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
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.
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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.
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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
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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
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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
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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
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Total audience 2,300,000
Average issue circulation 1,800,000
RPC2,300,000/1,800,0001.27 readers per copy
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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
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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
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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
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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.
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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
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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.