All types of business need advertising and marketing assistance to help generate awareness, interest, and ultimately, profit. Obviously the Internet has changed the landscape of advertising by adding another media form, the presence of which appears to be everywhere.
The way we use the Internet has changed. And the way Google—by far the most dominant search engine—leads us to web pages has also changed. With that in mind, we’ve decided to create a case study in the property management vertical. Just how much does domain name matter? Are links really all that important? What about content? What about TLDs (top-level domains)?
So, starting from ground zero, we’re setting out to determine what matters when you’re trying to get a website business up and running. Why property management? We chose this vertical partly because we have experience in the field of lead generation for property management companies. So we’re familiar with the players, the content required, and business issues. We also chose it because it’s an appropriate mid-sized market.
An important question for us is how quickly can we get a website up, running, and generating leads, using minimal time and money.
With that in mind, we’ve selected ten domain names, with varying TLDs. Of the ten, six have .org TLDS. Five of the domains contain a “geo” for major US cities, on the assumption that you are more likely to rank higher using a term because they filter out competition from irrelevant locations. These domains are: Portland (propertymanagementportland.org), Houston (propertymanagementhouston.org), Atlanta (propertymanagementatlanta.org), Chicago (chicagopropertymanagement.org), and San Diego (sandiegopropertymanagement.org). And one .org domain is a general domain, propertymanagmentcompanies.org.
The remaining four domains are a bit of an experiment using the .co, .management, and .net TLDs. They also contain a “geo” designation for a major US city: Denver (propertymanagementdenver.net), Utah (propertymanagementutah.org), Tucson (tucsonproperty.management), and Orlando (propertymanagementorlando.co).
Stay tuned as we explore the most efficient and cost effective ways to get traffic to websites.
The two basic tasks of marketing communications are message creation and message dissemination. Media planning supports message dissemination. Media planning helps you determine which media to use--be it television programs, newspapers, bus-stop posters, in-store displays, banner ads on the Web, or a flyer on Facebook. It also tells you when and where to use media in order to reach your desired audience. Simply put, media planning refers to the process of selecting media time and space to disseminate advertising messages in order to accomplish marketing objectives. When advertisers run commercials during the Super Bowl game at more than $2.5 million per thirty-second spot, for example, media planners are involved in the negotiation and placement.
Media planners often see their role from a brand contact perspective. Instead of focusing solely on what medium is used for message dissemination, media planners also pay attention to how to create and manage brand contact. Brand contact is any planned and unplanned form of exposure to and interaction with a product or service. For example, when you see an ad for Volkswagen on TV, hear a Mazda's "zoom zoom" slogan on the radio, are told by a friend that her iPod is the greatest invention, or sample a a new flavor of Piranha energy drink at the grocery store, you are having a brand contact. Television commercials, radio ads, and product sampling are planned forms of brand contact. Word of mouth is an unplanned brand contact -- advertisers normally do not plan for word of mouth. From the consumer's perspective, however, unplanned forms of brand contact may be more influential because they are less suspicious compared to advertising.
The brand contact perspective shows how the role of media planners has expanded. First, media planners have moved from focusing only on traditional media to integrating traditional media and new media. New media -- cable and satellite television, satellite radio, business-to-business e-media, consumer Internet, movie screen advertising and videogame advertising -- is playing an increasingly significant role. Spending on new advertising media is forecast to grow at a compound annual rate of 16.9 percent from 2005-2009, reaching $68.62 billion by 2009, while traditional media advertising is expected to rise only 4.2 percent on a compound annual basis during the same period to $192.28 billion.
Second, media planners are making more use of product placements now, in lieu of advertising insertions. Advertising insertions, like print ads or television commercials, are made separately from the content and are inserted into it. The ads are distinct from the articles or TV programs, not a part of them. As a result, the ads seem intrusive. In contrast, product placement (also called brand placement or branded entertainment) blends product information with the content itself. Whether content is a television program, movie, video game or other form of entertainment, product placement puts the brand message into the entertainment content. For example, in the movie E.T., the extraterrestrial eats Reese's Pieces candy. The candy was authentically integrated into the movie ?and sales of Reese's Pieces soared 80% after the movie, catapulting the new product to mainstream status. On the other hand, inappropriate or excessive product placements may do more harm than good to the brand.
Finally, the role of media planners has expanded as media planners have moved beyond planned messages to take advantage of unplanned messages as well. Whereas planned messages are what advertisers initiate -- like an ad, press release or sales promotion -- unplanned messages are often initiated by people and organizations other than advertisers themselves. Word of mouth, both online and offline, is one form of unplanned message. Although advertisers have little direct control over the flow of unplanned messages, they can facilitate such a flow.
