Commercial Ratings: A Tutorial

NEW YORK (AdAge.com) -- Feeling lost amid all the talk about commercial ratings? You're not alone. Players on both sides of the table who buy and sell TV spots for a living cannot agree on the best way to determine how many people watch TV ads. One media buyer even told us he'd like to try to explain the complexities of moving from the longstanding program ratings to a commercial rating system but admitted it would probably be too boring. Still, it's an issue that's going to be with us for a while, and we want to help you get your head around it before November, when the new "average commercial minute per program" data from Nielsen Media Research come out and really get everyone confused. So let's start at the beginning. During the past upfront negotiations, ABC lost its battle to get marketers to pay for DVR viewers who watch shows the same day they record them -- "live plus same day" -- or within a week of recording them ("live plus seven"). With commercial ratings, at least the networks get credit for the people who watch commercials in playback. (The TV guys argue that viewers do watch some ads on their DVRs, and even if they fast forward, there's still some brand recognition.)Won't the networks lose money? Uh, no. Do you think they would agree to it if there was even a chance of fewer dollars? The price of TV airtime is always subject to supply and demand. And the networks are in control of the supply. Media buyers buy TV time based on the idea that they are buying a certain number of ratings points within a certain demographic. If buyers are trying to reach women 18-49, they need to be in the shows that deliver the most female eyeballs in that age group for their dollars to work efficiently. Commercial breaks generally rate at least 5% lower than program ratings, so that just takes inventory out of the marketplace. If there's the same demand chasing lower ratings, it could lead to higher pricing.What about the cable guys? They're mad. The Cabletelevision Advertising Bureau has sent Nielsen a list of 19 questions about how commercial ratings will be measured and how they will affect the way cable is bought and sold, which is different from broadcast. Some cable networks are too small to even get program ratings, never mind commercial ratings. Advertisers buy those networks by daypart, not by individual show. So they will pay for flights of ads to appear during, say, daytime or prime time, assuming that enough of the demographics they are trying to reach will accumulate throughout the time period. Cable networks also program very differently than broadcast networks. For instance, will an infomercial be counted as a program or a commercial? How will sponsored programming be considered? What about direct-response shows that have no ad breaks?And the syndicators? The Syndicated Network Television Association says it's staying out of it. But it does note that syndicated shows tend to perform particularly well by any measure because most people watch them live and sit through the ad breaks, largely because the breaks are shorter. Some cable channels fare much worse under commercial ratings because of long breaks and repetitive program promos.Where are the media agencies in all this? As ever, there is no unity. Pulling the train for the average-commercial-minute-per-program measure is Mediaedge:cia, representing major buying block Group M. They want to move this thing forward and get some agreement on average commercial minutes. Chief Investment Officer Rino Scanzoni is confident there's some common ground. Carat is also moving things in the Group M direction. Meanwhile, Steve Sternberg, Magna Global's exec VP-audience analysis, says there are a ton of hurdles that need to be cleared before the industry can even begin to consider a change of currency. Among his conditions? That commercial ratings be accredited the same way program ratings are by the independent Media Ratings Council.What does the American Association of Advertising Agencies think? Well, they've just fired off a letter to Nielsen CEO Susan Whiting outlining some of their issues, not the least of which is the potential "chaos" sure to be wrought by this change if the issues aren't hashed out. They think Nielsen has a duty, beyond being a data provider, to produce data it stands behind and that is thoroughly trustworthy. "Nielsen's assertion that it will release multiple commercial-minute-ratings tapes based on various client requests is quite disturbing," the letter says.What's Nielsen's response? A spokesman last week said: "Meeting with the relevant client constituencies is entirely appropriate. We look forward to constructive proposals on how we can measure commercial minutes."So is there any consensus? Yes. Everyone agrees they should talk. September will see a flurry of activity, with NBC and Mediaedge:cia spearheading an industrywide dialogue involving Nielsen, as will Magna Global's Mr. Sternberg. The Association of National Advertisers will also be meeting in September to get caught up on the issue.Then should we just come back in May to see how it all turns out? You can do that, but if you want to have a say, you'll have to get yourself invited to one of those meetings.

Commercial Ratings: A Tutorial

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