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SEM I 3.08

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  1. SEM I 3.08 SELECTING ADVERTISING MEDIA - DETERMINING REACH - CALCULATING MEDIA COSTS

  2. ADVERTISING – SLIDING SCALE RATES • Sliding-scale rates are discount rate structures offered • by newspapers to advertisers willing to purchase a large volume of advertising space over a one-year period. • Split-runs are a printing technique that allows publishers to print differentadvertisements for the same product in alternating copies of the publication. • Preferred position is newspaper/magazine space thought to attract the greatest audience attention. Color requirements in ads increase their cost, as do split-runs and preferred position.

  3. RADIO ADS – # OF LISTENERS REACHED • The costs of radio spots will increase or decrease depending upon the length of the advertisement, the time at which the advertisement is broadcast, the number oflisteners, and how often the ad is run. • Most production costs are a small part of the actual charges for broadcast time. The size of the business and the type of information being aired do not effect the advertising rate.

  4. OUTDOOR ADVERTISING - VISIBILITY • Higher rates will be charged for outdoor advertising that is placed in areas where it will be highly visible to pedestrians/motorists. • Outdoor advertising is not difficult to replace, is set up to be seen over a period of time, and is often felt to be an eyesore rather than to have artistic appeal.

  5. COST EFFICIENCY OF A MEDIA VEHICLE • Cost per thousand measures the cost efficiency of a media vehicle based on the cost of exposing 1,000 people to a promotional message. • To calculate cost per thousand, multiply the cost of the ad by 1,000, then divide by the number of listeners in the audience: CPM = cost of ad x 1,000 ($500 x 1,000 = $500,000) ÷ audience of 200,000 ($500,000 ÷ 200,000 = $2.50).

  6. GROSS RATING POINTS • Gross rating points (GRPs) is the % of people reached by a media vehicle, multiplied by the frequency of exposure to the advertisement. • The cost per GRP is calculated by dividing the total advertising expense by the number of gross rating points ($117,000 ÷ 240 = $487.50).

  7. DIRECT MAIL • Direct mail is a promotional medium that comes to consumers' homes in the form of letters, catalogs, postcards, and folders. It allows the advertiser to target a specific market. • Newspapers, billboards, and Yellow Pages will not be cost-effective because they will reach many people who may/may not be interested in the advertiser's product(s).

  8. RADIO SPOT COMMERCIALS • Radio requires a relatively short lead time for placing ads, and it is considered an effective medium for local and regional markets. • Point-of-purchase displays would reach only those customers who came into the business. A direct-mail campaign must be prepared well in advance and may not be delivered on time.

  9. IMPACT OF ADS • Impact is the impression an advertisement will make on the average consumer in a target market. Impact is created by the credibility, prestige, and editorial environment of a media vehicle. • Reach, frequency, and cost per thousand are quantitative factors used in media selection.

  10. LOCAL NEWSPAPER • The target market for a local hardware store is adults in the local area. • Network television and a national news magazine also target adults, but the national media provide too much wasted coverage for a local business. The local rock station's audience is generally teenagers, not adults.

  11. CONTINUOUS STRATEGY - ADS • Food is a product bought on a regular basis; thus, it needs a continuous scheduling strategy which provides steady, regular advertising. • A flighting strategy would be inappropriate since buying food is not a seasonal activity. Although a pulsing strategy offers regular advertising, it is not steady, but intermittent. I

  12. VOLUME DISCOUNTS - ADS • Newspapers frequently offer volume discounts to advertisers who purchase repeated amounts of space for ads. Offering volume discounts encourages advertisers to purchase more ad space because they receive a better price. • Newspapers usually charge flat rates for ads that appear only one time. Advertisers usually pay a higher rate to obtain a preferred position in the newspaper.

  13. TV SHOW RATINGS - ADS • Businesses that buy broadcast advertising try to purchase time when a large segment of their target market is watching television. These businesses need information about the ratings for certain shows in order to determine which ones attract a high volume of viewers. • The ratings for each show indicate approx. how many households in the viewing area watched the show on a given day.

