Nielsen’s Plan on Ad Viewing Draws Fire

Nielsen Media Research Inc.’s plan to begin releasing data on TV commercial viewership is already stirring controversy, with a major advertising company questioning the ratings firm’s methodology.

“We are somewhat disturbed by Nielsen’s plans,” said Magna Global, which oversees several large ad-buying agencies, in a report released Wednesday. “These are not commercial ratings, nor are they an acceptable surrogate.”

Magna’s chief researcher, Steve Sternberg, who wrote the report, criticized Nielsen’s proposed system for not being precise enough to differentiate between commercial messages and the content of a TV show. Thus, several seconds -- or perhaps more -- of programming could get lumped into the time that Nielsen uses to calculate the “average commercial minute.”

Sternberg also blasted the plan because so-called time-shifted viewing -- shows that are recorded and watched later -- would be part of the measurement, including shows recorded on videocassette recorders.

“Previous studies have indicated that at least a third of VCR recordings are not played back, and that at least two-thirds of playback involves fast-forwarding through commercials,” Sternberg wrote. “Nobody debates this anymore.”

Magna’s strongly worded criticism underscored how much television ratings drive the economics of the TV industry. Nielsen’s ratings are used by television networks, cable channels, syndicators and TV stations to set the prices that yield about $60 billion a year in ad dollars.

Nielsen’s plan to begin reporting commercial viewership this fall could create a new yardstick to measure audience levels. For the first time, ad rates would be based not on how many people watch a given show but on how many stick around to watch the ads sprinkled throughout it.

But the report from Magna, part of the Interpublic Group of Cos., which oversees ad-buying firms such as Universal McCann and Initiative, indicates that even before Nielsen has the chance to launch its new service in November, there will probably be much kibitzing over how commercial viewership is quantified.

The current setup, designed more than three decades ago, gives overall ratings for a half-hour of programming, including commercials, promotions and the opening and closing credits.

Nielsen, which is owned by Dutch market research giant VNU, outlined its plan to report the “average commercial minute” in a letter to its clients late last month. Since then, the proposal has gained traction as the major broadcasters have thrown their weight behind it.

Some in the TV industry have suggested that the system could become the “currency” for negotiating buying and selling ad time as early as next spring.

But Sternberg said Nielsen’s plan wasn’t ready for prime time. In the report, he outlined several demands, including that any “time-shifted” viewing that occurs more than 24 hours after the initial broadcast be tossed out, along with VCR recordings. He also said that at least 30 seconds of every minute measured must contain a commercial -- not a snippet of a show.

Nielsen stood by its plan.

“How the industry chooses to negotiate is up to them. Our job is to provide the data,” said Gary Holmes, a Nielsen spokesman.

Holmes said the VCR issue would become less important as more homes upgrade to digital video recorders. He also acknowledged that the system was a work in progress.

“The average commercial minute is a first step,” he said. “If there is an industry consensus for more detailed reporting, we will try to accommodate that.”

Jon Nesvig, Fox Broadcasting Co.’s advertising chief, said it was unrealistic to demand second-by-second breakdowns of viewership. Trying to use that much data to negotiate ad rates for individual commercial breaks would be unwieldy, he said.

“When you are running a business this complex, you’ve got to make things as simple as possible and not as complicated as possible,” Nesvig said.