Nets, ad buyers go slow

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NEW YORK -- After the last ad buyer leaves Lincoln Center and Carnegie Hall in the middle of May, after the last lavish party is concluded, the business of upfront negotiations begin. Maybe not right away, but they do begin.

This year, however, it could take a lot longer.

After last year's skip step with the networks' insistence that it get credit for DVR playback, and the ad community's successful pushback, the two sides are preparing to do just that: use a combination of program ratings, DVR viewership data and the recently introduced new metric -- average commercial minute ratings -- to determine the currency for this year's upfront.

The broadcast networks, led by ABC, last year wanted to get credit for the viewing that is done via DVR playback, correctly believing that it would have an impact with Nielsen Media Research counting DVRs in the Nielsen television index. The networks, in a rare show of unity, even trotted out research that found commercials are still seen by viewers who play a program back hours or days later.

No dice, the ad community said. They didn't want to be locked into a new system without having a track record first. Madison Avenue won. After several weeks of standoff, upfront negotiations started.

This year's new wild card is average commercial minute ratings, which were finally launched Thursday after a six-month delay and intense debate about their accuracy. Networks set ad rates for their shows based on the standard TV ratings that count the viewers who watch a TV program. The new metrics measure how many people watch the national commercials that air during the program. Data is available back to April 30 on commercial minutes viewed live as well as played back on DVRs up to seven days later.

That is, after all, what advertisers are most interested in. Sara Erichson, executive vp client services at Nielsen Media Research, said last week that the average commercial minute ratings have made it easier for the media industry to calculate viewing for commercials. (Nielsen Media Research is owned by the Nielsen Co., parent company of The Hollywood Reporter.)

That's even more important now as DVR penetration stands at 17% and is likely to increase further in the years ahead. Nielsen said that more than half of the people who use DVRs skip at least some commercials.

"It varies by person, and it varies by when they're playing it back," said Pat McDonough, senior vp planning policy and analysis at Nielsen. She said there's less commercial avoidance than believed by the media industry.

Nielsen believes that there's going to be a lot of value in these upfront negotiations for buyers and sellers who can measure commercial avoidance or at least speak a more common language.

"The data is clearly showing that there is value to some of the (DVR) playback and there are important consumers who are seeing your commercial while they are playing your program," McDonough said.

How much value is a matter left to Madison Avenue and the networks, which seem to be coming closer to agreeing that live-plus-three-day viewing could become a currency for this year's upfront negotiations.

And even if buyers and sellers come to an agreement this year on the metrics they'll use to measure the ad performance, it might only be a temporary solution. Already some on Madison Avenue are clamoring for even greater detail that would replace average commercial minute ratings with ratings for each individual commercial.

Erichson said that Nielsen's technology allows drilling down to at least 30-second spots and possibly further with more investment. So advertisers might be able to see the efficiency of their 30-second, maybe 15-second spots. But she said that it will be dictated by clients' needs and what the marketplace will allow.

"It's certainly very possible that this is a steppingstone," Erichson said.

Insiders say there's still a lot of work to be done before the upfront negotiations start in earnest, though agencies and network executives have been laying the groundwork for a while now, well before the schedules were presented. But with all the questions surrounding establishing a uniform standard on how to rate viewership for TV programs and commercials, the upfront negotiations are likely to be slower than the brisk pace of some recent years. One year the upfront negotiations began after the broadcast networks finished their fall programming presentations. There isn't that urgency right now.

"I don't know, maybe Fourth of July," one media executive said last week.
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