CBS Is Leading the Charge on C7 Currency

Network wants to get paid for bonus impressions

If earnings season has been predictably drama-free—devoid of high-impact spectacles like the presidential election and the Olympics, the summer quarter was a somewhat drowsy affair—leave it to Les Moonves to produce a palpable frisson in the TV marketplace.

Speaking to investors on Nov. 6, the president and CEO of CBS Corp. announced that his ad sales team has begun making ratings guarantees outside of the standard C3 window. After months of agitating for a more inclusive currency, one that incorporates as many as seven days of time-shifted deliveries, Moonves has begun the process of wringing value from an overlooked audience segment.

“We have already concluded deals with some significant clients for seven-day viewing,” Moonves said during CBS’ third-quarter earnings call. “We expect [C7] to be the norm for next season. There is clearly value in advertising that’s seen between days four and seven … and beyond. We intend to monetize that going forward.”

CBS declined to comment on which clients had agreed to early C7 deals.

For CBS and its broadcast rivals, C7 ratings should deliver incremental returns from advertisers who recognize the value of impressions that occur four to seven days after the original airdate. Per Nielsen, ratings in that window among adults 18-49 are up nearly 20 percent season to date; in other words, literally millions of impressions are going to waste every week.

“The numbers between C4 and C7 are pretty substantial, and they shouldn’t be left behind,” Moonves said. “The good news is, more and more advertisers are agreeing with us—and they are making deals accordingly.”

While some buyers would argue that there’s little profit to be made in asking clients to pay for impressions that they’re effectively getting for free, it’s unlikely that the wholesale adoption of C7 would have a destabilizing effect on the TV market.

“Advertisers are afraid that if you go to C7, instead of a $10 million upfront, they’re going to have to invest $15 million,” said Marc Morse, svp, national buying, RJ Palmer. “But with so much erosion happening over the years, I don’t think it’ll have a dramatic impact on CPMs. You’re not going to suddenly jump from a 3.0 rating to a 5.0.”

It’s already well established that there’s not much of a statistical difference between live-plus-same-day ratings and the adjusted C3 numbers; in Week 1, the average show gained just one-tenth of a ratings point upon application of the currency. That said, a bigger push toward offering VOD content in which the skip functions have been disabled could boost the C7 numbers by at least another half a point.

With just six months before the 2014-15 presentations kick off, CBS is likely to embark on a pilot program of sorts, booking a number of C7 upfront deals with select clients whether or not the entire industry is onboard. (Buyers said that ABC also has signed off on a number of preliminary C7 agreements.)

“Like last time, when C3 was implemented, there should be a very careful vetting process,” Morse said. “It will take a lot of work … but we’ll all be better off and the marketplace will run that much smoother once everything is standardized.”