Linear TV is a futures market: deals are agreed ahead of campaigns being aired, usually with an agreement that a particular audience level will be delivered. For this to work as efficiently as possible, good audience forecasts are essential. Where forecasts are wrong, the media owner either over delivers, effectively giving away audiences for free, or under-delivers, requiring additional inventory to be added to the campaign for free.
Forecasting is a lesson in humility because no one gets it right all the time (Exhibit A: the media’s current favorite geeky guru, Nate Silver, who failed to predict that Donald Trump would be the Republican presidential nominee). No forecast is perfect and no forecasting model is good for all time, because the landscape is always changing.
The answers to these questions have a common origin that takes us back 80 years to 1936. Commercial consumer and social research was a new business then – AC Nielsen had been founded 13 years previously (in 1936 it was about the same age as Facebook is now) and Gallup inc. was just one year old. As it turned out, events in 1936 would soon make Gallup front-page news.
Like 2016, 1936 was a general election year in the US and there were opinion polls. One organization that considered itself expert in this field was The Literary Digest, a magazine that had been in the polling business since 1916.
You may have seen reports that Nielsen has expanded its US National People Meter panel and is using modeling in this expansion. What does this really mean? To understand the change that Nielsen has introduced, it’s useful to lay out the Nielsen TV measurement landscape in the US.