New Data Adopted for Upfronts

Jun 4, 2007  •  Post A Comment

Television sales executives and advertising buyers last week got what they ordered from the Nielsen Co. Now it’s time to digest.
Nielsen released its long-awaited commercial ratings data, which measures how many viewers watch spots rather than just the shows they run in. The new information put another wrinkle in an upfront ad-buying process that already seemed destined to drag on.
“This is not going to be like any other upfront that we’ve seen. There is not going to be some big bang where all of a sudden all of the agencies start moving,” said John Swift, managing director of PHD. “That is frankly the way it needs to be in order to deal with some of these unprecedented issues that are facing this marketplace.”
The new ratings data puts information about how many people are watching commercials into a form that can be used by network and media agency systems for tracking ads and calculating how many make-good ads need to be delivered when those ratings fall short of guaranteed viewership levels.
Nielsen is providing the data for free until September to allow networks and buyers to see how it works as a currency.
The new data represents another effort by networks, media buyers and Nielsen to keep up with rapidly changing viewer habits and new technologies shaking the TV and advertising industries. Providing audience information on commercial viewing will help marketers better measure the effectiveness of their ad spending.
Some of the new commercial rating numbers include ads seen by viewers after they air via digital video recorder. Capturing those commercial impressions is increasingly important to the networks as more consumers buy DVRs. Most DVR users skip commercials, but a significant number do see and recall ads.
There were a few opening-day glitches for Nielsen last week, affecting some syndicated shows and some demographic groups.
Broadcasters and syndicators are eager to put the numbers to use, while cable networks remain wary.
Wearing his broadcast hat, Alan Wurtzel, president of research and media development for NBC Universal, said he had confidence in the commercial ratings. “They’re ready for prime time, if you’ll pardon the pun.”
But NBC Universal also owns top-rated cable networks, including USA Network and Sci Fi Channel.
“I don’t know about cable, and we have to spend some time looking at those seriously,” Mr. Wurtzel said. “It’s just too soon to put billions of dollars against them.”
Jack Wakshlag, chief research officer for Turner Broadcasting, also ex%AD;pressed reservations. For one thing, he said Nielsen needs logs from the networks to determine when commercials appear.
Another stumbling block: The commercial ratings haven’t been accredited by the Media Ratings Council, and the industry has never before used a system that hasn’t been vetted by the MRC as a basis for negotiating ad purchases.
“It will take us a while to figure out how to get this to work so that advertisers have trust in it and use it to get [return on investment] on TV,” Mr. Wakshlag said.
The fact that the new ratings system seems to affect various media differently is a concern to Mr. Swift.
“I don’t think the release of this tape is going to really impact how people think about network prime time as much as I think it’s going to make it even more complicated to sort through other dayparts, including cable,” he said.
To that extent, it benefits broadcast prime time, Mr. Swift said.
Mr. Swift noted cable networks are recording lower audiences on DVR playback. Adding in factors such as viewers’ lower attentiveness to non-broadcast media and longer commercial breaks in cable compounds the imbalance, he said.
Besides the industry’s need to integrate the new data into upfront negotiations, the market is developing slowly because “there doesn’t appear to be an overwhelming consensus as to where the market is up or down. Which usually means it’s not much different than it was last year,” Mr. Swift said. “That’s not going to lead to a quick marketplace.”
The information released by Nielsen last week provided few surprises to network and ad buying executives, who have been looking at the source data for months.
In DVR households, according to Nielsen, only 58 percent of prime-time broadcast shows were watched live, compared with 85 percent of cable shows and 84 percent of syndicated shows. Broadcast shows added 31.7 percent to their commercial rating when three days of playback were included. Cable programs added 8.5 percent, syndicated shows 8.6 percent.
Mr. Wurtzel said the figures show the idea that no one is watching commercials is wrong and that it’s true that time-shifted viewing is an important factor in measuring TV. For the week Nielsen released data, the four broadcast networks’ live rating in 18-49 was 3.11. The commercial rating for live plus three days of playback was 3.12.
David Poltrack, executive VP for research and planning at CBS, said the figures showed viewers playing back shows even sooner than previous numbers had shown.
“It is reassuring to advertisers that these commercials are being seen in a short window,” he said.
Mr. Wakshlag said the commercial ratings commotion was distracting some people from the big picture: Whatever measurement is used, broadcast continues to lose viewers.
The figures Nielsen released were for the first week of May sweeps.
“They know it’s going to be different in June,” Mr. Wakshlag said. “Commercial-minute ratings are not going to keep broadcast networks from eroding and it’s not going to change the tide, which is that broadcast networks are losing ground.”

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