Manage media planning and placement to enhance return on marketing investment 3.08

Determine ADVERTISING REACH and MEDIA COSTS

ADVERTISING REACH WHAT: Number of PEOPLE THAT ARE EXPOSED to your message: – CALCULATION (%):Divide the target audience exposed to an ad by the total target audience There are 1,500,000 fans of Tar Heel Football. A recent advertisement was viewed by 375,000 of them. (375,000/1,500,000 = 25% ADVERTISING REACH) WHY: Determines if ad targeted the right audience effectively. HOW: RESOURCES – Circulation numbers, subscriptions or rating points

FREQUENCY and REACH FREQUENCY :Number of times you expose each person to your message Reach WITHOUT Frequency = Wasted Money

NEWSPAPER MEDIA COSTS – Factors affecting COSTS (Lower than most media): Position and color of ad Split-runs (print different ads for the same product) National ads cost more than local – Types of RATES: PREFERRED POSITION: ads placed in location with best exposure for their target market (Ex: Sports ad in the Sports section instead of Garden section) Flat: one time only Sliding scale/ VOLUME DISCOUNTS: more published = cost less per ad Combination: ads and inserts

MAGAZINE MEDIA COSTS – Factors affecting COSTS (Higher than Newspaper): CIRCULATION: Number of people reached Preferred Position Spreads Split-runs – Types of RATES: Size Frequency Combination

TELEVISION MEDIA COSTS – Factors affecting COST: RATINGS FOR CERTAIN SHOWS – Determines which shows attract a high volume of viewers Time availability – High demand for time during peak winter seasons Length of commercials – Types of RATES: Set according to “GROSS RATING POINTS” (GRPs) – GRPS = REACH X FREQUENCY RUN OF SCHEDULE (ROS) – Ad is run at the station’s convenience for lower cost

RADIO MEDIA COSTS – Factors affecting COST: “DAYPART” – Morning drive time, Evening drive time, Daytime, Nighttime Length NUMBER OF LISTENERS – Types of RATES: RUN-OF-SCHEDULE (ROS) TOTAL AUDIENCE PLANS (TAPs) – PACKAGED PLANS offer reduced rates when purchase a series of commercials instead of just one

INTERNET MEDIA COSTS – Factors affecting COST: Creative type (Text, image, sound, etc.) Size Placement – Types of RATES: COST-PER-THOUSAND (aka) COST-PER-MILE (CPM) COST-PER-CLICK (CPC)

OTHER MEDIA COSTS OUT OF HOME – Factors affecting COST: Size of the space Length of time Production costs – Types of RATES: Determined by: – Visibility – Location – Population DIRECT MAIL – Factors affecting COST: Production costs Mailing list costs Labor costs – Types of RATES: Postage Shipping CAN TARGET A SPECIFIC MARKET

ABSOLUTES vs. RELATIVE MEDIA COSTS ABSOLUTE COSTS TOTAL COST to run an ad = Cost of production + Cost for time/space purchased RELATIVE COSTS Determines which one media is most cost effective COST PER THOUSAND (CPM) Cost per GROSS RATING POINT (GRP)

SELECT ADVERTISING MEDIA

IMPORTANCE OF SELECTING ADVERTISING MEDIA Media cost is the largest cost of advertising Complex selection process Must select the most effective media to reach target market

SITUATIONAL FACTORS to CONSIDER OBJECTIVES (Goals) of the advertisement TARGET MARKET – Identify what media the target market uses to most Limit WASTE CIRCULATION (Number of people exposed to an advertising message who are not target market) COMPETITION – Use the same advertising media to reach same target market BUDGET – How much money can you spend? PRODUCT DISTRIBUTION

MEDIA FACTORS to CONSIDER Cost Media Coverage – EXTENSIVE COVERAGE: reaching a large audience (REACH) – INTENSIVE COVERAGE: reaching a smaller audience more often (FREQUENCY) Geographic Coverage Lead Time – Amount of time required to place an ad by the media Radio has shortest TV and Magazines have longest

QUANTITATIVE & QUALITATIVE FACTORS QuantitativeQualitative Reach Frequency Cost-per-thousand (CPM) IMPACT Impression an ad will make Credibility EDITORIAL ENVIRONMENT Management and talents of staff

STEPS TO SELECTING ADVERTISING MEDIA 1.Identify SITUATIONAL FACTORS 2.Identify MEDIA FACTORS 3.SELECT the MEDIA OUTLET 4. Determine the TIMING STRATEGY – CONTINUOUS (Steady, regular pattern) Frequently used/purchased products – FLIGHTING (During peak sales periods ONLY) – PULSING (Bursts of advertising)