THE MAN WHO INVENTED ADI'S

The Idea That Markets Can be Defined by Viewing Put TV at the Center of Media Planning.

By Erwin Ephron

In the six days of creation, when Chaos was ordered into heaven and earth, there was no television, so God did not create the ADI. That task was left to Bill Harvey, the newly hired marketing director of the American Research Bureau. The year was 1966. Harvey was 24 years old.

The idea that the entire country could be divided into marketing areas by TV station viewing patterns is taken for granted today, but, it is the spine of modern media planning.

In the 1960's, the only defined markets available to planners were states, cities, counties and metro areas. The Postal Service had not yet introduced Zip Coding. None of this market geography worked for television, whose signals knew few boundaries.

The rating services reported "metro ratings" and "station total audiences," much as radio is reported today. Both Nielsen and ARB were stumped by the problem of defining a common TV market area, which would satisfy all of their station clients in a market.

Since there was no standard, there was infinite variety. Each station defined the TV market in its own self-interest based the reach pattern of its own signal, so in effect, there were as many markets as there were stations. The situation was chaos for the national advertiser, who needed a uniform set of markets to plan television advertising.

Every three years or so, Nielsen would do a coverage study, mailing postcard ballots to viewers across the country to collect station-viewing in each of the 3,000-plus U.S. counties. A handful of advertisers, like Procter & Gamble, would buy the survey results and assign an agency to transform the data into viewing-based definitions of markets for all P&G agencies. Few other advertisers had the P&G's ambition, so for the majority of brands, national spot TV planning remained irksome and inexact.

Bill Harvey is not modest, nor should he be. Early in his career, he applied for a job in media research at BBDO and was asked to complete an impossible 100 question quiz, designed more to humble his spirit than to judge his competence. The legend goes Bill answered 96 correctly and on the four marked wrong, convincingly argued that his answers were better.

He rejected BBDO's job-offer and went to McCann Erickson.

At the time, the American Research Bureau (now Arbitron) was rapidly losing the battle with Nielsen for the local TV station ratings business. Both research firms were being whipsawed by stations, which wanted two suppliers to keep the price of research competitive.

ARB knew that while TV stations pay most of the money for ratings, the national agencies control which service is used. They hired Bill, with his agency experience, to help create a rating service designed for agencies. Harvey's big idea was the "Area of Dominant Influence," an audience-based definition of TV markets.

ADI's divided the U.S. into 200 exclusive geographic areas by assigning counties to the ADI whose originating stations capture the greatest share of prime time viewing. ADI's were considerably larger than SMSA's and did not respect state boundaries. The New York ADI, for example, contained several SMSA's (New York, Newark and Nassau/Suffolk ) and counties in four states (New York, New Jersey, Connecticut and Pennsylvania).

ADI data let agencies track the delivery of network TV in local markets to see where their schedules over- and under-delivered. ADI data facilitated the use of spot to compensate for network under-delivery. If the brand management could obtain, or estimate, sales by ADI, media planners could do A-to-S geographic planning, allocating advertising dollars by market sales.

ARB called the new agency service, "The Buyers Friend," and that innovation kept ARB in business for many years. Nielsen's ADI look-alike, the "Effective Marketing Area" soon followed, but the word "effective" was too much puff for Art Nielsen, Sr. and was soon changed to "Designated Market Area," or DMA. When the Arbitron TV ratings were discontinued in 1993, the ADI died, leaving only the DMA.

The ADI-concept recognizes that TV viewing, not county, city or state boundaries, defines markets for TV advertisers. It gives them a complete, rational and supremely useful geographic planning tool. The ADI helped create the $11 billion national spot television medium.

Today, Bill Harvey calls himself a "futurist." He is also a successful research entrepreneur. He lives in Shokan near Woodstock in the New York DMA, which was once an ADI.

- March 1, 1992 -
Originally published in Inside Media

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