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The Case for Spot a TVB presentation Produced in collaboration with Erwin Ephron.

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Presentation on theme: "The Case for Spot a TVB presentation Produced in collaboration with Erwin Ephron."— Presentation transcript:

1 The Case for Spot a TVB presentation Produced in collaboration with Erwin Ephron

2 “ nline advertising companies are increasingly desperate to use geographic targeting tools to reinforce their client's faith in Internet marketing... O

3 “In short, for a growing number of companies, this will be the year when the borderless Internet economy becomes an outmoded concept.” NEW YORK TIMES, MONDAY, APRIL 2, 2001

4 Revitalizing geo-targeting in the current mix of media strategies, is Local Broadcast Television’s challenge to Advertisers and Agencies.

5 For 30 years, media plans have been driven more by tight budgets than new ideas.

6 The building-blocks have been: EFFECTIVE FREQUENCY TARGETING CPM

7 Today we wonder why.

8 Is based on a rehearsed learning model (like memorizing a script). Effective frequency

9 There is good evidence that repetition alone is not how advertising works to influence consumers.

10 Demo-targeting Is often over-valued at the expense of other targeting criteria.

11 CPM Is a one-dimensional measure of media performance.

12 It focuses on exposure not communication, persuasion or sales.

13 In short, many of the planning tools we use are less useful.

14 In short, many of the planning tools we use are less useful.

15 And some familiar tools we neglect, now have greater value.

16 The aim of this new look at media planning is to create a more accountable process.

17 It is a point-of-view based on best practices.

18 And although the focus is on TV, the principles apply to all media.

19 We begin with an old joke...

20 "I've got enough money to last me the rest of my life." ”Provided I die at 3 o’clock."

21 The media planner’s version is heavier...

22 “I've got enough money to run an effective campaign.” “Provided it’s 16 weeks.”

23 There’s never enough money to advertise: at effective weight to all of the country for most of the year

24 That defines the planner’s assignment. Allocation.

25 Spending a limited resource for greatest total effect.

26 Think of the budget as...

27 A beautiful pie...

28 And media planning as...

29 Dividing-up the pie...

30 The pieces are... WEIGHT TARGETING CPM UNIT SIZE GEOGRAPHY WEEKS

31 The size of the portions determines the media plan.

32 And the size of each slice will determine the size of other slices.

33 1. WEIGHT LEVELS TRP’s, reach and frequency

34 Use moderate TRP’s and run more weeks.

35 We know advertising has its greatest effect when a consumer is “in the market.”

36 It works by influencing which brand is purchased.

37 For that reason, when a person gets a message is often more important...

38 …than how many messages a person gets.

39 It is as if there is a window in front of each purchase...

40 The job of the message is to influence that purchase.

41 The job of media is to put the message in the window. message

42 Because products are bought every day...

43 Brands need to remind people of their name and value every day.

44 This argues for more weeks of advertising.

45 Continuous Presence, not Effective Frequency.

46 These new ideas are called Recency Planning.

47 Since purchases are made continuously, but we usually don’t know who is ready to purchase...

48 REACHREACH The idea is to talk to as many target consumers as possible

49 Over as many weeks as possible C O N T I N U I T Y REACHREACH REACHREACH

50 PRINCIPLE Today the goal is “reach and continuity,” not “reach and frequency.”

51 2. TARGETING Demographics, user, usage

52 It’s easy to over-estimate how much demography is worth to a brand.

53 Example The target group is Women 18-49. It has a purchase index of 115.

54 A smaller target, like Women 18-34 in 5+ households, might index higher...

55 But it would not account for enough of a mass brand’s sales to be useful as a target.

56 That is the TV targeting paradox.

57 Small targets don’t concentrate enough sales.

58 But large targets don’t concentrate sales enough.

59 The reason is most TV brand demo-profiles are relatively flat.

60 That said, there are still targeting approaches which have great energy.

61 Recency, receptivity and geography are all powerful targeting tools.

62 Targeting Tools  Recency - Putting a message close to the purchase opportunity.  Receptivity - Reaching consumers who are in the market for a type of product.  Geography - Identifying markets with greatest sales potential.

