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#OpinionsThatCount: CPT buying - Now or ever?

While media agencies, broadcasters and advertisers have never sat across the table to discuss the vexed issue of CPT versus CPRP, the industry has raised concerns about BARC data’s stability, pricing, readiness of the agencies and other issues

Raushni Bhagia | Mumbai | October 20, 2016

tv-channels-1000“Change is the only constant and we must keep evolving to embrace the change,” a Greek philosopher once said.

While the media and advertising industry is once again bewildered by the spectre of CPT versus CPRP, the above proverb will only give some strength to the stakeholders in accepting the change from percentage rating points to absolute viewership numbers. Any shift from one currency to another or one metric to another is bound to create turbulence in the short term. It happened when the industry shifted from TAM to BARC. It happened when there was a shift from percentage to absolute numbers. It will happen when there will be a shift from CPRP to CPT buying – whether it happens now or years later.

This is not the first time that the issue of whether the industry should work on Cost Per Rating Point (CPRP) or Cost Per Thousand (CPT) has been raised. But it is the first time after the implementation and stability of BARC India data that it has been raked up. However, stability of data is quite ‘subjective’ as it came out while the discussions were ripe about the CPT-CPRP hustle.

For the last 20-plus years of media buying in television in India, media has been sold and purchased on the basis of percentage viewership or rating point. On October 13, in a Media Review session, Shashi Sinha, CEO, IPG Mediabrands, revived that call for CPT as the need of the hour. Since then, the industry has been relooking at the ifs and buts.

When BestMediaInfo.com spoke to honchos across the industry, it came out that all the players individually support the CPT system of media sales. But despite that, CPT is still not a reality.

Why then is it taking so long to decide on the implementation?

Is it time yet?

Ashish Bhasin Ashish Bhasin

Ashish Bhasin, ?Chairman & CEO South Asia, Dentsu Aegis Network, Chairman Posterscope and MKTG Asia Pacific-?Aegis Group plc, said the time was not right for the new system to be implemented. He said, “We have just made one change from TAM to BARC and there are areas that need to be stabilised like pre-post evaluation and ramping up the BARC meters. Until and unless the whole system doesn’t stabilise, to my mind it is not the correct thing (timing wise) to make a change in something based on the same system. CPT has merit. But you can’t change everything at one time. In my view, it is not a bad idea but it is just not the right time.”

Not just Bhasin, a lot of media planners, buyers and agency heads agree that there are serious issues in the pre- and post-evaluation of a media plan. Now, what does this evaluation mean? Consider this. Suppose one has to make a plan for say 1000 GRPs and while executing it, if you get 90-95 per cent accuracy, you will expect a similar accuracy while delivery. However, when the GRPs are noted after the actuals and when it happens, there is a huge variation – most cases are negative. So now, you might get about 700 GRPs. This is a big issue in the industry and even BARC has been informed about this.

Another media agency head, who refrained from being quoted by name, said, “While BARC has said that it will look into this, it will take some time and we must wait till at least that much time before jumping on to the CPT bus.”

Vikram Sakhuja Vikram Sakhuja

However, Vikram Sakhuja, Group CEO Media and OOH, Madison, has come out in support of CPT. He said, “I support CPT. It is a currency thing. Today, with a 2,500 CPRP of TN, 6,000 CPRP of Maharashtra and a 30,000 CPRP of HSM, can you tell me which market costs the least to deliver an eyeball? It is not obvious right? With CPT it will be an apple to apple comparison on efficiency.”

He further said, “The same analogy can be extended between TV and print, digital, radio, cinema and, one day, OOH. In a media agnostic world, CPT is the simple single currency to go with.”

When the measurement agency was Television Audience Measurement (TAM), the ratings were not fluctuating so much. It is seen that TAM used to give out ratings averaging the previous week’s ratings, which means it was ironing out the spikes and lows to a large extent. However, the broadcasters, agencies and advertisers were unhappy with TAM too and the agency became a punching bag for stakeholders.

There was also a time around 2012-2013 when a huge discussion on TVR and TVT erupted and TAM was made to release data only in TVTs (in thousands). However, the media buying and selling continued to be on the TVR basis.

Raj Nayak Raj Nayak

Raj Nayak, CEO, Colors, however, feels that the implementation of CPT should have long been done and stabilised by now. “CPT should have been implemented a long time back. A few years back when there was discussion about net versus gross, it was discussed that all reporting will also happen on TVT. After that, when the BARC changeover happened, CPT should have been immediately implemented at that time.”

Though at the time when BARC was implemented and its operation started, everybody said that there is a new system and let it stabilise. Along with Nayak, another broadcaster of one of the top four Hindi GECs, said, “The faster the better. Because now, one is not realising how the viewership is growing.”

Nayak said, “CPT will only benefit everyone – be it advertisers, broadcasters or agencies. Right now, everyone is complaining, but once CPT becomes the currency and one can see absolute numbers, these complaints will be resolved.”

BARC and its stability

As for the stability of the BARC system, it must be noted that BARC started giving out the ratings in April 2015 and in last 18 months or so, the system has had many infrastructural changes on account of expansion. So, there was household data, which shifted to individual data. Then they introduced rural viewership and added new barometers. But one must understand that BARC has taken a call to keep expanding its base, until there is adequate TV penetration in the country. Now, if India has headroom of growth to go from current 160 million TV households to 250 million, how does one expect to get ‘stable’ data?

