How Much Is That Ad View Worth When the TV Show Is a Week Old?by
The dramatic growth of on-demand TV viewing—The Voice when you want it, not when NBC dictates—is causing some advertisers to reevaluate the value of shows as much as a week after they’re initially broadcast.
For years, television advertising has been based on a viewing window called C3, the live broadcast of a show plus the following three days. That’s when most of an audience shows up, and it’s the “currency” on which networks typically guarantee a certain number of viewers and for which advertisers pay. Yet evidence is growing that the subsequent four days, called C7, draw plenty of viewers—especially among teens and millennials who wouldn’t dream of dealing with a cable TV bill. Moreover, networks led by CBS have been actively pushing for deals that allow them to be paid for whatever residual viewership there is on those four days, with CBS boss Les Moonves predicting a C30 ad window at some point.
“We are going to get paid for people who watch our shows 22 days from now,” Moonves said in December at a UBS media conference. “We may not get paid as much, but if you’re advertising Kraft Macaroni & Cheese, what the heck is the difference if you watch it tonight live or 21 days from now?”
As part of the VCR’s slow demise, the digital video recorder entrenched the notion that recording your favorite shows could be simple and free your schedule for TV watching at your convenience—and that you could skip the commercials entirely. Today, with the proliferation of DVRs and streaming services such as Hulu, Amazon Instant Video, M-GO, Vudu, and Netflix, TV fans have an abundance of options outside regular cable, broadcast, and satellite for catching new episodes. So if you catch Cosmos or Castle on the weekend, days later, how much is your endurance of that creepy “Mr. Tickles” commercial worth to Geico?
Right now, that’s hard to say, given that it’s early days for these discussions at most networks. But it’s likely to be worth something, given the growth at the video services. The latest data point in the ad sellers’ arsenal comes from TiVo Research, a subsidiary of the DVR firm, which found ratings increased more than 10 percent when it expanded the C3 window to a week. “We sort of live in a world now that’s long tail,” says Jonathan Steuer, TiVo’s chief research officer. The study focused on prime-time network shows using viewing data from a sample of 350,000 random TiVo users from September 2012 to August 2013. About half of U.S. households have a DVR, according to TiVo.
Focusing just on Modern Family, a hit sitcom for ABC, TiVo Research found that viewership rose nearly 11 percent in days four to seven. With 17 ad spots per show, and 24 episodes per season, the network could have earned an extra $10.9 million in revenue, the TiVo Research said. “The push we’re trying to make is that there are more sources of data that should be considered,” says Steuer. The C3 window dates to 2007, with insufficient evolution over the past seven years to account for the ways people use DVRs and their embrace of syndicated video-on-demand services, such as Hulu, he says. “You’re having the whole conversation about TV advertising in a very different context in the first place.”
Advertisers understand that lots of people watch TV shows on a delayed basis, but in the grand scheme of their buying, the numbers have not yet proved compelling enough to adopt a larger window, says Brad Adgate, senior vice president of research at Horizon Media. “Obviously there’s some (advertising) value there,” he says. “But I don’t think the lift is all that great. Generally, viewers still have a tendency to watch content in the first three days.”
Still, new measurement techniques are being pioneered quickly, with Nielsen Holdings, TiVo Research, and others working to track ad viewing by seconds and across an array of platforms. Moonves and his network colleagues can’t wait—they’re ready to cash larger checks derived from their time-shifted TV viewers. “We’re getting closer and closer to our goal,” he says, “which is to get paid for every eyeball that watches our show and hopefully get paid the same for that, and I think that is obviously happening.”