While viewing levels have declined as viewers, especially younger ones, spend more time streaming, the broadcast networks remain the No. 1 buy for big-spending national TV advertisers. “The viewership gap between broadcast and everything else is still holding up,” says Zenith Media’s Nick Hartofilis. And many viewers are watching broadcast shows on DVRs and on proliferating digital platforms. The networks challenge is to measure and fully monetize such non-broadcast audiences.
Broadcasting’s primetime ratings have once again declined this season, particularly among the desirable younger viewers, triggering talk that the network apocalypse is near.
But media agencies that watch the numbers as closely as the networks are neither surprised nor overly concerned.
“It’s actually not quite as bad as we were expecting,” says Brian Hughes EVP, advanced intelligence and strategy at Magna Global. The agency had projected a 20% decline in the C3 18-49 ratings for the entire season, which could still happen, but as of Nov. 18 they were down just 10%.
It’s no cause for panic, says Nick Hartofilis, EVP, national video activation at Zenith Media. “The value for advertisers is still there. Was it better 10 years ago? Of course. But [broadcast primetime] is still a valuable place to be for advertisers. And it will take several more years before broadcast TV is no longer the clear most important medium to advertise in.”
Gibbs Haljun, managing director, media investment, at GroupM’s Mindshare, says broadcast television is still more effective than most other options and the “best way to get mass reach.”
Michael O’Connor, SVP, activation at Horizon Next, puts it simply: “It is still the 8,000-pound gorilla.”
Season-to-season comparison between this year and last are complicated because a big ratings grabber Thursday Night Football moved from CBS and NBC to Fox.
But looking at C3 18-49 demo ratings minus sports, CBS is down 8%, NBC is down 9%, ABC is down 15% and The CW is off a whopping 36%, albeit off a lower total viewer base. Fox is up 2% minus TNF, but up 17% with it in the demo.
Through Nov. 18, the most recent C3 numbers available, without sports, NBC is averaging a 1.25 18-49 rating, Fox is averaging a 1.17, CBS is averaging a 1.08, ABC a 1.01 and The CW is averaging a 0.35.
Including sports programming, the C3 18-49 demo rating for Fox is 2.17, NBC is 1.95, CBS is 1.11, ABC is 1.01 and The CW is 0.35.
According to Hartofilis, the broadcast networks themselves projected the declines when they came up with their ratings guarantees during the upfront buying season.
“They assumed a certain level of ratings declines and offered better ratings estimates and guarantees for our buys,” he says. “So, despite the ratings declines compared to last season, they don’t owe as much makegoods as they potentially could have.”
The networks, anticipating ratings declines, also sold less inventory in the upfront, while some advertisers reduced their initial fourth quarter ad buys when it came time to finalize orders.
All of this has led to more ad inventory being available through the end of the year, and in many instances at more reasonable pricing, the buyers say.
The basic Nielsen ratings of first-run broadcast ratings have been steadily eroded for the past 40 years, first by cable and now by streaming services like Netflix and Amazon Prime. They have also suffered from the proliferation of DVRs. Many viewers routinely record shows and watch them on their own schedule.
According to Haljun, continued declines are inevitable, not only because younger viewers are growing up in a digital world, but because the networks have joined in the process, and maybe necessarily so, by offering their programming on as many digital platforms as possible. The more nonlinear platforms where broadcast shows are available, the worse it becomes for those first-run broadcast ratings.
The non-broadcast outlets for network programming include the networks’ own websites as well as various OTT and TV Everywhere offerings online and on cable and satellites. NBC says viewers can find its shows after their broadcast debuts on more than a dozen different platforms.
“Our definition of broadcast is changing,” says an NBC executive. “People are watching shows over longer periods of time. We run our shows beginning at 8 p.m. each night, but there is no finish line. People continue to watch them after the night is over and for days after that. Younger audiences are discovering or rediscovering our shows on digital and are viewing them in delayed mode digitally.”
The networks face a serious challenge, however. To monetize the non-broadcast audiences, they have to figure out how to roll them up and measure them in a way that satisfies buyers.
“Right now, there is no uniform digital measurement of viewers,” Hartofilis says “It’s not like in linear, where just Nielsen is the accepted measurement standard. Right now, everyone is trying to catch up to how digital should be measured.”
It complicates the buying process, says Horizon’s O’Connor. “It just takes longer to agree on terms for each deal.”
Without a uniform, standardized measurement system in place for digital viewing, each network uses its own proprietary data in selling.
NBCUniversal, for instance, has begun offering cross-platform measurement called CFlight with some success.
Most buyers say a uniform digital measurement system that will enable ads to be sold with parity across linear and digital is still several years away.
“We’re all working together to figure out where the North Star is,” says Hartofilis. “It’s a give and take between the networks and agencies to share digital data. It’s been fairly collaborative.”
Another way the networks grab credit for their downstream audiences is for the agencies to accept C7 ratings — commercial ratings over seven days — rather than the C3 ratings — commercial ratings over three days — that have been the norm for the past several years.
GroupM was a leader in getting the industry to move from live-plus-same-day to C3 and, in recent years, it has been doing more deals using C7. Other agencies are starting to follow.
Zenith’s Hartofilis says that other than a few categories like retail or fast food that sometime air time-sensitive spots, “there is not a fundamental reason for most advertisers to oppose moving to C7.”
But resistance remains as some agencies that believe prices should be lower for C7.
The difference between C3 and C7 is significant. This season, C7 ratings overall are 7% higher than C3.
The impact of C7 is most pronounced when you look at individual shows. On CBS, new series Seal Team’s 18-49 audience increases by 13.2% across seven days; FBI‘s grows by 12.3%; and Magnum PI‘s by 10.6%. Veteran series Criminal Minds grows 17.3%, Bull by 12.6% and The Big Bang Theory by 9.8%.
The biggest demo increases are at younger-skewing The CW, this season’s most ratings-challenged network. Its drama series Riverdale grows 18-49 viewing by 18.3% from C3 to C7; Black Lightning rises by 16.7%; Burden of Truth grows by 15.4%; The Flash by 14.3% and Charmed by 13.2%.
So, the agencies caution against making too much of the season-to-date measurement of first-run broadcast. “I’ve honestly been a bit surprised that this trend is still of interest [because] it’s nothing new,” says Hughes.
If the networks and agencies can come to terms on measuring viewing of network shows on non-broadcast platforms and on DVRs, the viewing trends of broadcast TV brightens considerably, the buyers say.
And even if they don’t, they say, the broadcast networks remain the No. 1 buy for big-spending national TV advertisers.
“The viewership gap between broadcast and everything else is still holding up,” Hartofilis says. “There is still a significant efficiency with broadcast TV ad buys. And there is not enough reliable data to leave broadcast completely.
“For many advertisers it would be too scary a proposition to pull out of broadcast totally.”