It’s Time for a Local TV Currency Change
Local TV broadcasters and buyers are finally moving to an impression-based vs. ratings-based currency in order to place Local TV on a playing field comparable to other video and digital channels. Viewing audiences have actually always been measured on impressions, and this evolution does not represent a fundamental change. What is changing is the transaction currency for those impressions — now transacted on a cost-per-thousand (CPM) rather than a cost-per-point (CPP) used when the impressions were converted to rating points. The pace of this evolution was accelerated to accommodate Nielsen’s upcoming integration of broadband-only (BBO) homes into its local samples and universes – originally slated to become the standard for most local markets on April 1st, but recently delayed by Nielsen to October 2021.
While rating points typically rounded Local TV viewing audiences to the nearest tenth of a percentage point, leaving some viewers on the sidelines, and were held to Nielsen’s minimum reporting standards, impressions account for all viewers and allow for more precise reporting of Local TV audience delivery and performance as well as post-buy evaluation.
In the past, ratings could easily be converted to impressions, but the nature of rounding and reporting minimums often under-represented the total number of impressions, and the recent addition of Nielsen’s BBO homes is affecting the local market universes. Early estimates indicate that the shift from ratings to impressions and the addition of BBO homes adds anywhere from 5%-20% of viewers depending on the daypart. Interestingly, while local market universes will increase, ratings will likely see an overall decline because of proportionately less Local TV viewing in BBO homes.
The shift to impressions not only enables sellers and buyers to count all viewers on screens, it helps to simplify cross-platform comparisons and include Local TV in those solutions. Using impressions as the currency for Local TV, buyers and brands can now plan holistically across platforms and screens.
Moving to impressions will also help buyers to consider automated TV platforms and processes common in digital platforms, and further efforts to use audience data across platforms.
This change doesn’t reflect a change in the way viewers are watching Local TV. Instead, it reflects the desire for sellers, brands and agencies like True Media to transact in a currency more similar to the majority of other channels, as well as positioning Local TV as an integral part of the evolving video landscape.