• by Joe Mandese , July 1, 2010

In a move that could significantly expand the number of networks vying for their clients advertising budgets during the cable TV upfront advertising marketplace, two big agencies - Aegis' Carat and Havas' MPG units - are using an innovative method to factor the ratings of networks that are not yet rated by Nielsen Co. The method, which was developed by a task force of top TV industry researchers organized under the auspices of MPG's Collaborative Alliance, uses digital TV set-top data to project what their equivalent Nielsen audience shares might be.

While the researchers emphasized that the technique is only "directional," and not necessarily the equivalent of Nielsen's "currency" data - ratings that are used as the basis of planning, buying, guaranteeing and posting upfront advertising buys - Carat and MPG executives said they nonetheless plan to use it as a means of including unmeasured networks in their 2010-11 cable TV upfront negotiations.

Over the past several weeks, MPG has held two day-long meetings - one with the top digital TV set-top data providers, including companies such as Kantar, Rentrak, TiVo, TRA, and even Nielsen; and another with major unmeasured cable TV networks, including Bloomberg, Current, Sprout, Sundance and Tennis - to see if they could structure upfront advertising deals on the basis of the new factoring method.

"If they can price fairly, we will do business with them," said executive vice president-national broadcast at MPG. He said the new method takes the stumbling block of Nielsen ratings out of the equation, and enables the media buyers to negotiate based on what each networks' equitable share of viewers might be.

In the case of Bloomberg, the task force's analysis concluded that the business news channel likely delivers about 4% of the overall cable business news impressions, while Sprout delivers about 8% of all kids cable network rating points.

Carat executives declined to comment on the record, but said they support the method and confirmed they also are using it in their upfront cable TV negotiations. Both agencies said the application of the data, and how it would be factored into pricing and guarantees, still is subject to negotiation, but that they now at least have some common ground for structuring upfront deals with networks that are not yet measured by Nielsen.

The fact that Carat and MPG are working closely on the new approach is interesting, because the parent companies of the two agencies - Aegis and Havas - have other things in common, including the largest shareholder (French financier Vincent Bollore) and have long been the subject of merger speculation. But Mitch Oscar, the executive vice president-televisual applications at MPG, and a former Carat executive, said that is coincidental, and that the main reason the agencies are working together is that they know each other and have common goals. In fact, other agencies have participated in the Collaborative Alliance meetings organized by Oscar, and he has encouraged them to also utilize the insights and methods developed from them, including the unmeasured network factoring system.

In that regard, MPG's Kanefsky likened the approach to the development of Nielsen's C3 ratings, the current currency of the national TV advertising marketplace. That ratings method was a compromise solution developed by researchers at WPP's GroupM unit, that blended the desire of TV networks to include time-shifted DVR viewing with advertisers' and agencies' desire to include TV commercial viewing in the process.

Kanefsky noted that the TV industry is at similar crossroads with other new methods, including ones that "integrate" TV viewing estimates with online video viewing data, or other marketing databases.

"C3 was different. All the integrations that people are doing are different. We're just trying to see if we can do something different that achieves all of our goals," he said.