Advertising Media: Planning and Analysis

1. CHAPTER11 Advertising Media: Planning and Analysis © 2010 South-Western, a part of Cengage LearningAll rights reserved.

2. Chapter ObjectivesAfter reading this chapter you should be able to: • Describe the major factors used in segmenting target audiences for media planning purposes. • Explain the meaning of reach, frequency, gross rating points, target rating points, effective reach, and other media concepts. • Discuss the logic of the three-exposure hypothesis and its role in media and vehicle selection. • Describe the use of the efficiency index procedure for media selection. © 2010 South-Western, a part of Cengage Learning. All rights reserved. 11–2

3. Chapter Objectives (cont’d)After reading this chapter you should be able to: • Distinguish the differences among three forms of advertising allocation: continuous, pulsed, and flighted schedules. • Explain the principle of recency and its implications for allocating advertising expenditures over time. • Perform cost-per-thousand calculations. • Review actual media plans. © 2010 South-Western, a part of Cengage Learning. All rights reserved. 11–3

4. Media versus Vehicles • Media • General communication methods that carry advertising messages • Examples: television, newspapers, and Internet • Vehicles • The specific broadcast programs or print choices in which advertisements are placed • Example: the American Idol program • Each medium and vehicle has a unique set of characteristics and virtues © 2010 South-Western, a part of Cengage Learning. All rights reserved.

5. Messages and Media: A Hand-In-Glove Reaction • Advertising message and media considerations are inextricably related—creatives and media specialists must team up to design ads • Choice of media and vehicles requires a variety of decisions • General media categories • Specific vehicles • Marcom budget allocations © 2010 South-Western, a part of Cengage Learning. All rights reserved.

6. Selecting and Buying Media and Vehicles • Choices: • Traditional full-service ad agencies separately providing creative, planning, and media buying services for a client’s individual brands • Single media buyer and planner agency providing centralized media planning and buying services for all of the client’s brands • Takeaway: • Creating effective messages is critical but it is just as essential that the messages are placed in the right media and vehicles. © 2010 South-Western, a part of Cengage Learning. All rights reserved.

7. The Media-Planning Process • Media Planning • Is the design of a strategy that will best allocate investments in advertising time and space to achieve the firm’s marketing objectives • Involves coordinating three levels of strategy: marketing, advertising, and media strategy • Media Strategy Activities • Selecting the target audience • Specifying media objectives • Selecting media categories and vehicles • Buying media © 2010 South-Western, a part of Cengage Learning. All rights reserved.

8. Figure 11.1 Model of the Media-Planning Process © 2010 South-Western, a part of Cengage Learning. All rights reserved.

9. Selecting the Target Audience Segmentation Factors Buyographics Geographic Demographic Lifestyle/Psychographics © 2010 South-Western, a part of Cengage Learning. All rights reserved.

10. Specifying Media Objectives Frequency Reach Weight Issues in Setting Media Objectives Cost Recency Continuity © 2010 South-Western, a part of Cengage Learning. All rights reserved.

11. Issues in Setting Media Objectives © 2010 South-Western, a part of Cengage Learning. All rights reserved.

12. Media Objective: Reach • Reach • Is the percentage of the target audience exposed, at least once, during a specified time frame to the vehicles in which the advertising message is inserted • Also known as 1+, Net coverage, unduplicated audience, and cumulative audience (cume) • OTS = opportunity to see • Determinants of Reach • Use of multiple media • Diversification of vehicles within each medium • Varying dayparts for radio and TV advertising © 2010 South-Western, a part of Cengage Learning. All rights reserved.

13. Media Objective: Frequency • Frequency • Is the average number of times during a media-planning period that the target audience members are exposed to media vehicles carrying a brand’s advertising message. © 2010 South-Western, a part of Cengage Learning. All rights reserved.

14. Table 11.1 Hypothetical Frequency Distribution for the FortwoAdvertised in Cosmopolitan Magazine © 2010 South-Western, a part of Cengage Learning. All rights reserved.

