Cost Per Thousand (CPT): A Metric from Media Planning
The Cost Per Thousand, abbreviated as CPT (or CPM – Cost Per Mille), indicates how much budget needs to be invested in an advertising measure to reach 1,000 people in a target audience.
It is a fundamental measure of the cost-effectiveness of an advertising medium. Every advertiser will try to buy their contacts as cheaply as possible, i.e., at a low CPT. But caution: The calculated value says nothing about the quality of the contacts. The more specific the client’s target audience, the higher the Cost Per Thousand typically is.
Formula for Calculating the Cost Per Thousand:
Advertising costs divided by gross reach, multiplied by 1,000
Example:
A newsletter has 100,000 subscribers, and the ad placement costs 1,000 EUR. This results in the following Cost Per Thousand:
In this example, the advertiser pays 10 EUR for each display.
The CPT as a Comparison Metric for the Media Plan
The Cost Per Thousand is a comparison metric used to relate costs in a media plan. The Cost Per Thousand is used across all media channels, both offline and online. Even in the online segment, prices are often quoted with a Cost Per Thousand. This applies to both mailings and Display Ads. Here, you can compare the corresponding prices very well.
Influencing Factors for the CPT
The level of the Cost Per Thousand depends on factors like reach, the quality of the medium, and the advertising medium itself. For example, a Mega-Light has a higher CPT than a large-format ad, and a wallpaper ad has a higher CPT than a skyscraper ad. Placement also influences the Cost Per Thousand. For example, a cover page is usually priced higher than a page in the interior, and a rotation of display ads is cheaper than a fixed placement.
Budget Planning with the CPT
Using the Cost Per Thousand, media plans can be better compared – even cross-media. Media planners can estimate how much budget is needed for each medium based on the CPT. Of course, this assumes that the technical details, such as desired placement and advertising medium, are aligned with the client. But caution: the contact price says nothing about the quality of a medium, it is merely a quantitative evaluation criterion.
Your Contact for the Right Medium
Do you need professional media planning? Then speak with our media specialist Heike Oeckinghaus (oeckinghaus@trebbau.com, Tel.: 0221/37646 – 391). She will help you position your products perfectly in the market.