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Television Fundamentals
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TV: NUTS AND BOLTSMedia Sales in a Cross Platform World
Presented by: Tracey McCormack | UCLA Extension
BROADCAST CALENDAR
The Broadcast Calendar is a standardized calendar used primarily
for the planning and purchase of TV media and advertising.
Broadcast Calendar weeks are Monday-Sunday weeks. And every
month has either 4 or 5 weeks. Every month has 28 or 35 days.
The link between the Broadcast Calendar and Gregorian calendar is
that the first week of every broadcast month always contains the
Gregorian calendar first of the month.
Broadcast calendar years can either have 52 or 53 weeks.
The Broadcast calendar was really created for Accounting purposes
and to align with certain financial calendars.
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BROADCAST CALENDAR
MEDIA UNIVERSE
TWO BROAD WAYS TO ADVERTISE ON TV
NETWORK / NATIONAL TELEVISION:
There are over 2,000 affiliated television stations across the United States
which are fed the same programming throughout the broadcast day. Some
portion of the day will be local, original content.
A commercial on network television will be seen all over the U.S. on
networks like: ABC, CBS, NBC, Fox, UPN, CW, Ion, Univision and more!!
Or on national cable channels like: ESPN, USA, TBS, BRAVO, FOOD
LOCAL / SPOT TELEVISION:
Here, an advertiser can use selected markets to advertise without regard
to network affiliation.
Buys are made on a market by market basis and schedules may be
entirely different in each city.
THERE ARE MANY TV OPTIONS
NATIONAL TV OTPIONS: Network (ABC, CBS, NBC, FOX, CW, ION)
Syndication (Wheel of Fortune, How I Met Your Mother)
Hispanic Television (UNI, TM, Azteca)
National Cable TV (Discovery, ESPN, Comedy Central)
There are several TIERS of Cable TV
REGIONAL TV OPTIONS: Spot TV (Affiliates/Indies)
Regional or Unwired Networks (Fox Sports West)
Cable Interconnect (Adlink)
Local Cable Systems (Comcast, Cox, Charter, Time Warner)
Critical Nielsen Basics
NIELSEN HISTORY
The AC Nielsen Company was founded in 1936 by Arthur C. Nielsen as one of the first research companies to measure the audience for radio and advertising on radio.
In 1950, Nielsen was there again at the birth of the TV Broadcasting business.
Nielsen has remained as the leading, dominating measurement service of all media/advertising platforms for more than 75 years!!
Unlike a newspaper or magazine, who can count how many they have sold – there is no simple way to know how many people are are actually watching any given program.
The TV rating is only the simplest and most democratic measure of the audience: how many people watched.
Nielsen basically answers two questions: “Who is watching TV?” and “What are they watching?”
RANDOM SAMPLING
Census vs Sample
Nielsen starts its measurement by drawing a sample.
A pot of vegetable soup does not require eating the whole vat to know what’s in it.
Stirring the soup is a way to make sure that the sample you draw represents all the different parts of what is in the pot.
A representative sample doesn’t have to be very large to represent the population it is drawn from.
RANDOM SAMPLING
While it doesn’t need to be large, it does need to represent the population.
The larger the sample, the smaller the standard deviation of error of the ratings information released.
Nielsen TV Families are recruited in-person by Nielsen
The families are a cross-section of the households with TVs all across America.
They have households in all 50 states with all different economic and socio-economic profiles
Samples are designated to match the profile of each city, each demographic group and are “weighted” if the sample comes back short.
Participants in the Nielsen sample are compensated for their efforts
Sample Characteristics of what they are searching for
include:
Territory and County Size
Status of Cable, ADS, DVR, multiple-sets in the Home
HH Size, HH ages, Number of Kids, Pet Ownership
Internet access
HOH Occupation, Education and Income
RANDOM SAMPLING
RANDOM SAMPLING
RANDOM SAMPLING
UNIVERSE ESTIMATES
Universe Estimate: (UE) – Total persons or homes in a given population
Television Universe: Total persons or homes in a given population with at least one television set
Universe estimates are updated by Nielsen every year in September
Those UEs are the basis for the formulas we use to calculate TV ratings, impressions, shares and HUTS
HOW IS TV VIEWING MEASURED?
