Question

Assume the following information: The cost of a full-page color ad in the U.S. national edition of The Wall Street Journal (newspaper) is $327,897 and its U.S. audience size is 1,566,027. The cost of a full-page color ad in the U.S. national edition of USA Today (newspaper) is $207,720 and its U.S. audience size is 1,711,696. The cost of a full-page color ad in the U.S. national edition of Bloomberg Businessweek (magazine) is $148,300 with an audience size of 900,000. The cost of a full-page color ad in the U.S. national edition of Sports Illustrated (magazine) is $396,600 and has an audience size of 3,000,000. The cost of a 30-second ad on the most recent Super Bowl telecast is $3,800,000 and has an audience size of 108,400,000. Using this information, which of the five media alternatives has the highest CPM?

Answer 1

Answer:  

The Wall Street Journal

Explanation:

CPM (cost per mille) is an important marketing measure that tells us what is the cost of advertising in media per thousand of impressions. It reflects on the money we are spending on advertising in order to get a thousand people seeing the advert.

The formula for CPM is:

CPM = (cost of the advertising program) / (audience size) * 1000

We have to calculate the CPM for all media respectively. So we have:

$CPM(Wall Street Journal) = \frac{327,892}{1,566,027} * 1000 = 209.38$

$CPM(USA Today) = \frac{207,720}{1,711,696} * 1000 = 121.35$

$CPM(Bloomberg) = \frac{148,300}{900,000} * 1000 = 164.78$

$CPM(Sports Illustrated) = \frac{396,600}{3,000,000} * 1000 = 132.2$

$CPM(Super Bowl) = \frac{3,800,000}{108,400,000} * 1000 = 35.05$

So, the Wall Street Journal has the highest CPM.