/nav-logo-desktop.webp "Marketing Architects"){kind=logo}
Episode 158
When CPM is King
Marketers are being told to stop buying media on CPM. But is that actually good advice?
This week, Elena and Angela are joined by Chief Media Officer Catherine Walstad and Chief Analytics Officer Matt Hultgren to dig into one of advertising's most debated metrics. Together, they break down why CPM still matters, where the low-CPM-equals-bad-media logic breaks down, and what actually signals media quality.
Topics Covered
• [01:30] Research on the true cost of dull media
• [06:00] Why TV outperforms digital on cost per attentive second
• [07:00] Should marketers stop buying on CPM?
• [11:00] Where low CPM signals bad inventory, and where it doesn't
• [16:00] How to identify high-quality media
• [21:00] Why CPM is king
• [25:00] How to design a test to challenge your CPM assumptions
Resources:
Think TV/Eat Big Fish/Amplified Report
Elliot Wright Article
Today's Hosts
Elena Jasper
CMO
Angela Voss
Chief Executive Officer
Matt Hultgren
Chief Analytics Officer
Catherine Walstad
Chief Media Officer
Transcript
Matt: So all of a sudden if you just optimize the low CPM, you can get on what I would call lower attention inventory, where you won't get the same payoff. So you do have to be careful, especially maybe more in the digital CTV environment, because the worlds are kind of merging. You're buying it in more of a digital-like fashion.
Elena: I'm Elena Jasper. I run the marketing team here at Marketing Architects, and I'm joined by my co-host Angela Voss, the CEO of Marketing Architects.
Angela: Hello.
Elena: And we're joined by Catherine Walstead, our Chief Media Officer at Marketing Architects, as well as Matt Hultgren, our Chief Analytics Officer at Marketing Architects.
Catherine: Hello. Thanks for having me.
Matt: Thanks for inviting me. What a crew.
Elena: We're back with our thoughts on some recent marketing news, always trying to root our opinions in data, research, and what drives business results. But before we dive into our topic today, I wanted to mention that Marketing Architects is going to be at Digiday's Modern Retail Event at the end of the month. So we're going to have a booth with some popcorn. We'll be doing a speaking session on marketing effectiveness in streaming TV. And if you're going, we'd love to know so that the team can meet you in person.
But today we are tackling a growing debate in marketing effectiveness, which is: should marketers stop buying media based on CPM? CPM, which we all know is cost per thousand impressions, is the price you pay to reach 1,000 people with your ad. And critics are arguing that optimizing for it can push marketers towards cheap, low-attention inventory instead of real effectiveness, and maybe we should just abandon it altogether.
But I'm going to kick us off, as I always do, with some research, and I chose two different things today. The first is a session from Think TV's Media Marketing and Effectiveness Event last year. Dr. Karen Nelson-Field and Peter Field — not married, just the same last name — presented findings from a report titled "The Eye-Watering Cost of Dull Media." They published this with Eat Big Fish and Amplified. The study includes 115,000 biometric ad views across 190 campaigns, 164 brands, 60 ad formats in 12 countries, covering CTV, linear TV, social, gaming, and web.
Across multiple studies, they show that mental availability and ad memory tend to start building around 2.5 seconds of active attention, but a large share of digital impressions just never reach that level. And on extremely dull media, only 9% of ad views crossed 2.5 seconds. The report argues that when we buy primarily based on CPM alone, we often end up favoring dull environments, whereas cost per attentive second tends to favor high-attention formats. They also connect dull media to business outcomes, showing declines such as negative 37% brand conversion, negative 77% brand conversion per dollar, and negative 14% long-term ROI. They estimate the total cost of dull media globally at $198 billion and suggest that advertisers are losing about 43 cents of every dollar spent in dull media environments. They also estimate media accounts for about 70% of impact versus 30% for creative. So this appears to be a big issue.
But before I go into my next piece of research, Ange — anything stand out to you? Anything surprising from that study?
Angela: Yeah, I would say what struck me here was: if you're on a marketing effectiveness learning journey for yourself, for your brand, I would just say we need to be very careful about what the walkaway impression is from research like this. Is the research right? Is it done well? I don't know — given the players involved, I would say probably. Peter Field specifically has a pretty good reputation for his research.
But this is where research can be right and wrong depending on what you pull from it. We can take research like this and, without some critical thinking, build a narrative that low CPM media is bad and high CPM media is good — the development of a belief system that could be incredibly damaging to the very goals that we have for ourselves and the businesses that we work for.
Second, if you sell your product directly — your customers can buy your product or service on your brand's website — and you're measuring TV well, this is not a question that you should be asking at all. We have to remember TV does two jobs, both short and long, and if you're effectively measuring the short, you don't wonder about how low and high CPM media work together or against each other. It's maybe a little harder for retail-only brands or QSR spaces. But this is where direct marketers have a great benefit — to be able to see data directly that can help them sort through things like high versus low CPM media and what that means for quality and, ultimately, the response and sales they're generating for their brand.
Elena: Yeah, you're right. I wouldn't be surprised if that reaction you were describing — the dangerous reaction — would happen from data like this, because you hear about this and you're like, oh my goodness, that sounds really, really damaging. But we're going to get into the nitty-gritty of our thoughts on CPM. That was maybe a little sneak preview of how we feel about it.
Matt: Can I throw out a quick stray punch? Google makes enough money — we can throw punches at them — but 43 cents on the dollar, like, that's a scary figure. We commonly joke about the Google tax over here, but it does just feel like another tax on marketing. Could you imagine 43% of your money going to waste? That's just a really tough pill to swallow as a marketer, especially when we have to fight our CFOs for every dollar we get.
Elena: Yeah, definitely a spooky stat there. I also wanted to highlight a different article. This one is titled "What's Holding TV Back: Culture, Not Effectiveness" by Elliot Wright. And the article responds to a piece that Peter Field put out called "Five Charts to End the TV Debate," which was again published in Think TV. Field argues that TV remains one of the most effective advertising channels and that the problem isn't performance, it's how we measure value.
He draws on research from Dr. Karen Nelson-Field and shows that most digital video ads fail to hold attention for even two and a half seconds, which she identifies as a minimum threshold needed to reliably build memory. Fewer than 0.5% of digital impressions reach 10 seconds of attention, and that's where brand effects become more meaningful. But TV consistently exceeds those attention thresholds. And when media is priced on cost per attentive impression, TV becomes significantly more cost effective — three times more cost effective than social video and around 60% cheaper than digital video platforms when adjusted for attentive seconds. I thought that was also a nice one to include.
Since our perspective on the CPM debate is going to cover both digital and offline, but we have a special TV expertise, this episode is going to center more around that. But I still think it'll be interesting for marketers who have read stuff like this or heard "you should stop buying media on CPM" and are wondering how to think about advice like that.
Okay, long lead-in. But Matt and Catherine, thank you again for joining. We're excited to have you both here today — you're experts in media buying and measurement, so this is going to be fun. Let's just get right into it. Spicy question to kick us off: yes or no, should marketers stop buying media on CPM?