For example, advertising agency Crispin Porter + Bogusky (CP+B) created a viral marketing mascot, the Subservient Chicken, for Burger King to illustrate its slogan "Have It Your Way." Visitors to the www.subservientchicken.com site can ask the chicken to make a move, such as jump, dance or lay an egg. In the first two weeks after the site's launch, the Subservient Chicken story appeared on 63 broadcast segments, including five separate segments in television shows unplanned success. Within months, the site had generated 426 million hits from 15 million unique visitors averaging six minutes per session. Many visitors learned about the site through word of mouth, both online and offline. More recently, specialized agencies have started to hire word of mouth agents to work for advertisers on a fee basis. Initial research suggests that many consumers react positively to this kind of word of mouth communication. For example, Rock Bottom brew pub chain, reported a 76% jump in 2003 revenues after hired gun Bzz-Agent launched a 13-week word of mouth campaign employing 1,073 of its "agents" to get the word out.
These new approaches have altered how media planning works in the advertising process. "Seven years ago media was the last five minutes of the presentation. Now it's reversed," said Rishad Tobaccowala of Publicis Groupe Media, whose fast-growing Starcom division helps clients buy and measure interactive, mobile, and gaming ads. Media planners are playing an increasingly important role in today's advertising industry because of the continuing proliferation of new media options and the increased complexity of media and audience research.
How is a media plan developed? Media planning is a four-step process which consists of 1) setting media objectives in light of marketing and advertising objectives, 2) developing a media strategy for implementing media objectives, 3) designing media tactics for realizing media strategy, and 4) proposing procedures for evaluating the effectiveness of the media plan.
Let's take a look at the planning process through an example: P&G's launch of the Gillette Fusion shaving system for men in early 2006. First, P&G's media objectives called for a $200 million media blitz to reach men in the U.S.
Second, P&G's strategy included a mix of national media to introduce the brands. For example, television advertising, such as a $5 million Super Bowl ad campaign, portrayed Fusion as an advanced technology found in a secret government UFO lab. The TV ads also established the brand's signature orange and blue color scheme. In store aisles, 180,000 display units promoted Fusion, using the brand's colors to catch consumers' attention. "We're trying to put the product wherever men shop," said Pauline Munroe, marketing director for blades and razors in P&G's Gillette business unit.
Third, P&G's media tactics -- such as a Father's Day sweepstakes, an episode of NBC's The Apprentice in which the show's teams competed to promote the razor, and sponsorship of competitive surfing -- helped the company reach men of all ages. "Fusion will get so much attention that it will drive a lot of men to try these grooming products," said Gary Stibel of New England Consulting Group. Finally, P&G used sales and market share targets to assess the effectiveness of the media plan. P&G expects sales of Fusion to reach $1 billion in sales by year three. P&G knows that the brand has already achieved 25% market share in the U.S. Thus, although $200 million seems like a lot to spend on advertising a new product, it represents a sound financial investment toward the tremendous future profit that P&G will gain from the new shaving system.
Now, let's take a deeper look into the media planning process. Media planning, such as planning the marketing communications for the launch of the Fusion new shaving system, starts with setting media objectives. Media objectives usually consist of two key components: target audience and communication goals. The target audience component of the media objectives defines who is the intended target of the campaign. For example, P&G's target audience objective for its Fusion shaving system was men 18-40 years old. The communications goals component of the media objectives defines how many of the audience the campaign intends to reach and how many times it will reach them. In short, media objectives are a series of statements that specify what exactly the media plan intends to accomplish. The objectives represent the most important goals of brand message dissemination, and they are the concrete steps to accomplish marketing objectives.
The next two sections (2.1. and 2.2.) provide details on target audience and communication goals. You'll learn about sources of data to use to identify your target audience. You'll also learn how to quantify communication plans.
The first objective of a media plan is to select the target audience: the people whom the media plan attempts to influence through various forms of brand contact. Because media objectives are subordinate to marketing and advertising objectives, it is essential to understand how the target audience is defined in the marketing and advertising objectives. The definition may or may not be exactly the same, depending on the marketing and advertising objectives and strategies.
A common marketing objective is to increase sales by a specific amount. But this marketing objective does not specify a target audience, which is why the media objective is needed. Consider Kellogg's Corn Flakes and all the different strategies the advertiser could use to increase sales among different target audiences. For example, one target audience might be current customers -- encouraging people who eat one bowl a day to also "munch" the cereal as a snack. Or, the advertiser might target competitors' customers, encouraging them to switch brands. Or, the advertiser might target young adults who are shifting from high sugar "kids cereals" to more adult breakfast fare. Finally, the advertiser could target a broader lower-income demographic. The point is that each campaign could increase sales via a different target audience.
