The perfect sales funnel. Does the formula exist? How can it be built, and how can TV advertising help get predictable and measurable results at every stage of the funnel? Let's discover this and see how TV ads (on both Linear and Streaming TV) can be a solution.

By sales funnel, marketers usually mean a visual representation of the journey potential customers take from first becoming aware of a product or service to the final purchase decision. It maps out the stages of the customer journey, starting with initial contact and ending with a closed deal. The term "funnel" is used because the process typically begins with a large pool of potential buyers that narrows down to a smaller group of actual customers. As potential customers move through the stages, some will drop off, resulting in a progressively smaller number of prospects as they approach the point of purchase. This narrowing effect visually resembles a funnel, hence the name.

The differences between the sales and marketing funnels are that the first describes customers' journeys, and the second describes the marketing team's actions to move potential customers into the sales funnel.

The example of sales and marketing funnel

 is the first step to successful campaigns, so let’s examine every stage of the funnel to understand which problems and tasks can be solved with TV ads and how to build one.

There is no second chance to make a first impression, so let’s discuss the top of the funnel—the Awareness stage. The main goal of the brand is to introduce itself to a broad audience and generate interest. This stage represents the widest part of the funnel, where the largest number of potential customers are introduced to a brand. They may not yet recognize a problem that needs solving but will begin to explore solutions. The awareness stage is crucial because it sets the foundation for the customer journey and influences future interactions.

How TV Ads Can Be Solution For Awareness Stage

 There is no better tool for mass reach than Liner TV. Despite the general downtrend, it still plays a crucial role, especially during important events like Presidential debates or the Super Bowl, where TV ad slots may cost $8 million. 

 TV ads often have higher engagement rates due to their visual and auditory appeal. Viewers are more likely to remember brands that they see on the big screen. That is why linear works not only for brands from the “premier league.” Middle-size or regional brands can use regional broadcast channels.

. Liniar could be a great tool to get new audiences (except those you reached on Google, Meta, and other tools).

 CTV allows advertisers to target specific demographics, interests, or behaviors based on viewer data. This means brands can reach audiences who are more likely to be interested in their products. People were reached in leaner, and there were no duplications.

 CTV ads can include interactive elements that encourage viewers to engage with the brand immediately. For instance, viewers might be prompted to visit a website or download an app using a QR code directly from their TV.

 CTV provides detailed analytics on viewer engagement and ad performance, allowing marketers to refine their strategies based on real-time data.

. With platforms like TV+, brands can reach potential customers and create a halo effect, which is really important at the awareness stage.

The second phase in the customer journey follows the initial awareness stage. At this point, potential customers have already heard or seen something about the brand. They are still not ready to purchase but are interested in learning more about how the product or service can meet their needs or solve their problems.

The primary goal during this stage is to build on the curiosity generated in the previous stage. Marketers aim to provide more specific information about their offerings.

This stage emphasizes educating potential customers about the product's features, benefits, and unique selling points. It helps them understand how the product can address their needs. Businesses can engage prospects through various content types.

How TV Ads Can Be Solution For Interest Stage

 Linear TV ads can effectively capture attention and generate interest among a wide audience. They are especially useful for brands looking to create a memorable impression.

 TV ads allow brands to tell compelling stories that resonate emotionally with viewers, helping to deepen their interest in the product.

 Running ads with different call-to-actions (CTA) in different regions will show which drives more actions.

 Data received after the first awareness stage helps create a more precise targeting-based and detailed product-specific ad. Advertisers can create retargeting ads that reinforce key brand messages to previous viewers.

. Brands can target viewers with personalized and continued storytelling that was started at the awareness stage. For example, an animal feed brand can create an ad that tells about the impact of feed quality on a pet's health for an audience that is engaged with such content topics.

At this point, potential customers have been introduced to a brand or product and started to show deeper curiosity about the proposed product or service. However, they are still not ready to buy and need some more information on how their problems can be solved and needs covered.

The primary goal during this stage is to build on the curiosity generated in the awareness stage. Marketers should provide more specific information about their offerings. It is better to tell them about the product's features, benefits, and unique selling points.

The best TV Ad strategy at this stage is to create product-focused commercials with the brand's differentiators.

