How to Figure Radio CPM

Radio advertising buyers need to know the CPM.

The realm of radio advertising encompasses more than ads for car dealerships and furniture stores. Behind the scenes, a flurry of numbers rule the industry. From Arbitron ratings to market share, it's all about the numbers. Similarly, advertising buyers focus on numbers as well. Most importantly, they focus on the cost per thousand, known as the CPM in the industry. With basic math, an advertiser can calculate this number and see the effectiveness of a potential advertising campaign.

Things You'll Need

• Arbitron ratings

Instructions

1. Get the average quarter-hour persons rating of the radio station from the Arbitron ratings. Radio stations provide the Arbitron ratings to potential advertisers.

2. Calculate gross impressions by multiplying the average-quarter hour rating by the number of advertising spots to be purchased.

3. Calculate the cost of schedule by multiplying the number of purchased advertising spots by the cost of one spot.

4. Calculate the CPM. First, divide the cost of schedule by gross impressions. Then, multiply the result by 1000.

References

• Arbitron: Terms for the Trade