Audit Finds Nielsen's C3 Ratings Hurt Advertisers

WatchingTV

While average commercial minute ratings are seen by most advertisers as a significant improvement over program ratings, many marketers are still pushing for a system that measures the audiences for specific spots. 

They may want to push harder for that advancement, given a provocative new analysis of the so-called C3 ratings system by P.J. Leary, the North American CEO of media audit firm Ebiquity.

In effect, Leary argues that the C3 ratings approach, put in place for the 2007-08 network TV season, almost forces broadcasters to game the system -- to the potential disadvantage of many advertisers.

Historically, he says, broadcasters have insisted that they strive to offer a fair and equitable rotation of premium pod positions. Now, he states, "that's no longer in their interest."

Ebiquity research has found that ads running in the first position of a commercial pod average 28% higher awareness compared to advertisers receiving mid-break placements.

The basic problem with the C3 system, Leary contends, is that the audience levels for the spots are based on average ratings for each break. As a result, the position of a commercial in the break, the length of the break and commercial length do not have any impact as far as calculating the numbers are concerned.

But for broadcasters, the position in the break now makes a huge difference -- it determines how much they can charge and therefore, how much money they can make, argues Leary. In theory at least, a clever, engaging ad in the first pod position will keep larger audiences tuned longer in the break, while a dumb or boring ad in the first slot will chase viewers away immediately.

"C3 Ratings incentivize broadcasters to influence the sequencing of ad content. And if broadcasters can increase their ratings by changing the ad sequence, you can bet they'll do it," he says. "Their goal is to minimize the audience exodus and maintain a higher average viewership across the break, thereby increasing advertising revenue."

In a bid to minimize commercial zapping, broadcasters are likely to lead pods with catchy ads for a new tablet, followed by a movie premiere ad, Leary argues. There is nothing sexy about ads for toilet paper and high cholesterol medications or spots for other prosaic essentials, which "are likely to get buried in the middle -- and less effective -- portion of the break," Leary states.

"Broadcasters have an agenda in programming ad positions -- and the ratings methodology encourages them to do it," the analysis concludes.

His recommendation to advertisers: "prepare yourselves with data, collect relevant insights and negotiate your best position. Advertisers are right to fight for gold standard positions in pod (first, second or last) and should insist that they get their fair share or better."

A switch to a system that measures specific commercials -- favored by the National Association of Advertisers -- would put pressure on advertisers and agencies to deliver highly engaging, ratings-grabbing spots all year round -- and not just for events like the Super Bowl or the Oscars.

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5 comments about "Audit Finds Nielsen's C3 Ratings Hurt Advertisers".
  1. John Harpur from Yellow Submarine , September 19, 2011 at 6:10 p.m.

    A question: Does"Ebiquity research has found" mean they did the research or their analysis of others' research found the 28% advantage in the first position in a pod? Sources would help with credibility.
    A comment: The networks (and local stations) know the advantage of the first position and that's why they traffick their own promo spots in the first position, thereby signalling the commercial break for commercial avoidance of all types. They already are doing a disservice to advertisers/clients.

  2. Darrin Stephens from McMann & Tate , September 20, 2011 at 11:17 a.m.

    The broadcast networks generally do not air promos in the "A" position of a pod.

    Media agencies can avoid having their clients' ads being inequitably placed in the middle of a pod by monitoring the buys they make and keeping track of ad positioning. In other words, by doing their job.

  3. William Hoelzel from JWB Associates , September 20, 2011 at 8:29 p.m.

    Has anyone done similar research on the value of positions in the pod for RADIO? I'm convinced that tune-out is high after the first radio spot, but I've never seen research on it.

    Has anyone seen such research?

  4. Iris Escarraman from WideOrbit , September 28, 2011 at 3:10 p.m.

    @William: I believe Arbitron with Coleman research has conducted Radio studies on Pod positioning. There was a 2006 study called "What Happens When the Spots Come On

    On Average, Radio Holds Onto More Than 92% of Its Lead-In Audience During Commercial Breaks"

  5. Kitsa Lee from formerly of iBiquity Digital , September 28, 2011 at 4:48 p.m.

    @William - the study that Iris referred to is still available at Arbitron's website (www.arbitron.com) under Free Studies and Reports/Advertising Effectiveness along with another study entitled "Spot Load Study 2005: Managing Radio Commercial Inventories for Advertisers and Listeners". You can download them for free.