PowerPoint Presentation by Charlie Cook The University of West Alabama Eighth Edition © 2010 South-Western, a part of Cengage Learning All rights reserved. Advertising Media: Planning and Analysis CHAPTER 11

1.Describe the major factors used in segmenting target audiences for media planning purposes. 2.Explain the meaning of reach, frequency, gross rating points, target rating points, effective reach, and other media concepts. 3.Discuss the logic of the three-exposure hypothesis and its role in media and vehicle selection. 4.Describe the use of the efficiency index procedure for media selection. 1.Describe the major factors used in segmenting target audiences for media planning purposes. 2.Explain the meaning of reach, frequency, gross rating points, target rating points, effective reach, and other media concepts. 3.Discuss the logic of the three-exposure hypothesis and its role in media and vehicle selection. 4.Describe the use of the efficiency index procedure for media selection. Chapter Objectives After reading this chapter you should be able to: © 2010 South-Western, a part of Cengage Learning. All rights reserved.11–2

5.Distinguish the differences among three forms of advertising allocation: continuous, pulsed, and flighted schedules. 6.Explain the principle of recency and its implications for allocating advertising expenditures over time. 7.Perform cost-per-thousand calculations. 8.Review actual media plans. 5.Distinguish the differences among three forms of advertising allocation: continuous, pulsed, and flighted schedules. 6.Explain the principle of recency and its implications for allocating advertising expenditures over time. 7.Perform cost-per-thousand calculations. 8.Review actual media plans. Chapter Objectives (cont’d) After reading this chapter you should be able to: © 2010 South-Western, a part of Cengage Learning. All rights reserved.11–3

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–4 Media versus Vehicles MediaMedia  General communication methods that carry advertising messages  Examples: television, newspapers, and Internet VehiclesVehicles  The specific broadcast programs or print choices in which advertisements are placed  Example: the American Idol program Each medium and vehicle has a unique set of characteristics and virtuesEach medium and vehicle has a unique set of characteristics and virtues

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–5 Messages and Media: A Hand-In-Glove Reaction Advertising message and media considerations are inextricably related—creatives and media specialists must team up to design adsAdvertising message and media considerations are inextricably related—creatives and media specialists must team up to design ads Choice of media and vehicles requires a variety of decisionsChoice of media and vehicles requires a variety of decisions  General media categories  Specific vehicles  Marcom budget allocations

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–6 Selecting and Buying Media and Vehicles Choices:Choices:  Traditional full-service ad agencies separately providing creative, planning, and media buying services for a client’s individual brands  Single media buyer and planner agency providing centralized media planning and buying services for all of the client’s brands Takeaway:Takeaway:  Creating effective messages is critical but it is just as essential that the messages are placed in the right media and vehicles.

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–7 The Media-Planning Process Media PlanningMedia Planning  Is the design of a strategy that will best allocate investments in advertising time and space to achieve the firm’s marketing objectives  Involves coordinating three levels of strategy: marketing, advertising, and media strategy Media Strategy ActivitiesMedia Strategy Activities 1. Selecting the target audience 2. Specifying media objectives 3. Selecting media categories and vehicles 4. Buying media

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–8 Model of the Media-Planning Process Figure 11.1

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–9 Selecting the Target Audience Buyographics Geographic Demographic Lifestyle/ Psychographics Segmentation Factors

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–10 Specifying Media Objectives Issues in Setting Media Objectives Frequency Reach Weight Cost Recency Continuity

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–11 Issues in Setting Media Objectives Reach What proportion of the population should be reached with advertising message during specified period? Frequency How frequently should audience be exposed to message during this period? Weight How much total advertising is needed to accomplish reach and frequency objectives? Continuity How should the advertising budget be allocated over time? Recency How close to the time of purchase should the target audience be exposed to the advertising message? Cost What is the most economically justifiable way to accomplish objectives?

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–12 Media Objective: Reach ReachReach  Is the percentage of the target audience exposed, at least once, during a specified time frame to the vehicles in which the advertising message is inserted  Also known as 1+, Net coverage, unduplicated audience, and cumulative audience (cume)  OTS = opportunity to see Determinants of ReachDeterminants of Reach  Use of multiple media  Diversification of vehicles within each medium  Varying dayparts for radio and TV advertising

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–13 Media Objective: Frequency FrequencyFrequency  Is the average number of times during a media- planning period that the target audience members are exposed to media vehicles carrying a brand’s advertising message.