Marketers analyze the market situation to identify the potential avenues for boosting sales increase and consider how advertising might achieve those aims. If the advertiser chooses to attract competitors' customers -- like what Sprint does to attract users of other wireless services -- the media plan will need to define the target audience to be brand switchers and will then identify reasons to give those potential switchers to switch, such as greater convenience, lower cost, or additional plan features. For example, in 2006 Sprint Nextel ran an ad campaign urging consumers to switch to Sprint because "no one has a more powerful network."
The target audience is often defined in terms of demographics and psychographics. Syndicated research services such as Simmons Market Research Bureau (SMRB or Simmons) and Mediamark Research Inc. (MRI) provide national data on a number of demographics of U.S. consumers, including gender, age, education, household income, marital status, employment status, type of residence, and number of children in the household. Using demographic variables, for example, the target audience of a media plan could be "individuals who are 26-to-45 years old with yearly household income of $50,000 or more" or "all households with children age 3 years or younger."
Some advertisers believe that demographic definitions of a target audience are too ambiguous, because individual consumers that fit such definitions can be quite different in terms of their brand preference and purchase behavior. For example, think about the students in a media planning class. Even though some of them are the same age and gender, they may like different brands of toothpaste, shampoo, cereal, clothing, and other products. Therefore, media planners use psychographics to refine the definition of the target audience.
Psychographics is a generic term for consumers' personality traits (serious, funny, conservative), beliefs and attitudes about social issues (opinions about abortion, environment, globalization), personal interests (music, sports, movie going), and shopping orientations (recreational shoppers, price-sensitive shoppers, convenience shoppers). Mazda, for example, doesn't define its target audience by age, income or gender, but by psychographic principles. Mazda targets people who have a need for self-expression, are young at heart, and love to drive.
One psychographic system which media planners often use is called VALS (short for Values And LifestyleS), which was developed by SRI in the 1980s. VALS places U.S. adult consumers into one of eight segments based on their responses to the VALS questionnaire. The eight segments are: Innovators, Thinkers, Achievers, Experiencers, Believers, Strivers, Makers and Survivors. Each segment has a unique set of psychological characteristics. For example, Innovators are "successful, sophisticated, take-charge people with high self-esteem. Because they have such abundant resources, they exhibit all three primary motivations in varying degrees. They are change leaders and are the most receptive to new ideas and technologies. Innovators are very active consumers, and their purchases reflect cultivated tastes for upscale, niche products and services." Defining a target audience by psychographic variables helps not only creative directors with the development of advertising appeals but also media planners with the selection of effective media channels. If a psychographic group of consumers likes playing golf, for example, they are likely to read golf-related magazines and visit golf-related Web sites.
In addition to demographics and psychographics, generational cohort is another useful concept for selecting the target audience. Because the members of a particular generational cohort are likely to have had similar experiences during their formative years, they maintain analogous social views, attitudes, and values. Generational cohorts in the U.S. are the Baby Boomers (about 70 million people born 1945-1964), Generation X (about 17 million people born in 1965-1978), and Generation Y (about 60 million people born between 1979 and 1994). Each of the cohorts possesses distinct characteristics in their lifestyles and often serves as a reference group from which finer segments of the target audiences can be selected for specific advertising campaigns.
An interesting example of a generational cohort is "kogals" in Japan. Originating from the world for "high school," kogals are a unique segment of young women in urban Japan who conspicuously display their disposable incomes through unique tastes in fashion, music, and social activity. They have the leisure time to invent new ways of using electronic gadgets. For example, they started changing mobile phones' ring tones from boring beeps to various popular songs and changing screen savers from dull defaults to cute pictures. Manufacturers observe kogals and listen to what they say is unsatisfactory about the products. In some cases, manufacturers simply imitate the new usages that kogals spontaneously invented and incorporate these usages part of their own new commercial services, thereby increasing sales.
Target audiences can also be more precisely defined by their consumption behavior. Product usage includes both brand usage (the use of a specific brand such as Special K cereal or Dove soap) and category usage (the use of a product category such as facial tissue or chewing gum). Product use commonly has four levels: heavy users, medium users, light users and non-users. The levels of use depend on the type of product. For example, Simmons defines heavy domestic beer users as those who consume five or more cans in the past 30 days, medium beer users as those who consumer two to four cans, and light users as those who consume one can in 30 days. For travel, Simmons' definitions are: three foreign trips per year indicate heavy travel users, 2 foreign trips per year are medium travel users, and 1 trip per year are light travel users. There is a popular saying in the industry: "the twenty percent who are heavy users account for eighty percent of the sales of a product." This highlights the importance of heavy users for a brand's performance. Examples of defining a target audience by product usage can be "individuals who dine out at least four times in a month" or "individuals who made domestic trips twice or more last year."