Catherine: No, but —
Elena: Episode done.
Catherine: No. Done. But they should totally stop buying only on CPM. We know CPM is the price of reach. Elena, you talked about how to calculate a CPM, what it is — we know that reach powers advertising. So if you ditch CPM, you lose the ability to understand if you're getting efficient reach. And I think where marketers have lost their way is when CPM becomes the only proxy for assessing quality and effectiveness. A low CPM isn't automatically bad and high CPMs aren't automatically premium. At MA, we believe CPM is a starting point. It is not the finish line. So of course we want efficient reach, but it needs to be validated with tangible outcomes like sales, like any kind of response or brand lift. I think that's when CPM becomes a powerful signal.
Matt: I think it's an interesting question, and I think sometimes I sit over here a little naive — our agency focuses on television and we have these marketers that come in, and there's just this really strong association between cheap and low quality when it comes to marketing. We've all experienced this firsthand in the real world, right? You buy an off-brand version of something. Falls apart in a week. And I think unfortunately a lot of marketers have just experienced that exact same thing buying media. You chase the low CPM, you ended up with garbage inventory, and you got burned. And now there's just this stigma that cheap is low quality, and it's almost become synonymous in marketers' minds.
And I think that's where it gets dangerous, as Ange was alluding to earlier. If you flip it around though — if you can pay less for the same exact thing, won't we all take that deal 10 out of 10 times? That's not bad buying, that's smart buying. Now, I'm not saying cheap always wins — low CPM, low-attention inventory absolutely can lose to higher CPM stuff that's in higher-attention environments, and I think Elena's research makes that statement pretty clearly. But I think a lot of marketers have just overcorrected on the low CPM and they write it off before they even ask: what am I doing? What channel is it? Is the attention actually there? And they're leaving fruitful opportunities on the table, especially when it comes to TV, where you can get really efficient CPMs and high attention. Those things don't have to be mutually exclusive, and we have to stop assuming they are.
Angela: Matt, do you think it's more common for marketers to assume that low CPM means bad, or that high CPM means good and premium?
Matt: Usually if you think one, you by default believe in the other. If you're thinking that way, it's usually because you got burned — probably burned on the low end first — and that has led you to wanting to test the higher CPM stuff. People are usually willing to take the smaller risk before they go into the higher, more expensive risks. So I'd say more people probably believe in the low side first.
Angela: Yeah, I'd agree with you there.
Elena: Ange, I guess you kind of gave away your answer, but yes or no?
Angela: I am very much aligned with Catherine and Matt on this one. I don't know that I need to regurgitate a lot of it. I think that in marketing we look for absolutes. We all have to have a playbook that we operate by, and sometimes those belief systems get established because of an experience, because of a mentor, because of a test gone wrong. And it's easy for us to latch onto something and make it bible in terms of how we operate from there on out.
And I think that, especially as you're moving into new channels, we might want to pull our previous experience just for background, but there are certain assumptions that we need to let go of. The digital space and being below the fold with low CPM inventory for something that never even gets seen versus what happens in the TV environment — they're just wildly different. Back to Matt's point: if we can pay a fifth the cost to reach the same person —
Matt: In the same environment.
Angela: In the same, yeah. Right? Like, why would you not do that? It's fine to bring learnings from channel to channel, but I think we just need to think through the fact that the environments are very different and reestablish new ground rules, so to speak, based on testing.
Elena: So in the spirit of not having absolutes, let's be super clear. When people say buying on CPM leads to low-quality, low-attention inventory, where do we think they're right and where would they be wrong?
Catherine: I think when you're talking digital, they're right in a lot of instances. In digital advertising, inventory is basically infinite. You can make impressions anywhere. We've all seen the autoplay videos, teeny-tiny little placements, ads that are on screen for a millisecond and then they're gone — and that's where you get low CPMs, but the trade-off is zero attention. So in digital, if you're chasing the lowest CPM, you can inadvertently end up in some really low-attention environments.
Now that argument breaks down when you apply the same logic to TV. TV is fundamentally different. It's finite. The supply is what it is — it's limited, it's curated, it's regulated. And whether it's linear TV or premium streaming, the ad is appearing on the living room screen where the viewer has chosen to watch the content. In that context, a low CPM to me is not a sign of bad inventory. It's a sign of really smart buying.
Matt: I think if I were to add on to that — everything's spot on there. I will say it's been interesting to watch traditional linear shift to streaming, because streaming can be a little bit more digital-like. Whether you're looking at The Trade Desk or any of the other DSPs, or in our journey of building out our own DSP over here, the worlds are becoming closer and closer where CTV is sitting next to digital inventory. Before you know it, there's leakage — there's actually digital inventory that can sneak into DSPs. Everyone's aware of it at this point. You go to a CTV campaign, 5, 10, maybe in a bad case up to 20% of it, it's not even on a TV. You go a layer deeper, you look at your apps — these aren't actually apps anymore. Now we're talking about games and websites. And if you're not careful and if you don't curate that, those will lower CPM — surprise. So all of a sudden, if you just optimize the low CPM, you can get on what I would call lower-attention inventory, where you won't get the same payoff. So you do have to be careful, especially maybe more in the digital CTV environment, because the worlds are kind of merging. You're buying it in more of a digital-like fashion.
Elena: So Matt, you're talking about the environment we're buying in — and Catherine, you mentioned that too. I wanted to dig into that a little bit more, because from a media buying perspective, there are structural differences between a channel like linear TV that are different from digital. As we said, in a digital world, low CPMs can more often signal low-quality inventory. So how does that logic translate to television?
Catherine: I'll repeat myself a little bit here. In linear and CTV, again, the viewer has chosen to watch the content. It's a lean-back experience in their living room. You can't scroll past it while multitasking the way you can with digital video. And I want to double-click on what Matt was saying — sometimes low-quality inventory sneaks into the bitstream disguised as CTV, and we pride ourselves on spending a lot of time curating our inventory by hand to ensure that low-quality stuff is not sneaking through. And like I mentioned before, TV inventory is finite — it's constrained by programming schedules and specific ad loads, which is naturally going to translate to higher-attention impressions. So when you look at how the two channels are fundamentally structured, a low CPM in digital is going to be very different than a low CPM in TV. It's like apples and elephants — or oranges and elephants — whatever that analogy is.
Elena: Yeah, I was thinking most offline channels would be similar — like out-of-home. Though once you get into digital out-of-home, that could maybe get sketchy. Radio, print — buying in those marketplaces is just a little different, because like you're saying, there's a finite number of billboards.
Matt: I was just going to say the super interesting thing is that the phenomenon of "low CPM equals low quality" has leaked into people's minds to the point where they think that way within a channel itself. And I think that's where the thinking gets a bit dangerous — like, oh, I'm looking at my TV buy and I'm now going to think of it as low quality and high quality. That's just a different scenario than comparing digital to TV. That line of thinking will lead you to pay more to reach the same people. We see that far too often. It's unfortunate.
