This Week…& Some Good-to-Know Terms

There is a lot of talk about the 'upfront.' Currently, Ad Sales isvery busy trying to sell commercial space for the upcoming year.Agencies and brands generally purchase a chunk of commercial ad timefor the upcoming year rather than making all of the deals on a weeklybasis. AE's usually go out to present to companies in March to tellthem all of the benefits of advertising on VH1's network. Thisincludes making business trips to Chicago, LA and in New York (becausethat is where most of the advertising agencies are located). It makesmore sense and is a lot easier to sell a ton of commercial space forthe upcoming year as a whole, rather than every week. First of all,the agencies do not have enough staff and man power in order to be inconstant contact with all the tv channels to purchase air time fortheir brands on a weekly basis. Additionally, it is a lot easier forus to sell a bunch of units (commercials) for the year rather than ona weekly basis as well.

With the state of the current economy, it is not surprising that theupfront has 'gone on sale' but has not 'sold out.' With bettereconomic times, the upfront would sometimes sell out within the first48 hours of being available. Things are a little different this year.With consumers spending less, companies and their brand have lessmoney, which means agencies generally have a lower budget to spend oncommercial advertising with VH1.

Another important term used a lot around here is the CPM (Cost perthousand). This is how sales and money is measured in the office. CPMis the media cost divided by the number of gross impressions.Basically, it measures what the agency is paying for how many viewerswill see the commercial. CPM can differ based on a lot of factors. Ifa client is purchasing a large number of c ommercials, the CPM can godown (this is the same idea as buying in bulk at BJ's). There is alsoa higher CPM if it is for another network advertising their upcomingshow. CPM's can also vary depending upon the time of day and thepopularity of the show it will be aired during. Unfortunately however,in a bad economy, there is less demand and more supply; and in thiscase the average CPM will go down. Agencies are able to bargain for alower CPM when there is more open commercial space.