How TV Ads Can Be Solution For Consideration Stage

 Use this ad to build a strong emotional connection. 60 sec. TV ads can work here.

 At this stage, streaming ads help reinforce brand identity and messaging, making it more likely that potential customers will remember the brand when they're ready to make a purchase.

The customers are almost ready to buy. They demonstrate clear signals that they are interested in making a purchase but still need reassurance or additional information before finalizing their decision.

Some signals show that the potential clients are in the intent stage, such as adding items to their shopping cart, signing up for product demos, or requesting more information about pricing and features. So what stops them? They may compare different products or brands to determine which best meets their needs. They may be looking for specific features, reviews, or testimonials to help inform their decision.

At this stage, potential customers are likely to conduct more in-depth research, visit websites, read or watch reviews, and seek out comparisons.

How TV Ads Can Be Solution For Intent and Evaluation Stage

 Create ads with strong CTAs (propose limited-time offers).

 Make ads that encourage store visits. Choose regional networks to reach customers.

. Retargeting engaged viewers with conversion-focused messaging.

 Create messages that speak exactly to the audience on the Intentse stage based on user data.

 Use a Brandformance TV approach and combine Liniar and connected TV to catch the attention of all potential customers.

This is the final phase, where potential customers decide to buy a product or service. At this stage, customers are ready to take action and complete their purchase. They may have already added items to their cart or expressed intent to buy. Customers often seek final reassurances about their decisions, such as confirmation of product quality, pricing, and any ongoing promotions. Here, brands should be very careful; the purchasing process should be straightforward and user-friendly, minimizing any barriers that could prevent completion.

Brands should use strong CTAs to guide customers through their purchases. Offering immediate assistance through chatbots or customer service representatives can help address any last-minute questions or concerns.

How TV Ads Can Be a Solution For Purchase Stage

 Linear TV ads can reinforce key messages and benefits that resonate with potential buyers.

Click-to-Action Ads with QR Codes and Deep Links.

 Customers should receive direct links to purchase process guides or chatbots that can assist them.

TV ads drive the sales funnel: Linear TV boosts broad awareness, while CTV enables targeting, retargeting, and click-to-action for conversions.

What is a Sales Funnel? How To Build One in 2025

Big plans look scary and impossible to reach. However, when everything is divided into small stages and created as a step-by-step plan, it is easy to navigate and reach goals, no matter what they are—to increase engagement, boost conversion rate, or improve brand awareness.

We will guide you through every step of the process and explain 

 that is easy to navigate, produces results, and helps you succeed.

 is the process of selecting and scheduling media interactions with a brand’s audiences. A media plan shows how, when, where, and why a brand’s messages will reach target audiences. It involves analyzing various media platforms, such as television, radio, print, and digital channels, to determine the most efficient way to communicate a message to the intended audience. TV advertising media planning includes information such as the list of channels where the ad will be aired - linear or streaming or both (

 ad frequency, type of ad (15, 30 or 60 seconds), the list of videos that will be used for this campaign, the list and descriptions of target audiences and other details.

Crafting media plans involves many nuances. The advertiser should not only understand how to cover audiences’ needs and determine the ads’ frequency but also keep up with the latest trends and create up-to-date advertising.

The main target here is to share information about the company’s news, presentations of new products, important hires, etc., with the audience to work on brand awareness and company reputation.

This type of plan works to show a steady presence in the market. The ad runs over a specific period. The goal of a continuous media plan is to ensure frequent exposure, keeping the brand top-of-mind throughout the year. Key features of continuous media plan:

This type of plan involves alternating between periods of active advertising and periods of no advertising. This works perfectly for seasonal products. For example, garden equipment is usually promoted in spring, just before the gardening season starts. This approach helps to optimize advertising budgets by focusing on times when consumer demand is high.

A pulsing media plan is a mix that combines elements of a continuous media plan and a flighting media plan. This means that while the ad is aired throughout the year, during crucial periods such as peak season, special events, holidays, or product launches, the budget for ads increases, and the company can improve its media presence.

Advertisers prepare this kind of media plan for specific times of the year, such as the Winter Holidays. This plan assumes that demand is actively growing at this time, so the company's main goal is to maximize brand visibility and sales.

Such plans are usually prepared well in advance; for example, media plans for Winter Holidays advertisers start in summer.

