Media Strategy, Tactics, and Budget Decisions

1. Media Strategy, Tactics, and Budget Decisions

2. Publications such as newspapers, magazines, direct mail, outdoor, etc. Publications such as newspapers, magazines, direct mail, outdoor, etc. The specific carrier within a medium category The specific carrier within a medium category Number of different audience members exposed at least once in a given time period Number of different audience members exposed at least once in a given time period The potential audience that might receive the message through the vehicle The potential audience that might receive the message through the vehicle The number of times the receiver is exposed to the media vehicle in a specific time period Media Terminology Print Media Media Vehicle Reach Coverage Frequency

3. Marketing Strategy Plan Creative Strategy Plan Setting Media Objectives Determining Media Strategy Selecting Broad Media Classes Selecting Media Within Class Media Use Decision — Broadcast Media Use Decision — Print Media Use Decision — Other Media Developing the Media Plan Situation Analysis Situation Analysis Marketing Strategy Plan Creative Strategy Plan Setting Media Objectives Determining Media Strategy Selecting Broad Media Classes Selecting Media Within Class

4. Measurement Problems Lack of Information Media Planning Challenges Measurement Problems Lack of Information Challenges in Media Planning Inconsistent Terms

5. Target Market Coverage Target Market Coverage Geographic Coverage Geographic Coverage Scheduling Scheduling Reach vs. Frequency Media Strategy Decisions Media Mix Media Mix

6. 1. Media Mix • Generally a number of alternatives • Decisions are based on: • Objectives • Product/service characteristics • Budget • Preferences • Creative strategy

7. Target Market Proportion Full Market Coverage Partial Market Coverage Coverage Exceeding Market 2. Target Audience Coverage Population excluding target market Target market Media coverage Media overexposure

8. 3. Geographic Coverage • Firms should maximize the effectiveness of advertising and promotion dollars by spending in markets where they will achieve the desired objectives. • Useful calculations examined by marketers to make this decision: • Brand Development Index (BDI) • Category Development Index (CDI)

9. Percentage of brand to total Canadian sales in market BDI = X 100 Percentage of total Canadian population in market Brand and Category Analysis Brand Development Index

10. Percentage of total product category sales in market CDI = X 100 Percentage of total Canadian population in market Brand and Category Analysis Category Development Index

11. Brand and Category Analysis High BDI Low BDI High market share Good market potential High market share Good market potential Low market share Good market potential Low market share Good market potential High CDI High market share Monitor for sales decline High market share Monitor for sales decline Low market share Poor market potential Low CDI

12. Brand and Category Analysis High BDI Low BDI The market usually represents good sales potential for both the product and the brand. The market usually represents good sales potential for both the product and the brand. The product category shows high potential but the brand isn’t doing well; the reason should be determined. The product category shows high potential but the brand isn’t doing well; the reason should be determined. High CDI 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 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. Both the product category and the brand are doing poorly; not likely to be a good place to advertise. Low CDI

13. Continuity Flighting Pulsing 4. Scheduling Three Scheduling Models Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

14. 5. Reach vs. Frequency Reach • Exposing potential buyers to the message. • There is no known way of determining how much reach is required to achieve levels of awareness, attitude change, or buying intention. • We cannot be sure an ad placed in a vehicle will actually reach the intended audience.

15. 5. Reach vs. Frequency Frequency • The number of times one is exposed to a media vehicle. • Advertiser has no way of knowing if exposure to a vehicle results in exposure to ad. • Therefore, one exposure to the vehicle constitutes reach. • This does not help determine frequency required to make an impact. • Precise determination requires consideration of creativity of ad, receiver involvement, noise, etc.

