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Why would you want to know your cost per medium? When you are in the business of advertising a product or service, the cost can really add up.
If you know the CPM you know what is costing you the money. You can tell if you are spending a lot on the ad, or if you got a great deal.
When you can calculate your CPM, you know you whether you spending the money on the right type of advertising. CPM is the cost of your advertising per 1000 potential people viewing the ad.
If you aim to reach a certain amount of people you can multiply the cost by 1000 to get your total. The more potential customers you wish to reach the cost goes up times 1000. This is an easy equation you can do before or after you run your ad. CPM= Cost of Ad/Circulation*1000.
Audience
You want your ad to reach as many people as possible, and cost per medium can help you track how many people saw/read/know about your advertisement.
Cost per medium is a fair and friendly way to understand the money spent in this business. Advertising may be costly, but it is a cost you want to acquire. New customers are usually customers that will last. Adding to your customer base is the only way to expand your business and your success.
How to use it
When you are advertising something, say a new car. This car has all the bells and whistles and is even a hybrid model. You spent money to make the car, and now you must sell it. In order to buy something as big as a car, or anything else for that matter, you must know what it is you are buying.
Commercials, magazine ads, newspaper articles, all of these are tools in which you may spotlight your new product. The people you do reach will either like the car or not, but the fact is that you reached them. You want to reach as many people as possible so that you have more of a chance of someone liking the car enough to come down and buy one.
This is where cost per medium comes in. You pay for your advertising to reach however many people you want to or can afford to. You hope the people you reach will want to buy.
Action Steps For Understanding Cost Per Medium
1. Have a product you want to share with society for purchase.
2. Do your research and figure out just how many people you want to or can afford to reach.
3. Put the ad out and see how many people respond.
4. Analyze results for future advertising in that area. How many responded? How much did you spend? Can you afford to spend more in the future?
Important Points About Understanding Cost Per Medium
- Reach those customers with the demographics and psychographics that are most likely to want and need your product.
- Advertise to that group extensively.
- Spend the amount you wish to reach.
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