It’s obvious that knowing an audience, where they spend their time and money and how they consume media, is key to effective media planning. There is another, equally important, side to it though: the cost of media. Media plans should be as efficient as possible and best practice will take value into consideration.

 

There are two key terms that media planners build each plan around.

 

The absolute costs are simply the price of each media spot/unit. Unit costs vary massively, but are roughly worked out according to the number of impressions an ad will receive and, crucially, the value placed on that number by the media owners and advertisers.
No brand has an unlimited budget, so it is the job of the media planner to trade off where necessary, to choose media based not only on suitability with regards to reach but also suitability with regards to the budget.

 

To be able to do this we need to be able to compare the relative cost efficiency of different media. Yes, a 30 second Superbowl spot might get a huge audience, but you will spend a fortune on it. How can we compare it to a paper ad (for example) with a smaller reach and a far smaller cost? This is what we call the relative costs – the understanding of the relative efficiencies of different formats is key to effectively and prudently spending your marketing budget.

 

This is where we look at something called Cost Per Thousand. It allows us to work out the relative cost of different vehicles (say, The Times and The Telegraph) and even different mediums (for instance television and print). Instead of comparing the cost of each ad placement and the reach at the same time, we assume the same reach, that of a thousand. This allows us to easily see how much it costs to reach the same number of people. Comparing media is more complicated. The quality and collection of data varies, so we have to compare the cost per click (for example) of a digital ad against the cost per thousand of a print spot. Experience and knowledge of the audience can provide the rationale to justify one medium over another at this point.

 

Value for money needs to vie with effectiveness in a good media plan. One without the other is a job half done.