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Published byIsaiah Schroeder Modified over 11 years ago
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MEDIA COSTS
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Newspaper Rates Classified Ads –Grouped into categories –Paid by word or line Display Ads –More creative –Generally larger –Paid by column inch (one column wide by one inch deep)
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Example #1 Cost is $17.00 per column inch Ad size is 4 long and 3 columns wide ANSWER 4 X 3 columns X $17 12 column inches X $17 $204.00
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Factors Affecting Newspaper Rates Run-of-paper rate vs. guaranteed or preferred Color vs. black and white Frequency (more = less) –Contract rate vs. Open (non-contract) rate –Contract guarantees space purchased
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Cost per thousand (CPM) Cost of exposing 1000 readers to an ad Measurement that allows advertisers to compare costs Formula: Cost of ad X 1000 Circulation
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Example #2: Cost of ad = $1200 Circulation = 222,000 What is the CPM? ANSWER Cost of ad X 1000 Circulation 1200 X 1000 222,000 1,200,000 = $5.41 222,000
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Example #3: All other things being equal, which newspaper would you choose? Constitution Cost = $500 Circulation = 500,000 Times Cost = $400 Circulation = 300,000
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Cost Results Constitution $500 X 1000 500,000 Tribune $400 X 1000 300,000 $400,000 300,000 $1.00 per 1000 readers $1.33 per 1000 readers
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Magazine Rates Key Terms Bleed – ads printed to the edge of page –No white border –15-20% extra for bleeds Color rates –if any color is added –Price increases as color added –Four-color – a.k.a. Full-color ads Premium position – where ad placed
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Example #4: Four-color rate = $23,300 Bleed = 15% What would the ad cost? ANSWER $23,300 x.15 = $3,495 $23,300 + $3,495 = $26,795
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Example #5: Four-color ad with bleed = $26,795 Commission = 15% Cash discount is 2/10 net 30 ANSWER $26,795 X.15 = $4,019.25 $26,795 - $4,019.25 = $22,775.75 $22,775.75 X.02 = $455.52 $22,775.75 - $455.52 = $22,320.23
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Radio Advertising Network Radio Advertising –Broadcast from studio to all affiliated stations –Allows reach to several markets at once National Spot Radio Advertising –Used by national companies –Allows local station-by-station ad to reach specific markets Local Radio Advertising –Used by local businesses –Limited to specific geographic area
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Key Terms in Radio Spot radio – refers to geographic area Spot commercial – refers to length of message: one minute or less –Can be carried on network or spot radio Rates based on time of day –a.m. and afternoon more expensive Run-of-schedule rates –radio station decides when the ad will run –Less costly
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Television Rates Rates vary with time of day –Prime-time 7-11 p.m. most costly –a.k.a. Class AA time
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Selection of Media Reach vs. cost Ability to illustrate product Ability to present adequate selling message Special problems with media? Flexibility for last-minute changes Ability to use with special promotions Image of business/desired image Coverage of targeted area
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