Media Math

Formulas
 Table of Contents
Page No.
Netting a Figure……………………………………….. 2
Increasing a Figure………………………………….. 3
Averages…………………………………………………….. 4
Weighting…………………………………………………… 5
Ratings………………………………………………………… 6
HUTS/PUTS/Share………………………………. 7-8
Viewers per Viewing HH………………………….. 9
Reach/Frequency …………………………………. 10-11
GRPs/TRPs………………………………………………… 12
Gross Impressions…………………………………… 13
Cost Per Points (CPP)………………………………. 14
Cost Per Thousand (CPM)………………………. 15
Converting CPM to CPP…………………………... 16
Index…………………………………………………………. 17
Brand Development Index…………………….. 18
Category Development Index……………….. 19
Coverage…………………………………………………….. 20
Composition……………………………………………….. 21
Coverage and Composition..……………………. 22
Formulas Used in Media……………………….… 23

Copyright 1999 Page 1 J. Rodda/FCB San Francisco

Netting a Figure
Most fee structures are based on the
standard commission in advertising of 15%.

FORMULA

• Converting a gross figure to net

Gross figure x .85 = net figure

• Converting a net figure to gross

Net figure x 1.1765 = gross figure
or
Net figure ÷ .85 = Gross Figure

Important Note
DO NOT multiple a net figure by 1.15 to get back to your gross
figure

• This will give you a +15% of your net figure, not 15%
of your gross figure (the larger number)

EXAMPLE

Budget of $352,000 net = $414,128 Gross

Network TV buy of $754,000 Gross = $640,900 Net

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Increasing a Figure
When you need to estimate a rate
increase, apply a premium or increase a
figure, you multiply the original number
by one plus the percentage increase:

FORUMLA

Original rate x (1 + % increase) = New Rate

EXAMPLE

Due to rising paper costs and circulation

increases, Vanity Fair has raised their rates
by 6.5% for 1999. If $46,750 is your current
rate, what will your client be paying next
year?

$46,750 x 1.065 = $49,788.75

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Averages
An Average is a number that is typical of a
group of numbers or quantities. The most
common average used in media calculations is
the mean, but you may occasionally need to
find the median or mode.

MEAN
The sum of a group of figures divided by the number
of figures in the group. Commonly called average.

MEDIAN
The number that occupies the middle position when
the numbers are arranged in their sequential order.
If there are any equal number of figures, the mean
of the two middle figures is used.

MODE
The number or quantity that occurs most frequently
in a given series.

EXAMPLE

There are three media planners age 24, two age 26

and one age 32..

MEAN = (24+24+24+26+26+32) ÷ 6 = 26

MEDIAN = (24+26) ÷ 2 = 25

MODE = 24

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Weighting
Weighting is a method of averaging numbers
to reflect additional considerations. Unequal
emphasis (based on selected criteria) is
placed on the elements averaged.

FORMULA

(Weighting Factor for A x A) + (Weighting Factor for B x B)…..

Sum of Weighting Factors

EXAMPLE

Find the average A25-54 TRP delivery for the

region:

Market % of U.S. A25-54 Delivery

Detroit 3.2 100
Grand Rapids 1.1 400
Lansing 0.9 500
Region 5.2 ?

ANSWER

(3.2 x 100) + (1.1 x 400) + (0.9 x 500) = 320 + 440 + 450 = 233 GRPs
5.2 5.2

Average GRP delivery for region is 233 GRPs

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Ratings
A rating is the audience of a particular
program expressed as a percentage of a
given universe (HH’s, adults 25-54,
etc.). The % sign is not shown.

FORMULA

Rating = Audience of Vehicle

Universe

EXAMPLE

18,410,000 HHs watching “ER”

100,000,000 TV Households (whether set is

on or not)

18,410,000 x 100 =18.4 HH Rating

100,000,000

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HUTS/PUTS/Share
HUTS (Households Using TVs) is the percentage of
Households with TV sets in use. HUTS do not count
multiple TV usage in home.