16. 5. Reach vs. Frequency Establishing Reach and Frequency Levels Figure 9-12

17. 5. Reach vs. Frequency • Gross Rating Points (GRPs) • Based on the total audience the media schedule may reach. • Use a duplicated reach estimate. GRP = Reach x Frequency

18. 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

19. Determining Effective Reach Figure 9-15

20. Brand Loyalty Brand Share Usage Cycle Brand History Share of Voice Purchase Cycles Target Group Marketing Factors Determining Frequency Marketing Factors Brand Loyalty Brand Share Usage Cycle Brand History Share of Voice Purchase Cycles

21. Message Complexity Message Uniqueness New Vs. Continuing Campaigns Image Versus Product Sell Message Variation Wearout Advertising Units Message Factors Determining Frequency Message or Creative Factors Message Complexity Message Uniqueness New Vs. Continuing Campaigns Image Versus Product Sell Message Variation Wearout

22. Clutter Scheduling Repeat Exposures Attentiveness Editorial Environment Number of Media Used Media Factors Determining Frequency Clutter Repeat Exposures Media Factors Attentiveness Editorial Environment Number of Media Used

23. Media Tactics Decisions • Media Vehicle • Budget Adjustments • Blocking Chart

24. Determining RelativeCost of Media Cost per thousand (CPM) Cost of ad space (absolute cost) CPM = X 1,000 Circulation

27. Newspaper Cost Calculation Newspaper rates are based on a per line rate There are two ways to calculate lines – MAL and Agate Some newspapers use one way, some use another Usually, the line rate goes down as you advertise more = Volume discounts

28. Calculating Newspaper Costs The Globe and Mail Assuming you spend only $25,000 per year Find the cost of: 320 line ad in the National Paper on Saturday for four Saturdays

29. Calculating Newspaper Costs The Toronto Star A 3000 line ad in the Saturday edition for 2 Saturdays

30. Factors Influencing Newspaper Rates A request for a specific page or section increases the cost. Position Charge Colour increases cost but it also increases awareness. Colour Rates are quoted on a CPM basis and are influenced by number of pages. Inserts

31. Buying Magazine Space The cost of the ad is determined by multiplying the page rate (by size) by the frequency. If a 1P, 4C ad costs $20,000 and it runs in 6 consecutive issues of a monthly magazine, the total cost would be: $20,000 x 6 = $120,000.

32. Magazine Cost Calculation Plan Canadian Geographic 1 Page 4 Colour 4 insertions The base rate would be the 3-5 times rate on the rate card. Cost Calculation: $10,755 x 4 = $43,020

33. Magazine Cost Calculation Find the cost of the following ad in Canadian Living 1 page, 4 times in the National edition What is the cost of the ad? What is the CPM?

34. Magazine Discounts The number of times the ad is run. Frequency The length of time during one year period. Continuity Total pages bought by all company brands during one year period. Corporate

35. Colour and Position Charges Colour advertising is the norm in magazines so rates are usually quoted as 4-colour rates. Higher rates are charged for cover positions and specific page requests. Inside Front (IFC), inside back (IBC), and outside back (OBC). About 20% more. Covers A specific page request increases the cost per page by 15 – 20%. Position Charge

36. Comparing Magazines for Efficiency Both magazines have different rates and circulations but the CPM is almost identical.

37. What we’re willing and able to spend What we need to achieve our objectives Media Budget: Balancing Objectives and Budget Dollars Goals

38. Managerial Approaches in Budget Setting Factors Influencing the Budget Decision • Market Size • Market Potential • Market Share Goals • Economies of Scale in Advertising • IMC Tools

39. Ad Spending and Share of Voice Decrease–find a Defensible Niche Increase to Defend High Competitor’s Share of Voice Attack With Large SOV Premium Maintain Modest Spending Premium Low Low High Your Share of Market

40. The Promotion Budget Is Set to Stay Within the Spending Limit Top-Down Budgeting Top Management Sets the Spending Limit Top Management Sets the Spending Limit

41. Competitive Parity Arbitrary Allocation Percentage of Sales Return on Investment Affordable Method Top-Down Budgeting Methods Competitive Parity Arbitrary Allocation Percentage of Sales Top Management Affordable Method

42. Total Budget Is Approved by Top Management Cost of Activities are Budgeted Cost of Activities are Budgeted Activities to Achieve Objectives Are Planned Activities to Achieve Objectives Are Planned Bottom-Up Budgeting Promotional Objectives Are Set Promotional Objectives Are Set

43. Determine Specific Tasks (advertise on market area television and radio and local newspapers) Estimate Costs Associated with Tasks (determine costs of advertising, promotions, etc…) Objective and Task Method Establish Objectives (create awareness of new product among 20 percent of target market) 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)