Television Bureau of Advertising The Importance of DVR Viewing to the Advertiser

Television Bureau of AdvertisingTelevision Bureau of Advertising

The Importance of DVR Viewing to the Advertiser

Before making the decision to limit television buys to Live Only

ratings in local markets, consider what is being left behind.

3

Timeshifted Viewing Delivers Valuable Customers

Timeshifted Viewing Delivers Valuable Customers

Households with DVRs contain upscale demographics.

While the vast majority of viewing is still Live, timeshifting is increasing.

Most playback, however, occurs near the time of original telecast.

Research indicates that a high percentage of commercials are not skipped; those that are skipped are also likely to deliver their message and/or reinforce key message points.

DVR Homes contain the kinds of consumers that advertisers

most want to reach.

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Characteristics of DVR Homes:More likely to have a younger HOH,

children

Characteristics of DVR Homes:More likely to have a younger HOH,

children

44.2%

29.1%

36.2%

20.8%

Age of HOH < 35 Any Children <18

DVR HH Total US HH

Index = 140

Index = 122

Source: Nielsen, Local DVR Timeshifting Analysis: Observations from November 2007. Released 1/11/08. Data based on 56 metered markets.

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Characteristics of DVR Homes:High ADS Penetration, Higher Educated

HOH

Characteristics of DVR Homes:High ADS Penetration, Higher Educated

HOH46.5%

42.8%

27.9%27.3%

ADS Penetration HOH 4+ Years College

DVR HH Total US HH

Index = 157Index = 167

Source: Nielsen, Local DVR Timeshifting Analysis: Observations from November 2007. Released 1/11/08. Data based on 56 metered markets.

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Characteristics of DVR Homes:More likely to have HHI $75K+, POM HOH

Characteristics of DVR Homes:More likely to have HHI $75K+, POM HOH

59.7%

50.8%

40.6%

29.8%

HHI $75K+ HOH Prof/ Owner/ Mgr

DVR HH Total US HH

Index = 171

Index = 147

Source: Nielsen, Local DVR Timeshifting Analysis: Observations from November 2007. Released 1/11/08. Data based on 56 metered markets.

8

Nielsen’s Home Tech Report Also Indicates DVR HHs Contain Sought-

After Consumers

Nielsen’s Home Tech Report Also Indicates DVR HHs Contain Sought-

After Consumers

Source: Nielsen, Home Technology Report, 2nd Quarter 2008.

Respondents inTotal HH

Respondents inHH with DVR Index

Bachelor's Degree 20.5 28.2 138

Master's Degree, Prof. or Doctorate 14.8 17.5 118

Married 53.6 66.9 125

Presence of Children (up to 17 yrs) 26.9 38.3 142

Presence of Children under 2 14.7 17.0 116

Presence of Children 6-11 49.9 68.3 137

Professional/Administrative/Managerial 22.3 29.2 131

Sales/Tech/Clerical 13.9 19.1 137

HHI $70-100K 14.5 22.9 158

HHI $100-200K 13.1 25.7 196

HHI Over $200K 2.8 5.2 186

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While Time Shifted Viewing Has Grown, It Is Still a Small Percentage of Overall

Viewing

While Time Shifted Viewing Has Grown, It Is Still a Small Percentage of Overall

Viewing

Source: Nielsen, Three Screen Report, Third Quarter 2008.

3Q ‘07 3Q ‘08Difference(In Hours)

Traditional TV 136:54 142:29 5:35

Timeshifted TV 4:17 6:32 2:15

% of TV Viewing that is Timeshifted 3% 4%

Time Spent in Hours:Min per Month, per Quarter

Persons 2+

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Adults 25-44 Show Higher Percentages of Timeshifting, Relative to Other

Demos

Adults 25-44 Show Higher Percentages of Timeshifting, Relative to Other

Demos

Source: Nielsen, Three Screen Report, Third Quarter 2008.

