No-guesswork ratings: U.K. media buyers pay per viewer

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While debate over commercial ratings rages in the U.S., (see Upfront Panel, P. S-2), U.K. buyers are enjoying a system that takes the guesswork out and ensures advertisers only pay for viewers they reach.

Marketers in the U.K. know how many people see a spot because the Broadcasters' Audience Research Board, an independent body of major British broadcasters, monitors viewing figures for every 30 seconds of airtime via a panel of 5,000 households.

Ian Lomas, head of trading at Omnicom Group's OMD Europe, said, "In the U.K., we have total accountability and complete transparency, something that every client wants."

The U.K. system, in place for about five years, offers a glimpse of the granular data on commercial viewership that many U.S. advertisers clamor for. VNU's Nielsen Media Research, the dominant U.S. ratings supplier, has sold minute-by-minute data since 1999 and greatly expanded its offering last year, but agencies have balked at the price.

The U.K. system shows enormous variation in viewing figures across a single commercial break. Take a recent break leading into a popular soap "Coronation Street." The first spot (for Toshiba) had a rating of 7.8 (or 7.8% of the show's target audience) while the final spot before the show (for Procter & Gamble Co.) had a 9.3 rating. That's a difference of nearly 20% in the number of viewers between the start and end of the break.

The mid-show break (there is only one for a half-hour show) saw much less fluctuation. The first of seven spots had a 10.4 rating; the last had a 10.1. The first ad at the end of the show had only a 3.5 rating.

U.K. TV stations can only sell a certain number of advertising minutes per hour, and, as public companies, they also publish their advertising revenues.

From these two figures, agencies calculate the station average price (SAP) for a 30-second slot. That's used as the benchmark for negotiations. A big media buyer can command up to 30% off the SAP.

The accuracy of audience measurement means advertisers pay a cost per thousand viewers reached, rather than per spot. If the slot under or over delivers, adjustments are made to the schedule so that a commercial may be aired more or fewer times to reach the promised number of viewers.

Advertisers get quick access to the data. "Now that we can measure overnight figures, you get clients calling up the next day and asking how many ratings they got last night," Mr. Lomas said. "We are 10 to 15 years ahead of any other country."

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