The Stickiness Factor

It takes a bit of shouting for syndication to be heard over the clamor of broadcast-network and cable TV, particularly around the time of the upfront ad market.

Syndication, which generates the lowest revenue of the three, is working hard to be heard this year with a slew of research studies from the Syndicated Network Television Association (SNTA) that tackle hot-button issues like DVR playback, commercial ratings and viewer engagement. SNTA expects those stats to go a long way in determining whether syndication sees revenue rise from $3 billion in 2006 and cost-per-thousand (CPM) increase over last year.

“We find ourselves in a position of educating and providing insight that might make someone say, 'Aha, that's useful information,'” says Michael Teicher, executive VP of media sales at Warner Bros. Television Group, which syndicates shows ranging from Friends to The Ellen DeGeneres Show.

Teicher is also on the SNTA board. “Our message is getting out there,” he says. “Hopefully, we've led the horse to water and will make it drink.”

The most contentious issue between buyers and sellers, as it was last year, is placing a value on viewers who watch programs recorded on digital video recorders. There's still no consensus on the inclusion of DVR playback in this year's negotiations, but SNTA isn't waiting around for agreement.

Instead, earlier this year, the organization issued an analysis of one week's worth of Nielsen ratings from September, reporting that 95% of syndication's 18-49 ratings in DVR homes come from viewers watching programs the same day they air. By comparison, only 77% of broadcast-network TV's primetime ratings were from live and live-plus-same-day viewing.

“You cannot electronically skip a commercial if people are watching a program live,” says Mitch Burg, president of SNTA. “And 86% of our audience is watching us live. Network prime, for example, has roughly 60% of people watching it live.”

SNTA also reports that, among adults 18-49 who watch DVR-recorded programs, 62% do so the same day as the original broadcast, compared with 45% for network primetime programs. And 91% of recorded syndicated programs are played back within three days, compared with 84% of network programs.

“This is one of the bullets in the gun for any syndicator where most of the programming is viewed, if not live, very close to live, and, as a result, commercials are not skipped by a device,” says Elizabeth Herbst-Brady, general manager/senior VP of ad sales at Twentieth Television, a syndicator of such shows as Family Feud, Judge Alex and Malcolm in the Middle. “If you're an advertiser, not only do you care about the environment, but, at a minimum, your commercial is being seen.”

It's generally assumed that viewers don't record first-run syndicated programs since many of them are on every day, creating less urgency about seeing them. Also, off-net shows are repeats to start with, which means that, if they are popular, they will be played over and over for years to come.

Nielsen Media Research last year began reporting DVR playback and, in January, expanded that service to include multiple levels of viewing, from live-plus-same-day ratings to live-plus-seven-day.

Negotiations dragged during last year's upfront when ABC held out for the inclusion of some viewers watching DVR-recorded programs. It eventually gave in to buyers who insisted upon using only live ratings because it's unclear how many people are fast-forwarding through commercials.

Susan McClellan, national broadcast buying strategist at Empower MediaMarketing, says SNTA's DVR findings will bolster syndication in the upfront ad market, particularly if buyers and sellers agree to use DVR ratings this year.

But she also notes that syndication's research, no matter how compelling, cannot completely make up for what she says is its main weakness: “The bigger issue for syndication is programming. They've been on such a downturn if you look at all the failed programs last year with Dr. Keith Ablow, Megan Mullally, Geraldo at Large and others. That's what syndication has to solve. How are we going to get good first-run programming that sticks around?”

Meanwhile, perhaps the biggest change ever to take place in the TV ad market will dramatically affect next year's upfront and is already a recurring topic of conversation this year. Nielsen, for the first time ever, will begin issuing average commercial-minute ratings later this month.

These ratings are widely expected to replace program ratings as the currency used in negotiations, though probably not for this year's upfront. The data will only begin coming out as the upfront ad market gets under way.

“I don't think it'll factor into this upfront,” says Suzzie Malloni, national broadcast buying strategist at Empower. “It won't be a big factor because a lot of agencies aren't yet equipped to handle or evaluate that information. I think we need a year to analyze it.”

Still, SNTA has been touting syndication's strength in this area, relative to broadcast-network and cable TV.

Citing an analysis of Nielsen ratings from media-buying agency Magna Global, SNTA says syndication's commercial pods are shorter than network and cable pods. In theory, that should mean more viewers hang around to watch, and indeed, that's what SNTA's research determined.

Syndication indexes at a 98 in retaining program ratings during commercial breaks, or only 2% below average, versus a 93 for broadcast-network primetime and a 90 for cable TV.

This stat is roughly the same for all kinds of syndicated fare, with game shows indexing highest at 99, followed by talk and court shows at a 98 index each, entertainment newsmagazines at 97, and sitcoms and dramas at 96 each.

Empower's McClellan says buyers will keep these findings in mind during negotiations. “We'll take a look at it, but without a history, it'll be difficult to use in negotiations,” she says. “Certainly, this time next year, it'll definitely play a major role in how we negotiate.”

In a separate study, SNTA also addresses viewer engagement, a much talked-about concept that isn't clearly defined but ultimately is meant to gauge how well viewers pay attention to commercials.

Research company E-Score recently found that TV viewers identify and trust stars of off-network and first-run syndicated programs, suggesting that viewers are engaged with these shows.

For example, survey respondents trust off-network–sitcom stars like Friends' Jennifer Aniston nearly twice as much as the average TV personality. Moreover, viewers are about 50% more likely to trust syndicated-program hosts like Oprah Winfrey than the average TV personality.

“That's a tremendous association, and it falls under the category of however you define engagement, or it's a piece of it,” says Teicher. “Those brands that have resonance with consumers have to be important to advertisers. But does it enter the discussion when we're negotiating in the upfront? No. It's part of what we utilize as a sales tool to make our programming more relevant and desirable.”