Television advertisers have long wanted to know how many people actually watch their commercials, but until now ads have been sold based on the average viewership of a whole program.
That could be on the verge of changing, however, now that Nielsen Media Research is preparing to offer data for the first time on how many people are tuned in during the commercial breaks.
Jack Loftus, a spokesman for Nielsen, a unit of the privately held company VNU, says the major networks asked the research company several months ago to provide the new data, and Nielsen plans to begin doing so this fall on a test basis.
However, much negotiation remains to be done among advertisers and the networks over how the data will be used and in what form, Loftus said, adding that the earliest it could be adopted as an arbiter of value would be the advance ad-selling season for the fall 2007 season, called the “upfront.”
“Obviously this is going to have a huge impact on next year’s upfront,” Loftus said, “but we don’t know what.”
The change came about as networks and advertisers tussled this year over whether to count shows that are played back on digital video recorders, or DVRs, as part of the viewership that advertisers get charged for.
Walt Disney Co.’s ABC network pressed particularly hard for those viewers to be counted, but yielded in the end after advertisers resisted.
The new data showing the viewership of commercials will also include those played back on a DVR device within seven days, something that is likely to favor highly rated shows that are more likely to be viewed on recorded playback such as “American Idol.”
Network executives say the inclusion of played back viewership in the commercial ratings should render moot any concerns that advertisers may have over ad-skipping.
But Alan Wurtzel, the president of research for General Electric Co.’s NBC Universal, says the next challenge is getting all parties to agree on how to actually use the data. “We understand what Nielsen’s trying to do, but there are many specific details that need to be ironed out,” Wurtzel said.
Advertisers had resisted paying for viewership that was played back, partly because they’re concerned that many people are skipping through the ads, and also because Nielsen’s sample included fewer households with DVRs than the national average.
Nielsen spokesman Gary Holmes said Nielsen’s sample is now about 7 percent made up of homes that have DVRs, versus the national average of about 12 percent. Holmes says Nielsen expects its sample to catch up to the national average of DVR penetration by the end of the year.
Networks have long acknowledged that viewership dips during commercials. David Poltrack, the head of research for the CBS network, says that studies have found commercials consistently rate about 5 percent lower than regular programming.
What networks are eager to show, Poltrack says, is that not everyone actually skips through the ads when shows are being played back on a DVR, say if the remote is out of reach or the viewer is walking around the room or doesn’t feel like skipping through the ads.
Poltrack says research suggests that somewhere between 40 percent and 50 percent of audiences do watch commercials on playback. Nielsen’s Holmes said the company wasn’t releasing any data on commercial viewership yet.
This could favor big shows like CBS’s “CSI,” Poltrack says, which go up against other popular shows like “Grey’s Anatomy,” which CSI viewers couldn’t otherwise see since they’re scheduled in the same time slot. “We know that a lot of people are going to watch one live and record the other one and watch it later,” Poltrack says.
For advertisers, the new data represent a welcome means to measure the effectiveness of their ads, but also more work in figuring out how to agree on ways to value a new audience measure.
Advertisers are increasingly asking for clearer breakdowns of how many people see and act on ads, especially now that Internet advertising can provide great detail on how many people made a purchase after seeing and clicking through an ad online.
“This is a step in the right direction,” said Brad Adgate, director of research for Horizon Media Inc., an advertising buying and planning agency. “This is one of the important things that buyers want.”
Adgate added, however, that the data won’t be a perfect solution — not every single ad will be rated, just the average ratings for all ads in a given time period will be measured.
Jack Klues, chairman of Publicis Groupe Media, called the step long overdue, noting that advertising is sold in most other countries on the basis of ratings for commercials themselves, not the shows in which they appear. Klues’s group oversees the global ad-buying activities of Publicis Groupe SA, a Paris-based advertising conglomerate.