National Broadcast and National Cable are Measured as a part the National Sample 20,000 Homes in the National Sample All homes Have People Meters 364* Days of Household and Demographic Data (*Broadcast Calendar)
Local Broadcast Measurement DMAs: Designated Market Areas as defined by Nielsen 210 DMAs 56 Metered Markets
31 are Metered by HH Audimeters 364* days of HH information only 4 Rating Books – Feb, May, July and November
25 are Metered by Local People Meters 364* days of HH and Demo Information 12 Rating Books – 1 per month
Audimeters tell us that a HH has the TV “on” so we know if the TV is on or
off
What we don’t know is …. WHO is watching
People meters are remote controls that are only found in the National Sample and the 25 LPM markets.
Each TV in the HH gets a box and a special remote control with a “check-in” button designated for each person in the family.
People Meter Service launched in the national sample in 1987 and it took Nielsen until 2001 to launch it in the local markets
Markets with Audimeters (31 of them) get 364 days of HH overnight data
Markets with People Meters (25 of them) get 364 days of HH and Demo Overnight Data
PEOPLE METERS
PEOPLE METERS and DIARIES
SWEEP PERIODS
The top 25 LPM markets get 12 books a year (one in each month) and 364 days of overnight data. The “sweep” months are largely unimportant any longer due to 364 days of
data and competition from Cable with original programs all year long
Most of the TV markets still use viewer diaries on a spot TV basis. The 31 non-LPM markets use diaries to support audimeters and get 365 days
of HH overnight data. They also get 4 books a year in the major sweep months
The 154 non-metered markets use only diaries for all measurement and get no HH overnight data They also get 4 books a year in the major sweep months.
The four major sweep periods are: February, May, July and November Some markets also get data in January, March and October Sweep dates are always Thursday-Wednesday weeks
SET TOP BOX DATA
Set Top Box Data is a relatively new phenomenon in national and local television whereby companies such as – Rentrak Kantar Media Ti-Vo And others are using the set top boxes that already exist in your home via
cable or satellite to have a larger sample and theoretically have a lower standard deviation of error.
Today, Rentrak is probably the biggest of all the companies that offer this service and it has been bought by a number of small, un-rated by Nielsen networks and ad agencies.
STB data has had many challenges to over-come but have done so one by one (in some cases) including the likes of – It is not a representative, random sample of the US Population Integrating into the Donovan Data System Having enough homes in the sample Having Demo information as well as HH Getting the ad agencies to begin to use it
There are still great skeptics to STB data but it appears that Nielsen is getting into the game of STB data as an addition to their sample which will help the cause tremendously.
RESEARCH:Definitions, Formulas &
Terminology
HOUSEHOLDS USING TELEVISION (HUT)
HOUSEHOLDS USING TELEVISION is the PERCENTAGE of total television households having their sets tuned on at a particular time.
Example: The first two homes are viewing Black List on NBC on Monday from 10-11p The next home is viewing Hostages on CBS on Monday from 10-11p And the next home, Castle on ABC from 10-11pm on Monday. Of the 5 homes owning television sets, four are viewing (or USING
television) 4 TV homes watching television from 10-11pm DIVIDED by 5 total homes
that own TV sets = 80%. Expressed as a percentage, the HUT at this time is 80%. When the same calculation is done with PEOPLE, it is referred to as
PERSONS USING TELEVISION or PUT.
NBC NBC CBS ABC NOT USING TV
HUT LEVELS VARY BY DAYPART AND BY SEASON
Daypart Fall/Winter Spring Summer Avg Year
Daytime 27 26 26 27
Early Fringe 50 43 40 46
Prime 64 57 40 59
Late Fringe 28 28 28 28
SHARE
A SHARE refers to the PERCENTAGE that a program or station has of the total viewing audience. Share is NOT projected to the total households owning a set, but only those households that are viewing at a particular time.
