Execs at three of the big networks believe next year's upfront will be negotiated with commercial ratings, and Mike Shaw, president-sales and marketing at ABC, which raked in the biggest upfront ad haul this year, thinks it could happen even sooner, in the scatter market, well ahead of next year's marketplace. "Commercial ratings are going to be the new big thing," he said. "It has huge implications for the TV industry, based on return on investment and return on equity."
Pressured by online ad models, and forced this upfront to forgo payment for viewers watching shows in playback via DVRs, broadcast networks are marching toward more consumer-focused metrics. The alternative is to risk losing millions of ad dollars as the DVR universe expands and "live" ratings shrink.
Come November, Nielsen Media Research will begin delivering average commercial ratings per program with measurements backdated to the start of the season. The figures will be in a format buyers can crunch much more simply than the minute-by-minute data available through Nielsen systems.
"Agencies and clients have charged us with proving that people who are recording commercials watch them, and that, in fact, is what this would do," said Fox President-Sales Jon Nesvig. "There has to be some form of currency that makes sense for both sides, and so I would think that commercial viewing over a reasonable time frame would be what our customers want."
NBC is a bit more cautious than Mr. Shaw in its timetable. "We will be very interested in pulling together a meeting after the summer, after the data comes out," said the Peacock network's research president, Alan Wurtzel. "Hopefully the industry can come to an agreement in the winter and then that will be the currency."
Ad break average
While the change is radical, marketers still won't be paying for viewers of their own commercials. Rather, they'll pay for an average calculated on the basis of every ad break, or pod, that runs during a specific show. Still, it is the best way to move forward without buyers having to spend big to retool their current data-crunching systems. It also guards against the prospect of networks being penalized for bad or unpopular creative.
The metric is one that media-agency conglomerate GroupM supports. Group M's Mediaedge:cia Chief Investment Officer Rino Scanzoni and Senior VP-Director of National Research Lyle Schwartz have been encouraging talks between the buyers and sellers.
"Our feeling is the average commercial program rating is the optimal way to go," said Mr. Schwartz. "One of the reasons we chose the method we did is that it would work well with existing planning and buying systems and wouldn't delay implementation."
Want separate rating for each break
MediaVest welcomes commercial ratings but wants to see a more granular level of data. It's pressing Nielsen to offer average commercial ratings for each ad break instead. Jim Kite, exec VP-director of research insight and accountability at the agency said: "We buy for our clients the bits between the programs. The commercial ratings are not averages. ... We want a separate rating for each break."
Not everyone, however, is a believer. "Nielsen is not able to measure commercial ratings," said Steve Sternberg, exec VP-director of audience analysis at Magna Global. "The proposed 'average commercial minute rating' is really an average of minutes that contain national commercials and program time [or promos]."
Yet Gary Carr, senior-VP director broadcast with TargetCast TCM, said: "It is not measuring the average commercial in a show. It is a start, it's something, but it's still not exact. You are still paying for an average."
Switch to cause disruptions
It's anticipated that the networks could lose out in the switch, since broadcast networks generally see commercial pod ratings drop by around 5% against the program rating. "The commercial audience will decline," said CBS Exec VP-Research David Poltrack. "The tradeoff is we'll get credit for them."
"It is like the move from paper diaries to people meters. It does disrupt for a short time, but you adapt, you move on and you're better for it," Mr. Wurtzel said.