Ratings Metric Boosts TV Ad Buys

TV broadcast networks wrapped up the spring ad selling season with gains after a slow start, thanks in part to an industry shift to commercial ratings from program ratings.

"It was truly a transformational 'upfront,'" says Mike Shaw, president of sales and marketing for ABC networks, a division of Disney (DIS Quote). "The television advertising business just changed by switching to a new metric for measuring audiences. The entire advertising business and everything it was based on just got turned on its head."

Commercial ratings measure viewing during commercial breaks as well as during programming, and after tough negotiations, the industry settled on a metric that includes viewing from TiVo (TIVO Quote) machines and other digital-video recorders for as long as three days after a program airs.

Given this year's changes to the longtime ritual on Madison Avenue, ad deals were more complicated in May's so-called upfront selling season. The end result, however, was as good as or a bit better than last year. Network broadcast advertising is expected to increase 2.5% to $18.45 billion in 2007 from a year earlier, according to a report by PricewaterhouseCoopers.

"Advertisers were more optimistic about this coming year than last year," says Shaw. "It was a pretty robust marketplace in general. We could have kept selling and selling, but we ran out of inventory."