Bhasin agrees that BARC might take another three to four years to stabilise in terms of universe base. He said, “Barometers will keep on being added, but the fluctuations in numbers will stop once bulk of it will be done.”

The broadcaster of one of the top networks feels that the measurement agency has found its stability and fluctuations might actually be the reality. He explained, “If there’s an attack on the Indian soldiers at Uri, it has to shift eyeballs from say movie or English genre to the news genre. Do you call this as unnecessary fluctuation? No. Even within fiction shows, the episodes with high points of the story – like coming back of a dead character or a marriage ceremony or a simple trick of the protagonist to beat the antagonist’s plan – gains viewership. There’s no running away from that and we all have to adjust to it.”

We must not forget that the industry bodies jointly preferred fidelity over stability while forming BARC. If that was the case, fluctuations are inevitable even after years. So, should this always imply that data is not stable and hence CPT will always be opposed?

Nayak seconds this argument, saying, “BARC has stabilised after a year. All agencies are using it, media buying is happening based on this. I understand tweaking is required and it will keep happening as we go along, it is not an exceptional matter. Whenever there is a sporting event, or Colors Stardust or a movie premier, spikes will happen. That is the nature of the business. Nothing can be perfect, everything has room for improvement.”

Sakhuja suggested how co-existence of CPT and CPRP will be a good idea for some time during the transition. “One is that since CPT and CPRP are two expressions of the same measure, whatever volatility you see in CPRP numbers you will see in CPT numbers. As with all currency changes it is prudent and advisable to run two currencies in parallel for a period. Thus it would help to keep both CPRP and CPT for a while.”

Readiness of agencies

Coming to pricing, BARC data and the will to bring in the CPT model of media buying are all in place. So, is the lack of readiness of media agencies the reason that is acting as a road block?

A recent media report stated how the agencies voiced their concerns over infrastructure, experts and understanding issues about the shift in the system. Bhasin, however, denies this. He said, “Media agencies are completely ready to implement the CPT model. It is not going to take a different infrastructure or expertise; it is a matter of using a different metric. There isn’t any significant change.”

Sakhuja too agreed. He stated, “Yes, the readiness is very much there. How long does it take to input a formula that changes CPRP into CPT in your worksheet? The operative question is comfort with CPT norms and benchmarks, which is why it is essential to have CPRP and CPT coexisting for a period.”

Nayak however says that there might be some issue with getting out of the comfort zone. He commented, “Yes, any kind of change faces resistance, but the truth is as an industry we need to look at what is good for all of us – CPT is good for everyone, clients, agencies and broadcasters.”

What about pricing?

One of the reasons quoted by a lot of industry players is how absolute numbers increase the prices of per unit of viewership that an advertiser wants to tap. A senior media agency executive suggested that advertisers are often not keen on the CPT model owing to the fact that if increase in viewership numbers is evident, then increase in pricing will not be avoidable or negotiable beyond a point.

He explained, “While now, say 10 per cent of the universe (consider 300 homes) is the viewership, if after a year, the viewership becomes 8 per cent (consider universe has increased to 450 homes), the rates should ideally increase because the absolute value is increasing. But since percentages are decreasing, the client gets a negotiation benefit. Hence, a lot of clients have been avoiding the model for some time now.”

As Sinha put it at the Media Review, “What you buy and sell depends upon the demand and supply situation. Metric is something which we get used to.”

One may have to keep in mind that advertisers’ budgets will not go up just because the metric has changed. The fragmentation in media will continue to happen and hence what it will change eventually is fair pricing.

Nayak argued, “Those who say prices will go up have to understand that the buying on TV happens on negotiation. If you don’t want to buy on a certain price, nobody can force you. It’s the same with selling.”

One has to also agree that in practice, even today, the client will be seeing all the numbers, be it absolute and percentages, to understand the growth.

Sakhuja makes a valid point here saying that media pricing is only a way to create confusion. He said, “View CPT as a currency, nothing more, nothing less. People who talk about CPT as a means of taking up media pricing are creating confusion. What CPT will do is remove opaqueness.”

He goes on to explain, “CPT and CPRP are two expressions of the same measure. A CPRP (Cost per Rating point) of 30,000 in a market with 30 million people will give you a CPT (Cost Per thousand) of Rs 100. Since 1 Rating point = 1% of the TG, the math is CPT = (CPRP/(1% of TG)*1000). Or in the case of our example, (30,000/(1% of 30 million)) x 1000 = Rs 100.

Over a year or two CPT benchmarks will become the norm. For example, in digital, a banner ad has CPT benchmark of Rs 75; a video ad has a benchmark of 250 and so on. Similarly, over time, advertisers and agencies will become familiar with TV CPT benchmarks.”

The concluding point

While broadcasters have come out in full support, it is funny to look back when about six to seven years ago, two of the renowned agency heads made presentations to all IBF members for CPT and that time, the broadcasters resisted it.

All said and done, while majority of the media agencies and broadcasters agree that CPT is the way forward for healthy growth of the industry, the problem really is the lack of dialogue between the three stakeholders. Bhasin agreed that not enough discussion and debate has happened between the three stakeholders to enable a consensus.

Info@BestMediaInfo.com

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