This is a baby step, not a giant leap forward

The industry is greeting the new "commercial ratings" as a new holy grail. The idea that TV stations will be able to report on who is actually watching commercials rather than fast forwarding thru those ads is a step forward. But as this editorial in Adweek points out, it's only a baby step.

Ratings only a building block

Published: July 17, 2006

It took some 65 years to come around, made the front page of The Wall Street Journal and was heralded in these very pages as nothing less than a sea change for the TV business. But all the crowing over commercial ratings only serves to underscore just how behind the times the advertising industry is.

Don't get us wrong: Measuring viewers of commercials, rather than simply the programming that surrounds it, is a quantum leap. We agree with Mike Shaw, ABC sales and marketing president, when he says it has "huge implications for the industry, based on return on investment and return on equity."

Of course, the networks will start out losing money, and there will be squabbling over how best to measure commercial ratings. Already, there is dispute over whether the standard will be average ratings by break or the average of all breaks. And some argue Nielsen may not even be able to pull it off. Still, as TargetCast TCM's Gary Carr said, it's a start.

But the fact that the industry is only starting to tackle the issue is unsettling. Pure measurement should be the building block upon which other metrics, such as engagement, are layered. In this age of interactivity, where video-on-demand and click-to-buy technologies can actually measure sales results and purchase behavior that result from marketing, knowing who is watching your commercial isn't nearly enough. What marketers need to know-and are willing to pay for-is what motivates them to buy.

Pundits love to predict the demise of TV, which may never happen and certainly won't happen anytime soon, considering the $9.05 billion reaped in the just-concluded upfront. But only a fool could fail to see emerging media steadily chipping away at TV's hold on the advertising dollar as highly measurable digital and other technologies take root.

So yes, commercial ratings are history-making. But instead of patting itself on the back, the industry should look ahead and focus on new technology that would make commercial ratings ancient history.

Comments

[KDPaine]

Great point. I always loved the line my my father, who was the Managing Editor of Fortune at the time told me. Apparently the magazine industry was very loudly and publicly questioning the value of TV advertising back in the 50s. So the National Association of Advertisers had a meeting and someone said, you know, that guy Nielsen has an interesting approach. And they all said, okay -- and that's how it became a standard. So much for sophisticated anlaytics and research!

[jpkaye]

Most of the rest of of the world has had this capability for a long time, sometimes for decades. It's not difficult, and most TV stations have learnt quickly that it's just as much to their advantge as it is to advertisers: of course it can make a lot of extra work for the media departments of ad agencies.

Mind you, it's typical of Nielsen and the industry that they get round to making this available just as it starts to become less relevant!