TV Advertising Costs

A television campaign can be costed using a variety of mechanics, such as:

• Cost per TARP (CPT) – the cost to reach 1 per cent of your target buying demographic
• Cost per thousand (CPM) – the cost to reach 1,000 viewers of your target demographic
• Cost per reach point (CPRP) – the cost to reach a set percentage a of you target demographic a particular number of times. For example, reaching 45 per cent of people aged 25-54, at least 2 or more times over 2 weeks.

There are a multitude of other variables that also influence the cost of an effective TV campaign including:

• Markets – Advertising spot costs across markets vary greatly primarily influenced by population and market demand
• Target demographic – Some demographics are easier to reach on TV than others resulting in cost fluctuations
• Commercial duration – The length of the tv commercial has a direct correlation to the cost of each spot. A 60 second spot is double the cost of a 30 second spot however a 15 second spot is usually 60% of the cost of a 30 second spot.
• Seasonality – Market demand for TV advertising fluctuates across the year which reveals opportunities for advertiser who are flexible and able to respond to long- and short-term changes in market demand
• Campaign approval lead times – As a general rule the longer campaign approval lead times are the better the campaign cost efficiency that can be achieved. Any lead time shorter than three months usually impacts the cost efficiency of the campaign due to limitations on program availabilities. The more efficient audience generating programs get bought first, leaving the more expensive programming (on a CPM) basis for those advertise who approve late.
• Buying strategy – Employing particular TV buying strategies will have a significant effect on the overall campaign cost. Some strategies such as exclusive program sponsorship, peak only, or high frequency targeting will command a premium where as other such as increasing off peak ratio, 1OTS or late week focus can lower the campaign cost per thousand. The strategy employed needs to be determined at the time of campaign planning, well before the buy actually starts so that accurate cost modelling can be performed allowing for accurate budget allocation
• Negotiation ability of your TV buyer – The best strategy in the world can come undone if the person responsible for activating and implementing the campaign doesn’t have the experience or knowledge to drive the best deal for you. Maintaining a strong relationship with the TV networks is not only important when it comes to achieving the best discount but is critical in delivering the extra added value that can amplify your campaign performance exponentially and save you, the client, thousands of dollars in the process.

There are new and developing software platforms available in the market that can further improve TV campaign cost and delivery such as Nine Galaxy and VOZ which will continue to change the TV buying process as they become more widely adopted.

Multi Media TV Advertising Services

If you would like to find out more about how Multi Media can save you money on your next TV advertising campaign, get in touch with us today.