C3: Metric for the Market

April 7, 2008

GroupM's Rino Scanzoni, is widely credited with having driven the need for commercial measurement as an issue. Since GroupM represents Mindshare, Mediaedge: cia and Mediacom agencies, he carries a considerable stick. Currently, C3 ratings measure commercial viewing only on broadcast networks; however, according to Scanzoni, it was unhappiness with cable that helped create this new metric.

            "We pushed C3 because of cable," Scanzoni begins. "We spoke to many, many cable networks, trying to get them to worry about their commercial retention rate, which was not very good." Scanzoni cites cable networks having extremely long pods, some filled with five minutes of advertising and messages. Also, many cable nets used the first 15-second spot in that pod to hype their own programming. Those promos got repeated relentlessly, he adds, and consumers got wise.

            "The A-position on cable got killed," he says, "because people knew it was usually a promo they'd seen before, and it became a 'green light' to surf elsewhere."

            Some specifics: C3, measured by Nielsen (parent company of AdweekMedia), looks at the live viewing of network commercials run during and between programs plus factors in these same commercials as viewed (or not) by Nielsen HH's taping them on their DVRs three days later. Hence, C3.

            Scanzoni offers data that shows most commercials on broadcast have a 96 percent viewing audience retention, with cable getting close to 92 percent. "On some cable networks, however, that level dropped to only 15 or 20 percent," Scanzoni says. "That's huge, huge."

            While advertisers like the targeted content of most cable networks, they are paying for viewership during commercial breaks, not for live, scripted or reality programming. "Creating commercial ratings has changed things significantly," Scanzoni continues. "Now, cable and others have an incentive to create shorter commercial time. Plus, cable DVR viewership is excellent. Some shows like Battlestar Gallactica have huge DVR followings."

            Kris Magel, senior vp/director of national broadcast, Initiative, agrees. "The focus on commercial delivery certainly has changed the way people think about how commercials are viewed, and it's inspiring ways to drive more attention to commercials, through pod-busters, in-break vignettes, etc.," he says. "Networks and agencies alike are simply interested in finding more ways to engage the audience, and that just wasn't the case before."

            "The C3 scenario has tightened up the market," adds Carat Digital executive vp Mitch Oscar. "Everybody's lost rating points. However, we are only measuring the total pod. If we were measuring individual commercials, then I'd say yes, there'll be some real impact."

            Oscar also notes that recent studies show TV viewers (whether live or on DVR) aren't skipping everything. "People are catching frames," he notes, "and if the frame is relevant, they will stay and watch the commercial. It's a lot of work to skip commercials."

            Nevertheless, Oscar sees a lot of information coming out of commercial tracking that will give advertisers a better sense of viewer behavior. Oscar looks forward to some other metrics now being devised by companies such as TNS, with its Take Away study being done with 300,000 Comcast homes. Google is using set-top data from 13 million EchoStar households, and cable MSOs have their own CANOE project to devise a joint metric for their own set-top data vaults. Invidi and Navic are also working with cable (Comcast in Baltimore with Invidi) and creating a history of viewer programming interests (Navic).

            "Commercial ratings are a boon for cable," says Suzanne Daniels, president, Lifetime Entertainment Networks. "Our C3 numbers are really strong. We've noted in certain demographics, especially women 18-34 and women 18-49, we are very, very strong."

            Some nets are even touting their C3 "reports" as part of their upfront pitch, like Hallmark calling itself the "Leader in the C3 Metric, Ranking #1 in Prime." Hallmark bases that statement on Nielsen NPower, 4Q '07 data showing Hallmark indexing at 96.5 (viewer retention), with Nick @ Nite and Sci Fi/HGTV filling out the top three.

            Other cable sales executives, such as Joe Abruzzese, Discovery Networks president of sales, note a downside. "C3 has helped our industry by providing more accurate data," he begins, but adds, "Since our drop is in the 7-10 percent range and broadcast networks only drop off 3-4 percent, we are competitively hurt."

            "We've all learned from it," adds Steve Mandala, executive vp/cable entertainment sales & marketing, NBC Universal. "It's a sales metric designed by agencies and clients that has forced us to retain our viewers during commercial breaks. It¹s made us better and smarter."

The Perfect Storm continued:
The Perfect Storm Part I
The Perfect Storm Part II
The Perfect Storm Part III
The Perfect Storm Part IV
C3: Metric for the Market