3 things a local tvradio station will never tell a current or prospective local advertiser

3 THINGS A LOCAL TV/RADIO

STATION WILL NEVER TELL A

CURRENT OR PROSPECTIVE LOCAL

ADVERTISER

(BUT SHOULD!)

WHOLESALE AIRTIME AUCTION

3 Things a Local TV/Radio Station Will Never Tell a Current or Prospective Local Advertiser (But Should!) 2015

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INTRODUCTION

No matter the size of the business or the budget they have to invest, there are some important

things that local TV and radio stations keep from both their current and their prospective local

advertisers. Here are three things that local TV and radio stations will never tell you (but should!)


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1. How many people your

campaign will reach

When we talk about “impressions,” what we’re referring

to is the estimated number of people tuned in at any given

time. One thing most advertisers don’t know is that 90%

of cable companies, radio stations, and TV stations don’t

provide anything quantifiable in this regard: all they’ll

give you is a quote with the timeframes and price per spot

of what they’re selling. As for the other 10%, what you

can expect from them are household counts and Cume

impressions.

“Household counts” means exactly what it sounds like:

it’s the number of homes in the metro city/market/DMA,

or alternately, the number of households connected to the

cable grid the station is trying to sell you. Sounds like a

figure you can take to the bank, right? If you believe that,

you’re the one who’s going to get taken: even if the

station delivers your ad to the number of households they

promise, there’s no guarantee there will be anyone home

when it airs, let alone watching/listening to their channel.

“Cume impressions” are the other bit of fuzzy math

stations will try to sell you on. Cume (short for

“cumulative”) impressions means the number of people

tuned into a station for at least five minutes over a specific

period of time. When a station tells you they have Cume

impressions of 100,000 during a specific period, all that

means is that 100,000 people will be watching/listening

during that timeframe, not that 100,000 people will

see/hear your commercial – in reality, the average

audience per commercial here would probably be in the

9,000–10,000 range.

So what numbers can you trust when it comes to

impressions? The answer is simple: you want average

impressions. Average impressions will tell you the

average number of people watching/listening during a

given time frame, usually expressed in either thousands or

as a percentage of the total potential audience for a given

demographic (which is where Nielsen ratings come

from).1

1 Source: Nielsen Media Definitions http://www.nielsenmedia.co.nz/en/pdf/mri/28/mediaterms.pdf

Cumulative Impressions 100,000

Average Impressions 10,000

Average Impressions

*Average impressions

is only 10% of Cume

impressions.

AVERAGE IMPRESSIONS

are determined by Nielsen

and Nielsen Audio. They

calculate the number of

people watching specific

channels at specific times

in specific cities.


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Example of an Effective

Reach Plot

2. “#1” means nothing

“We’re #1!" is something you hear all the time from TV

and radio stations. The problem is, no matter what they

claim to be “#1” in, that doesn’t actually tell you what

kind of ad exposure you’ll be getting with them. As an

advertiser, you need to look past the marketing spiel and

get solid figures on the station’s effective market reach:

how many people will be exposed to your ads, and how

often they will be exposed to them. You also need to find

out the penetration and saturation percentages for the

same timeframe across multiple stations in order to figure

out which would be the best fit for your particular

advertising campaign.

An effective reach curve shows the portion of an audience

which has been exposed to programming at various levels of

frequency. Among other things, it shows:

The percentage of the audience that was exposed to

any portion of at least one quarter hour of a set of

quarter hours

The percentage of that same audience that was

exposed to at least two quarter hours

The figure shows the effective reach curve for an eight-week

campaign for a luxury car with ads on both broadcast and

cable television. The curve shows that 69.2% of the sample

adults in the 18-49 age bracket saw at least one ad for the

car, while 30.7% saw at least three ads.

Credits:

http://audiencewatch.nielsen.com/data/help/glossary/reacheff/index.htm


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3. A spot is worth nothing

Advertisers often ask, “what is a fair price for a spot?”

The easy answer is, “it varies wildly.” $2,000 for a 30-

second spot would be considered a fair price in New York;

if someone tried to sell a spot that same length for the

same price in Great Falls, MO, however, they’d be

laughed (or booed) out of the room!

Why is this the case? First of all, to understand how spot

pricing works, you need to understand what a spot really

is. A spot is 15, 30, or 60 seconds worth of airtime. Those

breaks between programs become commercial spots –

airtime – time on the air. We breathe air for free; why

should you pay for it? So what is a spot worth? Nothing!

Imagine you just bought a large bag of Doritos for $3.50

(plus tax). With about 100 chips in it, that comes out to

three-and-a-half cents per chip – a perfectly reasonable

price, by all standards. But what would you think if you

opened the bag and found out there were only five chips

inside? Now you’ve paid 70 cents per chip: not only have

you been ripped off, but you probably have some choice

words for whoever sold you the bag!

And therein lies the problem. While it’s silly to imagine a

world in which snackers need to ask how many chips

they’re getting in each bag (as opposed to more relevant

questions such as “do you have Cool Ranch in stock?”),

this is very much the reality advertisers face on a daily

basis: the important question here is not the price of the

spot, but how many viewers/listeners come with it. A spot

is just an empty bag – what matters is what comes in it,

and that’s the number of eyeballs and ears your ad will be

exposed to each time it runs.

What is a Fair Price for a Spot?

A fair price for a spot could be:

$2 in Great Falls, MO $300 in Houston, TX $2,000 in New York City $1.5 million during the

Super Bowl

When a commercial hits the

airwaves, it becomes a spot. A

spot is 15, 30, or 60 seconds worth

of airtime. Airtime is just that:

time on the air. Air is worth

nothing. We all breathe it for free.

You should pay nothing for air. So

what is a spot worth? Nothing!


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3 things a local tvradio station will never tell a current or prospective local advertiser