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–14 Hypothetical Frequency Distribution for the Fortwo Advertised in Cosmopolitan Magazine Table 11.1

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–15 Media Objective: Weight Weight DefinedWeight Defined  The advertising volume required to accomplish advertising objectives RatingsRatings  The percentage of an audience that has an opportunity to see an advertisement placed in a particular vehicle Weight Metrics:Weight Metrics:  Gross rating points (GRPs)  Target ratings  Effective ratings

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–16 Weight Metrics Gross Rating Points (GRPs)Gross Rating Points (GRPs)  Represent the gross weight that a particular advertising schedule is capable of delivering—the sum of all vehicle ratings in a media schedule  GRPs = Reach (R) × Frequency (F)

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–17 Weight Metrics (cont’d) Target Rating Points (TRPs)Target Rating Points (TRPs)  Are adjusted vehicle’s ratings that reflect only those individuals who match the advertiser’s target audience  Indicate a media schedule’s net (non-wasted) weight

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–18 Weight Metrics (cont’d) The Concept of Effective ReachThe Concept of Effective Reach  Answers the question of how often does the target audience have an opportunity to be exposed  Is that an advertising schedule is effective only if it does not reach members of target audience too few or too many times Three-Exposure Hypothesis (Krugman)Three-Exposure Hypothesis (Krugman)  A minimum of three exposures to an advertising message needed for effective advertising

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–19 Weight Metrics (cont’d) Effective Reach Planning in Advertising PracticeEffective Reach Planning in Advertising Practice  No fewer than three and no more than ten exposures during a four-week media planning period  Use of multiple media  Subjective factors must be considered Effective Rating Points (ERPs)Effective Rating Points (ERPs)  ERPs = effective reach (or exposures) × frequency

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–20 Alternative Media Plans Based on a $25 Million Annual Budget and Four-Week Media Analysis Table 11.2

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–21 Weight Metrics (cont’d) An Alternative Approach: Frequency Value PlanningAn Alternative Approach: Frequency Value Planning  The objective is to select the media schedule that generates the most exposure value per GRP.  Step 1.Estimate the exposure utilities for OTS that a schedule produces.  Step 2.Estimate the frequency distribution of the various media schedules that are under consideration.  Step 3.Estimate the OTS value at each OTS level.  Step 4.Determine the total value across all OTS levels.  Step 5.Develop an index of exposure efficiency.

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–22 Exposure Utilities for Different OTS Levels Table 11.3

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–23 Frequency Distributions and Valuations of Two Media Schedules Table 11.4

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–24 Media Objective: Continuity ContinuityContinuity  Involves how advertising is allocated during the course of an advertising campaign.  Addresses the fundamental issue of how the media budget be distributed:  Uniformly throughout the period of the advertising campaign  In a concentrated period to achieve maximum impact  Some other schedule between these two choices

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–25 Allocating the Advertising Budget Continuous Schedule Pulsing Schedule Flighting Schedule Budgeting Alternatives

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–26 Advertising Budgeting Alternatives Continuous Advertising ScheduleContinuous Advertising Schedule  An equal number of ad dollars are invested throughout the campaign PulsingPulsing  Some advertising is used during every period of the campaign, but the amount of advertising varies from period to period FlightingFlighting  The advertiser varies expenditures throughout the campaign and allocates zero expenditures in some months

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–27 Continuous, Pulsing, and Flighting Advertising Schedules for a Brand of Ice Cream Figure 11.2

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–28 Advertising Budgeting Alternatives Recency Planning (a.k.a. The Shelf-Space Model) PrinciplesRecency Planning (a.k.a. The Shelf-Space Model) Principles 1.Consumers’ first exposure to an advertisement is the most powerful 2.Advertising’s primary role is to influence brand choice 3.Achieving a high level of weekly reach for a brand should be emphasized over acquiring heavy frequency

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–29 Recency Planning: Continuous Presence Advertising’s Role in Optimizing Weekly ReachAdvertising’s Role in Optimizing Weekly Reach  To influence brand selection by reminding, reinforcing, and evoking earlier messages  To reach consumers when they are ready to buy a brand—”rent the shelf”, not out of sight, out of mind  To reach consumers close to the time when they are making brand-selection decisions  Single exposure cost effectiveness is about three times the value of subsequent exposures  To reach as many consumers for as many weeks as possible rather than sporadically at select times

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–30 Allocating the Advertising Budget Toward Reconciliation: It Depends!Toward Reconciliation: It Depends!  No single budgeting approach is equally effective for all brands—what works best depends on the particular circumstances of the brand Strong Advertising ModelStrong Advertising Model  Advertising is important because it teaches consumers about brands and encourages trial purchases leading to the prospect of repeat buying Weak Advertising ModelWeak Advertising Model  Most advertising messages are not important to consumers and that consumers do not learn much from advertising

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–31 Cost Considerations Cost per Thousand (CPM)Cost per Thousand (CPM)  The cost of reaching 1,000 people as a measure of media efficiency  CPM = Cost of ad ÷ Number of total contacts reached (expressed in thousands) CPM-TMCPM-TM  The cost of reaching 1,000 members of the target audience, excluding those people who fall outside the target market  CPM-TM = Cost of ad ÷Number of target market contacts reached (expressed in thousands)

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–32 Cost Consideration Calculations Advertising at a Football GameAdvertising at a Football Game  Cost of message delivery = $  Stadium capacity = 80,000 persons  Cost per Thousand (CPM) = $ ÷ 80 = $ 6.25 Advertising on TelevisionAdvertising on Television  Total program viewership = 18,273,600 households  Cost of 30-second commercial = $780,000  CPM = $780,000 ÷ 18,273.6 = $42.68  Target market percentage = 60%  CPM-TM = $780,000 ÷ (60% × 18,273.6) = $71.14

