TV Audience Ratings: Less And Less Relevant for Advertisers

With the National Television Upfront presentations for the 2011/2012 season completed, it's a good time to ask what TV audience ratings really mean for advertisers today.  The advertising world is moving bit by bit toward its one-time holy grail of commercial ratings - currently in the form of C3 ratings defined as "the average of a live rating for a (national) commercial minute and up to three days of DVR playback viewing" (check out a great reference site launched this month (May 2011) by the Coalition For Innovative Media Measurement - the CIMM Lexicon. Be sure to use the "find" window at the top for definitions of specific terms.)

The big problem facing advertisers in 2011 is that the quality of DVR playback measurement for commercials is still incredibly unclear.  I learned a new term today: "Trick Play" or "Trick Mode" - a term (according to CIMM's Lexicon) used to describe "the use of DVR time-shifted viewing or On-Demand with a TV Remote Control device. Features include fast forward, rewind and pause."  CIMM goes on to note that measurement of this is extremely weak: "DVR metrics need to be decided. According to Kantar these data are not currently available in the U.S. but are available in the U.K. Rentrak says that it depends on the operator and the device. Some operators have trick mode data available in various forms (some more detailed than others)."

As up to $10 billion are committed to U.S. upfront TV deals in the coming months, this very confusion underlines how irrelevant TV program ratings have become for advertisers. This uncertainty puts advertiser dollars in great jeopardy as far as achieving media communication goals. Even C3 ratings only confirm that a TV program is attracting a certain size audience.  In no way can that programming performance be projected to consumer attention to advertising.

Program ratings were always just a surrogate for the number of potential impressions an ad could garner within the program, helping set pricing for advertisers in a world of imperfect measurement. This surrogate was developed in a time before audiences had powerful ad-avoidance technologies in their hands, or when set-top boxes could provide click-stream analysis of consumer viewing behavior, or even before commercial loads had hit the levels they are at today. Without a better understanding of DVR usage, advertisers will pay more and more to run spots - especially on successful, high rated programs with the highest commercial loads - all while significant numbers of consumers are increasingly avoiding ads.

Can you imagine advertisers opting in to such a business model if it hadn't already been running this way for years?  There has always been ad avoidance such as channel switching, leaving the room, multi-tasking and most frequently using social media & web surfing on other media devices during ad breaks.  Buying into C3 or any other program ratings only confuses and further decreases the eroding value of a linear TV ad buy for advertisers everywhere.

The ad-supported media industry doesn't need a better mousetrap.  It needs a better way to allow consumers to willingly enable advertising to pay for their premium TV content, thereby justifying the financial contributions paid out by the advertisers themselves.

Kudos and thanks to CIMM for providing such an important language guide and translation tool for this discussion. The very future of ad-supported television is at stake.

Tags: television, tv
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2 comments about "TV Audience Ratings: Less And Less Relevant for Advertisers".
  1. John Grono from GAP Research , May 27, 2011 at 10:55 p.m.

    While here downunder we don't have C3 ratings, we do get 7-day playback added back in on a minute-by-minute basis. From this data media agencies can calculate ad-minute ratings (by purchasing ad verification data) and use that as part of the planning process that feeds into the buying process.

    However, what we do have here is that ANY 'trick play' (slow-mo, fast-forward, rewind, mute etc.) is EXCLUDUED and ONLY ads in real-time with audio are credited. Accordingly, any viewing of ads in trick-play is a bonus should the viewer get brand recognition/recall etc.

  2. Howie Goldfarb from Blue Star Strategic Marketing , May 28, 2011 at 9:52 a.m.

    The problem with the measurement issue is that too often on the Brand side the CMP/Marketing folks don't fight for their best interests in hopes of keeping their jobs. They will use whatever ratings look best to show they are reaching enough people even if that is a hollow number.

    My sister ran email campaigns a few years back and she only told her boss how many emails were sent to how many people but hid the pitiful open rates.

    Since it is really hard to connect sales with advertising in the same way we number crunch everything else it allows a lot of room for business and people to support the status quo if it benefits them.

    Just my opinions.