• by Joe Mandese  @mp_joemandese, November 7, 2006

Nielsen's on again, off again plan to introduce average commercial minute ratings may have been delayed until early next year, but they are still only an interim step toward an "ideal" form of TV audience measurement - exact commercial ratings - that top agency and network executives say will transform the TV marketplace in the years ahead, fundamentally altering the way advertising deals are negotiated and guaranteed, and how networks schedule their programming and advertising content. The big question, said two research heavyweights - ZenithOptimedia's Bruce Goerlich and CBS' Dave Poltrack - Monday during an industry luncheon in New York is what exactly will be included in those exact commercial minute ratings. TV executives like Poltrack want time-shifted viewing to be included, while ad executives like Goerlich would like to see only "live" ratings.

In fact, the debate surrounding time-shifted viewing is what has derailed Nielsen's new commercial ratings, and once again promises to be the biggest issue leading up to next year's upfront advertising marketplace. And according to Goerlich, the focus may not simply be on digital video recorders. It may be extended to include videocassette recorders, something some leaders on Madison Avenue currently believe is a bigger problem than DVRs.

While Nielsen claims it is unable to measure VCR playback, Goerlich noted that ad agencies do have the ability to re-process Nielsen's ratings to edit out VCR data and he implied that is exactly what some agencies are planning to do as part of next year's upfront ad negotiations.

"It may be something that becomes a negotiating item in this upfront. So stay tuned," Goerlich said during the Radio and Television Research Council luncheon.

Goerlich did not provide any details on the plan, but the move is likely to spark a bigger industry battle than the one that centered on Nielsen's inclusion of DVR playback data heading into this year's upfront marketplace. Faced with prospects for another weak upfront marketplace, the networks caved in on their fight to include DVR playback in their upfront advertising deals, marking a rare Nielsen research win for Madison Avenue.

Meanwhile, the heated debate surrounding the introduction of commercial minute ratings has emerged as a proxy for the networks to re-integrate playback into the official "currency" of the TV advertising marketplace.

The networks have been lobbying aggressively to include playback as part of Nielsen's new commercial ratings, and Nielsen last week announced plans to postpone their rollout once again to let the industry discuss how time-shifted data should be included in the mix.

On Monday, Nielsen said it scheduled a special client meeting for Nov. 30 to resolve the issue, but during the RTRC luncheon a Nielsen executive implied that at least some form of playback appears to be a fait accompli, even if it means adding yet another stream of ratings data to an already convoluted process.

"Are we going to replace an existing stream? Are we going to add an additional stream? It will be part of the ongoing streams of data," said Tom Ziangas, senior vice president-sales and marketing at Nielsen.

Late last year when Nielsen introduced time-shifted audience data, it began providing ratings in three streams: "live," live plus same day of DVR playback and live plus seven days of DVR playback. In the past several weeks, network executives have begun pushing hard for yet another stream - one that would provide data for "live" plus two or three days of DVR playback. The logic of this new stream is derived from a recent Nielsen analysis showing that the majority of shows recorded on DVRs are played back within a couple of days (MediaDailyNews Nov. 6).

To date, Madison Avenue has been somewhat circumspect on the topic of reintegrating time-shifted viewing into the official currency data. Big agency executives have mainly demurred, saying they were happy to wait until Nielsen got the new commercial ratings data right before introducing it into the marketplace. But if Goerlich's prediction is indicative, the fight may now be moving in a diametrical direction, with agencies planning to force VCR data out of the equation.

Even a major TV industry research executive acknowledged the double standard of Nielsen providing time-shifted viewing via DVRs and not for VCRs. Noting that DVRs currently represent only about "8-9%" of Nielsen's panel, and that VCRs are present in "11 times" that number, consultant and former NBC research czar Nicholas Schiavone said "There seems to be a gross inconsistency," and suggested the industry needed to get the time-shifted viewing "pie" right.

Nielsen's Ziangas alluded to some progress Nielsen is making with VCR playback measurement, but offered no specific plan.

Meanwhile, as the industry focus shifts to time-shifting, both Goerlich and CBS' Poltrack said that on a longer term basis, exact commercial minute ratings would be transformational and would impact virtually everything advertisers and programmers think about television, including the way they program both content and advertising.

As long as networks were compensated based on the ratings of their programs, said Poltrack, "There wasn't a lot of emphasis on optimizing a commercial placement," which is what has contributed to the current state of advertising clutter in commercial breaks and advertising pods.

"That will increase exponentially as we are paid on the basis of a commercial rating," Poltrack predicted.

Both he and Goerlich predicted the shift could also raise new issues for advertisers and agencies to prove the accountability of their advertising and their appeal to viewers, and might ultimately require advertisers to "copy test" their ads before placing them on a network.