What is the best way to calculate the CPM for TV ads?

An advertisement on television can be a costly investment, but it is a great way to get your product seen by lots of people at once. The best way to know if you are getting your money’s worth is to calculate the CPM of your ad.

Please be aware that CPM view count is typically how many people are watching the program (tv show) not always a measurement of how many people are watching the commercial. See the Google assessment of commercial breaks here.

The best way to get an accurate CPM for a television advertisement is to know how good the ratings are of the television show with which your ad plays. Nielsen ratings are the golden standard for estimating the popularity of a television show. The average for a network series is 11 percent of the television-owning American population, which is estimated to be 94 million households, according to the Museum of Broadcast Communications.

That means a show with ratings of 11 percent reaches 10.3 million people. The more popular a show is, the more expensive advertising around it will be. A less-expensive example would be a show that is seen by 5 million people.

If your ad is featured next to an average television show that garners 5 million viewers, then you can use that figure to determine your CPM when you compare it to the price of advertising. First, divide the viewer number by 1,000, since you are calculating the cost of one thousand viewers.

The amount you are working with now is 5,000. If you buy a single thirty-second advertising slot for $10,000, then divide that price by 5,000 for a CPM of $2. This is the cost per 1,000 people if you buy $10,000 of ad time during a show that gets 5 million viewers.