The Power of Local TV

There are those in the advertising industry who scoff, nay bray, at the supposed decline of local TV stations. I don’t believe this to be true. The power of local TV is in its localness—its ability to connect and unite communities. The best example of this is the reaction of TV viewers to traumatic events. This blog talked about the reaction of viewers to Hurricane Sandy last fall where TV viewing increased during the storm in the East Coast markets. The same phenomenon happened during the horrible tornados in May in Oklahoma. The chart below shows what happened to TV viewing levels in Oklahoma City the day the storm hit, compared to the same day a week before.

Oklahoma City HUT% (Monday Prior to Tornado and Monday Day of Tornado)

Viewing levels on Monday, May 20, were higher starting around 8 a.m. and leapt up when the storm hit at approximately 3 p.m. (Note that Rentrak’s HUT includes viewing of multiple TV sets in the home, so our HUTs can rise over 100 percent.)

The aftermath of the storm continued to bring in high viewership as people tuned in to understand more about what had happened. The chart below shows viewing levels the day after the storm, along with levels for the same day of the week prior. Viewing was up throughout the day.Oklahoma City HUT% (Day After the Tornado and Week Before)

This increase in viewing went disproportionately to the broadcast stations in the market. As the table below shows, HUT went up the day of the storm by 18 percent on average. However, the share of viewing to the major broadcast affiliates went up by 58 percent.

Viewing Levels in Oklahoma City - May 2013

This is not to say that cable news viewing did not go up as well—it did. But local TV news is still the dominant place to which the public turns in times of crisis. Brevity being the soul of wit, I have not included the results for Wichita and Sherman. But the results are the same, increase in HUTs during the storm, and a disproportionate increase for broadcast stations. Please contact me if you wish to see that data.

As an aside, I believe that advertising is about story telling. Marketers are telling stories about their brands. And any storyteller wants to tell her story in a place where the listener is disposed to be trusting and attentive. Local TV clearly is that sort of place.

In case you don’t know, I am Bruce Goerlich, Chief Research Officer at Rentrak, the global standard in movie measurement and your TV Everywhere measurement and research company. I have been in the research end of the marketing business for more than 30 years primarily on the ad agency side, with my last stint prior to Rentrak in the role of President, Strategic Resources Zenith Optimedia North America. Somewhere along the way I morphed from young Turk to old fogey. Now that I have grey hair and am horizontally-challenged, I can speak with some authority on advertising and research issues – which I will do from time-to-time on this blog.

Viewer as Target — How Some Ancient TV History Might Help Networks Today

Okay, I am not getting desperate for blog topics! I first wrote this over three years ago, and when I was reading recently about the second planned departure of Jay Leno from “The Tonight Show,” I thought it was worth a look back at what happened to NBC the last time he left and moved to the 10 p.m. Monday through Friday time slot. Rentrak now has a much bigger footprint, more operators, and a more sophisticated projection system, but I think the basics still ring true.

MY PREVIOUS ANALYSIS

What were the underlying dynamics of the disappearing viewers that NBC suffered Monday through Friday at 10 p.m. when Leno was on? Rentrak, through its analysis of hundreds of thousands of households, has determined that NBC suffered a double whammy. (Please note — we now track more than 11 million homes.) First, heavy viewers watched a lot less of the network. And second, medium and light viewers to the network turned away in droves. Where did the viewers go? The biggest beneficiary in terms of stealing away NBC viewers was ESPN.

Using the Rentrak TV Essentials system, Rentrak statisticians pulled out 353,000 households that watched NBC Monday through Friday from 10 to 11 p.m. in October 2008, and then compared those same homes’ viewing patterns to NBC in the same time period in October 2009. In short, Rentrak looked at the viewing of the same NBC viewers for the Monday through Friday at 10 p.m. time slot across two years.

What happened? First, the average number of hours NBC viewers watched Monday through Friday from 10 to 11 p.m. dropped off, driven by heavy viewers, who fell off by almost two hours.

Chart 1While there was a slight uptick in hours watched by medium and light viewers, the actual number of those viewers fell dramatically (as shown below). The number of heavy NBC viewers fell by only 10 percent, while the number of medium and light viewers fell by 24 percent and 30 percent respectively.

Chart 2Where did the viewers go? The biggest overall beneficiary was ESPN, which got 28 percent more NBC viewers in October 2009 than in October 2008. Fox came in second with 20 percent (perhaps another reason why they are leaking talks about stealing Conan away). As reported in the trade press, TBS also did well, increasing reach among NBC viewers by 17 percent. The complete list of top 10 gainers is shown below.

