CPM and Composition Problems

Quiz #1

CPM and Composition

These problems help you practice calculating overall CPM, and also use composition numbers to quantify smaller audiences and how to calculate the CPM for those audiences.

The important thing to note, with these kinds of problems, even if you are measuring the CPM for a smaller subset of the overall audience, the cost of the ad remains the same.  Just because you only want to measure your CPM vs. a portion of a media audience, doesn't mean that they are going to change the price for you.

(Problem setups and answers are the end of the post)

 

Practice problem 1A:

A half page ad in the Everytown News is $11,890, gross.  The circulation of the Everytown News is 43,895, spread over six counties.  63% of Everytown News' circulation is in Washington County. 

 

What's the overall CPM for this ad, and then the CPM for just the Washington County portion of the buy? 

Practice problem 1B:

Breaking Badminton, the TV show, did well with adults with average incomes of over $100,000.  One :30 second ad in Breaking Badminton costs $21,500 gross, and an average of 425,000 adults saw an ad in the program -- with 32% of them having incomes of over $100,000.  How much is the overall CPM for an ad in the program, and the CPM for reaching Adults with $100,000 incomes and up? 

Practice problem 1C: (a little twist in this one)

An ad on the video board during a football game at Football U stadium costs $1,125, gross.  Usually, about 10% of those attending games are from the opposing school.  If there are a total of 102,381 fans at the game, what is the CPM for reaching just the home team fans at the game? 

Practice problem 1D (another little twist)

You can buy a sponsorship on the home page of weatherwatching.com for a month for $75,900, gross.  In a month, an average of 1,234,000 consumers visit the page.  However, about 37,500 of those visitors are classified as Weather Enthusiasts (people who really, really are into the weather).  

 

What is the CPM for reaching Weather Enthusiasts, as well as the overall CPM?

Practice problem 1E (this one is really, really tricky, with several calculations needed)

A full page ad in LookACelebrity! magazine costs $325,500, gross.   The circulation of LookACelebrity! magazine is 2,457,000, and it has 9.56 readers per copy.  15% of their total readers are Men 18-49 and about 18% of the total readers are Women 18-49. 

 

What is the CPM for Adults 18-49?  What the CPM for the TOTAL Audience of LookACelebrity! magazine?

 

Setup and answers

 

Note that the overall formula for CPM is Cost divided by Audience (in thousands).

In all the problems below, the audience has already been divided by 1,000. 

For instance, in Problem 1A, 43,895 divided by 1,000 = 43.895

Problem 1A Solution:

Overall CPM = $11,890 divided by 43.895 = $270.87

Washington County CPM  

First, 43,895 X 63% = 27,654; then $11,890 divided by 27.654 =$429.95

Problem 1B Solution:

Overall CPM = $21,500 divided by 425.000 = $50.59

 

$100K+ income CPM:  First, 425,000 X 32% = 136,000;  then $21,500 divided by 136.000 = $158.09

Problem 1C Solution:

Overall CPM = $1,125 divided by 102.381 = $10.99

Home Team Fan CPM:  First 102,381 X 90% = 92,143; then $1,125 divided by 92.143 = $12.21

(note the twist -- you had subtract the percentage of visiting fans (10%) from the total (100%) to get the percentage of Home Team fans at the game

 

Problem 1D Solution:

Overall CPM = $75,900 divided by 1234.000 = $61.51

Weather Enthusiast CPM  = $75,900 divided by 37.500 = $2,024 

(note the twist -- I just simply gave you the smaller audience, you didn't have to calculate it)

Problem 1E Solution:

Overall CPM = First, to get to Total Audience, multiple 2,457,000 (circulation) times 9.56 (readers per copy) = 23,488,920 total audience, then $325,000 divided by 23,488.920 =$13.83

A1849 CPM = The trick here is when you have M1849 and W1849 you can add those together to get A1849 (you only can do this when the age breakdown is the same, for instance, you can't add M1849 and W2554) 

 

So, in the long way, first, you take the total audience from above 23,488,920 and multiply it by 15% for the M1849 number = 3,523,338 and then by 18% for W1849 number = 4,228,005, then add those two numbers together = 7,751,343, then take $325,000 divided by 7,751.343 = $41.93 A1849 CPM 

The alternative way to calculate for the A1849 CPM is to add 15% (M1849 composition) and 18% (W1849 composition) to get 33% A1849 composition, then multiply 23,488,920 X 33% = 7,751,343, then $325,000 divided by 7,751.343 = $41.93 CPM