Question

6. Fakeout, a fake vomit manufacturer is considering buying advertisements in two magazines to try and sell more fake vomit. Jokes ‘R Us has a readership of approximately 72,000 people per monthly issue, while Magicians Monthly has a readership of 58,000 per issue. They estimate that about 21% of the people who read Jokes ‘R Us also read Magicians Monthly. a. If Magicians Monthly charges $1250 per advertisement, what is the CPM for their magazine? 65% of Magicians Monthly readers are actual magicians. What is the CPM for magicians only? (5pts) b. What is the net reach if Fakeout runs a single ad in each magazine? (5pts) c. Fakeout negotiates a deal where if they buy ads for 6 consecutive months they will get a 20% discount for Magicians Monthly (use the price from the first question. If they get a net reach of 215,000 what is the average expected frequency for the entire campaign? (5pts) d. If 15% of Jokes R’ Us readers are magicians, and 45% of those magicians also read Magicians Monthly, what is the net reach for magicians by placing a single ad in both magazines? (5pts)

Answer 1

Given:

Joke 'R Us monthly readership = 72000

Magicians Monthly monthly readership = 58000

21% of 72000 = 21*720 = 15120

Therefore, number of people whole read both, monthly = 15120

CPM is Cost per Thousand

Ans(a)

Monthly Magicians charge $1250 per advertisement.

Therefore, CPM = 1000*1250 = $1250000

65% of Magicians Monthly readers are actual magicians.

i.e. 65*58000/100 = 37700 are actually magicians.

Thus CPM for magicians only = 37700*1250000 = $47125000000

Ans(b)

Net monthly reach if a single ad is run in each magazine

= Readership of Joke 'R Us + Readership of Monthly Magicians - Common readership of both

= 72000 + 58000 - 15120 = 114880

Ans(c)

Monthly magicians charge $1250 per advertisement.

Net reach for 6 months = 215000

20% of 1250 = 20*12.5=2*125=250

Discounted price for 6 months =  215000*1250 - 215000*(1250-250) = 53750000.

Ans(d)

If 15% of Jokes R’ Us readers are magicians, and 45% of those magicians also read Magicians Monthly, what is the net reach for magicians by placing a single ad in both magazines?

Number of Jokes R' Us readers who are magicians = 15% of 72000 = 15*720 = 10800

45% of these 10800 also read Magicians Monthly = 45*108 = 4860

65% of Magicians Monthly readers are actual magicians.

i.e. 65*58000/100 = 37700 of the Magicians Monthly readers are actually magicians.

Thus, net reach for magicians by placing a single ad in both magazines = 10800 + 34400 - 4860 = 40340