Similarly, brand usage has several categories. Brand loyals are those who use the same brand all the time. Primary users use a brand most of the time but occasionally also use other brands in the same category; they are secondary users for these competing brands. Brand switchers are those who have no brand preference for a given product category but choose a brand on the basis of situational factors. An analysis of the brand usage pattern is helpful for the identification of the appropriate target audience. Simmons  and MRI  offer brand usage data for many national brands.
The target audience in a media plan can be either primary or secondary. A primary target audience is one that plays a major role in purchase decisions, while a secondary target audience plays a less decisive role. In the case of video game players, for example, children's requests often initiate a purchase process; parents often respect their children's brand selection. Thus, it is reasonable to consider children as the primary target audience and their parents as the secondary target audience. If the parents are aware of the advertised brand, it will be easier for children to convince them of the purchase. Media planners need to examine and identify the role of consumers in shopping, buying and consuming a product or service to target the right groups of consumers effectively.
In the process of defining a target audience, media planners often examine and specify the actual size of a target audience -- how many people or households fit the definition. Knowing the actual size helps advertisers to estimate the potential buying power of the target audience. For example, if the target audience of a campaign is defined as working women 26-to-44 years old who are interested in receiving daily news updates on their mobile phones, media planners should estimate the number of these women in the U.S. to quantify the sales potential.
As another example, if the target audience consists of 2,000,000 households in the U.S. and each household purchases the brand two times a month, the monthly sales would be 4,000,000 units. The U.S. Census Bureau  provides the most authoritative data about demographics of the U.S. population by state. Whereas the U.S. Census provides demographic data, market research services such as Simmons and MRI provide demographic data that is linked to product data. This means that media planners can get information about consumers of hundreds of product types.
After media planners define the target audience for a media plan, they set communication goals: to what degree the target audience must be exposed to (and interact with) brand messages in order to achieve advertising and marketing objectives. For example, one communication goal can be that 75 percent of the target audience will see the brand in television commercials at least once during a period of three months. Another communication goal is that 25 percent of the target audience will form a preference for a new brand in the first month of the brand launch. The different communication goals can be better understood in a hierarchy of advertising objectives, such as Bill Harvey's expansion of an earlier model of Advertising Research Foundation (ARF).
The expanded ARF model has ten levels, as shown in Figure 1. The first three levels of goals from the bottom -- vehicle distribution, vehicle exposure, and advertising exposure -- are particularly relevant for media planning. Vehicle distribution refers to the coverage of a media vehicle, such as the number of copies that a magazine or newspaper issue has, or the number of households that can tune in to a given television channel. Vehicle exposure refers to the number of individuals exposed to the media vehicle, such as the number of people who read a magazine or watched a television program. Advertising exposure refers to the number of individuals exposed an ad or a commercial itself.
It is important to note the difference between vehicle exposure and advertising exposure for many media with editorial content. For example, not all audience members of a television program will watch all the commercials interspersed in the program. A study shows that only 68 percent of television audiences watch the commercials in television programs. Vehicle exposure represents only an opportunity to see an ad, not necessarily that the ad has actually been seen. In reality, advertising exposure is rarely measured, and media planners use vehicle exposure as a proxy measure of advertising exposure.
Another group of communication goals is advertising recall, advertising persuasion, leads and sales. Advertising recall represents the cognitive effect of the ad, advertising persuasion represents the emotional effect of the ad, and leads and sales are the behavioral effects of the ad. Each can be specified in a media plan as a communication goal. For example, a communication goal can specify that 50% of the target audience will recall the radio ad during the month of the campaign, or that a campaign will generate 3000 leads.
Media planners often define the communication goals of a media plan using the three interrelated concepts of reach, gross rating points, and frequency. Media planners use reach to set their objective for the total number of people exposed to the media plan. Reach is one of the most important terms in media planning and has three characteristics. First, reach is a percentage, although the percentage sign is rarely used. When reach is stated, media planners are aware of the size of the target audience. For example, if a media plan targets the roughly 5 million of women who are 18-25 years old, then a reach of 50 means that 50% or 2.5 million of the target audience will exposed to some of the media vehicles in the media plan. Second, reach measures the accumulation of audience over time. Because reach is always defined for a certain period of time, the number of audience members exposed to the media vehicles in a media plan increases over time. For example, reach may grow from 20 (20%) in the first week to 60 (60%) in the fourth week. The pattern of audience accumulation varies depending on the media vehicles in the media plan. Third, reach doesn't double-count people exposed multiple times if the media plan involves repeated ads in one media category or ads in multiple media categories. Media planners use reach because it represents that total number of people exposed to the marketing communication.
