1. MEDIA COSTS

2. 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)

3. 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

4. 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

5. 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

6. 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

7. Example #3: All other things being equal, which newspaper would you choose? Constitution Cost = $500 Circulation = 500,000 Times Cost = $400 Circulation = 300,000

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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

14. Television Rates Rates vary with time of day –Prime-time 7-11 p.m. most costly –a.k.a. Class AA time

15. 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