Upfront Deals: How Will Commercial Ratings Play?

by Wayne Friedman, Apr 23, 2007, 7:00 AM

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While no one is estimating what the primary thrust in upfront deal-making will be in the coming weeks, many deals will probably have a component that includes some aspect of commercial ratings.

Although the official Nielsen Media Research rating will not be ready for this upfront, big media agencies are moving to doing deals based on their own commercial-ratings data. Average commercial ratings are an average of all commercial minutes in a program. Group M's agencies--MindShare and Mediaedge, for example--are pushing for deals based on average commercial ratings.

Many networks have said publicly they are ready to do deals on average commercial ratings. "We'd have no problem in doing deals that way," says one veteran network advertising sales executive.

Other media agencies, such as Publicis Groupe's Starcom and MediaVest, are focused on the more exacting minute-by-minute ratings, not an average--something that could be more difficult for networks to process. Adds one veteran network sales executive: "We have told media agencies there are some things we can do, and some we can't."

Aaron Cohen, executive vice president and director of national broadcast for Horizon Media, prefers to strike agreements using "live" program audience data for this upfront--just like deals were done a year ago. He notes that doing deals on live commercial ratings is tricky. "The negotiation will take on a different direction," he says.

In theory, media agencies could save some money in going to commercial ratings, since those numbers are anywhere from 3% to 10% under their respective program ratings. That depends, of course, on the program and whether it is on a broadcast network, cable network or in syndication.

Reality, however, is something else.

"They are not going to get 3% to 10% less," says Horizon's Cohen. "The networks need the money. Nobody will gain an advantage on cost by using commercial ratings."

And then there's the DVR issue. The networks may still want to add DVR viewership back in, with anywhere from one day to seven days of viewer playback data. All that would essentially bring back overall ratings to square one, say media executives--similar to current program ratings. "So then there is no gain or loss," says one network advertising sales executive.

Some agencies even appear to offer concessions. Group M is all for average commercials, and some say it even hinted to the networks that it would add back in DVR viewership after three days from its original airing, the "live-plus three days" metric. Ideally, networks want as much as seven days of DVR playback. Group M executives did not return phone calls by press time.

However, media agency executives don't expect the networks--in any combination of buying metrics, program or commercial ratings, with or without DVR playback--to ask for less money this year.

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