Cable Networks Hold Viewers for Ads

Oct 31, 2007  •  Post A Comment

The main benefit to the ad business of this season’s sudden, complicated switch to commercial ratings is a new focus on how many people are actually watching commercials during the shows televised by broadcast and cable networks.
When viewing on digital video recorders is factored in, some cable channels perform better than the broadcast channels in terms of holding onto viewers for advertisers. But other cable networks sink to the bottom of the rankings.
While few in the media agency business think the Nielsen Co.’s average commercial ratings system is perfect, most consider it a step in the right direction. (A few carp that because Nielsen can only calculate ratings on a minute-by-minute basis, what it’s really measuring is the average rating of program minutes that contain some commercial content.)
This season there are reams of new numbers to crunch. Some network executives joke that all of the data streams pouring forth from Nielsen add up to a full-employment act for people in the television research business.
Indeed, there is no shortage of numbers, ways to compare them, people to parse them and interpretations of what’s going on in television land.
Few are as vocal as the redoubtable Steve Sternberg, executive VP of audience analysis at Magna Global.
From a business point of view, there are reasons to compare live program ratings (LP), which was the ad-buying currency for years, to commercial ratings for live programming plus three days of DVR playback (C3), this year’s new currency.
“Advertisers need to see both metrics to help determine what impact switching audience measurement methodology has on the cost efficiencies of their national television buys, and to get an indication of how many more or fewer rating points are available for sale in the marketplace (i.e., has supply changed significantly from a year ago),” Mr. Sternberg wrote in a recent report.
While the new C3 ratings measure commercial watching, there is still value in comparing how many people are watching a show—which advertisers used to pay for—versus how many are watching the commercials—what advertisers pay for now.
“Because there was so little C3 data available going into the upfront, most people estimated live ratings, and used indices to estimate C3,” Mr. Sternberg said. “But there was no seasonal data, and people had to do this essentially using just a couple of summer months of data. We need to monitor the percentages more closely than ever, because to a large degree people are still estimating live and using percent differences to estimate C3.”
“Equally important going forward is that we need to continually be able to project the impact of DVR usage as penetration grows,” he added. “The live falloff is not difficult to assess, because channel switching, particularly for broadcast, as we’ve noted in our commercial pod studies, is relatively stable year-to-year. But DVRs will increasingly result in less overall commercial audience retention. We have to anticipate the impact.”
In his report, Mr. Sternberg said it was important when measuring commercial retention to look at similar stream lengths. That means comparing live program ratings to live commercial ratings, or live-plus-three program ratings to C3. And the results of looking at live programming are quite different from looking at data that include time-shifting and fast-forwarding by DVR users.
In live viewing, the broadcast networks tended to have higher audience retention than their cable competitors, with the Big Four broadcast networks among the top 10 in all television.
But in the real world, where DVR use is becoming a bigger and bigger factor, retention by the broadcast networks tends to get hurt because more of their programming is watched on DVRs, which gives viewers an easier means of fast-forwarding through spots, which happens about two-thirds of the time.
In his report, Mr. Sternberg looked at the first two weeks of the new season, and did both comparisons.
In comparing household ratings using P3, or live-plus-three-days program ratings, and C3, Hallmark Channel scored the highest level of retention, with an index of 96%.
Rounding out the top 10 were Nick at Nite, HGTV, Court TV, BET, Headline News, USA, Adult Swim, TNT and ABC. All of those channels scored a 92 or better.
Among the other broadcasters, Fox was at 91, CBS at 90 and NBC at 89. With its younger-skewing audience, The CW scored an 87.
At the bottom of the pack were AMC, E! and MTV at 83 and WGN, MSNBC and VH1 with 84.
Mr. Sternberg said using household ratings seemed to be the fairest way to compare the networks. It’s also the most accurate, because the data deals with only a few minutes per hour and there were only two weeks of data available.

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  1. Neat blog layout! Very easy on the eyes.. i like the colors you picked out

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