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Upfront debate:
Rethinking TV ratings


More buyers are looking to pay only for ads

Mar 23, 2006

Each year going into the upfront TV ad selling season, buyers and sellers jockey for dominance in negotiations by arguing for whatever market condition or new wrinkle in ratings or audience measurement will give them an upper hand.

This year it's all about redefining rating points, and the argument is over time-shifted versus minute-by-minute ratings.

The networks led by embracing Nielsen Media Research’s new time-shifted ratings for digital video recorders, advancing the argument that advertisers should be paying an additional cost for audiences that record a show but watch it at a later time. Nielsen now provides data on programs recorded on DVRs and viewed up to seven days later, and this new data is raising network ratings.

Media buyers have responded with a big no, as in no way. They say they'll refuse to pay additionally for DVR audiences during upfront negotiations for next year's primetime shows.

For their part, buyers are favoring an entirely different notion, one that's a radical departure: paying only for the audience that actually watches commercials, based on new minute-by-minute ratings, not for those watching the programming airing between.

Nielsen began issuing minute-by-minute ratings in October, and the sense among buyers is that their eventual use will be raised during this upfront's negotiations but won't become a full-scale point of contention until next year.

That's in part because it will take some time to analyze all the new data and to reprogram agencies' computer systems. Too, there are as yet only relatively few subscribers.

When minute-by-minute ratings do become an issue, they stand to cost the networks plenty. Based on agencies’ initial analyses, these ratings are expected to result in commercial audiences that on average are 2 percent to 10 percent lower than program audiences and in some cases perhaps more than 25 percent lower.

Bruce Goerlich, executive vice president and director of strategic resources at ZenithOptimedia, explains succintly the two sides of the debate, time-shifted versus minute-by-minute.

"What the networks are saying is that television is changing and they should be credited for different venues and different times," says Goerlich.

"We want a scaleable metric that matches these changes in television. Minute-by-minute does that because what we’re looking at is people being exposed to our commercials wherever they are."

Tellingly, none of the broadcast networks have yet subscribed to minute-by-minute ratings. The only cable network to subscribe is the Weather Channel.

But several media buying agencies have signed on, and others are lining up to do so.

Starcom MediaVest Group began receiving minute-by-minute data in December for all its agencies, including Starcom, MediaVest, GM Planworks and Tapestry. And ZenithOptimedia and Saatchi signed on two weeks ago, according to Nielsen.

Lower ratings aren’t likely to be the networks’ only headache with minute-by-minute ratings.

Some agencies are expected to also negotiate prices based on where a commercial falls within a program, or within a commercial break. This is already done, but with the new data it will become dramatically fine-tuned.

John Spiropoulos, vice president and group research director at MediaVest, found in an initial analysis that viewers watch some commercial breaks far more than others.

"What we have learned, taking the Opening Ceremonies in the Olympics as an example, is that we can see where viewers are interested in the content of the program," he says. "What we saw is that people wanted to see the U.S. team enter the stadium. [For] the commercial that preceded that, there was limited tune out. After the U.S. team entered, [NBC] went back to commercials and viewing dropped off."

This type of finding will certainly be raised during upfront negotiations.

And they will take place, says Liz Janneman, senior vice president of cable advertising sales at the Weather Channel.

"At the end of the day an advertiser wants to make sure their commercials are being seen and then remembered," she says. "This data is now holding the community to a higher level of accountability. I think it’s the currency of the future."



Kevin Downey is a staff writer for Media Life.




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