Cpp cost per rating point

Cost Per Rating Point (CPRP) — Meaning, Importance & Example

The cost of reaching 1% of the targeted audience in print (advertisements) or any other media vehicle is called cost per rating point (CPRP or CPP). In other words, it refers to the cost of buying one percent of the target population.

Formula for Cost Per Rating Point (CPRP)

CPRP = Cost of the Campaign / Gross Rating Points

CPP is also referred as cost per gross rating point.

CPRP tells you the amount required to be spent in order to reach the desired target audience on various media platforms i.e. CPP lets you to plan your media budget efficiently. CPP also lets you to compare the costs and the efficiency of different outlets.

It also serves as a permanent record of the advertising expenses. The greatest problem with CPP is that it does not ensure that different people will be reached at a particular time or just a single person will be reached repeatedly many times. CPP by itself does not provide any analysis. It is primary for budgeting purpose.

Importance of Cost Per Rating Point

Cost Per Rating Point is abbreviated s CPRP or CPP. Cost Per Rating Point is one of the media and advertising planning terminologies which is an essential measure of the cost incurred by the company through a particular advertisement. The term CPRP holds intrinsic depth which needs to be understood by marketers to be able to find relevance and for the success of the marketing campaign. Media planning ideally requires assessing cost that is incurred to reach one customer in the target group. CPRP is an important framework used which calculates the cost borne by the company to reach/or pass on the message to one individual in the target group. But because it is impossible to find the reach of the ad through exact number of individuals, media planners resort to consider the rating point to get an average measure. It is evaluated as the ratio between campaign cost and gross rating point (GRP). It is used as one of their planning tools by the media planners for:

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СPP (cost per point)

СPP (cost per point) или стоимость за пункт рейтинга — стоимостной показатель, используемый в медиапланировании; представляет собой цену информирования или достижения 1% аудитории. Стоимость пункта рейтинга является основным показателем стоимостной эффективности, в первую очередь ТВ кампаний.

Для расчета данного показателя необходимо знать расчет показателя Рейтинг или Совокупный рейтинг (GRP).

OTS (opportunity to see)

CPT (cost per thousand)

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How to Calculate Cost per Rating Point (CPP)

Laura Lake is a marketing professional with experience working for agencies and as an independent consultant.

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 percent 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.

Different Types

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.

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Cost Per Point (CPP): Definition & Calculation

The devil is in the details, and if you’re planning an advertising budget for out-of-home (OOH) or place-based media, you best pay attention to details such as Cost Per Point (CPP).

CPP is a staple metric used in advertising and is heavily referenced for OOH billboard advertising, TV, and radio media buying. It’s essentially an approximation you can use to plan out your budget, and when used with other metrics, can help you make adjustments to your overall strategy.

So what exactly is CPP, how do you calculate it, and where would it fit into your advertising strategy? Let’s find out.

What is Cost Per Point (CPP)?

According to the Out of Home Advertising Association of America (OAAA), CPP is defined as “the cost of advertising exposure opportunities that equals one rating point in any geographically defined market.” 1

While succinct, this definition might not be practically useful. In layman’s terms, CPP—also called Cost Per Rating Point—gives you the cost of reaching 1% of your target demographic. In other words, it’s the cost of a single rating point, which is, by definition, 1% of your target market.

How to Calculate CPP

CPP calculation is straightforward and can be easily determined using the following equation:

CPP = Media Cost ÷ Gross Rating Points (GRP)

To be sure you’re executing this equation accurately, you’ll need to have a better grasp of the following terms:

• Media cost – This will equate to the overall ad cost of the OOH media.

• Gross Rating Points – GRP refers to how many in the intended target population are exposed to the media.

GRP, in turn, is calculated by multiplying media reach by its frequency.

Essentially, GRP gives you a numerical value that tells you how much of your target audience can actually see your ad—and how many times. For example, if you estimate 20% of your target audience will be exposed to a single billboard (reach), and you deploy three billboards (frequency), the value of your GRP will be 60:

20 (reach) x 3 (frequency) = 60 GRP

Putting it all together, let’s say you have a total media budget of $25,000 for three billboards. Using the same reach estimates above (20%) means you can calculate CPP as follows:

$25,000 (media cost) ÷ 60 (GRP) = $416.67 CPP

Ultimately, within your budget of $25,000, you spent a little under $417 to show your message to every 1% of your intended audience.

A Note on Media Cost

You might come across a slightly different metric than media cost, namely “gross media cost” or “net media cost.” That’s because, a few decades ago, during an era when broadcast TV and radio dominated advertising, CPP was calculated using gross media cost:

• Gross media cost is essentially how much a TV or radio ad costs in total, plus a 15% commission for the media agency that facilitated the placement.

• This 15% fee was eventually phased out, being rendered illegal as an anti-competitive industry standard. However, gross media cost had become so ingrained into advertising metrics that it remained as a piece of outdated terminology.

Media cost typically refers to net media cost or gross media cost—minus the obsolete 15% commission. Nowadays, media agencies use many different pricing methods, and for some (such as performance-based commissions), it wouldn’t make sense to bundle fees on top of the actual CPP calculation media cost.

Use CPP to Adjust Your Strategy

The CPP formula marketing teams use to weigh options isn’t meant to be used in a vacuum. After all, CPP tells you the advertising cost of putting your message in front of 1% of your target market, but it can’t tell you if they actually acted on your ad campaign.

The value of CPP is in measuring the cost efficiency of a campaign or media type. You can see for yourself how CPP can direct your strategy using the example above.

Then, you can use the data you’ve gathered as a side-by-side comparison to inform your next move. Consider the following:

• Scenario #1 – What if you use two billboards instead of the three mentioned above? In this case, your CPP will work out to $625, meaning it’s less cost-efficient to expose 1% of your target audience to your messaging using fewer billboards.

• Scenario #2 – What if you used a different OOH media with a different reach? Let’s say you can buy nine elevator placements at $10,000 with a reach of 40%. That works out to a CPP of $27.78.

Whatever is the most cost-effective for your purposes will depend on your messaging, budget, and goals, among other considerations. Calculating the CPP gives you an approximation you can then use to compare and contrast how much value you can potentially gain from place-based media buying. With that being said, you can also combine CPP with other advertising metrics such as Geopath OOH ratings and Daily Effective Circulation.

Maximize Your Reach with True Impact Media

Now that you’ve mastered the concept of Cost Per Point and how to calculate it, it’s time to put it to the test with an OOH advertising campaign. From airport and taxi advertising to traditional and digital OOH, True Impact Media offers an assortment of advertising mediums to fit the goals of your unique project.

Plus, we don’t just help you get your message out. We offer flexible planning tools and in-depth campaign analytics so that you can optimize your reach and make adjustments where needed.

With millions of outdoor advertising spacing, which one will you choose to relay your message? Start building your campaign with True Impact Media.

1. OAAA. OOH Glossary of Terms. https://oaaa.org/AboutOOH/OOHBasics/OOHGlossaryofTerms.aspx#c
2. The Balance Small Business. How to Calculate Cost per Rating Point (CPP). https://www.thebalancesmb.com/cost-per-rating-point-cpp-2295460
3. Digiday. WTF is a GRP?. https://digiday.com/marketing/what-is-a-grp-gross-ratings-point/

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