15. Media Objective: Weight • Weight Defined • The advertising volume required to accomplish advertising objectives • Ratings • The percentage of an audience that has an opportunity to see an advertisement placed in a particular vehicle • Weight Metrics: • Gross rating points (GRPs) • Target ratings • Effective ratings © 2010 South-Western, a part of Cengage Learning. All rights reserved.

16. Weight Metrics • Gross Rating Points (GRPs) • Represent the gross weight that a particular advertising schedule is capable of delivering—the sum of all vehicle ratings in a media schedule • GRPs = Reach (R) × Frequency (F) © 2010 South-Western, a part of Cengage Learning. All rights reserved.

17. Weight Metrics (cont’d) • Target Rating Points (TRPs) • Are adjusted vehicle’s ratings that reflect only those individuals who match the advertiser’s target audience • Indicate a media schedule’s net (non-wasted) weight © 2010 South-Western, a part of Cengage Learning. All rights reserved.

18. Weight Metrics (cont’d) • The Concept of Effective Reach • Answers the question of how often does the target audience have an opportunity to be exposed • Is that an advertising schedule is effective only if it does not reach members of target audience too few or too many times • Three-Exposure Hypothesis (Krugman) • A minimum of three exposures to an advertising message needed for effective advertising © 2010 South-Western, a part of Cengage Learning. All rights reserved.

19. Weight Metrics (cont’d) • Effective Reach Planning in Advertising Practice • No fewer than three and no more than ten exposures during a four-week media planning period • Use of multiple media • Subjective factors must be considered • Effective Rating Points (ERPs) • ERPs = effective reach (or exposures) × frequency © 2010 South-Western, a part of Cengage Learning. All rights reserved.

20. Table 11.2 Alternative Media Plans Based on a $25 Million Annual Budget and Four-Week Media Analysis © 2010 South-Western, a part of Cengage Learning. All rights reserved.

21. Weight Metrics (cont’d) • An Alternative Approach: Frequency Value Planning • The objective is to select the media schedule that generates the most exposure value per GRP. • Step 1. Estimate the exposure utilities for OTS that a schedule produces. • Step 2. Estimate the frequency distribution of the various media schedules that are under consideration. • Step 3. Estimate the OTS value at each OTS level. • Step 4. Determine the total value across all OTS levels. • Step 5. Develop an index of exposure efficiency. © 2010 South-Western, a part of Cengage Learning. All rights reserved.

22. Table 11.3 Exposure Utilities for Different OTS Levels © 2010 South-Western, a part of Cengage Learning. All rights reserved.

23. Table 11.4 Frequency Distributions and Valuations of Two Media Schedules © 2010 South-Western, a part of Cengage Learning. All rights reserved.

24. Media Objective: Continuity • Continuity • Involves how advertising is allocated during the course of an advertising campaign. • Addresses the fundamental issue of how the media budget be distributed: • Uniformly throughout the period of the advertising campaign • In a concentrated period to achieve maximum impact • Some other schedule between these two choices © 2010 South-Western, a part of Cengage Learning. All rights reserved.

25. Allocating the Advertising Budget BudgetingAlternatives ContinuousSchedule Pulsing Schedule Flighting Schedule © 2010 South-Western, a part of Cengage Learning. All rights reserved.

26. Advertising Budgeting Alternatives • Continuous Advertising Schedule • An equal number of ad dollars are invested throughout the campaign • Pulsing • Some advertising is used during every period of the campaign, but the amount of advertising varies from period to period • Flighting • The advertiser varies expenditures throughout the campaign and allocates zero expenditures in some months © 2010 South-Western, a part of Cengage Learning. All rights reserved.

27. Figure 11.2 Continuous, Pulsing, and Flighting Advertising Schedules for a Brand of Ice Cream © 2010 South-Western, a part of Cengage Learning. All rights reserved.

