The television industry seems poised to transition from a ratings-based model to an impression-based measurement system.

Industry advertising groups are pushing the idea and several local broadcast groups are pushing forward as they see the approach as a way to ensure viewers — no matter what screen they view — are being counted.

“Broadcast TV’s shift to impression-based pricing has a number of benefits,” said Gordon Borrell, CEO of Borrell Associates. “Foremost, I believe, it will let TV more handily compete with YouTube and other emerging OTT [over-the-top] programming.”

How TV sells today and what the future looks like

Steve Lanzano, president and CEO of Television Bureau of Advertising, Inc., said the move to an impression-based selling model will mean TV groups will be focused on selling to a targeted audience.

“Historically, all transactions were ratings (gross rating points), based on a percentage of the target audience universe,” Lanzano said. “Impressions transactions will be based on the actual number (in thousands) of the target audience.”

Katherine Fuller, vice president of research for Graham Media, a company that is in the process of implementing impression-based selling, explained how the industry got here.

“Up until this point, local television has been transacting off of a ratings-based currency, although audience impressions have always been readily accessible,” she said. 

Fuller explained that a rating is an estimated percentage of the “universe of TV households” — or other specified demographic group — tuned to a program, and impressions is that rating percentage expressed in thousands of estimated viewers.

Are broadcasters supportive of the idea?

Local broadcast TV sellers are supportive of the move to impression-based transactions because of changing technology and the potential for better reporting, Lanzano said.

Here are some specifics he lays out:

• The industry is in a new era of multiple platforms and “new universes,” so the way to evaluate viewership must also evolve. The use of impressions ensures that all viewers, on all screens, are counted.

• Impressions recognize all TV audiences, resulting in the inclusion of a greater variety of programs – both extending reach and providing greater targeting for advertisers.

• Using impressions allows for more precise reporting of program performance and post-buy evaluation.

Impressions provide a more granular representation of viewership, Fuller said.

“Currently, rating points are generally rounded to the tenth of a point, therefore not fully accounting for all viewers,” she explained. “The ability to capture viewing and usage across all of our television and digital platforms is critical, and impressions will provide that common audience measurement moving forward.”

Fuller said down the road, Graham imagines Nielsen’s definition of a TV household to evolve and to include broadband only households in their local television measurement.  

“When that change occurs, Graham will be ready to capture and monetize those impressions,” she said.

How will this work for advertisers?

“This is a win/win for both buyer and seller … from the elimination of zero cells allowing advertisers to purchase more programs and hidden audiences, to the expanded use of advanced targeting, to the integrated buying of linear TV and digital assets and OTT, to moving automated buying forward,” Lanzano said.

Fuller seemed to agree.

“Maximizing advertising campaign exposure by counting all eyeballs across all platforms benefits all,” she said. “The ease of cross-platform buying will make the entire buying/selling process seamless and much more efficient.”

Borrell said he thinks the TV space will try to appeal to a broader pool of smaller buyers.

“They’ll be trying to steal more customers from radio and outdoor, and of course the streaming digital sellers,” he said. “It’s great in theory but will require retraining of TV’s relatively small ad-sales force, and perhaps an expansion of it. It’ll be interesting to see how it all folds out, especially in 2021 when the big political bonanza ends.”

The transition is underway

There’s not a huge learning curve, Lanzano said, other than getting accustomed to working off thousands versus percentages. 

“The stations have already been selling their digital assets using impressions,” he said.

He noted that many companies are getting their practices and systems in place and that his organization is working with agencies as the change ramps up.

“We are working closely with our partners at the media agencies providing guidance regarding their processes and systems to start transacting on impressions,” he said. “A couple of large, major media agencies (including IPG/MAGNA and Dentsu Amplifi) are already transacting business on impressions.”

At Graham, Fuller believes the transition should be relatively simple.

“Audience impressions data has always been available and all of our systems currently have the capability of producing that data for our clients.,” she said. “We have begun the process of negotiating any future business utilizing impressions and have provided our Graham teams with tools and resources to assist our advertisers in making the transition as well.  We will begin posting off of impressions in the first quarter of 2020.”

This article was originally published November 2019.