Example: The first two homes are viewing BlackList The next home is viewing Hostages. The next home is viewing Castle. The fifth home is not viewing any television program and therefore
is not counted in the share equation.
BlackList = 2 out of 4 homes viewing = 50 share (2/4) Hostages = 1 out of 4 homes viewing = 25 share (1/4) Castle = 1 out of 4 homes viewing = 25 share (1/4) ALL SHARES SHOULD ADD UP TO 100%.
NBC NBC CBS ABC NOT USING TV
RATING
A RATING is expressed as a PERCENTAGE of individuals or total television households tuned to a particular television program. Rating is projected to the universe of all TV homes, viewing or not.
Example: Assume a total television population (those owning a set) of five
homes. Two of five homes are viewing BlackList on NBC. One of five homes is viewing Hostages on CBS. One of five homes is viewing Castle on ABC. One of five homes is NOT viewing television at that time.
BlackList = 2 of 5 homes = 40 rating (2/5) Hostages = 1 of 5 homes = 20 rating (1/5) Castle = 1 of 5 homes = 20 rating (1/5) ALL RATINGS SHOULD ADD UP TO THE HUT LEVEL (80).
NBC NBC CBS ABC NOT USING TV
IMPRESSIONS
IMPRESSIONS are the RAW NUMBERS of individuals viewing a particular program, usually attributed to a demographic and expressed in thousands (000).
Example: Assume there are five homes viewing Hostages on CBS. In one home there are 2 women 18-49 viewing for a total of 2
impressions against W18-49. In two homes there is 1 woman 18-49 in each viewing for a total
of 2 impressions against W18-49 viewing. In two homes there are no W18-49 viewing although some other
demographic is viewing. The grand total of women 18-49 impressions is 4.
CBS CBS CBS CBS CBS
VPVH
VPVH (Viewers per Viewing Household) is a calculation that quantifies the concentration of a particular demographic within viewing homes.
As in our prior Example: There are five homes viewing Hostages on CBS. Within those 5 viewing homes there is a total of 4 women 18-49
viewing. Therefore we have 4 Viewers (W18-49) per 5 viewing
households. This is calculated as 4 divided by 5 and described as a
decimal .800
CBS CBS CBS CBS CBS
GROSS RATING POINTS (GRPS) TOTAL IMPRESSIONS (000)
GROSS RATING POINTS and TOTAL IMPRESSIONS: A mathematical expression of total media weight generated by an ad campaign. The sum of all ratings and impressions for all commercials in a given media schedule.
Example:
Jello Pudding aired spots in the following programs:
PROGRAM UNITS RATING IMPRESSIONS GRPs (000)
Katie Couric 7x 3.0 2.1 21.0 14.7
News 5x 5.0 3.5 25.0 17.5
The Tonight Show 5x 2.5 1.8 12.5 9.0
CSI: Miami 1x 4.0 2.8 4.0 2.8
TOTALS: 18x 62.5 44.0
TIME SHIFTED VIEWING
National Broadcast and Cable includes “time-shifted viewing” (DVR usage) in their equations
National Broadcast and Cable have 4 Different Nielsen Audience Data Streams From Which to Choose: Nielsen measures the national sample and releases audience
information in 3 feeds of “program rating” data: Live, Live +Same Day, Live +7
Nielsen also releases audience information in 1 feed of “commercial rating” data called the “C3” C3 = Commercial Pod Ratings PLUS 3 days of Time Shifted
Viewing
Generally, the agencies that buy national broadcast and cable buy off of the C3
MEDIA FORMULAS TO KEEP IN MIND
Rating Share X HUT
Share Rating / HUT
HUT Rating / Share
VPVH Viewers/Viewing Homes
GRP Reach x Frequency
STATS: “Key Stats on Key Players”
HOURS OF WEEKLY MEDIA CONSUMPTION
MediaHours
(weekly)
Traditional TV 35.1
AM/FM Radio 14Internet on a
Computer 5.1Video on the
Internet 1.5
Game Console 1.5
Video on Mobile 1.3
DVD/Blu-ray 1.3
*Nielsen Media Research released its Cross Playform Q3 2013 report. Weekly media usage by platform, as reported by Multichannel News:
AVERAGE TIME SPENT PER DAYWITH MAJOR MEDIA BY U.S. ADULTS (2010-
13)
Category Media 2010 2011 2012 2013 EST.
