Why CPM is king

This newsletter comes from the hosts of The Marketing Architects, a research-first show answering your biggest marketing questions. Find us on Apple Podcasts or wherever you listen to podcasts!

 

This week, we're tackling a principle that makes marketers squirm called "Everything works at zero." Translation? If media were free, every campaign would look amazing. Our numbers guy (and VP of Media Analytics) Jordan Rossler joins us to prove why cost can be your secret weapon. 

—Elena  

 

Media cost determines TV effectiveness more than any other factor.         

The price you pay for TV media impacts ROI more than creative, targeting, or any other element of your campaign.  

 

Cost efficiency matters more than you think.                  

The most efficient media strategy often contradicts conventional wisdom. Here's what our data shows for TV advertising. 

1. CPM is king. Lower cost per thousand impressions almost always translates to better campaign performance when buying TV media.
2. The power of one. While seeing an ad multiple times does increase conversion likelihood, each additional impression costs money. Our data shows the first impression delivers the best ROI.
3. Targeting adds hidden costs. Narrower targeting, especially on CTV, can increase your CPM by 2-5x with little to no performance improvement, especially thanks to data inaccuracies.
4. Premium doesn't mean better. Expensive media often signals complexity, not quality. NFL spots might be prestigious, but most viewers of “premium” content also watch plenty of other programming.
5. Great creative should be able to stand alone. If your agency is selling you on "slow burn" creative that only makes sense after 12 viewings, they're overestimating their cleverness. Every ad should deliver value immediately, no multi-frequency storytelling required. 
6. Broad reach isn't waste. What marketers perceive as "waste" is actually positive spill, or reaching tomorrow's customers who aren't in-market today. Remember, most of your audience isn't ready to buy at any given moment. 

Listen in on our discussion.

 

“Report: Three Principles for Effective TV Advertising”      

This report explores how the right media strategy can transform your TV performance, with specific emphasis on cost efficiency as the primary driver of ROI. The section on "The Principal Determinant of TV's Ability to Drive ROI is Cost" remains our most discussed (and controversial) insight. 

Read the report.

 

 

It really is that simple.           

“Less is more." 

— Ludwig Mies van der Rohe, architect