Hunt for the truth: Reasons for the decline of "TV Spot Achievement"

Today, as accountability for investment in advertising becomes highly publicized, there might be quite a few executives who question the reality that there is no small gap between purchased volume and exposed volume in TV CMs. This TV CM volume makes up more than 30% of advertising expenditures in Japan, and the main component of this volume is the TV Spot.

For instance, though company A ordered a TV Spot 100GRP (note 1), they achieved a rating of 90GRP after airing the spot according to their agency. "A 10% loss occurs quite often", says the agent, something you hear them explain quite often.

Is this really true? And is the reason for the loss clearly explained?

If not, in the above scenario where one billion yen is invested in TV Spots annually, then the loss of 100 million yen is not accounted for and, as a result, no attempt is made to lessen the loss.

To solve these problems, we would like to use basic terminology and post-evaluation methods to give several illustrations of the reasons for achievement loss and present preventive measures.

This know-how is part of our service called "TV Audit", and it has already been endorsed by many advertisers.

* Hereinafter, please note "Rating" means "Household Rating" which is the basic purchase unit of a TV CM.

Basic Version

Program Average Ratings and Time Point Ratings

A Program Rating is the sum of a one minute rating within a relevant program divided by program minutes. So, it is the average rating including the program itself, Time (note 2) and the Spot CM.

A Time Point Rating is the rating achieved after the CM is aired. The current rating is basically measured per minute, therefore, technically, it might be possible that this rating is different from the actual aired rating, but the gap between the two is less than 1 minute maximum.

Do you know which rating, the Program Rating or the Time Point Rating, is used in the report from the agency?

Distinguishing between these two is a point advertisers cannot afford to ignore.

Please see the following figure:

 

Let's take a report where the rating is calculated using the Program Average Rating, and all Time and PT (Note 3) are evaluated using the same rating. (SB [Note 4] is evaluated using the rating of 1 minute prior to end of program)
However, a number of people feel uncertainty regarding all the CMs receiving same evaluation as the above figures show. It is obvious that the number of viewing households differ according to the position in which the CM is aired. Therefore it is necessary that each CM type receive an appropriate evaluation.

As for Time, it tends to be aired when the rating is supposed to be relatively high, and rotation is basically required. Therefore, the difference in ratings within Time is small, thus evaluations with Program Average Ratings can be useful in this case. However, ratings of Spot CMs differ largely within the same program, and an aired position can cause advantages and disadvantages. From the advertisers' position, an evaluation using the Time Point Rating, which enables us to grasp more accurate results, is recommended.

Purchase GRP (Plan GRP)

Many advertisers use GRP as purchasing units of TV Spots. Under the current purchasing system, the pay counter value of Purchase GRP volume is determined in advance of actual air.

This Purchase GRP can be called Estimate GRP. However, very few people know how to currently "estimate" that rating.

We would like to demonstrate the rating used for purchasing here.

First of all, regarding how to estimate ratings, the Estimate Rating is set for each individual Spot CM. Basically, the above-mentioned Program Average Rating (the rating of 1 minute before program end for SB) in the same past time zone is used. However, the number could change according to which day in the past is used as the norm, even if the program name is the same. Therefore, the norm day and the average number of the same time zone from previous 4 weeks prior to the day must be determined to decrease error.

However, it is not realistic to set each norm day for all Spot CMs. So, we start with the designation of 1 week by campaign or by month. The week as a norm, the average of the rating in the same day of the week, and the same time zone can be used as relevant spots in the previous 4 weeks prior to that week to set the Estimate Rating of each spot.

The week set here is called Designated Week. It is the number of weeks in the calendar year.

So, this Designated Week has a great effect on the number of Estimate Ratings. This is an extreme example, but if the ratings of the World Cup or the Olympics were included in calculating the Estimate Rating, the difference between the Estimate Rating and the Actual Rating would be noticeable. The following is a noticeable example:

 

The designation of the norm week has a great effect on the calculation of the purchase volume plan.

We would like to go deeper into how the difference between the Purchase Plan GRP figured using this Estimate Rating and the Actual Rating (based on the Time Point Rating) occurs next time.

(Note 1) GRP: Short form of Gross Rating Point. Sum of CM rating aired in certain periods.
(Note 2) Time: Called Sponsor CM. Basically with sponsor name showing, but there is an exception
(Note 3) PT: Short form of Participating Announcement. Called "Pi-Ti". CM other than Time aired during the program
(Note 4) SB: Short form of Station Break. Called "Sute-bure". Spot CMs aired between programs.

Written by Toshikuni Fuji / Senior Analyst

Please contact us with questions or for more detailed information.
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