State Farm is interested in increasing brand awareness within 18-25 year olds on
ID: 429241 • Letter: S
Question
State Farm is interested in increasing brand awareness within 18-25 year olds on a national level. Your budget of $3,000,000 will be allocated strictly to buy magazine space in the months from October through December. They are considering the following publications. For simplicity, let’s imagine these are the only seven publications in existence and all ads are full-page ads.
CPM = Cost per full page ad * 1000
TM Circulation
Step 1: Calculate the CPM for each publication.
Name
Circulation
Reach
Cost 4/C FP
CPM
Allure (Monthly)
3,750,000
14%
$165,000
Cosmopolitan (Monthly)
7,183,000
27%
$297,000
Elle (Monthly)
3,119,000
12%
$164,000
ESPN (Monthly)
2,571,000
10%
$254,000
Game Informer (Monthly)
3,474,000
13%
$205,000
Glamour (Monthly)
4,624,000
17%
$240,000
Maxim (Monthly)
3,575,000
14%
$241,800
Step 2: Using a $3,000,000 budget, determine the publications you will purchase from October through December and place them into a schedule below. Please note your selection should be based on the lowest CPM and within budget.
MAGAZINE
OCT
NOV
DEC
AVG FREQ.
TOTAL $
Step 3: Calculate the average frequency of your media plan.
AVG. FREQ = (Media 1 Reach)(# of issues) + (Media 2 Reach)(# of issues) + (and so on)
Name
Circulation
Reach
Cost 4/C FP
CPM
Allure (Monthly)
3,750,000
14%
$165,000
Cosmopolitan (Monthly)
7,183,000
27%
$297,000
Elle (Monthly)
3,119,000
12%
$164,000
ESPN (Monthly)
2,571,000
10%
$254,000
Game Informer (Monthly)
3,474,000
13%
$205,000
Glamour (Monthly)
4,624,000
17%
$240,000
Maxim (Monthly)
3,575,000
14%
$241,800
Explanation / Answer
1. CPM = cost per thousand
Formula = (cost for full page ad/circulation)*1,000
2. Magazine selection as per lowest CPM (ascending order): Cosmopolitan (41.35), Allure (44), Glamour (51.9), Elle (52.58), Game informer (59.01), Maxim (67.64) and ESPN (98.79)
The total spend on the above (october+november+december) for the magazines mentioned above = $2,803,000
Budget left = 3,000,000 - 2,803,000 = 197,000. This amount is less than the cost of full page ad in game informer or maxim or ESPN. Thus it cannot be used.
3. Reach is the number or percent of different homes or persons exposed at least once to an advertising schedule over a specific period of time. So reach for a magazine = circulation *reach %
No of issues is 3 (for the months of October, November and December) for Cosmopoliton, Allure, Glamour and Elle.
No of issue is 1 for game informer. Using the formula:
Thus average frequency = 9,106,320 for all the magazines for October to December
Name Circulation Cost cost/circulation CPM (cost*1000/circulation) Allure 3,750,000 165,000 0.04 44.00 Cosmopoliton 7,183,000 297,000 0.04 41.35 Elle 3,119,000 164,000 0.05 52.58 ESPN 2,571,000 254,000 0.10 98.79 Game informer 3,474,000 205,000 0.06 59.01 Glamour 4,624,000 240,000 0.05 51.90 Maxim 3,575,000 241,800 0.07 67.64Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.