Nielsen will soon be able to report how many viewers are watching TV shows on a time-shifted basis. Sounds like a good thing, but the problem is the networks will likely want to find a way to charge something for those viewers, while advertisers consider these viewers to be ad-skippers of little value to them.
Nielsen Media Research on Dec. 26 will begin providing agencies with data on how many people watch TV shows via their digital video recorders. Agencies, which negotiate pricing based on historical viewing patterns, fear the new data means they will suddenly be forced to commit to buying airtime through to the first quarter of 2007, on the basis of a single quarter of Nielsen's new "playback" data.
For media agencies, the fundamental issue is whether audience-delivery guarantees will be based on people who watch a given show in real time; the "live" viewers, or those who watch it "same day" (up to 3 a.m. the next day); or "live plus" (within a week of the initial broadcast).
"There is going to be a big debate about this and we will want to create a policy. I'm leaning toward basing my buying on live data," said Geoff Robison, senior VP-national TV, Palisades Media Group, Los Angeles, who buys for the newly launched movie group Weinstein Co. Mr. Robison said the debate would most likely turn into a battle between both sides over establishing a new currency. "Come January, this will be a hot topic. I'd like to see the networks state their position on this," he said.
Most agencies and marketers believe their ads are most likely skipped by time-shifting viewers and want to negotiate as they have been doing on "live" viewing. For retailers with limited price promotions or movie studios with weekend releases, viewers watching ads in real time are critical. They will be hit hardest by widening popularity of time-shifted viewing.
For Omnicom Group's GSD&M, Austin, Texas, which represents major advertisers such as Wal-Mart, DreamWorks and Mastercard, the time to talk is now, not next May. GSD&M recently wrote to media sellers saying it would base guaranteed audiences on the "live" figure ,not the "live-plus" figure. So far, it's had little response from broadcast networks and cable companies.
"We are anxious to see what the data shows. We want to track `live' and `same day' and `live plus,' to see if there is a major fluctuation. It won't affect the numbers now but if DVR penetration reaches 40% by 2010 it will," Chris Allen, GSD&M VP-associate director of national broadcast, said. "Our thing is, let's err on the conservative side here. Successful advertisers are paying the freight for people who are not sticking around to watch the ads already. They shouldn't also be paying for others who skip them."
Agencies' own planning departments are also scratching their heads about the rapidly expanding world of time-shifted viewing and are grappling with exactly how planning departments, which spend millions of dollars trying to predict the optimum moment to target specific demographic groups, will adjust.
Little to say
As yet, the broadcast networks have little to say on the matter, but it's fair to say they have already lost out on viewers who might play back shows the next day or a week later. The broadcast networks would argue that DVRs have increased TV viewing of top shows and that interesting or relevant ad creative is not ignored. Furthermore, advertisers negotiating product-placement deals will soon be able to see how many more people watched the programming in playback-not the commercials-and might have to dig deeper for those additional viewers.
According to an executive familiar with discussions, ABC's position is that it wants to negotiate pricing based on live plus, while NBC has said it will come back within the next few weeks with a formal response. Other networks have not stated their positions on the matter.
Steve McGowan, Nielsen's senior VP-client research initiatives, however, characterized their likely take. "The broadcast networks would prefer to base their guarantees based on `live-plus-seven days'... that is what they'll want to cash in on. It is going to be a logistical challenge to manage all three sets of data," he added, when asked whether a tiered approach to pricing might work. He points out that cable news and sports channels providing the biggest numbers of "live" viewers are already attempting to capitalize on the debate over DVR playback audiences.