How do you calculate circulation advertising?
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Circulation is the number of paid subscribers that magazines and newspapers have. Broadcast media -- television and radio -- do not use the term circulation; instead, they measure their audiences in terms of viewers and listeners. Advertising revenue is how much money media earn from selling advertising space or time. This is applicable to all forms of media: print, broadcast and digital, such as Internet and mobile. Small business owners need to pay attention to both numbers to calculate how many people they can reach through public relations and advertising efforts. Show
CirculationCirculation is a revenue source for publications and a gauge as to their ability to generate advertising revenue. As a business person, consider circulation figures when deciding whether to buy advertising in a publication. Typically, the higher the circulation figures, the more advertising costs, but you may decide it’s worth it due to high circulation figures. That’s why circulation figures are audited to ensure credible calculations. The Alliance for Audited Media – formerly the Audit Bureau of Circulations – sets circulation rules and performs audits of print and digital media. This includes online publications that charge each time you access them, known as paywalls. ReadershipDon’t confuse circulation with readership, which is a calculation of people who read a publication. Readership is almost always higher than circulation. Readership is measured by the Media Rating Council. It’s important to you as a small business advertiser, because it breaks down readers by demographics. If you want to reach homemakers of a certain age or income level, look at readership levels. Readership also attempts to calculate “pass along” readers; for example, a woman waiting in a pediatrician’s office will read a magazine but she did not pay for it. Print Advertising RevenuePrint advertising revenue has declined overall as of 2012, even for magazines where circulation and readership have still been high. Newspaper print circulation and advertising have both been low, as readers and advertisers have moved to online editions. It is mostly large companies who make up print advertising revenue, while smaller businesses have gone to online ads. This is important as you decide to spend limited advertising dollars; with online ads, your customers can “click through” an ad to go directly to your website or product information. Digital and Broadcast RevenueOnline advertising revenue has risen as digital media becomes more popular. There are also many websites that aren’t news publishers selling online advertising. As of 2012, television advertising revenues declined; in general, TV advertising is cost-prohibitive for small businesses. Radio or audio advertising revenue is also changing as digital radio advertising, both online and mobile, increases in popularity. As a small business owner looking to advertise, following ad revenue trends to digital media can lead you to a bigger audience and a better value for your advertising budget. References Writer Bio Based in Central Texas, Karen S. Johnson is a marketing professional with more than 30 years' experience and specializes in business and equestrian topics. Her articles have appeared in several trade and business publications such as the Houston Chronicle. Johnson also co-authored a series of communications publications for the U.S. Agency for International Development. She holds a Bachelor of Science in speech from UT-Austin. Image Credit Jupiterimages/Photos.com/Getty Images Skip to content
Reach, Frequency, Ratings, GRPs, Impressions, CPP, and CPM in AdvertisingWhat are GRPs, Ratings, Reach, Frequency, and Impressions in advertising? How are they calculated? And how do they relate to each other? When creating a media plan, it’s important to have a firm grasp of these often misunderstood advertising terms, even if they are built into your media planning software. This article aims to give you clear, concise definitions and examples of important advertising terminology: Media Market, Population, Rating, Reach, Frequency, Gross Rating Points (GRPs), Impressions, Cost per Point (CPP), and Cost per Thousand Impressions (CPM). Media CostMedia Cost is the price you pay to present your advertisement. There are many different ways to price media including points, impressions, clicks, leads, actions, days, weeks, months, etc. However, it ultimately boils down to the amount you pay to present your advertisement, which is Media Cost. Media Cost excludes the cost to create the advertisement and other costs. Media MarketMedia Market or Market describes the set of people that could potentially be exposed to your advertisement. The media market is often described using Designated Market Areas or DMAs, which are trademarked by Nielsen. However, Media Market can be any market you define. More on Media Markets… PopulationPopulation is the total number of people in your Media Market. RatingRating is the percentage (0 to 100) of the Media Market that will likely be exposed to your advertisement. Rating is an estimate based on past performance often sourced from surveys. More on Ratings… Average PersonsAverage Persons is the number of people that, on average, will be exposed to each Spot. Average Persons is calculated by multiplying Population by Rating then dividing by 100. SpotA Spot is a single broadcast of an advertisement. Typically, an advertising placement includes multiple spots. Gross Rating Points (GRPs)Gross Rating Point (GRP) is a measure of the size of an advertising campaign by a specific medium or schedule. GRP is calculated by multiplying the number of Spots by Rating. For more, see How to Calculate GRPs – Gross Rating Points. Cost per Point (CPP)Cost per Point (CPP) is a measure of cost efficiency which enables you to compare the cost of this advertisement to other advertisements. CPP is calculated as Media Cost divided by Gross Rating Points (GRPs). For more, see How to Calculate Cost Per Point (CPP). ImpressionsImpressions are the total number of exposures to your advertisement. One person can receive multiple exposures over time. If one person was exposed to an advertisement five times, this would count as five impressions. Impressions are calculated by multiplying the number of Spots by Average Persons. Cost per Thousand Impressions (CPM)Cost per Thousand Impressions (CPM) is another measure of cost efficiency which enables you to compare the cost of this ad to other advertisements. CPM is calculated as the Media Cost divided by Impressions divided by 1,000. ReachReach is the number of people in the Media Market that will likely be exposed to one Spot. Estimating reach is tricky because when you run an ad multiple times, the same person may see the ad more than once but you only want to count them once in Reach. There are many different methods to estimate reach. Most rely on software, such as Bionic’s Media Planning Software, to calculate reach. More on Reach… Reach PercentageReach can also be expressed as a percentage, which indicates the percentage of the Population that is exposed to at least one Spot. FrequencyFrequency is the average number of times the advertisement will be presented to the Reached Population. One way to calculate frequency is to divide the number of Impressions by the Reach. Another way is to divide GRPs by Reach Percentage. Example – Broadcasting 5 Radio Spots in ChattanoogaHere’s an example of all of the above advertising terms in action. In this example, we’re broadcasting 5 radio spots at a cost of $500 each to the Chattanooga market.
Related PostsHow is media circulation calculated?To do this, multiply the net circulation (10,000) by the percentage of households that receive the publication (99 percent), arriving at 9,900. Next, multiply the number of people that receive the publication (9,900) by the percentage of people that indicate they read it on a regular basis (75 percent), or 7,425.
What is advertising circulation?Circulation is the number of newspaper/magazine copies distributed on average in a day. Advertisers need to be aware when deciding which publications to place ads in, because circulation includes both paid circulation, as well as newspapers that are distributed free of cost.
How do you calculate pass along readership?Pass-along Readership
As a rule of thumb, you can determine readership by multiplying the circulation by 2.1 (ex. circulation of 50,000 would result in a pass-along readership of 105,000).
What's the difference between circulation and readership?Circulation is a count of how many copies of a particular publication are distributed. Circulation audits are provided by the Audit Bureau of Circulations (ABC). Readership is an estimate of how many readers a publication has.
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