Glossary 

Target Audience The subset of the total media universe against which a campaign is targeted.  Target group definitions are fixed by Nielsen (for TV) according to predetermined “cuts,” e.g.: Women 18-49.
Targets (Demographics) can be defined in terms of:
  • Geography

  • Gender and age

  • Other parameters include housewives, children in the home, etc.

  • Print targets may have more granular definitions

Rating A rating is the percentage of the target group watching at a given point in time. 1 Rating Point = 1% of the Target Group. Ratings are reported by channel or program and are tied to:
  • Geography – National, New York, Los Angeles, etc.

  • Target – Adults 25-54

  • Time Period – Dates (days, day-of-week), hour range or program

Ratings provide quantitative measure of the audience levels and are the basic currency for media transactions.  Ratings are a statistical measure of audience and are:

  • Based on a representative sample of the population

  • Values are subject to statistical errors

GRPs & TRPs Gross Rating Points (GRPs) or Target Rating Points (TRPs) are the sum of all rating points for TV spots in a schedule.
  • GRPs are used for household ratings, TRPs for target (demo) ratings

  • Used interchangeably (TRPs may be referred to as GRPs, even if they are specific to a demo)

  Example:

# of Spots HH Rating GRPs
Program 1 3 20 60
Program 2 5 10 50
Program 3 2 15 30
Total 140


Impressions Impressions represent the number of people exposed to a program or spot (expressed in thousands). An impression occurs every time an individual or home is exposed to a commercial announcement. Can be calculated for a schedule as the sum of all exposures for the schedule.


Example for 50(000) target size:

# of Spots HH Rating HH (000) Impressions (000)
Program 1 3 20 10 30
Program 2 5 10 5 25
Program 3 2 15 7.5 15
Total 70

CPM Cost Per Thousand (CPM) is the cost of one thousand impressions delivered by a media schedule.

CPM = Cost of Schedule
  Impressions (000)
 
Example:

# of Spots HH (000) Impressions (000) $/Spot Cost
Program 1 3 10 30 50 150
Program 2 5 5 25 30 150
Program 3 2 7.5 15 35 70
  Total 70 $370

CPM = $370 / 70 = $5.29

CPP Cost per Rating Point (CPP) is the cost of the schedule divided by the GRPs/TRPs delivered by the media schedule.

CPM = Cost of Schedule
  TRPs

Example:

# of Spots HH Rating TRPs $/Spot Cost
Program 1 3 20 60> 50 150
Program 2 5 10 50 30 150
Program 3 2 15 30 35 70>
  Total 140 $370

CPP = $370 / 140 = $2.64

HUT/PUT

Homes Using Television (HUT) represents the percentage of homes tuned to all programs at a given time. People Using Television (PUT) represents the percentage of people in the target tuned to all at a given time period.

Share Share (of audience) – the percentage of the HUT/PUT that are watching a particular show.

Reach Reach is the percentage of unduplicated individuals in a target group that have been exposed to a schedule:

1. At least once,

2. Within a specific time period (usually 4 weeks)

Example:

HH Rating Accumulated Reach Additional Unduplicated
Program 1 20 20 -
Program 2 10 27 7
Program 3 16 33 6
  Total 46 33

Frequency/
Average Frequency
Frequency represents the average number of times a home or individual is exposed to the schedule within a specific period of time.

Frequency = GRPs
  Reach

Sometimes called "Opportunities To See" (OTS). This emphasizes that a respondent can be logged by the ratings service as being present when the commercial is aired, but does not necessarily mean the viewer actually saw the ad, merely had the opportunity to do so.

Example:  Total GRPs of 46 – Reach of 33 – Frequency of 1.4

Affinity Affinity is the index of the spot/program target rating divided by the total universe rating. It reflects a program's popularity among a specific target audience/demo. A program that has a target rating which over-indexes against the rating of the total audience is considered to have high affinity.

Affinity  =      Rating for Target x100
Rating 4+

Flighting Alternating active advertising periods (usually weeks) with periods of inactivity.

Media Mix Optimization Media mix optimization consists of selection of the optimum mix of media to maximize reach/impressions or achieve a media goal at the minimum cost. This is usually done through a program that is able to combine audience and cost data for different media (TV, radio, print, etc.) to determine the optimum mix to deliver against a specific media goal with the minimum budget.

Schedule optimization Schedule Optimization consists of selecting the best combination of individual spots to maximize reach at a set cost or TRP level. Conversely, this can also be done by achieving a specified reach goal with the minimum possible budget.

Spot Length Duration of a TV commercial in seconds.

Equivalent lengths Standard length spots are 30 seconds for TV and 60 seconds for radio. When adding ratings for spots of different lengths, these need to be normalized to the standard length. For example when 15s TV spots are scheduled, ratings for these spots should be adjusted to 50% of the rating of a 30s spot.

