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.
Commercial Ratings: A Tutorial

Just what are commercial ratings?
In an ideal world, a commercial rating would be the precise number of viewers who saw a TV spot, whether it ran for one second or 10 seconds or 30 or 60. But Nielsen doesn't provide second-by-second ratings. It provides minute-by-minute data, and that's as close as advertisers have been able to get to a measure of how many people are watching during commercial breaks. Since most commercial spots tend to be 30 seconds long, not a full minute, the ratings don't drill down far enough to let marketers know if their ads indeed were watched. Part of that minute could have been taken up by network promos for shows, public-service announcements or local ads. And that's just one of the problems.
So what's new?
A number of the broadcast networks and media-buying agency Mediaedge:cia have asked Nielsen to provide an "average commercial minute per program." Nielsen said in June it would release the first set of data in November and include information from the start of the new season in September. To arrive at the rating, Nielsen will add up all the breaks in a show and average them out to come up with a single number that could be used as a new trading currency.
Why is everyone so mad about that?
Whoa, weren't you paying attention during the upfront? The first problem is that those average commercial minutes are based on ratings that include digital-video-recorder viewers who play back shows within one week. (For those plugged in, that means the measure is based on -- shriek! -- "live plus seven" ratings.)
Many advertisers feel their ads have no value if they're not seen at the time they were broadcast or within at least a few days of the original broadcast. So the idea that average commercial minutes per program could become currency and be used in the next upfront annoys all those media buyers who said they wouldn't pay for "live plus seven" viewers in this past upfront. And, as we noted above, those average commercial minutes will still include all those local ads and network promos.
So the broadcast networks are willing to use commercial ratings even though everyone's zapping the ads with their DVRs?
Yes, the broadcast networks have said they'd be willing to deal on commercial ratings in the next upfront. ABC sales president Mike Shaw has gone a step further, saying he'll do deals in the scatter market -- ads that are bought and sold in the quarter they appear rather than ahead in the upfront -- based on the new currency as well.
Why would he do that?
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.