Besides reach, media planners use Gross Rating Points as a shorthand measure of the total amount of exposure they want to buy from media outlets such as TV networks. For example, the 2006 Super Bowl game received a rating of 42, which means 42 percent of U.S. television households tuned in to the program. If an advertiser planned to run a commercial once during the Super Bowl, that ad would appear in 42% of households. If the commercial was run only once, the reach is equal to the rating of the program, a GRP of 42. If the advertiser's media plan called for running the ad twice during the Super Bowl, the GRP would be 2*42 = 84.
Media planners often think in terms of gross rating points because ad prices often scale with this measure. As a rule of thumb, it costs about twice as much to obtain a GRP of 84 as to obtain a GRP of 42. A media plan that calls for a GRP of 84 doesn't necessarily mean that the advertiser must advertise twice on the Super Bowl. The advertiser could also buy 6 spots on popular primetime shows that each have a rating of 14 (6*14 = 84) or buy a large number of spots (say 42 spots) on a range of niche-market cable TV programs, radio stations or magazines that have a rating of 2. Some media vehicles are best-suited to specific target audiences. For example, the Nickelodeon TV channel controls 53% of kids GRPs.
Notice the difference between GRP and reach: GRP counts total exposures while reach counts unique people exposed. Thus, GRP does double-count people who see ads multiple times. Frequency connects the concept of reach with that of GRP. To see this relationship between GRP and reach, let's consider what happens when an advertiser puts two spots on the Super Bowl -- one during the first half of the game and another in the second half. As mentioned earlier, this example plan has a GRP of 84. But what is the reach? That depends on how many people watch both halves of the game. Rating services such as A.C. Nielsen monitor who watches the game, when they watch, and whether they watch the first half or the second half or both halves of the game.
These rating services know that, for example, 1/3 of the game-watching households stop watching after the first half and 1/3 of game-watching households start watching during the second half. This means that, although 42% of households are tuned in to the game during each half, it's not the same 42% for both halves. Thus, the reach of the first ad is 42, but then one-third of these households (42%*1/3 = 14% of all households) tune out before the second ad during the second half. This means that only 28% of all households watch both first and second halves of the game and see the ad twice. This 28% of households who are still watching when the second spot shows won't add to the reach when they see the second spot. During the second half, a different 14% of U.S. households tune in. These new watchers do count toward the reach during the second half because they didn't see the ad during the first half. Thus, the total reach for the game for the two-ad plan is 42+14 = 56.
Frequency is the ratio of GRP over reach. Frequency is a measure of repetition. The formula of calculating frequency is:
Frequency = Gross rating points / Reach
Using the Super Bowl example again, if the GRPs were 84 and the reach was 56, then the frequency would then be 1.5 (84/56=1.5). A frequency of 1.5 would mean that, on average, audience members of the Super Bowl game had one-and-a-half opportunities to watch the ad.
The media objectives of a media plan often call for some combination of reach and frequency. Media planners want the highest reach possible because that means more people will be exposed to the campaign, which should lead to more brand awareness, customer loyalty, sales, and so on. Media planners also seek high frequency if they feel that consumers will only take action (that is, buy the product) after multiple exposures to the campaign. For example, launching a new brand or teaching consumers about the features of a product (like the features of a five-bladed shaving system) may take several impressions.
Thus, reach indicates the media dispersion while frequency shows the media repetition. Notice that the formula for frequency can be flipped to make a formula for GRPs; GRPs are the product of reach multiplied by frequency. If a media plan calls for a broad reach and a high frequency, then it calls for very high GRPs (lots of ad exposures to lots of people). Achieving a very high GRP is very expensive, however, and budget issues may preclude such a high GRP. Thus, media planners may start with budget, then estimate the GRPs that they can afford and then either sacrifice reach to maintain frequency or let frequency drop to one in order to maximize reach.
Media planners also consider frequency distribution in order to fully understand exactly how many exposures different people experience; that is, how many people will see the ad once, twice, three times, etc. This lets the planner estimate the effective reach of the plan at the effective frequency needed by the campaign ?the number of people who see the ads a sufficient number of times for the media plan to be effective.
