Pricing

1 / 18
About This Presentation
Title:

Pricing

Description:

TV and Radio. Costing out Media. How do you figure out what it costs to ... Radio-For Radio and Television, you're going to assume that schedule can be ... – PowerPoint PPT presentation

Number of Views:15
Avg rating:3.0/5.0

less

Transcript and Presenter's Notes

Title: Pricing


1
Pricing
  • TV and Radio

2
Costing out Media
  • How do you figure out what it costs to purchase
    media?
  • Direct Mail
  • Take Phoenix Media Facts sheet
  • Every time Drop is made, determine you want to
    make-Example. If you want to drop 3500, multiply
    3500 times .62 cents per piece 2170 every time
    you drop. If you choose to drop 10,000, the
    price drops to .53 cents per piece or 5300 for
    10,000.
  • You can count on a 2-3 return on investment, so
    if you drop 10,000 pieces, Homevestors would
    receive between 200-300 calls based on history.
    (That comes out to around 30.00 per call which
    isnt bad.) We dont work with cpps on Direct
    Mail

3
Costing out Media
  • Outdoor
  • Outdoor can be sold by fixed and pre-emptable
    positions.
  • Fixed means you purchase exact locations for an
    exact period of time (possible to have extra time
    if board is not sold)
  • Pre-emptable means you purchase distress
    inventory, you dont necessarily get to pick many
    of your locations although you can negotiate
    areas. Other advertisers can come in even after
    you purchase this and pre-empt you. You only pay
    for what you run.

4
Costing out Media
  • Outdoor
  • Homevestors uses 100 pre-emptable outdoor
    boards,
  • Means that they might say to the outdoor company,
    give me 80 30 sheets June-Sept. Because they are
    pre-emptable, they might only get 65 of them, but
    they pay about .50 on the dollar or less. So,
    you might budget for 80 at 500 per board per
    month ( 28.00 for paper per month) but you would
    only be charged for 65 boards.
  • Homevestors buys up distressed inventory which
    means that they take whats left over, but only
    pay half of what everyone else does. Also,
    because the outdoor co. may not sell the
    inventory when their contract is up, they would
    get additional time at no charge.

5
Costing out Media
  • Outdoor
  • Showings equate to GRPs. If you decide to
    purchase 40 30-sheets on a pre-emptable basis,
    the cost would be (40 x 50028) 21,120 per
    month.
  • This would deliver a 25 showing or 25 GRPs/wk or
    100 GRPs month
  • CPP would be 21120/100 or 211.20 per point
    meaning it costs 211.20 to reach 1 of the
    target audience.
  • In-Class exercise for Outdoor

6
Costing out Media
  • Yellow Pages
  • Known is that you will run every month with a
    dollar billed size Ad in Phoenix/Prescott Yellow
    Pages for 1600 per month and Phoenix/Prescott
    White Pages for 175 per month. Total cost 1775
    per month. This is purchased for the year.

7
Costing out Media
  • Sold by column inch
  • Display ad SAU (standard advertising unit)
  • Line-rate (or agate rate) for classified ads
  • Open-rate/Flat rate (color rate)
  • Color charges are add-on
  • Different rates for national, retail, classified,
    co-op
  • Geographic rate
  • Frequency/volume discount

8
Costing out Media
  • Readers-per copy
  • The total number of primary and pass-along
    readers of a given issue of a publication
  • As a copy is passed from one reader to the
    next, the number of readers of that copy
    increases ie readers-per -copy

9
Costing out Media
  • Factors affecting Readers-per copy
  • Distribution patterns-airplanes, doctors
    offices, etc allow more people to be exposed to a
    specific copymuch of this readership is
    passalong
  • Amount of EditorialThe more words contained in
    a magazine, the longer it takes to read. Primary
    readers will hold that copy longer with fewer
    passalong readers
  • Type of editorialSome pubs are retained by
    primary reader because of the reference material

10
Costing out Media
  • Readers-per-copy (RPC) is determined by dividing
    total audience of an average issue (as reported
    by various research companies) by the average
    issue circulation of that pub
  • Not necessarily an accurate number, but is
    commonly used by planners to assess total
    audience of a pub or to plan for a new publication

11
Costing out Media
  • Total audience 2,300,000
  • Average issue circulation 1,800,000
  • RPC2,300,000/1,800,0001.27 readers per copy

12
Costing out Media
  • For Newspaper (Classified)
  • You select the line rate for the day you want
  • Determine how many column inches you want
  • Each Column inch is 14 lines.
  • Multiply the line rate times 14 times the
    column inches you and that is your rate for one
    day

13
Costing out Media
  • Example You want to purchase 2 column inches on
    Thursdays paper.
  • Rate for each line on Thursday is 35. Multiply
    14 x 2 (14 lines x 2 column inches) and multiply
    that times 35. That is your daily rate for the
    classified ad.980

14
Costing out Media
  • Radio-For Radio and Television, youre going to
    assume that schedule can be purchased for 80 of
    what the listed costs are (good negotiations by
    media buyers)
  • You decide you want to purchase 40 TRPs or Early
    Morning per week, 40 TRPs of PM Drive per week
    every week for 2nd and every other week for 3rd
    quarters (13 weeks)
  • 2nd quarter AM Drive is 205 per point and PM
    drive is 257 per point18480 per week would
    deliver 80 GRPs. This equates to 320
    GRPs/month for 73920 (231 cpp) 1040 GRPs for
    240,240

15
Costing out Media
  • Radio
  • For third quarter, you want to purchase 40 trps
    of AM Drive every other week and 40 TRPs of PM
    drive every other week.
  • Cpp for AM Drive in 3rd quarter is 202. CPP for
    PM Drive is 240 442 x 40 GRPs 17,680 week
    for 80 GRPs. Lets say you buy this for 6 of the
    13 weeks. This is 106,180 for 480 GRPs
  • Total for entire radio would be 240,240
    106,180346,420 and 1040 480 1520 GRPs.
    But dont forget that you have great media buyers
    that can negotiate this for 80 of rate card, so
    multiply you cost by .80 271,136

16
Costing out Media
  • Television
  • Look at SQAD data. SQAD stands for Standard
    Quotations and Data and is based on advertising
    agencies all over the world that subscribe to the
    service. There are generally 3 different levels
    of SQAD, Low which means it is being purchased at
    least 13 weeks out (long term purchase. Medium
    which means there is about 6 weeks lead time and
    High which means client has to get on the air
    immediately and you are buying when there is no
    inventory available and you have to go in and
    preempt other advertisers, so you are paying a
    higher price.

17
Costing out Media
  • Television
  • You decide that you want to purchase 30 GRPs of
    Early Morning and 20 GRPs of Day time in First
    and 2rd quarter for 6 weeks each quarter.
  • In 1st quarter, EM costs 237 per point and Day
    costs 267 per point.
  • 237 x 30 grps x 6 weeks 42,660.
  • 267 x 20 grps x 6 weeks 32040
  • So, 300 (50 x 6) GRPs in 1st quarter will cost
    74700

18
Costing out Media
  • In 2nd Qtr, Early morning costs 273 per point
    and Day costs 308 per point
  • So, 237 x 30 grps x 6 weeks 42,660
  • 308 x 20 GRPs x 6 weeks 36,960
  • 2nd quarter ttl 300 grps/79620
  • 1st Qtr 2nd Qtr 74700 79620 154,320but
    your great media buyers can buy this for 80 of
    rate card, so 154,320 x .80 123,456 for 600
    grp/s.
Write a Comment
User Comments (0)