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–33 Use Media Cost Calculations With Caution! The CPM and CPM-TM StatisticsThe CPM and CPM-TM Statistics  Are useful for comparing the cost-efficiency of different advertising vehicles, not their effectiveness  Lack comparability across media that are unique and priced differently  Can be misused unless vehicles within a particular medium are compared on the same basis (e.g., usage and timing)

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–34 The Necessity of Making Tradeoffs Why Tradeoffs?Why Tradeoffs?  Media planners operate under the constraint of a fixed advertising budget  Optimizing one objective impacts other objectives

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–35 Media-Scheduling Software Computerized Media-Scheduling ModelsComputerized Media-Scheduling Models  Attempt to optimize an objective function (e.g., reach) subject to satisfying constraints (e.g., budgetary limits) in developing a specific media schedule Steps in Using a Computerized ModelSteps in Using a Computerized Model 1. Develop a media database 2. Select the criterion for schedule optimization 3. Specify budget and frequency constraints for each vehicle 4. Seek out the optimum media schedule

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–36 Media Database for the Esuvee-H Table 11.5

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–37 ADplus Magazine Schedule for the Esuvee-H Table 11.6

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–38 ADplus Magazine Schedule for the Esuvee-H (cont’d) Table 11.6

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–39 Review of Media Plans The Diet Dr. Pepper CampaignThe Diet Dr. Pepper Campaign  Target:  Adults ages 18 to 49 who are present or prospective diet soft-drink consumers  Objectives:  To increase Diet Dr. Pepper sales by 4 percent and improve its growth rate to 1.5 times that of the diet soft-drink category.  To heighten consumers’ evaluations of the key product benefit and image factors that influence brand choice in this category.  To enhance brand-personality dimensions that differentiate Diet Dr Pepper from other diet drinks—particularly that Diet Dr Pepper is a unique, clever, fun, entertaining, and interesting brand to drink.

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–40 Review of Media Plans (cont’d) The Diet Dr. Pepper Campaign (cont’d)The Diet Dr. Pepper Campaign (cont’d)  Creative Strategy  To position the Diet Dr Pepper brand as “tasting more like regular Dr Pepper”—nearly 60 percent of initial trial users of Diet Dr Pepper are motivated by the desire to have a diet soft drink that tastes like regular Dr Pepper.  Media Strategy  Place advertisements during professional and college football games  Sponsor various special events  Continuously advertise during prime time, on late-night television, on syndicated programs, and on cable stations

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–41 Media Plan for Diet Dr Pepper Table 11.7

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–42 Media Plan for Diet Dr Pepper (cont’d) Table 11.7

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–43 Review of Media Plans (cont’d) Saab Model 9–5 CampaignSaab Model 9–5 Campaign  Target:  Upscale families and relatively affluent older consumers  Objectives:  Generate excitement for the new 9–5 model line  Increase overall awareness for the Saab name  Encourage consumers to visit dealers and test-drive the 9–5  Produce retail sales of 11,000 units of the 9–5 during the introductory year

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–44 Review of Media Plans (cont’d) Saab Model 9–5 Campaign (cont’d)Saab Model 9–5 Campaign (cont’d)  Creative Strategy  To position the 9–5 as a luxury automobile capable of delivering an ideal synthesis of performance and safety  Media Strategy  To generate high levels of reach and frequency among the target group of older and financially well-off consumers  Media Schedule:  Network and cable TV advertising before and following the 9–5’s introduction  Continuous magazine and newspaper advertising throughout the 9-5’s introduction year  Internet banner advertising the 9-5 model continuously throughout the introductory year

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–45 Media Plan for the Saab 9-5 Table 11.8

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–46 Review of Media Plans (cont’d) Olympus Camera Media PlanOlympus Camera Media Plan  Target:  Digital camera users  Objectives:  To introduce the Stylus Verve and the m:robe successfully  To shift marketplace perceptions that Olympus was a maker of designer electronics items and not merely cameras  Strategy  Place the Olympus message in media that people talk about, that generate buzz, that yield free media coverage, that have longevity, and that are influential.  To reach both men and women and suitable for Olympus’ fourth-quarter selling season (October through December)

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–47 Review of Media Plans (cont’d) Olympus Camera Media Plan (cont’d)Olympus Camera Media Plan (cont’d)  Media and Vehicles:  Sponsored sporting and fashion events  National network and cable TV programs with high viewership and buzz potential  Various magazines with different readership segments  Out of home (OOH) impact units in key Olympus markets  In-theater advertising in the top-25 markets  Online advertising through a non-branded interactive Web site

© 2010 South-Western, a part of Cengage Learning. All rights reserved.11–48 Media Plan for Olympus’ Stylus Verve and m:robe Brands Table 11.9