Digital Total 3:14 (29.6%) 3:50 (33.8%)4:31
(39.1%) 5:09(44.4%)
Online 2:22 (22.0%) 2:33 (22.6%)2.27
(21.0%)2:19
(19.5%)Mobile (non-
voice) 0:24 (3.6%) 0:49 (7.1%) 1:33
(13.5%) 2:21
(19.8%)
Other 0:26 (3.9%) 0:28 (4.1%) 0:31 (4.5%) 0:36 (5.1%)
TV Total 4:24 (40.9%) 4:34 (40.4%) 4:38
(39.8%)4:31
(38.1%)
Radio Total 1:36 (14.9%) 1:34 (13.9%)1:32
(13.2%)1:26
(12.1%)
Print Total 0:50 (7.7%) 0:44 (6.5%) 0:38 (5.4%) 0:32 (4.5%)
Newspapers 0:30 0:26 0:22 0:18
Magazines 0:20 0:18 0:16 0:14
Other Total 0:42 (7.0%) 0:36 (5.5%) 0:20 (2.5%) 0:14 (1.0%)
Total - 10:46 11:18 11:39 11:52
* Hours: Minutes
MEDIA CONSUMPTION REPORT: ETHNICITY
Nielsen's Cross Platform Media Consumption Report (2013) *Monthly Usage by Platform & Ethnicity
Hours/Minutes
MEDIA TOTALAFRICAN-AMERICAN HISPANIC ASIAN
On Traditional TV 152:08 211:10 127:18 93:49Watching Time-Shifted TV 12:31 9:40 8:21 9:01Using a DVD/Blu-ray Device 5:30 6:22 5:22 4:30Using a Game Console 6:39 7:53 7:20 5:03Using Internet on a computer 28:32 30:17 24:21 37:01Watching Video on Internet 6:20 8:46 8:03 11:57Watching Video on Mobile Phone 60:42 62:51 60:07 N/A
Source: Multichannel News
TOP BROADBAND PROVIDERS (3Q13)
Category Provider Subscribers
Cable Comcast 20,283,000
Time Warner 11,550,000
Charter 4,535,000
Cablevision 2,774,000
Suddenlink 1,039,100
Mediacom 956,000
WOW (WideOpen West) 725,000
Cable ONE 469,296
Others 6,530,000
Sub-total 48,681,396
*Source: Leichtman Research Group
SALES: “Terminology, Currencies,
Marketplace”
TERMINOLOGY
UPFRONT: The marketplace for buying TV commercial time well in advance of the
telecast date and usually for an extended period, such as for a year, typically 4Q-3Q.
Usually begins in May.
SCATTER: The marketplace for purchasing TV commercial time closer to telecast date, for
a quarter at a time or less. Usually purchased the quarter before or during the quarter of
telecast.
GUARANTEE: An assurance by the selling network that the advertiser’s commercial
schedule will be viewed by a specific total of audience (Gross Impressions).
UNDER-DELIVERY: The amount of audience (Gross Impressions) that an advertiser’s
schedule falls short of the guaranteed amount.
ADU & RECAP: Free commercials units given to an advertiser either in anticipation of
audience under-delivery or after the fact. A Recap my be “recaptured” by the network and
may be booked at the time of the order.
MAKE-GOOD: A commercial unit given to an advertiser to compensate for a commercial
that was missed.
