• by Joe Mandese  @mp_joemandese, November 8, 2005

Some big media shops last week gave the networks notice that they will not negotiate ad deals based on anything but "live" ratings data when Nielsen begins reporting playback via digital video recorders (DVRs) next month. Now one of the biggest media buyers, Interpublic's Magna Global USA unit, is taking the action a step further, asserting it will no longer accept a far more pervasive form of time-shifting that is already baked into the TV industry's currency: ratings for programs recorded on videocassette recorders (VCRs). Unlike DVRs, which are estimated to be in only 8 percent of U.S. TV homes, VCRs are ubiquitous and represent a sizeable share of the audience estimates for most TV shows: 6 percent of the average prime-time show, and 15 percent of the average daytime show.

"Magna Global will not use live plus VCR recording, plus seven days of DVR playback data in negotiating with the networks," declares Steve Sternberg, executive vice president-director of audience analysis, in a position paper the agency plans to send to clients and the media today. The paper does not explain how Magna will separate VCR recording from Nielsen's ratings, but noted that it would deduct as much as 10 percent of the audience from some of the most popular prime-time shows. According to Magna's analysis of Nielsen data, VCRs currently represent about 9 percent of the ratings for hit shows like NBC's "ER" and "West Wing," and can be more than a third of the audience for some shows. UPN's "Veronica Mars" currently derives 38 percent of its audience from VCR recording.

The problem, says Magna, is the agency has no idea whether people actually watch the shows they recorded, or whether they see the commercials that appear in them, because Nielsen currently does not measure playback of VCR-recorded programming. Nielsen claims that unlike DVR playback, it does not have the ability to measure VCR playback. As an alternative, Magna is asking Nielsen to remove VCR ratings from its so-called reported ratings data. "They have acknowledged they can do that with relative ease," asserts Sternberg, who describes the continuing existence of VCR ratings as a "scam" that is much bigger than the DVR issue is, or will be for some time.

Originally, when Nielsen began measuring VCR recording in the 1980s, Sternberg says the TV audience researcher claimed it would have a solution for measuring playback within a "couple of years." That never happened, and VCR recording--not playback--has become an integral component of Nielsen's official ratings estimates, even as VCRs have expanded into more than 90 percent of U.S. TV homes. Moreover, when people do play back VCR-recorded programming, research indicates they fast-forward through more than 75 percent of the commercials in those shows.

Magna has repeatedly asked Nielsen to remove VCR data from its official ratings estimates, and Sternberg recently drafted a letter sent to Nielsen on behalf of the American Association of Advertising Agencies' Media Research Committee "stating in no uncertain terms" that removing VCR ratings was a "top priority." Nielsen so far has refused, something Sternberg calls an "outrage."

Interestingly, Magna hints that it would be willing to negotiate ad deals based on so-called "live" plus same day of DVR playback ratings with the networks if Nielsen would remove VCR ratings for the "live" component. Last week, Magna and several other agencies, including Mediaedge:cia, told the networks they would not accept any DVR playback estimates in their ad deals.

Magna is the corporate-level media negotiating unit that represents all network TV ad buys for Interpublic's agencies, including Initiative Media, Universal McCann and FCB Media.