Ad Cost Picture Is Clouded

Feb 23, 2004  •  Post A Comment

If buying African American media is tricky, the cost advertisers pay to reach black consumers is even harder to grasp.
The perception is that media buys targeted at African Americans command a lower relative advertising cost than comparable general market media buys. While that may be so in some cases, the exact opposite more frequently is true.
The differences come down to how you look at and define African American media buys. If you define them specifically as media that exist purely to serve African Americans, the relative costs are often-but not always-less than comparable general market options.
When it comes to television, not many properties are discretely targeted at African Americans. The one cable network most associated with that audience-Viacom’s BET-does in fact fetch market costs per thousand that are lower than comparable general market cable networks.
The differential can be as much as 20 percent, media buyers said.
Part of that differential exists because of historical patterns. When BET first launched, the demand from mainstream marketers for multicultural media was not as great as it is today and the network had to cut ad deals that were priced competitively at that time. BET has done a good job of closing the gap, but still has some catching up to do, just as a new network-TV One-aimed at African American viewers is launching.
But looked at another way, the cost of reaching black viewers can often be considerably higher than that of mainstream audiences. Since African Americans don’t use only African American media, media buyers often target them through general market buys, including some of the top-rated network TV shows.
While buyers tend to select shows that index high among African Americans, such as UPN’s lineup and some shows on Fox, the cost-efficiency can vary considerably. As a rule, these shows will always index higher among African Americans simply because African Americans are typically a smaller part of the audiences.
On average, the cost-per-thousand to reach African American adults on network prime-time TV is about eight times greater than reaching total adult viewers, while the cost of reaching them on prime-time cable TV programs is about six times higher, according to an analysis of Nielsen Monitor-Plus data compiled for TelevisionWeek.
“The perception is that when you’re buying a specialized market like African Americans, the CPM is cheaper, but over the years, we’ve found the opposite is true-in many cases the CPM is much higher,” said Doug Alligood, senior VP, special markets, at BBDO, New York.
The reason, he said, is simple mathematics.
“Unless you’re buying a show that indexes higher with that audience, the CPM has to be higher because the advertising rates are the same,” he said.