By Jason Bohrer, Associate Media Director, U.S. and Jessica Muzzin, Associate Media Director, Canada
We brought together our Associate Media Directors in the U.S. and Canada to answer a few questions highlighting the differences—as well as the similarities—between their respective markets and the DRTV media landscape in general.
Jessica Muzzin from north of the border and Jason Bohrer from stateside have teamed up for our two-part DRTV Media Q&A series.
1. How do the eligible TV households in the U.S. and Canada compare?
Jason: To start, there are over 320 million people living in the United States. Roughly 93% of all people over the age of 2 live in a home with a TV. The top ten television markets make up only 30% of the total population.
Jessica: To contrast that with Canada, the top 10 markets represent 75% of the total population. Because of the unbalanced spread across Canada, national ratings are not utilized north of the border, as they would not accurately reflect the top 10 markets versus minor markets. Canada’s population is more than nine times smaller than the U.S. at about 35 million, and it is estimated that of the 14.5 million households 96% have a television. To help put that into perspective, Canada has 42 TV markets that are measured by Numeris (formerly BBM), whereas the U.S. has 210 DMA regions (designated market area) that are measured by Nielsen.
2. What about audience measurement in both markets? Who measures what and how is that data collected?
Jason: The U.S. has come a long way since measuring audience by diary. From LPM (Local People Meter) technology to set-top box data, the way audience behavior can be collected and measured is evolving as rapidly as the medium itself. Nielsen remains king, however, competition in the measurement space is growing with companies like Rentrak.
Jessica: In Canada, Numeris provides television audience data using Portable People Meters (PPMs). This is the current system in place for measuring national television audiences. If you are not familiar with the process, PPM is a passive measurement system in which panel members carry the device throughout the day. The unit “listens” for any encoded television signal, which is audible to the wearer and then sends the recorded data to Numeris. In addition to PPMs, diary surveys are also relied upon. This information is then leveraged by advertisers to target a specific audience.
3. How does the Canadian TV landscape compare to the U.S.?
Jason: The television landscape in the U.S. will always be competitive, and the emergence of non-linear TV has added a new angle to the landscape. While options are plentiful in the non-linear space (Hulu, Netflix, etc.), traditional linear television options have remained constant over the years. There are still the five major broadcast networks (ABC, CBS, Fox, NBC and the CW), along with hundreds and hundreds of cable stations (national, local, regional, etc.).
Jessica: In Canada, we have conventional and specialty stations. Choice is limited compared to the U.S., as stations are consolidated under only a few broadcasters here.
Similar to the U.S., Canadians are choosing to view content when and where they want it, whether through on-demand services or streaming sites like Netflix. Although we are seeing some changes in consumption behavior, traditional TV viewing audience numbers in Canada have only dropped 4% since the launch of Netflix in 2010.
In response to the direction viewing behavior is headed, on March 1, 2016, the CRTC mandated that all Canadian cable and satellite operators provide efficient delivery of programming at affordable rates, allowing Canadians to pick and pay for the channels they want. They must offer channels either individually or in packages of up to 10 channels.
We anticipate that some channels might not survive in the Pick-and-Pay atmosphere, due to lower viewership/revenue and greater subscriber choice, which could lead to a decrease in inventory and options. It will be months before we are able to understand the impact.
4. How is DR media bought and sold in Canada compared to the U.S.?
Jason: There are many ways to buy and sell direct response media in the U.S. Depending on the specific needs of the advertiser, air time can be purchased directly from a station or network, a national or local rep firm, or even a local cable provider. These companies control inventory that has not been sold —either during the upfront process or in the scatter market. DR media buyers attempt to secure the remnant inventory at the lowest rates possible. The constant fluctuation of direct response inventory means that rates are never fixed.
The process is similar to auction bidding, where an advertiser can be pre-empted at the last minute due to another marketer willing to pay more for the airtime. Buyers can look at CPMs when it comes to buying stations/dayparts where the results are unknown. It is less of a risk to buy a station/daypart with a lower CPM, as there are more people watching who may respond to the ad.
Jessica: In Canada, DRTV inventory tends to always be pre-emptible, unless a premium is paid or negotiated with the stations. The U.S. has more than 1,381 stations, while Canada only has around 100, meaning inventory availability is very limited and lead time is essential.
Another notable difference is the cancellation policy in both markets. In Canada, stations typically require a four-week cancellation period, whereas in the U.S. it is generally three to five days, providing more flexibility and allowing for quicker adjustments and optimization.
Stay tuned for Part Two
Overall, both markets share many similarities – with their own quirks, of course. Stay tuned for Part Two, which will focus on creative (from DRTV lengths that work, to the clearance process) and also dive into video on demand (VOD) and programmatic.