• by Wayne Friedman , March 22, 2010

Now within days of a deadline that will drastically change the way viewership is counted for local TV stations, a new plan from major media agency Group M has surfaced, hoping to gain industry approval.

Group M has proposed to Nielsen and to stations that it use Nielsen national people meter sample data of commercial-skipping in DVR homes and apply it locally.

Currently, Nielsen does not measure commercial ratings or the fast-forwarding of commercials in local TV DVR homes.

"Skipping rates are pretty consistent," says Rino Scanzoni, chief investment officer of Group M North America. He adds that the use of the national sample data for commercials could be filtered by demographics, by market, and by daypart.

Late last year, Nielsen said it was instituting a plan to eliminate the decades-long use of live-only program ratings for local TV stations in major markets covering around 60% of the country -- much to the chagrin of many big media agencies. The new currency for media buyers would be live-plus-same-day time-shifted program ratings.

Media agency executives said this could immediately boost ratings around 7%, depending on the market -- allowing stations to charge more for programming.

The original plan was to start in January. Media agencies fought back for a three-month delay to March 31. Nielsen was to respond to a letter from the American Association of Advertising Agencies arguing not to eliminate live-only ratings by this week.

A Nielsen spokesman says there are currently "no changes to the timeline we outlined last December." He did say that various alternative plans have been proposed: "We would be willing to consider alternatives that had the support of both buyers and sellers."

In regard to Group M's plan, Scanzoni says: "The good news is that you have a national sample. We've been working through a solution."

He believes it might take six months to get the data up and coming. Until then, the hope is that Nielsen would keep the live-only stream of data, as well as the live-plus-same-day, the live-plus-three-day, and the live-plus-seven-day local ratings.

Group M has been talking with Nielsen and TV stations about the plan, and Scanzoni is confident it could take hold: "I think we'll get it worked out."

TV stations have long wanted to find a way to account for time-shifted viewing. National TV networks wanted the same. And three years ago, a compromise of sorts was reached for national TV -- commercial ratings plus three days of DVR playback, C3.

It gave national advertisers what they wanted -- commercial ratings -- and gave TV networks the extra viewership beyond live-only program ratings.

Good news for TV stations, says Scanzoni. Current national C3 ratings are 5% to 6% above that of live-only national program ratings.

With DVRs in 35% of U.S. TV homes -- and growing -- Scanzoni believes the problem will only get worse. "The impact is going to be significant," he says.

Still, others -- such as John Muszynski, chief investment officer of media agency group SMGX (Starcom MediaVest Group Exchange), which like Group M, is a big buyer of local television -- are more adamant that there should be no compromise.

"We are not also going to let them add DVR programming and the skipping of messages," he says. "It's unfair and not right." He adds: "It's a really an embarrassment for local spot television."

In recent weeks, Nielsen has been showing agencies data that suggests there is little difference between live-only and live-plus-same-day data.

"They are saying we can get rid of live," says Muszynski. He adds that Nielsen only offered up scant data of programs in November 2009 -- but not the whole quarter. But Muszynski says it's not Nielsen's call.

Muszynski believes that using live-program rather than live commercial ratings is already a compromise. "No one is addressing the real issue: Why doesn't Nielsen have commercial ratings for us?"

Ultimately, Scanzoni believes Group M's plan is not a long-term solution -- that down the road, the better numbers will come from millions of set-top boxes in TV homes.

Says Scanzoni: "This is a business of inches."