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In my last blog, I mentioned that it is appropriate to
think in terms of Gross Rating Points (GRPs) – not the number of spots to be
purchased – when planning broadcast media buys. Here is a short demonstration
using "WXYZ TV" a mock, top-ten ACNielsen DMA network affiliate.
Suppose you want to advertise a
new anti-aging, fat-burning, sun-screening, appetite-reducing, muscle-toning, beautifying, sun-tanning, skin cream product (using
all natural ingredients, of course) that is proven to eliminate cellulose, varicose veins
and love-handles while adding years to one's life. Extensive research indicates that
the primary target market is Women 18+, stay at home moms. Your client wants to first run the ads in a top-ten, spot television market before going national.
So you call the network affiliates in your test market and request
availabilities (avails) in the DMA for the Female 18+ demographic -- believing
that you need to run the commercial 30 times because your client -- who recently attended a one-day beauty business seminar -- told you so. You take a look at the Morning and Daytime day-parts for your Female 18+ demo for the fourth quarter.
[Television viewers are typically loyal to programs as opposed to
stations. Nevertheless, I am using availabilities from a single station for demonstration purposes. The numbers are representative of an actual "top-ten" broadcast TV market.]
As you can see in the above "avail," the Female 18+ demo has dramatically different ratings and rates depending on the program. The cost per rating points (CPPs) are also quite different...even among programs specifically targeted to women.
In the avail, Program "A" (top-rated morning show 1) and program "B's" (morning show 2) adjacent time periods have different numbers when comparing 9a-10a (1.9 rating) vs. 10a-11a. (1.4 rating). The gross rate for the 9-10a slot is $350, considerably higher than the $265 rate for the 10a-11a time period... yet the CPP and CPM are lower for the 9-10a slot. This is a better buy for the Female 18+ demo as you would be reaching 44.2 thousand vs 32.1 thousand at a lower ($7.92 vs $8.26) cost per thousand (CPM).
An even better comparsion is made when comparing Program "F" (soap opera) vs Program "G" (homemaking show) which represent programming specifically targeting women. Program "F" gets a 2.7 rating for Females 18+ (reaching 64.4 thousand) while Program "G" only gets a 0.7 rating for the same demo (17.4 thousand). Program "F" has a lower CPP of $203.70 vs $250.00 for Program "G" So, Program "F" is a much better buy -- if you can afford it at $550. This simple comparison should be enough to discredit the absurd idea of buying media based on a predetermined number of spots for the simple reason that the same number of spots on one program vs another can yield vastly different reach at dramatically different costs.
A far more viable approach would be to determine how many viewers you can afford to reach with effective frequency. Since the minimum generally accepted frequency is three times, you might want to consider shooting for an even better frequency of four times. If you bought 400 GRPs, you could reach virtually 100 percent of Females 18+ viewers in your DMA with an average frequency of four times. Assuming an average morning and daytime CPP of around $220 (based on your avails) your budget would be $88,000. It would be much more common (trust me) to purchase around 100-150 GRPs per week. So, let's assume that you propose to your client that they purchase 250 GRPs for a two-week flight. At an average CPP of $220, this would result in a budget of $55,000.
A much quicker method for determining average CPPs would be to refer to SQAD. Since SQAD (pronounced "squad") is based on actual buys, it has the added benefit of providing you with a good indicator of what is actually being negotiated and paid vs what is presented by the respective stations on their avails. In addition to being a helpful negotiating tool, SQAD might also be helpful in determining desirable test markets based on average CPP data -- in consideration of buying power index data and other marketing research. At Davis Advertising, Inc., we strive to beat SQAD by a significant amount.
Your job as a media buyer is now cut out for you -- get your client as much "bang for the buck" as possible by negotiating rates and developing a schedule -- using avails from a variety of broadcast (and cable) stations -- that will improve the numbers significantly, maximizing effective reach and frequency...based on both quantitative and qualitative insight. That will be the subject of an upcoming blog.
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