63 PRINCIPLE Look well beyond demography to target potential brand purchasers.

64 3. CPM VALUE Reach, environment, attention

65 This is the twilight zone of media planning…too many conflicting theories.

66 Clearly there has been a move to cheaper media. In TV this has meant lower ratings and cable.

67 But as we gain in cost efficiency are we losing value?

68 There are reasonable arguments on both sides.

69 On the face of it, Recency Planning supports the use of low ratings...

70 ... Recency says reach is bought with dispersion, not high ratings.

71 Optimizers have supported this for national television.

72 Multi-tasking and repeated commercials result in less attention for all TV, regardless of rating level.

73 And some new data suggest rating size does not appear to affect message recall.

74 Yet research with Nielsen Quads suggests attention may be a function of rating-level.

75 And agency research shows that viewing duration (which favors higher ratings) predicts attentiveness.

76 CPM value is still very much under study. PRINCIPLE Be aware of the new data and be wary of CPM as a sole measure.

77 4. UNIT SIZE 30 or 15 second messages

78 Choice of unit is a creative decision, forced by pricing and budget. 15

79 15’s comprise close to one-third of national TV weight. But, there’s a paradox.

80 Research usually finds shorter units are more recall effective.

81 But sales tracking shows 15-second commercials are less sales effective. Source: Adworks 2

82 The conflict may be in the way 15’s are planned.

83 Even if two 15’s provide greater recall than a 30...

84 One 15 is still worth less.

85 Yet plans are written “60 TRP’s/50% 15’s by weight ” which sounds like 15’s are equal to 30’s.

86 Sixty TRP’s, half 15’s is at best 50 points in communication value.* * This assumes a 15 has 65% of the effect of a 30.

87 Don’t plan 15’s to make a budget appear bigger than it is. PRINCIPLE That does not help a campaign.

88 5. WEEKS Scheduling and weight

89 Research indicates increasing returns as weeks are added to a schedule. Source: Adworks 2

90 This suggests the overwhelming value of continuous advertising for Consumer Package Good brands.

91 Recency theory also supports more weeks of advertising.

92 The recency goal is to intercept sales with a brand message. The best schedule intercepts the most weekly purchases.

93 PRINCIPLE A moderate weekly reach goal results in a better performing schedule.

94 It intercepts more purchases, because it allows more weeks of advertising.

95 6. GEOGRAPHY National, spot or some combination.

96 Before we look at Geography, lets review what’s happened to the pie.

97 WEIGHT Should be moderate to generate more weekly reach.

98 TARGETING Look well beyond demography to target potential brand purchasers.

99 CPM’S Be wary of CPM as a sole measure.

100 UNIT SIZE 15’s should not be used to make a budget appear bigger.

101 WEEKS Have become highest priority in planning.

102 Both weeks and weekly reach are key recency planning goals.

103 But most brands can’t afford both when costs are increasing faster than budgets.

104 The old trade-offs for buying more weeks Less weight Smaller units Lower CPM’s

105 Have been pushed to the limit.

106 The remaining option is to target Geography. And that is spot planning.

107 “ ne of the most basic pieces of information that Web sites often lack is a visitor’s physical location.” O THE NEW YORK TIMES, MONDAY, APRIL 2, 2001

108 6. GEOGRAPHY Targeting with spot

109 Every brand has geographic areas of opportunity.

110 These are spot markets where advertising is most likely to produce sales.

111 They can be identified by BDI, CDI, brand share, growth or absolute volume.

112 Let’s begin with the most familiar measure, BDI, the market’s per-capita index of brand purchase.

113 BDI is calculated by dividing a DMA’s share of brand sales by its share of US population.

114 A market like Dallas, containing 3% of a brand’s sales and 2% of the population would have a BDI of 150.

115 For most brands, markets comprising a third of the US, will have a BDI index of 130 or higher.

116 This is far greater selectivity than demos provide. Here are a few examples:

117 Pasta Sauce Source: IRI Infoscan special tabulation/MRI The best 1/3 of the US indexes at 135 The best age demo only indexes at 112

118 Chevy Blazer Source: Polk Special tabulation/MRI The best 1/3 of the US indexes at 156 The best age demo only indexes at 122

119 Financial Planning Source: MRI Special tabulation The best 1/3 of the US indexes at 140 The best age demo only indexes at 114

120 Barbecue Sauce Source: IRI Infoscan special tabulation/MRI The best 1/3 of the US indexes at 133 The best age demo only indexes at 106