PUTS (People Using TVs) is the percentage of people

who are watching TV. PUTS are listed by demo.

Share is the percentage of Households Using TV

(HUT) tuned to a particular program.

FORMULAS
HUT = Rating
Share

Share = Rating
HUT

Rating = HUT x Share

Target Rating = PUT x Share

EXAMPLE #1
Not
Program A Program B Program C Viewing

2 Sets watching Program A (of 4 sets viewing)

4 out of 5 sets are in use

Program A: .4 ÷ .8 = .5 or 50 Share
.4 ÷ .5 = .8 or 80 HUT
.8 x .5 = .4 or 40 Rating

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HUTS/PUTS/Share
EXAMPLE #2

Calculating a Household Rating

5 out of the 9 homes are using TV
5/9 = 55% HUT

2 of those 5 homes are watching “Friends”

2/5 = 40% Share

HH Rating = HUT x Share

HH Rating = 55% x 40% = 22 HH Rating

(22% of the households will see your ad one time)

Preferred Method (Shorthand)

2/9 homes watching “Friends” = 22 Rtg.

Calculating a Target Rating

- 45% of W25-54 watch TV on Tuesday nights
- “Ally McBeal” Audience is 25% W25-54
- Total W25-54 Population = 58MM

PUT: 58MM x 45% = 26.1MM W25-54

watching TV on Tuesday night.

SHARE: 26.1MM x .25 = 6.5MM W25-54 watch

“Ally McBeal”

Target Rating: = PUT x Share

.45 x .25 = .112 OR 11.2 W25-54 Rtg.

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Viewers Per Viewing Household
(VPVH) - Calculating a Rating
The average number of people viewing a
program or using TV during a time period
among Households that are watching the
program. Utilized for estimating target
audiences and ratings when HH ratings are
known.

FORMULA

Rating = VPVH x Household Audience

Demographic Universe

EXAMPLE
Mad About You
Total HH’s tuned into “Mad
About You” (HH Audience): 5.19MM

W18-34 VPVH: 221

M18-34 VPVH: 116
A18-34 VPVH: 337 ÷ 10 = 33.7

W18-34 Universe: 30.93

M18-34 Universe: 30.77
A18-34 Universe: 61.70

5.19 x 33.7 = 174.903 = 2.8 A18-34 Rating

61.7 61.7

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Reach/Frequency
Reach is the number of different homes or
people exposed to a brand’s advertising one
or more times. Reach is expressed as a
percentage of a population base and cannot
be larger than 100%.

Frequency is the average number of times

those people who are reached will be exposed
to the advertising. Effective Frequency is
the number of advertising exposures that
are judged necessary to produce a positive
change in awareness, attitude or purchasing
action.

Effective Reach is the percentage of the

target audience that is exposed to the
advertising schedule at the determined
Effective Frequency level.

FORMULAS

Reach = GRPs
Average Frequency GRPs

Frequency = GRPs
Reach Freq.
Reach

Page 10
Reach/Frequency

EXAMPLE

If the effective frequency is defined

as exposure to 2 or more messages and
17 of 100 homes are exposed to 2+
messages, an Effective Reach of 17% is
generated. Homes exposed to only one
message have no value in this example.

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GRPs/TRPs
While the terms are often used
interchangeably, GRP (Gross Rating Points)
correctly refers to household ratings, TRPs
refer to target demographic ratings.

GRPs/TRPs are the simple additions of the

rating from all the times the ad runs.

• GRPs/TRPs are the sum total of ratings for a

given list of media vehicles and includes duplication.

• GRPs/TRPs can only be added for the same

demographic group (I.e., you can not add A25-54
and A18-49 TRPs.)

• GRPs/TRPs can go to infinity because GRPs/TRPs

are duplicated ratings.

