EBM203
INTEGRATED MARKETING COMMUNICATIONS
Chapter 15
Media Planning and Analysis
Calculations
Lecturer: B Gray
1
CALCULATIONS
COST-PER-THOUSAND METRIC
TEXTBOOK EXAMPLES
Chapter 12 & 15
Slides 3-12
CLASS EXAMPLE
Slides 13-30
SG EXAMPLE – SU 5
Slide 31
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TEXTBOOK EXAMPLES
COST-PER-THOUSAND METRIC (CPM)
Calculation of cost-per-thousand metric (CPM)
Ch 12 p 358
CPM is the cost, on average, of exposing
1000 people to an advertisement in a
Ch 15 p 449
particular vehicle (TV program, radio
program, magazine, outdoor billboard)
CPM
= Ad Cost x 1 000
Circulation
= $300 x 1 000
80 000
= $3,75
Or
Cost of ad ÷ Number of total contacts
$300 ÷ 80
$3,75
3
INTERPRETATION CPM
Stadium capacity 80 000 spectators
Motivation for using a vehicle:
80 000 spectators are potentially exposed, ie., have an
opportunity to see (OTS) an advertising message trailing
from an aeroplane.
Interpretation:
It costs, on average, $3,75 to expose 1 000 football
spectators to an advertisement using an aeroplane
advertising message service. Ad for Brand X, is exposed
on a trailing device extended behind the aeroplane.
4
COST-PER-THOUSAND METRIC
(CPM-TM)
Calculation of cost-per-thousand metric (CPM-TM)
Ch 15 p 449
CPM-TM is the cost of reaching 1000
members of the target audience,
excluding those people who fall outside
the target market
CPM-TM
= Ad Cost x 1 000
Target Audience
= $300 x 1 000
20 000
= $15,00
Or
Cost of ad ÷ No. of target market (TM) contacts
$300 ÷ 20
$15,00
5
INTERPRETATION CPM-TM
20 000 student spectators
Motivation for using a vehicle:
20 000 students sitting in the stadium’s stands will
potentially be exposed (have an OTS) to an advertising
message trailing from an aeroplane.
Interpretation:
It costs $15,00 to expose 1 000 members of the student
spectator target audience using an aeroplane advertising
message service. Advertising message for the opening of
the new student bookstore will be exposed on a trailing
device extended behind the aeroplane.
6
TARGET RATINGS TV PROGRAMS
CPM
Number of households in USA
1 rating point
Therefore
= 102 200 000 m HH
= 1%
= 1 022 000 m HH
ER’s GRP rating (1 wk in Feb)
= 17.9
(ie 17,9%)
Target audience
= 1 022 000 x .179
Therefore
= 18 293 800 m HH
18 293.8m were tuned into ER in its timeslot of Thurs on 2/2/2001
and had an OTS any TV commercial aired during that program
(ER)
A 30 sec commercial costs $425 400 on this program during the 20012001 season
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TARGET RATINGS TV PROGRAMS
CPM (cont.)
CPM is calculated as follows:
Total viewership
30 sec commercial
= 18 293 800 m HH [÷ 1000]
= $425 400
CPM = Cost of ad ÷ No. of total contacts (viewership)
= $425 499 ÷ 18 293.8
= $23,25
8
INTERPRETATION CPM
TV Programme: ER
Motivation for using a vehicle:
18,3m HH potentially had an OTS any TV commercial
aired on this programme on Thurs 2 Feb 2001.
Interpretation:
It costs, on average, $23,25 to expose 1 000 viewers to
an advertising message on the TV programme, ER on
Thursday 2 Feb 2001.
9
TARGET RATINGS TV PROGRAMS
CPM-TM
Assume the target market for Brand X consists of women
aged 18-49 years, ie., 63% of the total audience.
Calculate the CPM-TM
Target market
= Target audience x % representation
= 18 293.8m x 63%
= 11 525.1m female TM
10
TARGET RATINGS TV PROGRAMS
CPM-TM cont
CPM-TM
= Cost of ad ÷ No. of total contacts
= $425 400 ÷ 11 525.1
= $36,91
11
INTERPRETATION CPM-TM
Female target market watching ER
Motivation for using a vehicle:
11 525.1 m female viewers will potentially be exposed
(have an OTS) to an advertising message while watching
the TV programme ER on Thurs 2 Feb 2001.
Interpretation:
It costs $36,91 to reach 1000 members of the female target
market (TM) to an adverting message on the TV
programme ER, on Thurs 2 Feb 2001.
12
CLASS EXAMPLES
Answer the following questions based on the
information provided. All calculations, including
formula, must be shown. Answers must be
rounded off to two decimal places.
13
COST-PER-THOUSAND DATA
Cost-per-thousand data are useful in making
media vehicle selection decisions, in particular
magazines. However, such decisions are made
in conjunction with many other marketingrelated factors which also need to be taken into
account.
14
Question 1
Consider Men’s Health as a candidate
magazine for LaCoste Essential, the new
fragrance for men.