K2-11 T12-17 A18-24 A25-34 A35-44 A45-54 A55-64 A65+

Traditional TV 108:34 110:59 108:36 133:00 134:51 159:23 175:18 196:23

Timeshifted TV 5:25 4:55 4:36 10:04 8:15 7:19 6:32 3:44

% of Monthly TV Viewing that is Timeshifted

5% 4% 4% 7% 6% 4% 4% 2%

Time Spent in Hours:Min per Month

By Demographic

Commercials Viewed in Playback Mode Have Value for Advertisers

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Just How Many Commercials Are Viewed in Playback Mode, Anyway?

Just How Many Commercials Are Viewed in Playback Mode, Anyway?

Most studies seem to indicate about 50-60% of commercials are fast forwarded…meaning that 40-50% are viewed in real time.

Even when commercials are fast forwarded, it appears that message points are delivered – consumers are in an alert state to ensure they don’t miss program content – and recall of key ad message points is strong.

Here are some examples of the latest research findings.

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Just How Many Commercials Are Viewed in Playback Mode, Anyway?

Just How Many Commercials Are Viewed in Playback Mode, Anyway?

According to Nielsen’s recently released Three Screen Report, among DVR households, about half of commercial content was viewed when programming was played back within 3 days.

Source: Nielsen, Three Screen Report, May 2008.

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Just How Many Commercials Are Viewed in Playback Mode, Anyway?

Just How Many Commercials Are Viewed in Playback Mode, Anyway?

According to Dave Poltrack, EVP of Research and Planning for CBS, about 60% of commercials are fast forwarded, meaning 40% are viewed in real time.

Even the 60% that are fast forwarded deliver value: Poltrack cites research showing that people

stop fast forwarding for certain ads, “so good ads don’t get fast forwarded through as much as poor ads…We’re trying to get our commercial pods as consumer friendly as possible.”

Source: Advertising Age, October 18, 2008.

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Just How Many Commercials Are Viewed in Playback Mode, Anyway?

Just How Many Commercials Are Viewed in Playback Mode, Anyway?

According to a study from Innerscope Research for NBC Universal, viewers with DVRs who fast forward through commercials still recall and recognize brands at twice the expected rate.

People fast forward in a “hyper-alert state” to ensure they don’t miss their show.

Seeing a familiar ad further enhances recall for both live and DVR viewers:

For DVR viewers, ad recall increased from 15% to 53% when an ad had been seen before.

Advertisers are beginning to take advantage of hyper-alert gaze by centering key images on the screen.

Source: LiveScience.com, October 2, 2008.

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Just How Many Commercials Are Viewed in Playback Mode, Anyway?

Just How Many Commercials Are Viewed in Playback Mode, Anyway?

A study appearing in November 2008’s Journal of Marketing found that people who fast forward through commercials actually pay more attention to the television screen than those viewing in real time, and can be influenced by the brand images they view for only a short amount of time.

The study recommends placing branded information at the center of the screen, noting that this can positively affect brand recognition and attitude, and behavioral intent.

Source: Journal of Marketing, “Breaking Through Fast-Forwarding: Brand Information and Visual Attention,“ November 2008.

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Playback Viewing in DVR HHs is Relatively Consistent Across Major

Demographics

Playback Viewing in DVR HHs is Relatively Consistent Across Major

Demographics

Cumulative Viewing

Live Viewing

Same DayPlayback

1 Day Playback

2-3 Day Playback

Remaining Playback

HH 92.2% 97.0% 98.0% 99.2% 100.0%

P18-34 87.2% 94.7% 96.5% 98.7% 100.0%

P18-49 87.7% 95.1% 96.6% 98.7% 100.0%

P25-54 87.5% 95.0% 96.6% 98.7% 100.0%

P55+ 91.8% 96.6% 97.7% 99.1% 100.0%

Viewing Among DVR HouseholdsTotal Day, November 2007

HH based on 56 metered markets; person demos based on 13 LPM markets

Source: Nielsen, Local DVR Timeshifting Analysis: Observations from November 2007. Released 1/11/08.

The vast majority of viewing is still live. Less than eight percent of HH viewing is in playback mode, and approximately 12% of viewing among key

demos is in playback. By the end of three days, over 98% of total viewing is captured.

