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.

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.