LaCoste Essential
Advert removed – copyright restrictions
15
Question 1 (contin.)
Use the following information to calculate the CPM
for Men’s Health.
Cost of a full colour full page advertisement (exc. 14% VAT) = R39 900
Latest Audit Bureau of Circulation (ABC) copies 2005
= 89 600
Actual readership according to AMPS 2004
= 719 000
(Note the high for this magazine readership: @ 8 per copy)
719 000 ÷ 89 600
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Question 1 (contin.)
COST-PER-THOUSAND METRIC (CPM)
CPM
= Ad Cost x 1 000
Circulation
= R45 486 x 1 000
719 000
= R63,26
Or
Cost of ad ÷ Number of total contacts
R45 486 ÷ 719
R63,26
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Question1 (contin.)
INTERPRETATION CPM
Motivation for using a vehicle such as Men’s Health:
A 719 000 readership (readers) are potentially exposed
to a print advertisement in Men’s Health, ie., 719 000
readers have an OTS an advertising message in this
magazine (a print ad).
Interpretation:
It costs, on average, R63,26 to expose 1 000 readers of
Men’s Health to an advertising message for
LaCoste Essential.
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Question 2
The brand manager for LaCoste Essential is
considering other media options in which to
advertise the new fragrance. Cost comparisons
between several candidate vehicles will be
considered before accepting the media planner’s
recommendations.
19
Question 2 (contin.)
Popular local production, Generations, on
SABC1 between 20:00-20:30 on weekday
nights, is another candidate vehicle for the
fragrance. Generations has a rating of 15.7.
The latest AMPS figures for 2004 show that
approximately nine million households in the
country own television sets. If a 30 second TV
commercial on this channel costs R28 000,
what will the CPM be for Generations? All
calculations must be shown.
20
Question 2 (contin.)
TARGET RATINGS TV PROGRAMS
VIEWERSHIP
Number of households in SA
= 9 000 000m HH
Generation’s GRP rating
= 15.7
Target audience
= 9 000 000 x .157
Therefore
= 1 413 000m HH
1 413 000m were tuned into Generation’s in its timeslot and
had an OTS any TV commercial aired during this programme.
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Question 2 (contin.)
COST-PER-THOUSAND METRIC (CPM)
CPM
= Ad Cost x 1 000
Circulation
= R28 000 x 1 000
1 413 000
= R19,82
Or
Cost of ad ÷ Number of total contacts
R28 000 ÷ 1 413
R19,82
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Question 3
INTERPRETATION CPM
TV Programme: Generations
Motivation for using a vehicle such as Generaions:
1 413m HH in South Africa potentially had an OTS any
TV commercial aired on this programme.
Interpretation:
It costs, on average, R19,82 to expose 1 000 viewers
to an advertising message on the TV programme,
Generations in its weeknight timeslot.
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Question 4
CPM-TM
The marketers of LaCoste Essential have set the
target market for the brand as trendy, young
male consumers aged 18-24 years. Research
figures supplied by the media planner indicated
that this group represents 27% of Generations
total audience.
Calculate the CPM-TM for this programme.
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Question 4 (contin.)
TARGET RATINGS TV PROGRAMS
CPM-TM
Target market
= Target audience x % representation
= 1 413 000 x 27%
= 381 510 male TM
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Question 4 (contin.)
TARGET RATINGS TV PROGRAMS
CPM-TM cont
CPM-TM
= Ad Cost x 1 000
Target Audience
= R28 000 x 1000
381 510
= R73.39
Or
Cost of ad ÷ Number of total contacts
R28 000 ÷ 382
R73,30
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Question 4 (contin.)
INTERPRETATION CPM-TM
Male target market watching Generations
Motivation for using a vehicle such as Generations:
381 510 male viewers will potentially be exposed (have an
OTS) to an advertising message while watching the TV
programme Generations in its timeslot.
Interpretation:
It costs R73,39 to reach 1000 members of the male target
market (TM) to an adverting message on the TV programme
Generations in its weeknight timeslot.
27
Question 6
Calculating reach and frequency
Two very important, if somewhat misleading,
concepts in media planning are:
Reach (how many people?)
and
Frequency (how often?)
NB: See Shimp for difference between R & F
The performance of a media schedule is
therefore measured in terms of reach and
frequency.
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Question 6 (contin.)
According to the media planner, GRPs are
used to describe the gross weight of a given
media effort against a defined target market.
In the case of LaCoste Essential, trendy young
men in the 18-24 age category.
From the following information calculate the
GRPs.
Reach
Frequency
= 75
= 4,6
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Question 6 (contin.)
From the following information calculate the
GRPs.
Reach
Frequency
GRP’s
= 75
= 4,6
= Reach (R) x Frequency (F)
= 75 x 4.6
= 345
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Answers to Study Guide Questions
Study Unit 5
Question 3 – page 119
CPM = R43,75
Question 4 – page 122
4.1 Rating audience = 1 960 000m HH
4.2 CPM = R229,59
4.3 Target audience = 1 215 200m HH
4.4 CPM-TM = R370,31
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