Elena: Yeah, I think it's a growing movement too — just this fear over buying a low CPM. I'm trying to think of a good analogy for it in the real world. I can't — if anyone has something, let me know.
Matt: Spending $8 million on a Super Bowl ad instead of reaching 20 times as many people.
Elena: There you go.
Matt: Or more impressions, I should say. Maybe not more reach, but.
Elena: So if we're saying that you can't just rely on CPM to tell you if something's high quality — just because you're buying at a $50 CPM, it doesn't mean that something lower cost is going to be bad — then how should marketers be evaluating media quality today? I wanted to start with the high end. If you had to pick a few signals that your media is quality, what would they be?
Catherine: I think I'd look for three things. The first is attention — we've talked about that a little bit here today. Is the ad appearing where people are going to stop and actually watch it? Full-screen, professionally produced content still matters a lot. Secondly, is the ad reaching new audiences at scale, or is it the same people over and over again? High-quality media is going to deliver broad, incremental reach versus hitting the same people over and over again. And finally, and I think most importantly, is figuring out if the media is producing a business outcome. At the end of the day, good media should move the needle — it should drive sales, drive website visits, drive people into stores, move the needle on brand metrics like awareness. At the end of the day, it's what happened because of the impression.
Matt: I think media quality comes down to how efficiently can I maximize my reach of my ICP or my target audience. And we've just found, repeatedly for the last three decades, that efficient reach is the biggest driver for our clients in seeing business results and outcomes.
I think from there it is important to monitor response rates. And this might be a little controversial — you asked for some spice earlier, I'll give you the spice — but the reality is "prime" sounds like it's the best. When I came into the marketing world decades ago, it was like, oh my gosh, prime — must be really good, like a prime steak. Everyone wants that. But the reality of looking at decades of data is that prime is just like any other daypart. We may have fallen subject to branding it as "prime" and now thinking of it as a premium thing. There are more eyeballs there if you need to get reach, so yeah, you have to be in prime. I'm not saying don't go be in prime — but if you actually look at response rates of prime versus early fringe versus daytime, the rates are the same, the attention's the same, but people are willing to pay more for it. So this is an interesting part of the equation. We actually monitor the response rates of all our buys across all dayparts and all networks so we can find the pockets that are more responsive and the pockets that are less. The reality is there isn't anything that's like, oh, 10 times magically better than the others — it's often quite a bit less than that.
And I think the last thing — Catherine hit it — but you have to have results. So if you want to go test a high CPM opportunity, great. But your CFO is going to need the bang for the buck. And if there's a more efficient way to reach people, my bet is you probably see more outcomes that way. At the end of the day, it's our CFOs that allow us to be in the jobs that we're at, and we need business results, not just theories.
Elena: Yeah, what's crazy, Matt, is that what we've seen about different dayparts performing similarly — there are a lot of people who just fundamentally disagree with you. They know in their heart that that's not true, even though we have the data to show it is. That can be challenging. But I like the advice of asking yourself: is my ad visible? Am I hitting new people? And is it producing a business outcome? I like that as the process.
Let's talk about the opposite. What would be some red flags in my data that suggest my inventory is bad or dull? And maybe it's just the complete opposite, but is there anything else we would look for?
Catherine: Yeah, there are a couple of red flags that we see pretty consistently, and it goes back to that outcome piece. One is huge impressions but nobody's home — there's no business impact. If a campaign is claiming to have massive reach and there's no outcome that can be tied to it of some kind, that to me is a sign that those impressions maybe weren't as valuable as thought, or weren't valuable at all. I think another red flag that we see is high frequency — the same group of people seeing the same ad dozens of times. We've all seen this on our streaming platforms. That media isn't really expanding reach, it's literally just recycling impressions to the same people, which probably is not going to drive an outcome. Or it might the first time, but not the 52nd time that person saw the ad. So those are the couple I would point to.
Matt: I think that coupled — and this may be less about bad inventory and starting to leak over into strategy — but a lot of times when you do go and start to key in, some people believe you need high frequency. But when you start to shrink down and over-hyper-target, we just see diminishing returns. There might be signs of life initially, your attribution models look good, they start showing good results, but then the runway's just so short. When you start to put yourself into a corner of maybe just a handful of networks instead of trying to reach everyone, the diminishing returns show up really, really early in those campaign cycles. And it means you've just exhausted that small audience because you've over-targeted them time and time again.
Elena: That's a good point, Matt. The debates are similar — marketers looking at it two ways. One is: the environment my ad is in matters so much that I need to overpay for it. Or: I need to reach this exact customer. But it ends up in the same place, which is justifying a higher CPM.
So Matt, I knew I wanted you in this recording because I have heard you say more than once: CPM is king. Which is pretty opposite to what is happening right now in some of the CPM conversation. But that's a belief that we have at Marketing Architects. Why do we say CPM is king?
Matt: It's easy for me to just say CPM is king and be met with a whole bunch of resistance. I think the important part before you make that statement — something that Catherine alluded to earlier — is that we are super curated in terms of where we are showing these commercials. We are only showing our content in high-intention, high-attention environments. So whether that's linear — again, think more like sofa, lean back, commercial on the wall — or CTV slash streaming, we filter out all the more digital-like environments. Apples to apples, we're showing commercials, people are sitting down, they're watching them.
If that is all table stakes and all true, I would make the argument that CPM is king from that point forward. The more people you can reach per dollar, the more outcomes you're going to see for your business. You could spend $50,000 on one airing at a $50 CPM, and it might be the coolest airing of all time. I'm going to make the argument that if you took that $50,000 and reached 10 times as many people, you're going to see better outcomes.
Elena: I think one point in this debate we would definitely agree on — and Catherine mentioned this earlier — is that while we believe CPM is king, it should definitely not be the only metric that you're using to evaluate if your marketing works. So Matt, how do you think CPM fits within all the different metrics that we measure and optimize to for clients?
Matt: I kind of think of it as an entry gate. If you use that as the entry gate, it kind of tells you whether you're in the game from an efficiency standpoint. But once you're through the gate, there are a lot of metrics you should be looking at — reach, frequency, response rate, acquisition numbers if you have those. I think CPM is kind of the first filter to determine where you should be entering. And from there, there are a lot of other really valuable metrics to optimize, and sometimes that might actually lead your CPM to increase into pockets where there are higher response rates. But I think CPM is just a really good first filter to say, this is what makes sense for my campaign.
Elena: I wanted to talk about attention metrics. Because in the research that we shared, that was front and center — they're even advocating that instead of CPM you should buy to cost per attentive second. And we've had attention thought leaders on this show before, we've talked about it. Matt, I'm curious — when do you think attention metrics are worthwhile? What's been our experience with them in TV specifically?
