Know for Final 12/6. Know what’s in red.
Impression: a single exposure of an audience member to an advertising unit AKA a set of eyeballs
Flight – period of time during which advertising runs.
Example: If you are running an online campaign for six weeks, then you are running a six-week online flight
Two ways to buy advertising for digital and display:
1) CPC or PPC: Cost Per Click or Pay Per Click. When you purchase an ad on a CPC or PPC basis, you do not pay for the ad to be shown (aka ‘served), you only pay if someone clicks on the ad.
2) CPM: Cost Per Thousand Impressions (do not forget about the word ‘impressions’ when asked what a CPM is). When you purchase an ad on a CPM basis, you pay for every 1,000 impressions (set of eyeballs) that your ad garners. A CPM is the cost to generate one thousand target impressions. Why is it used — it is used to evaluate the relative efficiency of various media. (see below for peanut butter analogy).
CPM = Total Cost / Total Impressions divided by a thousand
Example: RollingStone.com ad gets 12,800,000 impressions a month and costs $75,000 (you must know how to do this calculation):
Step 1: you divide the number of impressions (in this case 12,800,000) by 1,000 (i.e your answer here is 12,800)
Step 2: then divide that number into the cost of the ad (in this case $75,000) — which gives you the CPM or ‘cost per thousand impressions’ (in this case, the CPM is $5.85, that means that for every 1,000 eyeballs, you pay $5.85)
CPMs are used as ‘benchmarks’ to compare costs of various media when building your advertising/marketing plans. In other words, CPMs ‘level the playing field’ when comparing different advertising vehicles (i.e. different publications, tv programs, websites).
Peanut Butter Analogy:
• Think about CPMs the same way you would if you were at the grocery store comparing products before purchases.
• For example – Which is the be]er bargain: the 15 ounce jar of Skippy peanut bu]er at $4.50 or the 24 ounce family size jar of Jiffy peanut bu]er at $6.80?
• You can compare adver&sing vehicles the same way, for instance, which is the be]er adver&sing bargain: the full page ad in Publica&on “A” at $60,000 and 1 million impressions or Publica&on “B” at $100,000 and 2 million impressions? The calcula&on is the same as the peanut bu]er scenario, except your unit of measure will be CPMs (cost-per-thousand- impressions) instead of ounces.
• Of course, if you don’t like Jiffy peanut bu]er, it’s not really the be]er bargain is it? So remember to also seriously consider relevance when choosing your adver&sing (i.e. ensure that the publica&on/channel/website is the right vehicle to reach your target audience).
Another important ‘media math’ term to know is CTR (click-through rate).
CTR: measures the number of clicks advertisers receive on their ads per number of impressions. The higher the CTR, the better your ad performed (in other words, the higher your CTR, the more people clicked on your ad).
CTR formula (you need to know the formula but you will not have to do the calculation):
clicks ÷ impressions = CTR
For example, if you had 5 clicks and 1000 impressions, then your CTR would be 0.5%.
Other misc terms:
ROI: Return on Investment
IO: Insertion Order (the contract that commits you to buying the ad placement)
You do not need to know this for the Final:
When buying advertising — you need to:
1) Create the Ad
2) Place the Ad (buy the ‘real estate’ where the ad will appear)
And you will be dealing with two Closing Dates:
1) Space Closing (you sign an IO which commits to pay for the ad placement)
2) Materials Closing (when you have to submit the actual commercial to the place where you bought the media)