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A Dummy's Guide to CPT and CPRP
Let's get this straight: this article is NOT aimed at the pros in media agencies or in broadcasting companies. It is aimed at the rest of us who are too embarrassed to admit that they can't figure why people are willing to go to war over a few letters.
What's the difference between CPT and CPRP anyway? If you don't know the answer to that question, this article is meant for you.
Cost Per Thousand. It is the advertising cost of reaching that many viewers in a defined target group on television through a programme or a channel. (The absolute number of people watching a particular channel for at least a minute is Reach. Cumulative Reach is the figure you get after removing the duplication of audience.)
What is CPRP?
This is the Cost Per Rating Point. As the name suggests, it is the cost of advertising time on television based on the price of time for a single rating point generated by the channel. This has been the basis for buying TV time in India.
What is a rating point?
A single rating point is equal to one per cent of the total 'targeted audience' watching television at that moment in time. (For instance, for Hindi General Entertainment Channels, the 'targeted audience' is people over 4 years old in Cable & Satellite Homes, in Hindi Speaking Markets.)
Though the buying happens on the basis of ER (effective rates), CPRP helps a media planner zero in on the best media space for a client's communication.
What then is GRP?
Gross Rating Points is a summation of all the rating points generated during a show. GRPs quantify impressions on a particular channel as a percentage of the population reached.
Anyway, what is the difference between CPT and CPRP?
There is a fundamental difference in approach while calculating the two. Since CPT is based on the absolute number of people reached, it effectively takes into account the sharp increase in the number of Indians watching television. CPRP, on the other hand, is a relative measure that identifies the percentage of total viewers reached by a programme or channel- so it doesn't capture the increase in the television universe.
While CPT is based only on reach, CPRP is based on GRP.
Are there any other differences between the two?
CPRP takes into account the average of number of minutes for which a viewer stays with a show or an ad. It takes into account the duplication of viewers unlike CPT. However, CPRP cannot measure reach, which is increasing with time.
Why are ratings falling despite the increase in reach?
That's because the increase in the number of channels has resulted in the fragmentation of audiences. This also means that viewers are spending less time on individual channels. So, relative to the size of the (growing) universe, the percentage of viewers drawn to a programme or channel is falling.
Has the incomplete roll-out of DAS (digitisation or Digital Addressable System) had an impact?
Yes, it has. Let's say that TAM was earlier measuring 100 homes (all analogue) in Delhi. Now, post-digitisation, as per the government mandate, TAM isn't allowed to measure the analogue homes. So, if only 80 out of 100 homes have got digital set-top boxes, the universe has declined by 20 per cent.
Don't all other media use CPT?
Indeed, all of them, whether print, radio and outdoor, are being planned on the basis of CPT, as they work on reach. Television is the only medium in India that uses CPRP since it can provide average ratings of viewership.
Radio, however, works very differently. The advertising time sold on a radio channel is based on a combination of listenership numbers received from RAM (a radio measurement arm of TAM) and IRS (Indian Readership Survey, a quarterly survey). While RAM gives time-slot-wise listenership figures (RAM is restricted to only four markets), IRS works on the channel recall method.
How is TV different from other media?
TV is different because it measures program and ad viewership by the minute, whereas print readership is based only on the masthead recognition method, not taking into account readership of specific articles or write-ups.
What has set off the current dispute between broadcasters on the one hand, agencies and their clients on the other?
Since the inclusion of LC1 markets (towns with less than one lakh population) by TAM late last year, the average ratings of channels have been falling, partly because the audience base has expanded.
Broadcasters find it ridiculous that they should pay the price for more people being included in the universe - but that's because the CPRP system is cruel and considers only percentages. So, instead of being able to raise rates, channels are struggling to defend their ad rates. That is why they want to shift to the CPT method but advertisers are unwilling to go along.