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CPT or CPRP - The big debate: TV.NXT
The debate about which is a better criterion for ad sales -- CPT or CPRP - has been an ongoing one between broadcasters and media buyers. At the TV.NXT event held in Mumbai, both parties got into an animated discussion on the subject
At the last session of the event TV.NXT held in Mumbai, Paritosh Joshi, CEO, STAR CJ Home Shopping, kick-started a discussion by elucidating on the two most widely used words in advertising sales -- CPT (cost per thousand) and CPRP (cost per rating point). To begin with, CPT is the money paid to reach every 1,000 people watching television. CPRP is a relative measure, where money is paid for a proportion of audiences reached, where 100 rating points would mean the entire audience.
Joshi said that while agencies are in favour of flattening of the CPRP; broadcasters want to be paid for the absolute number of people watching television, that is, by considering CPT.
Monica Tata, VP and DGM, Entertainment Networks, South Asia, Turner International India, put forth the broadcasters' view. Stating that there has been a considerable increase in cable and satellite homes over time, she said, "The actual audience delivered has tripled over the years, but the acceptance of this fact has not happened. In the Hindi GEC space, there have been a lot of offerings, but the CPRP hasn't grown. It's only fair to pay us for the eyeballs we deliver."
Joshi pointed out that while the economy is growing year on year, yields in the TV industry have dropped year on year. To this, Gowthaman Ragothaman, MD, Mindshare, said that yield is not a problem, considering that 50 more channels are waiting to be launched.
About the big debate, he said that whether it is CPT or CPRP, the source of both is ratings. "The difference is only in the mathematics and calculation," he added.
According to him, more than 95 per cent of the programmes today have ratings below 1. In contrast, two to three years ago, around 30 per cent programmes earned ratings of above 5.
Rajesh Kamat, COO, Viacom 18 Group, said, "We do calculate cost per contact and benchmark that across platforms. But our CPTs are 40-50 per cent less than CPTs in the US."
Gowthaman's point of contention was that with the sheer number of channels, broadcasters have commoditised the market. "The problem is too much of fragmentation, and the fact that TV is not delivering as much as it was delivering some years back," he reiterated.
Kamat acknowledged that there has been a 75 per cent growth in inventory in the last few years. "With new players coming in, the old ones have increased their inventory," he observed.
He also said that the GEC category, which garnered 1,000 GRPs five years ago, garners 1,300 GRPs today. There has been a 125 per cent increase in audience base today. "So when looking at CPRP, we need to ask, it is 1 per cent of what?" he urged.
Ashok Venkatramani, CEO, MCCS, gave a perspective from the news side of the business. Of the 100-plus new channels in the country, 70- 80 per cent are not chasing profits; they are in the business for other reasons. The top 10 or 15 channels are struggling to make profits. One of the key impediments is that the measurement metric is not evolved, he said.
"The way an advertiser divides his money is ad hoc; there is no science to it. Why can't there be a measurement, which can help an advertiser to deploy his money wisely?" he questioned, adding that news channels often get bullied in the bargain.
According to him, CPT may not be the perfect currency; but it's a step forward in the right direction, so that advertisers spend their money meaningfully.
Gowthaman further argued, "Why should a different rate be paid for programmes that garner the same rating?" He pointed out that the rate should be uniform in such a scenario. To this, Kamat said that quality of audiences delivered is also a parameter that needs to be considered.
Venkatramani added, "A viewer watches a channel programme and not a channel to get entertained; whereas in the news genre, people watch channels. Then, why isn't the credibility of the channel taken into consideration?"
Joshi asked Matt O'Grady, EVP, Audience Measurement, Nielsen, about the scenario in the US. Grady said that in the US, the C3 system was followed, which refers to the ratings for average commercial minutes in live programming plus three days of digital video recorder playback. This provides answers to how many people saw and how often they saw a programme.
Joshi later presented the Indian scenario, where two-thirds of the population have television, of which two-thirds are cable and satellite homes. The market is metered by approximately 9,000 peoplemeters.
When O'Grady was asked if this was adequate, he said, "A sample like that will work for the larger networks, and not for the long tail. Large panel and use of return path data, or some sort of online evaluation needs to emerge to track online mobility."
The debate remained unresolved. Tata said that if CPT was not the ultimate solution and CPRP had its limitations, a mid-way solution could be proposed, which acknowledged that the audience delivery had increased manifold.
Gowthaman responded that there was a need for all broadcasters to come together and move to another currency across categories collectively. Having a divided opinion on this would not help the industry.
(TV.NXT was organised by afaqs!, in association with Big CBS (main sponsor) and Star News (associate sponsor). The other sponsors include UTV Action, Bloomberg UTV, Sony PIX, Sahara Samay and Mastii TV.)