Reference library · TV budgeting
Budget Iteration Loop
A Budget Iteration Loop is the repeated recalculation of achievable TRPs against a fixed budget that happens when the cost per point depends on a volume discount tier, and the tier itself depends on the spend the calculation produces. The planner fixes a CPP, computes the resulting TRPs and spend, checks whether that spend still lands inside the tier band that produced the CPP, and reruns with the next tier's rate if it doesn't. The loop stops once the tier assumption and the spend it produces agree.
Worked example
A planner has a €150,000 net budget for a national TV flight. The station's rate card runs three volume tiers: spend up to €100,000 costs €850 per TRP, €100,001–€200,000 costs €780 per TRP, and above €200,000 costs €720 per TRP. Pass 1 applies the entry-tier rate: 150,000 / 850 = 176 TRPs, but that spend sits inside the second tier's band, so the entry-tier price doesn't hold. Pass 2 applies the second-tier rate: 150,000 / 780 = 192 TRPs, and €150,000 falls inside the €100,001–€200,000 band that generated this rate, so the loop converges. The plan closes at 192 TRPs and €780 CPP, 16 TRPs more than a planner would book by leaving the entry-tier rate in place.
How it is used
Planners run this loop whenever inventory is priced in spend-based discount bands rather than a flat CPP, which is standard on TV upfronts and on volume-rebate digital deals. Each pass fixes a CPP, derives the TRPs and the spend that follows from it, then tests whether that spend still belongs to the tier band that set the CPP; a mismatch triggers another pass at the next tier's rate. Two or three passes is normal since rate cards rarely carry more than three or four tiers, and the loop converges because higher tiers only ever lower CPP.
The common mistake
The common error is locking in the entry-tier CPP without checking that the spend it produces actually falls within that tier's band, which understates the final TRP total.