The advertising reality of Live+SD vs. Live ratings…
As longtime readers have no doubt noticed, ICN has been noting the various controversies regarding traditional Live ratings vs. Live+SD ratings. Monday, the story took a new and unexpected twist when I heard from a top industry ad sales executive regarding ad buying. The executive said that all commercial time purchased through the end of September for cable news is based on Live ratings and not Live+SD ratings.
Of the cable networks, FNC does not use Live+SD data to publicly benchmark its programming but MSNBC and CNN do (presumably, this also means CNBC and HLN do as well as both are sister networks of MSNBC and CNN respectively). But according to the ad exec, MSNBC and CNN are not selling by Live+SD. (Inquiries to CNN were not returned. An MSNBC spokesperson said they would get back to me but I did not hear back from them before this was published. However I did hear via another source that MSNBC is using Live data to sell advertising).
Before I get any further on the ramifications of the above, some background is in order. A majority (around 75%) of cable and broadcast advertising is purchased well in advance in what are called up fronts. Up fronts run for a year. The current year’s up fronts began last September and will expire in a couple of weeks and then next year’s up fronts will kick in. This next year’s up fronts will be based on a new time shifted standard that was agreed upon between all the broadcast and cable networks and advertisers and is called Live+3. There is an open question as to whether advertisers will really agree to ad rates based on Live+3 ratings for the cable news niche of the TV spectrum due to the low likelihood that DVR viewers would hang on to news programs past the first 24 hours in most instances, a scenario far more probable for TV dramas, comedies, and movies. But that’s a topic for another day.
The remainder of the ads that weren’t bought as part of up fronts are called Scatter and are divided up to be sold through each of the four quarters of the year. There’s all sorts technical considerations involved with the ad rate negotiation process; so technical that I’m not going to attempt to break them down here because it’s more information than you need and they really aren’t germaine to this subject.
The fact that Live ratings were used for the up fronts this year and, presumably, last year means that the Live+SD ratings which have been bandied about have been relatively meaningless as a benchmark because they aren’t what those nets have been using to charge for advertisements. It would be argued in some quarters that their importance is very significant for the future because time shifting in the ratings will be part of the next year’s ad buys. But what concerns me and what’s prompted this entry isn’t the future. It’s the past.
Live+SD ratings have been used on blogs like TVNewser and elsewhere in the MSM and on TV going back nearly two years now in some cases. And that’s the problem for me because those ratings apparently weren’t being used as part of the ad buying process. They weren’t used to negotiate the current year’s up fronts. So why were they being used publicly as the benchmark when they weren’t being used to contribute to the bottom line?
The likely answer seems to me to be PR. Live+SD ratings are frequently higher than Live ratings. Depending on the program and the day/time it aired the difference could be a few thousand (which technically would put the difference within Nielsen’s own margin of error for ratings) or it could be twenty, thirty, forty, fifty, sixty thousand. Or higher. The higher, the better, because it would make a program look better on paper than what a net was really getting for it in advertising money via the Live ratings. And, in the cut throat world of cable news PR, having the highest number is key. It’s a clever strategy. The only problem arises if someone finds out the ratings being given out publicly aren’t being used to charge for advertising. And charging for ads are what ratings are supposed to be used for.
Spud, I thought CNN’s charts/graphs and such they “trumpet” were based on the program ranker? Btw, isn’t the program ranker based on live data only? Can you get the .pdf versions of the program rankers in the future? I sent the new and NOT improved TVN a blurb wondering why he stopped releasing them. Apparently he didn’t find my inquiry worthy of a “blog” response. (I sent it via the tip box)
Comment by Terance — September 12, 2007 @ 3:57 pm
I asked him that too, Terance…by the tip box and e-mail. No response. What a surprise.
Comment by Anonymous — September 12, 2007 @ 4:04 pm
The program ranker is based upon whatever demographic you want to base it on. There’s a Live program ranker. But there is probably a Live+SD program ranker.
I get PDF versions of the monthly and quarterly Program Rankers. I have to convert them over to JPG because the blog won’t take a PDF upload…
Comment by Spud — September 12, 2007 @ 4:13 pm
Thanks Spud for that VERY interesting look into this subject. It really does help clarify matters. I can’t blame the networks for using the data that makes them look better but now knowing for sure that advertisers were never buying off the Live Plus really does make their PR claims quite questionable. Thanks!
