Question

A local radio commercial costs $600 and reaches an estimated 10,250 listeners. A local cable commercial costs $1000 and reaches an estimated 18,500 viewers. Which medium provides the lowest CPM?
a. The radio commercial
b. The cable commercial
c. The radio and cable commercials have the same CPM
d. The CPM cannot be calculated given the limited information provided
e. None of the above

Answer 1

Answer:

b. The cable commercial

Explanation:

CPM or cost per mille is a measure used in advertising to determine how effectively a promotional message is getting to its audience. It is the cost of getting an advert in front of 1,000 people.

In this scenario when we calculate CPM for the radio station

$600 = 10,250 listeners

x= 1,000 listeners

Cross multiply

x= (600 * 1,000) ÷ 10,250 = $58.54

For the local cable commercial

$1000 = 18,500 viewers

y = 1,000 viewers

Cross multiply

y= (1,000 * 1,000) ÷ 18,500= $54.05