PRE-EMPTION: A commercial unit that was scheduled to be telecast but is not, typically
because a program that was originally purchased has been changed, or a technical error.
TERMINOLOGY
REGISTRATION: An RFP from an agency. Includes client name, brands, target
audience to be guaranteed, budget, flight dates, dayparts and audience mix for
each and other terms & conditions.
PROPOSAL: Prepared by the network to include units and projected audience
delivery within each daypart and a schedule of either ROS and/or programs, all
for a total gross cost.
HOLD: After negotiations are complete, the agency in good faith requests that
the network “holds the inventory out of sale” until the agency can get final
approval of the proposal.
ORDER: Once the proposal has been approved by the client it becomes an
order.
CANCELLATION OPTIONS: On long term deals such as upfronts some portion
of the order may be agreed to be cancelable with sufficient notice.
FIRM: The portion of the order that is not cancellable is considered Firm.
DAYPARTS
Because Traditional Television viewing is linear, the time of day that the viewing occurs is important.
Audience viewing during different times of the day have different implied values
For instance, women viewing during Primetime are worth more than women during Daytime
The different times of day are called DAYPARTS
Broadcast and Local Affiliate Dayparts are based on network’s schedule
Local affiliates sell short breaks during network programs and in adjacencies and own 100% of the time during their own local programming, like local news.
Cable Network Dayparts are defined by (and different) for each Network
Cable Networks schedule 24 hours a day, so their affiliates (cable systems) get 2 or 3 minutes every hour to sell.
Typical Broadcast Dayparts are:Early Morning 5a-9a Daytime 9a-4p
Early Fringe 4p-7p Prime Access 7p-8p Prime Mon-Sat 8p-11p / Sun 7p-11p
CURRENCIES
COST PER POINT (CPP): The amount of money an advertiser pays to
deliver one GRP (1 rating point) of people or homes.
Time Period Cost / Time Period Rating = Cost per Rating Point (or CPP)
COST PER THOUSAND (CPM): The amount of money an advertiser
pays to deliver 1,000 people or homes.
Time Period Cost / Impression = Cost per Thousand (or CPM)
GROSS VS NET
A contract is negotiated for an amount of money and the TV station or network bills the agency for that entire amount, known as “Gross”.
In theory, the agency would collect the entire “Gross” amount from the client to pay the station, but would receive a 15% discount from the TV station or network.
Known as the agency commission, it was originally considered to be the agency’s compensation. The TV station or network receives the “net” amount, 85% of the negotiated money.
Only the most foolish of clients now allow their agency to keep the full 15% discount that stations and networks give.
CURRENCIES FROM THE AGENCY’S POV
Agencies determine what CPMs they want to pay for their clients by using the following types of data:
Internal Cost History
Competitive CPMs paid on Like-Sized Nets
Collusion
Available Market Data Such As:
SQAD reports
Nielsen Data Reports on CPMs
Kantar Media Reports on Competitive Spending
CURRENCIES FROM THE NETWORK’S POV
Television time is both finite and perishable.
There is a fixed number of commercials that can run in any given hour.
Unsold units cannot be moved to another day.
