What is the value of your ad if nobody sees it? Though some may see OOH advertising as a vanity play to get as many eyes as possible on their brand, there’s actually a system behind it that allows advertisers to target their audience based on a number of factors including demographics, geography, time of day and even people’s behaviors.
In this article, we will teach you the basics of how target audiences are found and defined in OOH, the difference between CPM and CPP and what affects the cost range of buying eyes on your ad displays.
How to Reach Your Target Audience?
Usually, the advertiser already knows what geographic areas and age ranges they want to target, with a few exceptions. A media specialist company like Billups can help advertisers to further refine and define their audience. Some of the parameters may include:
- Age (18+, 25-34, etc)
- Where they live
- Household Income
However, targeting parameters have nearly infinite possibilities that can drill down an audience to whether or not they shopped at a certain store in the last six months, how active they are, and more.
At Billups, we use audience tools to create heat maps that show concentration levels of certain demographics in relation to OOH inventory. Targeting has become more advanced with the use of mobile ad ids that further break out where audiences live and travel during the day. This expands the ability to target based on traffic patterns and capture audiences when they are en route to where they live, work or play, both entering a market (inbound) and leaving a market (outbound).
For example, a running shoe and apparel brand may look at heat maps of where runners live. They may also look at hotspots or Points of Interest (POIs) such as the most popular running trail or local running stores. The brand could then choose to execute their OOH campaign everywhere in that area or could take a hyper-targeted approach by putting the advertisements near a local running store. Or the advertiser could be a bit more tongue-in-cheek and surprising in their approach by putting an ad for running in front of a local fast food restaurant with messaging that says, “You should be running” and test the results.
What is the Difference Between a DMA and CBSA?
Basic OOH planning can be done based on geographic areas and age demographics. Designated Market Areas (DMAs) defined by Nielsen Media Research refer to geographic areas and are how television advertisements are typically bought. CBSAs, pulled from US Census Data refer to audience age groups and are how radio advertisers typically segment and buy their audiences. Although CBSA is primarily used in OOH planning, OOH campaigns can also pull from DMAs to help fold into a multi-channel delivery to allow for greater flexibility in planning. When planning an OOH campaign it is very important to ask whether DMA or CBSA defines the market to ensure optimal market coverage.
Designated Market Area (DMA)
A DMA is a geographic area of the US that represents specific television markets defined by, and annually updated by Nielsen Media Research. There are 210 DMA regions covering the US based on groups of counties and zip codes in which the home market television stations hold a dominance of total hours viewed.
Though CBSAs are more frequently used in OOH, DMAs are often used when wanting an apples-to-apples audience approach for a multichannel marketing strategy that includes broadcast.
Core-Based Statistical Area (CBSA)
Core-Based Statistical Areas (CBSAs), which tend to be the default for Outdoor Advertising, are pulled from US census data and consist of Metropolitan and Micropolitan statistical areas built of urbanized areas, plus any adjacent areas that have a high degree of social or economic integration through commuting. Metropolitan statistical areas have at least one urbanized area of 50,000 or more people. Micropolitan statistical areas have at least one urban cluster of 10,000-49,999 population. There are 362 metropolitan statistical areas and 560 micropolitan statistical areas in the US.
Most advertisers set their goals based on impressions, so it is important to clarify between the two numbers as they can be significantly different depending on how the data is pulled, which could lead to missing out on a unit that would be great for your campaign.
Calculating the Cost of Your Audience: What is the Difference Between CPM and CPP?
Once your target audience is identified, it is important to know how much it will cost to buy that audience.
CPM (Cost Per Thousand) is how much it costs to reach 1,000 people. This includes all audiences, not just those you are targeting. CPM is how much it costs to deliver 1,000 impressions from individuals who notice the advertising on display in a market.
CPP (Cost Per Point) is the cost of advertising exposure opportunities, equal to one rating point in any geographically defined market. Target Rating Points (TRPs) are the target audience impressions shown as a percentage of the market population, in which one TRP equals 1% of the target audience.
CPM = (Total Cost / Total Impressions) * 1000
Cost = CPM * Impressions / 1000
CPP= Total Cost / TRPs
In Out-of-Home advertising, we typically buy based on CPMs. CPP is more commonly broadcast-based but can be used as well. CPMs tell you the total cost of impressions, whereas CPPs tell you how heavily your advertising is saturating the market. For example, if you want to have a $10,000 budget and want to buy 100,000 impressions you could afford a CPM of $10. However, depending upon the units you choose you may have different TRPs that fit within that budget and want to buy units that fit that higher TRP, using CPP. This situation can be used starting with any of your metric goals, whether it's a TRP rate you desire, a number of impressions, or a set max CPM.
This information helps you evaluate your plan and delivery to maximize your marketing budget. OOH as a one-to-many channel tends to have a lower CPM than many other marketing channels, allowing advertisers to spend less to get more.
Want to Learn More About OOH Measurement? Billups Can Help!
Ready to get started on your next campaign? Billups can help you find your target audience where they work, live and play and help you develop effective campaigns that reach your audiences and prove ROI. Submit an RFP today!