How to calculate which print media advertising source is best value for money

There are two approaches to this:

Approach #1: The cost of the advert relative to the circulation (or readership) figures.

This method is good when you haven’t advertised with a publication before or when you are first starting out and you want to estimate which publication is going to bring you the best return on your money.

Let’s say Publication A has a circulation of 100,000 and the cost of a 15 word advert is $6. This means that the advert cost is $6/100 = $0.06 for every 1,000 circulation.

Publication B has a circulation of 250,000 but the cost of a 15 word advert is $12. This means that the advert cost is $12/250 = $0.048 for every 1,000 circulation.

My conclusion from this would be that Publication B is the better value for money as the cost per 1,000 is lower. Therefore, when first starting out I would tend to choose Publication B over Publication A. Or when looking for addition areas to advertise, I would compare their cost per 1,000 circulation with my existing Publications cost and see if they are similar. If they are vastly more expensive per 1,000 I may be much more cautious over whether to advertise with them or not.

Approach #2: The results from each ad relative to their cost.

This method is the best once your ad is out there because it is based on real life and not guestimates based on circulation figures.

Here, you would advertise and then monitor the response from each enquiry. You would track which clients you got from which advert, how much you have spent on advertising in that publication and how much revenue these clients have produced.

Next, you would work out how much revenue each advert generated for every $1 spent on advertising in that publication.

For example, Publication A has brought in $1,000 in revenue from 5 clients and the advertising spend cost $90. Therefore, for every $1 you spend you have generated $11.11 in revenue.

Publication B has brought in $2,500 in revenue from 8 clients and the advertising spend cost $120. Therefore, for every $1 you spend on advertising you have generated $20.83 in revenue.

Clearly, Publication B appears – at least at the outset – to be better value for money.

Be careful that your figures are not being distorted by repeat business. In other words, you may have had one ad running much longer than the other and has therefore had time to have the inevitable repeat business building up the revenue figures. Perhaps you would want to just compare the first month’s results for each Publication to make the comparison fair.