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MEDIA COSTS. Newspaper Rates Classified Ads –Grouped into categories –Paid by word or line Display Ads –More creative –Generally larger –Paid by column.

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Presentation on theme: "MEDIA COSTS. Newspaper Rates Classified Ads –Grouped into categories –Paid by word or line Display Ads –More creative –Generally larger –Paid by column."— Presentation transcript:

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 ,000 1,200,000 = $ ,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 ,000 Tribune $400 X ,000 $400, ,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, $26,795 - $4, = $22, $22, X.02 = $ $22, $ = $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


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