NBC May Be Alone With Engagement Guarantees

While commercial viewer engagement guarantees are on the wish list of every advertiser and media agency for this year’s upfront, don’t expect many of the broadcast networks to follow NBC’s move two weeks ago to offer advertisers guarantees based on IAG Research engagement data, following a test with Toyota this season.

“NBC’s upfront take has slipped by $1 billion over the past two years, so it is vital for that network to do whatever it can to lure more dollars back to the fold,” said one broadcast sales executive, who did not want to speak for attribution. “And NBC has fallen from first to fourth in the [adults] 18-49 ratings race. The networks that have more solid program ratings will be less likely to want to offer commercial engagement guarantees.”

While it’s still possible that commercial ratings in some form could be used by the broadcast networks as a negotiating currency this spring, it is not expected they will go out of their way to extend those guarantees to also include commercial engagement. That sales strategy is more likely to come from cable networks looking for a way to distinguish themselves during the buying process.

Networks that have expressed a willingness to discuss or actually offer some forms of engagement guarantees include Court TV, The Weather Channel, Rainbow Media’s AMC and WEtv, Discovery, A&E and Lifetime, according to media buyers.

One media agency, Magna Global USA, recently sent out a letter calling on basic cable networks to meet with its executives regarding plans for commercial engagement guarantees, sources familiar with the situation said last week.

IAG, whose clients include all of the broadcast networks except The CW and 17 cable networks, along with advertisers such as Johnson & Johnson, Home Depot, and the major movie and wireless companies, among others, has gotten mixed reviews from the media agencies in regard to its engagement data.

Said one media agency executive: “IAG’s work in this area puts us a step closer to coming up with some sort of industry currency on measuring viewer engagement of commercials.” But another media buyer said that IAG’s research could not be widely used because it has not been vetted and accredited by the Media Research Council. Still, most media agencies executives agree that IAG has raised the the bar in measuring both ads and programming.

According to Dave Marans, evp, IAG, 150 people come into the company’s New York headquarters every night of the year and watch everything on the broadcast networks from 8-11 p.m. and all shows on 20 different cable networks from 6 p.m. to midnight. A portion of the group also separately watches every commercial. Another segment of the group monitors product placement. They then formulate a series of detailed questions that are then posed to an online panel of 5,500 people the next morning. Based on their answers, each show and commercial is given an engagement score or rating.

Marans said history has proven that the more engaged a viewer is in a program, the more engaged that viewer will be in the commercials during that program. He pointed out that engagement scores are higher for original episodes of shows than for repeats. And when it comes to pure viewer engagement, he added, a cable network can get as high a score as a broadcast network, even though the program rating for a broadcast show will invariably be higher.

Among the shows with the highest viewer engagement scores this season, according to IAG, are ABC’s Lost and TNT’s The Closer. Sometimes, Marans noted, a show that is not one of the highest rated can get a solid engagement score such as CBS sitcom The Class.

Some media agencies said that IAG’s system to reward its poll participants gives them pause. But Marans explained, “We have a high turnover. People stay for three or four weeks at a time and that’s good because we don’t want people getting too set in their patterns. But despite the turnover, the engagement scores from week to week stay relatively stable.”

Sam Armando, svp, director of television research at Starcom USA, said while commercial engagement guarantees are not going to be a major part of the upfront negotiations, every agency is seeking ways to quantify the relevancy of its commercials. “We should all be trying to look at not only how many people are watching our clients’ commercials, but also how deeply they are watching those commercials,” Armando said.

Lyle Schwartz, evp, director of research and marketplace analysis for GroupM, said while the IAG data is not likely to become an industry-wide negotiating currency, it is one tool clients and their agencies can use for individual deals. “Any way the networks can find to provide better value to advertisers, they need to do it,” Schwartz said, adding that IAG is offering in essence an evolutionary step beyond what the agencies previously had available to them.

But one broadcast sales executive went as far as to say measuring viewer engagement has limited value. “It all comes down to the quality of the commercial,” the sales executive said. “A viewer can be engaged in watching a commercial, but if it is not very good and doesn’t result in the viewer following up with a purchase, then how meaningful is the engagement rating?”