Should Radio Convert to Gross Impressions?
September 10, 2020
When I started selling in 1981 (yikes, that is nearly four decades ago!), I was taught that radio sales people use GRPs (gross rating points) and CPP (cost per point) as our transactional currency. These numbers were hard to describe to anyone who was not used to buying broadcast media. Because rating points are based on the market’s population, it also made comparing rates across markets difficult.
As a young sales person, I had the nerve to ask about the system of using GRPs and CPP to sell radio. The answer was simple: “That is the way TV is sold, and therefore radio must follow’s TV’s lead. If we want to play on TV’s playing field, we must use GRPs.”
Now that nearly four decades have past (again, yikes!), the question about the radio pricing system of using GRPs is being raised. The reason is that many television outlets are converting to a gross impression model. Ironically, the reason TV is making this conversion is so that they can compare themselves to digital advertising – which sells impressions.
Personally, I have always thought impressions are a better way to position a radio schedule. I am not sure what 75 GRPs are, but 75,000 gross impressions can be roughly translated into the advertiser’s message being heard 75,000 times.
Converting to gross impressions also allows the user to compare radio’s cost across markets. If a CPM (cost per thousand) in market X is $10 and in market Y is $12, then it’s more costly to reach consumers in market Y.
As (and if) TV makes the full conversion to selling cost per impression, then radio will be standing alone still using gross rating points, while both TV and digital are selling impressions.
In my opinion, the radio industry should make the conversion to gross impression selling. It puts our industry on the same currency as other advertising outlets. It will also make it easier for station sales reps to build combined radio and digital advertising solutions and effectively communicate a full marketing plan to advertisers.
What’s your opinion on the debate? Please share your thoughts below.
-Charlie Sislen, Partner