CBS could sell "leftover" audiences -- those who are older than 55 and assigned no value by advertisers -- to a second party by altering what ads a viewer might see through digital distribution, he said. His remarks were part of an all-day presentation yesterday given by the CW, a new network formed by the merger of CBS' UPN and Time Warner's WB.
Alter what the viewer sees
Mr. Poltrack said while the deals were not in place, the technology was there and all it would take is for distribution partners to get together and hammer out an agreement. "As more and more viewers watch television through two-way distributions systems, such as digital cable and the internet, we have the ability to identify who is viewing while they are viewing. We can then, in collaboration with distributors, alter what the viewer sees."
Mr. Poltrack explained that most advertisers assign no value to people viewing content out of home (such as in a bar) or who are older than the sought-after 25-54 demographic. CBS wants to get credit for those types of viewers, and addressable advertising might be one way to do it. Mr. Poltrack even suggested that viewers who didn't want to see ads at all might be charged a premium rate for an "ad-free" version of a program.
His remarks point to a much broader conversation about how to change advertising the broadcast networks are having with the cable systems operators. CBS currently works with Comcast to offer its programming through video on demand.
The idea formed part of Mr. Poltrack's presentation on commercial ratings, and, not surprisingly, he articulated some bad news for cable on that front. "Commercial ratings for cable networks are lower relative to program ratings than those for broadcast networks," he said. "The average broadcast network's commercial ratings are about 95% of a program's ratings ... [F]or cable advertising, that's over 10% for key demographics."
Daytime, evening news and sports programming are the dayparts that show very little variation between the program and the commercial break. That's something Mr. Poltrack said surprised him. He also said CBS is experimenting with the makeup of its commercial breaks to see what configuration kept viewership at its highest. So far, he said CBS hadn't found anything that worked as a well as what it has on air currently.
Mr. Poltrack also noted that next year the addition of college dorms to the Nielsen ratings would bring about positive news for CW, which targets a younger audience with shows such as "America's Next Top Model" and "Everybody Hates Chris." The CW's main rivals include youth-skewing cable networks.