This approach assumes that the brand will capture as much media space as possible. The brand purchases all available advertising slots across multiple media channels simultaneously. This approach maximizes impact and reach, as one brand captures the entire media landscape.

The main benefits of such an approach are enhanced recall, increased brand awareness, and competitive advantage, as the entire media landscape is about your brand.

To create a media plan that will make TV ad campaigns succeed, a detailed description of 

The more detailed the media plan, the easier it is to follow and control. The clearer the plan, the more every step is described. Therefore, it’s easier to find mistakes and correct them or update the plan after receiving real-time insights.

It starts with a clear understanding of who the target audiences are. First, marketing research is needed to create buyers’ personas. Some time ago, brands had to provide polls by themselves or rely only on panel data and buy expensive research to build their audience. But now, it is the AI era. Simulmedia uses AI and big data. When crafting media plans for TV ads (for linear or connected TV) with the Simulmedia tool, ad campaigns go beyond typical age, gender, and country; there are more specific identifiers. It is the combination of historical viewership data, audience intelligence, lookalike modeling, and AI that ensures that advertising is seen by an audience interested in a product or brand.

Simulmedia’s TV+ platform helps to find a strategic audience and get better reach and performance outcomes.

Success should be measurable. The most common KPIs for TV ads are usually:

. These metrics help to see the results of media plans, but we need to be careful with them. For example, some advertisers chase lower CPMs. Still, sometimes, it may lead to ineffective placements or over-frequency and ad fatigue. It doesn't work - to look at the numbers separately. The low cost-per-thousand doesn't mean the win; it's better sometimes to have a higher CPM, but be sure that the ad reached the target customer and not just was shown to someone not in the brand’s target for a small price.

A holistic media approach guarantees results.

Creating clear objectives is the next step. Establish specific goals for the TV ad campaign, such as increasing your company's brand awareness.

Next, cost research must be done. Information on production and media buying costs for the brand’s markets should be gathered. Rates from different networks, production companies, and time slots should be compared to identify the best value for the budget.

It is better to divide the budget between production and media buying according to the campaign’s goals. Good production is important, but ensure your ad gets enough airtime to reach your audience. Remember that there are some ways 

 costs, like AI tools or collaboration with freelancers instead of industry stars.

Utilize historical performance data and industry benchmarks to inform your budget allocation. Channels consistently delivering strong ROI should receive a larger share of the budget.

Optimal timing should also be identified. The best time slots for airing ads should be determined, considering that peak times often come at a higher cost but offer greater visibility. However, the focus should be on reaching an audience with the potential to become customers rather than targeting all audiences.

TV ad schedules should be aligned with seasonal trends or special events related to the product or service. Ads should reach the target audience with sufficient frequency to drive action while avoiding ad fatigue.

The selection of channels should align with ad campaign goals, whether they are increasing brand awareness, driving sales, or promoting a new product.

The reach and demographic characteristics of various TV channels should be analyzed. Factors such as the number of viewers, age, gender, hobbies, and interests should be considered to ensure alignment with the target audience. For regionally specific products or services, not only national channels but also those with strong local viewership should be selected

Use a data-driven approach to forecast where your audience will be watching

Systems like Automated Content Recognition (ACR) can be utilized similarly to predictive models. Advanced predictive techniques, including regression models, neural networks, and ensemble models, analyze historical data and trends to forecast future viewing patterns.

Seasonal patterns, such as increased viewership during holidays or major events, should be taken into account. Audience segmentation based on demographics, viewing habits, behaviors, and preferences allows for more tailored forecasts.

The influence of TV program content on viewership should be analyzed, considering factors like program genres, attractiveness indices, and competing shows to optimize ad placements.

Cross-platform measurement should be employed to determine which platforms yield the best results.

Data-driven insights. Platforms like Simulmedia provide advertisers with such insights. This data can be used to adjust advertising strategies dynamically based on current trends.

A few strategies can help us understand networks’ efficiencies. We should choose the one that best suits our specific needs.

Media mix modeling (MMM) can be used to understand the impact of TV advertising on overall marketing performance.

Performance data should be collected and evaluated regularly to identify inefficiencies in current ad placements. This involves analyzing metrics such as cost per thousand impressions (CPM), cost per rating point (CPP), and audience reach to determine where adjustments can be made for better efficiency.

