Finance community interprets Nielsen data as 11% fall in viewers

A note from US finance analysts MoffettNathanson gives a peek into Nielsen figures for October, demonstrating another significant fall in viewer ratings of the major US networks – off by around 11% over this time last year. This is the second month in a row that the viewing numbers have been this far off – cable off by 11% and broadcast by 12% – although apparently the viewing figures for October are higher than September – but that’s seasonal apparently.

It is interesting that we even continue to debate this, and it’s because of consistent “re-interpretation” of the Nielsen figures in the past. As early as 2003 we remember Nielsen “losing” 10% of males 18-34 in a single quarter. Because TV as the main “entertainment” medium has been under assault since at least then, people are used to reporting down figures. Back then, 16 million for a single show was common, today that’s 12 million – and that’s the popular shows.

MoffettNathanson described the C3 ratings numbers as “abysmal.” Interestingly going all that way back to 2003, when the first crash in viewing figures was observed, the C3 ratings were not even in existence. They were brought in as a compromise to put a value on TV content watched on a DVR within 3 days of it being broadcast. If you take out those C3 numbers, on the basis that everyone fast forwards through those ads, the continued fall in viewing in the US would be nothing short of catastrophic. The assumption has always been that if you watch within 3 days of the broadcast, you also watch the adverts – not behavior we recognize.

Fox managed to turn the tide, up 21% because it put Thursday Night Football into its prime time. This meant that CBS, which used to have Thursday Football fell 38%. Each of the channels went tit for tat, some up, some down, but it is the totality that is not in question.

Major advertisers are torn between using online video advertising, which is currently fraught with fraud, or continuing to use broadcast advertising, which is falling in its effectiveness by the day. Twice in the past 12 months, scare stories about the effectiveness of online video advertising have sent advertisers scurrying back to broadcasting, but in the end all it will lead to is less video advertising – bad for the industry, and also bad for big branding exercises, so bad for the advertisers themselves.

The problem with looking to the US to follow its technological lead is that it has come up with most programmatic advertising approaches, and yet its broadcasters are the least resilient to change. Elsewhere in the world – for instance in Europe and China – taking the same broadcast free to air content and giving it over to OTT delivery is well ahead of the US, and the shift in the advertising base is also more advanced.

Meanwhile all of this is being undermined by Google and Facebook, which don’t produce the longform video advertising that should be meat and drink to advertising agencies and this duopoly is reaching directly to advertisers, and yet doing a poor job – due to consistent ad fraud and uninterested in fixing the problem.

The lead for this needs to come from advertising agencies who need to protect their future revenues (online) and sponsor the shift of perhaps $220 billion worth of TV advertising globally, from broadcast to online – instead of resisting it. To do that they need resilience against online ad fraud (see separate story in this issue).

The viewing totals in the US saw broadcast TV networks with just 4.1 million viewers in the 18-49 category and broadcast cable networks down to 7.8 million. The lower the age group, the bigger the fall.

So the next time you read a story about broadcast advertising not falling away as fast as it should – ignore it as a temporary blip.