28. Advertising Budgeting Alternatives • Recency Planning (a.k.a. The Shelf-Space Model) Principles • Consumers’ first exposure to an advertisement is the most powerful • Advertising’s primary role is to influence brand choice • Achieving a high level of weekly reach for a brand should be emphasized over acquiring heavy frequency © 2010 South-Western, a part of Cengage Learning. All rights reserved.

29. Recency Planning: Continuous Presence • Advertising’s Role in Optimizing Weekly Reach • To influence brand selection by reminding, reinforcing, and evoking earlier messages • To reach consumers when they are ready to buy a brand—”rent the shelf”, not out of sight, out of mind • To reach consumers close to the time when they are making brand-selection decisions • Single exposure cost effectiveness is about three times the value of subsequent exposures • To reach as many consumers for as many weeks as possible rather than sporadically at select times © 2010 South-Western, a part of Cengage Learning. All rights reserved.

30. Allocating the Advertising Budget • Toward Reconciliation: It Depends! • No single budgeting approach is equally effective for all brands—what works best depends on the particular circumstances of the brand • Strong Advertising Model • Advertising is important because it teaches consumers about brands and encourages trial purchases leading to the prospect of repeat buying • Weak Advertising Model • Most advertising messages are not important to consumers and that consumers do not learn much from advertising © 2010 South-Western, a part of Cengage Learning. All rights reserved.

31. Cost Considerations • Cost per Thousand (CPM) • The cost of reaching 1,000 people as a measure of media efficiency • CPM = Cost of ad ÷ Number of total contacts reached(expressed in thousands) • CPM-TM • The cost of reaching 1,000 members of the target audience, excluding those people who fall outside the target market • CPM-TM = Cost of ad ÷ Number of target market contacts reached (expressed in thousands) © 2010 South-Western, a part of Cengage Learning. All rights reserved.

32. Cost Consideration Calculations • Advertising at a Football Game • Cost of message delivery = $500.00 • Stadium capacity = 80,000 persons • Cost per Thousand (CPM) = $500.00 ÷ 80 = $ 6.25 • Advertising on Television • Total program viewership = 18,273,600 households • Cost of 30-second commercial = $780,000 • CPM = $780,000 ÷ 18,273.6 = $42.68 • Target market percentage = 60% • CPM-TM = $780,000 ÷ (60% × 18,273.6) = $71.14 © 2010 South-Western, a part of Cengage Learning. All rights reserved.

33. Use Media Cost Calculations With Caution! • The CPM and CPM-TM Statistics • Are useful for comparing the cost-efficiency of different advertising vehicles, not their effectiveness • Lack comparability across media that are unique and priced differently • Can be misused unless vehicles within a particular medium are compared on the same basis (e.g., usage and timing) © 2010 South-Western, a part of Cengage Learning. All rights reserved.

34. The Necessity of Making Tradeoffs • Why Tradeoffs? • Media planners operate under the constraint of a fixed advertising budget • Optimizing one objective impacts other objectives © 2010 South-Western, a part of Cengage Learning. All rights reserved.

35. Media-Scheduling Software • Computerized Media-Scheduling Models • Attempt to optimize an objective function (e.g., reach) subject to satisfying constraints (e.g., budgetary limits) in developing a specific media schedule • Steps in Using a Computerized Model • Develop a media database • Select the criterion for schedule optimization • Specify budget and frequency constraints for each vehicle • Seek out the optimum media schedule © 2010 South-Western, a part of Cengage Learning. All rights reserved.

36. Table 11.5 Media Database for the Esuvee-H © 2010 South-Western, a part of Cengage Learning. All rights reserved.

37. Table 11.6 ADplus Magazine Schedule for the Esuvee-H © 2010 South-Western, a part of Cengage Learning. All rights reserved.

38. Table 11.6 ADplus Magazine Schedule for the Esuvee-H (cont’d) © 2010 South-Western, a part of Cengage Learning. All rights reserved.

