posted 08-19-2004 04:59 PM                       

"CPM" stands for "Cost Per Thousand". It's an advertising term that attempts to quantify the value of an intangible. I'm most familiar with the term as it applies to broadasters, who frequently have (at best) only survey information from which to establish how many people are actually listening to their station.

Internet advertising firms have adapted the term by applying the number of "click-throughs" a sponsored ad might get.

None of this has anything to do with how much business you might actually receive as a result of your ad. It only means that the advertising medium is agreeing to put your ad in front of "X" thousand viewers for the price they're asking.

In theory, it can sound pretty good. "We'll put your ad in front of millions for just pennies per thousand". Newspapers are a great example of this, loudly touting their subscription numbers... and the multiplier they apply to each (ie: "2.3 people in every household read our paper!"). However, once you whittle down how many newspapers go into the hands of people who will actually find your ad, and then be motivated to respond to it... the numbers start to look like the kind of business you can expect from a bulk mailing. The value of each response you get (or purchase), applied against what you spent in advertising to attract it, will show the real value of your advertising strategy, when compared to the number of people you paid to reach in order to get those responses in your door.

Pretty much the same in a theatre auditorium. Sure, you've got a captive audience. However, in a room with 300 viewers, how many of them might be likely to run out and buy your particular product... assuming they remember the ad?

It's as much an art as is booking films you think will bring in the crowds. I've always felt there's a certain amount of voodoo in the mix!

GROSS MEDIA VALUE is something I hadn't run into, so I looked it up... and there wasn't much. However, the definitions I could find seemed to fit. As I understand it; If you purchase advertising at "X" dollars per thousand, and the advertising provider is guaranteeing you, say, 50,000 pairs of eyeballs, then your GMV would be "X" times 50,000.

I did find this in a search
(excerpted from)
http://www.alianco.com/Press/091603_HollywoodReporter.html

quote:

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Based on sponsorship rates for events like the Olympics, Propaganda came up with an average CPM of about $19, which the company factors against estimated global audience (also including DVD, cable and network windows) to determine gross media value. That very large figure then is factored against the "Q" factor to determine "net media value" (vs. the actual cost of a promotion).

The difference between the cost of a promotion and its "value" is return on investment. But in order to determine ROI, partners must first negotiate the parameters of a promotion: Is it domestic only, or does it include international? Is it theatrical, or does it extend to the DVD and ancillary markets?

If an end-date were defined at 10 years, then the CPM might be nearly zero. But brand managers have fixed-length seasonal marketing campaigns into which promotions generally must fit. Typical feature film promotions run 12-18 months, for example, and include theatrical and video windows.

"If you take the impressions from theatrical and home video and amortize against the amount of monies the advertiser paid or the total value -- including in-kind and barter, if we're talking media (joint ads upfront) -- that's how you calculate your impressions," Kessel says. "That's part of the deal: the parameters that the advertiser and the producer have to agree upon. The termination date they choose defines their ROI."

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posted 08-19-2004 10:32 PM                       

quote: Jon Miller

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As far as I can tell, once the goods are loaded onto the ship, aircraft, or truck, any shipping costs from that point on are borne by the buyer.

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Correct. Which is why my favourite shipping term is FOB our dock.