Effective frequency refers to the minimum number of media exposures for a communication goal to be achieved, while effective reach is the reach (% of households) at the effective frequency level. Media planners choose an effective frequency based on the communication goals. Communication goals vary across the continuum from awareness, preference, attitude change to trial, purchase, and repurchase. To change brand attitude requires more exposures (higher effective frequency) than does creating brand awareness. If the effective frequency is set for a given communication goal, the reach at that effective frequency level will be the effective reach.
Let's go back to the Super Bowl example. A total of 28% of households see the ad twice by watching the entirety of the game. During the first half, 14% of households see the ad once but then don't watch the second half. Another 14% join the game in progress and see the ad once during the second half. Thus, 14+14 = 28% see the ad just once. This leaves 44% of households (100% - 28% - 28%) who never see the ad. In summary, the frequency distribution is: reach of 28 at the frequency of 2; reach of 28 at the frequency of 1; and reach of 44 at the frequency of 0 (also called non-reach).
Let's extend this example by continuing this hypothetical campaign. On the Thursday after the Super Bowl, the advertiser does one more media blitz ?showing an encore of their Super Bowl ad on all major networks during the prime time slot of 8:00 to 8:30 PM. This practice of advertising on multiple channels at the same time ensures that most people will see the ad regardless of which channel they watch. Table 2 shows the viewer data, collected from households across the country, with the percentage of households who were watching during various combinations of the three time slots.
Viewers of the Ad's Time Slot
|Segment||Super Bowl First Half||Super Bowl Second Half||Prime Time Blitz||Frequency||% of Households|
Media planners can process this data to compute the frequency distribution (see Table 3) by tallying the total percentage of households that saw the ad 0, 1, 2, etc. times.
If the advertiser believes that its ads are only effective if they are seen at least twice, then the advertiser will want to know what percentage of households saw the ad two or more times. In this example, the effective reach is 51 because that is the sum of the reaches for frequencies 2 and 3 combined.
GRPs of this media plan were 144 and reach was 70, because 30% of households did not watch during any of the three times the ad was shown, resulting in an average frequency of 2.1. The frequency distribution of the plan is in Table 9B. That is, 23 percent of the households watched the time slot three times, 28 percent twice, 19 percent once, and 30 percent did not watch at all.
Media planners can set communication goals based on the level of reach. That is, how many of the target audience should be reached with the media plan, say 50%, 75% or 95%? Theoretically, a reach of 100 is possible, but it is rarely a communication goal because some audience members may not use any of the media, making them unreachable. What, then, would be the optimal level of reach for a given product category or a market situation? There is no quick answer to this question; it all depends on the media planner's analysis of major factors facing the brand.
Media experts suggest high reach is appropriate when something new is associated with the brand, such as new features, new sales incentives, new packaging or new service opportunities. The newness requires a high level of awareness among the target audience. A high reach is also often necessary in three other situations: a) advertising in support of sales promotion activities, b) for reminder advertising for a mass market product, and c) when the brand faces severe competition.
When setting levels of frequency, media planners have more rules of thumb to choose from when setting levels of reach. For example, media planners have often been setting a frequency of 3 during a purchase cycle, following Michael Naples' seminal study of effective frequency published in 1979. Naples' study suggests that there is a threshold level of repetition; advertising below the threshold level will be ineffective. Therefore, three exposures during a purchase cycle are necessary. Many media planners still use this rule in setting the effective frequency of a media plan.
More recently, Philip Jones found that one exposure generates the highest proportion of sales and that additional exposures add very little to the effect of the first. Erwin Ephron further developed the concept of "recency planning" and suggested that one exposure within a purchase cycle should be set as close to the actual purchase moment as possible. Recency planning starts with the idea that when is more important than how many; That is, advertising will be most effective if it is timed to when a consumer is in the market to buy the product or service. In the short-term, therefore, additional exposures are likely to be wasteful because audience members are not in the buying mode. In some cases, advertisers know when consumers are in the market, such as Wyoming's ads during the spring when many people are planning summer vacations.
