Marketing Communications

264 CHAPTER 8 MEDIA PLANNING

to the Roman symbol for thousand. CPM is calculated by dividing the cost of the medium

(the air cost of a 15- or 30-second commercial, the cost of a one-page magazine ad, etc.) by

the medium’s audience. More interesting to know is the cost per thousand in the target market,

represented by CPM-TM. In this case, the cost of the medium has to be divided by the useful

reach:

CPM-TM

Cost of themedium

Useful reach

=× 1000

CPM

Cost of themedium

Totalreach

=× 1000

Suppose a fashion chain wants to reach young females (between 16 and 30 years of age). An ad is inserted in three

women’s magazines, in a TV guide and in a special interest magazine. The following CPMs can be calculated.

Although the CPM for the TV guide is the lowest, calculation of the CPM-TM shows that, for reaching the young

female audience, Woman I may be more cost efficient.

Type of magazine Magazine Cost (€) Total reach (000s) CPM (Useful) reach CPM-TM

Women’s magazines Woman I 3250 230 14.13 115 28.26

Woman II 1995 116 17.19 58 34.39

Woman III 1800 106 16.98 53 33.96

TV guide TV One 3900 585 6.67 117 33.33

Special interest Modern Lifestyle 2260 44 51.36 7 322.8

business insight

Calculating cost per thousand useful contacts

As was the case with the other concepts, only taking CPM and CPM-TM into account can

lead to major errors. CPM and/or CPM-TM may be low because the medium vehicle is very

cheap and does not reach the target medium in an effective way. Using billboards near minor

roads does not cost a lot, but only a very small percentage of the target audience may be

reached.

Media objectives

There is a difference between media and vehicles. Advertising media refer to types of com-

munications channels that can distribute a message. Examples are newspapers, magazines,

TV, etc. On the other hand, vehicles are particular programmes, magazines, etc., such as

The Simpsons, The Osbournes, Pop Idol, Cosmopolitan, Star, etc. This section is mainly devoted

to media, and not so much to specific vehicles. The percentages presented in Figure 8.10

reveal that worldwide TV is the medium to which most of advertising spending is devoted,

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