MRK317 Integrated Marketing Communications Chapter 8 Media Decisions

Marianne Marando Winter 2005 Media Terminology  Media Planning - A series of decisions involving the delivery of messages to audiences.  Media Objectives - Goals to be attained by the media strategy and program.  Media Strategy - Decisions on how the media objectives can be attained.  Media - The various categories of delivery systems, including broadcast and print media.  Broadcast Media - Either radio or television network or local station broadcasts.

Marianne Marando Winter 2005 Media Terminology  Print Media - Publications such as newspapers, magazines, direct mail, outdoor, and the like.  Media Vehicle - The specific message carrier, such as the Washington Post or Tonight Show.  Coverage - The potential audience that might receive the message through the the vehicle.  Reach - The percentage of the target audience that is exposed at least once by the vehicle.  Frequency - The number of times the receiver is exposed to vehicle in a specific time period.

Marianne Marando Winter 2005 Developing the Media Plan Analyze the Market Establish Media Objectives - give direction Develop Media Strategy Implement Media Strategy Evaluate Performance

Marianne Marando Winter 2005 Which Media Vehicle?  Considerations (money not being an issue): What is the key message? How complicated is the product / message?  Factual details, print / interactive is likely choice  Demonstration important? – go with TV  Brief message? – transit or OOH  Urgency?-- newspaper is good What are the target group’s media habits?

Marianne Marando Winter 2005 Media Strategy Challenges  Insufficient information Some mediums cannot be measured Too expensive  Inconsistent terminologies Print vs. Radio  Difficulty measuring effectiveness

Marianne Marando Winter 2005 Marginal Analysis  One of the most used theoretical approaches to establish advertising budgets.  As advertising/ promotional expenditures increase, sales and gross margins also increase to a point, then they level off.

Marianne Marando Winter 2005 Managerial Approaches in Budget Setting You must understand…  Many firms apply more than one method  Budgeting approaches vary according to the size and sophistication of the firm

Marianne Marando Winter 2005 Factors Influencing Budgets Decision  Market size  Market potential  Market share goals  Economies of scale in advertising  IMC tools

Marianne Marando Winter 2005 Top Management Sets the Spending Limit The Promotion Budget Is Set to Stay Within the Spending Limit Top-Down Budgeting

Marianne Marando Winter 2005 Top-Down Approaches  The affordable method What we have to spare. What's left to spend.  Arbitrary allocation method No system. Seemed like a good idea at the time.

Marianne Marando Winter 2005 Top-Down Approaches  Percentage of sales method Taking a percentage of sales dollars. A fixed amount of the unit product cost to promotion multiplied by the number of units sold Disadvantages Sales Difficult for new products Decrease in sales, decrease in ad

Marianne Marando Winter 2005 Top-Down Approaches  Competitive parity method Match competitor or industry average spending.  Return on investment method Spending is treated as a capital investment.

Marianne Marando Winter 2005 Bottom-Up Approaches Total Budget Is Approved by Top Management Cost of Activities are Budgeted Activities to Achieve Objectives Are Planned Promotional Objectives Are Set

Marianne Marando Winter 2005 Bottom-Up Approaches  Objective and task method 1.Isolate objectives 2.Determine task required 3.Estimate required expenditure 4.Monitor 5.Reevaluate objectives  Payout planning Determines the investment value of the advertising and promotion appropriation.

Marianne Marando Winter 2005 Objective and Task Method Establish Objectives (create awareness of new product among 20 percent of target market) Determine Specific Tasks (advertise on market area television and radio and local newspapers) Estimate Costs Associated with Tasks (create awareness of new product among 20 percent of target market)

Marianne Marando Winter 2005 Media Strategy Decisions to be made 1.Target audience coverage 2.Media mix 3.Geographic coverage 4.Scheduling 5.Reach and Frequency

Marianne Marando Winter 2005 Target Audience Coverage Population excluding target market Target market Media coverage Media overexposure Coverage Exceeding Market Partial Market Coverage Full Market Coverage Target Market Proportion

Marianne Marando Winter 2005 Percentage of users in a demographic segment Percentage of population in the same segment Index =X 100 Index Target Audience Coverage

Marianne Marando Winter 2005 Example Our market is Take out Coffee  55% of women drink coffee  30% of men drink coffee  Women make up 52% of the population  Men make up 48% of the population Calculate an Index for men and women What does this mean?

