• by Lyle Schwartz , January 27, 2010

In a recent Media Daily News commentary, Jan. 20 , Janice Finkle-Greene of Magna Global endorsed Nielsen's move to replace local Live Program Ratings with Live + Same Day, saying the plan "should be welcomed by the advertising community."  While GroupM agrees that live ratings are not a long-term viable metric for the local marketplace, we feel they currently provide the only viable metric as a trading currency due to the high commercial skip rate that occurs during delayed viewing. 

As the DVR penetration grows, so will its impact on how and when consumers view TV and more importantly, our clients' commercials.  With DVR penetration currently at 34%, national plus same day overstates commercial audience for the same metric by 10.3% among adults 18-49 on a 5 Net in Total Day basis, according to GroupM calculations.  This gap will increase as DVR penetration increases (see chart).

advertisement advertisement DVR Penetration	% Diff
34%	10.3%
40%	11.0%
50%	12.0%

 

Currently, a significant number of LPM homes are being weighted into the national sample.  It is safe to assume that a respondent's TV viewing behavior would be the same in both samples despite how Nielsen processes that data differently.

GroupM's proposed solution is to use the live + same day LPM data and apply the national commercial same day DVR skip rate to the delayed viewing contribution, which is 50% for 18-49s watching five networks in total day.  This would allow the local stations to get credit for the delayed same day viewing -- and the advertisers would pay for only those viewers that actually watch the commercials.

Commercial skip rates are consistent by demographic group across dayparts and programs.  This would be done by Nielsen and would be tied to the national database and adjusted accordingly.  The 50% commercial skip rate for example on 18-49 would be applied to the same day delayed program viewing contribution to reflect actual commercial exposure.

In New York, the average Prime-time 18-49 live rating in November 2009 was a 2.33 for WABC.  The live + same day was a 2.67; therefore, the same day delayed rating was a 0.34.  We then apply the live + same day 50% commercial skip rate, resulting in a delayed commercial rating of 0.17. This is added to the live rating of 2.33 netting an adjusted live + same day rating of 2.50.

In summary:

  

·Live + Same Rating (2.67) minus Live Rating (2.33) equals Same Day Delayed Rating (0.34)

  

·Same Day Delayed Rating (0.34) times Same Day Skip Rate (.50) equals Same Day Commercial Rating (0.17)

  

·Live Rating (2.33) plus Same Day Commercial Rating (0.17) equals Adjusted Live + Same Day Rating of (2.50).

 

GroupM has proposed this plan to several key industry leaders, including NBC Universal.  The network indicated interest in pursuing this approach to determine if it is an effective solution to address all relevant issues. At the same time, we have reached out to Nielsen to determine if it is capable of producing this metric. We are still waiting for a response.  Till then, we invite any and all who wish to meet, discuss and/or work with us to produce a viable solution.