Demos in the network’s sweet spot yield a higher CPM
Stations decide what their selling cpp will be based on some of the following factors:
Ratings/Demand
What the Market Will Bear
In Some Cases Volume Discounts Apply
It is the responsibility of the Sales Manager to sell every spot, each day for the highest CPM possible and most of it is sold months in advance
FACTORS EFFECTING THE MARKETPLACE
Economic Downturn or Upswing
Olympics
Politicals (Major Election Year)
Propositions
Disasters (Plane Crashes)
Major News Coverage (Car chases)
Content of a Show (American Idol)
Major Sporting Event Coverage (World Series)
The Pace of the Automotive Industry
UPFRONT SALES
Upfront Sales (billion)
Networks 2012-13 2013-14
ABC $2.1 $2.2
CBS $2.5 $2.6
FOX N/A $1.8
NBC $1.9 $2.0
CW $0.400 $0.420
*This chart delineates broadcast network TV sales during the upfront for 2013-2014 as represented in the trade process
AD AGE’S 10 BIGGEST MEGABRANDS IN 2012
RANK BRAND PARENT EXPENDITURE
1 AT&T AT&T $1.59 billion
2Verizon Verizon Communications $1.43 billion
3Chevrolet GM $958.0 million
4McDonald's McDonald's $957.0 million
5Geico Berkshire Hathaway $921.0 million
6Toyota Toyota $879.0 million
7Ford Ford $857.0 million
8T-Mobile T-Mobile $773.0 million
9Macy's Macy's $762.0 million
10Walmart Walmart $690.0 million
FASTEST-GROWING AD SPENDERS IN 2012
# ADVERTISERAMOUNT SPENT IN
2012
PERCENTAGE GROWTH FROM
2011
1 Samsung $881 million 58%
2 Amazon $1.1 billion 47%
3 IAC $547 million 43%
4 Lions Gate $418 million 43%
5 AbbVie $481 million 41%
6 Discover $603 million 30%
7 Dish Network $469 million 29%
8 Honda $1.2 billion 29%
9 Kia $637 million 27%
10 T-Mobile US $1.1 billion 27%
LARGEST GLOBAL MARKETS
Advertising Age's 10 Largest Global Markets (2013)
Rank Market Major Media Spend (Millions) Change vs.
20121 United States $166,905 3.50%2 Japan $52,838 2.10%3 China $40,948 10.10%4 Germany $23,184 -1.10%5 United Kingdom $20,345 5.00%6 Brazil $15,859 3.70%7 Australia $13,072 2.00%8 France $12,145 -2.80%9 Canada $11,589 -0.40%10 South Korea $10,612 -1.20%
*Source: ZenithOptimedia
Post BuyAnalysis
Post Buys are done with what is called “exact time posting” via a
combination of data from the media buying software, the network
trafficking system and invoices of the exact time that a spot has run.
Programs are sold/purchased in rotation format with an average
impression from the daypart but are posted via exact time that the spot
ran.
Often in national TV, third party companies are hired to handle the post
buys. In local TV, the post buys are done by the local station and the
local rep.
Most national agencies require that networks guarantee and deliver 100%
of the promised audience impressions.
Most local buys are required to post at +/- 10%, depending on the market
and due to less available, daily audience data and information.
Under-posting and over-posting are equally bad business for the ad agency
POST BUY ANALYSIS: HOW??
POST BUY ANALYSIS WHY??
Post Buy Analysis is a controversial issue.
It is an invaluable tool for Ad Agencies
To ensure that buyers are highly scrutinizing estimates.
To prove to their clients that they did in fact do their job in
delivering the promised audience.
To assist in pitching new business to illustrate the reliability of
the media dept.
To keep networks honest and working to achieve ratings success
It is an important tool for the Clients To ensure that their media agency is doing a good job To evaluate and make decisions on media spend and purchases
It is a complicated issue for the Networks Adding ADU’s makes it very complicated to manage the inventory “Selling Out” in part due to increased ADU’s can be disastrous for
networks There is no added benefit to a network for over-delivering
BUT DID THE CASH REGISTER RING??? Does posting at 100% mean sales went up? If sales went down, can it be pin-pointed to the media post? Is the ultimate job of the agency and station partners to post? Or to
move product?
POST BUY ANALYSIS: WHY??
Tracey McCormackPhone: 323-977-TMACEmail: Tracey@McCormackMedia.netWebsite: www.McCormackMedia.netTwitter: @TraceyMacTweetsLinkedIN: Tracey McCormackFacebook: McCormack Media ServicesYouTube: Tracey McCormackGoogle+: McCormack Media Services
Los Angeles HeadquartersMcCormack Media Services3219 Kelton Ave.Los Angeles, CA 90034
New York OfficeMcCormack Media Services138 W. 87th Street, 2RNew York, NY 10024
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