DVR + Nielsen = a Mad Scramble for TV Networks and Advertisers
During the past several years, the usage of digital video recorders (DVR) such as TiVo and those provided by cable and satellite providers has increased to a national average of 17% of households in America. With that number expected to jump into the upper 20s by the end of 2008, the “Big Four” networks (ABC, NBC, CBS, and FOX) and advertisers are jumping up and down worrying about whether or not viewers who watch a show are actually watching the ads. This week, and thanks to superb coverage of this issue by the New York Times, it has been revealed the networks and Nielsen Media Research have agreed to a unique way of accounting for audiences with live and recorded viewing. The system is called “live plus three”, a ratings report generated by Nielsen that will account for total viewers who watch a program live or via DVR within 72 hours of its original broadcast. While the new approach is intriguing, will it truly measure the total audience for a show? And will it appease both networks and advertisers who have been dragged kicking and screaming into the changing world of media?
The need for an accurate ratings system is imperative. As of just a few months ago, Nielsen’s prime source of information was the old-fashioned method of sending paper diaries to viewers in the hopes the viewer actually remembers what he or she was watching that day in case they didn’t write it down while watching TV. If you’ve ever taken part in one of those surveys, and I must admit I have before, it’s not as easy as it sounds. With the technology available today, Nielsen is FINALLY moving into the 21st century by collecting data through digital means, and through info collected by DVRs themselves. Accurate ratings are crucial to both the networks and advertisers. For networks, accounting for the “lost” viewers who record and later watch a program helps them raise ad rates since they have a clearer picture over who is watching their programs. For advertisers, an accurate number helps determine if a particular ad campaign on a particular network is paying off those big bucks spent on the spots. But I’m not so sure the “live plus three” is the best solution for this issue, although it is a start.
In Stuart Elliott’s article, the idea of “live plus seven” was apparently floated out to the networks and advertisers only to get shot down. This is curious to me because BOTH parties could use the “live plus seven” method to their advantages, and the capability of providing those numbers is available from Nielsen. I bring this up as an issue because some of us have hours and hours of prerecorded TV shows we haven’t watched yet, and they happen to be more than three days old. I actually have three or four episodes of House I have yet to watch, but I know when I get a free afternoon I will finally catch up on one of my favorite shows. I also haven’t watched last week’s edition of The Office yet, but I know I will watch it tonight before the season finale’. Both NBC and its advertisers have “lost” me, and since I love the show (and have since day one… I’m one of the few who can say that) they may want to count me in their final numbers.
Right there is the dilemma both parties are fighting. The networks would like to have the seven day report because those of us who take our sweet time watching a recorded show can be counted. That would mean bigger numbers, higher ad rates, and ultimately more revenue for the networks. Outside of revenue, a true accounting of viewers may also do the networks a great service since so many people think the Big Four are losing their relevance in today’s media-savvy society.
The advertisers, however, want instant gratification… and you can hardly blame them. Corporations spend billions and billions of dollars in national advertising in the hopes of generating and maintaining a consumer base. Even if viewers aren’t watching the commercials live or when the program is prerecorded on a DVR, the numbers generated will justify a corporation or ad agency to spend more or cut back on a particular show or network. With so much money at stake, and even a few corporations’ public image as well, the instant turnaround when it comes to results is a given. Viewers either really love a commercial, or they really hate it. Why spend more in seven days to air a spot that isn’t received well, and why hold back when consumers want more?
The division of interests has caused some tension between the parties. As it is stated in the aforementioned article, CBS president of sales Jo Ann Ross said, “This is still a gentleman’s business. You do business on gentleman’s agreements.” The article goes on to suggest CBS would really like the advertisers to try the seven-day method, and to let them “write the business” where recorded viewing is factored in to ad rates. I applaud CBS (and it appears other networks are leaning this way) for trying to get the best of both worlds with the seven-day plan. But in these days where the bottom line is everything with the Wall Street giants (the networks and advertisers) money talks and common sense walks. The advertisers want to make key financial decisions not just for a season or month of programming, but for individual episodes as well. The networks need every dollar that walks through the door, so the “gentleman’s agreement” gets done. That means both sides are still left a little short in my opinion.
For advertisers, I can’t see why a seven-day or even a 30-day plan can’t be effective. Sure, there are some products or services (such as movie releases, national car sales, etc.) that are time-sensitive. But even if a viewer sees a commercial for an “expired” product or service, didn’t the viewer still see the spot? It’s almost the “if a tree falls in the woods…” scenario. If I see an ad for a Ford F-150 that originally ran in April, wasn’t I exposed to the product? I may not be able to get that truck for the exact same monthly payment or interest rate advertised, but that won’t stop me from thinking it’s a pretty nice truck. The same goes for movies. I may be watching an ad for Spiderman 3 three weeks after the movie was first released, but does that mean I won’t go out and see it now? Does it also mean I won’t order it on Netflix or buy it when it comes out on DVD? NO! This short-sightedness is one reason why advertising in mainstream media is so fluky.
Another problem with the advertising world is why is advertising so crucial on the “Big Four”? Yes the message typically gets out to more people than the cable networks, but getting a message to your intended audience seems to make more sense to me (and also justifies your media spending a bit more). That F-150 ad would look better on CMT, GAC, or ESPN instead of in the middle of a “Heroes” episode. The Spiderman trailer might be more successful when used on the Sci-Fi channel, Cartoon Network, or Nickelodeon instead of lost in a sea of ads during “Ugly Betty”. Creative ads playing on You Tube or downloaded via iTunes would also hit that target consumer better than the “mass media”. It’s just another sign that some advertisers clearly haven’t figured out how to reach the consumers they want through new media.
As for the broadcasters, I would think the accounting of a show beyond seven days would be helpful in determining the real success of a show (and of course the ad rates). If a network discovers an extra one million viewers watched an episode of a show 8-14 days after it originally aired, could that save a show from getting canceled? Could it help a network show advertisers fans of shows are loyal to programming for weeks and weeks and not just 30 minutes a week? Could it also help networks devise programming and advertising methods that help viewers become more interactive with the show? If I’m told I could win a million dollars by answering a trivia question about a show online, but only after I watch the show live in its original airing, you can bet I’ll find some way to shift my schedule around for that carrot on a stick.
For now, both sides will wade through the waters of this new agreement to see how it works. It is a start, but I think the data available now can be used for better purposes on both sides. But since the advertisers need to make shrewd decisions now, and the networks need every penny they can squeeze out of them, I won’t hold my breath for things to change.
SOME OTHER NOTES ON ADVERTISING:
* It’s a bit of a spoiler, but NBC’s three-minute preview of tonight’s “The Office” on YouTube is simply genius. I was going to watch the show already, but now I’m so amped up for it I will probably watch it live! Note to networks: this is the use of new media as the “carrot on the stick” I was referring to before.
* The Orbit chewing gum commercials have grown old with me, mostly because they’re just plain silly (or in some cases not). But this commercial had me howling when I first saw it last night:
* On the not-so-funny end, in 2003 NHL player Dany Heatley was speeding in his car in a residential neighborhood in Atlanta. He lost control of his car, causing a wreck that killed his Atlanta Thrashers’ teammate Dan Snyder. Snyder’s parents are traveling across the U.S. and Canada to spread the word about their son. While they have forgiven Heatley, they haven’t forgotten what has happened. The use of Heatley in the Versus network’s bumpers for the NHL playoffs, where Heatley (now playing for the Ottawa Senators) proudly proclaims the playoffs are “do or die” time, just doesn’t feel right to me.
* Finally, success finds the most unexpected people at the most unexpected time. Just ask the guy who plays the role of the Geico caveman.
