Today, the most loyal program viewers, those who watch their favorite programs on DVRs, are the most likely to avoid commercials. These loyal folks only represent about half of TV homes in the U.S. but the vast majority of their viewing is time-shifted — which presents a dilemma for advertisers.
Season-to-date, 40% of viewing of prime-time original cable scripted series, and 20% of viewing to original broadcast scripted series, were time-shifted via DVRs.
Since virtually every study ever done on the subject shows about 75% of commercials on DVRs are fast-forwarded, this means, for original scripted series in prime time, roughly 30% of cable commercials and 15% of broadcast commercials are skipped.
The glass half-full way of looking at this, of course, is that 70% of cable commercials and 85% of broadcast commercials in original scripted prime time series are not skipped.
If we look at all prime-time series, we see a slightly different picture. Because original scripted series are such a small part of the cable landscape, an average of all cable series shows only 10% viewing through DVRs. Broadcast, with the bulk of its programming being original scripted series, maintains its 20% delayed viewing. You can add 5% to each for traditional channel switching.
That still sounds like a lot of commercial avoidance. But does anyone really believe that digital or online ads are viewed at anywhere near this rate? Part of the problem is that there’s so much good linear television data available that you can make numerous positive or negative points depending on what you are trying to sell and who you are trying to sell against. There’s little good data on digital commercial viewing.
Does it matter that Nick-at-Nite and ION each have 96% of their adult 18-49 and 25-54 audiences live, if they only average three-tenths of a rating point and are just reaching the same small group of viewers over and over again?
Does it matter that TBS and USA have a smaller percentage of live viewing (93% and 87%, respectively) if they have 40% more live + 7 viewers? Does it matter that CBS has only 80% live viewing among these demos, if it has five to six times as many viewers?
In a sense these stats matter, simply because it’s important to know how many people are potentially exposed to your commercials.
But from a marketplace perspective, they are not as significant as they might seem. And this has nothing to do with C3, which does not account for fast-forwarding through commercials. The key to buying and selling is not rating size, it’s how networks rank compared to their competition. Pricing will always adjust to new benchmarks, but its how you perform relative to your competition that really counts.
If you look at the broadcast networks among adults 18-49 and 25-54, for example, their ranking does not change going from live to live + 7 ratings. If you look at cable networks, while the actual ranking changes slightly, the top 15 networks are exactly the same among live and live + 7 viewers. On a program basis, 28 of the top 30 original scripted series on broadcast and cable combined, were the same among adults 18-49 live and live + 7. Among acquired, off-network series, 30 of the top 30 series were the same.
Research precision is not as important as directional accuracy. In other words, knowing that program A has 10% more commercial viewers than program B is more significant to buying and selling (i.e., pricing) than knowing the precise number of people watching program A.
Until the rankings dramatically change for different streams of ratings data, this is interesting from a research standpoint, but shouldn’t really be a major concern when it comes to the buying and selling of commercial time.