The 2007-08 television season marked a milestone that goes far beyond the debut of a slate of new programs. It was the first full season where Nielsen Media Research offered standardized ratings of commercials, giving networks and media buyers a way to measure the impact that digital video recorders (DVRs) have on commercial viewing.
The result is something that’s known in the industry as “C3 ratings,” a combination of audience ratings for average commercial minutes for live broadcasts plus three days of playback on DVRs after the live or original broadcast.
Until Nielsen began offering this new measurement tool last spring, standard ratings of live television programs were the currency used to negotiate the buying and selling of commercial time. The previous ratings measured average viewership during an entire program including commercials, while C3 can measure average viewership during specific times when commercials air. By all accounts, this momentous shift in ratings measurement was brought about by the relentless advance of technology and the booming popularity of DVRs.
When Nielsen began using households with DVRs in its samples in January 2006, it estimated that DVRs were in only about eight percent of U.S. households. Now, Nielsen reports almost 21 percent of the nation’s 113 million households have DVRs, a figure that many industry insiders expect to reach 30 percent within the next year.
This explosive growth has sparked debate among the networks and those who buy commercial time on their broadcasts. Networks contended they should get credit for the boost DVRs were giving overall viewership, considering that many people who might not otherwise have watched the live broadcast were now viewing it via their DVRs. Media buyers countered that a good deal of those people watching programs recorded on their DVRs must be fast-forwarding through the commercials, the actual commodity the buyers are paying for. The compromise that resulted from this technology-fueled dilemma was C3.
Nielsen explains C3
“C3 was really coined by our clients and has become an industry term but it’s just one of six streams that we provide,” says Nielsen spokesperson Anne Elliot of the company’s new commercial ratings data. She explains that the six “streams” of viewer analysis provided to Nielsen clients in its Average Commercial Minute Data File include live programming, live programming plus DVR playbacks on the same day and DVR playbacks over a one-, two-, three- and seven-day period following the original live broadcast.
Elliot says that the new commercial ratings data is made possible because technology in “active-passive meters” Nielsen now uses in national market survey homes with DVRs recognize specific codes embedded in programs. These codes can determine the exact date the program was viewed on the DVR. The Nielsen meters also can capture when the DVR is in the play (versus fast-forward) mode during a particular program, making it possible to determine whether commercials were viewed or skipped during DVR-viewed programs.
“The advertisers and networks seemed to come together over the live-plus-three (C3), believing that it best met their needs, especially if you think about a movie advertiser, for example, who is advertising mid-week for a new release over the weekend,” says Elliot. “They don’t want to wait too much beyond those three days because they want you to go watch their movies over the weekend and if you don’t watch the commercial until a week later, then the movie may have already closed.”
Elliot adds C3 also became the standard measurement of commercial viewing because Nielsen research has revealed that 95 percent of all broadcast primetime viewing (live plus playback) in DVR homes occurs within three days of the original live telecast, and DVR playback occurring closer to the original broadcast retains a higher level of viewing during commercials.
Initial learnings and reactions
While everyone generally agrees that it is simply too early to gauge the long-term implications of C3, the new ratings data is providing a fresh glimpse of changing television program viewing habits spurred by DVRs.
Among the most significant revelations about DVRs’ impact on television viewing that have come from recent Nielsen research and ratings are:
- During premiere week of the 2007-08 television season, there was no significant difference between live program rankings and C3 rankings.
- When DVR playback is included in the ratings, audiences increase for both programs and commercials, although at different rates. Among households with DVRs, the average primetime broadcast program audience increases 73 percent including three days of playback, while commercial minutes within these broadcast programs increase 32 percent over the same timeframe.
- The sooner a DVR-captured program is viewed after recording, the higher the commercial viewing rates.
- The top five “timeshifted” primetime TV programs in 2007 experienced an increase in total viewership (in all U.S. households) of between 14.8 and 17.6 percent when live broadcast plus seven days of DVR playback are included.
- Ten percent of all broadcast primetime viewing is now seen via DVR playback, while 97 percent of all primetime cable and 98 percent of all syndicated programming are still seen live.
- Within DVR households, 58 percent of broadcast primetime viewing takes place live, with 42 percent occurring through some sort of DVR playback. Within these homes, 95 percent of all broadcast primetime viewing (live plus playback) occurs within three days of the original live telecast.
- The amount of cable and syndicated viewing that occurs via DVR is lower, with 85 percent of primetime cable viewing and 84 percent of syndicated programming taking place live in DVR households.
“I think that the advertisers and their agencies are probably feeling that this (C3 rating) is getting them a little closer to seeing who is really watching their message which is why they are buying time,” says Elliot.
Steve Sternberg, executive vice president of audience analysis for media agency Magna Global, believes the new C3 ratings system has united advertisers and programmers around a common goal of keeping viewers engaged throughout the program. He recently told Broadcasting & Cable magazine, “Their (networks) business in the past was program ratings, which didn’t necessarily coincide with our business, which was commercials. But now they have a stake in having the C3 numbers be higher. For the first time they’re trying to get more people to watch the commercials. That’s going to be a benefit to advertisers.”
Shari Anne Brill, senior vice president and director of programming for media agency Carat, also sees benefits in the C3 ratings. In a position paper endorsing C3, Brill wrote that C3 is “an important first step towards providing greater accountability for our clients. It also offers a better read of potential commercial exposure because it accounts for fast-forwarding as well as channel switching behavior. It also helps to shed light on commercial formatting issues.”
C3 and Scripps
Scripps Networks and the Scripps Television Station Group also continue to digest the C3 ratings and what they may mean going forward.
“One issue we’re keeping an eye on is how the broadcast networks respond to this process, specifically how they may adjust commercial breaks in response to ratings performance,” says Bob Sliva, who became the general manager of WXYZ in Detroit in January after serving as vice president/director of sales for the Scripps TV Station Group. “It’s much too early in the process to determine whether this methodology will provide any long-term advantages for the broadcast group. But it does enhance the analysis process for categories such as the effectiveness of the creative or ratings delivery based on the position of the copy in a commercial pod and, of course, measuring audience guarantees,” he says.
The executive vice president of ad sales and emerging media at Scripps Networks, Steve Gigliotti, reports that the networks have fared well thus far in the new C3 ratings landscape. “Our networks show well within the new C3 ratings measurement, with a couple of them ranking right at the top with adults and women,” he says. “Part of the reason we have some high receptivity and retention during the breaks is the environment we create for advertisers through our content and our innovative advertising tools such as our ‘short stories’ and vignettes.”
-- by Jeff Waddle