CPMs
So What‘s the Deal with CPM?
Low CPM. High CPM. Which one is preferable? To answer that question one must first understand the make-up of this figure. According to Erwin Ephron, a leading media consultant, there are five factors that make up the CPM (cost per thousand) value.
| 1. Ad exposure is the probability that the average viewer, listener, reader or looker, as measured, will see or hear the average ad. 2. The second factor is the communication value of that ad exposure. This is the probability that the ad, when seen, will communicate the message. The communication value considers the physical dimensions of different media. 3. The third factor is the message delivery patterns of the medium. This includes timing and reach/frequency. 4. The fourth factor is the diminishing marginal returns to any single medium. 5. The final factor is personal, but not totally subjective. It takes into account the media buyer’s perspective asking questions such as, “What’s it worth to me to do business with these people as opposed to others? Where will the ads be positioned?” |
All of these factors combine to provide the market’s best estimate of the relative media value. Many media buyers believe the media that targets better usually has a higher CPM for that target. The assumption is that media with higher CPM provides a better environment and greater attentiveness. In fact, media buyers will tell you that a high CPM indicates greater value while a low CPM indicates lesser value. This perspective is hardly inviting for outdoor advertising, a medium boastful about its low-cost and unmatched efficiency. Like it or not, this model reflects the current thinking of most media buyers. The answer for outdoor’s improved CPM estimates lies with the work being done by Arbitron and Nielsen to develops out-door ratings.
So which one is preferable, a low or high CPM? The answer is simple. The preferred CPM value reflects the media plan that more effectively reaches a desired target audience regardless of raw cost.
Frequency - Reach - Gross Impressions - GRP - CPMs - DMAs - Geographic Targets - Markets
