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.

‘Tis the Season

“’TIS THE SEASON”

As the summer ends, all thoughts turn naturally to the start of the new TV season. Lots of money and creative effort ride on the success or failure of new shows. One thing I believe could help shows succeed is using classic innovation theory to find the “early adopters”—those people who are more likely to watch new shows­. Promote to them and encourage them to spread the word. Their behavior tracks over time.

One of the wonderful benefits about Rentrak measuring more than 22 million TVs is that it allows us to create segments or advanced demographics that not only cross broadcast years, but are also robust enough to provide consistent insights over those years. To study the “early adopters” of TV shows, we looked at viewers of new TV series in both the springs and summers of 2010 and 2011. Our key determinate was viewership to 44 new shows in 2010. We divided HHs by the number of hours they viewed these shows, creating three groups: new show adopters, moderates and avoiders. We made sure we had the homes in both years. We then looked at those same groups’ viewership to another group of new shows in 2011.

The first thing we noticed is that the “adopters” stayed pretty consistent year-to-year. As the chart below shows, in 2010 the new show early adopters had a 171 index in terms of hours spent with the new shows versus the average HH and, while dropping in 2011 to a 137 index, still remained quite high.

Both the moderate and the avoiders’ hours also moved to the average (“regressed to the mean”), but they still held their relative positions. This means that using an advanced demographic created in one year, can be used to predict behavior in the second year. This is key for any sort of promotion activity for a TV network, or for any type of viewer segmentation that an advertiser or agency needs.

The proof can be seen in the details. Each dot in the chart below represents a program that aired in the spring and summer of 2010. The vertical axis is the rating against the New Show Adopters; the horizontal rating is the rating against the total U.S. You can see that the New Show Adopter ratings are much higher, and that there is a good fit (the blue line-stats folks can see the values in the legend box), the higher the New Show Adopter rating, the higher the general market rating. Because there are so many shows, it wouldn’t be clear to label them all. I’ve labeled the breakout show Rizzoli and Isles. It really pulled in the New Show Adopters! And it was renewed!

Now the cool thing is, we can take those same people (the folks who were New Show Adopters in 2010) and see what they did in 2011—they were still helping to drive up new show ratings. The chart below shows those 2010 New Show Early Adopters and their ratings to 2011 new shows on the vertical axis and the total U.S. rating on the horizontal. Each dot represents a new show that aired in 2011. The statistical fit is still good. In this case, I’ve called out two very successful new shows, Franklin & Bash and Falling Skies, both of which were renewed.

This ability to look at advanced demographics over time, and have the results be consistent and predictive is a powerful result of the massive size of Rentrak’s footprint.  A happy result for us and for our 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.

Having a Heat Wave

It has been an unusually hot summer, and I don’t know about you, but when I get hot, I immediately think of local news. I want to check the weather and see what Mother Nature has in store for me. And I am not the only one. Rentrak’s TV viewing data shows that viewers tune in to local news to get a better picture of the need to pack in more lemonade (or beer).

To do a little test of the hypothesis that local news benefits from the heat, I looked at Des Moines for the month of June. I started with the premise that Monday through Friday news and weather behavior deserved to be looked at in isolation, given the work week and the content of the news. Therefore, I averaged the daily maximum temperatures for the month from the National Climatic Data Center Preliminary Monthly Estimates for the weekdays (Monday through Friday) and then indexed each weekday against that average temperature. You can see the daily maximum temperatures below.

I then pulled the average ratings for Early Fringe and Late Fringe news programs (over 200 telecasts) for the same days from Rentrak’s StationView Essentials for the Des Moines market. I averaged them and indexed each day against the average. You can see the daily averages below.

I then slapped the indices together in a statistical analysis and voila! It didn’t work. The fit was weak. There were a couple of days, like June 15th where the news just popped up and the model was out of whack. What was going on?

I then realized that local is indeed local. Des Moines is suffering from a terrible drought. It isn’t just heat that would drive Iowans to their TV news; it is also the chance and actuality of rain. When I threw in the rainfall during the month, the model worked well with a R2 of .61. The chart below shows the results. The rainfall on the 15th did in fact drive up local news viewership.

June in Des Moines shows the continued relevance of local news in an important aspect of peoples’ lives – even in this day of instant information.

Has anyone ever tried lemonade in beer?

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.

Oh Say Can You See?

In a world of multiple screen options, I thought it would be interesting, not to mention patriotic, to see how Americans’ viewing moved between screens during the Fourth of July. While this Fourth may be part of a communist plot since it is on a Wednesday rather than a “red, white and too many hot dogs” Monday or Friday, I think we can draw insight from recent Fourths.

First off, it’s not surprising to see that movie going pops up during the Fourth, particularly if it is a long weekend. Looking at the early summer Mondays of June and July 2011, the Fourth of July pops out – although as the chart below shows, Memorial Day did even better.

Turning to a smaller screen – what happens with TV? There was a slight drop-off in viewership (a 3% decline in hours viewed) compared to other Mondays in 2011, but the interesting phenomenon was how viewing shifted. Americans know that it is their duty to sleep in late on the Fourth, in honor of all the places where “Washington slept here.” The chart below shows the change in viewing levels by time of day for Monday, July 4, 2011, compared to Tuesday through Friday of that week. The TV was switched on a little later, and there was less viewing at night as people went out to watch and blow up fireworks.

Like linear TV, On Demand viewing shows more of a shift within the format than an overall level change. VOD transactions were flat for the Fourth of July in 2011 compared to other early summer Mondays. However, there was a significant shift in type of VOD viewing. Transactions On Demand (TVOD), e.g. movies you pay for, increased their average share of VOD orders by 145%, and the amount of money spent on TVOD increased by 140%. Catching up on movies, either in the theater or at home, is part of the Fourth.

Two other screens also bear mention. First, internet streaming. Rentrak measures this on a custom basis for a major TV content provider. Last year, viewership dropped on the Fourth, but on the following Monday, when folks were back at work, viewership increased.

Finally, going back two years to take a look at some mobile viewership, in the summer of 2010, Rentrak measured the Open Mobile Video Coalition (OMVC’s) trial of live TV on mobile devices. In this case, the viewing did decline on Friday, July 4, but average length of views increased. Perhaps less commuting and work meant less views, but being at home offered a chance to view longer.

So this little snapshot of how viewership moves across screens on a weekday Fourth indicates more movie watching for theaters and VOD, a shift in time of day for linear TV, and less internet and mobile viewing.

Hope you had a great Fourth and you won the battle of the mustard stains. I lost. More thoughts in a week or so.

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.