Cost per Point (CPP) is the cost of buying one Rating Point, or one percent of the target population.
Here is the equation:
CPP = cost of the campaign / Gross Rating Points
Media planners calculate CPP to compare the costs of different outlets. Resources available to help in your calculation include rate cards from the outlets and directories such as SRDS and Cision and Alexa.
After the fact, it is a measurement for reporting and analysis. It is a permanent record of where your advertising messages went.
This is a fundamental navigational metric. It is a coarse measurement of the cost of approaching your target audience. It is an easy way to compare the efficiency of different outlets (especially within radio and television).
By itself, it provides no analysis – it is primarily for budgeting. Media planners use it as one of their planning tools.
It is a navigational tool. In other words, it can help you move your marketing program toward more profitability, but it cannot actually measure profitability. For more details, see navigational metrics and evaluative metrics.