The effectiveness of ads should be evaluated based on the day of the week and position within commercial breaks.

The frequency at which ads are shown should be monitored to avoid diminishing returns. Research indicates that after a consumer sees an ad multiple times, its effectiveness declines.

Different ad formats, such as 30-second spots or 60-second ads, should be considered. Shorter ads can provide higher metrics with fewer expenditures.

Plan approach for cross-platform reach and efficiency

The Brandformance TV approach, which combines linear and streaming TV advertising, should be used to enhance overall performance and growth. This integration allows for a cohesive brand message across all touchpoints.

When the media plan is ready, it's time to start airing advertising and tracking metrics. The media plan shouldn't be run as it was created; optimization is the key. Adapt and adjust your ad campaign to improve the results.

Unique reach and frequency are the key metrics for expanding brand awareness and growth. Unique reach shows how many new customers saw the ad, while frequency measures how many times the same viewer saw this ad.

Maximizing unique reach allows us to reach more potential buyers, but the weak point - is that this metric doesn't show audience quality.

Be careful with frequency; for most brands, 

 would be enough; by making more exposure, advertisers are risking facing ad fatigue.

Not relying only on one channel is the key. Despite the downtrend, linear TV is still a must if broad reach is needed. When advertising on streaming, it’s better not to orient on a few popular channels where brands think their audience is but to use a data-driven approach that will show where and when the audience is actually watching TV. Maybe the ideal customers watch some TV show on HBO at 3 a.m., and brand try to reach them during a football game at prime time. However, to understand this, advertisers need reports from all streaming companies or trusted partners like Simulmedia. The TV+ Cross-channel Delivery Dashboard shows de-duplicated reach across the entire cross-channel campaign, including unique reach from linear TV versus connected TV. Unified reports paint the true picture of how successful a cross-channel campaign is.

Tracking success is an equally important part of media planning and strategy as execution or pre-planning. Without a structured approach to measurement, advertisers risk missing valuable insights that could refine future campaigns and improve ROI. The key question at this stage is: Did the media plan deliver on expectations, and were the campaign goals achieved?

Ensure proper measurement and results insights.

The first step is establishing a clear framework for evaluation. As we said before, advertisers should define key performance indicators (KPIs) when launching campaigns.

Once data is collected, advertisers need to identify gaps between expectations and actual performance. A few key areas for analysis include:

Master media planning with a step-by-step guide, key strategies, and data-driven insights to optimize TV ad campaigns across linear, streaming, and digital.

Media Planning 101 Guide 

When discussing the fastest-growing markets of the next decade, healthcare stands as a clear frontrunner. The global healthcare advertising market, valued at USD 40.11 billion in 2023, is projected to grow at a CAGR of 5.4%, reaching USD 64.21 billion by 2032, according to 

. This growth is no surprise, given the aging global population—by 2050, one in six people will be over 65, compared to the current one in 11, according to the 

. The health challenges accompanying this demographic shift are daunting. 

 forecasts that by 2050, hypertension in the U.S. will rise from 51.2% to 61%, diabetes from 16.3% to 26.8%, and obesity from 43.1% to 60%.

With demand soaring, competition in pharma advertising will intensify. So, what challenges await in targeting TV audiences, and how can advertisers thrive in this evolving landscape? Let’s explore.

Playing by customer rules. The challenges and opportunities in pharma ad

The fragmentation of TV viewership - spread across linear and streaming platforms - presents a dual-edged challenge for pharma TV advertisers. Audiences no longer fit into neat silos; they consume content on their terms, whether it's prime-time linear or on-demand streaming. This disjointed landscape risks diminishing reach and precision unless approached strategically.

, a hybrid approach that merges traditional TV's mass awareness with streaming's measurable, targeted efficiency. This model isn't optional for pharmaceutical marketers navigating strict compliance and niche patient demographics - it's essential.

Tailored messaging is no longer just a best practice; it's the cornerstone of impactful campaigns. HIPAA-compliant targeting, precision audience duplication across channels, and data-backed insights are critical to reaching the right patients while avoiding ad waste. The real opportunity lies in leveraging these tools to maximize reach, ensure frequency balance, and create resonance with both patients and caregivers. Pharma advertisers can navigate complexity and turn fragmentation into a competitive advantage by bridging performance and brand impact.

