Understanding PPM Conversions

Kim Vasey

Arbitron has a new marketing campaign: 70 Meter points can equal 100 Diary points. 70 can be the new 100......huh??? 

By Kim Vasey 

When I have to explain this new measurement paradigm I have found that by first explaining a bit of media math 101 it helps gain a better understanding of PPM audience translations. Providing some insights of the numbers behind the ratings through specific examples helps everyone grasp the numbers more easily.  Let me explain.......

The Average Quarter Hour Ratings (AQH) are derived from a mathematical formula using the cume (unduplicated listeners) crossed-tabbed to Time Spent Listening - which results in an estimated AQH rating by station / by day-part.  And the total AQH persons is an expression of the total gross impressions which builds as you add additional stations, spots and day-parts. Let's look at this example to explain the difference of cume (net reach)  versus gross impressions.  I use an analogy of a train making stops through a train line.  Look at the chart below and read along with the next paragraph:

We have a train making 5 stops - at each stop 2 new people board the train.  After passengers board the train at each stop a commercial message is played as the train pulls out of the station.  Thus, in this example below 10 different people (2 at each stop - A through E) boarded the train.  However, the total gross impressions made is 30.  And each group of people heard the spot a different number of times.  For example the 2 people from Stop A heard the spot 5 times yet the 2 people got on at Stop E only heard the spot once. In using this analogy we can begin to see the differences in the numbers and how the unique audience (cume) and gross impressions begins to build.  As the gross impressions builds - our frequency increases.

With that basic understanding of cume versus impressions let's add Time Spent Listening (TSL) into the equation. The higher the time spent Listening - the greater potential to build impressions.  Referring back to our example above: the 2 people from Stop A heard the spot 5 times because they were on the train for the longest period of time - thus, the # of impressions made was greater because they were listening longer. And, likewise, the 2 people from Stop E - had few impressions because they had the shortest ride. Now we can begin to see how everything ties together.  So let's turn to PPM................

PPM data reveals that more stations are being captured and more people are tuning in for shorter periods of times.  Thus, the PPM measurements results in a higher cume audience (significantly more different listeners) but for shorter listening occasions.  The net result is a lower AQH rating but higher net reach.

In reviewing a sample ranker which includes the AQH rating, cume persons and TSL (Time Spent Listing) we can clearly begin to see the relationship between the numbers. See Ranker below:  Compare WDAS-FM and WMMR-FM -higher rating on WDAS-FM with low cume but high Time Spent Listening.   Lower rating on WMMR-FM with Higher cume but lower TSL.  Because the longer TSL the more potential to build on gross impressions - think of the 2 people from Stop A on our train line who heard the spot 5 times.

RANKER FROM DIARY



Now let's compare the diary numbers above to PPM ranker - look at the SIGNIFICANT increase in the number of people reached based on the findings through electronic measurement.  Notice the cume on all stations increased but time spent listing on all stations decreased. - therefore, the AQH rating is lower on all stations but there is no loss of audience.  We actually see a gain in audience across all stations. And because TSL is down across all stations we won't see the build of frequency numbers we've seen under diary method.  But, that does not diminish the size of our audience reach.

RANKER FROM PPM


Now let's review a few sample schedules (A, B and C below) based on approximately 102 GRPs so we can see the numbers change as we add stations and spots. Keep in mind that when purchasing 100 GRPS in any given market we are not reaching 100% of the market but rather delivering an estimated # of gross impressions.  And a buy delivering 100 GRPs will achieve a net reach (cume) which will differ depending on mix of stations, number of spots on each station, day-parts purchased, etc.   See the following three quick sample schedules each at approximately 102 GRPS with widely different delivery.

Per these 3 samples schedules you see that we reach more people as we add stations and spots. The number of different people reached increases with a decline in the number of times they are reached (frequency) In the examples above (top to bottom) we go from a 4.6 frequency to a 3.5 frequency as we increase our reach.  Hence, the new paradigm in PPM - each station reaches more people only less frequently.

Looking at the rankers, explanations of the numbers behind the media terms of AQH, Cume or net reach, gross impressions and the sample schedules helps to clarify numbers and demonstrate there is no loss in audience delivery in the conversion from 100 Diary GRPs to 70 PPM GRPs because PPM measurement has confirmed that radio is, in fact, a reach medium.  Let's take a further look...............

Because PPM data has demonstrated that radio captures a significantly larger audience base than has been reported under the diary method - the numbers show that most stations reach more audience but less frequently. So let's look at the numbers based on a real schedule from Philadelphia - a PPM measured market.  See actual schedule delivery based  a buy against the Summer / Fall 2006 books.

100 Point Schedule  - 6 weeks - based off of a 2 book average Diary



Translation of above schedule on PPM - Converted to 79.3 Points Weekly - 6 weeks



Based on the schedule delivery on the diary - the reach is 55% of the target demographic (A18-49) - a net number of people of 1,251,400.  The schedule CPP was $324.00.

Conversion of the same schedule on PPM - the reach is 66.1% of the target demographic (A18-49) - or a net number of people of 1,493,700.  The schedule CPP translates to $407.00 gross.

As you can see there no loss of audience in the conversion to PPM despite the translation of a lower achieved weekly GRP level. We've actually gained a significant increase in audience reach of our target demographic.  

Yes, as a mathematical function of determining CPP - (gross budget divided by GRPS) - the market CPP is higher.  But because you can plan the PPM markets at a lower GRP level your budget will remain flat. 

Example:



In this particular example there was a only a 20% difference in the GRPs and the percentage does change by demo / day-part, mix of stations day-parts, etc. and by referring to the conversion charts developed by Arbitron it will help you determine how you should adjust your GRP levels - in many cases 70 will be the new 100.

Kim Vasey is Senior Partner/Director of Radio at mediaedge:cia