Media involves more mathematics than most of us would care to admit or to do.
The calculations we need in order to function within the industry seems to be an ever-growing list of convoluted names and abbreviations. This is why I take the Countdown Approach [1] and have a cheat-sheet of important definitions and common calculations, all in the hopes that I might eventually learn them via osmosis.
Quick-fire Definitions
- Click Through Rate (CTR)
The proportion of ad impressions that led to a click.
- Cost per Click (CPC)
The Cost per Click of a digital ad that leads to a website or web-page
- Cost per Lead (CPL) / Cost per Action (CPA)
The Cost per Lead generated or action (often a KPI) completed
- Cost per Point (CPP)
The cost to deliver a single rating point
- Cost per Thousand (CPM)
The cost per thousand impressions
- Frequency
The number of times an ad is seen
- Gross Impressions
The total number of times it was possible to generate an impression in a perfect world
- Gross Rating Point (GRP)
The sum of all ratings across a media schedule
- Impression
A single, actually measured, view of an ad. It is possible that one individual can generate multiple impressions
- Impression Share
Similar to SOV, impression share is the proportion of impressions gained compared to the number of impressions that were available
- Net Reach
The number of people who have generated at least one impression - i.e. seen an ad at least once
- Rating
The number of impressions achieved as a proportion of the universe
- Reach (%)
The proportion of people reached in your given universe
- Return on Ad Spend (ROAS)
The number of pounds generated per pound
- Return on Investment (ROI)
The proportionate number of pounds generated per total pounds spent
- Share of Market (SOM)
The proportion of a markets total sales earned by a particular company
- Share of Voice (SOV)
A measure of how big your share of advertising is compared to all your competitors
- Universe / Sample Size
The estimated (or exact) number of people in your target audience
- Click Through Rate (CTR) - The proportion of ad impressions that led to a click
- Cost per Click (CPC) - The Cost per Click of a digital ad that leads to a website or web-page
- Cost per Lead (CPL) / Cost per Action (CPA) - The Cost per Lead generated or action (often a KPI) completed
- Cost per Point (CPP) - The cost to deliver a single rating point
- Cost per Thousand (CPM) - The cost per thousand impressions
- Frequency - The number of times an ad is seen
- Gross Impressions - The total number of times it was possible to generate an impression in a perfect world
- Gross Rating Point (GRP) - The sum of all ratings across a media schedule
- Impression - A single, actually measured, view of an ad. It is possible that one individual can generate multiple impressions
- Impression Share - Similar to SOV, impression share is the proportion of impressions gained compared to the number of impressions that were available
- Net Reach - The number of people who have generated at least one impression - i.e. seen an ad at least once
- Rating - The number of impressions achieved as a proportion of the universe
- Reach (%) - The proportion of people reached in your given universe
- Return on Ad Spend (ROAS) - The number of pounds generated per pound
- Return on Investment (ROI) - The proportionate number of pounds generated per total pounds spent
- Share of Market (SOM) - The proportion of a markets total sales earned by a particular company.
- Share of Voice (SOV) - A measure of how big your share of advertising is compared to all your competitors.
- Universe / Sample Size - The estimated (or exact) number of people in your target audience
Calculations Cheat-sheet:
- Average Frequency
GRPs / Reach
- Change (%)
((New / Old) - 1) OR ((New - Old) / Old)
- Converting GRPs to Impressions
(GRPs / 100) x Universe
- CPA/CPL
Cost / Number of actions or leads
- CPC
Cost / Number of clicks
- CPM
(Cost / Impressions) x 1000
- CPP
Total schedule cost / GRPs (%)
- CTR (%)
(Number of clicks / Number of impressions) x 100
- Digital GRPs
(Unique impressions / Universe) x 100
- Estimated Reach (%)
(Impressions / Frequency) / Universe
- Gross Profit
Total sales value - Cost
- Gross Profit Margin
Gross profit / Number of sales
- Individual Organic Keyword SOV
Sum of Rank average CTR
- Mark-up Percentage
Selling price - Cost of production / Cost to produce
- Overall Organic SOV
um of Individual Organic Keyword SOV's / Number of Keywords
- Reach (%)
Number of people who have generated at least one impression / Universe
- Revenue
Number of units sold x Sales price
- ROAS
Revenue from advertising / Advertising cost
- ROI (%)
(Revenue - Investment) / Investment) x 100
- SOM
Total number of your sales / Total number of sales in the entire market
- Traditional GRPs
Reach x Frequency
- Traditional SOV
Brand advertising (£ or metric) / Total market (£ or metric)
Some Bonus Facts
- Total UK population over 15 years old (2019) - 52,941,000
- Proportion of men to women - 49:51
- Population Proportions by age group:
- 15 - 24: 14.39%
- 25 - 34: 16.55%
- 35 - 44: 15.32%
- 45 - 54: 16.86%
- 55 - 64: 14.53%
- 65+: 22.35%
Some Bonus Facts
- Total UK population over 15 years old (2019) - 52,941,000
- Proportion of men to women - 49:51
- Population Proportions by age group:
- 15 - 24: 14.39%
- 25 - 34: 16.55%
- 35 - 44: 15.32%
- 45 - 54: 16.86%
- 55 - 64: 14.53%
- 65+: 22.35%
Average CTRs by rank according to AWR: https://www.advancedwebranking.com/ctrstudy/
[1] Countdown contestants are advised to quickly jot down the 75 times tables when they eventually sit down at those shiny hallowed desks. Presumably, this is so they aren't seen attempting to count 75 x 7 on their fingers like the rest of us mere mortals at home.