EXAMPLE

Rating # of Spots GRPs

Program A 15 1 15
Program B 5 3 15
Program C 3 10 30

TOTAL 14 60

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Gross Impressions
The sum total of all advertising exposures.
Gross Impressions are additive, within a given
universe and includes duplication. They are the
numerical equivalent to GRPs.

FORMULA

Gross Impressions = GRPs x population base (universe)

100

EXAMPLE

Household Gross
Universe Impressions
Market GRPs (000) (000)
Los Angeles 50 4,931.6 2,465.8
Eureka 1,000 54.5 545.0
Dayton 100 506.7 506.7
TOTAL 3,517.5

I.e., Los Angeles

50 x 4931.6 = 2465.8
100

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Cost Per Points (CPP)
A Cost Per Point is the cost to reach
one percent of the homes or individuals
within a specified target group (I.e.,
the cost of one rating point)

CPPs from various media can only be

compared if the universes are the
same.

FORMULA

CPP = Cost unit OR Cost

Rating per unit TRPs

EXAMPLE

CPP = $120,000 for Network Prime spot

12.9 Target rating

CPP = $9,032

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Cost Per Thousand (CPM)
Cost Per Thousand is a method of relating
audience to a media vehicle’s cost. It
reflects the cost of buying one thousand
impressions. The lower the CPM, the more
efficient the vehicle or schedule.

FORMULA

CPM = Cost
Audience (000’s)

OR

CPM = Cost x 1000

Audience

EXAMPLE
Cost Aud. ÷ 1,000 CPM
Newsweek $69,600 ÷ 7,010,192 = $9.93
U.S. News $59,830 ÷ 6,201,777 = $9.65

Although Newsweek’s audience is larger than U.S.

News’, the magazine is less efficient on a CPM basis .

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Converting CPM to CPP
There is a relationship between CPM and
CPP.

FORMULAS

CPM = CPP
(base(000) x 1%)

CPP = (base (000) x 1%) x CPM

EXAMPLES

CPM
Prime M25-34 CPP = $400
M18-34 base (pop) = 5,218,300

400 = 400 = $7.67 CPM

(5218.3 x .01) 52.183

CPP
:30 W25-54 Daytime CPM = $3.50
W25-54 base (pop) = 91,800,000

91800.0 x .01 x 3.50 = $3,213 CPP

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Index to Average
An index quanitifies the relationship
between you a number you are interested in
and the base. For example, if 45% of your
target are women and 50% of the population
are women, 45/50 = 90 index, meaning that
your target is 10% less likely (100 - 90) to
be a woman than the average person.

FORUMLA

Index = Variable x 100

Base
EXAMPLE

MTV’s spending on advertising for the average

month is $809,000 (average/base). The following
shows how spending the first quarter compared to
the average.

Month Spending Index

January $300,000 37
February $988,000 122
March $1,140,000 141
3 month avg. $809,000

I.e., Base = 300,000 ÷ 920,000 = .326

.326 x 100 = 32.6 or 33

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Brand Development Index
(BDI)
Brand Development Index illustrates the
relationship of a brand’s sales as compared
to the population in a given market. BDIs are
often used to identify opportunity markets.
BDI is simply an index.

FORMULA

BDI = % of a brand sales in a market area x 100

% of US population in a market

EXAMPLE

The East Coast Sales Division of Pillsbury is looking

for new markets to tap growth.

Sales Region %W35-64 % Brand Sales BDI

New York 8.5 11.5 135
Atlanta 3.4 2.5 74
Chicago 5.4 5.4 100

Atlanta could be a good market for Pillsbury to focus

their efforts if they want to tap into under-
developed markets.

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Category Development Index
(CDI)
Similar to a BDI, a Category Development
Index expresses the relationship of an
entire category’s sales to the population in
the given market.