39. Review of Media Plans • The Diet Dr. Pepper Campaign • Target: • Adults ages 18 to 49 who are present or prospective diet soft-drink consumers • Objectives: • To increase Diet Dr. Pepper sales by 4 percent and improve its growth rate to 1.5 times that of the diet soft-drink category. • To heighten consumers’ evaluations of the key product benefit and image factors that influence brand choice in this category. • To enhance brand-personality dimensions that differentiate Diet Dr Pepper from other diet drinks—particularly that Diet Dr Pepper is a unique, clever, fun, entertaining, and interesting brand to drink. © 2010 South-Western, a part of Cengage Learning. All rights reserved.

40. Review of Media Plans (cont’d) • The Diet Dr. Pepper Campaign (cont’d) • Creative Strategy • To position the Diet Dr Pepper brand as “tasting more like regular Dr Pepper”—nearly 60 percent of initial trial users of Diet Dr Pepper are motivated by the desire to have a diet soft drink that tastes like regular Dr Pepper. • Media Strategy • Place advertisements during professional and college football games • Sponsor various special events • Continuously advertise during prime time, on late-night television, on syndicated programs, and on cable stations © 2010 South-Western, a part of Cengage Learning. All rights reserved.

41. Table 11.7 Media Plan for Diet Dr Pepper © 2010 South-Western, a part of Cengage Learning. All rights reserved.

42. Table 11.7 Media Plan for Diet Dr Pepper(cont’d) © 2010 South-Western, a part of Cengage Learning. All rights reserved.

43. Review of Media Plans (cont’d) • Saab Model 9–5 Campaign • Target: • Upscale families and relatively affluent older consumers • Objectives: • Generate excitement for the new 9–5 model line • Increase overall awareness for the Saab name • Encourage consumers to visit dealers and test-drive the 9–5 • Produce retail sales of 11,000 units of the 9–5 during the introductory year © 2010 South-Western, a part of Cengage Learning. All rights reserved.

44. Review of Media Plans (cont’d) • Saab Model 9–5 Campaign (cont’d) • Creative Strategy • To position the 9–5 as a luxury automobile capable of delivering an ideal synthesis of performance and safety • Media Strategy • To generate high levels of reach and frequency among the target group of older and financially well-off consumers • Media Schedule: • Network and cable TV advertising before and following the 9–5’s introduction • Continuous magazine and newspaper advertising throughout the 9-5’s introduction year • Internet banner advertising the 9-5 model continuously throughout the introductory year © 2010 South-Western, a part of Cengage Learning. All rights reserved.

45. Table 11.8 Media Plan for the Saab 9-5 © 2010 South-Western, a part of Cengage Learning. All rights reserved.

46. Review of Media Plans (cont’d) • Olympus Camera Media Plan • Target: • Digital camera users • Objectives: • To introduce the Stylus Verve and the m:robe successfully • To shift marketplace perceptions that Olympus was a maker of designer electronics items and not merely cameras • Strategy • Place the Olympus message in media that people talk about, that generate buzz, that yield free media coverage, that have longevity, and that are influential. • To reach both men and women and suitable for Olympus’ fourth-quarter selling season (October through December) © 2010 South-Western, a part of Cengage Learning. All rights reserved.

47. Review of Media Plans (cont’d) • Olympus Camera Media Plan (cont’d) • Media and Vehicles: • Sponsored sporting and fashion events • National network and cable TV programs with high viewership and buzz potential • Various magazines with different readership segments • Out of home (OOH) impact units in key Olympus markets • In-theater advertising in the top-25 markets • Online advertising through a non-branded interactive Web site © 2010 South-Western, a part of Cengage Learning. All rights reserved.

48. Table 11.9 Media Plan for Olympus’ Stylus Verve and m:robe Brands © 2010 South-Western, a part of Cengage Learning. All rights reserved.