Chart 3BACK TO THE PRESENT

I know it helps network programmers to understand what their heavy, medium, and light viewers contribute, and what other programs those viewers are watching. If one goal of today’s CEO is customer retention, understanding what your best customer might do is a good idea. And Rentrak, with its millions of homes and TVs, can make that kind of learning possible.

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In case you don’t know, I am Bruce Goerlich, Chief Research Officer at Rentrak, the global standard in movie measurement and your TV Everywhere measurement and research company. I have been in the research end of the marketing business for more than 30 years primarily on the ad agency side, with my last stint prior to Rentrak in the role of President, Strategic Resources Zenith Optimedia North America. Somewhere along the way I morphed from young Turk to old fogey. Now that I have grey hair and am horizontally-challenged, I can speak with some authority on advertising and research issues – which I will do from time-to-time on this blog.

The Upfront Season, Exact Commercial Ratings and the Power of Position

As the networks, advertisers and agencies start the annual waltz of the wallet known as the upfront, I thought it would make sense to take a look at some of the value that is delivered.

It is not a surprise that where an ad is placed has a large impact on how many people see it. As an example, I looked at 1,588 major quick service restaurant 30-second units, which ran from December 31, 2012 through February 24, 2013. The chart below shows the index of the Exact Commercial RatingTM to the telecast rating for the restaurant’s spots. (The index is the exact second rating for the ad divided by the telecast rating.) The live indices are the teal columns; the indices for the 3-day DVR audience are shown in orange.

ECR Index

So, while 93 percent of the live telecast audience on average watched the ad when it was the last ad prior to a program promotion, only 62.2 percent of the 3-day DVR audience did. In contrast, when the ad was the first paid ad after a program promotion, it actually did slightly better than the telecast average, but with the DVR, only 87.9 percent of those viewers saw the ad. Where an ad is positioned in a pod has an impact.

61 percent of the quick service restaurant’s ads ran in the middle of pods, which can be seen in the pie chart below. They did do well with the first position with 24 percent of ads, versus 15 percent, being in a last position.

Distribution of QSR Ad Copy by Position in Pod

There was also a difference by network. The table below shows the range of the average 3-day DVR ad index to telecast across the 40 networks, which the restaurant used. The index ranged from an 85 to 53.5. Networks were not identified since many factors could have impacted the scores, including daypart mix, position mix, average rating, genre, etc.

Range of Network 3 Day Ad Indices

In fact, I made several attempts to build sophisticated models to predict what the 3-Day DVR Index would be by including network, daypart, program rating, pod position, and percent of the program that was live. I failed.

Then I tried something simpler. I said to myself, what if each network had the same distribution of ads by pod position as the average network did? In short, if you truly created the same rotation across networks, what would happen to the indices? Now, I could only do this with the networks that had ads placed in each position, which cut the list down from 40 to 13 networks. The chart below shows the networks in teal with what their original average was across all ad positions; the orange line shows what happens when I weight averaged the results to reflect the distribution of units across all networks. With only one exception, all the network scores went up.

Range of 3 Day DVR Ad Index for Networks with QSR Ads in Each Pod Position

So, in other words, if you create a buy where the ads across networks are distributed in the same manner, the holding power of your ads won’t differ as much. A “fair” rotation works. But, paradoxically, an “ unfair” buy can work as well. If an advertiser decides to push for those first positions, more people will see their ads. And that push for first becomes an interesting item to negotiate. And only Rentrak, with its second-by-second Exact Commercial RatingsTM, can provide the granularity and stability to make that type of buy.

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In case you don’t know, I am Bruce Goerlich, Chief Research Officer at Rentrak, the global standard in movie measurement and your TV Everywhere measurement and research company. I have been in the research end of the marketing business for more than 30 years primarily on the ad agency side, with my last stint prior to Rentrak in the role of President, Strategic Resources Zenith Optimedia North America. Somewhere along the way I morphed from young Turk to old fogey. Now that I have grey hair and am horizontally-challenged, I can speak with some authority on advertising and research issues – which I will do from time-to-time on this blog.

Video On Demand – The Power of Pre-Roll

On Wednesday, March 20th, I gave a talk at ARF Re:think 2013 on video on demand. The following is an excerpt from my talk. Contact me at bruce.goerlich@rentrak.com if you would like the full presentation.

Television as medium has moved beyond fragmentation into granularity as programs are being carried on new platforms such as mobile, the Internet, and video on demand. Video on demand viewership has been growing at double-digit rates, with the largest portion of growth coming from “traditional” TV programs being placed by TV networks. However, there has been little understanding of how commercials perform in video on demand.