  14. TV SHOW RATINGS - ADS • Businesses do not need information about the ownership of the stations, the qualifications of management, or the popularity of newscasters in order to purchase advertising time.

  15. PACKAGE RATES – RADIO ADS • Radio stations offer reduced rates to advertisers who agree to purchase a series of commercials over a certain period of time. • The package rates cost less than single commercials and provide considerable savings to advertisers. The stations also benefit because they have sold a block of time.

  16. PACKAGE RATES – RADIO ADS • Display is a kind of newspaper and magazine advertising which includes several elements such as illustrations, headlines, white space, and type. • Transit is a form of out-of-home media found in various modes and locations of mass transportation.

  17. CIRCULATION • Circulation is defined as the number of people reached by a media vehicle. A company with a well-known brand might want to reach as many people as possible. As a result, it places ads in nationally distributed publications instead of local publications. • Motivation is an influence/reason that causes someone to take action.

  18. REPUTATION OF PUBLICATION • Reputation often refers to the image/status of an entity. Businesses often consider a publication's reputation when buying advertising; however, a business's reputation does not always indicate details regarding the publication's readership or reach. • For example, it is possible for a magazine to have a good reputation & small reach.

  19. REPUTATION OF PUBLICATION • It is also possible for a publishing company to have some negative aspects in terms of overall reputation and still maintain a sizable reach. • Participation is the ability or willingness to take part or share something. A publication's participation in a variety of activities does not necessarily reflect its circulation in terms of size and demographics.

  20. PREFERRED POSITION • When requesting preferred positions, advertisers place their ads in the newspaper location that generates optimal exposure for their target market. • For example, an athletic shoe retailer might request placement in the sports sectionof the newspaper instead of the home and garden section. Because the advertiser is requesting a specific placement location, the advertiser pays a higher rate.

  21. RUN OF PAGE RATES - ADS Run-of-page rates do not allow advertisers to specify advertisement placement and are generally lower than the preferred-position rate. Contract rates are negotiated rates & are often lower than preferred-position rates. When ads are placed more than once, the advertiser often receives a frequency rate. The higher the frequency of ad placement, the lower the rate.

  22. CIRCULATION - REACH • Reach is a quantitative measure of the number of different people in the target audience who are exposed at least once to an advertising message. • Circulation is the number of people reached by a media vehicle. Magazine circulation includes subscription and newsstand sales. .

  23. CIRCULATION - REACH • To determine the % of reach for a radio ad, divide the actual # of message exposures (393,750) by the target audience of 18-30 yr.-old-males (875,000) (393,750/875,000 = .45 or 45%) .

  24. CIRCULATION - REACH • To determine the percentage of reach for a local cable-television advertisement, divide the actual number of message exposures (313,000) by the target audience of 16- 36-year-old females (939,000) = .33 or 33%). .

  25. MOVABLE BILLBOARD • Sport/Event marketers choose the media vehicles that will most effectively reach their target audiences. One vehicle is a movable billboard that drives throughout the area promoting a specific event. • These billboards are large and attract attention. As a result, they have proven to be a good promotional tool because they are seen by a lot of people.

  26. MEDIA VEHICLES • Airplane banners are often used to promote OTHER products during an event rather than to promote an upcoming event. • Internet advertising is NOT as effective because people must have access to the Internet in order to see the advertising. • Stadium posters reach ONLY those people who visit the stadium. .

  27. MEDIA VEHICLES • The most effective way to reach the public to promote a local event (e.g., charity fundraiser) is by running local television commercials. • Oftentimes, the television station will help sponsor the event by providing low cost or free airtime to run the commercials. The advantage to running local television commercials is they reach a lot of people for a low cost per exposure. .

  28. MEDIA VEHICLES • Direct mail is sent to consumers' homes and businesses and is often very expensive. • It is possible that many members of the local target market do not read national newspapers or consumer magazines. .

  29. COVER PRE-EVENT EXPENSES • By selling tickets for sport/events in advance (e.g., season ticket holders, groups), sport/event organizations obtain revenues before the sport/event occurs. These revenues can be used to cover expenses such as purchasing supplies, printing costs, and personnel salaries.

