Nielsen Co. has begun monitoring Americans’ viewing of TV commercials, possibly writing new rules for the sale of television advertising time.
Nielsen has for years calculated the size of the audience for TV shows based on the number of people watching during the initial telecast. It currently installs devices in select households’ television sets. What’s new is that Nielsen is measuring not only who’s watching the shows but who’s watching the commercials.
The main reason: As digital video recorders have become more popular, networks have claimed that the old-fashioned Nielsen rating system was missing a big chunk of viewers who record shows for later viewing. Advertisers, on the other hand, said that DVR-owning viewers were fast-forwarding through commercials, raising the possibility that ad rates should be lowered.
DVRs are now in 17% of households, according to a Nielsen report released Thursday.
The new Nielsen monitoring system “is a compromise that makes networks and marketers happy,” said John Moore, senior vice president at MediaHub, which is part of Interpublic Group’s Mullen Agency.
This month, as networks and advertisers negotiate the cost of commercials for the fall season, some major agencies are lobbying to use the new Nielsen numbers to calculate ad rates for prime-time shows. The method of tracking viewership for three days after a show’s airing could become the standard adopted by the industry to account for the people who record programs and watch them later.
Last year, advertisers committed $8.75 billion for network prime-time commercial spots during the “upfront” sales season. People in the industry expect that figure to be lower this year, a sign of a migration of advertising to the Internet.
Networks hope the new Nielsen effort will help them keep advertisers in the fold by proving that DVR users don’t always push the fast-forward button.
“We’ve always said that people are watching commercials,” said Alan Wurtzel, president of research for NBC Universal.
CBS Corp. is “prepared to do business utilizing this technology” for the fall lineup, said David Poltrack, chief research officer for the company.
Poltrack said CBS would gain 4% more viewers by using the commercial ratings, which demonstrate that some people who record TV programs and watch them later actually see some commercials.
The average commercial is seen by about 40% of people who play shows back on DVR, Poltrack said.
Advertisers have more places to spend their money now that eyeballs are shifting online, so networks may not be able to use the new Nielsen numbers to charge more for commercials, MediaHub’s Moore said.
On the other hand, the Nielsen commercial-viewing tracking system will allow advertisers to see how compelling any one ad is on any one particular night.
Nielsen measures viewers through “people meters” installed in 10,000 households throughout the country. The company asks people in the sample households to log out of the system when they leave the room or are no longer watching the program, spokeswoman Anne Elliot said.
About 58% of broadcast prime-time viewing takes place live in households with DVR, Nielsen said, and 95% of recorded programs are viewed within three days of the show’s initial airing.
Times staff writer Meg James contributed to this report.