4. Factors Influencing Cost

Question 1

Two key elements that make up the cost of TV advertising

Answer 1

1. The TV advertising rate (cost per spot)
2. CPM (Cost per thousand). This is the cost to reach your audience.

Question 2

3 Main approaches to Television Rate Card negotiations

Answer 2

1. By Agency Group
2. By Agency
3. By Client

Question 3

The Three Key Factors Influencing Cost

Answer 3

1. Supply and Demand (inventory)
2. Timing
3. Content

Question 4

External factors that influence supply and demand

Answer 4

PEST
1. Political
2. Economic
3. Social
4. Technological

Question 5

Different times that influence cost

Answer 5

1. Time of year
2. Time of the week
3. Time of day

Question 6

The most cost efficient month to advertise

Answer 6

January (excluding spot)

Less audience and demand so rate card is lower

Question 7

The most efficient days of week to advertise

Answer 7

Thu-Sat, less people to reach so rate cards are low

Conversely, front end of the week is most expensive

Question 8

Standard Conversions for different ad lengths

Answer 8

15” = x 0.6
45” = x 1.5
60” = x 2.0

Minimum ad length you can run is 5”, but this comes at a premium/you may need to buy multiple in one program

Question 9

Content & Environment Strategies that Influence Cost

Answer 9

• Program sets
• Advertorials
• Exclusivity & roadblocks
• Sponsorships
• Sport and special events

Question 10

Program sets

Answer 10

Program sets allow for greater attention and cut through for your advertising through a selection of programs. ~synergy~

Based on factors (Campaign audience, Creative, Product & Advertising Message)

Program sets can include (Mood, time of day, path to purchase [time when viewer is more likely to act], context)

This increases cost as you’re restricting what you can by and not only focussing on CPM.

Question 11

Advertorials

Answer 11

Typically don’t appear in an ad break, but within the program itself.
● Placement is usually in off peak zones, late night or mid-morning.
● This type of advertising tends to feature product or services.

Question 12

Exclusivity…

Answer 12

… achieves greater cut through

Question 13

Levels of exclusivity

Answer 13

For example, Toyota may sponsor the AFL. There are typically two levels of exclusivity:

● 50% which is when the competitor can have half the number of spots the sponsor does. If
Toyota have 10 spots in the AFL, then the competitive car brands can only have 5 spots each.
Toyota will be the dominant advertiser.

● 100%, where no competitive car brand advertising can be placed in the AFL. This means that
Toyota will be the only car advertiser within the AFL.

Question 14

Entitlements that can be a part of sponsorships

Answer 14

Priority positioning in break (PIB), e.g., first ad, in ad break
● Category exclusivity Advertiser will have a dominant number of ads within their category, or 100%
exclusivity, meaning no competitor advertisements.
● Logo association
● 5 or 10 second Billboards (opening and closing) e.g., the program will be “brought to you by …”;
during sport telecasts Sponsor Billboards can also run throughout the telecast.
● Sponsorship will also allow for talent to be integrated into your TVC or marketing and can help deliver
product integration into the program i.e Masterchef and Coles, Bachelorette & Sally Hansen

Question 15

Considerations for a Sponsorship

Answer 15

• Won’t need the cut-through if competitors in the category aren’t also advertising
• Depends on the campaign objective

Question 16

Considerations for Olympics

Answer 16

As sport is more expensive…

• Time Zone of the host country (what time will it be telecast in Australia)
• Historical ratings of previous Olympics
• Size of Australian team competing
• Strength of Australian team in winning medals