Media Mathematics Formulas

Following below media mathematics are simple formulas. You should be able to know these on top of your head.

CPM (Cost-Per-Thousand)

  • How much you earn = CPM x (Total Impressions / 1000)
  • CPM = Flat rate per month / (Total Impressions / 1000)

CTR (Click-Through-Rate)

  • CTR = (Number of clicks / Number of impressions) x 100

CPC (Cost-Per-Click)

  • How much you earn = CPC x Total number of clicks
  • CPC = Flat rate per month / Total number of clicks

CR (Conversion Rate)

  • (Number of people who took action / Total number of people who clicked on the ad) x 100
  • Average value per visitor = (Conversion rate / 100) x Price of your product

CPA (Cost-Per-Acquisition)

  • Cost to an advertiser = CPA x (Impression x CTR x CR)
  • Average Cost Per Acquisition (CPA) = Average Cost Per Click / Conversion Rate

Cost Per Thousand (CPM)

Cost Per Thousand (CPM) allows a media planner to compare media based on two variables: audience and cost. CPM is used as a comparative device. The lowest cost per thousand medium is the most efficient, all other variables being equal. Oftentimes the media with the lowest cost per thousand are selected, but not always. CPM may be computed for a printed page or broadcast time, and the audience base may be either circulation, homes reached, readers, or number of audience members of any kind of demographic or product usage classification.

1. For print media (when audience data are not available):

CPM = Cost of 1 ad x 1000
Circulation

Because many print media do not have audience research data, this formula is often used.

2. For print media (when audience data is available):

CPM = Cost of 1 ad x 1000
Number of prospects reached

3. For broadcast media (based on homes reached by a given program or time period):

CPM = Cost of 1 unit of time (commercial) x 1000
Number of homes reached by
a given program or time period

4. For broadcast media (when audience data is available):

              CPM =                      Cost of 1 unit of time (commercial) x 1000
Number of prospects reached by a given program or time period

5. For newspaper (when cost of ad is known):

CPM = Cost of ad x 1000
Circulation

How to Find CPM from CPP

Cost per thousand for a broadcast schedule can be determined from the cost per target audience rating point
(abbreviated cost per point or CPP).

Two factors must be known:

  1. CPP, which is simply the cost of the schedule divided by the schedule’s number of GRPs.
  2. The total population of the target audience.

The formula for finding CPM from CPP is as follows:

CPM = (CPP X 100) / Population
1000