The value of advertising time in video on demand is immense, given that viewers have to be actively engaged to select the programs. Video on demand advertising is often structured with the first position, “the pre-roll,” starting before the program content. Rentrak, through its analysis, demonstrates that the “pre-roll” has a very high value. Rentrak’s original research shows much higher indices for ad viewership in the pre-roll position. The metric employed was the Ad Retention Index (ARI), which is the average audience during commercial minutes on video on demand divided by the entire program’s average audience (including ad minutes). The ARI is a concept similar to “C3” on linear TV. The pre-roll ARI for regular duration programs was a 122, and the average pre-roll short duration program was a 129. This high value of audience for pre-roll gives advertisers a unique opportunity to connect with engaged viewers. Rentrak is now also producing a monthly video on demand transparency report on ratings networks have on video on demand. (Details upon request!)

BACKGROUND ON VIDEO ON DEMAND

Currently, there are more than 53 million video on demand-enabled households with an average of two set-top boxes per household. More than 43 million set-top boxes access video on demand content each month.

Consumers who use this medium spend around 8.5 hours per month with video on demand content.

Free video on demand content represented 78 percent of all transactions in 2012. Free video on demand (which includes ad-supported content) is the fastest growing part of video on demand. From 2009 to 2012, free video on demand’s growth rate outpaced that of all video on demand by increasingly wider margins.

Growth Rates in Video On Demand Playtime 2009-2012
We are pleased to see free content coming to video on demand soon after live airings. Content owners are increasingly including linear ad loads in the first three days. Additionally, our research shows the majority of video on demand viewership of TV shows occurs 4+ days after air, presenting additional valuable advertising opportunities. Free on demand offers advertisers an opportunity since much of this content is now (or could be) advertising-supported. However, advertising results are not traditionally broken out. A group of networks approached Rentrak in the fall of 2011 asking for a study of advertising levels using set-top boxes where second-by-second ad detail could be identified.

We used a mathematical technique to identify where ads were located — essentially when there was a huge drop and return in audience. This is shown in the chart below.

Index of HH Audience at :30 Second IntervalsAll the video on demand long form programs had a downward-trending slope of viewership. This can be explained in large part by the fact that there is no subsequent program that follows, so there can be no audience flow “in” once the program starts. Also, therefore, the maximum size of the audience is at the start of program. That large “starting point” means that commercials in the pre-roll position will have the advantage of exposure to all of the program’s viewers. So even with trick play, the ARI for the pre-roll is a 103, while for entire program, the ARI was a 55.

For short-form programs (less than six minutes), we looked at the first 60 seconds to estimate ad position.

The bottom line for the analysis is below.

ARI Video On Demand ResultsWhen one considers that normal DVR playback ratings for commercials are in the 60 percent range, not only is the average video on demand ARI of 71 quite strong, but the pre-roll first position playback of more than 120 is fantastic. Video on demand is a medium that can and will work well for advertisers.

In case you don’t know, I am Bruce Goerlich, Chief Research Officer at Rentrak, the global standard in movie measurement and your TV Everywhere measurement and research company. I have been in the research end of the marketing business for more than 30 years primarily on the ad agency side, with my last stint prior to Rentrak in the role of President, Strategic Resources Zenith Optimedia North America. Somewhere along the way I morphed from young Turk to old fogey. Now that I have grey hair and am horizontally-challenged, I can speak with some authority on advertising and research issues – which I will do from time-to-time on this blog.

Political Fragmentation

One thing that has become clear from the recent election is that traditional outlets for reaching conservatives are not delivering what they used to deliver. The chart below shows the shift in viewership for “The O’Reilly Factor” since last October. The decline in total ratings was a .75, but for the core audience of conservative viewers (from Rentrak’s Political Segmentation Schema), the decline was even greater — a 1.6 rating drop. Ratings stabilized in January, but are still way off their pre-election high.

Shift in Live HH and Conservative Viewers to The O'Reilly Factor

“Hannity” shows the same pattern. Total ratings are down by .9 and the rating among core conservative viewers was down by around double — at a 1.8 decrease.

Shift in Live HH and Conservative Viewership for Hannity

Of course, just because conservatives are not watching the tried and true the way they used to does not mean they can’t be captured on TV. The chart below shows this for a sample of networks where large concentrations of conservatives can be found.

Index of Conservative ViewershipUnfortunately, the Republicans stuck to an old style type-buying pattern, using traditional demographics and sticking to a limited number of networks. Obama for America used a privacy-protected matching process to align their key segments with Rentrak viewer data. This enabled them to buy much deeper, going to around 60 networks. Rentrak went to the Republican side and made the same offer. We were turned down. The results were much more narrow with traditional buys going only 18 networks deep.