  30. REVIEW

  31. 28 (2). Which of the following decreases the costs to a business of using newspaper advertising: A. Color requirements • B. Sliding-scale rates • C. Preferred position • D. Split runs

  32. 28 (2). Which of the following decreases the costs to a business of using newspaper advertising: A. Color requirements • B. Sliding-scale rates • C. Preferred position • D. Split runs

  33. 29 (2). The cost to a business of radio spots will vary with the: A. Basic production costs • B. Size of the business • C. Number of listeners being reached • D. Type of information being aired

  34. 29 (2). The cost to a business of radio spots will vary with the: A. Basic production costs • B. Size of the business • C. Number of listeners being reached • D. Type of information being aired

  35. 30 (2). An important factor in determining rates for outdoor advertising is its: A. Short life • B. Ease of replacement • C. Visibility • D. Artistic appeal

  36. 30 (2). An important factor in determining rates for outdoor advertising is its: A. Short life • B. Ease of replacement • C. Visibility • D. Artistic appeal

  37. 31 (2). A radio station sells a 30-second spot for $500. If the number of listeners is 200,000, calculate the cost per thousand (CPM). A. $50.00 • B. $5.00 • C. $25.00 • D. $2.50

  38. 31 (2). A radio station sells a 30-second spot for $500. If the number of listeners is 200,000, calculate the cost per thousand (CPM). A. $50.00 • B. $5.00 • C. $25.00 • D. $2.50 : CPM = cost of ad x 1,000 ($500 x 1,000 = $500,000) ÷ audience of 200,000 ($500,000 ÷ 200,000 = $2.50).

  39. 32 (2). An advertiser spent $117,000 for 12 television spots with a total of 240 GRP (gross rating points). What was the cost per GRP? A. $975.50 • B. $585.50 • C. $712.50 • D. $487.50

  40. 32 (2). An advertiser spent $117,000 for 12 television spots with a total of 240 GRP (gross rating points). What was the cost per GRP? A. $975.50 • B. $585.50 • C. $712.50 • D. $487.50 ($117,000/240 = $487.50)

  41. 33 (2). When an advertiser wants to reach specific target markets, which type of print medium would be most cost-effective? A. Newspapers • B. Billboards • C. Direct mail • D. Yellow pages

  42. 33 (2). When an advertiser wants to reach specific target markets, which type of print medium would be most cost-effective? A. Newspapers • B. Billboards • C. Direct mail • D. Yellow pages

  43. 34 (2). Your business wants to sell a shipment of goods by the end of the current work week at the lowest advertising cost. Which of the following promotional media would be best: A. Ad in next Sunday’s paper • B. Direct-mail campaign • C. Point-of-purchase displays • D. Radio spot commercials

  44. 34 (2). Your business wants to sell a shipment of goods by the end of the current work week at the lowest advertising cost. Which of the following promotional media would be best: A. Ad in next Sunday’s paper • B. Direct-mail campaign • C. Point-of-purchase displays • D. Radio spot commercials

  45. 35 (2). Which of the following is a qualitative media factor used in the selection of promotional media: A. Reach • B. Frequency • C. Impact • D. Cost per thousand

  46. 35 (2). Which of the following is a qualitative media factor used in the selection of promotional media: A. Reach • B. Frequency • C. Impact • D. Cost per thousand

  47. 36 (2). Which of the following is the most appropriate promotional medium for a local hardware store: A. Local newspaper • B. Network television • C. Local rock station • D. National news magazine

  48. 36 (2). Which of the following is the most appropriate promotional medium for a local hardware store: A. Local newspaper • B. Network television • C. Local rock station • D. National news magazine

  49. 37 (2). What is the most appropriate media-scheduling strategy for advertising food and other frequently purchased items? • Continuous • Flighting • Pulsing • Intermittent

  50. 37 (2). What is the most appropriate media-scheduling strategy for advertising food and other frequently purchased items? • Continuous • Flighting • Pulsing • Intermittent