Radio CPM Rates
Radio CPM rates vary across the US and also across the world. The following are some of the facts about the radio industry and what affects the CPM rates.
How Radio Ads are Sold
Companies use different techniques to try and get advertisers onboard, but the following is a general overview. First, the categories of the advertisers are chosen. The selection will depend on the format of the radio station. Advertisers that want to put ads on the radio station will be aimed at the radio station’s audience.
The ads will then be sold to the radio programs. Like TV, the rates will vary depending on the time. The typical way of figuring the campaign expenditure is to divide the sum of individuals with X number of commercials by one thousand. This is multiplied by the market CPM rate.
Factors Affecting Radio CPM Rates
The CPM has been going down for several reasons. The first is that it is simpler to get to 1,000 people today compared to a few years ago. With more local impressions being made, the supply can be bigger than the demand.
For radio stations to survive, they must define a competitive cost per thousand rate for the market. There are other issues that determine what media buyers purchase. With various pricing available, it is not surprising that even online CPM is only a few dollars (save for a few exceptions).
The Internet, Radio and CPM
The prognosis is that many of radio’s clients will prefer the lower expenses offered that is found in local web advertising. However there is something that radio must keep in mind.
Getting a web site hooked up to a radio does not automatically justify heftier web CPMs. Further, a station website should not just present more impressions when they are already getting cheap.
The key is in using metrics and analytics to assess the ad campaign. Using the figures obtained here, the advertiser, the media buyer and the media will get an idea if the money spent is being recouped or not.
By using these figures, radio will be able to thrive and survive in the Information Age. Needless to say, a radio station should employ people skilled in these techniques. Radio must demonstrate to their clients that combining on air ads with web ads works.
The emergence of the Internet has no doubt affected the radio CPM rates. But by learning to adapt to the new environment, the industry will be able to survive.