Wearout The point at which exposure of an ad begins to lose impact with the Target Audience. The wearout level of spots will be affected by media pressure (TRPs), creative, type of audience, competitive clutter, etc. Research studies estimate that a spot that has received over 2,000 TRPs will show signs of wearout. Newer research sets this value at 1,200 TRPs.

Net vs. Gross Costs In the United States, a net cost is the final negotiated cost to be paid out to media vendors including all discounts but excluding the standard agency commission. Gross cost is the net cost plus the agency commission. The standard agency commission is 15% of Gross (Gross = 100, Net = 85, Standard Agency Commission = 15).

Media Audit Key Performance Indicators (KPI)

Cost KPIs:

Cost KPIs will vary depending on the medium being evaluated:

  • Television and Radio costs are measured on a CPM basis (Network, Syndication and Cable) or CPP (Spot TV and Radio). CPMs and CPPs are usually calculated on the campaign’s planning target and should be prorated reflect the equivalent value of 30 second commercial lengths.

  • Print costs are usually measured on a CPM basis or unit cost basis.

    CPMs are normally calculated based on circulation (number of copies printed and distributed). Ideally, circulation figures should be audited. The two leading print circulation audit firms, not to be confused with media auditors, are ABC (Audit Bureau of Circulation) and BPA (Business Publication Audit International). In some cases CPM may be calculated based on readership.

    When reliable circulation figures are not available, print costs may be tracked on a cost-per-unit basis. A standard unit size needs to be defined, for example, a four color full page for magazines or a junior page for newspapers.

  • Digital display costs are usually tracked on a CPM or CPC (Cost Per Click) basis. It is important to understand how digital display was purchased (for example, geographic or behavioral targeting) and what size and types of units were placed (rich media, in-banner video, etc.). Cost should be compared on a like-to-like basis.

  • Outdoor media costs can be calculated on a CPM basis if accurate DEC (Daily Effective Circulation) figures are available. If not, outdoor costs can be evaluated on a cost per unit basis. Size and type of the board or panel should be compared on a like-to-like basis.

Quality KPIs:

Quality KPIs will also depend on the medium being evaluated. Quality KPIs can be defined based on a company’s or brand’s needs. The following provides a listing of the most common quality KPIs used for auditing purposes.

  • Television Quality KPIs available for evaluation include:

    • Position in Break, where first and last positions are more desirable.

    • Average Rating. In general terms, a schedule with a higher average rating will be considered of higher quality. This is particularly relevant for cable schedules, where an average rating will provide a sense of how many low rated spots in secondary networks were used to achieve the required media weight.

    • Audience Composition/Affinity will provide a measure of the relevance of the programming for the planning target.

    • Percentage of Prime may be used as a measure of quality of the media mix used for a campaign.

    • Other quality KPIs can be defined depending on the specific requirements or goals of a campaign or plan.

  • Other Media

    • Quality KPIs for other media are usually simpler since audience data does not provide the same level of resolution as for TV.

    • Radio quality is usually measured by the percentage of drive time in a schedule based on TRPs or number of spots.

    • Print quality KPIs are usually based on position criteria. For example, an insertion in the first 25% of the magazine will be given a higher score than one in the back of the publication. Covers are usually considered a different type of insertion since there is a significant cost difference vs. a regular page and are evaluated separately.

    • Digital quality KPIs can be defined based on position or type of page.

Control KPIs:

Control KPIs are normally based on adherence to plan parameters and goals, such as:

  • Delivery of TRPs vs. Plan

  • Delivery of CPM/CPP vs. Plan

  • Delivery of R&F vs. Plan

  • Compliance with budget parameters

Other control KPIs that are normally tracked for even/fair distribution are rotation of 15s vs. 30s and distribution of spots within a rotation time band.

Buying Guidelines – KPIs:

When a Buying Guideline Compliance Audit is carried out, the following are examined:

  • Use of restricted programming. Most advertisers have identified a list of programs that they find objectionable or not aligned with their company’s image.

  • Instances of Double Spotting. When two or more commercials for the same campaign air in the same program episode, this is considered double spotting. Double spotting can also be defined as airing two or more spots within a 30 minute or 60 minute block.

  • Separation. As with double spotting, advertisers may require that their spots not air in proximity to each other, even if they air in different programs. Separation guidelines typically require that spots not air within 30 minutes or 60 minutes of each other.

  • Brand Separation. Advertisers may require networks not to air spots for other brands from the same company within a break. This is of particular importance for companies that have multiple brands active in the same category.

  • Competitive Separation. Advertisers normally require that competitors not air in the same break as their brands. Please note that most networks will only agree to guarantee any of the separation guidelines listed here for 30s spots.

  • Other guidelines may require networks not to air spots before or after specific times of the day. This is particularly important when rotators are purchased.

  • Advertisers may also require that no spots be aired outside of specified flight dates. In a few cases, advertisers may except ADUs and allow them to air in shoulder weeks (one week before or after a flight).

Performance Related Incentive Program (PRIP)
  • A mechanism for tying agency performance to compensation.

