Carat endorses Commercial Minute Ratings as currency
Shari Anne Brill, SVP/director of programming for Carat USA and her team have issued an official white paper defining why the media agency endorses Average Commercial Minute ratings, including up to three days of DVR viewing, or "C3."
Said Brill: "Next week, Nielsen will release the first set of official average commercial minute ratings which became the new reporting standard for most national television buys in the 2007/08 upfront marketplace. While we may have liked the time to examine more data before entering the marketplace, we think this is an important step towards providing greater accountability to our clients.
The catalyst behind the industry's migration to Commercial Minute Ratings was the growing number of DVR households and the need to include the increasing amount timeshifted viewing. For an industry that can't agree on much of anything "Average Commercial Minute Rating Plus Three Days of DVR playback" (now dubbed "C3"), quickly became an adopted standard. It gives the networks credit for live and timeshifted viewing behavior up to three days later, provided viewers stay tuned through the minutes that contain national ads. It offers a better read of potential commercial exposure because it accounts for fast-forwarding as well as channel switching behavior. It also helps to shed light on commercial formatting issues.
Timeshifted viewing is most prevalent during primetime and to a lesser extent, daytime. It's virtually non-existent in other network dayparts and not much of an issue in cable, with the exception of popular scripted originals.
Marketplace Impact
The new currency's cost impact on the 2007/08 upfront marketplace appeared to be marginal, but did result in a certain diminution of available ratings points across various dayparts. Our upfront negotiations resulted in many networks
absorbing some or most of the "CPM gap" between the live program rating and the C3 metric. The coming change also didn't seem to affect sales of any particular program in the upfront. Based on preliminary evaluation data, some shows with the greatest drop-off between program ratings and commercial ratings (thus potential ad-skipping) are among the most sought after by national advertisers.
The impact of commercial ratings may be most felt in the short term "scatter" network marketplace if C3 ratings fall well below the networks' expectations. Available inventory may be taken out of sale to address rating shortfall, resulting in a tighter supply and an increase in short term ad costs.
It's not all about DVRs
As previously mentioned, commercial minute ratings also hold the networks accountable for prior malfeasance in formatting commercials, particularly outside of network primetime.
Some late night programs had been jamming ads into the lower-rated last half of the show. Late Show with David Letterman (CBS) was a particular offender and the program was reformatted to move commercials to an earlier, advertiser-friendlier position. Jimmy Kimmel Live (ABC) used to contain a non-program break that was eight to nine minutes long (also in the back half of the show) - that's now gone. Similar transgressions in the early morning daypart are now under scrutiny. Some cable networks with notoriously long commercial pods (i.e. MTV, VH1) have changed to shorter breaks (albeit more breaks per hour).
Additional benefits may be forthcoming. Cable networks that dilute commercial audiences by airing promotional announcements in "A" positions or running national ads after a show ends will not just hear media buyers whine about it, they'll face the wrath of the god Nielsen, and subsequently their CFOs.
This is only a first step in a big journey
Despite what you might read, the average commercial minute rating is not a measure of who is watching an ad because Nielsen is only reporting the program minutes that contain them. We have requested that Nielsen refine its measuring and reporting capabilities so at the very least we will be able to get a more realistic picture of the performance of a commercial pod. In order to measure the performance of an individual ad, Nielsen would have to move to second-by-second measurement, something that is a long way off.