Joseph W. Ostrow created a decision model to help media planners determine the optimal frequency level through assessing marketing factors, copy factors and media factors. Starting with a base effective frequency of 3, the media planner makes frequency adjustments based on a series of 20 factors in three categories. As illustrated in Table 4, each category includes several statements, upon which the media planner makes judgments by circling an appropriate rating in that row of the chart. For example, the first factor asks the planner to rate whether the product is an "Established brand" or "New brand." A totally new brand will require higher frequency than an established brand, and so the planner would circle the "+.2" frequency adjustment. After assessing the factors, the media planner sums the adjustments to calculate the recommended effective frequency. Media planners may modify the model by adding or removing statements to make the estimate more appropriate.
|Low Required Frequency||Frequency Adjustment||High Required Frequency|
|Established brand||-.2||-.1||+.1||+.2||New brand|
|High brand share||-.2||-.1||+.1||+.2||Low brand share|
|High brand loyalty||-.2||-.1||+.1||+.2||Low brand loyalty|
|Long purchase cycle||-.2||-.1||+.1||+.2||Short purchase cycle|
|Less frequent usage||-.2||-.1||+.1||+.2||Frequency usage|
|Low share of voice||-.2||-.1||+.1||+.2||High share of voice|
|Target other group||-.2||-.1||+.1||+.2||Target old people or children|
|Low message complexity||-.2||-.1||+.1||+.2||High message complexity|
|High message uniqueness||-.2||-.1||+.1||+.2||Low message uniqueness|
|Continuing campaign||-.2||-.1||+.1||+.2||New campaign|
|Product-focused message||-.2||-.1||+.1||+.2||Image-focused message|
|Low message variety||-.2||-.1||+.1||+.2||High message variety|
|High wearout||-.2||-.1||+.1||+.2||Low wearout|
|Large advertising units||-.2||-.1||+.1||+.2||Small advertising units|
|Low clutter||-.2||-.1||+.1||+.2||High clutter|
|Favorable editorial setting||-.2||-.1||+.1||+.2||Neutral editorial setting|
|High audience attentiveness||-.2||-.1||+.1||+.2||Low audience attentiveness|
|Continuous scheduling||-.2||-.1||+.1||+.2||Pulse or flight scheduling|
|Few media vehicles||-.2||-.1||+.1||+.2||More media vehicles|
|High repeat exposure media||-.2||-.1||+.1||+.2||Low repeat exposure media|
When setting frequency level goals, media planners know that higher-level communication goals such as persuasion and lead generation (as shown in the expanded ARF model in Figure 9A) require higher frequency levels. For example, brand awareness usually requires a lower level of frequency than advertising persuasion and lead generation. In other words, a media plan that intends to change the brand preference among consumers of competing brands would need a higher frequency of advertising exposures than a media plan that intends to introduce a new brand.
In addition to the reach and frequency goals, media planners may set goals for other forms of communication. For example, promotional activities may be used in a media plan, such as sweepstakes, contests and coupons. Media planners estimate and specify response rates for these activities. By establishing communication goals, media planners set the stage for assessing the effectiveness of a media plan at the end.
Media planners make three crucial decisions: where to advertise (geography), when to advertise (timing), and what media categories to use (media mix). Moreover, they make these decisions in the face of budget constraints. The actual amount of money that an advertiser spends on marketing communications can vary widely, from billions of dollars for multinational giants such as Procter & Gamble, to a few thousand dollars for local "mom-n-pop" stores. In general, companies spend as little as 1% to more than 20% of revenues on advertising, depending on the nature of their business. Regardless of the budget, some media options are more cost effective than others. It is the job of media planners to formulate the best media strategies -- allocating budget across media categories, geographies, and time. Let's look at each of these three decisions in turn, and then consider cost effectiveness.
Which media should the advertiser use? Media planners craft a media mix by considering a budget-conscious intersection between their media objectives and the properties of the various potential media vehicles. That is, they consider how each media vehicle provides a cost-effective contribution to attaining the objectives, and then they select the combination of vehicles that best attain all of the objectives.
When making media mix decisions, planners look to a whole spectrum of media, not just to traditional media vehicles such as TV, radio, and print. That is, media planners consider all the opportunities that consumers have for contact with the brand. These opportunities can be non-traditional brand contact opportunities such as online advertising, sweepstakes, sponsorships, product placements, direct mail, mobile phones, blogs, and podcasts. The scale and situations of media use are especially important when evaluating suitable brand contact opportunities. For example, product placement in a video game makes sense if the target audience plays video games. Sweepstakes make sense if many of the target audience find sweepstakes attractive.
A media planner's first media mix decision is to choose between a media concentration approach or a media dispersion approach. The media concentration approach uses fewer media categories and greater spending per category. This lets the media planner create higher frequency and repetition within that one media category. Media planners will choose a concentration approach if they are worried that their brand's ads will share space with competing brands, leading to confusion among consumers and failure of the media objectives. For example, when Nestle launched its 99% fat-free cereal Fitnesse, the similarity of ads actually increased the sales of the competing Kellogg's Special K Cereal.
