In paid advertising where the goal is to raise awareness, one of the most commonly used advertising metrics is Cost Per Mille (also known as CPM), which measures the cost of every 1000 ad or media impressions. It is a way to see the efficiency of your ad spend.
In layman’s terms – it measures how much it costs to place your ad 1000 times on a particular page(s) of a target website.
The formula for calculating CPM in advertising is:
A CPM of $80 means that for every 1000 impressions of your ad on the website, you’ll pay the ad network…..surprise surprise….$80. Simple right?
The weakness of this metric is that it’s not factoring in the cost of the advertising pro to create the ad and push the buttons to get that ad live. Feel free to use that line if you’re ever asked to compare with advertising channels by the way!
Wouldn’t it be nice to be able to calculate a CPM $ number for your media & social coverage? Absolutely. The good news is, it’s really easy to calculate.
But first, here are some questions CPM can help you answer…
“How does the CPM for PR coverage compare to other paid channels?"
(my guess is it will look great!)
“Are we getting more or less cost-effective at driving CPM?”
“How does the CPM compare across certain territories if you’re assessing global coverage and the impact of your teams or agencies?”
Work out the total cost of all the PR inputs into the campaign or time period. This usually includes the total salaries/retainer fees of the work.
Calculate the Estimated views of all your media or social coverage. (Ideally this should be for a specific time period or campaign.) I’m not talking about the total reach of the outlets here. I mean the actual or predicted number of views the page or post your coverage appeared on got. Luckily if you use CoverageBook we provide this number for you.
Once you have the total, you can do a simple calculation using the CPM calculator above.
Total cost to generate coverage = $10,000
Total views/impressions of the coverage = 1,500,000
CPM formula = (Total $ spend / total impressions)* 1000
If you’re a CoverageBook user, you can add a custom metric to your report to demonstrate your CPM. Not useful to everyone I know, but it’s key to remember the idea here is not to produce a financial equivalent value of advertising for your coverage. This is not AVE!
But a step forward for somewhere measuring awareness and your cost efficiency of driving it is something you want to measure.
Just a few ideas anyway. Hope that was useful. Let me know over on Twitter.
“It's a big gripe of mine seeing PR saying potential reach is X million or even X billion people. As a brand manager and allocator of budget, you can't take a lot from 'reach data'. We like using the 'Estimated Coverage Views' metric in CoverageBook. It's more realistic which means it's easier for me to compare PR against other areas of marketing.”
Head of Culture & Entertainment, PR & Influencer Marketing, Diageo