Marianne Marando Winter 2005 Index Women: 55/52 = 1.1 Index Men = 30/48=.63

Marianne Marando Winter 2005 Media Strategy Decisions to be made 1.Target audience coverage 2.Media mix 3.Geographic coverage 4.Scheduling 5.Reach and Frequency

Marianne Marando Winter 2005 Brand and Category Analysis Percentage of brand to total Canadian sales in market Percentage of total Canadian population in market BDI =X 100 Brand Development Index

Marianne Marando Winter 2005 Brand Development Index Our brand is Tim Horton’s Coffee. We would like to compare our brand development in Ontario vs. Alberta. Let’s say that:  50% of our sales come from Ontario  30% of our sales come from Alberta  58% of the Canadian population lives in Ontario  29% of the Canadian population lives in Alberta Calculate the BDI for each province. What does this mean?

Marianne Marando Winter 2005 Brand Development Index  Ontario BDI = 50/58=.86  Alberta BDI = 30/29 = 1.03

Marianne Marando Winter 2005 Brand and Category Analysis Percentage of product category total sales in market Percentage of total Canadian population in market CDI =X 100 Category Development Index

Marianne Marando Winter 2005 Category Development Index Tim Horton’s example:  40% of sales of all takeout coffee come from Ontario  30% of sales of all takeout coffee come from Alberta  58% of the Canadian population lives in Ontario  29% of the Canadian population lives in Alberta Calculate the CDI for Ontario and Alberta

Marianne Marando Winter 2005 Category Development Index Ontario = 40/58 =.69 Alberta = 30/29 = 1.03

Marianne Marando Winter 2005 Brand and Category Analysis High market share Good market potential High market share Good market potential High market share Monitor for sales decline High market share Monitor for sales decline Low market share Good market potential Low market share Good market potential High CDI Low CDI Low market share Poor market potential Low market share Poor market potential High BDI Low BDI

Marianne Marando Winter 2005 Brand and Category Analysis The market usually represents good sales potential for both the product and the brand. The category isn’t selling well but the brand is; may be a good market in which to advertise but should be monitored for sales decline. The product category shows high potential but the brand isn’t doing well; the reason should be determined. High CDI Low CDI Both the product category and the brand are doing poorly; not likely to be a good place to advertise. High BDILow BDI

Marianne Marando Winter 2005 Media Strategy Decisions to be made 1.Target audience coverage 2.Media mix 3.Geographic coverage 4.Scheduling 5.Reach and Frequency

Marianne Marando Winter 2005 Three Scheduling Methods Continuity Pulsing Flighting JanFebMarAprMayJunJulAugSepOctNovDec

Marianne Marando Winter 2005 Lee Jeans Media Flow-chart

Marianne Marando Winter 2005 Media Blocking Chart

Marianne Marando Winter 2005 Media Strategy Decisions to be made 1.Target audience coverage 2.Media mix 3.Geographic coverage 4.Scheduling 5.Reach and Frequency

Marianne Marando Winter 2005 Balancing Strategic Variables ReachHow many people? FrequencyHow often hit? ContinuityHow long an effort?

Marianne Marando Winter 2005 Reach The total unduplicated audience exposed to a message one or more times in a period (week). Reach can be expressed as individuals or households, and can be expressed as a absolute number or a percentage.

Marianne Marando Winter 2005 Reach Formula Reach = # of target group tuned in x100 # of target group in area = 50, ,000 = 20%

Marianne Marando Winter 2005 Frequency The average number of times an audience is exposed to a message over a period of time (week).

Marianne Marando Winter 2005 Frequency Formula Frequency = Total Exposures Reach = 250,000 50,000 = 5.0

Marianne Marando Winter 2005 Impressions Impressions, or total exposures, are the total number of commercial occasions multiplied by the total target audience potentially exposed to each occasion.

Marianne Marando Winter 2005 Impressions Formula Impressions = Reach (in #’s) x Frequency = 500,000 x 4 = 2,000,000 (Reach = the number of individuals or households)

Marianne Marando Winter 2005 Gross Rating Points GRPs refer to the weight of a media schedule against a pre-determined target audience. GRP = Reach (%) x Frequency = 50 x 3.5 = 175

Marianne Marando Winter 2005 Determining Relative Cost of Media Cost of ad space (absolute cost) Circulation CPM =X 1,000 Cost per thousand (CPM)

Marianne Marando Winter 2005 Homemakers Magazine ChatelaineCanadian Living One time, 1 page, 4 colour $20,640$35,695$27,222 Circulation 1,290,000802,714561,102

Marianne Marando Winter 2005 Homemakers Magazine ChatelaineCanadian Living One time, 1 page, 4 colour $20,640$35,695$27,222 Circulation 1,290,000802,714561,102 CPM $16$44.47$48.57