A key metric used in traditional advertising to evaluate the efficiency of media buys, particularly in television, radio, and out-of-home advertising. It represents the cost of reaching one rating point in a defined target audience. A rating point equals one percent of the population in a specific market that is either exposed to or expected to be exposed to an advertisement. For example, in a market with one million households, one rating point would be 10,000 households.
CPP is calculated by dividing the total cost of the advertising campaign by the number of rating points (GRP) delivered.
Loading formula...This formula provides advertisers with a standardized method for comparing the cost-effectiveness of different media options. If one television spot has a lower CPP than another, it indicates that the ad reaches the audience more efficiently, even if the overall price tag is higher.
The metric matters because it enables marketers to strike a balance between reach and efficiency. A campaign with a high cost might still be valuable if its CPP is competitive relative to other placements, meaning it delivers more audience impact for the investment. Conversely, a low CPP might signal a cost-effective buy, but it could also raise questions about whether the quality of the placement aligns with the brand’s objectives.
While CPP has its roots in traditional media, it remains relevant for buyers who need to justify advertising budgets and maximize exposure within targeted demographics. In modern media planning, CPP is often considered alongside other key metrics, such as cost per thousand impressions (CPM) and cost per acquisition (CPA), to provide a broader view of a campaign’s performance across various channels.
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Additional Acronyms for CPP
- CPP - Custom Product Pages