TV advertising can be bought nationally or regionally, with national campaigns allowing ads to reach audiences across all regions. The cost of a TV ad campaign is based on the cost per thousand (CPT) impacts, where one impact is one person viewing an ad. To calculate a TV budget, determine the number of impacts needed to reach the target audience, multiply that by the CPT, and divide by 1000. Standard national campaigns aim for 3 times the universe of the target audience. An example calculates a budget of around £959,740 for a campaign targeting 20 million impacts to housewives with children based on a CPT of £47.67 per thousand impacts.

1. TV: getting startedOverview of pricing for marketing students

2. TV can be bought nationally and regionallyTo buy a national campaign with terrestrial channel (ITV C4 C5) you buy the regions separatelyDigital channels cannot be split up, and all adverts therefore are broadcast nationallyFor most marketing projects a national campaign is required

3. TV is bought on a cost per thousand (CPT) impactsOne impact is one viewing of an advert by one pair of eyesThe advertiser pays an agreed amount per thousand impacts deliveredIf an advertiser has £10,000and the CPT is £4 they will be buying 2.5 million impactsBudgetX 1000ImpactsCPT

4. Quickest way to calculate TV budget for a projectHow many impacts do you think you will need against your target audience to achieve your objective?Use below formula to work out how much this would costUse the price matrix on the next sheet to find you CPT for the month you want to advertiseImpacts£ BudgetX CPT1000

5. Pricing

6. Universe = number of people in buying audienceBelow table shows the number of people in each target audience (universe) for you to gauge how many impacts you need for your campaign. ** NB standard national campaign would be to buy a number of impacts equal to 3 x the universe, i.e. Men campaign would be 70,797,000 impacts

7. National Campaign exampleIf you are advertising in March and your buying audience is HWChil (housewives with children) your CPT is £47.67The HWChil universe is 6,711,000 individualsMultiply HWChil universe by 3You will therefore need to buy 20,133,000 impactsThis campaign will cost you:20,133,000£959,740X 47.671000

8. Channel selectionOnce you have sorted the number of ratings and the cost of your campaign, you can then chose your channelsGenerally speaking a national campaign will include ITV1, C4 and C5 to deliver the coverage and the big spots, and then the more niche digital spots will add frequency and spot countA list of channels is enough – the number of spots is irrelevant really when you are buying a national campaign, the number impacts is more important

9. Ratecard vs. trading ratesAll of these rates are what is called ‘ratecard’ which is the broadcaster’s asking priceTrading teams at agencies will reduce these by percentage pointsIf you reduce your overall campaign total by 10% then you will have shown that you understand trading

10. Delivery of a campaignA TV campaign is essentially an agreement between the media agency and each individual broadcaster to deliver a number of impacts against an agreed buying audience depending on budgets allocatedThese impacts are delivered by a number of ‘spots’ that the broadcaster allocates to each advertiser and are measured in TVRsThe media agency will ensure that the advertiser achieves a good mix of spot sizes to achieve the number of impacts boughtIf you think of all of the impacts that you are buying as being one pot, then each spot which is broadcast leaves less impacts in the pot

11. MarketPlacewww.mplondon.co.ukinfo@mplondon.co.uk9/10 Market Place, London W1W 8AQ