The process of measuring target audience size against the cost of that audience is based on efficiency calculations, which are popularly known as cost-per-thousand (CPM), which is an estimate of the cost of exposing 1,000 audience members.
Generally, media specialists do these calculations and communicate them to the account executive or advertiser. Anyone who works in advertising must understand what a CPM represents.
Cost per thousand: It is better to use a CPM analysis to compare vehicles within a medium (one magazine with another or one television program with another). It is also important to base it only on the portion of the audience that has the characteristics of the goal, such as women between 25 and 34 years of age. This is called cost-per-thousand directed.
To calculate CPM, only two figures are needed: the cost per unit (such as television time or space in a magazine) and the estimated target audience at which the program arrives. The cost of the unit is divided between gross audience impressions to determine the advertising spend that is required to expose 1,000 target audience (because it is cost per thousand).
For greater ease you can use the spreadsheet with the following format, please use one of the following formats that suit your use: