After years of media industry debate about the effectiveness of ads on television, Nielsen Media Research will finally help provide some answers. Nielsen, the company that measures TV audiences and, hence, network ratings, will now proffer up TV ratings for commercials. It used to only do so for TV shows, but come fall, will provide minute-by-minute data. The initiative will be important to the big networks, including GE's ( GE) NBC, News Corp.'s ( NWS) Fox, CBS ( CBS) and Disney's ( DIS) ABC. Needless to say, it will also be watched closely by advertisers large and small who collectively pour billions dollars into television buys each year. In providing commercial ratings, Nielsen could be opening up a Pandora's Box for either advertisers or the networks. The networks say the new ad ratings will show that TV is still the best medium to reach the masses and that viewership doesn't really drop off as much as advertisers say. Advertisers, in turn, believe results will show that they've been overpaying the networks when people are turning away and tuning out. Media company stocks have not performed well in recent times. The possibility of advertiser defection from TV based on weak commercial ad ratings figures would be unwelcome at a time when this year's upfront sales were flat to down. Meanwhile, the Internet continues to emerge as a powerful competitor for eyeballs, especially coveted younger ones. On the flip side, if the Nielsen data shows that folks don't channel surf as often as was previously thought, the news will be good for the networks, and advertisers will likely be forced to pony up more cash for spots, especially around big hits like American Idol. Advertisers and networks have known for years that people use their remote controls to flip channels during commercials. Now both industries have larger challenges from emerging technologies including the DVR, which allows wholesale ad skipping.
The Wall Street Journal, which Tuesday published a wide-ranging piece on the development, says in its report that the new ad ratings will measure the average viewership for all the national commercial minutes that run during a program, but won't track individual commercials. So the new service from Nielsen might not be the panacea all are looking for. Jordan Breslow, director of national broadcast research at Mediacom, a large media buying agency, credits Nielsen with a number of their newer measurement initiatives, but says he's "not a big fan" of the new commercial ratings. Breslow says that second-by-second ratings would really capture the data that advertisers are looking for. The reason: Minute-by-minute ratings can include seconds of network programming, promotions along with advertising all measured together. In other words, if an episode of your favorite show runs eight seconds across a minute, the viewership for the eight seconds will be lumped in the tabulation for the commercial ratings -- part of the reason, perhaps, that the networks are all so keen on the new venture. A new currency, but one that may face stern resistance from some quarters until the figures are broken down to a further degree. Meanwhile, no one has figured out how to measure the number of times people press the mute button on commercials, or how frequently they visit the WC.