Unifying Ecosystem. Integrating Linear and Streaming

For consumers, TV is TV—whether it’s live sports on linear or binge-worthy series on streaming. This blurred distinction demands a holistic approach from pharma marketers who aim to optimize reach and minimize waste.

Allocating budgets exclusively to one channel limits impact; the reality is that most audiences engage with both. Marketers can capture the full spectrum of patient demographics by strategically investing across linear and streaming. 

 advanced audience deduplication technology ensures that impressions aren’t wasted, achieving higher unique reach while maintaining optimal frequency.

Live events, like sports or shows, remain a cornerstone of linear TV, making it critical for maintaining mass awareness. Meanwhile, streaming’s precision targeting and data-driven insights allow pharma brands to engage niche audiences effectively. The key is treating these platforms as a unified ecosystem, aligning investment and messaging across channels to amplify brand resonance and performance. This approach turns fragmented viewership into an opportunity for smarter, more impactful campaigns.

Growing business, not metrics. Using Data-Driven Precision

The shift from broad demographic targeting to precise, data-driven methods reshapes pharma advertising. Advertisers can refine their understanding of patient audiences without compromising privacy using HIPAA-compliant tools like anonymized data and clean rooms. Advanced modeling helps pinpoint where and when to engage viewers most effectively. By integrating insights from both linear and streaming platforms, marketers can adjust campaigns in real-time, creating more tailored and impactful outreach strategies. Jason Wittmer, Account Executive at Simulmedia, has more on how pharma marketers can target audiences on TV.

Tailoring Strategies. Navigating Ads During Drug Lifecycle

Pharma advertising requires a dynamic approach, evolving alongside a drug’s lifecycle. Let’s look closer at every stage's most important points (from a tv ad perspective).

The priority in the launch phase is establishing widespread awareness. This is achieved by combining Linear TV's mass reach with emotionally resonant messaging that captures the attention of patients, caregivers, and decision-makers in CTV.

As the drug grows, the focus shifts to leveraging data insights. This includes optimizing performance and refining targeting strategies driven by measurable KPIs like healthcare provider (HCP) visits and new prescriptions.

In the maintenance phase, the challenge is to sustain market share in a highly competitive landscape. This requires balancing ongoing brand awareness campaigns with retention efforts designed to reinforce loyalty and fend off competitors.

The key to success lies in flexibility—adapting strategies as the drug progresses through its lifecycle, ensuring every campaign aligns with current goals. Whether launching a product or maintaining its relevance, understanding the lifecycle is critical to delivering impactful, audience-specific messaging.

Managing Compliance and the FDA’s Clear, Conspicuous, and Neutral Ruling

 introduces a pivotal shift in pharmaceutical advertising. By mandating both audio and visual disclosures of potential risks, this policy redefines how brands communicate with audiences.

For advertisers, it means rethinking traditional 60-second spots, with many now extending to 90 seconds to accommodate these compliance requirements. However, longer ads come with higher costs, making it imperative to balance compliance with creativity.

Maintaining viewer engagement while presenting critical information demands innovative storytelling and strategic pacing. Pharma advertisers must craft transparent and compelling campaigns, delivering compliance without sacrificing the emotional resonance that drives brand connection. This shift underscores the importance of collaboration between creative teams and compliance experts to ensure that ads meet regulatory standards while still effectively capturing audience attention. In an era of heightened scrutiny, compliance is no longer just a box to check - it’s a creative challenge to embrace.

Find out how Simulmedia helps brands navigate these regulatory changes effectively.

Democratizing Pharma Advertising. Providing Accessibility for All

Connected TV has revolutionized access to TV advertising, enabling smaller pharma brands and regional businesses to compete effectively.

Unlike traditional TV’s high entry costs, some CTV services offer the possibility of budget-friendly campaigns that can be tailored to specific regions, patient demographics, or health conditions. Geo-targeting allows advertisers to focus on precise locations - be it urban neighborhoods or rural areas—where their message will resonate most.

 further enhance accessibility by providing measurable solutions that deliver impactful campaigns on a scale previously reserved for large pharma brands. This shift empowers companies of all sizes to leverage TV advertising, making it a viable option for even the most niche markets while maintaining precision and cost-efficiency.

