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MBPT Spotlight: Broadcast Networks Love Their C7 Currency; Advertisers…Not So Much

Broadcast networks, eager to prove the value of new metrics, have been promoting their live-plus-seven-day primetime ratings heavily in press releases to the media lately. But even with all the resulting articles about the sizable audience gains of programming in time-shifted mode, most media agencies are not really buying in.

The agencies’ lack of enthusiasm is not only because viewers waiting via DVRs can fast-forward through the commercials they buy for their clients, but also because even if those commercials are watched, for many major advertisers in key categories, timing is more important than volume.

In a recent newsletter to execs from media agency Carat, Billie Gold, VP, director of buying/programming research, wrote, “We are sure you all see the trades and email blasts touting how well a particular show did when time-shifted; live-plus-seven viewing is counted in. Well, that’s great and it means a lot more people are watching the show in time-shifted mode, but it doesn’t necessarily mean that the extra delivery is what our clients are getting.”

Gold specifically cited “NBC’s latest spin in the trades stating that their new hit show The Blacklist now holds the record as the first show ever to add an addition 6-plus million viewers when going from live-plus-same-day to live-plus-seven, a 57.3% increase. That’s certainly great; however, when it comes to C3, the currency we use, there is only a 10.5% lift in ratings. Don’t get me wrong, that’s still worth boasting about, but we want you to understand the dynamics of network press releases.”

For that week—Sept. 30 through Oct. 6—The Blacklist averaged 11.35 million viewers in live-plus-same-day and 17.85 million in live-plus-seven-day viewing. But in live-plus-three-day viewing, or C3, on which most media buys are based, The Blacklist averaged 12.5 million viewers.

Actually, for that week, The Blacklist didn’t have the largest percentage of audience growth for either live-plus-seven or C3. That honor went to Fox’s New Girl, which grew its live-plus-same-day by 68.5% in live-plus-seven mode and by 15.6% from live-plus-same-day to C3. But New Girl’s C3 viewership was only 4.4 million viewers, which is still pretty paltry.

Of 96 primetime shows during that week, all 96 increased their viewership in live-plus-seven-day mode, but only 47 increased their viewership in C3. Clearly the networks would want the new negotiating currency to be based on live-plus-seven-day so they could charge more for all of their shows.

There’s also the question of logistics in seven-day measures. Live-plus-seven-day ratings include the total viewership of a show over a seven-day period, whether the viewers are watching the commercials or fast-forwarding through them in time-shifted DVR mode. With C7, Nielsen only includes viewers over a seven-day period who watched the commercials during their viewing of the show. The distinction is all part of the complications of evolving what judgment works for all sides—along with the innate issue of immediacy.

Timing is Everything
That issue won’t exactly go away, as brands in categories where advertising is bought to spur consumer sales on a more immediate basis are going to oppose a shift to C7, even if the networks offer them discounts.

Categories like retail, movies and auto want consumers to see their ads and respond within a day or two, not a week later. For brands in categories such as pharmaceuticals and consumer packaged goods, immediacy is less important.

With many of the largest TV ad spenders opposing a switch to C7—a switch broadcast networks seem to be lobbying for— it is unlikely that such a move would happen. But there is a possibility that a dual ratings currency, i.e. C3 and C7, could come into play at some point.

That’s because those large TV ad spenders less concerned with timing might welcome the potential rate discounts coming from broadcast networks in a move to a C7 upfront currency.

Some media agency execs say that may already be happening. “Deals are being done for some clients with the broadcast networks using C7 ratings, but right now there aren’t that many and in order for a network to get a marketer to agree to C7, they have to offer decent-sized rate discounts,” said one agency executive who did not want to speak for attribution.

Carat’s Gold agrees that a complete move from C3 to C7 is highly unlikely, but she does believe if the networks offer sizable enough price breaks there would be some marketers who would sign C7-based deals.

From an agency research perspective, Gold says it would make the agency’ job much more complex, having to deal with two sets of ratings currencies throughout the season. Keeping data on one currency is hard enough, she says.

How widespread is time-shifted broadcast primetime viewing this season so far? According to Nielsen data compiled by Carat, 71% of all primetime broadcast viewing has been watched live, while 82% was watched within the same day and 96% of time-shifted viewing was watched within three days.

Saturday is the night most watched live, at 94%, since most of the shows are repeats and not DVR’d, and also with ABC airing live college football, along with Fox and NBC on certain Saturday nights. Thursday has the lowest percentage of shows watched live at 61%.

NBC is the network most watched live and live-plus-same-day, primarily because of Sunday Night Football, which comprises four hours of its weekly schedule, the Carat-compiled Nielsen data finds. The CW is the network that is most time-shifted.

The most watched non-sports show live is CBS’ news magazine 60 Minutes. The most watched scripted series live, live-plus-same-day, live-plus-three-day and live-plus-seven-day is CBS drama NCIS.  In live-plus-seven, the NCIS audience during the week of Sept. 30 to Oct. 6 reached 24.2 million. That should answer the question of why CBS would like to move to a C7 currency.