Outdoor Math and Audience Measurement

Determining cost per thousand (CPM) or cost per point (CPP)

Cost per thousand (CPM) and cost per rating point (CPP) are comparisons commonly used by advertising planners to analyze a multi-media plan or buy. These are methods by which the costs of various media can be directly compared.

CPM simply means the average cost of 1,000 potential impressions. When compared with other media, the CPM for outdoor advertising is exceptionally low. Likewise, CPP means cost per ration point, or the cost of reaching circulation equal to 1% of the market's population.

To calculate CPM, multiply the average Daily Effective Circulation of a panel (DEC) by the showing period, normally 30 days. Then divide that quotient by 1000 to arrive at the "number of thousands." Finally, divide your cost per panel by this number of thousands.

For example, if
Average DEC = 25,000
Cost per Panel = $455.00
15,000 x 30 = 450,000/1000 = 450M
$550/450M = $1.22 (CPM)

To arrive at CPP, determine the circulation equivalent of one rating point (ie 1% of the population), then divide the monthly circulation per panel by that number to determine the number of rating points delivered by one panel per month. Finally, divide the per panel rate by the resulting number of points to determine CPP.

For example, if
Population = 1,000,000
One Point = 10,000
Average DEC = 15,000
Cost per Panel = $550.00
15,000 x 30 = 450,000/10,000 = 45 Rating Points
$550/45RP = $12.22 (CPP)

Estimating Reach and Frequency

Gallop Math Model for estimating Reach and Frequency
Target Audience Weights

These target audience weights, which take into account the propensity of each group to view outdoor, are used to determine:

Frequency = Target audience weight x daily GRPs x days divided by 100 +2 for Posters or +6 for Permanents +4 for

Rotaries Reach = Target audience weight x daily GRPs x days divided by Frequency

Example:
To determine the reach and frequency of a four week, 50 GRP 30-sheet poster showing addressed to 18-34 year old women,
F = 0.93 x 50 x 28 divided by 100 +2 = 15.02x
R = .93 x 50 x 28 divided by 15.02 = 86.68%

Circulation Hand Counts

Hand counting traffic to determine circulation can be accomplished by utilizing the 15-minute counting method between the hours of 9:00 am and noon or between 1:00 pm and 4:00 pm, Monday through Friday.

These 15-minute counts are then converted to the traditional one-hour count through the use of multiplying factors. Be certain to note the exact starting time of the count since this time will dictate the multiplier to be used. See the tables below.

To calculate 18-hour (illuminated) or 12-hour (regular) circulation, multiply the converted one-hour count by either 10.4 or 7.3 respectively.

The factors are doubled for one-way streets.

Example:
A count taken from 9:41 am to 9:56 am = 527 cars.
From the table, the One-Hour Count Multiplier is 5.14.
527 x 5.14 = One-Hour Count = 2709.
Regular 12 hour DEC: 2709 x 7.3 = 19,775 (Adult 18+ DEC)

Handy to Know

To convert total population figures to Adult 18+ population, multiply by .746
To convert total population DECs to Adult 18+ DECs, multiply by .771
Average automobile occupancy (Load Factor): 1.35 adults.

To convert official 24-hour counts to DEC:

To expand one-hour equivalents to DEC:

Pedestrian Circulation:
Calculating pedestrian circulation requires two separate 30-minute counts at each counting station. The counts must be conducted between 9:00 am and noon and between 1:00 pm and 4:00 pm. The resulting one-hour total is then expanded:

Count both directions for exactly 30 minutes. The factors applied convert two-way traffic to one-way traffic. Bicycle riders are counted as pedestrians.
For example:
(30-minute am count + 30-minute pm count) x 6 = 12 Hour DEC

How Poster Circulation is Verified

The official organization for auditing circulation of Out-of-Home media is The Traffic Audit Bureau for Media Measurement (TAB). The TAB was founded in 1933 as a not-for-profit, tripartite organization by the Association of National Advertisers (ANA), the American Association of Advertising Agencies (AAA) and the Outdoor Advertising Association of America (OAAA). TAB authenticates traffic media. Presently TAB audits 30-sheet posters, eight-sheet posters, bulletins and shelter advertising displays.

Traffic counts are taken according to nationally approved methodology and adjustment factors are then applied to convert those counts to circulation of adults age 18 and over. Although exposure covers all ages, this adult 18+ audit count allows Out-of-Home media to be more easily compared with other media.

Exposure is expressed as Daily Effective Circulation (DEC), specified as either 12-hour (non-illuminated panels) or 18 to 24-hour (illuminated panels). The DEC measurement equates to paid circulation for print media or viewing/listening audiences for broadcast media. This information is published in the form of Plant Operator Statements.

Companies audited within the past three years use the TAB logo in their listings together with the appropriate DEC's. New TAB member companies, or companies whose audits are more than three, but less than four years old, use only the logo or the logo with the term "audit pending:"

In 1992, TAB auditing standards were modified to reflect a population base of adults 18+ with corresponding adult 18+ DECs. Therefore, the populations listed herein are adult 18+ populations, and the DECs shown are adult 18+ DECs.

Glossary of Terms

ALLOTMENTS
Allotments are the number of panels required to produce a given number of GRPs. For example, a 50 GRP showing represents the number of panels required to deliver 50 rating points per day or daily exposure opportunities equal to 50% of the market's population.

DAILY EFFECTIVE CIRCULATION (DEC)
For illuminated panels, adult DEC is defined as the number o persons 18+ exposed to a message during 18-hour directional traffic. For non-illuminated panel, DEC refers to 12-hour directional traffic. To convert 24-hour official tow-way traffic counts to 18-hour adult DEC, multiply the traffic count by .64. Example, 18,000 (24-hour official traffic count) X .64 = 11,520 (18-hour DEC). The conversion factor of .64 automatically converts a 24-hour count to an 18-hour period and total traffic to DEC by applying an average load factor of 1.35 adults per vehicle. (Non-illuminated panels use a .45 conversion factor to accommodate a 12 hour viewing period.)

REACH
Reach is the approximate percentage of a market's or demographic group's population which will be exposed to an advertising message during the period of the showing. A four-week general coverage 30-sheet poster 50 GRP showing will reach approximately 83% of a market's adult population.

FREQUENCY
Frequency refers to the average number of times those reached by a showing will be exposed to the message. The frequency of a four-week general coverage 30-sheet poster 50 GRP showing will be approximately 16.9 times.

RATING POINT
One Rating Point represents 1% of the market's population. For example, in a 100,000 population market, a rating point equals 1000.

GROSS RATING POINTS (GRPS)
GRPs represent the total number of rating points produced by a given media buy.