Page 240 - DMGT507_SALES AND PROMOTIONS MANAGEMENT

Sales and Promotions Management

Notes It is difficult to compare costs across various media. There is no common standard between CPM
and CPRP to make direct comparison possible. In an attempt to develop standard relative
costing procedures, newspaper and broadcast media have started using the following approaches:

Cost of 1 unit of time 1000
Television: Cost per thousand
Programme rating
Cost of 1 ad space 1000
Newspaper: Cost per thousand
Circulation
Such a cost comparison of media is important. However, inter-media comparisons can be quite
misleading. For example, television can combine sight and sound with motion, and magazines
provide longevity. Attributes of different media make direct comparisons difficult. Other than
cost comparisons, the advertiser must also take into account the specific characteristics of each
medium and the vehicles within the medium.
Comparison based on cost per thousand alone has the potential of leading to over or under
estimation of media cost effectiveness. In the example of two magazines already mentioned,
Competition Success Review has a circulation of 35,36,000, and the circulation of Reader's Digest
is 372,5000. Let us assume that the target market reached by the first is 20% of its circulation, and
the other reaches 50% of the target market. The cost per page of the first is 6000, and for the
second it is 8000.
In spite of cost difference, and no significant difference in total circulation, if we consider the
reach to actual target audience, CPM for RD will be 4.29 and for CSR 8.48. Only the consideration
of cost per thousand and the total circulation figures in this situation would lead to wrong
vehicle choice.
Comp. Succ. Review Reader’s Digest
Circulation: 3536,000 3725,000
Cost per page: 6000 8000
Target market covered: (25 – 45 years of age): 20% 50%
Actual reach to households with this age group: 707, 200 1862, 500
Calculation of CPM:

6000 1000 8000 1000
CPM =
353,6000 372,5000
CPM = 16.96 21.47
Calculation based on actual: CPM = 8.48 4.29
reach to target audience
Magazine publishers often argue, and it is a fact, that more than one person reads an issue and
the actual reach of magazines is much higher. But to estimate the number of people who read a
particular magazine without buying, has the potential to be highly inaccurate and somewhat
difficult to determine. Over the years, managers develop a good idea about how great the reach
of a magazine is likely to be than provided by circulation figures.
Another important aspect of different media is the qualitative value, which CPM figures do not
reveal. CPM may be good in comparing very similar media vehicles, but they are of lesser value
in making inter-media comparisons. Media planners require going beyond figures only because
media planning is not only a science but also an art.

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