Reach Per Dollar or R.P.D.
(by Systems of Changes)

The traditional way of comparing media is CPM but we find that it was slightly unfriendly or difficult to use. In 1993, we "developed" (as we cannot find other alternative from any known marketing books) another term called RPD. This tool has 2 tasks – 1) to facilitate cost comparison between media and 2) to facilitate marketing budgeting.

1) Comparing

RPD stands for reach per dollar or for every dollar I spend, how many readers/viewers/ customers/users can I reach. It is calculated by dividing the circulation by the cost one ad placement. The tool was as useful as CPM in comparing between media like magazine "A" has a RPD of 22 vs magazine "B" has a RPD of 10, it is obvious magazine A with the higher number is more cost effective.

2) Budgeting

Next on its role in budgeting. Our task is to calculate how much we need to spend on advertisement to sell 500 units of PC. If the buy-out rate is 10,000, ie, for every 10,000 people that saw our ad, one will buy. We will need to reach 5,000,000 (500x10,000) and if the publication’s RPD is 22, we will need to spend $227,000 (5,000,000/22).

It is fundamentally sound and useful but vs with CPM, there is one problem, some publications, particularly, provide readership figures vs some only provided circulation numbers. Taking all these into considerations, we have additional terms as defined :

Terms	Basic explain	Description
RPDC	colour pages	Circulation divided by cost of a colour page
RPDB	black and white page	Circulation divided by cost of a black & white page
ARPD	adjusted reach per dollar	Calculated after adjustment is made to the readership.
TRPD	targeted reach per dollar	Calculated based on the group that you wish to target.
ERPD	effective reach per dollar	Calculated based on the special rates that you have obtained and the actual readership.
****	******	More related terms developed by SOC

3) Targeted Comparison

For some products, there is not single title/magazine that is their target audience, TRPD will be extremely useful.  Using a simple illustration: Our target audience is the administrative staff and 3 magazines claim that it is in their readership profile, but 3 also circulates to other audience as well

	Admin	MIS	Account	TTL	Ad Rates
Mag A	15,000	10,000	55,000	80,000	2,000
Mag B	25,000	5,000	20,000	50,000	2,000
Mag C	20,000	20,000	20,000	60,000	2,000

Whichever method you use RPD or CPM, it will show that Mag A is the 'cheapest' or most cost effective.  But if we take a closer look, using TRPD, we will use the figures in the Admin column and divide by the ad rates thus giving us Mag B as our choice.  If our traget group is Admin & MIS, then Mag will be our choice.

>>Back to MainPage
>>Back to Equipment and Tools

© 2000 ALM PR Agency. All rights reserved.