C3-NFL Ratings Scrimmage

NEW YORK A Nielsen client letter issued last week has sparked a new debate about whether it’s time for TV sports ads to be bought and sold using the two-year-old C3 ratings system — or not.
Some major buyers are pressing for a switch beginning with the start of the 2009 National Football League season, but most of the NFL rights holders including CBS, Fox, NBC and the NFL Network are resisting the move, arguing that the system needs another year of testing to make sure all the bugs are worked out given the ad dollars at stake.
Nielsen says it is ready to issue accurate C3 sports ratings starting with the new season. “Next year we will be able to handle and report accurate C3 ratings on a regionalized basis,” said Pat McDonough, svp of insights, analysis and policy at Nielsen. “We can put procedures in place to handle it properly.” (One exception: early rounds of the National Collegiate Athletic Association’s men’s basketball tournament, in which CBS airs up to 64 games in various regions around the country.)
But the networks aren’t so sure, given a memo that Nielsen issued to clients last week acknowledging that it made errors in processing the ratings for five NFL regional and national telecasts, as well as mistakes for a number of pre- and post-game shows, and pre-kick and post-gun segments, which are made up primarily of ads.
For two seasons now network TV ads have been bought and sold using a new ratings system based on average commercial minutes combined with three days of DVR playback, known in the industry as the C3 system. That “currency” replaced live program ratings, which had been in place for decades. The new system covers all network time periods and program genres with the exception of the $8 billion-plus cable and network TV sports market, per TNS Media Intelligence, which has remained measured for the most part on the basis of live program ratings.
The delay is largely due to the fact that measuring the audiences for average commercial minutes in regionalized sports is more complicated than measuring viewership in a single national program feed, which is the way most entertainment programs are delivered. Commercial breaks stop and start at different times for individual games and the networks frequently hand-off to and drop out of different games in multiple markets, depending on the action (and blackout rules), so keeping track of individual ads and exactly when they air in each market is a more complex process. All parties agreed two years ago to continue buying sports based on the incumbent ratings system for at least the first year that C3 was put in place. A year ago, the networks said they wanted to wait another season while Nielsen worked out all the glitches of measuring sports with the new system.
Nielsen has been compiling C3 ratings for the sports genre and improving its multi-region processing technique with the expectation that the sports business would switch to the C3 currency starting in the fall of 2009. “All the networks wanted to wait a year,” said Lisa Quan, vp, director of audience analysis at Magna, the Interpublic Group research and marketplace intelligence arm. “We waited a year and now we believe we should move forward.

“Magna’s analysis has shown that Nielsen’s C3 data for sports is as stable and projectable as the traditional live-program measurement. From a research standpoint, Magna does not see any reason not to use it as currency.”
Andy Donchin, evp and director of media investments, Aegis Group’s Carat, agreed: “The reason we went to C3 in the first place was because we’re looking for more accountability and accuracy in what we report to clients with respect to who is actually watching our commercials. Why wouldn’t we want to extend that to sports?”

While methodology issues are legitimate, said Donchin, he also suspects that part of the hesitancy on the part of the networks is the likelihood that sports ratings will go down with the switch to C3 — a decline that won’t be offset by significant DVR playback, as is the case with many entertainment shows. “And I don’t believe the discrepancies will be any worse than for any other daypart,” he said. Magna estimates that Nielsen’s C3 sports ratings are on average 6 percent lower than its live sports ratings.
CBS, Fox and NBC all declined to comment. But sources at all three networks said that for now, they have no plans to switch to C3 for sports in the coming season. The NFL Network also will not switch to C3 for the coming season, a representative confirmed, without further comment. ESPN declined to comment specifically on C3 for the NFL. A rep at the network would only say that the network had begun to do “some” ad deals based on C3 beginning in the first quarter of this year.
Network sources, who refused to be quoted during the upfront season, said they believed that Nielsen and the agencies were underplaying the work Nielsen still needs to do to get the C3 sports numbers right. Given the dollars at stake — the NFL alone is a $1 billion-plus market, they said — they want to see Nielsen go mistake-free for a full season before making the switch.
One network research executive calculated Nielsen muffed the C3 sports ratings for 15 percent of all the NFL programs on CBS and Fox combined in the 2008 season, when all the pre- and post-game errors are considered along with the games and that mistakes were made on 13 of the 17 Sundays during the regular season. In every case, the researcher said, the corrected ratings were higher than the errant ones. “If we had been selling sports on C3 in the 2008 season, that would have been an eight-figure revenue loss, more than $10 million that Fox and CBS combined would not have been able to recoup,” the executive said.
In a $1 billion-plus market that may not seem like much money, unless, of course, it happens to be yours.