Audience Insights: TV Takes a Second Look at a First Impression
Jun 24, 2021David Gustafson
2 minute read
In an often underappreciated 1986 hit, musical group Nu Shooz lamented, “It’s taken me a while to learn…I’m at the point of no return.”
In 2021 those words could serve as an anthem of sorts for local television advertising. As has been the case for decades, the ever-resilient rating point and its trusty companions GRPs (gross rating points) and CPP (cost-per-point) continue to be a major point of discussion in most local TV transactions. Today, though, the proliferation of on-demand and streaming video options has helped spawn a movement that seeks to push TV to a new point – one that takes attention away from the venerable rating point to focus instead on one of its core components, the impression.
A solid first step in understanding the rationale behind this change is to revisit the difference between impressions and ratings, as well as the mathematical relationship between the two. In TV terms, viewers are commonly referred to as impressions. By definition, an impression is a household (or, in some cases, an individual viewer) exposed to a program, network or advertisement. As such, impressions are nothing new to television advertising. They are, in fact, one of the two ingredients necessary to calculate TV ratings.
Nielsen, the long-time provider of TV audience measurement, defines a rating as the “estimated percentage of the universe of TV households (or other specified group) tuned to a program” or network during a specified time period. In math terms, then, determining a rating is a division problem. The estimated number of viewers – i.e., the number of impressions – sits atop the equation as the numerator, and the total population, or “universe,” resides below the line as the denominator. The resulting percentages are then multiplied by 100 and referred to as rating points.
As a result, a 1.0 rating represents 1% of the population in the geography being measured. Consequently, the bigger the market, the more viewers are delivered by each rating point. Each rating point in the Phoenix TV market, for example, delivers more viewers than each rating point in the Topeka (KS) market.
The potentially daunting division required for ratings is one of the more commonly cited benefits associated with the conversion to an impression-based standard for local TV advertising. Focusing on impressions instead of ratings eliminates the division problem and the potential confusion of mismatched universes, allowing for more direct comparisons of audience delivery across different geographies.
While supply-and-demand and a variety of other factors ultimately determine the value associated with any TV campaign, no additional information is needed to determine that an audience of 1,000 viewers in the San Diego Interconnect is equal in size to an audience of 1,000 viewers within a single Cable ad zone in Gainesville, FL.
Therein lies the true beauty of impression-based TV transactions. Not only are impressions able to be easily compared across different geographies, impressions can also serve as an equalizer across video platforms. From traditional TV to TV Everywhere, retreating from ratings in favor of impressions supports a local marketplace that is shifting to a more audience-based mindset.
For those reasons, TV advertising influencers are ready to make an impression. “Now is the time to transition to a universal language of impressions,” Katz Television Group president Leo MacCourtney said in a recent release. Disney Media & Entertainment networks president Debra O’Connell agreed in a separate release, saying, “Using an impressions-based currency to evaluate, sell and buy local [TV] enables us to offer our advertisers full visibility into local audiences.”
Cox Media supports these and other local advertising peers in the ongoing transition to impression-based TV. In fact, portions of this article are excerpted from our examination of this very topic nearly five years ago on these same pages. As Van Halen once wisely noted, “only time will tell if we stand the test of time” when it comes to retiring the rating point, but the current momentum toward impression-based TV is measurable and meaningful. Please contact Cox Media to discuss how we can partner with you on this impressive transition.