Matt: It's been a mixed bag. I think the hardest part that we're seeing in the industry is: are there universal attention metrics across channels? How do you compare something on a website to something on a phone to something on a TV? I do think it's a really important debate, and I think the industry still has some development to do there — how no two impressions are the same when you're looking at cross-channel.
I think the way our clients approach it a lot of times is running incrementality studies, which kind of gets away from attention. But the reality is there just hasn't been a universal language of impression quality control. You can have a digital display impression as one and a TV impression as one, and it's just like, oh, I had one impression in both. How do we actually get it to attention? I know people run studies on panels of people forced to sit down and participate, but I think it's hard. I honestly want to raise my hand and say I don't think channels are evaluated fairly when it comes to attention as it stands right now. Channels that do have longer sit-down periods where you're engaged in content get the short end of it, versus companies that own the world like Google and Meta, where they can serve 90-plus percent of the population and just say they have all these unique impressions.
Elena: Yeah, I think it's interesting — the idea of attention and measuring it and optimizing to it, there are issues with that. But it sort of makes sense in your head. I think we're a little bit spoiled because we operate in TV, so our impressions are going to have more attention. But I think it's good to talk about, and maybe marketers could look at some of the general attention research. I thought it was really interesting in that second article that Peter Field found TV — while it might have higher CPMs or be more costly — is much more efficient on a cost-per-attentive-second basis. So just being aware, at a high level, how the channels differ might be a good idea.
Okay, to start wrapping us up, I wanted to make this practical. If I'm a marketer and I have this belief that higher CPM means higher media quality, how could I design a test to prove or disprove that belief?
Catherine: I don't want to steal Matt's thunder here — he's the data guy. But one of the best ways I've seen to test and prove this is a head-to-head comparison. Take the same creative, the same budget, and deploy a couple of different media strategies. One would be focused on high CPM inventory that's assumed to be more premium, and the other is focused on efficient CPM buying with strong reach. Then take a look at what kind of business impacts result from those two different strategies — something like sales response or brand lift. What we see time and time again is that high CPM inventory that's believed to be premium doesn't necessarily translate to a better outcome. Sometimes it does, but often, like Matt was saying before, you're just paying more for the same media. So I think the real goal isn't high CPM or low CPM — it's finding the CPM that is going to produce the strongest result.
Matt: I'd be the first one to say it's not easy. What Catherine described is exactly it, but you have to get it to be an apples-to-apples test. There are numerous ways to go about testing that. For some of our clients, they're constantly testing some high-impact stuff — think more like premium live sporting events — alongside a core base of just hyper-efficient reach TV buys. But we have to set it up structurally in a way that we can get a really good, clean A/B read, whether that's something more geo-based or running different cells or more at a national level. The key is to be very thoughtful to make sure you're getting a good apples-to-apples read of the two against one another.
Angela: I don't know if I'm going to add anything valuable to that, but I think a lot of times CPM is sort of an afterthought in a media plan. And it's incredibly important to be talking about, as a marketing team, your CPM range — what you think you should be targeting. Say there are three marketers that all compete in the same space, the same industry. One's targeting a $10 CPM, one's at $5.00, one's at $2.50 — there's a 4X difference in the audience you're even starting with. The driver of growth is reach, we would say. We know that reach drives growth. How many people can we get top-of-mind awareness, preference, and intent with? Ultimately we're trying to drive sales, but most people are not shopping for your product or service today. So if right from the get-go we're cutting that addressable audience in half or more, we're just dealing with a wildly different reality than a competitor that's starting with a funnel that's 4X the size of ours.
Elena: So maybe — and you'd argue it's not that not enough marketers look at reach, but not enough of them are valuing it?
Angela: Yeah. I think there's so much conversation around strategy and consumer audience and maybe audience segments and where do we find them, and then the media just comes at its cost. And we question those costs a lot. And I think that's what's made us successful as an agency and why our clients see success and why they see so much reach for their dollar. But put more emphasis on what you think that CPM should be. And are there ways that you can ultimately extend that reach and drive more growth for the brand?
Elena: Yeah. I know we mentioned this earlier, but there's kind of an opportunity for brand marketers to learn from performance marketers a little bit too, because you think a performance marketer is probably going to realize sooner: okay, maybe this high CPM is leading to worse business outcomes. So I feel like this belief system sort of changes according to what you hold your marketing accountable to.
Matt: Sometimes too, as the data guy, it's easy to just be unemotional about it. I don't do the creative, I don't do the fancy stuff — I just look at the numbers. If I have a million dollars and there are three plans in front of me, one's at a $2 CPM, one's at a $5, one's at a $10 — and it's all on TV, commercials on a wall — you're talking about 500 million impressions compared to 100 million impressions. And again, if you can get the same thing but way more impressions, who wouldn't want the 500? Sometimes you just A) test it, but B) take the emotion away from it. If it's in the same environment, there's just so much upside to be had.
Elena: Agreed. Alright, to wrap us up here with something a little more lighthearted — what is something cost-effective in your life that just massively over-delivers? Let's go: Catherine, Matt, Ange, and me.
Catherine: For me it's a toss-up between sleeping and walking — they're both free. But sleeping is super cozy. It comes with the best blankets that money can buy, my two adorable dogs that you can kind of see here in the background. I always feel happy when I'm sleeping, I always feel calm and relaxed — I mean, I assume I am feeling that way. But on the other hand, walking's also free. It can be done literally anywhere. I don't know about you guys, but it helps clear my head, it helps solve at least half my life problems, and somehow it manages to produce some really kick-ass ideas. So between those two things, those are definitely the highest ROI activities that I engage in.
Matt: Could have probably guessed this — it's cliché or on brand or whatever you want to call it — but a good spreadsheet. My whole life is in Excel. I have a 2-year-old. What did I do? I created a spreadsheet of every diaper brand, the cost, how many diapers — and it saved me hundreds of dollars. That's just one example. You don't want to know how many spreadsheets I have for every facet of my life, but it brings me joy, it's cheap, and it saves me money. It's fantastic.
Elena: We're such different people, Matt, but that's great. Okay, Ange, what about you?
Angela: Mine is sort of like Matt's, but it's the most analog version of a spreadsheet, which is a notebook and a pen. Just writing things down, being able to put your thoughts and your lists — it just creates order in my brain, and it continually just beats any productivity app that I've ever tried.
Catherine: You have really nice handwriting too, Ange. If I were you, I would totally keep writing. Just stay analog. That's good.
Elena: I'm the same way. I have a digital calendar and a physical calendar — I just like to have both. But there's something about writing stuff down. It's great. I was actually going to say podcasts — they're free and I learn so much from all of them. They're entertaining. I am obsessed with podcasts. I even listen to podcasts to recap TV shows I just watched. And how valuable is that? It's just a free thing people are doing, including us. So shout out to us, honestly.
Okay, great. Thank you so much Matt and Catherine for joining us. That was fun — just as spicy as I wanted. Thank you so much for joining the pod.
Matt: Thanks for having us.
Catherine: It was fun.
