Direct Response Marketing Blog

   

Direct Response Television Advertising: Ratings vs. Rates

Posted by Jessica Metz

Dec 5, 2013 10:00:00 AM

The process of buying TV ads can be very different, depending on the nature of the campaign. If your goal is Direct Response TV Advertisingbrand awareness, ratings will be your guideline. If your objective is to generate a response via phone or web, your tactics are not quite as black and white. No matter what you are trying to achieve, understanding the relationship of ratings and rates plays a huge role in campaign success.

 

RATINGS

Thanks to Nielsen, we can obtain viewership data for each DMA (Designated Market Area). The country is divided up, typically around major cities, where networks broadcast from. The TV watching activity is recorded and reported to give stations, advertisers, and buyers a snapshot of what programs gain the most attention.

Ratings are communicated in points, which are a percentage of the overall population in that market based on the demographic you are targeting (i.e. Woman 18-34, Adults 25-54). The data is taken one step further, by specifying “share,” which is the percentage tuned in at that given time. All of this information helps to make an informed decision on what programs to buy in order to reach the most viewers in your target audience, and is crucial to maximizing your money. Rates are divided by rating points to give you a CPP (cost per point), to show the efficiency of your media spend. Breaking stations down by CPP can assist in comparing – for instance, a spot during Monday Night Football might cost a lot more than the noon news, but the viewership is so much higher during MNF, that it is a cheaper way to reach more people. 

 

RATES

Some might be surprised to learn that TV rates are negotiable. There are typically two different rate cards, general and DR, and each are published by the station but rarely followed. Most stations have a limited amount of inventory (available spots) and once that inventory is filled, the higher paying advertisers take first priority. In fact, high profile programs such as a major sporting event might be sold out, but you can still get on by paying a “bump rate.” This term refers to the amount you have to pay in order to bump other advertisers off the traffic log. Paying such a premium rate is not usually part of the DR strategy, which instead looks for high inventory situations where a low rate will clear. It’s all about supply and demand, and depending on your clearance needs (must spend to must save), your rates will fluctuate.

 

USING RATINGS TO NEGOTIATE RATES

As I said above, understanding the relationship between ratings and rates is critical, and here is why. If you are buying for a DR campaign, let’s face it, there is always room for improvement. You can never have too many leads. Is a particular station static or dropping in production? It could be because their rates are dropping as well. Identifying negative changes in the ratings will help put forth a strong case for getting a rate reduction. Perhaps there is no correlation between a station’s rating and their results – this happens more frequently than you can imagine- but the station doesn’t need to know that. If you are getting a lower CPP somewhere else in the market, use that rate to reduce the other stations. The data is there for you to analyze and use in your favor, but remember, it is always changing. Staying on top of the market will certainly put you at an advantage.

 

Topics: Direct Response, Ad Mediums, Rate Negotiation

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