Press

All Access: Survey Claims Introduction Of PPM Results In Higher CPP

RESEARCH DIRECTOR, INC. has completed an examination of how the introduction of ARBITRON's PPM has affected radio cost-per-points. The study examined cost-per-points in the top ten markets and their associated embedded metros. Cost-per-point (CPP) is the currency that is often used to judge the relative value of a radio station's inventory.

The study used two years of SQAD data for Adults 25-54, MONDAY-FRIDAY 6a-12m. (SQAD is the service that tracks market cost-per-points). The study shows that the introduction of PPM into a market results in cost-per-points rising significantly. PHILADELPHIA, where PPM became currency in APRIL (MARCH report) has seen a 21% increase in Adult 25-54 CPP. In APRIL 2007, SQAD reported PHILADELPHIA cost-per-points averaging $257. Eleven months later CPP has risen to $311.

But Has CPP Remained Flat?

HOUSTON PPM data became currency in JULY (JUNE Report). In the last nine months CPP has risen from $223 to $312, a 40% increase. In comparision, in markets where PPM is not yet currency the CPP has remained basically flat, or does it?

If we are to go by the new adjusted agency planner thinking that 70 is the new 100, it looks as if CPP in PHILADELPHIA is off 15% and HOUSTON is down slightly, just 2%, in comparison to the more familiar diary-based CPP advertisters have been dealing with forever. Looks like not everyone at the agency level has made that adjustment.

RESEARCH DIRECTOR Pres. CHARLIE SISLEN , pointing to his study's numbers, said, "It is a clear sign of market forces. Radio station rates are based on supply and demand. Cost-per-points are only a gauge. This dramatic rise in cost-per-points clearly shows this."

RESEARCH DIRECTOR Partner MARC GREENSPAN observed that "many in the industry were concerned how the switch over to PPM would affect cost-per-points. Clearly, planners are readjusting their parameters to reflect the new measurement tool. It is our hope that the next wave of released markets will see similar CPP gains."

Find the full article at http://www.allaccess.com.