Thank you for taking my question. We are in the process of deploying an OOH Digital Signage network and I have a problem to solve in regards with the CPM of which seems to be critical in the media buy.
We will be deploying 9000 screens one per location, we know that we have 420 people of which will be exposed to the medium per week, 420 x 9000= 3,780,000 people will be exposed weekly. Is this number considered as the reach or unduplicated impressions? We assume it will be both.
We are running a 20 minute loop of content and advertising, of which 5 minutes will be dedicated to advertising and we know for a fact through our resaerch that each individual will be in front of the screen for the full 20 minute loop.
The ads are 15 seconds each therefore, there will be a maximum of 20X15 second ads per 20 minute loop.
We wish to charge a per screen rate per week, for simplifying things lets say $10.00 per screen per week.
We are also asuming that each individual will be exposed to all the adverts as they can not leave the environment or turn it off. Are we safe in saying that each individual will be have a frequency of 3 ads viewed minimum since there may be distractions etc.?
Therefore if we are at all correct the math would be 420 x 9000 x 3= 11,340,000 impressions weekly?
Therefore, 9000 screens x $10.00 per week per screen = $90,000 per week for total network,now if this is right we have to determine the CPM thus taking the total weekly cost $90,000/11,340,000 total impressions will give us a CPM of $7.93.
The question remains can this formula be acceptable towards the media buy or must we completely eliminate the multiplying factor of 3, thus 9000 screens X $10 = $90,000/3,780,000 for a CPM of $23.80?
If the later is the case then we would price ourselves out of the market, do you have any suggestions to my dilema?
Looking forward to hearing from you.
The scenario of forced exposure you propose is
somewhat unsettling and one must wonder what the audience attitude toward the medium's ads will be. If the 420 people are all different and do not see any of the other 9000 screens, then yes, 420 x 9000 is the reach per week and may also be called the unduplicated impressions.
You do not offer any reasoning to support your minimum of 3 ad viewed out of 20 on the loop. If there are distractions, they will probably be welcomed, but that doesn't lead to any particular frequency assumption. Frequency is the not an issue here. For impressions one assumes one showing of one ad to one person = one impression. Guru would use 20 as the base of your impressions inventory, but each advertiser will only care about what impressions their own as gets. Apparently this would be 420 x 9000 or 3,780,000 as you said.
If you charge this advertiser $90,000 that's a cpm of $23.80 as you said and it certainly is too high. But if you want to make $10 per screen per week, you will only charge each of your 20 advertisers $0.50 per screen per week or $4,500 for a very reasonably cpm of $1.19. You would be charging each of 20 advertisers this way.