:Media Math Formulas Rating = media vehicle\'s audience ÷ total audience x 100 C

Question

:Media Math Formulas Rating = media vehicle's audience ÷ total audience x 100 Cost Per Thousand (CPM) = cost of an ad ÷ audience (gross impressions) x 1,000 Share-TV's audience ÷ HUT x 100 Cost Per Point (CPP) = cost of an ad-rating Gross Impressions (GI) = (rating x total audience) ÷100 Gross Rating Points (GRP) = sum of ratings Gross Rating Points (GRP) = reach x average frequency Reach-GRP-duplication (if the question is (asked in terms of rating points Reach-GI-duplication (if the question is asked (in terms of raw numbers Average Frequency = GRP ÷ reach (if the (question is asked in terms of rating points Average Frequency = GI+ reach (if the question (is asked in terms of raw numbers

Explanation / Answer

1) Gross impressions is given by the formula = Rating * Total audience /100
Gross Impressions = media vehicle's audience / total audience * 100 * total audience =
media vehicle's audience * 100 /100 = media vehicle's audience
Thus, gross impressions = media vehicle's audience
Thus, we can say that impressions simply mean the total strength of the audience that we are going to have available at the particular media stream where advertisement is planning to be scheduled.

2) Cost Per Thousand (CPM) = cost of an ad / [audience (i.e. total impressions) * 1000 ]

This reflects how much it is going to cost us to reach out to 1000 audience memebrs.

This metric CPM becomes of massive importance to compare across advertisemtns, especially when a large number of audience is being targetted. It will help you truly compare the cost on the basis of its audience reach.
For instance, an ad schedule costing higher can be prefered over an inexpensive ad schedule if the former reaches out to far greater number of people comapred to latter. This comparison can be carried out successfuly by calculating the CPM metric of each ad schedule and then comparing it to arrive at the ad schedule with the lower CPM value which means lower cost per thousand member reach.

3) Cost Per Point: Cost of an ad/ rating = cost of an ad / media vehicle's audince/ total audience
= cost of an ad* total audience / media vehicle's audience

This compares the cost of an advertisement per point or rating by which that particular ad schule has.
This could mean that you may want to chose a more expensive ad over a less expensive one becuase its additional cost is easily compensated with the help of its higher rating (or higher audience of that particular media vehicle)
Thus, CPP helps us evaluate various options of ad schdules on the basis of how much rating it can provide us (i.e. how much audince the particular media vehicle has at its disposal to provide us)

Hence, CPM and CPP are extensie used to comapre efficiency of two competing advertising schedules!

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