Moving Local TV Buying and Planning from Points to Impressions
I know what you are thinking. Really? A blog post about a media metric change? Isn’t there something more interesting or timely to talk about? Maybe, but aren’t you tired of all things COVID? Besides, a post on this topic is almost as overdue as is the actual move to impression-based buying and planning for local television.
In case you were not aware, media such as print and digital evaluate cost efficiencies by the costs-per-thousand (CPM) metric. However, local TV advertising is still planned and bought based on percentage of population-based metrics, or rating points, using the cost comparison metric of costs-per-rating point (CPP). The benefit of using CPMs is that media efficiencies can be compared across all measured media, unlike the CPP metric.
Why is this still the case? Well, one reason is that changing engrained habits is hard. Another reason is that the system had been working – at least until the most recent explosion of video delivery platforms to the TV screen. With television content being consumed in both linear and non-linear formats, and through an ever-growing array of connected TV devices (Smart TVs, boxes, sticks, and game consoles), audiences have fragmented to the point where finding programs with even tenths of ratings points has become difficult.
Therefore to better deal with this fragmentation, as well as to make easier comparisons to digital and other media and combat revenue losses, local TV sellers (stations) and buyers (agencies and advertisers) have finally decided that not making a change is now harder and more problematic than maintaining the status quo.
Still, making a change of this magnitude is not without its issues. For starters, it will require significant changes to the legacy buying software systems used by agencies and stations, which are not set up to process the impression-based statistics rather than the population-based ratings and CPPs. Given the basic mathematical relationship of the metrics you would think this is a no-brainer, but an investigation of the major providers in this space (Media Ocean and Freewheel) indicate that there are important limitations in their systems that must be addressed before a full transition can take place.
Another issue for the transition is the fact that ratings (audiences expressed as percentages of populations) are easier to deal with across various markets because these figures are constant even though market populations are different. For example, 50 Adult 25-54 ratings points planned and bought for the local early news daypart are the same in Philadelphia as 50 ratings points are in Peoria IL, or any of the other 207 Nielsen DMAs. However, converting those 50 ratings points into impressions means that you will have 209 unique figures to deal with since every market has a different population.
As a result, some agencies have decided to continue planning their local TV campaigns in rating points, while moving their TV buying to an impression-based negotiation process. At Harmelin, in preparation for the agency’s move to impression-based buying and planning, our internal Business Intelligence team built an automated CPP/CPM conversion tool that allows our planning teams to easily convert rating points into impressions for all available demos and markets.
On the buying side of the equation, Harmelin’s local TV specialists have been testing the agency’s buying software capabilities analyzing both ratings and impression statistics in side-by-side comparison, while citing only rating points in discussions with stations as an interim step in the process. As both groups become more comfortable using the raw impressions figures – often expressed in hundreds or thousands depending on the size of the market population – the plan is to move entirely to impressions for local TV schedule transactions and posting guarantees by Q1 2021.
While the move from ratings to impressions for local TV may seem like a significant amount of work for a basic mathematical metric conversion, there are several long-term benefits that are the true driving force behind the change. First and foremost, the use of impressions should facilitate the measurement and counting of all local TV viewers regardless of platform or universe. Second, the move to impression-based buying should eliminate station objections that have prevented broadband-only TV homes from being included in Nielsen’s local TV measurement samples and unify local and national TV household definitions and populations. Finally, using impressions takes the friction out of buying local TV in combination with other platforms, and making direct efficiency comparisons to digital media channels.
From this writer’s and research professional’s perspective, it is high time for local TV to ‘make’, aka transact on, a good impression!
“The world hates change, yet it is the only thing that has brought progress.” — Charles Kettering
Inventor, engineer, businessman, and the holder of 186 patents. Helped found Memorial Sloan Kettering Cancer Care.