Commercials May Not Be 'Time-Sensitive,' But What About Their Price?

by , Dec 12, 2013, 4:40 PM
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Can TV advertisers still make the case that anything past three days of time-shifted viewing doesn’t amount to much for their brands?

Les Moonves, president and chief executive officer of CBS Corp., says hogwash, because 80-85% of TV commercials are not “time-sensitive.” Therefore they should be counted and paid for by marketers, no matter when they are seen.

Which commercials are ‘time-sensitive’? Those from movie and retail marketers, accounting for around 15- 20% of the total, according to one cable advertising executive.

Of course, marketers still have their worries about fast-forwarding through commercials.  But hold that thought for a second.

TV networks in the near term might work on a two-tier or three-tier system to guarantee ratings. Not only could they continue the current industry standard – Nielsen’s average commercial rating plus three days of time-shifting (C3) -- but perhaps C7, C14, and even C30.  

Right now, more than a few networks have spilled the beans to MediaPost and others that they have been making a handful of C7 deals.

Back to some marketers’ concerns: Time-shifting through DVRs has led to the fast-forwarding of commercials. But increasingly, the viewing of network shows from video on demand services is being included in the C3 metric.  And those VOD services disengage the ability to fast-forward through commercials.

When “dynamic ad insertion” rolls out to many platforms, TV networks and programmers will be able to insert new commercials after three days. Movie and retailing marketers would be more easily persuaded to buy.

What this all comes down to is price. Those $32- 35 C3 guarantees for a thousand 18-49 viewers may have company. Maybe C7 or C14 guarantees will have a 10% or 20% discount, with the assumption for more fast-forwarding activity.

Networks want to be paid for all viewing – whether on TV sets, PCs, tablets, smartphones, Xbox, or otherwise.

That’s their right. But commercial prices have yet to be determined -- with their time-sensitivity a factor.

15 comments on "Commercials May Not Be 'Time-Sensitive,' But What About Their Price?".

  1. Douglas Ferguson from College of Charleston
    commented on: December 12, 2013 at 4:56 p.m.
    VOD sounds like a bad deal if fast-forwarding is "disengaged" -- I'll stick to my TiVo.
  2. Michael Natale from MCM Media Sales
    commented on: December 12, 2013 at 4:58 p.m.
    Les Moonves is off his rocker. Do the terms "Future Consumption" or "Recency" mean anything to him? In his world ROI doesn't matter, the only thing that matters are higher retransmission fees (which lead to higher cable bills) and higher CPM's for fewer and apparently further between ratings! In his utopia consumers will react to ads (if they aren't already skipping them anyway) next year to ads shown this year. Use your DVR's the correct way folks...skip all the ads and get some of your precious time back.
  3. Michael Natale from MCM Media Sales
    commented on: December 12, 2013 at 4:58 p.m.
    Exactly Doug!
  4. John Grono from GAP Research
    commented on: December 12, 2013 at 6:03 p.m.
    I don't know what you folk are doing in the US, but in our TV Ratings system DownUnder, if someone FFWDs an ad it doesn't count to either the time-shifted programme rating of the ad-minute post-analysis.
  5. Michael Natale from MCM Media Sales
    commented on: December 12, 2013 at 6:15 p.m.
    Yes that's the case here too. Les Moonves isn't saying that...he just think any ad that gets played back at any time is worth alot. He's nuts. But the real issue is that the TV world Networks and Nielsen especially, want most people to think that Ad skipping is a small percentage of overall behavior because their model and ratings are a legacy business. They know if the truth came out it would ruin the party for everyone. Much like the way Credit Default Swaps, CDO's and Mortgages for millions of people who couldn't afford them ruined the economy here in the US and around the world.
  6. John Grono from GAP Research
    commented on: December 12, 2013 at 6:45 p.m.
    Sorry Michael you seem to have missed my point. If we look at the TV ratings just for the time shifted viewing we can clearly see the ad-skipping. And it's significant. That's why we only 'credit' ad-breaks in the time-shifted when they are viewed. As an over-simplification, in an hour's programme we 'credit' the programme with its 47 minutes and zero to the 13 minutes of ad-breaks. The truth is very transparent here, Business is not a 'party' but it is still rolling along. Where I think Les has drawn too long a bow with "any playback" is let's say I watch a replay of the 2005 AFL Grand Final (our Superbowl) which my team won for the first time in 72 years ... is he REALLY going to reissue the 2005 ratings and send an invoice. There needs to be a cap on it and I'd say 28 days seems logical. Mind you, this will play havoc with any post-analysis as the client would have to wait a month to see how the campaign went and any make-goods may be outside of the campaign period.
  7. Michael Natale from MCM Media Sales
    commented on: December 12, 2013 at 7:01 p.m.
    Got it, I see your point.
  8. Edmund Singleton from Winstion Communications
    commented on: December 13, 2013 at 5:27 a.m.
    If you make a good commercial that I view days later its still a good commercial that I viewed and should be counted...
  9. Michael Natale from MCM Media Sales
    commented on: December 13, 2013 at 10:54 a.m.
    Yeah Ed, tell that to an Auto client having a time sensitive sale or a retailer doing the same or a Movie Trailer. There is way too much good content out there to watch to waste time on a "good commercial" which to be perfectly honest is an oxymoron. Most advertisers are trying to sell stuff NOW, not 30 days from now...
  10. Edmund Singleton from Winstion Communications
    commented on: December 13, 2013 at 11:29 a.m.
    But Michael, it is possible to build a customer base of missed sales, 'I missed the last one but will not miss the next one'...
  11. Michael Natale from MCM Media Sales
    commented on: December 13, 2013 at 2:52 p.m.
    Ed I get it but we have become a society of instant gratification and if you combine this new world with a TV model has certainly "slipped" (content is all great but the power of when to watch and how has been passed on to the consumer) then you can just have your cake and eat it too as Les Moonves believes. I get your point....I am exaggerating a bit to make a point but seriously who really needs or wants to watch commercials in this day and age?
  12. Michael Natale from MCM Media Sales
    commented on: December 13, 2013 at 2:53 p.m.
    I meant "Can't have your cake and eat it too" not can
  13. Edmund Singleton from Winstion Communications
    commented on: December 14, 2013 at 3:59 a.m.
    Why would anyone address me as Ed?
  14. Michael Natale from MCM Media Sales
    commented on: December 16, 2013 at 2:12 p.m.
    You're kidding right? Sorry, Sir Edmund.
  15. Edmund Singleton from Winstion Communications
    commented on: December 18, 2013 at 6:01 a.m.
    Strange, that is what I was called in High School. Lessen

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