Commentary

Rethinking Ratings: How Advertising, Programming Are Changing

by Alex Petrilli , Op-Ed Contributor, March 16, 2018

Nielsen ratings have been the universal currency of television advertising and programming since 1950, the year Nielsen Media Research began applying its radio data collection to the blossoming television industry.

For nearly 70 years Nielsen data has been the deciding factor in cancelling TV shows and placing advertisements. It has become singularly embedded in the industry as the standard of measurement.

However, the rapid growth of internet-enabled smart TVs and devices enables more options for data collection than diaries, set-top boxes and meters. Although Nielsen and others are attempting to catch up, new technologies are changing not just the measurement, but the content of television itself.

Changing Viewer Habits

Back when broadcast was the only game in town, demographic data was the dominant tool for focusing advertising. With no other data on a national scale, traditional ratings were omnipresent in every programming and advertising decision.

Now, there are more ways to watch television programming. As over-the-top (OTT) programming provides services direct to consumers, the viewing habits of Americans are changing in ways no one could have predicted.

AMC's “The Walking Dead” debuted in fall 2010 and became an overnight cultural phenomenon, with unprecedented ratings for a cable television program. Now promoted as event viewing, “The Walking Dead” is still broadcast in fall but consumed year-round, often by fans that wait until the entire season is available.

OTT technology has enabled binge watching, instead of viewing through regular weekly episodes.

New Systems With Sharper Vision

In 2017, there were an estimated 22.2 million “cord cutters” over the age of 18, per eMarketer, with that figure expected to increase. The use of smart TVs also increased sharply in 2017, with over 168 million viewing through internet-connected devices.

Better measurements are coming by leveraging the connectivity of smart TVs, as well as technology platforms from companies like comScore. This will enable programmers and advertisers to discover what audiences are watching at much closer focus than Nielsen ratings provide.

This allows content creators and advertisers to develop more in-depth viewing segments and determine what people want to see on a household level.

Nielsen is still the currency of television viewing data, but many of its systems -- diaries, for example -- are not providing the granular data that enables programmers and advertisers to understand viewer decisions.

Which is a possible reason Nielsen has vowed to eliminate their use after the May 2018 sweep. Nielsen is moving to updated systems like code readers, which also have potential demographic limitations.

The Death Of Sweeps Week

The idea of demographic ratings and programming by seasons is thoroughly ingrained; they will endure until something compelling enough supplants them. People will still be accustomed to important programming in November, February and May.

But that expectation of continuity will not stop the march toward year-round programming, as institutions like Sweeps Week become less important with each cord cut and video streamed.

It would be a mistake to correlate the decrease of traditional television viewing with a decrease in overall viewing. In fact, the opposite is true; internet-connected devices are driving viewership up, with a corresponding increase in ad spending.

However, as traditional seasons become supplanted by capsule-style launches, advertisers and broadcasters will need to understand and utilize a variety of measurements to determine success.

Using anonymized digital data to provide addressable advertising is a major element of this next wave.

Television remains one of the most effective mediums for advertisers, but how they find audiences is undergoing a profound shift. The ability to sharpen focus and identify specific targets will drastically increase the value of each ad to the consumer.

Combining granular data available through internet-enabled devices with addressable programs will allow companies to match their ad spending to targeted viewers, regardless of device.

advertising, ratings, tv

4 comments about "Rethinking Ratings: How Advertising, Programming Are Changing".

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Ed Papazian from Media Dynamics Inc, March 16, 2018 at 7:59 a.m.
Alex, while it is obvious that Nielsen needs to find ways to measure all of the viewing that is taking place, regardless of venue, this is not as urgent as you imply nor as easy. The amount of viewing added to "linear TV" for an average TV telecast is, at this point, very small---a few exceptions aside. And this is mainly a time sellers' problem as they want to monetize every last set of "eyeballs" and not let the advertiser get these bonus droplets of audience for free.

But how does one equate a "linear TV" audience measurement where, the viewer identifies himself as a "viewer" of program content when the channel was first selected, with a digital "exposure"---- and especially for the commercials? With out-of-home audience measurement via PPMs we are expected to assume that if the device "hears" that a TV set is in use and knows what ad was on the screen that signifies commercial "viewing". Nonsense! As for digital all we have is time-on-screen, not "viewing" information. Until all of this is sorted out it's a bit unfair to blame Nielsen for proceding too slowly. In fact, it's use of the PPMs , acquired from Arbitron, for OOH "viewing" is an example of being hasty--at the prodding of certain sellers--- and also of the agencies not policing such matters like they once did.

Regarding "addressable TV", while this is a fine idea, in cases where it applies, so far the "addressable" folks, for the most part are unable to determine who is watching and they are resorting to profiling. So here, too, we've got a way to go before we have a workable alternative in place.

Finally, Nielsen has never used diaries for national TV ratings--onlyfor audience composition data and that ended in 1987.
Reply

dorothy higgins from Mediabrands WW, March 16, 2018 at 2:07 p.m.

Ho hum.

R. M. from self, March 17, 2018 at 2:45 p.m.

I'm not convinced that to "determine what people want to see on a household level." is moving forwards.

TV industy (content + delivery channels+ tech devices) will need to be a 1 to 1 personal evel to be able to target that user's mindset and their literal eyeball+ plus brainwave activity. (Even if they are deamed to be "in the room" that does not equal a conversion driven by user action/share/download/purchase).

"TV" is not as forward thinking as multi-screem silmultaneous "ratings". As people use more than 1 screen at a time, esp while watching linear TV , a "rating" is actually a shared rating between devices.

Ed Papazian from Media Dynamics Inc, March 19, 2018 at 9:12 a.m.

RM, I agree with you, however the quest for comparable TV/video audience metrics---especially as regards commercials ----is probably not going to be effectively resolved in the near future. We do not now have anything approaching a measurement of TV commercial "viewing" for either in-home or out-of-home and are relying basically on the assumption that if an ad appears on a screen it is "seen". The same issues face digital platforms---only more so---as here, we are often dealing with small screens and many ads are accompanied by other content on the screen as well as being truncated or otherwise "zapped". We may just have to face the reality that "audience" data has its limits and it will be up to each advertiser to use common sense judgement, augmented by whatever information is available---ad recall, sales results, etc. ---to make decisions about TV/video platform mixes. "Data" can't tell us everything----we must accept some responsibility---- or who needs us anyway?