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Upfront: Walt Disney Co. tries to go beyond Nielsen ratings

May 13, 2008 |  9:04 am

Walt Disney Co. is trying to get inside the minds of television viewers.

The Burbank-based entertainment company, with its profitable ESPN and ABC networks, said Tuesday that it was developing an "emerging media and advertising research lab"  to try to figure out why people watch the shows they do.

ABC made the announcement as part of its presentation to advertisers in New York City to kick off the industry's springtime television sales season. ESPN entertained advertisers this morning, and ABC is scheduled to unveil its fall schedule this afternoon.

The new research center will be based in Austin, Texas, and will test a variety of advertising practices to discern how receptive consumers are to products that are integrated into shows, whether people pay attention to split screens and how they watch programs on small mobile devices.  Disney did not say when the center would open.

The effort is part of a company-wide campaign to bring its advertising sales strategy into the 21st century because behavioral research about consumers is becoming increasingly available with the transition to digital television. Now, television networks have second-by-second viewing data available, through Nielsen Media Research, TiVo and cable television operators, which should help them analyze viewers' TV consumption choices.

Mike Shaw, ABC's advertising sales president, separately said that his team has developed a new metrics tool that he called the "advertising value index" that he said should help corporate advertisers figure out what shows have the greatest appeal to their targeted consumers.

"We want to take a deeper dive into the audience itself," Shaw told reporters at an early morning news conference at the ABC offices on Manhattan's Upper West Side. "We think this is kind of a step forward and I think the market will embrace it."

Advertisers spend billions of dollars each year buying commercials based on limited information about the audience that is watching. Buying decisions, and networks' commercial rates, have largely been based on whether a show appeals to a large swath of consumers that, for example, fall within the 18-to- 49-year-old age group or whether a show's audience skews male or female.

Thus, beer and fast food companies advertise heavily in sports programming because they draw the testosterone crowd and pharmaceutical companies typically buy spots in evening news programs because those shows' audiences skew older.

But just relying on such broad categories does not help advertisers discern whether a show has more appeal among affluent viewers, technologically savvy viewers or people who are preparing to make a major car purchase.  And then there are the more elusive factors, such as whether consumers are even engaged with a particular program.  In recent years, figuring out which shows have the highest levels of engagement among viewers has become something of a holy grail for the advertising world.

Early research has shown that people pay more attention to commercials if they are engaged or passionate about the program they are watching rather than the less-attentive "grazers."  One of the more than 16 factors that will be measured in ABC's new advertising index is the number of commercials that run in a commercial break, or "pod."  TV executives believe that consumers will sit through shorter commercial breaks rather than get up to snag a snack.

ABC figures that its network is particularly well positioned for such a change in sales strategy and pricing because so many of its shows, including "Lost" and "Brothers and Sisters," have large contingents of dedicated viewers.  They want to capitalize on that.

What's more, ABC is working harder to keep their advertising dollars rather than see the money moved to other platforms, such as the Internet. Network executives are concerned that the weak economy might cause advertisers to pull back on spending.

The so-called upfront television ad market is a $20-billion business for the broadcast and cable television networks.  Last year, the five broadcast networks sold $9.3 billion in advertising time in the weeks that followed the upfront presentations.

Disney, which plans to work with the academic Duane Varan, who is known in the industry for a research project called "Beyond :30" which aims to understand viewing behavior, is not the first company to try to better analyze why people watch the shows they do. CBS also has a built a comprehensive TV viewing research facility in Las Vegas.

-- Meg James