The Clamor for Commercial Ratings

NEW YORK Back in April, MTV media shop MindShare and its client Unilever co-produced a microseries starring Alicia Keys designed to support the launch of a new Dove body-wash product called Go Fresh. The series, which aired in commercial pods during episodes of MTV’s hit series, The Hills, did something that traditional commercials on MTV (and many other cable channels for that matter) rarely did in the past: It retained between 93 percent and 100 percent of its program audience.

By contrast, before the start of last season, MTV was one of the poorer performing networks when it came to holding audiences through commercial breaks with an average retention rate of just 85 percent from 10 p.m. to 11 p.m., the time slot where many of its marquee programs air.

But with the switch to commercial ratings last year, MTV knew it had to do better or face defections and lost revenue from advertisers looking for better audience delivery to their ads.

In order to tackle the problem the network formed a task force, comprised of staffers across every key department, including research, programming, ad sales and traffic. With guidance from the task force, the network tested and created dozens of nontraditional ad techniques like the Dove microseries, and tinkered with both the number and lengths of commercial pods throughout the its schedule.

The result, according to Sean Moran, MTV’s evp of ad sales, was a spike in audience retention rates for ads across the network, which climbed from 88 percent two years ago to 93 percent currently. Even better results were achieved during the 10 p.m.-11 p.m. time period, where the average retention rate climbed 10 percentage points to 95 percent, which is in line with broadcast network prime time. Over time, said Moran, “we think we can get the entire network to 95 percent.”

MTV’s effort reflects what buyers and sellers alike say is perhaps the most important change to occur as a result of the switch to the commercial ratings system known as C3 — an industry-wide focus on developing alternative ad formats that will entice more viewers to sit through commercials without changing channels.

“The idea that we are working with advertisers and agencies to maximize commercial audience retention is a major step forward,” said David Poltrack, chief research officer at CBS.

“There’s more work to be done, but no doubt there has been improvement,” said Rino Scanzoni, chief investment officer, WPP’s GroupM, which oversees media agencies Mediadge:cia, MindShare and MediaCom. He said that overall, cable has boosted its audience retention rate for commercials from 91-93 percent. “The biggest problem was that before C3 there really wasn’t an economic incentive to change behavior,” Scanzoni said.

And the focus isn’t just on prime time. During the past season CBS, at the urging of agencies and clients, moved the first commercial break in Late Show With David Letterman into the first 15 minutes of the broadcast after years of delaying it to close to midnight.

Why the delay? Because late at night the first break “is a signal to viewers to turn the set off and go to bed,” said Poltrack. For advertisers, the problem was audiences tend to fall off sharply between 11:30 p.m. and midnight, so the delay cost them viewers. By moving up the break into the first quarter hour of the show, the audience for the ads climbed approximately 10 percent compared to two years ago, Poltrack said.

Like MTV, other networks created new departments to focus, for the first time, on maximizing audiences for commercials, including NBC, which created a West Coast-based unit to address the issue.

Not every new technique has worked as planned. One early NBC trial involved posing trivia questions leading out of the comedy Scrubs. Viewers had to watch the commercial pod in order to learn the answer.

Retention levels weren’t raised, the network discovered. But a MasterCard spot in the mystery drama series Life, which offered new clues related to the content in the program, had a positive effect on DVR viewing: 25 percent of those watching in playback mode stopped skipping through ads to watch the MasterCard commercial, according to the network’s research.

At E! Entertainment, audience levels for commercials normally fell 15 percent compared to program content, said Suzanne Kolb, the cable network’s chief marketing officer. But a mix of commercial pod reformatting and new ad content techniques has narrowed the gap to between 9 and 10 percent, she said. One apparent turnoff for viewers was the length of breaks on the network, which usually ran three-and-a-half to four minutes twice every half hour. The network redistributed the same number of spots over three breaks averaging two-and-a-half minutes. “It makes it easier for people to get through,” said Kolb.

