• by Wayne Friedman , July 29, 2011

TV marketers could be seeing digital video viewership numbers in C3 ratings -- the metrics that national TV buyers use for their media buys -- in about a year, projects one senior media-buying executive. Maybe even by next upfront. 

Rino Scanzoni, chief investment officer of Group M, which controls about one-third of all television media buying, says strong business conditions will push Nielsen, TV content owners and TV marketers to make it happen.

"I think we are no more than 12 months away from an aggregation model," says Scanzoni. "It's going to be accounted in a C3 rating. I don't think we are that far away." Perhaps, he says, before the next upfront.

Part of this reasoning comes from TV networks, which are now regularly offering marketers makegood inventory on digital video sites from traditional TV deals. They are also increasing the number of networks offering online commercial loads that are the same as traditional TV. These added online commercials "have not turned off the audience," he adds.

Full TV commercial loads are becoming more common. The CW started the trend with its programming last season. Fox looks to go next -- most recently as a part of its deal with Dish Network. Other satellite and cable operators are looking to join in.

The move is also good news for marketers. "The costs are coming down [with digital]," he says. "As the views go up, you actually have decreasing CPMs -- although still at a higher level than broadcast."

New aggregated C3 ratings -- TV's main currency, commercial ratings plus three days of DVR playback -- will work in favor of media sellers when it comes to digital airings of TV shows. He says after three days, TV owners can resell that inventory.

Scanzoni says adding in digital viewing -- which has been growing quickly -- will help stem decades-long TV erosion. Until then, for next season, he expects more of the same.

For the 2011-2012 year, broadcast erosion in prime time will be around 6% to 7% -- about the same rate as in recent years. But cable will not be immune. He expects large, established cable networks to also experience a big drop: a 5% to 6% fall in ratings. Younger networks will still be gaining viewership, all of which means cable -- as a whole -- will lose 2% in overall audience.

What does all this mean for Group M clients? More money shifting into cable -- although at a slower pace than in previous years. Scanzoni says the price efficiency of cable versus broadcast is still intact and will drive marketers' dollars.

Concerning the upcoming scatter market, Scanzoni expects a return to more normal price gains -- low single-digit percentage increases or flat pricing over upfront costs -- this versus the big 20% or greater gain of a year ago.

There will also be slower growth in TV overall, due to the current trend of total advertising budgets, which is up only slightly, in the 3% range for the year, says Scanzoni. This pretty much mirrors U.S. gross domestic product.

His agency estimates broadcast prime time will be flat in 2011-2012 in terms of revenue -- although networks recorded strong low-double digit percentage price increases this past upfront. "Trouble is, we measure things on CPMs. But CPMs do not translate to revenue growth because the ratings aren't there," he says.

Overall broadcast prime-time revenues will decrease from the 2% growth in the 2010-2011 season, which witnessed an overall 3% gain when looking at all dayparts. Group M expects cable networks to grow 4% to 5% for all dayparts in 2011-2012, down from its higher 8% to 9% growth of previous years. For the upfront itself -- which represents 75% of all national TV buyings -- he believes broadcast prime-time revenues climbed 6% to $7.4 billion.

Adding in all dayparts -- but not for sports TV revenues -- broadcast landed $9.6 billion. Cable grew 12%, landing at $8.7 billion for all dayparts. Concerning the usual upfront sniping and posturing from network and media agency executives -- particularly about some companies missing the market, or doing early deals -- Scanzoni says it was a mixed bag. Group M did some of its deals early on, others late -- in July.

"We are going to move when we think we are at a price point and we are getting the inventory we need that is right for us. If that's going to be three or four weeks after the general market [moves], so be it." Was he ever worried about missing opportunities to get certain inventory in specific TV shows? "We are a third of the market," Scanzoni says, concerning overall national TV buying revenues. "There is no way they can get home without us. We are not going to let other agencies set a market for us that we think is inappropriate."