Chapter 14 Using Electronic Media: Television and Radio William F. Arens Michael F. Weigold Christian Arens McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter Overview Factors to evaluate when considering radio & television in the creative mix

Chapter Objectives Describe pros & cons of broadcast TV as an ad medium Evaluate cable TV as an advertising medium and explain how it differs from broadcast TV Explain the process of buying cable and broadcast TV time Evaluate the available types of television advertising Describe the process of TV audience measurement Discuss factors to consider when buying TV time Analyze pros and cons of using radio in the creative mix Discuss factors to consider when buying radio time

TV Viewers Heaviest viewers Middle income, high school grads and families Increased viewing hours Average American spends 4 hours/day watching TV World wide, older women watch most Average 36 hours/week Broadcast vs. cable Homes with cable watch less broadcast TV Many channels causes audience fragmentation DVD viewing has increased

Broadcast vs. Cable Viewer Characteristics

TV Audience Advertising Beliefs How adult viewers rate various media

The Medium of Television Broadcast TV Cable TV VHF and UHF Many Stations, some PPV Independent Stations Special Interest Stations Network Affiliates Compete for Ads

Q. 1. What are the various TV audience trends?

TV Audience Trends Demographics Cable households DVD Rental Viewing patterns TV viewing hours Audience fragmentation

Major Cable Networks

Q. 2. What are the pros and cons of TV advertising?

The Medium of Television Pros Cons Mass coverage High production cost Relatively low cost High airtime cost Some selectivity Limited selectivity Impact Brevity Creativity Clutter Prestige Zipping and zapping Social dominance

Q. 3. What are the pros and cons of Cable TV advertising?

Cable TV Pros and Cons Pros Cons Selectivity Limited reach Audience demographics Fragmentation Low cost Quality Flexibility Zipping and zapping Testability

Digital TV Advantages Improved picture and sound Increased number of channels Interactive video and data Efficiency through multicasting

TV Use of TV in IMC Niche medium Cost effective Leverage Tool Imparts brand meaning Leverage Tool

Q. 4. How do advertisers buy time on TV?

Types of TV Advertising Sponsorship Spot ads Syndication Direct response Local – LaVerge Beverage Depot

TV Ad Spending (Billions) Network TV dominates, but is losing ground

Most Expensive 30-Second Spots

Types of TV Advertising Prime time’s most expensive 30-second spots http://www.frankwbaker.com/2006_2007_ad_rates.htm How much for a 30-second spot? Insert ex. 16-7, p. 517 Ad cost per 30-sec spot Position = 2.9”horiz., 1.5” vertical Size = 4.6” TALL Resolution: 300 dpi

TV vs. Magazine Cost Comparison Cost of Ad = $700,00.00 Reach = 4,000,000 Cost Per thousand (CPM) = 700,000/4,000,000/1000 Cost Per thousand (CPM) = $175.00 Magazine Cost of Ad = $100,00.00 Reach = 200,000 Cost Per thousand (CPM) = 100,000/200,000/1000 Cost Per thousand (CPM) = $500.00

Network & Syndication Distribution

Why Direct Response Works Consumers pay attention; respond immediately Competitive advantage for brand managers Sufficient time for brand differentiation Results measurable and accountable Ad campaign can pay for itself Combines power of advertising, direct response, and sales promotion

Defining Television Markets DMA- designated market area for local stations Columbus, Georgia designated market area

Q. 5. How do advertisers measure their audience?

TV Audience Measurement Rating Services Defining TV Markets Dayparts Audience Measures Nielsen & Others Cable Ratings

TV Audience Measurement Rating Services Defining TV Markets Dayparts Audience Measures Nielsen & Others Designated Market Areas Cable Ratings

Designated Market Area Columbus, Georgia designated market area

TV Audience Measurement Rating Services Defining TV Markets Dayparts Audience Measures Nielsen & Others Designated Market Areas Daytime 9 a.m. – 4 p.m. Early Fringe 4 – 5:30 p.m.. Early News 5 or 5:30 – 7:30 p.m. Access 7:30 – 8 p.m. Prime Time 8 – 11 p.m. Late News 11 – 11:30 p.m. Late Fringe 11:30 – 1 a.m. Cable Ratings

TV Audience Measurement Rating Services Defining TV Markets Dayparts Audience Measures Nielsen & Others Designated Market Areas TV Households Cable Ratings Households Using TV Total TVHH in area TVHH tuned to program = Rating Program Rating Audience Share

Defining Television Markets Dayparts

TV Audience Measurement Audience Measures TV Households TVHH Program Rating Total TVHH in area TVHH tuned to program Households Using TV HUT Audience Share HUT # of viewers

Buying TV Time Gross Rating Points Reach (avg rating) × Frequency = GRP Cost per Point = CPP Rating Cost Cost per Thousand Thousands of People = CPM Cost

Buying TV Time 1. Determine program availability 2. Analyze program efficiency 3. Negotiate price 4. Determine reach and frequency 5. Sign broadcast contracts 6. Review performance affidavits

The Medium of Radio Who uses radio? 93% of U.S adults listen each week 72% of U.S. adults listen every day Average time is 2.5 hours per day Radio’s reach exceeds other media

Use of Radio in IMC Involves people Establishes intimate relationship Favors integrated marketing Maintain strategic consistency Target demographic group Stretch media dollars

Most Popular Program Formats

Q. 6. What are the pros and cons of Radio advertising?

Pros and Cons of Radio Ads Reach & frequency Limitations of sound Selectivity Segmented audiences Cost efficiency Short-lived, half heard Testability Clutter Timeliness & immediacy Local relevance Creative flexibility

Mini-network Programming Each network targets a specific demographic group

Q. 7. How do Radio advertisers buy time?

Buying Radio Time Network Spot Local Radio stations can increase market share with special programming

Average quarter-hour audiences Key Radio Terms Cumes Average quarter-hour audiences Dayparts Morning drive 6 a.m. – 10 a.m. Daytime 10 p.m. – 3 p.m. Afternoon drive 3 p.m. – 7 p.m. Nighttime 7 p.m. – midnight All night Midnight – 6 a.m.

Ratings Based on Dayparts Run-of-Station (ROS) Total Audience Plan (TAP) Average Quarter-Hour (AQH) AQH Rating Population = AQH Persons × 100 Gross Rating Points (GRP) GRP AQH Rating × No. of Spots = Cume Estimates Cume Rating = Population Reach Potential × 100

Satellite Radio Sirius & XM are major players Over 16 million listeners Many program choices Exclusive programming

Preparing a Radio Schedule ID stations with greatest concentration (cume) of target audience ID stations whose format offers highest concentration of buyers Determine which dayparts offer the most potential buyers Construct schedule with strong mix of best times Assess proposed buy in terms of reach and frequency Determine cost/1000 target people Negotiate and place the buy