Question

If you ordered a TV commercial to run on a local TV station that could reach 500,000 households for a cost of $1,000, what would your CPM be?

a. $1.00
b. $2.00
c. $2.50
d. $4.00
e. $5.00

Answer 1

b. $2.00

Step-by-step explanation:

For computing the CPM, first, we have to determine the number of groups which are shown below:

= Number of Households ÷ cost

= 500,000 households ÷ $1,000

= 500 groups

Now the CPM would be

= Cost ÷ number of groups

= $1,000 ÷ 500

= $2

For computing the CPM we simply divide the cost by the number of groups so that CPM can be correctly computed