If you think cable networks are unhappy with the way commercial ratings are being calculated, you should listen to the sales chiefs of some of the broadcast networks.
Last week, most of the major cable networks opted out of Nielsen Media Research’s plan to start reporting average commercial ratings data for this season They cited several flaws in the way Nielsen is generating the numbers and don’t want false-and possibly unflattering-information in the marketplace.
For broadcast networks, the issue boils down to whether they will get paid for viewers who use digital video recorders and watch the commercials after they are broadcast. The broadcasters lost that battle during the last upfront advertising sales, when advertisers insisted that commercial prices be negotiated on the basis of live viewers only.
Some top sales executives at the networks, who didn’t want to be identified, now feel betrayed over how the move toward commercial ratings is shaping up. They believed they had a deal with the media agencies: that in exchange for basing ad prices on the number of people watching commercials-as opposed to the number watching the shows-live-plus-seven-days ratings data, which includes DVR viewing, would be used to negotiate prices.
Instead, they said, the agencies convinced Nielsen to offer commercial ratings data for live viewers, live-plus-same-day audiences and live-plus-seven-day numbers-the same data streams that exist now for program ratings.
One network sales executive said he now feels the agencies acted in bad faith.
A Nielsen spokesman said its clients are demanding the multiple streams of commercial ratings data and that it’s up to them to decide which data is used for what purpose.
The buying agencies are inclined to make their buys based on the live-only data, which reflects a lower number of viewers. And in the last upfront negotiations, the agencies won the arm-wrestling match over whether or not delayed viewing would be included.
Even if the new average commercial ratings are ready to be used in next year’s upfront market, all the networks have achieved is another chance to arm wrestle. And if demand for ad time is again relatively weak, the networks are likely to lose again.
That would be a bitter pill for networks that, in an effort to be responsive to advertisers’ desire for better data on who is seeing commercials, helped push Nielsen to generate the commercial-minutes ratings.
“The issue is still what it was eight months ago, which is what’s the value of the research being produced and what’s the value to the advertiser,” said Larry Blasius, executive VP and director of negotiations for Magna Global.
He said the value of commercials seen on DVRs varies by advertiser. A spot for a retailer or movie studio trying to build weekend traffic is not worth anything if it’s seen after the fact, but could be worth something to a company that advertises 52 weeks a year.
“The intent is to do commercial ratings. But exactly how it’s done is still very much a conversation,” he said.
Cable Nets Opting Out
The broadcast network objections follow the cable networks’ rejection of Nielsen’s commercial ratings. Most of the big cable channels have opted out until some of the glitches they’ve found-including Nielsen’s inability to distinguish breaks containing national ads from local breaks-have been addressed.
“I’d like to get data for everything, but there are fundamental concerns that Nielsen hasn’t been able to address,” said Alan Wurtzel, president of research and development for NBC Universal Research. NBCU pulled its cable networks out of the commercial ratings plan, but left its broadcast network in.
Among those opting out were Turner Broadcasting, A&E Networks, Lifetime Entertainment, Scripps Networks, Fox Cable Entertainment, Discovery, ESPN and MTV Networks.
In a letter to Nielsen, Jack Wakshlag, chief research officer for Turner, said his staff had found new errors when examining output from Nielsen.
“You know the data is not ready,” he wrote. “I am distressed that you will be releasing it anyway, even as `evaluative,’ and strongly urge you to reconsider.”
Some of the cable networks’ objections came up Wednesday at a meeting of the Advertising Research Foundation. Tim Brooks, executive VP of research for Lifetime, chaired the meeting.
“Cable’s point of view was that it was worse to have bad data than no data at all,” he said. He added that most people think Nielsen is listening to the issues, even if they haven’t been addressed yet, and that some form of commercial ratings eventually will become currency for ad purchases.
Nielsen’s spokesman said the company has invested in equipment that will distinguish between national and local breaks and that the issue should be resolved by the end of the year.
TNS Media Intelligence was invited to the meeting and offered its ad-tracking service, a rival to Nielsen’s Monitor-Plus, to identify when commercials appear. TNS challenged Nielsen to a face-off in tabulating which commercials run when on which network.
“We believe our detection algorithm is superior to anything out there,” said Steve Fredericks, CEO of TNS, which has gone to the Media Rating Council for accreditation, as Nielsen has for Monitor-Plus.
TNS offered to participate in a side-by-side trial of the two services, with the winner’s data being paired with audience data from Nielsen to produce the commercial ratings.
The Nielsen spokesman said both the Monitor-Plus and TNS data will be evaluated during the MRC process, giving clients the ability to compare both products.
TNS’s system offers second-by-second tracking and reports which of the sponsor’s commercials appeared. Mr. Fredericks said the average commercial ratings plan is just a “baby step” in the direction clients want to go.
“Eventually the currency is going to move to commercial ratings,” he said.