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Broadcast Ratings Take Dip

Oct 21, 2007  •  Post A Comment

The commotion over last week’s release of Nielsen’s commercial ratings for the start of the 2007-08 season nearly obscured a bigger-than-expected drop in viewership of new shows on the broadcast networks, according to ad buyers.
“What stands out once we get all these numbers is how low the ratings are to begin with,” said Sam Armando, senior VP and video research director at Starcom USA. “Although we anticipated ratings on the networks to be down somewhat, the surprise is how much some are down.”
This year, most commercials are being bought based on the new average commercial rating, usually referred to as C3; it counts commercial minutes watched in live programming and in viewing over the three days after airing by viewers using digital video recorders. In the past, ad sales had been based on live program ratings.
It takes Nielsen about three weeks to process the new commercial ratings and distribute them to the networks and media buying agencies. When the numbers came out for the broadcast networks’ premiere week, buyers said they were very close to the live program ratings.
“It’s much better than we expected,” said Rino Scanzoni, chief negotiating officer for GroupM, a key proponent of the new commercial ratings.
Because there were no commercial ratings a year ago, comparing numbers for this season with last season has become a two-step process.
Mr. Scanzoni starts by looking at the live-plus-same-day DVR-playback program ratings.
“There the numbers are discouraging. If we look at prime-time network, the numbers are down about 9 percent on people 18 to 49,” he said. On that basis, every network was down except Fox, he said, with The CW and CBS showing especially big drops.
“That obviously is discouraging, but again, it’s only two weeks of the season,” he said. “But then if we take the next step and we talk about commercial ratings, C3, those numbers are actually stronger than I expected.”
According to a report by Steven Sternberg, executive VP of audience analysis at Magna Global, the C3 ratings among adults 18 to 49 for Fox and ABC were higher than their live program ratings; for the five broadcast networks, the difference was only 1 percent.
ABC was the top-rated network based on C3 with a 3.58, followed by NBC at 3.52, CBS at 3.04, Fox at 2.57 and the CW with a 1.02 among adults 18 to 49.
“This data just covers premiere week. This is not a typical week in terms of viewing behavior, and there is likely to be more DVR recording and delayed viewing than normal,” Mr. Sternberg noted.
Originally there was fear among buyers and sellers that the commercial ratings would be significantly lower than program ratings, which could hurt network revenue or push ad prices higher. But because of how fast DVR penetration is growing, the commercial ratings, which include delayed viewing, are increasing.
“What we have basically told our clients as well as the networks is we thought that it would probably take until first quarter of 2008 until the C3 ratings would equal program live. But it’s almost there,” Mr. Scanzoni said. “Fox is already there,” while The CW will be the last to get there because its young-skewing viewership does a lot of channel-switching while viewing live.
Commercial ratings also have improved because the networks have made changes in the positioning and length of commercial breaks in order to retain more viewers, Mr. Scanzoni said.
GroupM tracked commercial ratings earlier this year, and saw C3 for cable trailing live ratings by as much as 9 percent. Now that gap is down to 5 percent.
Even cable networks that previously showed a lot of commercial-skipping “are stronger than we expected, and I think it’s the fact that there’s an economic incentive to change behavior,” Mr. Scanzoni said. MTV’s commercial rating was 91 percent of its live rating, VH1’s was 88 percent and E! was at 86 percent.
At this point buyers said they were pleased with the switch to commercial ratings.
“At least we’re now talking about the people who are watching commercials, instead of the people watching the shows,” said Jackie Kulesza, VP and broadcast activation director at Starcom. “So the live ratings are down, but we are still on a more accurate and accountable guarantee, so that is something to be happy about.”
Alan Wurtzel, president of research and media development at NBC Universal Research, said the networks “needed to get credit for this time-shifted viewing. Had we stayed in live, it would have been disastrous.”
Mr. Wurtzel noted that several NBC shows, led by “The Office,” had higher ratings using C3 than live program ratings.
“In the end, I really believe the DVR is our friend, because people who have DVRs watch more TV, and as you can see, a show like ‘The Office’ in a pre-DVR world would have been toast up against ‘Grey’s Anatomy.’ Now it’s actually performing better than it had its first couple of seasons in an easier time period,” Mr. Wurtzel said.

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