The threat of a prolonged strike wasn't the only issue bottlenecking the TV industry last week. Confusion pervaded another central concern: The conversion to include commercial viewing in television ratings.
Several weeks of numbers are now being reported for the season. With ratings for cable finally available, executives at networks and media buying agencies are reading and spinning figures to determine who's faring best using the new metric.
The heart of the issue is how to interpret the C3 ratings.
For the first time networks and advertisers agreed to guarantee sold advertising based on average commercial-minute ratings plus three days of DVR playback.
But with no industry standard on the best way to read the figures, there's wiggle room for interpretation.
“Anybody can spin the data to make themselves look good,” says Shari Anne Brill, senior VP, director of programming for media buying agency Carat. “We have headaches over here from this—permanent ones.”
With fewer variables, broadcast numbers are easier to grasp: Most networks dip slightly when including commercial-viewing on DVR playback. Cable numbers present different challenges.
NBC Universal's Sci Fi tops the list of networks retaining viewers through commercials on DVR playback when looking at the 25-54 demo with a retention rate of more than 100%. That means, surprisingly, that more of its viewers watched commercials on their DVR than viewers who watched the program live. But looking strictly at household data, independent Hallmark Channel is the most viewed cable network (see adjacent chart).
“In the past, we've compared program ratings, but now you have [many others options],” says Sam Armando, senior VP, director of video research for media buying agency Starcom.
One such option is to compare the C3 number with the metric used last year—simple live viewing of a program. But with smaller audiences overall and programming that varies widely from network to network, cable's performance is harder to gauge. Sci Fi's Stargate Atlantis and Flash Gordon each rank in the top-five programs for commercial-viewing on DVR in the 25-54 demo. That's a point of validation for a network that has long believed DVR-less ratings didn't accurately reflect the size of the young, tech-savvy audiences devoted to its shows.
“Finally we can monetize a very loyal audience that has been excluded until now,” says Sci Fi Executive VP/General Manager Dave Howe.
Hallmark Channel, on the other hand, has an older audience that's less likely to use DVRs. When looking at overall household viewing, the network posts the highest audience retention rate using C3, with 97%. Still, says Hallmark ad sales Executive VP Bill Abbott, “We haven't had a definitive conclusion drawn on how C3 has affected the marketplace.”
Not all cable networks can boast such numbers. Among them: cable news networks and those with young-skewing reality fare, like the MTV networks and E!, retain fewer viewers.
With these numbers finally in, the ability to judge networks' ability to retain viewers through commercial breaks adds new pressures. The onus will be on networks to create new ad opportunities more creative than the standard 30-second spot to better hold viewer attention.
Discovery Communications, whose Animal Planet has performed better on the new metric than some of its corporate siblings, like TLC, has tasked each network general manager with examining minute-by-minute commercial-viewing data and devising creative ad options to keep viewing where it falls off, says ad sales president Joe Abruzzese.
Those ideas, however, are a double-edged sword as Nielsen's system is not fully trained to recognize anything other than a 30-second spot as an ad.
No doubt, a great deal of trial and error will occur as the industry winds its way to a more consistent metric scale.
“We're not going to consider this four weeks of data the holy grail,” cautions Starcom's Armando. “It's a start. We have a long way to go before we can draw steadfast conclusions.”