FORMULA

CDI = % of a category sales in a market area x 100

% of US population in a market

EXAMPLE

Sales Region %W35-64 % Category Sales CDI

New York 8.5 7.7 91
Atlanta 3.4 4.2 124
Chicago 5.4 8.1 150

While Pillsbury’s sales in Atlanta are low, the

breakfast toaster category does well in this market.
CDI
Brand & Category Not a good market
doing well for category but
High BDI High BDI Brand is doing well
B High CDI Low CDI
D
I Low BDI Low BCI
Opportunity High CDI Low CDI No Opportunity

Page 19
Coverage
Coverage can be defined as the
percentage of a given population which is
exposed to a media vehicle -- most
typically applied to magazines.

FORMULA

Coverage = Demo Audience x 100

Demo Universe

EXAMPLE

Readers of Spin
Magazine
Population of
Adults 25-54
(10,000M)
Readers of Spin
Magazine
Age 25-54 (100M)

If Spin has 100M readers who are 25-54 and the universe
of adults 25-54 is 10,000M then the coverage would be
1%.

100M readers ÷ 10,000M population base = 1% coverage).

Page 20
Composition
Composition is the percentage of a media
vehicle’s total audience that are members of
our target.

FORMULA

Composition = Demo Audience

Total Audience

EXAMPLE

Audience of
Friends (10MM)

Viewers
Age
18-24
(3MM)

If Friends has a total audience of 10MM and 3MM of it’s

viewers are 18-24, then 30% of it’s audience would be
composed of adults 18-24.

3MM target viewers ÷ 10MM total audience = 30% composition

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Coverage and Composition
Coverage is a measure of how many potential
prospects are exposed to a given media vehicle
(comparable to a rating). Composition shows how
many (what percent) of the vehicle’s total audience
come from our target.

Coverage and Composition can be determined from

an MRI crosstab:

EXAMPLE Coverage
• 11.16% of all
Base: Adults Men M18-34 read
All 18-34 Newsweek
Unweighted 42,821 6,328 • 4.68% of all
(000) 194,326 32,961 M18-34 read Spin
Horz % 100.00 16.96
Vert % 100.00 100.00 Composition
Index 100 100 • 17.54% of
Newsweek’s
Newsweek readers are
Unweighted 5,189 810 M18-34
(000) 20,967 3,677 • 56.79% of Spin’s
readers are
Horz % 100.00 17.54
M18-34
Vert % 10.79 11.16
Index 100 103 Index
• M18-34 are 3%
Spin more likely to read
Unweighted 569 315 Newsweek than the
(000) 2,715 1,542 average adult
Horz % 100.00 56.79 • M18-34 are 235%
Vert % 1.4 4.68 more like to read
Spin than the
Index 100 335
average adult
Page 22
Summary of Formulas
Ratings
Rating = Share x HUT
Share = Rating ÷ HUT
HUT = Rating ÷ Share
Target Rating = (TV HH Rating x TVHH Base x VPVH) ÷ Total
Target Base
Target Rating = TVHH Rating x (Program VPVH ÷ People per
TVHH)
Conversion Factor = VPVH ÷ PPH

Audience
Print Audience = Circulation x Readers Per Copy (RPC)
TV Audience = TV Homes Delivered x Target VPVH
Audience = Population x Rating (%)
Impressions = (Cost ÷ CPM) x 1000

Reach
Reach = GRP ÷ Average Frequency
GRP = Reach x Average Frequency
Average Frequency = GRP ÷ Reach
Average Frequency = Gross Impressions (000) ÷ Reach (000)
Gross Impressions = Average Audience x Number of Units
Gross Impressions = GRP x Population
Rating = Audience ÷ Population

Cost
CPM = Cost ÷ (Impressions ÷ 1000)
Cost = (Impressions ÷ 1000) x CPM
Cost Per Rating Point = Cost ÷ GRP
Target CPM = TVHH CPM ÷ Target VPVH
Demo CPP = (HH CPP ÷ Demo Conversion Factor)
HH CPP = Demo CPP x Demo Conversion Factor
Gross Figures = Net figure ÷ .85

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Notes

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Notes

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Notes

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Notes

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Notes

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