June 23, 2007
What Do Commercial Ratings Mean, with Nothing to Compare Them To?

As the upfronts continue to be negotiated, value is the question on everyone's mind. Now that commercial ratings are being gathered by Nielsen's, the idea is that it would lead to more accountability.

But how does that shift the metric? Obviously, with the first chance the industry has had to measure commercial ratings, it is hard to determine whether viewers are watching 30-second spots more or less than they did before. In other words, the first year of collecting data on commercial viewing would be better served as a benchmark to compare future years and has limited value as a reliable metric in itself.

Of course, I've expressed my concern about the reliability of the Nielsen ratings system as it stands on several occasions. Its value at this point relies much less on measuring the most viewed and most popular television content but rather on keeping the system status quo in place so that the industry can keep running business-as-usual as it always had.

That being said, there have been a variety of measures that Nielsen has inserted to make its information more reliable, and increasing the size of the Nielsen sample is a major part of that process.

But that still raises important questions about what the point of the Nielsen television programming ratings is when compared to the commercial ratings for a system used to measure viewers for advertisers and where commercial ratings will fit into the process long-term.

Jon Lafayette with TelevisionWeek wrote a blog entry last Sunday about some of these very questions, poitning out that if, in the past year, buyers bought 10 ratings points to reach 10 million program viewers, but only 9 million of those 10 million watched commercials.

If that's the case, then shouldn't those same buyers only have to buy 9 million commercial ratings points to reach the same viewers, which could be considered "a 10 percent reduction in demand for ratings points" using the measure of supply and demand.

Lafayette is confused because the networks seem to be looking for bigger price tags instead of smaller ones when talking about a smaller pool of viewers now that commercial ratings can be taken into account.

That level of confusion is precisely why the Nielsen commercial ratings mean so little in the first year of their running, as there is nothing to measure them against. Putting aside all the concerns and questions about the validity of these ratings, purely as a metric they mean very little until there's enough data to measure against something and to determine a pattern over time.

Of course, logic would tell you that there should be less demand for fewer viewers, but on the other hand those viewers watching commercials just don't mean much when there is no comparison point.

Earlier this month, I wrote about information touting that some shows had more commercial viewers watching counting DVR viewers three days out than watched the program itself live, according to Nielsen numbers.

I wrote, "Obviously, the Office rating for live plus three days was substantially higher for the programming, but the spin this data takes on it makes a pretty blunt point: people still watch the commercials on DVR for a variety of reasons, and networks are now going to try and make new arguments for the inclusion of this DVR data."

See more on my continued posts about the commercial ratings here and here.