NEW YORK Six months earlier than usual, posturing between the networks and media buyers for the 2006 TV ad sales upfront market has begun. The early back and forth was triggered by the ongoing debate over DVR playback viewing, which Nielsen Media Research will begin tracking as part of daily ratings reports next month.
In an unprecedented move, research officials from all six major TV networks got together to host a press conference in New York last week, during which they downplayed the effects of commercial skipping during DVR playback. NBC research and media development president Alan Wurtzel said Nielsen's DVR ratings "usher in a new era of measurement," and that the debate about the impact of the DVR on commercial effectiveness "has been kind of uninformed."
The networks consider the playback ratings important enough to join forces to preemptively address an issue that could affect pricing during the cut-throat upfront. Though the stakes aren't that high this year, the new ratings could eventually affect billions of dollars as DVR viewing mushrooms in coming years, sources said.
Because of antitrust laws, the networks were forbidden to talk specifically about pricing and even required clearance from their legal departments to hold the press conference.
Two weeks ago, a number of big agencies cast doubt on the value of playback recording, citing concerns about consumers skipping commercials and the time- sensitive nature of their ad strategies.
Then last week, the networks fired back, saying that many of those opinions were based on faulty data from analysts and market researchers who predicted that DVR would spell the end of mass marketing. The bottom line of the networks' position: Early "real world" research shows less DVR recording than predicted, and both viewing and commercial exposure will increase as DVRs become more widespread.
David Poltrack, evp, planning and research, CBS, blamed Wall Street analysts in general and researchers such as The Yankee Group and Forrester Research for issuing what he believes are misleading predictions. He said such forecasts were at least partly the cause for the well-publicized cutbacks in TV spending by top marketers.
"We don't like to say that advertisers are wrong, but we think they've been getting a lot of wrong advice," said Poltrack. "They've counted on intelligence that says DVR's are going to drive people away from their commercials." But, he added, new data from Arbitron and Nielsen "confirms that is wrong and when they see this kind of evidence, we think they will change their minds."
Forrester media analyst Josh Bernoff countered that the firm has never predicted DVRs would doom mass marketing, but stood by predictions that DVR's would "significantly decrease" network revenues. The Yankee Group didn't return calls for comment.
Interpublic Group's Magna Global drew a line in the sand two weeks ago stating that the holding company's buying arm would negotiate ad deals on the basis of "live" viewing only and would not consider or pay for DVR playback viewing as part of 2006 upfront negotiations. Magna last week said it stood by its earlier statement.
Wurtzel argued that there is some value to playback viewing. "It just doesn't go down to zero," he said, pointing to data from Arbitron's test of its Portable People Meter in Houston earlier this year that shows actual DVR recording levels to be around 9 percent of all viewing—a lot lower than earlier surveys, in which respondents claimed to record 40 percent or more of their viewing.
Poltrack said Nielsen tracking has shown that prime-time programs increase their audience by an average of 4 percent when seven-day DVR playback is counted.
Recent proprietary network research shows the impact on commercial recall "has no measurable impact," said Wurtzel. One recent recall study comparing DVR users to non-users showed the recall of the DVR users to be only 12 percent less than that of the non-users, he said.
Most agencies are still studying the matter. There may not be a single answer, said Jack Klues, chairman of Publicis Groupe Media. Whether there's value in DVR viewing will likely be determined after further research and on the basis of individual client needs and strategies, he said. "I disagree with those who say there is no value."