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Chapter 10. Broadcast and Interactive Online Media. Learning Objectives. Learn about television, radio, and Internet in terms of the overall trend, advantages and disadvantages as an advertising medium. Understand the reality of Internet as an advertising medium.

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Chapter 10

Chapter 10

Broadcast and Interactive Online Media


Learning objectives
Learning Objectives

  • Learn about television, radio, and Internet in terms of the overall trend, advantages and disadvantages as an advertising medium.

  • Understand the reality of Internet as an advertising medium.



Changes in broadcast television
Changes in Broadcast Television

Cable is Firmly Entrenched Worldwide and Is Still Growing

Battle Raging Over Who Will Control Digital TV Technology

Network TV’s Viewership Has Declined

Television is Now a Fragmented Medium



Forms of television advertising
Forms of Television Advertising

  • Sponsorships

    • Advertiser assumes the total financial responsibility for producing the program and providing the commercials.

  • Participations

    • Advertisers pay for 15, 30, or 60 seconds of commercial time during one or more programs.

  • Spot Announcements

    • Appear in the breaks between programs, usually local buyers.


Measuring the tv audience
Measuring the TV Audience

A.C. Nielsen Provides the Most Commonly Used Measures of National and Local TV Audiences:

Audimeter

Records When

The TV Set is Used

& Which Station

Watched

Viewing Diary

Provides Data On

Who is Watching

Shows

People Meters

Which TV Shows Are Being

Watched, Number of

Households Watching,

& Which Family

Members Are

Viewing


Pros and cons of broadcast tv advertising

Cons

Pros

Mass coverage

Low cost

Some selectivity

Impact

Creativity

Prestige

Social dominance

High production costs

High air-time costs

Limited selectivity

Brevity

Clutter

Zipping and Zapping

Pros and Cons of Broadcast TV Advertising


Pros and cons of cable advertising

Cons

Pros

Selectivity

Audience demographics

Low cost

Flexibility

Testability

Limited reach

Fragmentation

Quality

Zipping and zapping

Pros and Cons of Cable Advertising


Advantages of television
Advantages of Television

Reach a Large Audience in

A Cost-Efficient Manner

Use of Sound and Moving

Images Creates a Strong

Impact

Medium’s Influence on

Consumers’ Taste and

Perceptions is Pervasive


Disadvantages of television
Disadvantages of Television

Television

Is

Nonselective

Suffers

From a

Lack of

Flexibility

In

Scheduling

High

Level

Of

Commercial

Clutter

High

Cost of

Producing

&

Running

Commercials


Infomercial watchers

Ever purchased

anything in a store

based on information provided in an

infomercial?

Ever purchased

anything using a

toll-free number

at the end of an

infomercial?

Seen on

infomercial in

the past year?

Sex

Male 57% 8.0% 20.0%

Female 54 9.0 19.0

Age

18-24 70 4.0 19.0

25-34 63 9.0 19.0

35-49 58 12.0 20.0

50-64 55 10.0 26.0

65+ 33 3.0 13.0

Income ($)

under $15,000 53 4.5 22.5

15,000-20,000 52 11.0 24.0

20,000-30,000 62 8.0 21.0

30,000-40,000 63 9.0 25.0

40,000+ 60 11.0 16.0

Region

Northeast 65 7.0 24.0

North central 52 9.0 14.0

South 57 8.0 21.0

West 55 10.0 17.0

Total 55% 8.5$ 19.0%

Infomercial Watchers

  • Exhibit 9-4

  • Page 290


Structure of radio
Structure of Radio

AM Radio

FM Radio

Radio Can be Classified According to Transmission and Power.

Web Radio

Cable & DAB Radio


Radio advertising
Radio Advertising

Network Radio is a Group of Local Affiliates Connected to One or More National Networks Through Telephone Wire and Satellites and Has Increased in Popularity Because of:

Complete Market Coverage

Consolidation That Produced

4 Major Networks

Increase in Syndicated Shows

Emergence of Unwired Networks


The radio audience
The Radio Audience

Station Fans

46%, Clear Preference for One or Two Stations, Listen Up to 8 Hours a Day.

Radio Fans

34%, Listen to Four or Five Stations With No Preference for One Station.

Radio is a Highly Fragmented Medium

Music Fans

11%, Listen Exclusively for the Music Being Played.

News Fans

Choose Stations Based on a Need for News and Information.


Measuring the radio audience
Measuring the Radio Audience

  • Measure of the number of people listening to a particular station at a given time:

    • Station’s coverage, which is the geographic area that can pick up the station clearly.

    • Better measure is circulation, which measures the number of homes that are actually tuned in to the particular station.

    • Arbitron is an audience rating service.

    • RADAR is another rating service.

    • Birch/Scarborough-VNU conducts random phone interviews asking listening preferences.


