NEW YORK (AdAge.com) -- When marketers, ad buyers, TV networks and Nielsen lurched toward a mid-2007 agreement that allowed payment for TV ads to be based on the number of people who watched them -- not on the viewership of the shows they interrupted -- it was seen as a landmark. Less than two years later, marketers are already pressing for an even-more granular measurement: how many watched their ads.
Current commercial ratings -- known as C3 because they measure three days' worth of viewing -- hinge on figuring out how many viewers didn't skip past an "average commercial minute" in a particular program. Marketers would rather payment be based on the viewership of each commercial. The amount Nike paid would depend on the number of people who watched its latest iteration of "Just Do It," while the amount of cash McDonald's would fork over would be based on how many actually saw one of its burgers in a TV spot in real time.
What's wrong with the current data? At a time when the web is revealing so much specific information about the relationship of consumers and their reactions to ads, marketers feel TV ought to do the same.
"There is so much more data available now" about whether the first commercial in an ad break is better than the second, third or fourth, said Ed Gold, advertising director for State Farm Insurance. "The technology is there. As marketers who are under more and more scrutiny" concerning "what our plans truly deliver, actual commercial ratings for my specific ad in a specific pod position will give me an even truer idea of the value for the price paid. This is where we need to get to."
For every push, however, there is a pushback. Even as marketers say they are clamoring for more TV-ratings precision, Nielsen isn't certain they are willing to pay for it. While anyone can poke around in Nielsen's data and cobble together a better picture of specific commercial viewership, standardizing the process would require investment in technology that allows Nielsen to encode each ad so it can be tracked.
Paying for research
"We're open to discussing that with the industry, to see whether there's a demand for doing that, but at this point, the marketplace seems to prefer the average commercial minute," said Nielsen spokesman Gary Holmes. Encoding "would require a lot of work, and it would also require some kind of cost-benefit analysis to see whether the benefits would outweigh the investment."
In other words, Nielsen has been down this road before. Tight-fisted advertisers trying to muddle though a difficult economy have already pulled back on media spending, so how willing will they be this year to spend money on the research that helps justify that spending? Marketers pay a lot of lip service to the ideal of linking every dollar they spend to sales boosts, lead generation and market-share increases. But many of Nielsen's recent efforts to create a market in this area have floundered.
Project Apollo, an effort by Nielsen and Arbitron to use a portable electronic device to track consumers' exposure to commercials and media and subsequent purchase behavior, had backing from major marketers such as Procter & Gamble. It was scrapped in February 2008. The companies cited an inability to secure sufficient commitments from clients. More recently, Nielsen said it was suspending an effort known as Prism that was designed to help clients track the effectiveness of in-store promotional efforts. Walmart Stores had ended its support of the initiative in December 2008.
Interest in getting more-precise TV ratings isn't on the wane, said Bob Liodice, president-CEO of the Association of National Advertisers, which revived the commercial-ratings debate at a recent industry conference. Current commercial ratings represent "an appropriate interim step," he said, but "the industry is going to get there with or without Nielsen."
The next ratings milestone is likely to come from a nontraditional source, suggested network executives and media buyers. Without a central source of data like Nielsen, each marketer will be left to cobble together its own measures with specific media outlets.
David Poltrack, chief research officer at CBS Corp., envisions a time when advertisers make use of brand recall data as well as information that attempts to link consumer purchase information to TV commercials. But distilling the information will be up to the advertiser, not based on a widely-accepted system. "The issue is, 'Will it ever become currency?' and that is where I don't think it's going to happen," he said. Instead, "the negotiating process is going to become a lot more complex. There's going to be a lot more creativity in placing the ads and in combining ads that are relevant to the same people to effectively increase the audience that stays through the commercial."
Nielsen owns Nielsen IAG, a company that measures consumer response to and recall of ads and product placements, which could play a greater role as this sort of data becomes more essential to judging the success of commercials. Media buyers also point to the emerging availability of data from set-top boxes that shed light on viewer behavior from one second to the next.
"There's more nuance to be gotten from these other methodologies, and we should be looking at them rather than trying to get something out of the ratings that we can't get anymore," said one media-buying executive.