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TV Spot purchasing GRP, changing from Household to All Individual + “Recording Playback Rating” (=”P+C7”) – Decided to be introduced after April in Y20182017.12.12

Recently, TV stations in the Kanto-area (which is the major TV area of Japan) have declared the introduction of a new index/pointer to purchase TV Spot GRP.

Though TV Spot purchasing GRP has referred to the Household Rating up to now, TV stations have recently announced to advertisers that the “GRP will refer to All-Individual plus the Recording Playback Rating (=”P+C7”) from the year 2018.”

And then, this has been agreed between TV stations & JAA (Japan advertisers association), decided to be introduced after April in Y2018.

SPI, a pioneer of strategic/statistical media planning/analysis and a pioneer in the media buying audit sector in Japan , encouraging optimization of marketing ROI and achievement of transparency / accountability , has analyzed the announcement put together by the Japan TV stations and its repercussions.
*SPI has updated our analysis & announcement reported on July in Y2018 due to the agreement above.

1) The Process of Agreement between TV Stations and Advertisers
The fundamental problem is, TV stations seem to force advertisers (JAA) to agree this new-system quickly without enough time of discussion, risk-analysis & adjustment for advertisers.
As a background, currently, TV stations need to increase “Spot-CM space for sale” while they are suffering from its reduction due to decrease of its real-time TV-rating. Therefore, TV stations in Japan depend on this system simply to increase their total GRP as ‘space for sale’ by adding the Recording Playback Rating to the real time rating, according to the case in foreign countries especially United-States, by almost ignoring the opposite-argument from JAA and advertisers.
However, JAA has tackled this issue, and succeeded to avoid the “clearly unfair/demerit-condition of this system”. Therefore, at least, it might be NOT so serious damage for advertisers at this point, on the surface.

2) Merit for advertisers
There is almost no merit for advertisers.
It is a significant and general trend to incorporate the Individual Rating into the TV Spot purchase GRP. However, at the moment there is no inclusion of Segmented Target GRP (such as F20-34), only a ‘total’ All Individual Rating, so we doubt its effectiveness in improving the marketing efficiency of TVCMs.
Recording Playback Rating goes against the purpose of using the TV Spot because regardless of how your TVCM reaches its target Out of Campaign Term, you will have to pay the costs for that. In addition, there is the doubt about viewability of Recording Playback Rating (=C7) due to technical problems.
We feel that the actual object of TV stations which have agreed on this plan is to gain profit via the introduction.
We cannot help coming to the conclusion that this is an extremely self-profit oriented move.

3) Risk for advertisers
As for marketing & media-plan,
there will be “confusion about language-definition of GRP to other sections/partners (not media-specialists)”, “difference of GRP between Kanto and other 31 areas” and “difficulty to compare before & after performance internally”.
As for media-buying,
It will be difficult to track its performance before & after this system, and so that advertisers lose the negotiation-power with media & media-agency. On the other hand, advertisers will be suffering from “invisible” and “long-term” devastation of cost per GRP performance. Unfortunately, there are many advertisers that still haven’t recognized this fundamental risk of this system.

4) How advertisers deal with this issue
Advertisers should take initiative to tackle this issue, NOT depend on advertisement-agency because they are the side of media & media-sales due to their business-model.
Advertisers adopt “correct & appropriate logic” and “auditable & monitorable data (provided from 3rd party)” into the adjustment-INDEX from household-GRP to P+C7.
Advertisers should track the actual-GRP referring to “real-time GRP”, NOT “+Recording Playback Rating (=C7)”.

5) long-term effect of this issue
TV media & TV media buying trough advertising agency in Japan goes to more inefficient, non-transparent and far from the fundamental needs of advertisers with the adoption of this resolution.
TVCM needs to be monitored / validated / assessed by 3rd party more & more, NOT by advertising agency.
Advertisers need to spend much more power & costs to “monitoring / validation / assessment” of media buying & TVCM, however, it is kind of great CHANCE for advertisers to beat their competitors on the perspective of media buying efficiency. 5 – 10 years later, there will be huge media buying performance gap between advertisers “who minimized the risk of this resolution” and those who did NOT.

SPI monitors this issue, analyzes to show appropriate implication for all marketers and advertisers.

Shiro Kokue: Partner / Senior consultant
Ai Ono: Analyst
Aimi Kobayashi: Assistant

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