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Colleagues working together over tablets and computers at a table: CPP to CPM

It’s Time to Move From CPP to CPM

July 26th, 2017   ||    by Callie Wheeler

The shift from cost per rating point (CPP) to cost per thousand impressions (CPM) seems more inevitable with every passing year. The industry has been discussing the move from CPP to CPM for years—a 2013 TVNewsCheck audience poll revealed that 75 percent of broadcasters and agency executives were ready to make the move way back then.

But as you may have noticed, the change has been slow to take place. So, what should media buyers and sellers do—if anything—in the meantime?

Why the Shift Matters

If you’re wondering why the shift matters in the first place, there are a couple of key reasons. One is that CPP doesn’t provide as much information as CPM. That same TVNewsCheck piece explained that CPP is meaningful within a geographic market—but doesn’t easily add up across markets. Some markets are so small that Nielsen may not even report on them, though they still contain viewers advertisers want to reach (especially as brands are increasingly targeting local audiences).

Another reason to shift from CPP to CPM is to achieve unity across campaigns. Omnichannel marketing means brands are sharing consistent messages with audiences across mediums, and analyzing how to pair channels for the best return on investment (ROI). How can brands analyze their TV spend and impact when it’s the only medium that uses CPP? As the choice of mediums grows for marketers and advertisers, it only makes sense for TV to ensure it remains a medium they’ll want to use.

You’re Sold—So Now What?

While the industry might be slow in making the transition, there’s still plenty that media buyers and sellers can do in the meantime. Videa’s own tech already converts to CPM from CPP, for instance, letting users compare performance across digital, outdoor, and other channels.

You can also calculate CPP to CPM manually. The equation for CPM is CPP multiplied by 100, then divided by population. That result is then further divided by 1,000. While not as easy as using a platform that simply provides the information, calculating CPM from CPP provides vital information for comparing campaign performance across television and other advertising mediums.

Listen Up, Media People

The shift from CPP to CPM is coming, and many forward-thinking media buyers and sellers are already making the change on their own. Television is an important part of any brand’s advertising strategy, but that doesn’t mean the TV industry should ignore changes in reporting.

Providing CPM is the right way to make sure brands can measure television against other channels. Not interested in doing the math? That’s where automated TV technology comes in.

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