Episode 158
When CPM is King
Marketers are being told to stop buying media on CPM. But is that actually good advice?
This week, Elena and Angela are joined by Chief Media Officer Catherine Walstad and Chief Analytics Officer Matt Hultgren to dig into one of advertising's most debated metrics. Together, they break down why CPM still matters, where the low-CPM-equals-bad-media logic breaks down, and what actually signals media quality.
Topics Covered
• [01:30] Research on the true cost of dull media
• [06:00] Why TV outperforms digital on cost per attentive second
• [07:00] Should marketers stop buying on CPM?
• [11:00] Where low CPM signals bad inventory, and where it doesn't
• [16:00] How to identify high-quality media
• [21:00] Why CPM is king
• [25:00] How to design a test to challenge your CPM assumptions
Resources:
Think TV/Eat Big Fish/Amplified Report
Elliot Wright Article
Today's Hosts
Elena Jasper
CMO
Angela Voss
Chief Executive Officer
Matt Hultgren
Chief Analytics Officer
Catherine Walstad
Chief Media Officer
Subscribe on
Enjoy this episode? Leave us a review.
Transcript
Matt: So all of a sudden if you just optimize the low CPM, you can get on what I would call lower attention inventory, where you won't get the same payoff. So you do have to be careful, especially maybe more in the digital CTV environment, because the worlds are kind of merging. You're buying it in more of a digital-like fashion.
Elena: I'm Elena Jasper. I run the marketing team here at Marketing Architects, and I'm joined by my co-host Angela Voss, the CEO of Marketing Architects.
Angela: Hello.
Elena: And we're joined by Catherine Walstead, our Chief Media Officer at Marketing Architects, as well as Matt Hultgren, our Chief Analytics Officer at Marketing Architects.
Catherine: Hello. Thanks for having me.
Matt: Thanks for inviting me. What a crew.
Elena: We're back with our thoughts on some recent marketing news, always trying to root our opinions in data, research, and what drives business results. But before we dive into our topic today, I wanted to mention that Marketing Architects is going to be at Digiday's Modern Retail Event at the end of the month. So we're going to have a booth with some popcorn. We'll be doing a speaking session on marketing effectiveness in streaming TV. And if you're going, we'd love to know so that the team can meet you in person.
But today we are tackling a growing debate in marketing effectiveness, which is: should marketers stop buying media based on CPM? CPM, which we all know is cost per thousand impressions, is the price you pay to reach 1,000 people with your ad. And critics are arguing that optimizing for it can push marketers towards cheap, low-attention inventory instead of real effectiveness, and maybe we should just abandon it altogether.
But I'm going to kick us off, as I always do, with some research, and I chose two different things today. The first is a session from Think TV's Media Marketing and Effectiveness Event last year. Dr. Karen Nelson-Field and Peter Field — not married, just the same last name — presented findings from a report titled "The Eye-Watering Cost of Dull Media." They published this with Eat Big Fish and Amplified. The study includes 115,000 biometric ad views across 190 campaigns, 164 brands, 60 ad formats in 12 countries, covering CTV, linear TV, social, gaming, and web.
Across multiple studies, they show that mental availability and ad memory tend to start building around 2.5 seconds of active attention, but a large share of digital impressions just never reach that level. And on extremely dull media, only 9% of ad views crossed 2.5 seconds. The report argues that when we buy primarily based on CPM alone, we often end up favoring dull environments, whereas cost per attentive second tends to favor high-attention formats. They also connect dull media to business outcomes, showing declines such as negative 37% brand conversion, negative 77% brand conversion per dollar, and negative 14% long-term ROI. They estimate the total cost of dull media globally at $198 billion and suggest that advertisers are losing about 43 cents of every dollar spent in dull media environments. They also estimate media accounts for about 70% of impact versus 30% for creative. So this appears to be a big issue.
But before I go into my next piece of research, Ange — anything stand out to you? Anything surprising from that study?
Angela: Yeah, I would say what struck me here was: if you're on a marketing effectiveness learning journey for yourself, for your brand, I would just say we need to be very careful about what the walkaway impression is from research like this. Is the research right? Is it done well? I don't know — given the players involved, I would say probably. Peter Field specifically has a pretty good reputation for his research.
But this is where research can be right and wrong depending on what you pull from it. We can take research like this and, without some critical thinking, build a narrative that low CPM media is bad and high CPM media is good — the development of a belief system that could be incredibly damaging to the very goals that we have for ourselves and the businesses that we work for.
Second, if you sell your product directly — your customers can buy your product or service on your brand's website — and you're measuring TV well, this is not a question that you should be asking at all. We have to remember TV does two jobs, both short and long, and if you're effectively measuring the short, you don't wonder about how low and high CPM media work together or against each other. It's maybe a little harder for retail-only brands or QSR spaces. But this is where direct marketers have a great benefit — to be able to see data directly that can help them sort through things like high versus low CPM media and what that means for quality and, ultimately, the response and sales they're generating for their brand.
Elena: Yeah, you're right. I wouldn't be surprised if that reaction you were describing — the dangerous reaction — would happen from data like this, because you hear about this and you're like, oh my goodness, that sounds really, really damaging. But we're going to get into the nitty-gritty of our thoughts on CPM. That was maybe a little sneak preview of how we feel about it.
Matt: Can I throw out a quick stray punch? Google makes enough money — we can throw punches at them — but 43 cents on the dollar, like, that's a scary figure. We commonly joke about the Google tax over here, but it does just feel like another tax on marketing. Could you imagine 43% of your money going to waste? That's just a really tough pill to swallow as a marketer, especially when we have to fight our CFOs for every dollar we get.
Elena: Yeah, definitely a spooky stat there. I also wanted to highlight a different article. This one is titled "What's Holding TV Back: Culture, Not Effectiveness" by Elliot Wright. And the article responds to a piece that Peter Field put out called "Five Charts to End the TV Debate," which was again published in Think TV. Field argues that TV remains one of the most effective advertising channels and that the problem isn't performance, it's how we measure value.
He draws on research from Dr. Karen Nelson-Field and shows that most digital video ads fail to hold attention for even two and a half seconds, which she identifies as a minimum threshold needed to reliably build memory. Fewer than 0.5% of digital impressions reach 10 seconds of attention, and that's where brand effects become more meaningful. But TV consistently exceeds those attention thresholds. And when media is priced on cost per attentive impression, TV becomes significantly more cost effective — three times more cost effective than social video and around 60% cheaper than digital video platforms when adjusted for attentive seconds. I thought that was also a nice one to include.
Since our perspective on the CPM debate is going to cover both digital and offline, but we have a special TV expertise, this episode is going to center more around that. But I still think it'll be interesting for marketers who have read stuff like this or heard "you should stop buying media on CPM" and are wondering how to think about advice like that.
Okay, long lead-in. But Matt and Catherine, thank you again for joining. We're excited to have you both here today — you're experts in media buying and measurement, so this is going to be fun. Let's just get right into it. Spicy question to kick us off: yes or no, should marketers stop buying media on CPM?
