• by Steve Sternberg , Featured Columnist, March 9, 2015

Attracting loyal viewers who watch your commercials. There’s not much more an advertiser can ask of a network.

Five years ago, when I was working as a consultant, I developed the Commercial Value Index, which was designed to rank cable networks in terms of which were best at minimizing commercial avoidance among their viewers. 

The impetus for this stemmed from my frustrations when I was on the media agency side of the business.  I would sit through numerous upfront presentations every year, and there would invariably be a handful of cable networks that tried to sell me on some sort of value factors that went beyond just the Nielsen ratings. 

In some cases, they would come up with some nifty new name for their viewers, based on psychographic or custom research to explain why their audience was better than everyone else’s.

While some of these were interesting, most were fundamentally flawed — not viable for measuring viewer involvement, engagement, or activation on any current or ongoing basis. Creating a static audience picture from six months or a year ago is not particularly useful in a world where a network’s programming is often in a continual state of flux.

What I tried to do was develop a better set of value factors that could be objectively used at any point during the season to evaluate all cable networks. There are a few attributes I believe are essential for developing actionable value factors:

• The measurement should focus both on program engagement and minimizing commercial avoidance (i.e., channel switching and fast-forwarding).

• The data should be transparent.  One should be able to provide the analysis to support how the factors were derived.

• The results should be easily replicated.  A buyer, planner, or researcher should be able to do the analysis at any time during the year, covering any period of time, daypart, or demo (using current data).

• Ideally, the factors should be based on marketplace currency data to avoid a claim that the value factors are based on metrics some people don’t believe in or use.

Here are the factors I would use:

Holding Power:  The amount of time the average viewer spends per viewing session.  Some refer to this as Length of Tuning. The longer viewers are tuned to a network, the more likely they are to be exposed to the commercial.  Less channel switching means greater viewer involvement with the program. This data is available from Nielsen’s NPower system.

Live Viewing:  With DVR penetration at around 50 percent of U.S. TV households (higher for demos under 50), commercial avoidance via fast-forwarding is more common than ever.  Nielsen cannot fully measure this phenomenon (C3 misses a substantial amount of fast forwarding).  Aside from minimizing channel switching, the best way to minimize commercial avoidance is to maximize the percentage of live viewing.  This is calculated by dividing the Live Rating by the Live+7 Rating. I’ve conducted research that shows live viewers’ recall commercial brand messages at nearly three times the rate of viewers who watch TV via DVR playback.

Viewer Loyalty:  There are a number of potential measures of viewer loyalty.  I chose looking at the percentage of a network’s audience that watches 10 or more hours of the network per month.  This gets rid of the surfers and browsers, and hones in on viewers who watch more than just one or two programs – the most loyal (regular) viewers.  This data is available through NPower.

Each category is ranked independently, and the ranks are straight averaged, along with the C3 rating rank for whatever demo you are analyzing, to provide a composite ranking (of course, anyone who wants to provide more weight to one category can easily do so). 

Other categories important to any specific advertiser can be added, whether from such syndicated research data as TiVo, Nielsen Catalina, MRI, etc., or some proprietary dtatabase, but these three elements, Holding Power, Live Viewing, and Viewer Loyalty, should always be included in the mix when analyzing television.  They are foundational to maximizing commercial exposure.

I don’t include the broadcast networks because they are significantly higher-rated than cable networks, and as a result, have significantly higher viewer loyalty levels.  Because of the far greater original scripted series loads, they will have significantly lower rates of live viewing.  It is designed primarily for cable networks because their audience levels are generally in such a narrow range – for Adults 18-49 and 25-54, for example, less than half a rating point typically separates the top-30 rated general entertainment networks.

As an example, looking at November 2014, the composite ranking of the top-20 cable networks combining C3 ratings, Holding Power, Live Viewing, and Viewer Loyalty were, Adult Swim, Nick-at-Nite, ION, ESPN, ID, Hallmark, TBS, USA, History, Food, BET, HGTV, TV Land, A&E, AMC, ABC Family, TNT, FX, Fox News and Discovery.