Comment by Alison — September 12, 2007 @ 4:33 pm
Spud, I think this all makes perfect sense. I’ve recorded and watched many, many things on my DVR. I can honestly say that I’ve skipped over 100% of the commercials on these programs. It’s just so easy; an hour program takes like 45 minutes to watch.
I think the advertisers realize this.
Comment by William — September 12, 2007 @ 4:41 pm
Yes and using that same logic let us stop reporting the ratings for anyone over age 54.
The reality is by the time you hit age 54 you are locked into a certain brand of beer and chips and you are not going to be influenced by a flashy commercial to buy a new Ipod.
If DVR numbers are so irrelevant than so are the numbers of those over age 54. I say give us the live only numbers for the key demographic.
My apologies to anyone over 54 and to those who record their news programs with a DVR, but you don’t count for squat.
Comment by elmonica — September 12, 2007 @ 5:00 pm
Sure Elmo. Spin it however you want. People over 50 wouldn’t be at all interested in say, pharmaceutical ads, would they? How about cars?
Although, it is nice to hear you say all your fellow Olbyloons who try to pump up the DVR numbers “don’t count for squat”. Welcome to reality.
Comment by bigred — September 12, 2007 @ 5:13 pm
#6, yeah, elmonica, people over 54 stop buying cars, stop going on vacations, have no need for viagra/cialis, rarely vote, stop buying birthday presents for kids/grandkids, don’t need financial advise for retirement planning….you’re right, why advertise to these bunch of “locked in” folks.
Comment by Obama in 08! — September 12, 2007 @ 5:18 pm
At the end of the day what all this ratings talk hinges on is what is the average reader trying to get from the data? Does he/she want to know the rating because they want to know how many people are watching a show, or do they want the ratings to know how the business side is?
Comment by Steve — September 12, 2007 @ 5:33 pm
To be blunt Steve, it’s not the reader’s decision to make. The ratings were created for one purpose and one purpose only, as a measuring tool for broadcasters to sell their programs commercial time to advertisers. That the readers do not understand that is largely a matter of lack of education by Nielsen, the Trades, and the networks.
Comment by Spud — September 12, 2007 @ 6:01 pm
In a utopian world, I would prefer the news to be a public trust and held to that standard and not be held to an accountability method that the advertising community demands. However, news is a business and because of that, you can’t separate the news broadcast from the business side. It is a business and the reality is readers deserve to know why there can be a difference in the ratings from one site to another or from one channel release versus another.
It is supplying information so that one can have an informed understanding of the program performance if one so chooses and not have to be “in the business” to comprehend the nuances.
Comment by TV Colleague — September 12, 2007 @ 6:02 pm
Your misreading me Spud. I know what the ratings for the networks and ad buyers are for, I’m referring to the average reader of say this blog, or the person who reads an article in B&C. To what exactly are they getting out of it or trying to get out of these numbers.
Comment by Steve — September 12, 2007 @ 6:15 pm
So basically MSNBC and CNN use Live+SD to inflate their ratings because their getting their butts kicked by FOX.
Comment by mlong — September 12, 2007 @ 6:15 pm
Thanks for the informative piece, Spud. And thanks to MSNBC and CNN for misleading the public about their ratings numbers.
Comment by Goldfish — September 12, 2007 @ 6:35 pm
Spud: Good work.
My apologies to anyone over 54 and to those who record their news programs with a DVR, but you don’t count for squat.
Elmonica: Thanks for the apology. Today I was unexpectedly out all day and had to DVR “Your World With Neil Cavuto” which I’ll watch tonight.
And oh yes, last year I did get an new I-Pod.
Comment by Ira — September 12, 2007 @ 10:19 pm
Spud: Thanks
Elmo: So you think people over 54 don’t count for squat! I also remember somebody saying you cannot trust anyone over the age of 30, who changed her tune after SHE reached that milestone.
Comment by Missouri Show Me — September 13, 2007 @ 1:53 pm