Measuring Marketing

Chapter 52 Cost Per Gross Rating Point

Measurement Need

Marketers need to measure the cost per gross rating point, or cost per point (CPP).

Solutioni

The formula for CPP is:

$CPP=\frac{T{C}_{at}}{GR{P}_{Tt}}$

Where

CPP = cost per gross rating point

TCat = total cost of selected advertising in time period t

GRPTt = total gross rating points during time period t

CPP tells advertisers how much it will cost to reach one rating point (1% of the market). In Chapter 42, we illustrated GRPs using a hypothetical World Cup example. In that example, a company’s advertising choice yielded a GRP of 225. If the cost for television ads during the World Cup was $100,000, then the CPP is $444:

$\begin{array}{l}CCP=\frac{\$100,000}{225}\\ =\$444\end{array}$

Impact

Advertisers ...