  • Media KPIs (Key Performance Indicators) may be used as fact-based evidence to inform the final agreed payment.

  • Payments are often in the form of an extra bonus after fixed costs, overhead and agreed profit margin.

  • A third party audit of the media KPIs (by a credible, objective media auditor) is often seen as an important element in these arrangements.

Quality Panels
  • A grouping of other advertisers seen as peer companies (either direct competitors, like-minded advertisers or aspirational advertisers) against which a single advertiser is compared and benchmarked on a host of quality indicators deemed to be relevant by the client and agency.


Media Cost Pools
  • A grouping of other advertisers culled from a shared database against which a single advertiser is compared and benchmarked on a like-for-like basis.

  • Cost comparisons are often done on a unit basis, a delivered cost-per-thousand basis and/or a guaranteed cost-per-thousand basis.

Right to Audit
  • Just as Sarbanes Oxley guidelines advocate a company incorporate a “Right to Audit” in partnership agreements, advertisers with regard to their media investments executed by their agency should exercise the same rights.

  • This “Right to Audit” can be included as a component in contract language.

    • Example language:

      • [EXAMPLE] Company, at its own expense, shall have the right at all reasonable times during normal business hours and upon at least twenty-four (24) hours advance notice, to audit, to examine, and to make copies of or extracts from the media buying records maintained by Contractor [AGENCY] with respect to the Services described herein.

What is a media audit?

The term “media audit” can apply to a variety of types of reviews and analyses of your media spend in order to provide insights into its effectiveness. The different types of audits are described here however, the following describes media audits in the broadest sense.

A media audit is a review, by an independent third party, of the process and performance of buying and/or planning media. Some media audits focus more on validating that the advertiser received the media that was negotiated and paid for. In cases where there was an under-delivery by a media company, the audit process can identify rebates or make goods due to the advertiser. Other types of audits focus more on the quality of the media plans and buys as well as the effectiveness and structure of their processes and practices. Regardless of the type, media audits should enable collaboration among advertisers, agencies and auditors to provide learnings and guidance which will continuously improve the overall effectiveness and value of a client’s media spend.

There are also media audits that focus on agency contract compliance. These types of audits check that the agency is in compliance with their written contract as it primarily affects bill pay and fee invoicing.

It is common for a media audit to involve a custom blend of the types of services described above.


What is the Media Audit Council?


The Media Audit Council is a non-profit organization made up of US media auditors and created to help clients and agencies better understand the audit types and the advantages of media auditing. MAC member companies bring advertisers an independent evaluation of you largest budget line item – Media. They simplify the complex world of media planning and buying utilizing powerful tools and techniques to help you maintain and improve media value and efficiencies in the long term.


Why should I consider doing a media audit?


For the same reasons you do a financial audit. For any advertiser who is spending a significant amount on media buying, numerous opportunities for improvement inevitably exist, particularly if a media audit has either never been conducted or has not been conducted in the recent past. Typically, so much time is being spent executing media plans and media buys that objective process checks and results tracking, are not taking place. A media audit provides some or all of the following results and deliverables:

 

  • An objective external review of all media planning and buying activities

  • Independent validation of results and quantification of value received

  • An assessment of the effectiveness of financial controls within the advertising function

  • An assessment of the effectiveness of contract maintenance and compliance including Sarbanes Oxley requirements

  • A thorough and comprehensive review of the entire media process from beginning to end, including the strategic, financial and process components

  • Benchmarking of cost and quality against market norms

  • Comprehensive and accurate cost tracking

  • A documented analysis of media buying history and ongoing evaluations of value delivered from these buys – both quantitative and qualitative

  • Insights and recommendations to all relevant parties including advertisers, agencies and media companies for systematic improvements in the overall value of media delivered

  • Identification of specific areas for potential media savings and/or value improvements

  • Access to intellectual property, highly specialized expertise and technologies that power each member company’s approach

  • Proven track records of improvements in media value delivered. MAC member company clients, on average, report improvements in media value of approximately 10 to 20% and a typical ROI of 10 to 1 on the cost of the media audit

  • An opportunity for a long-term engagement that focuses on continuous improvement in the value of media delivered to the client


What are the different types of media audits that are performed in the US today?

Please click here for a clear definition of the four types of audits performed in the US today.


What does a media audit cost?


  • Numerous factors contribute to the cost of an audit. They include:

  • Type and scope of audit

  • Audit frequency

  • Complexity of audit

  • Skills and resources required

  • Travel costs

  • As a result, the potential costs cover a very wide range from as low as $10,000 - 15,000 for a simple one-time check to a range of $250,000 - 500,000 for a comprehensive annual audit program.

What is the average ROI of a performed media audit? 

Clients of MAC member companies report consistent returns in value of media delivered in the 10 to 20% range and higher, which often produces an ROI of 10 to 1 on the ROI of 10 to 1 on the cost of the media audit.