Catherine: No, but —
Elena: Episode done.
Catherine: No. Done. But they should totally stop buying only on CPM. We know CPM is the price of reach. Elena, you talked about how to calculate a CPM, what it is — we know that reach powers advertising. So if you ditch CPM, you lose the ability to understand if you're getting efficient reach. And I think where marketers have lost their way is when CPM becomes the only proxy for assessing quality and effectiveness. A low CPM isn't automatically bad and high CPMs aren't automatically premium. At MA, we believe CPM is a starting point. It is not the finish line. So of course we want efficient reach, but it needs to be validated with tangible outcomes like sales, like any kind of response or brand lift. I think that's when CPM becomes a powerful signal.
Matt: I think it's an interesting question, and I think sometimes I sit over here a little naive — our agency focuses on television and we have these marketers that come in, and there's just this really strong association between cheap and low quality when it comes to marketing. We've all experienced this firsthand in the real world, right? You buy an off-brand version of something. Falls apart in a week. And I think unfortunately a lot of marketers have just experienced that exact same thing buying media. You chase the low CPM, you ended up with garbage inventory, and you got burned. And now there's just this stigma that cheap is low quality, and it's almost become synonymous in marketers' minds.
And I think that's where it gets dangerous, as Ange was alluding to earlier. If you flip it around though — if you can pay less for the same exact thing, won't we all take that deal 10 out of 10 times? That's not bad buying, that's smart buying. Now, I'm not saying cheap always wins — low CPM, low-attention inventory absolutely can lose to higher CPM stuff that's in higher-attention environments, and I think Elena's research makes that statement pretty clearly. But I think a lot of marketers have just overcorrected on the low CPM and they write it off before they even ask: what am I doing? What channel is it? Is the attention actually there? And they're leaving fruitful opportunities on the table, especially when it comes to TV, where you can get really efficient CPMs and high attention. Those things don't have to be mutually exclusive, and we have to stop assuming they are.
Angela: Matt, do you think it's more common for marketers to assume that low CPM means bad, or that high CPM means good and premium?
Matt: Usually if you think one, you by default believe in the other. If you're thinking that way, it's usually because you got burned — probably burned on the low end first — and that has led you to wanting to test the higher CPM stuff. People are usually willing to take the smaller risk before they go into the higher, more expensive risks. So I'd say more people probably believe in the low side first.
Angela: Yeah, I'd agree with you there.
Elena: Ange, I guess you kind of gave away your answer, but yes or no?
Angela: I am very much aligned with Catherine and Matt on this one. I don't know that I need to regurgitate a lot of it. I think that in marketing we look for absolutes. We all have to have a playbook that we operate by, and sometimes those belief systems get established because of an experience, because of a mentor, because of a test gone wrong. And it's easy for us to latch onto something and make it bible in terms of how we operate from there on out.
And I think that, especially as you're moving into new channels, we might want to pull our previous experience just for background, but there are certain assumptions that we need to let go of. The digital space and being below the fold with low CPM inventory for something that never even gets seen versus what happens in the TV environment — they're just wildly different. Back to Matt's point: if we can pay a fifth the cost to reach the same person —
Matt: In the same environment.
Angela: In the same, yeah. Right? Like, why would you not do that? It's fine to bring learnings from channel to channel, but I think we just need to think through the fact that the environments are very different and reestablish new ground rules, so to speak, based on testing.
Elena: So in the spirit of not having absolutes, let's be super clear. When people say buying on CPM leads to low-quality, low-attention inventory, where do we think they're right and where would they be wrong?
Catherine: I think when you're talking digital, they're right in a lot of instances. In digital advertising, inventory is basically infinite. You can make impressions anywhere. We've all seen the autoplay videos, teeny-tiny little placements, ads that are on screen for a millisecond and then they're gone — and that's where you get low CPMs, but the trade-off is zero attention. So in digital, if you're chasing the lowest CPM, you can inadvertently end up in some really low-attention environments.
Now that argument breaks down when you apply the same logic to TV. TV is fundamentally different. It's finite. The supply is what it is — it's limited, it's curated, it's regulated. And whether it's linear TV or premium streaming, the ad is appearing on the living room screen where the viewer has chosen to watch the content. In that context, a low CPM to me is not a sign of bad inventory. It's a sign of really smart buying.
Matt: I think if I were to add on to that — everything's spot on there. I will say it's been interesting to watch traditional linear shift to streaming, because streaming can be a little bit more digital-like. Whether you're looking at The Trade Desk or any of the other DSPs, or in our journey of building out our own DSP over here, the worlds are becoming closer and closer where CTV is sitting next to digital inventory. Before you know it, there's leakage — there's actually digital inventory that can sneak into DSPs. Everyone's aware of it at this point. You go to a CTV campaign, 5, 10, maybe in a bad case up to 20% of it, it's not even on a TV. You go a layer deeper, you look at your apps — these aren't actually apps anymore. Now we're talking about games and websites. And if you're not careful and if you don't curate that, those will lower CPM — surprise. So all of a sudden, if you just optimize the low CPM, you can get on what I would call lower-attention inventory, where you won't get the same payoff. So you do have to be careful, especially maybe more in the digital CTV environment, because the worlds are kind of merging. You're buying it in more of a digital-like fashion.
Elena: So Matt, you're talking about the environment we're buying in — and Catherine, you mentioned that too. I wanted to dig into that a little bit more, because from a media buying perspective, there are structural differences between a channel like linear TV that are different from digital. As we said, in a digital world, low CPMs can more often signal low-quality inventory. So how does that logic translate to television?
Catherine: I'll repeat myself a little bit here. In linear and CTV, again, the viewer has chosen to watch the content. It's a lean-back experience in their living room. You can't scroll past it while multitasking the way you can with digital video. And I want to double-click on what Matt was saying — sometimes low-quality inventory sneaks into the bitstream disguised as CTV, and we pride ourselves on spending a lot of time curating our inventory by hand to ensure that low-quality stuff is not sneaking through. And like I mentioned before, TV inventory is finite — it's constrained by programming schedules and specific ad loads, which is naturally going to translate to higher-attention impressions. So when you look at how the two channels are fundamentally structured, a low CPM in digital is going to be very different than a low CPM in TV. It's like apples and elephants — or oranges and elephants — whatever that analogy is.
Elena: Yeah, I was thinking most offline channels would be similar — like out-of-home. Though once you get into digital out-of-home, that could maybe get sketchy. Radio, print — buying in those marketplaces is just a little different, because like you're saying, there's a finite number of billboards.
Matt: I was just going to say the super interesting thing is that the phenomenon of "low CPM equals low quality" has leaked into people's minds to the point where they think that way within a channel itself. And I think that's where the thinking gets a bit dangerous — like, oh, I'm looking at my TV buy and I'm now going to think of it as low quality and high quality. That's just a different scenario than comparing digital to TV. That line of thinking will lead you to pay more to reach the same people. We see that far too often. It's unfortunate.