Measuring Success. Implementing The Full-Funnel Approach

The Brandformance approach bridges brand awareness and direct response by aligning top-of-funnel visibility with bottom-of-funnel conversions.

Simulmedia excels at tracking metrics like unique reach, script lift, and precise attribution, offering a clear picture of campaign performance. Through case studies, we showcase how actionable insights from full-funnel measurement optimize strategies, delivering immediate impact while fostering long-term loyalty. By connecting data across linear and streaming channels, we help pharma brands understand how each ad drives patient engagement and outcomes. This holistic strategy boosts ROI and ensures every campaign builds sustainable, measurable success in a competitive market.

The growing market offers immense opportunities but also fierce competition. Securing your share of success demands leveraging the latest advancements and refining best practices. Capturing a customer's attention once isn’t enough—you need to be present at every touchpoint, understanding their needs, addressing their pain points, and being part of their key life moments. In today’s multi-screen world, this means reaching them across every platform without causing ad fatigue—a delicate balance that poses a significant challenge. At Simulmedia, we know how to navigate this complexity, delivering impactful, strategic campaigns that resonate without overwhelming.

Pharma advertising evolves with CTV and data-driven precision, blending compliance, tailored strategies, and cross-platform reach for maximum impact.

Brandformance TV Approach for Pharma Marketing

 has been the gold standard for TV ratings for decades, guiding media buyers and advertisers in tracking audience performance. However, 

 Global’s recent decision to move away from Nielsen in favor of VideoAmp signals a significant shift in TV ad measurement—and it could reshape the industry.

While TV networks have explored alternative measurement providers like iSpot, Comscore, and VideoAmp, these tools have mostly been used alongside Nielsen. Paramount’s decision, however, represents one of the first instances where a major network has chosen to operate without Nielsen—at least for now fully. This could set the stage for alternative measurement tools to compete more directly with Nielsen, offering networks and advertisers more flexibility in how they track and value audience engagement.

Paramount’s decision came after contract negotiations with Nielsen broke down over pricing issues. John Halley, Paramount’s Chief Advertising Officer, explained that Nielsen’s costs had "quintupled over significant parts of [their] business," making the current pricing model unsustainable. This echoes a broader sentiment across the industry: many networks have grown frustrated with the rising costs and perceived limitations of Nielsen’s services.

While Paramount has expressed a willingness to resolve the dispute and potentially return to Nielsen, their immediate focus is on VideoAmp for viewership data. This move highlights the industry's growing appetite for more cost-effective, flexible measurement solutions.

The broader implications for TV measurement

Paramount’s decision underscores two key trends shaping the future of TV measurement:

A new competitive landscape for measurement currencies:

This shift doesn’t suggest that Nielsen will cease to be a major currency, but it does lay the groundwork for alternative measurements to be considered true competitors. If Paramount successfully conducts business without Nielsen, it could inspire other networks to follow suit, accelerating the adoption of alternative currencies like VideoAmp. As these tools become more prominent, they could offer more tailored insights, giving advertisers a clearer picture of audience engagement and ad performance.

Pressure for cost-effective solutions and innovation:

Paramount’s frustration with Nielsen isn’t unique. Other networks may face similar pressures to seek alternative tools that provide more granular insights at a lower cost. As the industry evolves, networks and advertisers may gravitate toward measurement solutions that offer more flexibility and the ability to fine-tune campaigns in real-time.

For media buyers, Paramount’s break from Nielsen is an important reminder that the measurement landscape is evolving. While Nielsen remains the dominant player, alternative currencies are gaining traction, and buyers will likely encounter a mix of measurement tools in the near future.

Staying informed about these shifts will be crucial, as buyers may need to adjust their strategies to account for multiple measurement standards. Tools like VideoAmp offer the potential for more detailed, flexible insights, helping media buyers optimize ad spend and better understand viewer behavior across platforms.

Paramount’s move away from Nielsen doesn’t necessarily mark the end of Nielsen’s reign, but it does highlight the growing momentum behind alternative currencies. As more networks explore these options, the industry could see a more competitive, diverse measurement landscape where Nielsen is no longer the default choice.

