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November 22, 2006

Global Magna Not Thankful for Nielsen Commercial Ratings Compromise

One thing has been proven over the past few weeks--the tensions over the viability of the 30-second spot are being fueled into the continuing debate about commercial ratings. The industry has been at war for a while as to whether the DVR is going to be the technology that finally proves that a lot of people don't watch 30-second spots. We started writing about all this around this time last year. That was when the networks came together and claimed that the paradigm the industry has lived under for decades is as vibrant as ever.

The latest news is that Magna Global has announced that it does not support adding a new stream for average commercial minute ratings to the Nielsen data. According to Jon Lafayette's summary with TelevisionWeek, "Magna Global said it wouldn't support a compromise at live plus two days or live plus three days, which some networks and ad buyers are advocating." The tension is over whether the average commercial minute ratings would count DVR viewings after the show initially airs. The networks believe they would be greatly hurt by a plan that didn't count DVR viewing at all and felt that same-day viewing was also too narrow, while measuring viewing for seven days after was quite useless for any timely ads.

Plans for the commercial ratings were delayed in October and then again in November. This is a big battle, and neither side wants to show defeat. More importantly than that, both sides don't want to admit to the increasing lack of confidence in the whole traditional system television advertising is based around. So they're taking it out on these Nielsen ratings, in a case of deflected anger and frustration. Watching these arguments as a steam valve for the industry provides a fascinating indication as to what is going on under the surface in the current media environment.

Magna's statements say that anything that stretches beyond same-day viewing for commercial ratings "is simply not acceptable to many advertisers" and said that VCR-recorded shows should be removed from the calculations. Here's the problem--the Nielsen system can't measure when someone is watching a VHS tape as to what they are watching in particular, just whether they recorded the show or not. Networks say that, if a viewer records the show, it should be counted. Magna rejects that logic (and for understandable reasons, considering many people just pop a tape in the VCR and leave it recording. Back in August, advertising agencies further voiced their displeasure with the counting of VCR tapings as viewing. At the time, I wrote:

These issues surrounding the VCR aren't a new point of contention from advertising agencies, but it has an even more immediate impact on these commercial ratings, which may have a significant future impact on how advertising rates are negotiated and purchased. However, the networks maintain that, since playback cannot be measured, the number of recordings should be measured because including the data is more accurate than excluding it.

Magna first voiced their complaints in July on a variety of issues, including these. At the time, I wrote:

It's no surprise that people on both sides of the advertiser/broadcaster fence would fall into disarray over this issue, though. After all, the broadcasters aren't too thrilled to be going through this process in the first place, since they've been trying to uphold the status of the 30-second spot. And advertisers have plenty of reasons to be skeptical at what they see as protections built in. It shouldn't surprise anyone to hear Nielsen's policies knocked as not being an accurate reflection of real viewer behaviors, especially since it measures on quantity only and does not know how to handle new technologies at this point.

Instead, they would prefer ratings from second-by-second data but agree that the idea of the average commercial minute is better than nothing at all, even if they can't support the current plans for compromise. They would probably at least prefer The Weather Channel's minute-by-minute plans as compared to the average commercial rating. The problem is in the ideas for averaging commercial ratings minutes. If you count any minute that has any commercials at all in them, they will get a bump from the part of that minute that is the content from the actual show. And you can't tell which ads people watch in particular if all the commercial breaks are averaged together. The Weather Channel's proposal gives more accountability, but makes more sense for a channel that often doesn't have discernible 30-minute blocks of programming.

Of course the 30-second spot isn't dead, but it is slowly being reminded that it's relevance has always been a bit of a sham. The Nielsen ratings and commercial breaks have always been what the industry has built on, but it's also been a nuisance to many viewers who have skipped those ads for years. Whether they skipped them by flipping through channels or perhaps by just leaving the room or having a conversation with the sound turned down during the commercial breaks, the idea that people sit attentive during the commercial breaks is by and large something everyone has always known is a bit of a crock, except during the Superbowl or particular moments of boredom. Just refer back to the tensions I wrote about last November regarding WWE Unlimited's plan to air content online during the commercial breaks of the live show and the fit that people in the industry threw.

My argument was that online programming between the commercial breaks would keep people in the room and from flipping channels and encourages live viewing rather than time-shifting, which would cause 30-second spots to be more relevant, but many people in the industry threw a fit, saying that it would distract from the commercials. The real reason for their fit? That agreeing would force them to concede that people don't sit breathlessly watching while commercials are on.

The idea for commercial ratings gained traction back in June, and the networks immediately conceded even while questioning the reasoning behind these decisions. They made it clear that the DVR is just a continuation of technologies over the years that let people skip ads, and David Poltrack with CBS questioned the motivations of ad buyers and advertisers to have commercial ratings in place to prove it, as it relates to ad negotiations. Then, last month, NBC/Universal pulled out.

Does this mean that, after all this controversy, the whole idea could end up falling through? These ratings mean nothing if neither side consider them valid, but will there be any way to reconcile these differences in an argument over a system that does not have the semblance of power that it once did?

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