Elena: Yeah, I think it's a growing movement too — just this fear over buying a low CPM. I'm trying to think of a good analogy for it in the real world. I can't — if anyone has something, let me know.
Matt: Spending $8 million on a Super Bowl ad instead of reaching 20 times as many people.
Elena: There you go.
Matt: Or more impressions, I should say. Maybe not more reach, but.
Elena: So if we're saying that you can't just rely on CPM to tell you if something's high quality — just because you're buying at a $50 CPM, it doesn't mean that something lower cost is going to be bad — then how should marketers be evaluating media quality today? I wanted to start with the high end. If you had to pick a few signals that your media is quality, what would they be?
Catherine: I think I'd look for three things. The first is attention — we've talked about that a little bit here today. Is the ad appearing where people are going to stop and actually watch it? Full-screen, professionally produced content still matters a lot. Secondly, is the ad reaching new audiences at scale, or is it the same people over and over again? High-quality media is going to deliver broad, incremental reach versus hitting the same people over and over again. And finally, and I think most importantly, is figuring out if the media is producing a business outcome. At the end of the day, good media should move the needle — it should drive sales, drive website visits, drive people into stores, move the needle on brand metrics like awareness. At the end of the day, it's what happened because of the impression.
Matt: I think media quality comes down to how efficiently can I maximize my reach of my ICP or my target audience. And we've just found, repeatedly for the last three decades, that efficient reach is the biggest driver for our clients in seeing business results and outcomes.
I think from there it is important to monitor response rates. And this might be a little controversial — you asked for some spice earlier, I'll give you the spice — but the reality is "prime" sounds like it's the best. When I came into the marketing world decades ago, it was like, oh my gosh, prime — must be really good, like a prime steak. Everyone wants that. But the reality of looking at decades of data is that prime is just like any other daypart. We may have fallen subject to branding it as "prime" and now thinking of it as a premium thing. There are more eyeballs there if you need to get reach, so yeah, you have to be in prime. I'm not saying don't go be in prime — but if you actually look at response rates of prime versus early fringe versus daytime, the rates are the same, the attention's the same, but people are willing to pay more for it. So this is an interesting part of the equation. We actually monitor the response rates of all our buys across all dayparts and all networks so we can find the pockets that are more responsive and the pockets that are less. The reality is there isn't anything that's like, oh, 10 times magically better than the others — it's often quite a bit less than that.
And I think the last thing — Catherine hit it — but you have to have results. So if you want to go test a high CPM opportunity, great. But your CFO is going to need the bang for the buck. And if there's a more efficient way to reach people, my bet is you probably see more outcomes that way. At the end of the day, it's our CFOs that allow us to be in the jobs that we're at, and we need business results, not just theories.
Elena: Yeah, what's crazy, Matt, is that what we've seen about different dayparts performing similarly — there are a lot of people who just fundamentally disagree with you. They know in their heart that that's not true, even though we have the data to show it is. That can be challenging. But I like the advice of asking yourself: is my ad visible? Am I hitting new people? And is it producing a business outcome? I like that as the process.
Let's talk about the opposite. What would be some red flags in my data that suggest my inventory is bad or dull? And maybe it's just the complete opposite, but is there anything else we would look for?
Catherine: Yeah, there are a couple of red flags that we see pretty consistently, and it goes back to that outcome piece. One is huge impressions but nobody's home — there's no business impact. If a campaign is claiming to have massive reach and there's no outcome that can be tied to it of some kind, that to me is a sign that those impressions maybe weren't as valuable as thought, or weren't valuable at all. I think another red flag that we see is high frequency — the same group of people seeing the same ad dozens of times. We've all seen this on our streaming platforms. That media isn't really expanding reach, it's literally just recycling impressions to the same people, which probably is not going to drive an outcome. Or it might the first time, but not the 52nd time that person saw the ad. So those are the couple I would point to.
Matt: I think that coupled — and this may be less about bad inventory and starting to leak over into strategy — but a lot of times when you do go and start to key in, some people believe you need high frequency. But when you start to shrink down and over-hyper-target, we just see diminishing returns. There might be signs of life initially, your attribution models look good, they start showing good results, but then the runway's just so short. When you start to put yourself into a corner of maybe just a handful of networks instead of trying to reach everyone, the diminishing returns show up really, really early in those campaign cycles. And it means you've just exhausted that small audience because you've over-targeted them time and time again.
Elena: That's a good point, Matt. The debates are similar — marketers looking at it two ways. One is: the environment my ad is in matters so much that I need to overpay for it. Or: I need to reach this exact customer. But it ends up in the same place, which is justifying a higher CPM.
So Matt, I knew I wanted you in this recording because I have heard you say more than once: CPM is king. Which is pretty opposite to what is happening right now in some of the CPM conversation. But that's a belief that we have at Marketing Architects. Why do we say CPM is king?
Matt: It's easy for me to just say CPM is king and be met with a whole bunch of resistance. I think the important part before you make that statement — something that Catherine alluded to earlier — is that we are super curated in terms of where we are showing these commercials. We are only showing our content in high-intention, high-attention environments. So whether that's linear — again, think more like sofa, lean back, commercial on the wall — or CTV slash streaming, we filter out all the more digital-like environments. Apples to apples, we're showing commercials, people are sitting down, they're watching them.
If that is all table stakes and all true, I would make the argument that CPM is king from that point forward. The more people you can reach per dollar, the more outcomes you're going to see for your business. You could spend $50,000 on one airing at a $50 CPM, and it might be the coolest airing of all time. I'm going to make the argument that if you took that $50,000 and reached 10 times as many people, you're going to see better outcomes.
Elena: I think one point in this debate we would definitely agree on — and Catherine mentioned this earlier — is that while we believe CPM is king, it should definitely not be the only metric that you're using to evaluate if your marketing works. So Matt, how do you think CPM fits within all the different metrics that we measure and optimize to for clients?
Matt: I kind of think of it as an entry gate. If you use that as the entry gate, it kind of tells you whether you're in the game from an efficiency standpoint. But once you're through the gate, there are a lot of metrics you should be looking at — reach, frequency, response rate, acquisition numbers if you have those. I think CPM is kind of the first filter to determine where you should be entering. And from there, there are a lot of other really valuable metrics to optimize, and sometimes that might actually lead your CPM to increase into pockets where there are higher response rates. But I think CPM is just a really good first filter to say, this is what makes sense for my campaign.
Elena: I wanted to talk about attention metrics. Because in the research that we shared, that was front and center — they're even advocating that instead of CPM you should buy to cost per attentive second. And we've had attention thought leaders on this show before, we've talked about it. Matt, I'm curious — when do you think attention metrics are worthwhile? What's been our experience with them in TV specifically?
