No marketer or advertiser has unlimited budgets.
Even the largest advertising budgets try to run as efficiently as possible.
I call it simple media math but I know it is anything but simple.
In addition to having a great buy on the proper medium, targeted and memorable creative that resonates helps. So, does having a great product, that is in demand and scarce (many of my Auto clients are finding that right now (inventory is low).
This post is about media math, so I'll get right to it.
What costs more
a $20 CPM on traditional TV or cable
or
a $33 CPM on CTV?
Here are two questions I would start with.
1, What percent of the coverage provided by the television or cable station is outside of my primary marketing area.
Oftentimes with TV it is well over 50%. Here's a quick example, in Tampa DMA the distance (North to south) from Citrus to Sarasota is over 130 miles. From Polk to Pinellas (East to West) the distance is over 70 miles. Aside from distance, many contractors don't even operate in all counties.
2, What percent of the people reached are currently in the market for my product or service.
The average American purchases a new vehicle once every six years that would mean in any given year about 16% or in the market for a vehicle.
For this example, let's be generous
Many advertisers have multiple locations, let's double the GEO and go to 100%.
Now, let's realize that branding is very important. Even if someone is not in the market this year, they eventually will need to make a purchase. Let's double the In-Market number from 16% to 32%.
Here is the math. ( I intentionally made it simple)
100 Geo x32% In Market 32%
Now take the $20 CPM and divide by 32% to get the real CPM
20/32%=62.50 real CPM
CTV $33
TV or Cable $62.50
$62.5/$33=189%
TV or cable 189% more expensive
I did try to make this simple. If you have questions let's discuss
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