New Measures and a New Model motnl - Marketing Bulletin...

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Marketing Bulletin, 2008, 19, Article 1 Page 1 of 19 New Measures and a New Model for Television Network Loyalty (MOTNL) Denny Meyer and Siva Muthaly Network loyalty is of major interest to television program schedulers and advertisers. However, until now there has been no method for measuring the loyalty of individual viewers. This paper analyses People Meter data collected by Nielsen Media Research in New Zealand during July 2003. The data provides information on minute by minute television viewing for 1067 individuals in terms of channel and program genre. From this empirical data, new short-term and long-term measures of network loyalty are calculated for each viewer. The short-term measure of network loyalty can be used to monitor the frequency of channel switching within any 15 minute time slot, providing an essential reality check for television ratings. The long-term measure of network loyalty can be used by network schedulers to monitor performance. This data is used to test a postulated Model of Television Network Loyalty (MOTNL) in which network loyalty is linked to viewer demographics, socio- economic variables and viewing behaviour. MOTNL has significant implications for network executives in their programming choices as well as benefits for advertisers. Keywords: channel switching, television ratings, network performance Introduction Television consumers have a plethora of choice while switching from one television network (channel) to another. This behaviour has caused O’Keefe (2005) to ask “Is anyone watching TV ads?”, suggesting that people indulge in frequent channel switching in order to avoid advertisements. The network ratings, which are used to make advertising decisions, ignore frequent channel switching behaviour. This research attempts to address this problem by measuring and modelling an individual’s short-term and long-term network loyalty in relation to preferred viewing time, network and genre, providing a tool which can be used to better inform pricing and scheduling decisions for television advertising. According to Shachar and Emerson (2000), an accurate television viewing choice model is a critical working tool for both television network executives, who face difficult programming, scheduling and marketing decisions, and advertisers, who want to get the most from their spend. Shachar and Emerson claim that such a model can help television executives maximise ratings by improving both the scheduling and the characteristics of their shows. In addition it can help advertisers predict ratings and the demographic composition of the audiences. Many researchers have developed such rating models (e.g.; Rust, Kamakura, Wagner & Alpert 1992; Tavakoli & Cave 1996; Meyer & Hyndman 2006), however, the usefulness of these models to advertisers is questionable when there is no accompanying prediction of the frequency of channel switching as an indicator of reduced advertising attention. In this study we develop a model which describes the frequency of channel
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This note was uploaded on 07/21/2011 for the course BUS 10001 taught by Professor All during the Spring '11 term at Shaheed Zulfiqar Ali Bhutto Institute of Science and Technology.

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New Measures and a New Model motnl - Marketing Bulletin...

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