This morning's RBR addresses the concerns about the Cost per Point issue related to the "recalibration" of the numbers in Philadelphia:
Radio Business Reports: Kathy Crawford: Nothing to fear on PPM in Philly
Well, the first PPM numbers are coming out today for the City of Brotherly Love and there's a bit of apprehension from the radio stations. We will be asking for opinion on those numbers, but for now we asked Kathy Crawford, MindShare President/Local Broadcast, about fears that there will be lower AQH numbers and therefore less dollars for radio in the market.
Will buyers increase the CPP value to compensate? How will it pan out in negotiations?
"The same way that it happened with the LPM [Local People Meter-for TV]. The bottom line was the pricing
didn't change, the CPP changed," says Crawford. "Now, that is not to say that station 'A' in early news or late news went up and somebody else went down. But the average CPP remained what it was with a new number. It wasn't about price; it wasn't about CPP. It was about the numbers being lower and a change in currency. That's what's going to happen with the PPM-it's already happened in Houston. So why would it be any different in Philadelphia?"
So the CPPs went higher because the numbers were lower? They compensated?
"Let me put it this way. A few years ago we went from the Franc to The Euro. Does that mean that the value of the product changed? No, it's just how it was priced. And it was priced in a different currency. It doesn't mean that the same item had a lower or higher value. It just changed. And that's really what this is all about. It's just a currency change."So stations shouldn't be alarmed?
"No, but there are going to be individual changes-especially in demographics that were harder to measure in the diary. Those demographics will have a potential of being a greater change because they were do difficult to measure. But that doesn't mean that that overall there's going to be a whole heck of a lot of difference. It's a very simple situation."
Is it that easy to just establish a new currency? Buyers and sellers just sit down and go over it all?
"Yes, to some degree. Buyer 'A' will say to Station 'A', 'But you went down exponentially greater than so and so, so I'm going to come after you for make up/make goods later.' That will happen, but overall, it is what it is. It's much closer to reality in the PPM than it was in the diary." [ RBR ]
Comments