TVB: Data led to cable overspending

Jun 17, 2002  •  Post A Comment

Some advertisers have been buying cable programming locally based on potentially misleading Nielsen data, according to an analysis of Nielsen Media Research numbers by the Television Bureau of Advertising.
But that perennial problem-what TVB considers advertiser overspend for local cable-is about to go away, according to a Nielsen spokeswoman. The head of the Cabletelevision Advertising Bureau, the TVB’s counterpart representing the cable world, contends there never was a problem.
The overspending problem could have potentially cost advertisers between $275 million and $555 million in excess spending last year, according to the TVB, which estimates total local spot cable revenues in 2001 at $3.7 billion and says that as much as approximately 15 percent of that revenue was accrued through advertiser overspending.
The TVB analysis of previous Nielsen data measures the viewer shortfall for local-cable advertising that is missed on an alternative delivery system, the great preponderance of which is via direct broadcast satellite, and it concludes that ADS has continued to rise while wired cable penetration has fallen slightly.
For the first time, Nielsen addresses this problem in its book for the just-concluded May sweeps, the Nielsen spokeswoman said. The May book includes an ADS penetration chart for each TV market that Nielsen measures, she said.
According to the TVB analysis, national ADS penetration reached 15.1 percent in May 2002. That means that when an advertiser buys a local cable spot, the average 15.1 percent of the audience that doesn’t receive cable network programming from cable operators doesn’t see the local spot because satellite-delivered programming can’t insert local spots.
It was, therefore, possible for an agency or an advertiser to overestimate local cable’s reach by 30 percent or more in an individual market with high satellite penetration.
The national ADS penetration level is up from 12.7 percent in May 2001, while its largest component, DBS delivery, reached an estimated 13.8 percent, up from 11 percent last year. Wired cable penetration fell from 70.8 percent to 70.6 percent during the same period, according to the TVB.
“This may not have been as hot an issue three years ago. When there was so much money washing through the system it was almost like, `Who cares? So we overspent 25 percent on our local cable? Wow! Big deal,”’ said Chris Rohrs, TVB president. Today, however, “there is nobody who can afford to overpay.”
The broadcast proponents at TVB are “coming to a conclusion that is erroneous, inappropriate, and frankly it seems to me they should be more concerned about the continuing erosion of broadcast’s audience,” said Joe Ostrow, president and CEO of the CAB, who counters that the TVB’s contention that wired cable penetration has fallen is “not true.”