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DVR Playback by Daypart in LPM Markets

DVR Playback by Daypart in LPM Markets

Cumulative % of Playback

Same Day +1 Day +3 Days +7 Days

M-F 6-7A 85.7% 86.4% 93.7% 100.0%

M-F 7-9A 76.5% 80.1% 91.5% 100.0%

M-F 9A-12P 70.8% 75.0% 90.2% 100.0%

M-F 12-4P 68.4% 75.7% 90.6% 100.0%

M-F 4-6P 67.7% 78.1% 91.1% 100.0%

M-F 6-8P 71.4% 83.2% 94.0% 100.0%

M-Su Prime to 11P 51.3% 72.3% 89.2% 100.0%

M-Su 11P-2A 47.1% 75.5% 90.8% 100.0%

Playback Viewing by Daypart in LPM MarketsP18-49

November 2007

Source: Nielsen, Local DVR Timeshifting Analysis: Observations from November 2007. Released 1/11/08.

For the key demo of P18-49, of the 12.3% of viewing done in playback mode, the vast majority occurs in the same day.

Over three-quarters occurs within one day, and over 90% occurs within 3 days.

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Timeshifting Continues to Impact PUT Levels for All Demographics

Timeshifting Continues to Impact PUT Levels for All Demographics

10.0

%

5.7

%

5.8

%

5.7

%

9.0

%

8.1

%

8.1

%

8.6

%

7.7

%

7.8

%

8.0

%

7.6

%

2.8

%

2.7

%

2.8

% 4.0

%

3.4

%

P18+

W18+

M18+

P18-3

4

W18-3

4

M18-3

4

P18-4

9

W18-4

9

M18-4

9

P25-5

4

W25-5

4

M25-5

4

P55+

W55+

M55+

Teens

12-

17 K2-1

1

Percent HUT/PUT Increase from Timeshifting (Live v. Live + 7)13 LPM Markets

M-Su PrimeNovember 2007

Source: Nielsen, Local DVR Timeshifting Analysis: Observations from November 2007. Released 1/11/08.

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Timeshifting Continues to Impact HUT Levels Across all Dayparts

Timeshifting Continues to Impact HUT Levels Across all Dayparts

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In DVR Homes, Playback Tends to Occur in Prime and Late Night Dayparts

In DVR Homes, Playback Tends to Occur in Prime and Late Night Dayparts

Source: Nielsen, Audience Insight: US DVR Penetration and Usage. Released July 2008.

5% 5% 6% 6%

9%

33%

14%

8%

2%4%

2%

5%

M-F, 6A-10A

M-F, 10A-1P

M-F, 1P-4P

M-F, 4P-6P

M-F, 6P-8P

M-SU, 8P-11P

M-SU, 11P-1A

M-SU, 1A-6A

SA, 8A-1P

SA, 1P-8P

SU, 8A-1P

SU, 1P-8P

DVR Playback by Daypart – NPM SamplePersons 18-49

May 2008

• Includes time spent in “trick mode,” as well as playback older than 7 days.

• Highest DVR usage in Prime and Late Night is consistent with findings from earlier studies.

• Most often, content is played back in the same daypart in which it originally aired.

There is a perception that, nationally, C3 ratings are close to Live Only Program Ratings. Taking this a step further, some agencies

are using Live Only ratings in local LPM

markets on the assumption that what works nationally must work

locally.

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Do C3 Ratings = Live Only Program Ratings?

Do C3 Ratings = Live Only Program Ratings?

November 2007 NTI Network Prime Program AveragesC3 v. Live Only Program Ratings Index

On a national level, primetime C3 ratings do indeed equate very closely to Live Only Program Average ratings, as the table below

indicates.

A18-34 A18-49 A25-54

ABC 101 101 101

CBS 102 102 101

NBC 99 99 99

FOX 101 100 100

CW 99 99 99

MNT 94 93 93

Source: Nielsen NPower Analysis, November 2007.

This top-line view, however, does not demonstrate the variances of individual prime programs.

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For Individual Prime Programs, C3 v. Live Only Ratings Differences are More Apparent

For Individual Prime Programs, C3 v. Live Only Ratings Differences are More Apparent

November 2007 NTI C3 v. Live Only Program Rating

Index

Looking at individual programs paints a clearer picture; C3 ratings can be significantly higher than Live Only program ratings.

