New Study Clouds Future Of Commercial Ratings

For years, advertisers have pressed Nielsen Media Research to devise a ratings system that measures audiences for commercials as well as programs. Nielsen says it is working to that end, but a new study casts doubt on the feasibility of using commercial ratings as “currency” to buy and sell ads.

Advertisers have long complained that program ratings are not an accurate reflection of how many viewers watch the commercials they buy. Remote controls, VCRs and, more recently, DVRs allow viewers to avoid TV ads. But it has always been unclear exactly how many viewers change the channel during commercial breaks. The solution, ad buyers have argued, is to have a ratings system that measures audiences for commercials. But to work, it would have to measure viewing in 30- and even 15-second increments, something Nielsen (which is owned by Adweek parent VNU) currently does not do as part of its regular ratings service.

But Nielsen was able to produce, on a one-time-only basis, data that detailed audience levels for 30-second ads—for a study released this month by the American Association of Advertising Agencies and the Association of National Advertisers. The data analyzed the drops (and in a few cases, the rises) in viewing levels during commercial breaks for close to 16,000 network, cable and syndicated TV programs in the spring and fall of 2004. Researchers familiar with the findings say the study raises, for the first time, questions about just how useful commercial ratings would be for predicting audience size and, therefore, pricing ads. In fact, some agency executives who reviewed the study conclude that viewing patterns during commercial breaks are so erratic that commercial ratings cannot be used as a basis on which to buy and sell ads.

“The study’s most significant analysis was basically that commercial ratings are not a predictable measure,” said Susan Nathan, svp and director of media research at Interpublic Group’s Universal McCann, and one of a handful of senior industry research executives on the 4A’s/ANA task force who sponsored the study. “If you take that a step further, if they can’t be used to forecast, then using them in a negotiation is very questionable,” Nathan said. “And if you think about why people switch away from commercials from time to time, it’s probably a random occurrence.”

Steve Sternberg, evp and director of audience analysis at IPG’s Magna Global USA, agreed. “The differences [in audience falloff] by program, genre and network make the data not projectable,” said Sternberg, also a member of the task force. “If you’re going to use data as a yardstick on which to buy and sell, it needs to be projectable. So, while it would be good to have as an analytic tool, it’s nowhere close to being currency.”

The study did provide some positive news about the differences in viewing levels of TV programs and commercials: The falloff, on average, is only 5 percent, far less than some previous projections. But there are some huge drops for commercials depending on genre, daypart and medium. For some telecasts, the audience falloff is greater than 50 percent. In a few cases, the commercials had bigger audiences than the programs they were placed in.

Fran Kennish, director of strategic planning at WPP Group’s Mediaedge:cia and chairman of the 4A’s media research committee, and others believe that commercial ratings are useful, if only to better understand viewing dynamics. “Understanding those variations, and how audiences hold up against different genres and viewing sources, is very critical,” she said.

But advertisers acknowledge that the study raises serious doubts about the feasibility of an ad marketplace based on commercial ratings. “It’s one thing to have it available; it’s another thing to go to currency with them,” said a senior marketing executive at one Fortune 500 company who is on the ANA’s TV advertising committee. There is a lot more fervor for commercial ratings than knowledge about how to use them, the executive said. “No one knows how to trade on that basis.”

Another advertiser recalled sitting in a recent meeting about commercial ratings with ABC’s president of ad sales, Mike Shaw. “He said he would take the commercials with the highest ratings and put them in the better pod positions and charge the lower-rated spots higher prices because they aren’t helping to boost ratings on the network,” the executive said. “So it’s a double-edge sword.” Shaw declined to be interviewed for this story.

Media sellers have never supported the idea of commercial ratings, contending that the current system of program ratings is a fairly accurate predictor of commercial audience size and that it has built-in protection for advertisers in the form of ratings guarantees.

The commercial ratings debate also raises the issue of whose job it is to ensure that program audiences stick around for the commercials, said Tim Brooks, evp of research at Lifetime Television. “If the network delivers an audience to the doorstep and your spot drives them away, is that the media’s fault?” he said.

Brooks also argues that advertisers seem more interested these days in ROI tools that can provide answers about how audiences respond to commercials, and are less concerned about shifting from program to commercial ratings.

Nielsen declined to comment on the use of commercial ratings as aide to buying and selling ads. The study did prompt Nielsen to figure out how to pry 30-second data from its database—something it had never done, according to Kevin Svenningsen, Nielsen’s svp of sales and marketing, who coordinated the data collection for the 4A’s/ANA project. Going forward, he said, Nielsen can provide such data on a special-request basis for an additional fee.

As to providing such data as part of Nielsen’s regular ratings service, Svenningsen said it is not on the near-term agenda. Added Kennish of Mediaedge:cia, “Eventually it will happen. Hopefully in my lifetime.”