Marketers have often talked about fragmentation with traditional targets. Obama for America was smart enough to see it happening in the political arena. It’s up to the Republicans now to recognize the reality of political fragmentation or remain in the marketing world of 2004.

In case you don’t know, I am Bruce Goerlich, Chief Research Officer at Rentrak, the global standard in movie measurement and your TV Everywhere measurement and research company. I have been in the research end of the marketing business for more than 30 years primarily on the ad agency side, with my last stint prior to Rentrak in the role of President, Strategic Resources Zenith Optimedia North America. Somewhere along the way I morphed from young Turk to old fogey. Now that I have grey hair and am horizontally-challenged, I can speak with some authority on advertising and research issues – which I will do from time-to-time on this blog.

Using Advanced Demographics for Local TV Planning & Buying

This is a first for me. It is a jointly written blog between me and Rob Contreras, President of Whole Media Concepts, a Rentrak client in Austin, Texas. We both felt it would be a good idea if our combined readership learned how an ad agency used some of Rentrak’s information. I’ll start off, and then tell you when Rob comes in.

Rentrak gets complete automotive registration information about new and used car buyers from Polk Automotive. We then integrate that with our viewing data, in a privacy-protected manner. These charts are snapshots of some information in the Austin market, focusing on the Chevrolet and Mazda makes. Rentrak receives information down to the model level; this is just a taste of the service that’s available!

For this analysis, we looked in the Austin market at daypart viewing for the major ad supported broadcast affiliates. We pulled information for six dayparts, M-F EM, M-F Day, M-F EF, M-F PA, M-SU Prime, M-F LF, and SA/SU day. Our two automotive targets were Chevrolet buyers and Mazda buyers in the month of October 2012.

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When we rank the stations by composition of Mazda buyers the list shifts a bit. First, we can see that Mazda buyers don’t have the same high indices as Chevy buyers do.

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Composition indices, of course, just tell you how concentrated a target is on a station and don’t tell you the size of the target, the rating. The table below shows that information, comparing the top 10 ratings for Chevrolet buyers with Mazda buyers. Here we see the big four affiliates dominating, with Prime Time taking up the plurality of the slots for Chevy. Notice that the ratings for Mazda buyers both don’t fall in the same rank order and are lower.

ImageRanking the stations by Mazda buyers leads to lower ratings and little less dominance of Prime with only three winning stations, while Prime Access has four. Again, it is big four affiliates who do best.

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Thoughts from Rob Contreras, President of Whole Media Concepts

There are two general theories we set out to test with Bruce’s analysis.

  1. Whole Media Concepts is consulting with a Chevy dealer to identify programming that delivers a higher marketing efficiency.
  2. We’re assisting a Mazda dealer who wants to create a more robust digital marketing infrastructure and we need to validate this business decision.

Let’s start with Chevy

Looking at the composition index graphs, we gain immediate clarity toward the importance of TV for each brand. For Chevy, the scattershot of programming above the 1.00 mark provides a clear visual indicator to support the fact that many opportunities exist to target viewers with an affinity toward Chevy. Rentrak can help us pinpoint the exact TV programs that hit a concentrated cluster of Chevy fans. This helps our firm develop a more strategic plan that focuses less on general TV ratings, and more on targeted rating points. Ultimately, we end up reaching more potential customers for less money, while maintaining the necessary reach and frequency levels of the campaign.

The next step is to look at station and daypart rankings by index. The Austin, TX CBS affiliate, KEYE, dominates in this area, inclusive of their Telemundo network. The high index of Spanish language programming is now on our radar, as well as the efficiencies that might be gained by taking a closer look at KEYE. What we end up discovering is that KEYE’s primetime audience delivers the lowest market rating, but the highest index for Chevy owners. When we apply Polk, we discover that KEYE’s 3.675 Prime Time rating turns into a 7.12 rating among Chevy owners. With a Chevy index about 55% higher than the ABC affiliate, KEYE’s daypart now delivers the equivalent of the 2nd highest rated show in the market. The lower cost of the KEYE primetime spot, based on its general market rating, fits perfectly into our ability to stretch our client’s marketing dollar.

Now, looking at Mazda…

For Mazda, the composition index shows fewer opportunities to reach a concentrated cluster of Mazda vehicle owners. In fact, it peaks at only about 20% above the market average. While this is generally a good index, the data supports the dealer’s gut-instinct that TV is playing less of an impact role in their marketing plan. At this point, we would dive deeper into ratings for the 40+ cable TV ad-insertable networks in the market. If those numbers proved to max out at a lower index level as well, it would help us validate the dealers desire to shift marketing dollars into a heftier digital strategy. We already took a look at ESPN, TNT, USA and FXNC, and none of them had any gain in general rating when we applied a Mazda index.

