CALCULATING THE TRUE VALUE OF YOUR ZONED CABLE TV BUY

2017-09-08T21:55:32+00:00September 12th, 2016|Video|
  • video-advertising

“Are you kidding me? I can buy a TV spot on ESPN for $25? All of my sports buddies are going to see it! Where do I sign up?”

If the thought of finding the TV deal of the century ever crossed your mind when analyzing a zone cable TV buy, you are not alone. Thousands of business and political campaigns around the country buy cable TV ads in zones. But what are you really getting?

Let’s look at the math.

Let’s say that you are buying a cable zone with 100,000 households.

The average number of viewers watching any given program on cable is one (yes, 1) household out of 1,000.

If the zone has 100,000 households, you can estimate that 100 people saw your ad.

Sounds like a great deal, right? I mean, it’s sight, sound, motion and emotion. Its TV!!

Not so fast.

The standard way to compare media costs is to determine it’s Cost Per Thousand people reached (CPM). Yes, one can argue that a piece of direct mail doesn’t have the same impact as a beautifully produced :30 second video spot, but that value can be accounted for once we have established the baseline CPM.

To calculate the CPM, we need to know:
1. The cost of the commercial: $25
2. How many HHs are in the zone you are purchasing
3. How many people reached: 100 (in the example above, it’s one HH reached per 1,000 HHs with the zone containing 100,000 HHs total or a rating of 0.01%)

The formula for determining CPM is Dollars divided by audience x 1000
$25 / 100 = .25 .25 * 1000 = $250

The $25 commercial cost translates to a $250 CPM.

You can run the same video on desktops, smartphones and tablets and you can expect to pay less than a $45 CPM!

Do you think the video run on ESPN in your cable zone is worth almost 10x more than that exact same video run on the ESPN app in your same zone?

Same audience, same video, two very different up-front costs.

Questions to ask your cable rep:

How much will my commercial cost to run?
How many people will my commercial reach? (if they don’t give you a straight answer, use the equation above)
What proof do you have that the audience you tell me I am going to reach will actually be reached?

Armed with this information, our video CPM calculation tool and your negotiating skills, you should be able to get a much bigger bang for your CableTV buck.

Measurement. It’s important.

Marketers have been trying to bridge the measurement gap between digital and TV for years. With the advent of smarter TVs and set-top-boxes (such as Roku), that bridge is becoming seemingly shorter. Unfortunately, it’s just not there yet.

Here’s what you can directly measure when you compare TV to digital video:

TV:

Number of times you paid for your ad to run

Video:

Impressions: How many people saw your ad
Clicks
Completion Rate
Sign-ups, or any action taken on site
Creative efficacy
Cost

Thanks to the advancements in digital marketing, it’s more simple than ever to tie your goals back to your digital buy. Alas, it’s not so simple with television or other traditional media.

There you go. Next time you’re considering a Zoned Cable TV buy or a digital video investment, you’re armed with the right questions to ask and the right tools to assist in comparing the benefits of your investment.

Have questions or want input on your cable TV buy? Contact us to learn more.