CBS Expands TV Ads to VOD to Bolster Revenue, Nielsen Ratings (Updated)

Network explores viability of two advertising initiatives: inserting on-air ads into older episodes viewed on demand and using a deeper data “audit” to provide smarter stats

Last Updated: March 27, 2015 @ 12:33 PM

CBS is kicking off the dawn of network TV advertising’s future as it takes the first major steps toward changing the decades-old process of ad buying in the medium.

In one initiative with Comcast launched three weeks ago, CBS quietly began running the same ads from the new network airing of “Madam Secretary” on every episode of the show viewed through video on demand for the next three days. A first for TV networks and so far occurring only on Comcast systems, the move could open the door for viewership of older episodes — not just that for the latest episode — to be counted in some Nielsen ratings of TV commercials. Up to now, only viewings of current episodes got the same on-air ads and counted.

In the second initiative, CBS will start using additional data to provide advertisers a far better picture — which the network calls an “audit” — of how the ads do in triggering purchases or behavior.

Advertisers will still buy ads based on traditional ratings splits, like women 18 to 34 — CBS hasn’t gone too far just yet — but the network will offer a clearer picture of the return on investment for ads, potentially putting it on the path toward new ways to buy network TV.

The moves come as a plethora of new sources of information give advertisers far greater ability to see the direct interaction between advertising and consumers.

There are now more than 400 pieces of information about households that can marketers can use to better target their ads, said Jon Mandel, a longtime top advertising agency exec who once headed NielsenConnect and until recently was president-CEO of PrecisionDemand.

Information can include installers’ description of the room where a TV and its set-top box is — a living room, a kitchen or a bedroom, for instance — what viewers are watching or sophisticated data gathered on local buying patterns using data by companies like Acxiom and Experian. The information offers a far better opportunities for advertisers to understand consumer habits.

“It’s not just women 18 to 34,” for example, he told TheWrap, adding that advertisers can go deeper with data currently available.

Mandel said that while addressable set-top boxes offer the greatest possibility for returning the new data in targeting, advertisers can get many of the same targeting benefits at far lower cost by simply using the new information sources to hone their ad-buy strategy.

“You can target in a way that makes television far more valuable,” he said.

A marketer wanting to sell lipstick or mascara can use the information to go beyond buying a program high in viewership by women of a certain age and find the programs with the greatest appeal to those who buy lipstick and mascara.

The result he said is far more efficiency in buying. Mandel said he has used the new sources to demonstrate that advertisers can sometimes get better efficiency in making daytime TV and early morning TV buys, than in prime-time buys.

The audit is a step toward CBS more clearly demonstrating to advertisers the real-world impact of buying its shows, David Poltrack, chief research officer for CBS Corp. and president of CBS Vision, told TheWrap.

As part of the audit, CBS will use information from Nielsen’s Catalina system and other sources to provide a detailed breakdown on the effect of a TV ad buy on purchasing decisions.

“What we are realizing is that advertisers don’t know how well television works,” Poltrack said. “We want to put together programs to report back on actual performance data.”

Poltrack said the hope is that CBS’s “campaign performance audit” will help advertisers better track their return on investment and make them want to buy more CBS shows.

While Poltrack said the new data offers significant information to advertisers, he added that the detail isn’t yet sufficient to upend the process of selling network TV ad time or offer any advertiser guarantees.

“Right now the stability of the measurement … the granularity is not there,” he said. “We will measure it and learn together. Three years from now, who knows.”

The unveiling of the “audit” comes as CBS, working with Nielsen, launches its “Madam Secretary” experiment.

Nielsen’s C3 ratings of commercial viewing, which are different from its show viewer ratings, count viewers who watch a commercial “live” or within three days as long as the viewers see the exact same pods of ads. Running the same ads on older episodes of the series during those three days could allow CBS to add those viewers to its C3 numbers, boosting its revenues.

Poltrack described CBS’s move as “an experiment” with the intention being to set up the systems that allows the network to easily to insert the same ads running on a broadcast series into older episodes viewed through video on demand.

“We are just setting up the mechanism for video on demand,” he said, adding that the experiment on Comcast’s system would need to be expanded to other systems and gain scale before decisions get made on its use for defining or targeting an audience.

The latest moves follow efforts by CBS and other networks to better monetize shows airing after the initial three Nielsen days by giving advertisers greater capability to use dynamic insertions to more easily target viewers and change ads at the last minute.

For the record: A previous version of this post said that ads would appear online, but they will appear on VOD. TheWrap regrets the error.