E! also produces content such as short news segments that it mixes with commercial pods to boost retention. Another technique: putting a crawl along the bottom of the screen leading into commercial breaks, although many advertisers are resisting because they want the whole screen for their ad. “That’s not unreasonable, but we’re still trying to get buy-in [on the crawl technique] because it’s better for everybody” in terms of retaining a larger audience, she said.

But the new focus on commercial audiences has also raised fundamental questions about TV ads and ratings that have sparked debate within the industry. Just two weeks ago Nielsen Media Research began a survey of its national TV clients. With all the experimentation with new techniques such as microseries, live spots, content wraps and more elaborate brand integrations within actual program content, Nielsen wants to know if the industry feels the term “commercial” needs to be redefined.

Also up for reconsideration: should all nontraditional commercials be folded into C3 averages or broken out in separate reports? And what about the C3 system itself — should it remain in place as the standard yardstick for buying and selling ads or should Nielsen move to a more granular system that measures audiences for specific spots as some clients have requested?

Alan Wurtzel, president of research and media development at NBC Universal Television, said the survey is all well and good, but as a first step Nielsen should publish a paper outlining “what they can and can’t do” to change the current system, over what period of time and at what cost. “I don’t want to have a debate before everybody has a clear set of issues and a common base of knowledge of what’s achievable,” he said. “Then we can have a conversation.”

Wurtzel said he was “supportive” of a possible move to a more granular system. “The problem is the technical limits of the current system,” he said. As far as Nielsen’s ability to move to a system that measures specific spots, Wurtzel said, “They are not anywhere close yet as far as I’m concerned.”

A Nielsen representative confirmed that the survey was being conducted for the ratings company’s own “education” purposes, but said it was premature to comment further.

But a number of advertisers and agencies want Nielsen to go more granular. The Association of National Advertisers is pushing for exact commercial ratings. In an ANA survey of marketers earlier this year, 87 percent of those polled indicated they wanted to see the implementation of a ratings system that measures viewing to specific ads.

Bruce Goerlich, president, strategic resources, Publicis Groupe’s Zenith Media, said the agency wants Nielsen to be more precise as well. “We’ve never been very happy with the idea of an average number,” he said.

While Goerlich and others push the industry to focus more on audiences to specific spots, there is mounting pressure on advertisers (and by extension their creative shops) to provide ads that engage viewers.

“It’s sort of a case of be careful what you wish for,” said Wurtzel. “There’s no air cover anymore for the creative.”

Some networks, including TNT and TBS, are assessing the ability of specific ads to hold audiences and are talking to clients about spots that send viewers scurrying. “We are very much focusing on creative performance and placement and I think you will see that growing over time,” said Linda Yaccarino, evp, gm, Turner Entertainment Sales. “Look at The Closer. We are handing the advertiser a 6 or 7 national rating and we want the audience to stay through the break, so it really matters what creative goes in those breaks and what positions you put them in.”

However, Mike Shaw, president of ABC Sales, said at a recent research conference that he isn’t so sure he wants to get into conversations with clients where the network is forced to say “their baby is ugly.”

Yaccarino argues that the conversations would be more tactful than that, with benefits for both sides. “It’s more a matter of saying ‘your creative would work better if used in a different way,” she said. “We have a variety of opportunities on our air, including limited commercial interruption movies, commercial-free premieres, isolated pods that showcase genre specific ads. We want to be more creative and act with much more specificity in where we place ads. I don’t want it to be, ‘Hey, your spot isn’t working, so get out.’ It’s more your spot will work better in another place.”

MTV’s Moran said the network would look at research to assess the relative performance of individual spots. “We’re not there yet, but we’re going down that path,” he said. Commercial ratings have effectively transformed ads into “tiny shows that now have to perform against exposure metrics. They have to be entertaining in order to hold the viewer. If our currency is traded on other people’s content, advertisers have to understand that we have to format them so that they flow better.”

Flow issues raise all sorts of scheduling questions, Moran said, just as they do for program scheduling. “Do viewers like to see car ads followed by movie ads?” he asked. For some shows, perhaps all the spots work better if they have a consistent theme, like getting ready for a night out, he added, “or even what color people like seeing commercials formatted in. There are almost too many questions.”