DRMetrix is offering some new analytics in its industry report. One that will cause the most confusion is “% of national”. Simply put, “% National” let’s you know what percentage of the detected airings are true “national” airings vs. less expensive airings running in “local” cue tone ad breaks. What’s most important to understand is that not all DRTV airings on National Cable Networks are equal. DRMetrix’s “spend index” is therefore the most reliable way of understanding what one advertiser is spending in comparison to another. It would be a huge mistake to think because one advertiser has more airings that they are spending more. It would also be incorrect to think that the advertiser with the higher number of airings is having their ad exposed to more television viewers. The reason for this is based on the fact that certain national cable spot inventory is worth about 10 cents on the dollar and is only viewed by a small % of U.S. households. Want all the details? Keep reading…
As stated, it is important to understand that there are two different types of “ad breaks” that national cable networks sell. DRTV media buyers refer to these two different types of inventory as “national” and “local” – (“local” meaning inventory in local cue tone ad breaks on the networks).
The “national” ad break is easiest to explain, it’s when the network inserts a commercial that is seen on the TV screen of every cable viewer that is watching that particular network. This is the inventory that companies like Nielsen rate and is purchased by both traditional brand and DRTV advertisers. As a general rule of thumb, cable networks run a local break for 2 minutes out of every hour of programming. The “local” ad break is when the local TV provider has the opportunity to sell and insert a local advertisement. Let’s use Comcast as an example of a local TV provider that sells local advertising in communities across the country. It’s true to say that Comcast doesn’t sell advertising in every local market on every cable network. So if Comcast doesn’t insert an ad during a local break will the viewer be left watching static? Fortunately, this doesn’t happen because the cable network always sells this inventory as a “local”. If Comcast has sold the inventory, they simply “cover up” the network’s “local” with the commercial of a local market Comcast advertiser.
Many of us may recall a time when we were watching a commercial and the cover up ended prematurely allowing us to briefly see the end of another spot before programming resumed. You now understand that the spot that was covered up was sold by the cable network as a “local”. Since Nielsen doesn’t rate commercials running on cable networks in these local breaks, brand agencies don’t typically purchase this inventory. DRTV advertisers, on the other hand, don’t rely on Nielsen to determine the value of inventory. So, most cable networks will sell their “locals” to DRTV advertisers who understand that while their ad may be covered up in many urban markets they will still reach some rural market viewers.
When DRMetrix is monitoring network cable, we pay particular attention to both the national and local ad breaks. Our technology is able to discern the difference between the two, which is an industry first. This is a very important distinction and critically important as networks price the “local” at a fraction of the cost of a “national”. The “local” may be perceived as a good deal for DRTV advertisers if they happen to reach 20% of the viewers for 10% of the “national” rate. When DRMetrix calculates the “spend index” for any brand, we take these valuation differences into account. In many cases, it helps to explain why some advertisers rank lower despite having higher overall airings.