Again, the next step is to look at station and daypart rankings. Prime Time and Prime Access were the highest rated dayparts with the Mazda brand. An in-depth look showed that general ratings were almost identical to targeted ratings when we applied a Mazda index with Polk. This is probably one of the most interesting aspects of Rentrak, as it truly gives our clients a unique frame of reference. For the Mazda dealer to know that his brand has relatively little opportunity to speak to targeted clusters of Mazda owners via TV means that he can free up the most inefficient TV spots in his campaign and redirect those funds toward a digital campaign. He already knows his target audience is younger and more affluent than the general market, and Rentrak’s data was used to support this theory with facts. In fact, the demographic and lifestyle information we gathered regarding the Mazda consumer will guide our creative strategy with digital.

At Whole Media Concepts, we confidently use Rentrak as an unbiased source of information to help create meaningful and knowledgeable solutions for our clientele. The information gives us a distinct advantage in the marketplace, as our clients look to us as the authority on local consumer information.

Closing from Bruce

Thanks Rob. It is good to hear how Whole Media Concepts is utilizing Rentrak’s Advanced Demographics to not only define buys, but also to help set strategic direction on the entire media mix. Having a target of actual buyers that can be leveraged in more than one medium is a real advantage to Rentrak clients.

In case you don’t know, I am Bruce Goerlich, Chief Research Officer at Rentrak, the global standard in movie measurement and your TV Everywhere measurement and research company. I have been in the research end of the marketing business for more than 30 years primarily on the ad agency side, with my last stint prior to Rentrak in the role of President, Strategic Resources Zenith Optimedia North America. Somewhere along the way I morphed from young Turk to old fogey. Now that I have grey hair and am horizontally-challenged, I can speak with some authority on advertising and research issues – which I will do from time-to-time on this blog.

Exact Commercial Ratings: Improving Advertising Effectiveness

On January 22nd, I presented at the Association of National Advertisers (ANA) forum on Exact Commercial Ratings®. The following are some highlights. Feel free to email me at bruce.goerlich@rentrak.com to get the full shebang.

Rentrak provides Exact Commercial Ratings® for nationally advertised products to its clients through the merger of Kantar Media’s ad occurrence information with the second-by-second tuning data from more than 20 million televisions across virtually every residential ZIP code in the U.S. This allows our clients to see how national TV ads actually perform, be they 15, 30 or 60 seconds long.

There are several strategic questions for national advertisers and their agencies to ask regarding how Exact Commercial Ratings® (ECR®) can help improve advertising effectiveness. To highlight a few:

How did my commercial perform versus other commercials in the program? Ad effectiveness is not just how I did, but how I could do better.

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How does my Exact Commercial Rating® work best by pod position in a program? Pods of commercials are how ads are placed. Understanding how that placement is working is another way to improve ad effectiveness.Image

Buy placement – what can we do better in the future? And how does that work for Advanced Demographics? Seeing how networks, dayparts and pod positions perform over an entire quarter (or even longer), can lead to more effectiveness for the buyer and more sales for a network.

Combined with a long-term view, being able to look at demographics that go beyond age and sex is quite powerful. The case shown below looks at very high-income households across several networks for a quarter. CNBC has more audience leverage with upper income viewers than with the total population. With the combination of Exact Commercial Ratings® and Advanced Demographics, an advertiser can have both precision in the buy, as well as in the target. Ultimately this knowledge of what works and what doesn’t makes an advertiser’s investment both more effective and have higher ROI. Image

There are quite a few other strategic issues that ECR® can help advertisers with. I haven’t even addressed the question of currency – should ECR® become the currency? Rather than a broad scale measure of all ad performance over 3 days (including playback), with Rentrak’s Exact Commercial Ratings®, it is possible to have precise buys based on 7, 15 or even 28 days. But such questions are beyond my pay grade.

In case you don’t know, I am Bruce Goerlich, Chief Research Officer at Rentrak, the global standard in movie measurement and your TV Everywhere measurement and research company. I have been in the research end of the marketing business for more than 30 years primarily on the ad agency side, with my last stint prior to Rentrak in the role of President, Strategic Resources Zenith Optimedia North America. Somewhere along the way I morphed from young Turk to old fogey. Now that I have grey hair and am horizontally-challenged, I can speak with some authority on advertising and research issues – which I will do from time-to-time on this blog.