Live Ratings Kill Network Ad Yield, Hundreds Of Millions Sacrificed

The author states that their editorial is “based on conversations”, but numbers are being put against DVR/PVR delayed viewing and losses of advertising revenue.

This isn’t a new exposé on “how PVRs kill advertising’s revenue base”. It’s a look at how the increase in Nielsen figures are not being counted, and accounted for, in advertising sales.

To date, delayed viewing from digital video recorders is contributing another tenth of a Nielsen rating point to each of the Big 3 network’s prime-time ratings, which buyers estimate could be worth as much as $86 million per network over the course of the new TV season. When the impact of other broadcast network dayparts, cable and syndication are added into the equation, the total impact of the live-only decision could be worth upwards of half a billion dollars in sacrificed advertising revenues.

Yes, it could be worth that much. Probably. Perhaps. If there were consensus:

In the upfront, networks acceded to buyers’ demands that ratings incorporating DVR viewing (“live plus same day” and “live plus seven day”) should not be used as currency. Working under the impression that DVR viewers are rabid commercial-skippers, buyers insisted that negotiations should be based only on “live” figures. ABC ad sales chief Mike Shaw put up a fight; he first insisted on a “live plus seven” deal. Then he pushed for “live plus same day.” But a lack of consensus among all network sales staff seems to have led to the capitulation.

It’s clear to see that the old observation of DVR-users’ habits lives on in high-level network negotiations. The argument is perhaps a double-edged sword; the use and misuse of the information becomes part of the power play. That is, if the networks are using the “.1” bonus ratings to drive their sales team, then they need to convince the advertisers of the added benefit.

Inversely, if the advertisers don’t want to pay for the zapped ads’ eyeballs, they they should consider revising the blanket statement that DVRs kill all advertising’s effectiveness. They could push for better measurement of the behaviours that lead to zapped ads, and better access to interactive advertising platforms: and negotiate on the whole-picture of the audience.

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