This shift is an opportunity for media buyers. As alternative measurement tools continue to develop and compete with Nielsen, they could offer new ways to track and optimize campaigns, leading to better outcomes and a more nuanced understanding of audience engagement.

Ultimately, while Nielsen’s influence will likely continue, Paramount’s decision signals that the future of TV measurement may be more dynamic than ever before. Adapting to these changes and staying open to alternative tools will be key to delivering data-driven results in this new era of TV advertising.

Paramount's break from Nielsen highlights rising costs and growing demand for more flexible, cost-effective TV measurement tools

A Rise of Alternative Currencies Era: Paramount's Break with Nielsen and What It Means for the Industry

Back to basics. Let's kick off our guide with a quick refresher on what CPM is.

Cost per thousand, or Cost per Mille (CPM), denotes the price of 1,000 advertisement impressions. In TV advertising, one impression refers to one individual exposure to an advertisement. The formula for calculating CPM is:

CPM is calculated using the formula: (Advertising cost / Impressions generated) * 1000.

Why do we care about CPM? It is used to assess the ad cost across various television networks and programs. Typically, expressed in dollars, CPM represents the cost of running an ad on a specific program or network for a given period. For a comprehensive understanding of CPM in advertising, you can refer to our 

TV CPMs: Understanding the Cost of Television Advertising

Here, we'll dive deeper into the factors that influence this metric and how to navigate these elements to maximize the efficiency of your TV ad campaigns. CPMs are highly dynamic, affected by variables such as the advertiser base, seasonality, and whether the buy is upfront or scatter.

In a perfect world, we could set the perfect TV ad campaign once and maintain the lowest CPM indefinitely. However, reality dictates otherwise. CPMs fluctuate constantly due to factors like advertiser demand, seasonal trends, market dynamics, etc. Our primary goal is to help you steer through this ever-changing landscape effectively.

Audience size and demographics affect CPM in TV advertising

Larger audiences and targeted demographics lead to higher CPMs due to demand, scarcity, and advertising reach effectiveness. Understanding these dynamics is crucial for advertisers to optimize their campaigns and budget allocations. Competition for smaller audiences is higher, making them more expensive to reach, while larger audiences are cheaper. Consequently, CPM for smaller audiences is higher, and for larger audiences, it is lower.

If your brand’s potential customers are baby boomers, the CPM for your campaign would be lower than if you were trying to reach the 18-25 group on traditional TV.

Here are some examples of CPM for different audiences - 8-25 and 55+, over a period from March 2024 to May 2024. As you can see, linear TV CPMs for 55+ are significantly lower and more stable than 18-25 because they are still relatively plentiful in traditional TV.

The next chart shows us the average CPM for the 18-25 and 55+ age groups across four different genres: Drama, News, Reality, and Sports. The CPM for the 18-25 group is significantly higher in all genres, especially in News, where it reaches close to $800. The CPM for the 55+ group is minimal across all genres.

Programs with the largest audiences typically command the highest CPMs. Prime-time shows, for instance, often boast the highest CPMs due to their broad reach. These shows, airing during the coveted evening hours when most people are tuned in, attract a vast and diverse audience.

The scarcity of ad slots during these highly-rated programs further intensifies competition among advertisers, driving up CPMs even more, especially in the scatter market. Here, last-minute ad buys become a frenzy of competition, with brands vying for those few remaining spots. This dynamic creates a premium environment where only the highest bidders secure their place in front of millions of viewers.

So be ready that during the season premiere of a highly-anticipated show, the season finale of a extremely popular series, Presidential debates, or especially the Super Bowl, CPM will be sky-high.

Here is an example of how the CPM changed due to the May 2024 Presidential Debate.

On this chart, we indexed the previous CPMs to the CPMs of the Presidential Debate and contrasted the previous two months’ CPM relative to it. As you can see from the chart below, CPMs prior to the debate were significantly lower – coming in at x% one month below, and y% two months below. Tentpole events like the Presidential Debate give networks (like CNN) the opportunity to charge significantly higher CPMs for an event that would attract a larger audience versus the status quo.

During festive seasons, such as Thanksgiving and Christmas, CPMs typically rise due to increased consumer spending and heightened competition for ad placements. Especially high CPM would be driven by high advertising demand from such categories as retail, fashion, electronics, travel, and, counter-intuitively, financial services - people might open new accounts or take out loans during this time. Even car purchases see a boost.

