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Broadcasters make a case for CPT

Broadcasters make a case for CPT

Author | Simran Sabherwal & Shobhana Nair | Tuesday, Jul 09,2013 8:42 AM

Broadcasters make a case for CPT

Even as the industry witnesses a tumultuous argument over the efficacy of the current system of television audience measurement in the country, and broadcasters outright reject TAM Media Research – the sole agency measuring reach of television – what emerges is a hot debate over the very matrix of such measurement. An issue that has been simmering in the background for a long time is the debate between broadcasters and media agencies/advertisers over which is the better mechanism to measure television audiences – the current Cost Per Ratings Point (CPRP) or the globally more accepted Cost Per Thousand (CPT) system.

While CPRP has been under fire for a long time (low ratings could directly impact the broadcasters’ leveraging power with advertisers and media agencies, and thus lower revenues), both sides have differing views on what methodology should be used to measure the all-important RoI of media spends.

CPT is the cost to reach one thousand members of the target audience through a given advertising medium. It scores over CPRP as it takes into account absolute numbers, which could have increased because the overall base being measured has increased, and not because the viewership of a channel has improved. The other advantage of CPT is that it has the ability to handle multimedia metrics which currently CPRP does not offer. However, on the downside, as several industry stakeholders have rejected TAM data as not being robust, CPT calculations show variances for channels that don’t have high viewership numbers.

CPRP is a relative measure, where the money is spent to reach a certain proportion of the audience. As CPRP takes into account the percentage of the base which has been exposed to the communication, it is less impacted by the ever changing universe measured by TAM. In other words, CPRP is based on GRP/TVR which is a percentage and is rating sensitive. CPRP also does not account for growth in Cable & Satellite (C&S) homes.

While CPRP has the backing of advertisers and some media agencies, broadcasters want the measurement matrix changed to CPT, so that they get paid for the absolute number of people who watch the channel. However, as most TV plans have GRP objectives, CPRP becomes a more robust metric when buying TV GRPs and it is due to this that GRP delivering channels like GECs are bought on the basis of CPRP.

Case for CPT
It is estimated that the C&S universe has grown by over 60 per cent in the past five years and the C&S penetration has jumped from around 70 per cent in 2009 to over 90 per cent in 2013. However, despite the expanding universe, many broadcasters, particularly GECs have witnessed a fall in their TRP numbers. The main grievance of broadcasters is that despite the increase in audience size and more people tuning in, particularly for big ticket properties, the benefit of growth of overall viewership doesn’t accrue to the broadcaster in the CPRP module.

Broadcasters feel, because of this it is now time to move to the more effective CPT model which reflects the universe gain in actuals as against continuing with the archaic CPRP model because the advertisers’ main aim is to capture eye-balls.

Rohit Gupta, President, Network Sales, MSM Network said, “Increasing number of television channels has led to fragmentation and the ratings are coming down, But, even though ratings are decreasing, the universe is growing and the absolute numbers are growing. And it is this reach that the advertisers buy.”

Gupta added, “Brands pay a premium for IPL because of the reach and not for the rating. They pay me because I reach 180-200 million people.” Drawing a comparison with the Superbowl, the property commands a premium because of the reach and not because of the rating point.

The general consensus is that CPT will help broadcasters unlock value. An analyst explains that if a programme draws a consistent rating of 2 over a period of five years, it means that the viewership has increased (due to the changing universe) over the time period. However, broadcasters are unable to leverage this addition as advertisers and media planners insist on going by the TVR rating of 2.0, though the audience delivered by the channel to the advertiser has multiplied. And, it is this additional viewership that the channels are looking to unlock as they believe that they are getting compensated for only a fraction of their entire television viewing audience.

Broadcasters also emphasise the point that as CPT is the standard procedure for measuring RoI globally, it is high time that India also falls in line with global practices.

Ashish Sehgal, Chief Sales Officer of Zee Entertainment Enterprises Limited said, “Moving to CPT in the right way would definitely garner higher revenues not only to our network but to the industry at large. It is not about more revenues, it is about fair revenues as the industry is under-valued despite being the largest medium of reach in India.”

The other point to be kept in mind is that the yields in the TV industry have dropped year-on-year. K Subramanium, President of ETV shared, “CPT system will help broadcasters realise their true value. TV media efficacy is hugely under-valued through CPRP model. CPRP does not consider the Y-o-Y growth in absolute reach of a channel in C&S households. Over the years, the prices of audience measurement have remained mostly flat due to CPRP methodology, as it focusses more on time spent and stickiness than absolute reach.”

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