The A.C. Nielsen Company was started in 1923 by A.C. Nielsen, an engineer, and bought by Dun and Bradstreet in 1984 for $1.3 billion. On February 16, 2001, the company was acquired by VNU N.V., an international media and information corporation based in the Netherlands. Thus, ACNielsen is no longer an independent entity but a subsidiary of the larger conglomerate.

The A.C. Nielsen Company first became involved in audience studies in the 1930s, as an extension of Nielsen’s studies tracking retail food and drug purchase. In 1936 Nielsen bought the Audimeter from its designers, Robert Elder and Louis F. Woodruff, two Massachusetts Institute of Technology professors. The Audimeter (and a previous design for a similar device patented in 1929 by Claude E. Robinson and then sold to RCA, which never developed it) was intended to record automatically two aspects of radio listening that would be of interest to programmers and advertisers. The device recorded the frequencies to which a radio set was tuned when it was on and the length of time the set was on. This technique had an obvious problem: it could not ascertain who, if anyone, was listening to the radio. However, compared to the use of telephone surveys and diaries used by competing ratings companies, it had important advantages as well. The other ratings methods depended to a much greater degree on audience members’ active cooperation, memories, honesty, and availability.

After a period of redesign and a four-year pilot study, the Nielsen Audimeter was introduced commercially in 1942 with an 800-home sample in the eastern United States. The number of Audimeters and the sample size and coverage were expanded after World War II, eventually, by 1949, representing 97 percent of U.S. radio homes. The Cooperative Analysis of Broadcasting had ceased providing ratings in 1946; in 1950 the A.C. Nielsen Company bought Hooper’s national radio and television ratings services and thus became the single national radio-rating service. This allowed the company to increase rates, and the new capital was used to increase sample size. As the television industry grew, the Nielsen Company’s attention to television grew with it, and the company left the radio field in 1964.

In 1973 the Nielsen Company began using the Storage Instantaneous Audimeter, a new and more sophisticated design for the same purposes as the original (although surely not the only modification to the Audimeter made over the years, this one was much publicized). Set in a closet, designed with battery backup for power outages, and hooked to a dedicated telephone line for daily data reports to a central office, the device kept track of turn on, turnoff, and channel setting for every television in a household, including battery-operated and portable units (through radio transmitter).

Although the Audimeter, widely known as the “Nielsen black box,” was the company’s most famous device, it was used only for household television ratings. For ratings by people and demographic descriptions of the audience, the Nielsen Company required supplementary studies of audience composition based on a separate sample using the diary technique. This separate sample was smaller, and there was concern in the industry that the people who cooperated with the diaries were not representative of the population in general.

In the 1970s the Nielsen Company experimented with Peoplemeters, a system for measuring the viewing of individuals without diaries, but brought no new services to market. In 1983 AGB Research of Great Britain proposed a commercial Peoplemeter service in the United States similar to the system that organization was using in other countries. This proposal attracted funding from a group of networks, advertising agencies, and others for an evaluation study in Boston. In 1985, in response to this competitive threat, the Nielsen Company initiated its own Peoplemeter sample, as a supplement to its existing samples. Reports became available beginning in January 1986. The system depends on a box sitting atop the television set that keeps track, in the usual way, of what channel is tuned in. However, the meter is also programmed with demographic descriptions of individual viewers in the household and their visitors. Viewers are asked to push a button indicating when they begin or end viewing the television, even if the set is left on when they leave. The data then indicate which (if any) viewers are present as well as set tuning. (There have also been experiments with passive meters that use infrared sensing rather than requiring viewers to cooperate by pressing buttons, but so far these devices have not been sufficiently reliable.)

Because the Peoplemeters produced different numbers than diaries, they generated controversy in the industry. Ratings points are the reference for negotiations in the purchase of advertising time, in deciding which programs are syndicated, and other issues vital to the television industry. Thus, when different measurement techniques produce different ratings, normal business negotiations become complicated and less predictable. For this reason, many participants in the television business actually prefer one company to have a monopoly on the ratings business, even if it does allow that company to charge higher rates for its services. Even if this service provides inaccurate numbers, those numbers become agreed-upon currency for purposes of negotiation. Eventually, the most recent controversies were settled, and ACNielsen’s Peoplemeter system now dominates the production of national television ratings.

The Audimeter was originally conceived as a means to the testing of advertising effectiveness. To at least some extent, A.C. Nielsen’s own interest in broadcast audiences was originally motivated by his marketing and advertising clients. However, the ratings have grown to be an end in themselves, a product sold to parties interested in the composition of audiences for broadcasting.

Among the ratings reports provided by the Nielsen Company were, until 1964, the Nielsen Radio Index (NRI) for network radio audiences. Currently, ACNielsen provides the Nielsen Television Index (NTI) for network television audiences, the Station Index (NSI) for local stations and for designated market areas (DMAs), the Syndication Service (NSS) for the audiences of syndicated television shows, and the Homevideo Index (NHI) for the audiences of cable and satellite networks, superstations, and home video. More recent systems include the Nielsen/NetRatings Internet audience measurement service (in partnership with NetRatings).

ACNielsen periodically produces reports on special topics as well, such as videocassette recorder (VCR) usage, viewership of sports programming, or television viewing in presidential election years. In 1992 ACNielsen launched the first national Hispanic television ratings service (Nielsen Hispanic Television Index) in the United States.