121 And there’s a bonus.

122 Since geography and demography aren’t linked, the benefits are cumulative.

123 A brand with a BDI of 115 for Men 18-49 and 130 for Boston...

124 Will index at 150 among Men 18-49 living in Boston (1.15 x 1.30).

125 When demography is coupled with geography, brand sales benefit.

126 “ f baseball fans are your target, you may want to consider geo- targeting your online advertising to Cleveland, Atlanta and Boston.” I JUST AN ONLINE MINUTE, APRIL 4, 2001

127 Using BDI spot is one dimensional. A brand, depending on it’s circumstances, should consider targeting...

128 Category sales (CDI) Competitive vigor (share) Brand growth (% change) Brand volume (dollars) Alone, or in combination.

129 An example: TVB was supplied with real sales & marketing data for a DTC allergy relief brand.

130 DTC Allergy Relief Source: IMS prescription data, MRI The best 1/3 of the US indexes at 148 The best age demo only indexes at 111

131 This brand has 50 high BDI markets with an average index of 148. Source: IMS prescription data Index 148 US Average 100

132 These are markets where brand sales are strongest.

133 Source: IMS prescription data Index 157 US Average 100 This brand has 100 high CDI markets with an average index of 157.

134 These are markets where sales potential is greatest.

135 Source: IMS prescription data Index 132 US Average 100 This brand has 50 high share markets with an average index of 132.

136 These are markets where the brand is most competitive.

137 Source: IMS prescription data US Average 100 Index 164 This brand has 80 high growth markets with an average index of 164.

138 These are markets where everything seems to be working.

139 The planner can merge market lists to identify DMA’s which meet complex criteria… >

140 …in order to focus on markets which have the greatest probability of responding.

141 In our DTC example: 6 markets meet 4 criteria 42 markets meet 3 criteria 20 markets meet 2 criteria Resulting in a 68 market customized geography.

142 These 68 markets represent 34% of US population, but 48% of brand sales.

143 POPULATION Geographic Segmentation DTC Brand, 68 spot markets Balance US 66% Spot Area 34%

144 SALES Geographic Segmentation DTC Brand, 68 spot markets Balance US 52% Spot Area 48%

145 Providing a spot area sales-to-population index of 141*. *48% sales/34% pop=141

146 In the past most spot had been used to heavy-up GRP’s in high BDI or CDI markets.

147 There is evidence that spot should also focus on high Share and Growth markets.

148 And that it should be used to add weeks, not weight.

149 This is a far more advanced approach to spot planning.

150 In our DTC example, taking national dollars to buy more weeks in these 68 spot markets will significantly improve the media plan’s performance.

151 It will place a brand message close to more purchases.

152 Today spot CPM’s are roughly comparable to network, especially when planned to maximize local daypart and program opportunities.

153 The selected 68 DTC markets comprise a third of the population.

154 So, one week of national TV will fund roughly three weeks of spot.

155 And since the value of these spot markets is 41% greater than the national average…

156 Spending 20% of dollars 41% more effectively will produce a significant performance gain for the brand.

157 The value of spot targeting becomes even more evident when we calculate a CPM based on brand purchase potential of the consumers reached. Consumer CPM

158 (This is the same kind of CPM data that is used to plan magazines.)

159 Using the DTC example, we can assume equal Network and Spot CPMs. $15.00 CPM target SPOTNETWORK

160 The 68 spot market grouping delivers 41% greater sales potential than the national average. 141100BDI $15.00 CPM target SPOTNETWORK

161 When you apply this advantage, the Spot CPM is dramatically reduced, relative to Network. $10.64$15.00CPM Sales 141100BDI $15.00 CPM target SPOTNETWORK

162 Even when demo CPM’s are similar, Spot’s ability to target geography results in a far more cost-efficient buy than a national TV schedule.

163 DMA market-value data for spot planning are now widely available.

164 IRI for CPG brands Polk for automobiles IMS for DTC drugs And MRI special tabs for a wide range of products and services.

165 TVB can help you locate the data.

166 CONCLUDING PRINCIPLE Spot should be used in high potential markets and be planned to add weeks, not weight.

167 When demography is coupled with geography, brand sales benefit.

168 GEOGRAPHY Is the missing strategy for many brands.

169 Thank You


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