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DVR Ratings War Looms; Agencies, Nets Dig in Their Heels

This year’s upfront will be one during which media agencies have the opportunity to stand out from one another, to make or break their reputations based on the success of their negotiations with the networks. That’s because the agencies are claiming, as they did last year, that they will only use live-broadcast ratings as the currency for negotiating ad prices in the May upfront, while networks are saying (as they did last year) that they will not do business unless DVR viewing is factored in, either via live-plus-same-day or live-plus-two-day ratings.

Last year, the agencies won, and were able to negotiate television ad buys using live-only ratings. Media agencies such as MediaVest believe the commercial-ratings to be released by Nielsen will eventually solve the problem, writes MediaPost. But Nielsen will not be releasing commercial ratings until the end of May, too late for use during the upfronts.

In the meantime, “I’m expecting this throbbing pain in my head to get worse,” Steve Sternberg, executive vp of audience analysis for Magna Global USA, is quoted as saying.

Nielsen’s delay of the commercial ratings was in response to industry disagreement about various elements in the ratings methodology.

A CBS representative says that the network “intends to get paid for DVR viewing in this year’s upfront negotiations,” while Alan Wurtzel, president of NBC Universal research, says, “We have got to get some credit [for viewers] beyond live. The live-only data stream is a distortion of how people watch television today…. Live-plus-same-day is a good compromise and live-plus-same-day is what we are going to use for this upfront.”

Another broadcast network sales executive pointed out that last year, the networks didn’t know enough about the DVR impact on viewing. This year is different, he says, adding that the conversation will not be tabled again and that the network will not give in to the agencies.

While it is clear to agencies as well as to networks that people do indeed use DVRs to watch programming, it is unclear who is fast-forwarding through commercials, and whether there is still any value to an advertiser if a commercial is fast-forwarded through.
The article points out that, because most media agencies subscribe to Nielsen’s NPower system, they can pull together their own commercial ratings, which could make the DVR conversation moot. But to do so is a protracted and complicated process.

“Even if we use NPower to get commercial ratings for some clients and use that as a negotiating tool, we can’t do it for all of them,” one media agency executive is quoted as saying.

Media agencies are “really going to earn their money from their clients this year,” another says.