purdyum said:David, what in the world are you talking about, your $800-$1200 vs. $100-$125 is rate based, not CPP based. and billing has very little affect on CPP, market conditions affect CPP. If you don't know, just say "I don't know". SF and ATL have higher CPP's than LA for numerous reasons, none of which have anything to do with total market billing. Nor does it matter what corporate infrastructure issues you bring up, people live and work in the IE and more do so every year, as opposed to LA, where there are people leaving the market... simple economics, uptrending vs. downtrending.
Cost Per Point is the value an agency sets as a goal for each rating point in a buy in a specific market. A point in LA represents 1% of the 12+ population in the broadest demo and that is rougly 108,000 persons. A point in the IE represents about 16,000 persons. Thus, by straight math, a buyer will expect to get a CPP target in the IE that is about a tenth of that of LA (factoring in the smaller market size discount).
A point in San Francisco is 59,000 persons. The relationship is just under 2:1 in favor of LA. San Francisco bills about half of what LA bills. See the relationship? In most markets, the billing relationship to population is in proportion to that population save markets that have economic woes (Detroit, Stockton, the IE, Utica, etc.) Therefore, the CPP will be in pretty close lockstep with market size after discounting local economic conditions or differences in numbers of viable stations.
A 25-54 buy in LA will base the CPP pricing on each point in demo being worth about 57,000 persons. An agency will put out a call for rates for the buy, sepcifying a CPP goal. Stations will try to get on the buy by meeting the goal. If the goal is not realistic, then they will take a pass and not submit. Or they will submit with pricing that does not meet the goal the agency set out for. A station at the bottom end of the top 10 like KRCD with a 25-54 rating of 0.6 might submit a $600 rate, or a $1000 CPP which would likely meet any 25-54 goal in LA. A station at the top end, like KLVE, might submit a $1400 rate, which is above the $1000 but justifiable because of the high delivery.
In the IE, against 25-54, a ratings point is 9000 persons. That means that the CPP should be around $125 to $150 in that market. It is about delivery of the persons a point delivers in each market. So the CPP is very related to market size, and that is why the smaller the market, the lower the market billings.
A comparison of two station with comparable shares (and, thus, rating) in LA and SF will find the LA station bills about twice as much. That is because the CPM, CPP, audience delivery, etc., is twice as much in LA. Good examples are KGO in San Francisco and KFI in LA, comparable in 25-54 share in 06 (which we have full year billing data for). KFI in '06 billed $33 million, while KFI did $63 million. See the relationship? Both are talkers, both have about the same inventory and both are market leaders.
Please make your reply brief so I can read it all, also, please try to stay on topic.
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