CPP v CPM

The days of selling local television using traditional Nielsen rating points may one day be something old-timers share stories about with young sales reps. The move to impressions-based sales is getting a high-profile boost as the Television Bureau of Advertising (TVB) announced Wednesday it is spearheading an industry charge to convert local broadcast audience measurement from a ratings-based to an impressions-based system with a goal of industrywide implementation by 2020. TV moving swiftly to convert to the same metric used by digital media could force the issue at radio.

Impressions-based measurement is the hot topic in TV circles with the NBC, CBS, ABC and Hearst TV station groups all supporting the switch. While ratings performed well in the bygone era of limited media platforms, large audiences and a simpler audience universe, proponents say today’s multi-platform media landscape requires measurement to evolve. “The use of impressions ensures that all viewers on all screens are counted,” the TVB says.

Under the current system, local TV is bought and sold based on cost per rating point, which takes a program’s Average Quarter Hour Persons and divides them by the population to produce a rating. One problem is that rating points are getting smaller and smaller. The move to impressions-based sales is an attempt to latch on to a metric that provides more audience granularity and reduces ratings compression, so there isn’t a three-way tie at the top of a market ranker. Impressions would move the industry from a cost per rating point model to a cost per thousand impressions (CPM) approach, or from the percentage of the population to the projected number of viewers or listeners. The hope is that will give media sellers more pricing power and make it easier for advertisers to buy across media using a common metric.

TVB says local TV broadcasters have coalesced around making this currency shift. The TV equivalent of the RAB says it’s working to educate media agencies and other stakeholders on the advantages and to provide guidance on implementation. TVB says that local broadcast TV can continue to be planned on rating points while being negotiated and purchased on impressions, which is how network TV is currently handled.

Commonality Of Metrics

With “cross-platform” the new watchword among big advertisers, the move to align the metrics that media are bought and sold on across all the various platforms makes a lot of sense in today’s ecosystem, says Brad Kelly, Managing Director, Nielsen Audio. “Advertisers are telling us having a commonality of metrics would ease cross-media planning and buying, and help remove friction from their processes,” Kelly told Inside Radio.

So is radio ready for a fundamental change in how ad sales are transacted? Kelly says that’s up to the industry to decide. “Nielsen’s position has always been, and continues to be, that currency is defined as the number upon which both buyer and seller agree to transact business – be it AQH, average sessions, downloads, impressions, or something else entirely,” Kelly says. "On the audio side of the business, migrating to a new currency is not something Nielsen is in a position to unilaterally decide for the marketplace – nor should it be.” When radio ad buyers and sellers get together and engage “in an earnest dialogue about moving to impressions-based buying for radio – we’ll be ready to facilitate that discussion – and rest assured we’ll prioritize resources accordingly,” Kelly pledged. “But ultimately the marketplace needs to want this to happen and both sides need to support the move.”

While there hasn’t been any visible resistance to the idea in radio circles, there doesn’t appear to be any significant impetus either among broadcasters to up-end the metrics that radio has traded on for decades. It’s not yet clear what the implications for radio would be of migrating to this approach and how that might impact the essential ad campaign building blocks of reach and frequency. But TV stepping on the impressions accelerator could be a wakeup call for the radio industry to focus on the issue so it’s not the only media using an old school metric.

Veteran broadcaster Tom Langmyer, who launched Great Lakes Media Corp., a new radio group in 2018, notes that impressions have become a standard metric in today’s media world. “TV and radio are the only mediums that typically don’t transact based on CPM calculations, but we have the data,” he says. “Any transactional metric that encourages the use of radio and provides us the opportunity to demonstrate our effectiveness would be helpful.” But Langmyer, who was Market Manager for E.W. Scripps Milwaukee cluster and VP of news/talk/sports for the company after nearly a decade as the GM of WGN Chicago, believes radio “must continue to sell integrated marketing plans, sponsorships, events and unique experiences that aren’t valued solely on impressions. That’s where smart sales and marketing people provide even more value.”

Shift At TV Now Underway

Advocates in the TV industry say impressions-based sales will allow broadband-only households that aren’t watching though cable or satellite or over-the-air to be included in Nielsen’s local sample. The result is local stations would have a more complete picture of how big their audience is.

The conversion is expected to capture more TV programs that have viewing than the current system does. That’s because many ad agencies will only buy a TV program if it has a 0.1 rating or higher.

“As technology continues to weave its way into how and where we watch local broadcast television, it’s imperative for the industry to measure the entire audience, no matter where they watch,” said Steve Lanzano, president and CEO of TVB. “The use of impressions simplifies how we evaluate media across platforms and makes it easier to include local TV in the cross-platform consideration set.”

This comes after NBC owned-and-operated local TV affiliates and their sister Telemundo stations said they are making an immediate shift away from ratings-based metrics. In fact some have already quietly made the switch. Bob Beville, VP of Sales for Waterman Broadcasting-owned “NBC 2” WBBH-TV in Ft. Myers-Naples, FL says his staff has been selling impressions instead of rating points for some time. “Selling impressions makes sense, especially to local decision makers who understand ‘impressions’ but might not fully understand GRPs,” Beville says.

In addition to NBC, Julio Marenghi, President, Sales, CBS Television Stations says the group welcomes the switch. “We see this as the future currency and have already started working with clients using CPM modeling, giving us the ability to compete with other mediums,” she said.

The ABC and Hearst Television groups are also on board.

And some media agencies have already begun the transition. Magna Global says it was the first to make such a move. Bernie Shimkus, VP/Director of Research at Harmelin Media in Philadelphia, says his agency is having some “serious discussions” about moving to impression-based planning and buying next year. “It may not have been above the surface, but this has been a subject that has been bantered around below the surface much more actively this year,” says Shimkus.

Beville and others say the shift to impressions also helps when showing how television reach stacks up to digital, since that’s the metric that digital ads are sold on. Using the same metrics as digital could also help make local TV more attractive to agencies. “Consistency and ease is certainly a potential benefit,” says Shimkus. “It has even longer-term benefits as we start to move toward advanced targeting in television when we move beyond age and sex demographics.”

The biggest remaining hurdle may be simply resistance of some buyers who’ve grown accustomed to buying by ratings and not impressions. “I think the holdup has been the history of the way things have been done,” Shimkus says. Yet the tide may be turning. Several ad agencies have said it’s one of their goals for 2020. – Paul Heine/Frank Saxe