Next week, members of the media industry will converge at various New York midtown venues to view program schedule pitches by the major national broadcasters. It signals the seventh anniversary of Nielsen Media Research's move to C3 ratings -- providing standardized ratings for commercials during live broadcasts of programs, plus three days of playback.
The deal was groundbreaking at the time. Advertisers and their agencies wanted to pay for the audience that actually saw their ads. Previously, ratings measured average audiences for live programs, not specific commercials. The quid pro quo for the networks was recognition for later audiences of their programs that they hadn't been earning credit on. They negotiated with the agencies and settled on C3.
It's time to now move to C7 ratings, and here's why.
We need a ratings currency that actually represents how people watch TV in 2014.
Consumer viewing habits have shifted dramatically since C3 ratings arrived back in 2007. DVRs were only in 17% of homes, and they are now in 48%. Seven years ago, Hulu hadn't even gone live, Netflix was primarily a DVD mailing service, no one owned a tablet, and cord cutting was something that only happened in a hospital maternity delivery room.
Live TV viewing continues to fall. Within the all-important 18-49 demographic, live viewing in the last four years has dropped 36%, while the level of time-shifted viewing of a show the week after the live broadcast has doubled. So why is it that someone watching a catch-up episode of Sunday's "The Good Wife" on Thursday isn't as valuable or relevant as someone who watched on Tuesday?
Macy's one-day sales and film releases.
One reason cited for not making a change is retail and movie advertisers' time-sensitive advertising. But hey, even retailers advertise across flights. There's no denying that a spot in the first week of a three-week campaign has value if it's seen four days after it first ran. Media sellers can easily make an exception for obvious one-day sales. Of course, the studios are always going to insist on buying against same-day ratings. But why let the entire media industry be driven by just a minority of the campaigns that run in the market?
$137.8B U.S. ad spend for top 200 advertisers
In truth, the main reason agencies really don't want to have this discussion is because they're already "getting that extra audience for free." Now, I'm not necessarily advocating paying more for the same spots this year (I've got clients too!). But I am suggesting we take steps to put something in place that makes sense looking ahead.
The reason I'm advocating for C7 ratings is because going forward, I believe this has got to be better for the TV industry, and in turn for its advertisers.
Broadcast and cable TV's future isn't going to be about competing for share of broadcast dollars. It's going to be about share of video views.
We're not far away from ad budgets moving seamlessly between web, mobile and linear TV. Why tie TV's future to an outdated currency that doesn't reflect how people are actually watching TV?
A vibrant TV industry is in marketers' interest.
Until brands find a more effective marketing medium with the scale of TV advertising, they've got a vested interest in its health. As more cable networks invest in original programming, audiences increase and so do the ad impressions that are available to buy. This helps to maintain the efficiency of TV as an advertising medium. A shift to C7 ratings improves the economics and the ability of the networks to monetize that investment. That's something we should all want to support.
In the coming months, let's put C7 ratings on the agenda. It's the right thing for today and tomorrow.