Costs and pricing
Part of What connected TV advertising costs and pricing means for English buyers
Connected TV advertising budget method: CPM sums, price drivers and cost lines
A method for budgeting connected TV advertising in England: CPM arithmetic with a £10,000 worked example, ITV, Channel 4 and Sky routes, and the cost lines to price.
What to take away
- CPM is the common unitthe price of one thousand impressions. Divide the media budget by the CPM to see what it buys.
- Quoted CPMs for targeted premium inventory can reach £70 per thousand impressions or higher.
- Production, ad serving and measurement sit outside the media rate unless the quote says otherwise.
- The sums in the worked example are illustrative arithmetic, not rates from any seller.
What sets the price
Connected TV pricing moves with two things: how tightly you target and how good the content is. Inventory prices vary significantly on both. A broad buy in a weak environment costs far less than a targeted buy inside broadcaster programmes.
The IAB UK supply chain guide states that CPMs can reach up to £70 per thousand impressions or higher. Treat that as a ceiling to test quotes against, not a typical rate. Ask every seller which audience, content and ad serving the price covers.
Where the money goes
Broadcast-first publishers such as ITV and Channel 4 sell connected TV inventory alongside programmatic marketplaces. Many broadcasters and streaming providers also offer managed service access, and Sky has opened its AdSmart product to other broadcasters. Each route prices in its own way.
The pricing models a seller offers change the risk you carry. A fixed fee protects the budget but not delivery. A CPM deal protects delivery but leaves total spend open. Compare routes on cost per thousand impressions after fees, not on the headline package price.
Worked example: CPM arithmetic
Divide the media budget by the CPM, then multiply by one thousand. Every input below is illustrative and chosen only to show the sums. None of them is a rate from a seller. Replace them with the figures on your own quotes.
The same budget buys seven times more impressions at the lowest rate than at the highest. Rate alone does not decide value. A cheap impression in the wrong audience still uses up budget without reaching a buyer.
Add a frequency cap to see reach. At four impressions per household, 400,000 impressions reach about 100,000 households. The guide to frequency capping explains how to set that cap for each environment.
Costs outside the media rate
Media is one line of the plan. Creative, ad serving, measurement and clearance each need their own line. A low CPM with no measurement can leave you unable to show what the money achieved.
Use this list to price a quote before you compare it with another:
- Media spend, with the CPM and what it includes.
- Creative production or a re-edit of existing footage.
- Ad serving and platform fees, fixed or as a share of media.
- Measurement and reporting, priced separately if it is optional.
- Contingency for make-goods and late creative changes.
Each line is a place where a cheap headline rate turns expensive. The article on hidden costs covers the extras buyers most often miss, and a budget template turns the list into a plan.
Check the audience behind the price
A premium price needs a premium audience. Barb publishes weekly viewing data, including weekly top 50 programme tables and a weekly viewing summary. Use it to sense-check the audience size behind a quote before you accept the rate.
Then decide how you will prove results. Agree the measurement and reporting approach before launch, and work out the return on investment from the same cost lines you budgeted.
How to read a supplier quote
- Ask which audience and content the CPM covers.
- Ask whether ad serving and measurement are inside the rate.
- Ask what happens if impressions fall short of the plan.
- Convert each quote into impressions per £10,000, as in the table above.
- Add production and measurement, then compare the totals.
Common questions
Two short answers cover the usual doubts about price.
Is the lowest CPM the best buy?
Not by itself. The lowest rate often comes with the broadest targeting and the weakest content. Compare the cost of reaching the audience you want, then add the lines that sit outside the media rate.
Do published rate cards exist?
Rarely. Prices vary with targeting and content, so most sellers quote per campaign. Ask for a written quote that names the CPM, the audience and what the price includes.
