The television industry won’t be basing $50 billion in advertising sales on average commercial ratings just yet.
Last week, after an unusual meeting of ad buyers and top network sales and research executives, Nielsen Media Research confirmed its first streams of average commercial-minute ratings data will carry a warning label.
The label will say the figures are still experimental and not ready for prime time. When average commercial ratings will be used for buying and selling is to be decided later, after the data from Nielsen can be analyzed and evaluated. Some buyers say they will be surprised if the data is used in next year’s upfront.
The “experimental” label was seen as a way of discouraging eager clients from pushing their agencies to start using the data before it’s determined to be accurate, stable and projectable.
Last week’s meeting, arranged by Rino Scanzoni, chief investment officer for media buying company GroupM, and NBC Universal research chief Alan Wurtzel brought together about 35 ad buyers, cable executives, broadcast executives and Nielsen executives for the first time after months of debate to discuss their concerns about commercial ratings.
“I think everybody is in agreement that there’s no way we should be trying to rush this thing and have billions of dollars riding on something before it’s completely ready,” Mr. Wurtzel said. “If we don’t get data till Nov. 18, and assuming it’s perfect data, we’ll only have a couple of months to evaluate it before a decision has to be made. And I’m sure that even Nielsen would agree that the likelihood of being perfect is very small.”
Waiting to sell off of this new form of data is especially important to cable executives, who have been vocal in pointing to flaws in Nielsen’s commercial ratings methodology. Cable executives say Nielsen’s formula is partly responsible for making it look as if broadcast shows do a better job of holding onto viewers during commercial breaks.
But while cable executives said they’d prefer that Nielsen wait till all the bugs in the system are ironed out, the ratings agency still expects to produce those first, experimental commercial ratings data in November. Some cable networks may not allow their ratings to be included until some of their issues are resolved.
“Can it be delayed? Of course. Will it change? Most definitely. Will it be labeled? You bet,” a Nielsen spokesman said.
With the increasing use of digital video recorders, advertisers have become more concerned that they are paying for commercials that aren’t being watched.
At the same time, with more shows being watched on digital video recorders, networks worry that they’re not being paid for viewers who watch commercials while playing back shows on their TiVos.
Finding a new way to generate data on which broadcast, cable, advertising and Nielsen executives can agree is vital to the television business, Mr. Scanzoni said.
“We’re at an important point in history,” he said, noting that soon most people will have DVRs and that live viewing will further diminish. “If commercial exposure is taking place, there is value and this is the only way to measure that value,” he added.
Over the summer, Mr. Scanzoni and the broadcast networks asked Nielsen to produce ratings that find the average viewership for all of the commercial ratings within a show. (Nielsen is not currently equipped to produce ratings for individual commercials, and those ratings would be likely to be affected by several issues other than the programming in which they appear, such as the quality of the commercial that preceded it.)
David Poltrack, executive VP and chief research officer for CBS Corp., said he wants Nielsen to get started on the data early so it can be vetted in advance of next year’s upfront, when it could be used as currency for buying and selling ads. Likewise, ABC President of Ad Sales and Marketing Mike Shaw said he is ready to base sales on commercial ratings right away.
But once details of Nielsen’s methodology emerged, more questions were raised about how reliable the data would be. The ultimate goal for Steve Sternberg, executive VP and director of audience analysis for Magna Global, is to eventually use commercial ratings data as “currency,” he said.
“But we’re not there yet,” Mr. Sternberg said. “This meeting was a good first step in getting us there.
“When you’re talking about moving to a transactional currency, the threshold of how good the data has to be is much higher than just for analysis purposes,” he added.
Among the challenges to getting data fit to sell from is Nielsen’s inability to distinguish between local and national commercials on cable and to be able to locate commercials in double-run syndicated shows.
“Everyone understands that Nielsen doesn’t have a firm solution to these problems,” said Jack Wakshlag, chief research officer for Turner Broadcasting. Still, Mr. Wurtzel of NBC Universal, which owns USA Network, Sci Fi Channel and Bravo, said he would rather see data, “warts and all,” for his cable entities, and sooner rather than later.
Mr. Poltrack of CBS said the cable networks wanted to delay commercial ratings as long as possible because the data is going to show cable audiences lower.
Mr. Scanzoni said the data tends to look better for broadcast only because cable networks run longer pods and often lead off with a promo before ads run. “(The cable networks) will fix that,” he said. “I don’t want shows to be formatted in a way that encourages people to switch channels.”
Even if commercial ratings data that appears to favor broadcast isn’t used as currency in the next upfront, Mr. Poltrack said, Nielsen subscribers such as CBS or other networks can produce their own analysis that makes the same point to advertisers.