Nielsen Readies New Local Ratings

Nielsen Media Research in about two weeks will issue a new stream of ratings data for local TV programs that includes, for the first time, three days of playback DVR viewing.

The new data stream, known in the industry as L3, has sparked a debate over how local ads should be bought and sold. It has also raised questions about when — or if — commercial ratings might be introduced to the local broadcast market.

Stations hope to make the L3 ratings data a currency for buying and selling local ads.

Buyers, however, insist that the measurement doesn’t indicate how many viewers are fast-forwarding through commercials in playback mode. They also argue that the new system is useless for time-sensitive local retailers who often run one- or two-day sales events. In such cases, for viewers watching in playback mode on day three, the sale would be over and, in effect, the money spent trying to reach such consumers would be wasted, per buyers.

Many of the big buying shops — including WPP Group’s MindShare, Mediaedge:cia and MediaCom and Interpublic Group’s Universal McCann — have said they would not buy local ads based on L3 numbers. They plan to continue using live local program ratings to formulate media buys.

“We’re going to stick with live ratings for now” in the local markets, said Lyle Schwartz, managing partner, director of national broadcast research and marketplace analysis at GroupM, the WPP media agency management arm. L3, he said, provides an “overestimation of commercial viewing” because it cannot detect when viewers are fast-forwarding through commercials.

Kathy Doyle, svp, director of local broadcast, Universal McCann, said her shop would also stick with the live program ratings to buy local spots. “We will not use it,” she said of L3. “We do a lot of retail locally, so it’s the client’s money down the drain” if viewers see a spot during DVR playback days after an advertised sale has ended.

But station executives counter that as DVR penetration grows (Nielsen’s current estimate is about 25 percent, or 25 million homes), it is only fair that they get credit and payment for viewing to ads and content that are played back. “Consider that more than half of all playback occurs within one hour” of a program’s live broadcast, said Pat Liguori, svp of research and electronic measurement for ABC Owned Television Stations Group, making the case for L3.

The dollars at stake are high, said Liguori, noting that she has seen increases of up to 4 rating points for programs when DVR playback is added to their audience. On an annualized basis across the entire industry, that translates to possibly hundreds of millions of dollars in TV exposure.

“I understand there are time sensitive advertisers but not every advertiser has a time sensitive product,” Liguori said. “The larger DVR penetration gets, the less representative the live only numbers will be.”

The debate is similar to last year’s dispute between the national networks and advertisers. That difference of opinion was settled when the two sides agreed to buy and sell ads with live commercial ratings plus three days of DVR playback viewing, known as C3.

Buyers found that compromise acceptable because the live viewing measured ads, not programs, and the playback viewing counted only viewing of commercials, not those that viewers fast-forward through.

So why not implement commercial ratings at the local level?

Buyers, sellers and Nielsen Media Research executives say they’ve received numerous requests for such ratings from advertisers. That said, there are also numerous hurdles, according to Kevin Svenningsen, Nielsen svp, managing director of local television client services.