Traditionally, ad position within a program or break does not significantly impact the CPM. The position of an ad, whether at the beginning, middle, or end of a break, typically does not alter the cost per thousand impressions. However, potential influences can arise with sponsorships or special placements. For example, if an ad is part of a sponsorship package or strategically placed during a high-visibility moment, it might affect the CPM. Even then, the impact on CPM is not always guaranteed, as it depends on the specific terms of the sponsorship and the perceived value of the placement.

Common challenges in managing CPM for TV campaigns

 CPM is typically negotiated based on a network's sales estimates, which are often inflated.

Networks might need to use Audience Deficiency Units (ADUs) to meet guaranteed CPMs. ADUs are free advertising slots given to advertisers to compensate for viewership shortfalls during the contract period.

Popular shows and peak viewing times have limited ad inventory.

This scarcity drives up CPMs, making it tough to secure placements at reasonable rates.

Advertisers compete fiercely for slots during high-profile events like the Super Bowl.

This competition can significantly raise CPMs, straining the budgets of smaller advertisers.

Traditional linear TV relies on metrics like Nielsen ratings, which may not accurately reflect real-time audience reach beyond basic demographics (age and gender). That is why specific tool, like Simulmedia’s TV+ platform, which helps advertisers work with audiences, is needed

This inconsistency can complicate the assessment of CPM effectiveness.

Broader economic factors can influence advertising budgets and spending behavior.

Economic downturns may lead to reduced ad spending, affecting CPM rates and availability.

While not directly a part of CPM, ad quality and relevance significantly impact its effectiveness.

High-quality, relevant ads are more effective in driving engagement and achieving lower CPMs. Advertisers should continuously produce content that resonates with audiences.

Using data analytics to improve CPM Rates

Utilizing data analytics effectively can significantly enhance CPM rates by focusing on two key strategies:

Through data analysis, advertisers can pinpoint underutilized segments of inventory, such as specific networks or dayparts, where there is low demand but a high concentration of the target audience. These segments often present more cost-effective opportunities for ad placement, as they tend to have lower CPMs compared to highly sought-after slots. By strategically placing ads in these underutilized areas, advertisers can reduce their overall CPM and maximize the value of their media spend.

Targeting high-concentration audience segments

Data analytics also helps in identifying audience segments that are densely populated within certain inventory buckets. Targeting these high-concentration segments ensures that ads reach a large portion of the desired demographic without the premium costs associated with more competitive slots. This targeted approach not only improves ad efficiency but also enhances the effectiveness of the campaign by aligning ad placements with audience behavior and preferences.

Generally, a higher number of impressions should lead to a better ROI, provided that you are effectively targeting the right audience.

Higher CPMs can potentially yield better ROI when the ads effectively engage and resonate with the target demographic. Advertisers must ensure that the CPM costs align with the expected increase in sales or brand awareness. For instance, a strategically placed ad during a high-demand program can significantly boost returns, justifying the higher CPM.

However, measuring ROI from TV campaigns presents unique challenges. Unlike digital advertising, where clicks and conversions are directly trackable, TV advertising requires alternative methods for attribution. To address this, advertisers can use statistics provided by TV networks or leverage platforms like Simulmedia TV+, which aggregates data from various providers. This approach helps in assessing the impact of TV ads more accurately and linking them to sales increases or improved brand metrics.

In this guide, we’ve explored the complexities of CPM (Cost Per Thousand Impressions) in TV advertising, shedding light on its role and implications for effective campaign management. Here are the key points discussed:

 Smaller audeinces and more targeting generally lead to higher CPMs due to limited viewership (makes them harder to find), increased demand, and competition. Broader audiences, while less expensive to reach, often come with a higher CPM.

 The distinction between upfront and scatter markets affects CPM rates. Upfront buys typically have lower CPMs compared to scatter buys, which are more expensive due to limited inventory. However, scatter works better for your timing and provides marketers with a greater degree of control to manage their spend

 High-demand programs and peak viewing seasons drive up CPM rates, making it essential for advertisers to plan strategically to balance costs and visibility.

Discover key factors influencing TV Advertising CPM and how to optimize your campaigns with data analytics, balancing cost-per-reach and CPM for better ROI.

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