It was less than a week ago when Zero Hedge broke the news that for CNBC, 2014 Was The Worst. Year. Ever.
Much to the embarrassment of CNBC, its staunch defender David Rosenberg, and not to mention its advertisers who realized they overspent substantially for the reach they were promised and received instead, the report promptly went viral.
Rosenberg himself said, when referring to the report, that "Now they [Zero Hedge] have turned their attention to CNBC. I think these guys should subject themselves to a New Year’s resolution: show respect because there are in fact two sides to every debate."
Thanks for the advice, but we will actually continue doing precisely what we do: exposing lies, stupidity and fraud pretty much anywhere we see it. Here's why: five days after our Nielsen-sourced report before the Comcast-owned channel announced it would no longer be subject to the humiliation of Zero Hedge periodically revealing its crashing viewership and, as WSJ revealed today, "CNBC will no longer rely on TV ratings specialist Nielsen to measure its daytime audience, beginning later this year. Instead, it has retained marketing and research firm Cogent Reports for the task."
Two words: "seasonal adjustments"?
A few more words: why rely on a uniform, universally-accepted rating methodology when one can come up with one's own, bought and paid for "adjusted" ratings.
And here are CNBC's own words on why it is doing the stunning move which validates that its viewereship is indeed as low as it could get before the pain for Comcast became unbearable:
For years CNBC and its parent company, Comcast Corp. ’s NBCUniversal, have complained that Nielsen underreports the size and wealth of its audience by failing to track “out of home” viewing in places such as offices and airports.
CNBC’s switch to Cogent is the latest barb for Nielsen, which has faced criticism from media companies that it has been slow to adapt its traditional ratings to changing media consumption habits. While many media companies say they are frustrated with Nielsen, CNBC is the first network to opt out of its ratings.
Zero Hedge readers already know the facts. Here they are from the WSJ:
CNBC’s daytime Nielsen ratings, which always have been relatively small, have fallen sharply over the past decade. In 2014—its least-watched year since 1995—CNBC had an average audience of 177,000 people from the hours of 9:30 a.m. and 5 p.m., according to Nielsen. That is down 17% from an average of 214,000 viewers in 2004, and it is a drop of 13% from 2013.
It has gotten so bad WSJ is now actively losing leverage, and money, when discussing ads: "Executives at CNBC said they were leaving money on the table with advertisers and they needed to make a change. “Nielsen has never measured us accurately,” said CNBC President Mark Hoffman. “If we can’t count the people the right way we can’t get paid the right way.”"
For those who are unaware, Nielsen generates ratings from a panel of sample households, and those ratings are the currency used by networks and advertisers to determine the value of TV commercials. Which means that the simplest solution is the right one: households no longer watch CNBC for a whole host of reasons. But that is unacceptable, so time to change the methodology, and the ratings provider.
The CNBC arrangement marks the first time Cogent Reports, a unit of Market Strategies International, will be measuring the audience of a TV network. Cogent ratings will be used starting in the fourth quarter of 2015. The company will survey over 1,000 investors and financial advisers on their media habits during the day and use that data to provide ratings for CNBC.
“We talk to people once a week and ask them to report out their behavior,” said Christy White, managing director of Cogent Reports. Ms. White said many of CNBC’s advertisers are also Cogent clients. “They know and use and trust our data,” she said.
And then we send CNBC the invoice for the monthly "rating"?
How are CNBC's two main competitors handling the situation? Bloomberg TV isn’t measured by Nielsen, and never has been. Fox Business is measured by Nielsen and has no plans to change.
“Bloomberg has the most influential audience any cable TV network delivers,” Bloomberg Television said. “We’ve expanded our distribution to reach viewers on whatever platform they prefer.”
Explaining why Fox Business Network continues with Nielsen, Paul Rittenberg, executive vice president of advertising for the channel, said, “Only using the numbers you like is a little tough to sell.”
But the biggest trick will be convincing advertisers themselves why CNBC is changing the methodology. Needless to say, in a time when everything is moving to "native advertising" and distributed content, it will have a very tought time.
CNBC will still guarantee a rating to advertisers when it switches to Cogent, but it will need to persuade Madison Avenue’s advertising agencies that the numbers are trustworthy.
“Agencies have realized there is a lot of smart research out there that allows you to do business other than Nielsen,” said Sam Armando, a senior vice president at Starcom MediaVest Group Exchange, a media-buying firm. “We will definitely put it through the ringer to make sure what they are doing is sound and usable.”
Completing the picture is CNBC parent Comcast, which two months ago itself admitted advertising revenue is sliding rapidly.
Curious why Q3 revenue at the NBCUniversal segment of which CNBC is part of at Comcast remained unchanged at $2.255 billion compared to ($2.239 billion in Q3 2013), and why advertising revenue actually dropped by a lofty 4.6% in the quarter compared to a year ago?
Let's find out from the source, shall we. Here is the explanation from the company's earnings release: "For the third quarter of 2014, revenue from the Cable Networks segment increased 0.7% to $2.3 billion compared to $2.2 billion in the third quarter of 2013, reflecting a 5.1% increase in distribution revenue, partially offset by a 4.6% decline in advertising revenue, primarily due to a decline in ratings."
Expect this trend to accelerate sharply in the current quarter.
Luckily, there is always hope that the future brings better ratings. Here is how CNBC is approaching that, via PageSix:
CNBC is trying to find a new audience on gay hookup app Grindr after ratings for the business channel fell to a historic low.
While the NBCUniversal-owned network’s audience has traditionally been Wall Street bankers and avid watchers of the financial markets, after a huge drop in ratings in 2014, television industry insiders are joking that CNBC is now being more creative about attracting hot new viewers.
It is currently running a banner ad for the “All-new CNBC app for iPhone & iPad” on Grindr, which helps users find available gay, bi or curious guys locally.
CNBC’s shiny app features a smiling picture of Carl Quintanilla, but bears little resemblance to Grindr’s app and its somewhat semiclad users with catchy profile names like “PreppyJockDad.”
Good luck CNBC.