Answering that question is crucial if TV networks are to wring more dollars from "C7," a measure that pays them for commercials viewed up to a week after they appear on TV. For some marketers, the answer is "not yet."
"NCIS" or "Grey's Anatomy" that they can watch at a time of their choosing when the kids are in bed and there's no punishment for staying up a little later to take in a good drama.
Unlike the current standard, C3 (viewership of ad breaks up to three days after a show airs), however, there does not seem to be a universal agreement that C7 is the right system for everyone who might buy a TV ad. At present, it's right for broadcast, but not for cable. It makes sense for primetime, but not for latenight. It's appropriate for English-language but not for Spanish television. It makes sense for one large ad-buying firm, but not for all the clients represented by rivals.
Advertisers and TV networks agreed to the C3 yardstick in 2007, largely out of frustration that digital video recorders were letting TV audiences skip past the commercials that accompanied their favorite shows. Now, with newer technologies like mobile tablets giving one-time couch potatoes the ability to watch video wherever a broadband connection exists, TV companies think there's a new swell of potential ratings points to be found beyond the immediate three-day window.
That theory got a boost yesterday when word surfaced that one of the nation's largest ad buyers, GroupM, had put together deals with all the English-language broadcast networks. According to executives familiar with the negotiations, GroupM is likely to have won pricing concessions on the purchase of C7 guarantees. A spokeswoman for the agency declined to comment yesterday.
GroupM represents a massive collection of media dollars, a collection of accounts from WPP-owned media agencies MindShare, MediaCom, MEC and Maxus, among others, and handles nearly one-third of media spending around the world, according to data from RECMA, an independent group that analyzes media agencies. But it's not clear the agency has the heft in this case to make C7 the standard for TV buying in the current upfront market, when the nation's TV networks sell the bulk of their TV advertising, or even in next year's.
Starcom MediaVest Group, another large media buyer that represents Procter & Gamble and Coca-Cola, among others, is not putting together a similar C7 deal in this year's upfront, according to people familiar with the matter. The point was driven home by tweets made today and yesterday by John Muszynski, a veteran ad buyer who is now chief investment officer at SMG's Spark agency:
C7? Did someone really agree to pay for C7 in a buyers market? Really? Need a list of their clients!--
John Muszynski (@JohnMusz) June 02, 2014
Why the C7 hype? Where is the movement to more precise measurement? Exact commercial ratings? Single source measurement ? Seems old school!--Another senior executive suggested other buyers would also refrain from doing broad C7 deals. For one thing, such pacts require weeks of discussion and aren't to be done on the fly because a competitor has put one together. For another, this executive said, networks including ABC have put together individual C7 deals for specific clients in recent years. In a business where approximately 35% of advertisers have time-sensitive messages to put on the air, why is a one-size-fits-all pact necessary?
John Muszynski (@JohnMusz) June 03, 2014
The GroupM agreement is limited in scope, according to people familiar with the pact. It pertains to broadcast primetime - not latenight and not daytime, where, more than likely, the plus-seven audience is not as robust as it might be for primetime shows (have you ever had the urge to watch a broadcast of "The Tonight Show Starring Jimmy Fallon" or "Jimmy Kimmel Live"more than a day or two after it airs?). There is no deal for such C7 viewing at any of the cable networks, which air multiple runs of episodes from original series in the same week and, as such, do not have the ratings in later days that broadcasters do.
The agency may not want to do a single, massive deal. By establishing prices for time-shifted audiences now, GroupM may well be getting a great rate for its clients on the primetime of the future: TV shows with a lot of marketing behind them that get the most viewership across the traditional screen and new kinds of glass, too. According to people familiar with the pact, negotiations took months, not days, and the new agreement takes into consideration emerging TV-viewer behavior as well as that of the present-day.
Analysts think the benefits of C7 to the broadcast networks will be slight. Todd Juenger, a media analyst with Sanford C. Bernstein, estimates the broadcasters would take about $115 million from cable if C7 were instituted, but cautioned that CBS would be the only true gainer, as the other major media companies own cable networks as well as broadcast outlets. According to his thinking, broadcast networks might see a 3% uptick in primetime commercial ratings. "We believe the revenue impact will be negligible," he said in a research note Tuesday.
CBS sees gains to be made. Speaking at an investor conference Tuesday, CBS Corp. CFO Joseph Ianniello suggested that counting a full week's worth of delayed viewing represented a "nine-figure" revenue opportunity. Speaking to investors in May, CBS CEO Leslie Moonves pointed to significant chunks of audience watching TV on a "post-live" basis. For the network's "Elementary," he said, "it's more than 4.5 million people are watching it after the live broadcast. And we have more than six or seven shows that get more than 3 million viewers. That's just on C3. When you start adding in C7, that number will go up significantly more as well."
At at time when traditional ratings are under siege due to new forms of video viewing, establishing a C7 system is critical.
Yet until all advertisers feel the same way about the idea, it won't become the standard for the TV business. Meanwhile, with more viewers using video-streaming services and tablets to watch their favorites, the industry needs more than ever to come up with a measure that encompasses all kinds of viewing - live and delayed, TV and digital, living-room screen and portable device.
When that happens, the TV networks will be able to boast of their true mass, and advertisers will likely feel better about the money they shell out to support America's most-watched pieces of content.