How Do You Calculate Cost Per Thousand?
To calculate the cost per thousand, multiply the cost by 1,000, and divide by the target audience. Interpret the result.
- Determine the values
Find the cost and the target audience totals. The cost means the cost of producing the advertisement. The target audience total varies based on the type of media. The cost per thousand is calculated for a printed page or broadcast time. For print media, when the audience data is not available, use the circulation number. When it is available, use the number of prospects reached. For broadcast media, use the number of homes reached by a given program or time period. The target audience can also be readers or the number of audience members of any kind of demographic or product usage classification.
- Multiply the cost by 1,000
Multiply the cost of the campaign by 1,000.
- Divide by the target audience
Divide the result by the number of the target audience. For example, cost per thousand = 73,000/2,500 people = 29.2. The cost per thousand is $29.20.
- Interpret the result
The lowest cost per thousand is the most efficient ad campaign, assuming all other variables are equal. Often, the media with the lowest cost per thousand is the one that is picked.