel associated with it. It 23 currently does not do streaming video. 24 It is being modified such that the third 25 quarter of this year, it will be able to 130 1 produce ratings for streaming video. 2 Net ratings has not spent a lot 3 of time talking with them, kind of 4 marketing to the television community. 5 That will change over the course of the 6 summer. People will start hearing from 7 net ratings in terms of what their new 8 facilities are. 9 Next one. Fusion. So there's 10 really two faces. It is going to be a 11 year people we can measure internet and 12 television from among the same panel. 13 In the meantime, since this is going to 14 be the season of internet/TV combined, 15 we have done a fusion. We're happy with 16 it. We're showing people the kind of 17 quality parameters associated with. It 18 is not a buying and selling database, 19 but it gives you insight how it works 20 together. 21 It is represented as that. That 22 is available immediately. People want 23 to see what it has to say because, 24 otherwise, they have a net database or 25 TV database and they have no idea how 131 1 they relate to each other. Then the 2 plan is to be testing in the sandbox and 3 then a separate stand-alone panel and 4 net ratings meter within our television 5 households with the intent if the 6 response is good, the cooperation is 7 heard of integrating it, of making it 8 into the same ratings. 9 The streaming carries the same 10 testing. It would be baked in our 11 ratings starting next fall season. 12 That's the most aggressive. It might 13 not occur until 2008. The feedback, 14 this is the No. 1 priority, both on the 15 national clients and from the local 16 clients. 17 Next slide. Finally, engagement. 18 We think of ourselves as friends of the 19 court. Some role for engagement and not 20 some role for engagement. We completed 21 a pilot test. We have a questionnaire 22 done. We're going to use 47,500 23 households over the summer. Measure the 24 engagement, how it exists and adds 25 recall. If the industry gets something 132 1 from it and wants us to pursue it, 2 great. If not, that is the first step 3 towards what I'll call friend of the 4 court, too. And that is conducting 5 research which helps people understand 6 how advertising on cell phones and iPods 7 and internet relate to the advertising 8 on television and that platform 9 engagement. We're looking across 10 platform engagement. You can agree or 11 disagree. 12 Howard feels that engagement, 13 one, has got much more opportunity and 14 importance in the industry, but I don't 15 know how people use all these platforms 16 without research. 17 MS. GOLDBERG: How can you 18 measure? 19 MR. DONATO: The criteria is 20 people. 21 MR. SHIMMEL: In the test we're 22 doing, that's the determining variable 23 we're going to test all these other 24 definitions against. 25 MR. DONATO: This is so big that 133 1 I know it takes a couple -- we could do 2 this three more times and everybody 3 would learn more on the second or third 4 time through. The next time we can 5 dedicate a larger portion, have the 6 engineers come in and do the show and 7 tell and do the meters. 8 MR. ZACKON: We can put the 9 presentation up on the board website. 10 MR. DONATO: Yes. Thank you very 11 much. 12 MR. ZACKON: Thank you, Paul. 13 We promised to start on time and 14 end on time. I really want to keep that 15 promise. And there is certainly more 16 opportunity to speak to Paul. That 17 gives us five minutes to talk about 18 future directions. 19 Given that we're a year into this 20 endeavor, it might be good to have a 21 conversation about how we're doing and 22 specifically what I see, frankly, as the 23 biggest issue, is you guys have day jobs 24 which are most inconvenient for the work 25 of the council and -- 134 1 MS. PANTANINI: Just pay us and 2 we'll work full time. 3 MR. ZACKON: There's a thought. 4 MS. BUSLIK: Add $25. 5 MR. HESS: It is against the 6 bylaws. 7 MR. ZACKON: So we may not have 8 the moment of relaxed speculation to 9 have this conversation. We'll create 10 some time at the next meeting to bring 11 forth some ideas. I would like, first 12 of all, to congratulate Mark as the 13 chair, Mike as the vice chair, Nancy to 14 step up to chair the committee on 15 universe estimates, and existing people, 16 Ceril and Mike, for the work they have 17 been doing. 18 MR. SHIMMEL: Also acknowledge 19 Richard for keeping us all together. 20 He's accomplished a lot. 21 THE CHAIRMAN: Here, here. 22 MR. ZACKON: I used to have hair. 23 Should we end this? Thank you, 24 everyone. 25 MS. SHAGRIN: The only thing I 135 1 would like to add, it is great having 2 this date in advance. If you could 3 select the date to put it on our 4 calendars. 5 MR. ZACKON: E-mail. Rebecca 6 committed to get it out to people by -- 7 today is Wednesday. Can we get 8 responses for a day on Friday? We 9 should probably target after Labor Day. 10 Sometime in the month of September. 11 I know last year, Henry, you had 12 a concern with the new season. What is 13 the schedule date for the new season? 14 MR. DeVAULT: September 18. 15 MR. ZACKON: Before the 18th 16 would be okay. After -- 17 MR. DeVAULT: Before the 18th. 18 MR. ZACKON: Before the 18th. 19 Let's look to do it between Labor Day 20 and the 18th. I would like to thank the 21 people for being here and thank the 22 people for being on the phone, and I 23 thank you all for your good hard work. 24 THE CHAIRMAN: Thank you, 25 Richard. 136 1 (Whereupon, at 4:30 o'clock 2 p.m., the meeting was concluded.) 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 137 1 C E R T I F I C A T I O N 2 3 STATE OF NEW YORK ) 4 ss. 5 COUNTY OF NEW YORK ) 6 7 8 I, CATHERINE M. DONAHUE, a Shorthand 9 (Stenotype) Reporter and Notary Public of the 10 State of New York, do hereby certify that 11 foregoing Proceedings, taken at the time and place 12 aforesaid, is a true and correct transcription of 13 my shorthand notes. 14 I further certify that I am neither counsel 15 for nor related to any party to said action, nor 16 in any wise interested in the result or outcome 17 thereof. 18 IN WITNESS WHEREOF, I have hereunto set my 19 hand this 9th day of July, 2006. 20 21 _________________________ 22 CATHERINE M. DONAHUE, CSR 23 24 25