Broadcast Advertising

Advertising Defined Non-personal CommunicationNon-personal Communication Usually paid forUsually paid for By an identified sponsorBy an identified sponsor Persuasive in naturePersuasive in nature About products, ideas or servicesAbout products, ideas or services Through various mediaThrough various media

Advertising in the Marketing Mix ProductProduct –Quality, package, appearance, etc. PricePrice –Deep discount to premium PlacePlace –Distribution channels PromotionPromotion –POP, personal selling, PR, Advertising

Advertising Classified By audienceBy audience –Consumer –Business to Business IndustrialIndustrial TradeTrade ProfessionalProfessional FarmFarm

Advertising Classified GeographicallyGeographically –National –Regional –Local –International

Advertising Classified By mediumBy medium –Electronic RadioRadio TelevisionTelevision CableCable InternetInternet

Advertising Classified PrintPrint –Newspaper –Magazine OutdoorOutdoor –Billboard –Transit

Advertising Classified SpecialtySpecialty –Novelties –POP –Product placement –Etc.

Advertising Classified By functionBy function –Product -vs- non-product –Commercial -vs- non-commercial –Direct action -vs- non-direct action

The advertising industry AgenciesAgencies The mediaThe media The advertisersThe advertisers The support services and suppliersThe support services and suppliers The regulatorsThe regulators The consumersThe consumers

Advertising History Functions of advertising:Functions of advertising: –Identify products and differentiate them –Communicate information about product –Induce consumers to try the product –Increase product usage –Build brand preference and loyalty

Advertising History Dates to 1600sDates to 1600s –British newspapers paid notices

Advertising History Ben Franklin is credited with introducing white space and illustrationsBen Franklin is credited with introducing white space and illustrations

Advertising History Magazines became first national mediumMagazines became first national medium Volney Palmer – first ad agency – 1841Volney Palmer – first ad agency – 1841 –Bought newspaper and magazine space in large volumes at discount. –Marked up 15% N. W. Ayer – first full service agencyN. W. Ayer – first full service agency

Broadcast Advertising History Out of the debate on how to pay for broadcasting came…Out of the debate on how to pay for broadcasting came… “Toll” broadcasting“Toll” broadcasting –WEAF –AT&T station “telephone philosophy of paying toll for long distance calls.“telephone philosophy of paying toll for long distance calls. First commercial broadcastFirst commercial broadcast time.com/commercials/1stcommercial.htmlhttp:// time.com/commercials/1stcommercial.htmlhttp:// time.com/commercials/1stcommercial.htmlhttp:// time.com/commercials/1stcommercial.html

Broadcast Advertising History Post WWIPost WWI –Radio grew –Lifestyles improved –Spending increased –Radio networks emerged –Advertising stressed the “Unique Selling Proposition”

Broadcast Advertising History Television explodes post WWIITelevision explodes post WWII –Radio programs shift to television –Radio adopts musical formats Advertising costs increaseAdvertising costs increase Sponsorships give way to participations or “spots”Sponsorships give way to participations or “spots” By the 1960s – advertising entered the “image era”By the 1960s – advertising entered the “image era”

Broadcast Advertising History Depicting a lifestyle – not product informationDepicting a lifestyle – not product information Emotional appeals – not logical appealsEmotional appeals – not logical appeals Remember the package – not the nameRemember the package – not the name Focus on benefits to consumerFocus on benefits to consumer

The contemporary advertising industry Complicated by the proliferation of mediaComplicated by the proliferation of media Audiences are splinteredAudiences are splintered –Narrowcasting Clutter and competitionClutter and competition High costs of media drive demand for researchHigh costs of media drive demand for research

Effects of advertising On pricesOn prices On competitionOn competition On product imageOn product image On demandOn demand –“Creating” demands? –Bran, fiber, carbs, cosmetics, vitamins, etc. –Slow a declining market – “repositioning”

Media strategy Buying patternsBuying patterns –Weekly cycles –Monthly cycles –Annual cycles –Seasonal products Products/service with fixed maximum capacitiesProducts/service with fixed maximum capacities

Media strategy

ReachReach –Unduplicated exposures – gross impressions –Number of different people exposed to the message FrequencyFrequency –Average number of exposures –How many times audience is exposed to message

Media strategy Best frequencyBest frequency –Outdoor, newspapers, magazines Best ReachBest Reach –Network advertising, magazines Best combinationBest combination –Radio

Media strategy Calculating cost efficiencyCalculating cost efficiency Cost per thousand (CPM)Cost per thousand (CPM) –How much it costs to deliver 1000 gross impressions –How much to reach 1000 listeners, viewers, readers, households, etc.

CPM 2 $8.00 each 1 reaches 4500 QHP 1 reaches 3500 QHP

CPM = 8000 gross impressions = 8000 gross impressions 2 $8 = $16 – cost of the schedule2 $8 = $16 – cost of the schedule $16 ÷ 8000 =$16 ÷ 8000 = ¢ per person.002 ¢ per person X 1000 = 2.00X 1000 = 2.00 $2 per 1000 QHP$2 per 1000 QHP

CPM

CPM 200 ÷ =.004

CPM

CPM 354 ÷ =.002

Waste circulation Reaching people who are not the desired audienceReaching people who are not the desired audience Demographics = age, gender, incomeDemographics = age, gender, income Psychographics = “lifestyle”Psychographics = “lifestyle”

Audience research How we know the size of the audience reachedHow we know the size of the audience reached Rating = percentage of all possible viewers or listenersRating = percentage of all possible viewers or listeners Share = percentage of people using mediaShare = percentage of people using media Share is always a larger numberShare is always a larger number

Audience research All possible viewers or listeners 100%

Audience research TVHH 100%

HUT Not viewing HUT level = 50 50%

Audience research Tuned to our spot Not viewing

Audience research 25% of TVHH – 50% of HUT

Audience research Rating = 25 Share = 50

Audience research terms Gross ratings pointsGross ratings points Average quarter hour people (QHP)Average quarter hour people (QHP)

Audience research Began in the 1920s with radio listenershipBegan in the 1920s with radio listenership Archibald Crossley personal interviewsArchibald Crossley personal interviews C. E. Hooper – Hooperatings – personalC. E. Hooper – Hooperatings – personal A. C. NielsenA. C. Nielsen –Diaries –Audimeter

Audimeter

A.C. Nielsen Now only television ratingsNow only television ratings Use diaries, audimeters and “people meters”Use diaries, audimeters and “people meters” Meters used for “overnights”Meters used for “overnights”

A.C. Nielsen terminology Total survey area (TSA)Total survey area (TSA) Designated market area (DMA)Designated market area (DMA) –Every county in the U.S. assigned to a DMA Metro survey area (MSA)Metro survey area (MSA)

Market areas TSA TSA DMA DMA TSA

Arbitron Radio researchRadio research DairiesDairies Developing the “personal people meter” (PPM)Developing the “personal people meter” (PPM)

Arbitron terminology Total survey area (TSA)Total survey area (TSA) Area of Dominant Influence (ADI)Area of Dominant Influence (ADI) –Every county assigned to an ADI Metro survey area (MSA)Metro survey area (MSA)

Problems in audience research Poor return rates of diariesPoor return rates of diaries Absenteeism – controlled by PMsAbsenteeism – controlled by PMs HypingHyping What does “listening” or “viewing” really mean as it relates to advertising?What does “listening” or “viewing” really mean as it relates to advertising?