Cost Per Thousand (CPM)
One standard measurement metric for home improvement television buying is CPM. This is the cost to reach a thousand people. Depending on your market you should have a CPM of below $10 and as low as $2. Your local broadcast TV (CBS, NBC, ABC or FOX) can be your best source for getting a good CPM in your target market. The recent decline in cable subscribers has made it more expensive to advertise with your local cable network. It is best to use this measurement metric as your standard because you can use it to compare other advertising products in your market and it is more universal than cost-per-point (CPP, the cost to achieve one rating point). Although all advertising exposure is not created equal, you can compare the CPM’s of billboards, digital display ads, radio, and other media products to gauge how much it will cost you to reach your target audience. Knowing this information puts you in a great place to negotiate your best deal. Ask me about our 15/14 negotiating program if we ever talk.
15 and 30 (NO Book-ends) Second Commercials
Most of our clients utilize 30-second and 15-second television commercials for their home improvement advertising. This helps to lower your CPM and gives you the ability to make your marketing dollars go further because the cost of a 15-sec spot is (or should be) half the cost of a 30-sec spot. Most TV station advertising reps will try to sell you bookends (2, 15-sec spots that run in the same commercial block). This is OK, but it is ideal to run one 15-second spot per commercial block. This allows you to reach more people by being in two commercial blocks rather than one for the same amount of money. IMPORTANT: Demand that you pay half the cost of a 30-second spot for a 15-second spot, even if it is a non-bookend spot. Most TV stations will try to charge you 65%. Refuse and tell them you will only pay 50%. This further drops your CPM and keeps your budget in-line.
Auto Week for Television Advertising
If your region is saturated with automotive dealers, chances are you will be sharing air-time with your local Ford or Chevy dealer. Most auto dealers spend most of their TV dollars the last two weeks of the month (I know this because nearly 50% of our clients are auto dealers). They do this because it follows their buying cycle and factory incentives. TV spot pricing works on a supply and demand basis. So if the last two weeks are inundated with auto dealer advertising, chances are you will be paying more in the last two weeks. Ford, Chevy, and Toyota dealers get money from the manufactures to help pay for their advertising. This is called co-op. Large dealerships, therefore, have larger budgets which can reduce the amount of TV inventory available and inflate the price for you. With most home improvement companies, there is no such thing as co-op dollars. The owner of the company pays for the entire marketing spending with little to no help from the manufacturers. Schedule your campaigns to run the first two weeks of the month to avoid paying a premium on TV.
Struggling to measure your home improvement advertising? Check out this Home Improvement Advertising Measurement post.
Target Audience and Criteria for Home Improvement Advertising
Most of our home improvement clients service multiple counties in their region or entire states. When receiving a proposal from your TV station rep, you want to pay close attention to the demographics used to generate the performance metrics. I recommend targeting adults 35+ in your target DMA. It is important that you dictate the criteria for the buy and not allow them to as you will know your business and target geography best. Below is an example of criteria that I typically send to the TV station for the request for proposal (RFP).
EXAMPLE CRITERIA FOR RFP
Target CPM: $3.00
Flight Dates: August 1 – August 15
Spot Length(s): 15’s (Non-bookends) and 30’s
Rotation %: 50% 30’s and 50% 15’s
Dayparts: News and Daytime Rotators
Ratings Book: May 2019 or Most Recent
Geography: [[geo city]] DMA
Demographic: Adults 35+
*Monthly Posts (95% Delivery Require) will be conducted
*Quarterly Audits will be conducted
*Make Goods with Approval Only
NOTE: Please show a general summary at the bottom of the proposal that shows: Spots, Cost, GRPs, Imp(000), CPP, CPM, Reach, Net Reach Population and Frequency. Please show ratings/impression data in each row/daypart/program.
The list of tips and tricks for TV buying can go on for quite some time…
- How to handle pre-empt’s and make good’s
- What to do in an Election year (2020 will be something I’m sure)
- What reach % is critical for survival?
- How do determine the best frequency
- Should I be buying more than one channel?
The list goes on so if you are not sure your TV buys are reaching your full potential, feel free to contact us for further information about how we can help.