Rounding Issues in Hand Calculations

Basic Media Planning Concepts: Rounding Issues in Hand Calculations
ADV 4300, Kent Lancaster

There is a source of rounding "error" that you will encounter throughout many of the examples used in this course. These problems permeate the advertising industry as well. ADplus™ and most other media software results tables often present estimated media evaluation factors only one place to the right of the decimal. However, the programs actually do the calculations internally at very high levels of precision more than ten places to the right of the decimal. Consequently, a percentage like 54.5 presented on a results table could actually range from 54.45 to 54.54, that’s a difference of 0.09 percent (or .0009 as a decimal). Now if the base used for all percentages in a plan is 100,000 Alachua County adults, for example, this range represents 90 adults. This probably is not a big issue in absolute terms, especially if presented in thousands it is only 0.09. However, if the target size is 192,031,000 US adults, then this range represents a substantial number of individuals: 172,827.9, or 172.8 if expressed in thousands.

This rounding error can be a considerable source of frustration to students, particularly in exam situations, and especially for students with math or computer anxiety. One way to "fix" this problem is to give students only canned problems where numbers work out perfectly. In the long run this would be a disservice to students since the problem exists on media printouts and other research results tables used throughout the advertising and marketing-communications industries. Executives often make decisions based on limited and imperfect information. And reports upon which these decisions are based often focus on key points that are presented in as simple and as clear a manner as practical. Therefore, you need to keep these issues in mind throughout this course as well as your career.

Consequently, these rounding issues will be taken into account when your exams and projects are graded. That is, your exam or project answers will be correct as long as they fall reasonably within the range attributable to rounding. Make sure you know the basic principles cold and without hesitation and rounding issues should cause you little or no anxiety.

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