Television Media Average CPM Rate

Video Television Media Advertising,

The number one most high Ad relevant cost effectiveness in digital advertising.

 

According to tracking firms in the TV space,

Average cpm for TV Ads,

The going rate to run a 30-second spot on the average network prime-time show is $110,200, at a $25 cost per 1,000 homes. Factor in the significant number of viewers who are DVR-ing the ads – let’s even be conservative and say 25% of viewers skip ads – and the true CPM cost is a lot higher.
That’s because at least 25% of the viewers for whom the advertiser is paying aren't watching the ad. So the true cost to reach the viewers of the primetime 30-second spot is more like $33 CPM, according to the following calculation: $25 CPM / (1 – 25%) = $33.33 CPM.

Contrast that with recent announcements that popular television channels are now making preroll RTB video ads available on their full-episode players. What do CPMs for the online episode players look like? They’re in the $21 to $30 CPM range, or significantly lower than running on TV. Video with professionally produced content is an even better deal with average CPMs of $11 to $20.

How to Calculate the CPM for Television?

An advertisement on television can be a costly investment, but it is a great way to get your product seen by lots of people at once. The best way to know if you are getting your money's worth is to calculate the CPM of your ad. CPM is an acronym for cost per mille, which means the cost of getting your ad in front of 1,000 people. To determine how much you are spending on your advertising space per eyeball, use a few simple figures to ascertain your CPM.

Ratings Are Everything

The best way to get an accurate CPM for a television advertisement is to know how good the ratings are of the television show with which your ad plays. Nielsen ratings are the golden standard for estimating the popularity of a television show. The average for a network series is 11 percent of the television-owning American population, which is estimated to be 94 million households, according to the Museum of Broadcast Communications. That means a show with ratings of 11 percent reaches 10.3 million people. The more popular a show is, the more expensive advertising even social advertising around it will be. A less-expensive example would be a show that is seen by 5 million people.

The Equation

If your ad is featured next to an average television show that garners 5 million viewers, then you can use that figure to determine your CPM when you compare it to the price of advertising. First, divide the viewer number by 1,000, since you are calculating the cost of one thousand viewers. The amount you are working with now is 5,000. If you buy a single thirty-second advertising slot for $10,000, then divide that price by 5,000 for a CPM of $2. This is the cost per 1,000 people if you buy $10,000 of ad time during a show that gets 5 million viewers.

Making the Most of Your CPM

The best way to get a good deal on television ad time is by purchasing in advance. Once a year, typically in May, networks sell advertising slots for the upcoming international television season at what is known as the upfront market. You are taking a chance by buying in bulk for a network that will be testing out new series in the fall, but often there are some guarantees. If a network fails to attract the ratings they promise to advertisers, they run free commercials to make up for it.

The Future of CPM

With the evolution of technology that delivers media over the Internet, there have been the beginnings of big changes with analyzing television show ratings. Any new method of counting viewers will have an effect on determining CPM. A Microsoft patent on Nov. 1, 2012, reveals that XBox Kinect machines are being created to count viewers in the room. This may be used to charge viewers by how many people are watching, rather than by household. Regardless of whether household televisions or viewer totals will be used to determine ratings, using that number to calculate CPM for a television advertisement will likely remain the same.

		Households Viewing Avg. Min.		Cost Per 30 Sec.		Cost Per 1000 Homes
	1965	9,968,000		$19,700		$1.98
	1966	9,873,000		19,400		1.96
	1967	10,007,000		20,400		2.04
	1968	11,260,000		22,200		1.97
	1969	11,040,000		22,800		2.07
	1970	11,430,000		24,000		2.10
	1971	12,000,000		21,700		1.81
	1972	12,790,000		25,100		1.96
	1973	12,600,000		28,900		2.29
	1974	13,380,000		30,400		2.27
	1975	13,500,000		32,200		2.39
	1976	13,720,000		33,000		2.41
	1977	14,380,000		42,300		2.94
	1978	14,620,000		45,700		3.12
	1979	14,910,000		58,100		3.89
	1980	15,240,000		57,900		3.79
	1981	14,720,000		60,700		4.12
	1982	14,140,000		69,900		4.94
	1983	15,150,000		81,300		5.36
	1984	14,530,000		107,500		7.39
	1985	14,510,000		94,700		6.52
	1986	14,460,000		98,500		6.81
	1987	14,290,000		100,100		7.00
	1988	13,250,000		109,000		8.22
	1989	13,060,000		109,400		8.37
	1990	12,540,000		122,200		9.74
	1991	11,810,000		106,400		9.00
	1992(1)	12,020,000		93,700		7.79
	1993	11,070,000		92,700		8.37
	1994	12,710,000		97,200		7.64
	1995	10,860,000		95,500		8.79
	1996	9,940,000		101,400		10.20
	1997	9,530,000		106,500		11.18
	1998	9,640,000		121,300		12.59
	1999(2)	8,256,000		110,700		13.41
	2000(3)	6,134,000		82,300		13.42
	2001	5,885,000		88,700		15.07
	2002	6,472,000		108,700		16.79
	2003	5,822,000		89,100		15.31
	2004	6,070,000		120,500		19.85
	2005	6,043,000		129,600		21.45
	2006(4)	5,670,000		127,800		22.55
	2007	5,151,000		117,800		22.87
	2008	4,384,000		114,900		26.22
	2009	4,562,000		103,700		22.72
	2010	5,248,000		103,600		$19.74
	2011	4,710,000		106,500		$22.61
	2012	4,630,000		111,500		$24.08
	2013	4,397,000		110,200		$25.06
* Regular programs & specials SOURCE: NIELSEN MEDIA RESEARCH, FEBRUARY EACH YEAR Notes: (1) FOX added in 1992 (2) WB added in 1999 (3) UPN & Pax added in 2000 (4) Univision added in 2006. Effective January 2006, all audience estimates are based on Live+7 data.  Article Courtesy of TVB.ORG