How to Calculate Cost per Rating Point (CPP)
The cost per rating point, also known as CPP, refers to the cost it will take to reach a certain desired goal and/or objective. Let's say you are looking for the cost it will take to reach 1% of your audience in ads and print magazines. The CPP is very helpful when it comes to planning out your media budget.
Cost per Rating Point (CPP) Considerations
A few things are considered with this. You have to look at the basic internal perimeters. This refers to the media placement and how well it did by being placed in a specific media outlet.
- How many people are using the media outlet?
- How many of these people are men?
- How many are women?
- Which of the target demographics is being reached the most for an ad campaign and audience?
You also have to look at all the numbers in total. Look at how much of your demographic reach was attainable. Did it go above the original demographic numbers? Did the numbers go down? When you look at these numbers it'll give you an idea of how much a company still needs to spend.
Purpose of CPP Calculation
The main purpose of this rating is to determine if the numbers are telling a company the truth. Is a company spending more than what they need to just so they can reach their target audience media number goals? Do they need to spend more? Once these numbers are seen, a company can determine which direction they need to go.
This includes the amount of money being spent on media placement. It's also meant to determine if the company is meeting, or has already met, the objective or goal they have set for a specific campaign.
The actual calculation for CPP involves taking the cost of of total advertising campaign cost and dividing it by Gross Rating Points, or GRP. The GRP is a calculation that determines the amount of people within an intended audience that the ad might have reached.
There are no different types of CPP calculations, only the one laid out above. It's important to note that this is primarily for budget and money purposes. It is not proven to reach a certain audience at a specific time. It's also not proven to reach a certain demographic over and over. It's only good for keeping a company's budget at a minimum for media and ads.
Additional Information to Consider
There are a few ways the CPP can help out a company beyond budgeting. First is the barriers to accuracy. As mentioned above, there are some serious blockages which can happen when looking into the accuracy. This tool helps to remove these barriers, this way the numbers are more concrete and solid.
The CPP can help handle any and all blind spots that might pop up. History has shown that many companies end up failing in their numbers due to unforeseen blind spots. The CCP helps to avoid all of this. As each company removes their blind spots, the numbers and demographics end up becoming more solid. This way you know who exactly is a fan of your product and who is not.