Pros and cons of radio advertising

Cons

Pros

Reach and Frequency

Selectivity

Cost-efficiency

Timelessness

Immediacy

Local relevance

Creative flexibility

Limitations of sound

Segmented audiences

Short-lived and half- heard commercials

Clutter

Pros and Cons of Radio Advertising


Radio

Target Audiences

Inattentiveness

Flexibility

Lack of Visuals

Advantages

Disadvantages

Clutter

Affordability

Mental Imagery

Scheduling & Buying Difficulties

Lack of Control

High Levels of Acceptance

Radio


Interactive media
Interactive Media

  • Interactive technology (media) is a new form of broadcast media.

  • Estimate that Internet will capture 50 million users by 2000.

  • Formats for delivering ads:

    • Web page,

    • Banner ad,

    • E-mail.


Adoption curves for various media

120

80

60

50

40

20

0

Millions of Users

TV

Radio

Cable

Internet

1922 ‘26 ‘30 ‘34 ‘38 ‘42 ‘46 ‘50 ‘54 ‘58 ‘62 ‘66 ‘70 ‘74 ‘78 ‘82 ‘86 ‘90 ‘94 ‘98 Est

Years to reach 50 MM users

Radio 38

TV 13

Cable 10*

Internet 5**

Adoption Curves for Various Media

The Internet is the fastest growing medium in history

* Launch of HBO in 1976 was used to estimate the

beginning of cable as an entertainment/ad medium.

** Morgan Stanley Technology Research estimate

(Chart shows the Internet beginning as an entertainment/ad

medium in 1994 because its earlier use was restricted to

governmental activities)



Consumers use of interactive media

Types of Use Percent

Respondents making interactive purchases

within one year 58%

Of these:

Number who shopped via online service 86

Of these, number who used credit card 83

Number that shopped via Internet 43 Of these, number who used credit card 70

Number that switched to 800 number 16

Number that shopped via e-mail 8

Number that shopped via CD-ROM 5

Number making 2-4 purchases in last 6 months 47

Number making 5-10 purchases in last 6 months 12

Number who spent $26-$50 on each interactive purchase 46

Number who spent over $100 on each purchase 11

Types of products purchased

Books, music CDs, and videos 57

Computer related equipment 55

Flowers 20

Clothing 18

Travel 14

Respondents also making purchases from catalogs/TV shopping Channels 50

Consumers’ Use of Interactive Media


Broadcast and interactive media strategies
Broadcast and Interactive Media Strategies

Advertiser Should Ask About:

How Targeted

The

Audience Is

Cost of the

Medium

Ability to Meet

Advertising

Objectives

Ability to

Accommodate the

Style of

Message


Online products mix in 2000

Other 5%

Food and drink 5%

Gifts and flowers 10%

Apparel 5%

Entertainment 19%

Computer products 32%

Travel 24%

Online Products Mix in 2000


Pros and cons of internet advertising

Cons

Pros

Truly Interactive

Enormous audience

Immediate response

Affluent market

In-depth information

Rapid-growth industry

Business-to-business

Advertorials

Virtual storefront

Untested medium

Targeting costs

Slow downloads

Net yet mainstream

Ad may be placed inappropriately

Unproved security and privacy

Global marketing limitations

Pros and Cons of Internet Advertising


Internet advertising pros
Internet Advertising: Pros

  • Truly Interactive

  • Enormous audience

  • Immediate response

  • Affluent market

  • In-depth information

  • Rapid-growth industry

  • Business-to business

  • Advertorials

  • Virtual storefront


Internet advertising cons
Internet Advertising: Cons

  • Untested media

  • Targeting costs

  • Slow downloads

  • Net yet mainstream

  • Ad may be placed inappropriately

  • Unproved security and privacy

  • Global marketing limitation


Internet advertising reality
Internet Advertising: Reality

  • Advertising spending (Advertising Age 2001)

    • 1999: $2.8 million (1.3%)

    • 2000: $4.3 million (1.8%)

  • 61% of AA’s top 100 megabrands online (Forrester Research)


Internet advertising reality1
Internet Advertising: Reality

  • Advertising spending (Advertising Age 2001)

    • 1999: $2.8 million (1.3%)

    • 2000: $4.3 million (1.8%)

  • 61% of AA’s top 100 megabrands online (Forrester Research)


  • Various Forms of Internet advertising

    • Banner ads (55%): average click-through rate 0.3 to 0.5%

    • Sponsorships (27%)

    • Interstitials (4%): Rich media – average click-through rate just below 6%

    • Email (2%)

    • Others (12%)



Challenges
Challenges all revenues by 2003 (Forrester Research)

  • Can we go beyond current banners to create ads that are exciting, fun, and dynamic?

  • Can we increase ad impact through contextual relevancy?

  • Can we combine entertainment with brand equity?

  • Can ads be intrusive without being annoying?

  • Can ads communicate product superiority?


Review
Review all revenues by 2003 (Forrester Research)

  • Learn about television, radio, and Internet in terms of the overall trend, advantages and disadvantages as an advertising medium.

  • Understand the reality of Internet as an advertising medium.


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