Matt: It's been a mixed bag. I think the hardest part that we're seeing in the industry is: are there universal attention metrics across channels? How do you compare something on a website to something on a phone to something on a TV? I do think it's a really important debate, and I think the industry still has some development to do there — how no two impressions are the same when you're looking at cross-channel.
I think the way our clients approach it a lot of times is running incrementality studies, which kind of gets away from attention. But the reality is there just hasn't been a universal language of impression quality control. You can have a digital display impression as one and a TV impression as one, and it's just like, oh, I had one impression in both. How do we actually get it to attention? I know people run studies on panels of people forced to sit down and participate, but I think it's hard. I honestly want to raise my hand and say I don't think channels are evaluated fairly when it comes to attention as it stands right now. Channels that do have longer sit-down periods where you're engaged in content get the short end of it, versus companies that own the world like Google and Meta, where they can serve 90-plus percent of the population and just say they have all these unique impressions.
Elena: Yeah, I think it's interesting — the idea of attention and measuring it and optimizing to it, there are issues with that. But it sort of makes sense in your head. I think we're a little bit spoiled because we operate in TV, so our impressions are going to have more attention. But I think it's good to talk about, and maybe marketers could look at some of the general attention research. I thought it was really interesting in that second article that Peter Field found TV — while it might have higher CPMs or be more costly — is much more efficient on a cost-per-attentive-second basis. So just being aware, at a high level, how the channels differ might be a good idea.
Okay, to start wrapping us up, I wanted to make this practical. If I'm a marketer and I have this belief that higher CPM means higher media quality, how could I design a test to prove or disprove that belief?
Catherine: I don't want to steal Matt's thunder here — he's the data guy. But one of the best ways I've seen to test and prove this is a head-to-head comparison. Take the same creative, the same budget, and deploy a couple of different media strategies. One would be focused on high CPM inventory that's assumed to be more premium, and the other is focused on efficient CPM buying with strong reach. Then take a look at what kind of business impacts result from those two different strategies — something like sales response or brand lift. What we see time and time again is that high CPM inventory that's believed to be premium doesn't necessarily translate to a better outcome. Sometimes it does, but often, like Matt was saying before, you're just paying more for the same media. So I think the real goal isn't high CPM or low CPM — it's finding the CPM that is going to produce the strongest result.
Matt: I'd be the first one to say it's not easy. What Catherine described is exactly it, but you have to get it to be an apples-to-apples test. There are numerous ways to go about testing that. For some of our clients, they're constantly testing some high-impact stuff — think more like premium live sporting events — alongside a core base of just hyper-efficient reach TV buys. But we have to set it up structurally in a way that we can get a really good, clean A/B read, whether that's something more geo-based or running different cells or more at a national level. The key is to be very thoughtful to make sure you're getting a good apples-to-apples read of the two against one another.
Angela: I don't know if I'm going to add anything valuable to that, but I think a lot of times CPM is sort of an afterthought in a media plan. And it's incredibly important to be talking about, as a marketing team, your CPM range — what you think you should be targeting. Say there are three marketers that all compete in the same space, the same industry. One's targeting a $10 CPM, one's at $5.00, one's at $2.50 — there's a 4X difference in the audience you're even starting with. The driver of growth is reach, we would say. We know that reach drives growth. How many people can we get top-of-mind awareness, preference, and intent with? Ultimately we're trying to drive sales, but most people are not shopping for your product or service today. So if right from the get-go we're cutting that addressable audience in half or more, we're just dealing with a wildly different reality than a competitor that's starting with a funnel that's 4X the size of ours.
Elena: So maybe — and you'd argue it's not that not enough marketers look at reach, but not enough of them are valuing it?
Angela: Yeah. I think there's so much conversation around strategy and consumer audience and maybe audience segments and where do we find them, and then the media just comes at its cost. And we question those costs a lot. And I think that's what's made us successful as an agency and why our clients see success and why they see so much reach for their dollar. But put more emphasis on what you think that CPM should be. And are there ways that you can ultimately extend that reach and drive more growth for the brand?
Elena: Yeah. I know we mentioned this earlier, but there's kind of an opportunity for brand marketers to learn from performance marketers a little bit too, because you think a performance marketer is probably going to realize sooner: okay, maybe this high CPM is leading to worse business outcomes. So I feel like this belief system sort of changes according to what you hold your marketing accountable to.
Matt: Sometimes too, as the data guy, it's easy to just be unemotional about it. I don't do the creative, I don't do the fancy stuff — I just look at the numbers. If I have a million dollars and there are three plans in front of me, one's at a $2 CPM, one's at a $5, one's at a $10 — and it's all on TV, commercials on a wall — you're talking about 500 million impressions compared to 100 million impressions. And again, if you can get the same thing but way more impressions, who wouldn't want the 500? Sometimes you just A) test it, but B) take the emotion away from it. If it's in the same environment, there's just so much upside to be had.
Elena: Agreed. Alright, to wrap us up here with something a little more lighthearted — what is something cost-effective in your life that just massively over-delivers? Let's go: Catherine, Matt, Ange, and me.
Catherine: For me it's a toss-up between sleeping and walking — they're both free. But sleeping is super cozy. It comes with the best blankets that money can buy, my two adorable dogs that you can kind of see here in the background. I always feel happy when I'm sleeping, I always feel calm and relaxed — I mean, I assume I am feeling that way. But on the other hand, walking's also free. It can be done literally anywhere. I don't know about you guys, but it helps clear my head, it helps solve at least half my life problems, and somehow it manages to produce some really kick-ass ideas. So between those two things, those are definitely the highest ROI activities that I engage in.
Matt: Could have probably guessed this — it's cliché or on brand or whatever you want to call it — but a good spreadsheet. My whole life is in Excel. I have a 2-year-old. What did I do? I created a spreadsheet of every diaper brand, the cost, how many diapers — and it saved me hundreds of dollars. That's just one example. You don't want to know how many spreadsheets I have for every facet of my life, but it brings me joy, it's cheap, and it saves me money. It's fantastic.
Elena: We're such different people, Matt, but that's great. Okay, Ange, what about you?
Angela: Mine is sort of like Matt's, but it's the most analog version of a spreadsheet, which is a notebook and a pen. Just writing things down, being able to put your thoughts and your lists — it just creates order in my brain, and it continually just beats any productivity app that I've ever tried.
Catherine: You have really nice handwriting too, Ange. If I were you, I would totally keep writing. Just stay analog. That's good.
Elena: I'm the same way. I have a digital calendar and a physical calendar — I just like to have both. But there's something about writing stuff down. It's great. I was actually going to say podcasts — they're free and I learn so much from all of them. They're entertaining. I am obsessed with podcasts. I even listen to podcasts to recap TV shows I just watched. And how valuable is that? It's just a free thing people are doing, including us. So shout out to us, honestly.
Okay, great. Thank you so much Matt and Catherine for joining us. That was fun — just as spicy as I wanted. Thank you so much for joining the pod.
Matt: Thanks for having us.
Catherine: It was fun.