This difference is expected to grow as DVR penetration increases.

Source: Nielsen NPower Analysis, November 2007.

A18-34 A18-49 A25-54

The Office 111 110 111

Ugly Betty 110 108 107

Numb3rs 108 105 104

Bones 107 106 106

The Reaper 104 108 110

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For Syndicated Programs, Similar Ratings Differences Can Be Observed

For Syndicated Programs, Similar Ratings Differences Can Be Observed

November 2007 NTI C3 v. Live Only Program Rating

Index

Looking at individual programs paints a clearer picture; C3 ratings can be significantly higher than Live Only program ratings.

This difference is expected to grow as DVR penetration increases.

Source: Nielsen NPower Analysis, November 2007.

A18-34 A18-49 A25-54

King of Queens 111 110 110

Oprah 110 109 108

Dr. Phil 107 106 106

Cops 106 105 105

Sex and the City 106 106 107

For most other program genres and dayparts, Live + 3

Commercial Indices indicate very little commercial skipping.

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Nielsen Research on Commercial Skipping

Nielsen Research on Commercial Skipping

Source: Nielsen DVR Update July 2008 / Breakouts and programs less than 5 minutes have been excluded.

In addition to the ratings swings that can be observed nationally,

there are local issues to consider. Most important is DVR

penetration, which varies greatly market to market.

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17.2%

18.7% 18.6%19.7%

21.4%

23.0%

24.4%

26.9%

DVR Penetration Continues to RiseDVR Penetration Continues to Rise

As of November 2008 DVR penetration is 26.9%, up from 19.7% one year ago.

*Source: Nielsen, Media-Related UEs, November 2008.

National DVR Universe EstimatesSource: Nielsen Media Research

May ‘07July ‘07 Sept ‘07

Nov ‘07

Feb ‘08

May ‘08

July ‘08

Nov ‘08

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While National DVR Penetration is 24.4%; in Many DMAs, Penetration is

Much Higher

While National DVR Penetration is 24.4%; in Many DMAs, Penetration is

Much Higher

November 2008DVR Universe Estimates

In some DMAs, DVR penetration is nearly 50% higher than national estimates. Local market viewing patterns will be affected by

changes in DVR penetration, and need to be examined on a case by case basis.

Source: Nielsen, November 2008 Media-Related Universe Estimates.

DMA Rank DMA DVR Penetration

28 San Diego 37.7

49 Austin 37.4

5 Dallas-Ft. Worth 37.2

19 Orlando-Daytona Bch-Melbrn 36.8

2 Los Angeles 36.2

20 Sacramnto-Stkton-Modesto 35.2

6 San Francisco-Oak-San Jose 34.1

27 Raleigh-Durham (Fayetvlle) 34.0

37 San Antonio 34.0

17 Cleveland-Akron (Canton) 33.5

13 Tampa-St. Pete (Sarasota) 33.5

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TVB Recommends That Advertisers Count Timeshifted Viewing When

Planning Ad Buys

TVB Recommends That Advertisers Count Timeshifted Viewing When

Planning Ad Buys DVR penetration will continue to rise, and will increasingly affect viewing patterns. Ignoring this viewing shortchanges media plans.

While some commercial skipping occurs, close to half of ads are viewed in real time; ads that are fast forwarded through still deliver valuable ad impressions.

Most playback occurs close to the program’s original airtime, and commercials are delivered during desired advertising intervals.

Nationally, Live Only program ratings – for individual primetime programs – often exceed C3 ratings by significant margins.

Local market viewing nuances need to be considered; like cable and satellite penetration, DVR penetrations varies from market to market.

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TVB Calls for Live + 3 Standard TVB Calls for Live + 3 Standard

Over 90% of playback, regardless of daypart, occurs within 3 days.

Live + 3 day ratings capture nearly 99% of total Live + 7 viewing in key demographics.

For the vast majority of advertisers, ads that air within 3 days of original airtime: still serve to build awareness of a campaign, motivate viewers to reach to time sensitive

sales events, cause customers to take other desired actions.

Live Only ratings do not reflect the new realities of television

viewing in local markets. The Live + 3 standard represents

a more accurate estimate of viewing behavior.

Thank You!