Sports & Entertainment Marketing I Name: ______

Obj 3.08: Calculating Cost per Thousand, Cost per GRP, % of Reach

Equations & Examples:

·  Cost per Thousand (CPM) = (Cost of ad x 1000)/# of target audience

Cost of Ad = $10,000

Total Audience (TA) = 2,000,000

CPM = (10,000 x 1000)/2,000,000 = $5.00

·  Cost per Gross Rating Points (GRP) = expenses/GRP

·  GRP = Frequency x Reach % (the number of times an ad runs X the percentage of audience reached)

Expenses = $150,000

GRP = 210

Cost per GRP = 150,000/210 = $714.25

·  Reach % = # of target audience (TA)/total target audience (TTA)

TA = 200,000

TTA = 2,500,000

Reach % = 200,000/2,500,000 = 0.08 or 8%

Practice Problems:

  1. G105 sells a 30-second spot for $500. If the number of listeners is 200,000, calculate the cost per thousand (CPM).
  1. Apple spent $117,000 for 12 television spots on CBS with a total of 240 GRPs (gross rating points). What was the cost per GRP?
  1. What is the percentage of reach for a Foot Locker ad on 94.7 QDR, if the target audience is 875,000 18- 30-year-old males and 393,750 of the target audience is exposed to the message?
  1. What is the GRP if Moe’s runs an ad on G105 10 times and only 50% of the targeted audience hears it?
  1. WRAL sells a 30-second TV commercial during “How I Met Your Mother” on Monday night for $5,000. The number of people watching WRAL at that time is 500,000. What is the CPM?
  1. Milton’s Pizza runs an ad in the Wake Weekly on Thursday. The target audience is 250,000 people in the Wakefield/Wake Forest area. Of that 250,000, only 118,500 people were actually exposed to the ad. What is the reach % for this ad?
  1. O2 Fitness Center wants to increase its membership, so it is planning to run a television ad to promote lower membership fees for a limited time. If the target audience is 939,000 16- to 36-year-old females, and 313,000 of the target audience is exposed to the message, what is the percentage of reach for a local cable-television advertisement?
  1. Lily Mae’s runs a TV commercial on various TWC channels advertising their holiday sales. The ad runs 50 times during the week leading up to Black Friday. Based on ratings, 15,000 people saw the ad during that week, which is 30% of the total audience. Calculate the GRP.
  1. It cost the Wake Forest Red Robin $5,500 to run radio commercials in the Triangle area. The targeted audience was 250,000 people. Calculate the CPM.
  1. Leith Honda spent $100,000 advertising on WRAL TV. The gross rating points for this advertising are 435. What is the cost per GRP?