Flipping the Broadcast Currency – CPP vs CPM

11.6.19 | Deborah Platt

As integrated media planners and buyers look to seamlessly incorporate traditional and digital tactics, the need for a common denominator across media is driving the movement toward using impressions as common currency over rating points.

 Both CPP (cost-per-rating-point) and CPM (cost-per-thousand impressions) are metrics used to calculate the efficiency of media placements. A rating is an estimate of the size of an audience, expressed as a percentage. CPP is the cost to reach 1% of a given audience, such as Women 25-54 or Men 18+. On the other hand, an impression is the duplicated sum of audience exposures. CPM is the cost to reach one thousand impressions, which are not unique (an individual may be delivered an impression more than once).

 Currently most TV and radio are bought and sold based on CPP. After the TVB (Television Bureau of Advertising) announced in September that they would be spearheading an industry change to convert to an impression-based system by 2020, both Nielsen audio and COLRAM (NAB’s Committee on Local Radio Audience Measurement) have followed the TVB and focused on this transition in the audio space as well.

 Impression-based measurement in TV is supported by the top three affiliates as well as Hearst and Nexstar TV station groups. 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. Per the TVB, “the use of impressions ensures that all viewers on all screens are counted.”1

 This movement has triggered an industrywide discussion about radio moving swiftly to convert to an impression metric. As radio continues to expand their digital offerings, the next logical step is to combine their on-air audience with their digital platform via impressions. The move to align the metrics that all media are bought and sold on across 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.”2

 Inline Media has been working with clients using CPM modeling for some time, whether when we are evaluating media across platforms or reviewing station composition of viewers/listeners against a client’s target audience. As the traditional broadcast industry catches up to digital vendors and agencies, the use of impressions over ratings will provide clients, agencies, and vendors with common currency for cross-screen delivery and evaluation.

1. http://www.insideradio.com/free/tv-is-shifting-to-impressions-measurement-will-radio-follow/article_ce5e2800-dab2-11e9-a733-5fdc1b4e3d4e.html

2. http://www.insideradio.com/free/radio-aims-to-fast-track-transition-to-impressions-based-measurement/article_cbe3f64c-e8d9-11e9-b2b9-3386d31f13f5.html