Media planners can calculate or measure share of voice to estimate the dominance of their message in each category of media they use. Share of voice is the percentage of spending by one brand in a given media category relative to the total spending by all brands that are advertising in that media category.
A company can create a high share of voice with a concentrated media strategy. That is, the company can be the dominant advertiser in a product category in the chosen channel. Moreover, because only one set of creative materials will need to be prepared, a concentrated media strategy lets advertisers spend a higher percentage of their budget on frequency and reach. But a concentrated strategy is also an "all-eggs-in-one-basket" strategy. If the particular ad is not well received or the particular media category only reaches a fraction of the intended target audience, then it will perform poorly.
In contrast, media planners choose a media dispersion approach when they use multiple media categories, such as a combination of television, radio, newspapers and the Internet. Media planners will use dispersion if they know that no single media outlet will reach a sufficient percentage of the target audience. For example, a concentrated approach using only ads on the Internet might reach only 30% of the target consumers because some consumers don't use the Internet. Similarly, a concentrated approach using national news magazines might reach only 30% of the target audience, because not every target customer reads these magazines. But a dispersed approach that advertises in print magazines as well as on Web sites might reach 50% of the target audience. Media planners also like the dispersion approach for the reinforcement that it brings -- consumers who see multiple ads in multiple media for a given brand may be more likely to buy.
Table 5 illustrates the media concentration and media dispersion approaches to the media category allocations for three hypothetical brands of fatigue relief medication. Advertisers of Zipium took a media dispersion approach by allocating the budget relatively evenly across all four media categories, while advertisers of Pepzac and Enerzid took a media concentration approach by spending the budget in one or two media categories.
|Competing Brand||Television||Magazine||Direct Mail||Internet||Total Spend by Brand|
|Total Spend by Category||$750,000||$500,000||$200,000||$900,000||$2,600,000|
|Brands' Voice in Each Category|
Notice the share of voice figures for the three brands in television. Zipium gets a 40% share of voice in television because it spent $400,000 out of the total of $1 million spent on television advertising by fatigue remedy medications. Pepzac gets 60% because it spent $600,000 out of the $1 million spent on TV. Enerzid receives a 0% share of voice in TV because it spent no money in that media category. Pepzac enjoys a dominant share of voice in television because it has the highest percentage of spending in that category.
Looking across the other media categories, we see the effects of a concentrated versus dispersed media approach. Although Zipium spends the greatest amount of money, it only achieves dominant share of voice in one of the four media categories due to dispersal. Each of the other brands also dominates one category. For example, Enerzid concentrates all of its spending on the Internet. Thus, although Enerzid has a small budget, it manages to dominate that one category through its concentrated media approach.
The media concentration approach is often preferable for brands that have a small or moderate media budget but intend to make a great impact. For example, GoDaddy.com, an Internet hosting service, bought two spots in the Super Bowl in 2005. Because of the controversial nature of the ad, Fox Networks canceled the second run of the ad. The controversy over the pulled ad resulted in more than $11 million of free publicity. The single paid ad plus heavy media coverage of the incident greatly increased the awareness of GoDaddy. The spot also earned GoDaddy a 51% share of voice, a percentage which some say is the largest share of voice attributed to any Super Bowl advertiser ever.
Whether media planners select media concentration or media dispersion, they still must pick the media category(ies) for the media plan. Different media categories suit different media objectives. Most media options can be classified into three broad categories: mass media, direct response media, and point-of-purchase media. A media planner's choice will depend on the media objectives. If the media planner wants to create broad awareness or to remind the largest possible number of consumers about a brand, then he or she will pick mass media such as television, radio, newspaper and magazine. If the media planner wants to build a relationship with a customer or encourage an immediate sales response, then direct response media such as direct mail, the Internet and mobile phone are good choices.
For example, online ads for car insurance such as link directly to the application process to capture the customers right at the time they are interested in the service. Finally, if media planners want to convert shoppers into buyers, then they might use point-of-purchase media such as sampling, coupons and price-off promotions. In short, each of these three categories of media serve a different role in moving the customer from brand awareness to brand interest to purchase intent to actual purchase and then to re-purchase. An integrated campaign, such as the one described for P&G's Fusion shaving system, might use multiple categories -- combining national TV ads to introduce the product, Internet media to provide one-to-one information, and in-store displays to drive sales.
The creative requirements of a media category also affect media planners' decisions. Each media category has unique characteristics. For example, television offers visual impact that interweaves sight and sound, often within a narrative storyline. Magazines offer high reproduction quality but must grab the consumer with a single static image. Direct mail can carry free samples but can require compelling ad copy in the letter and back-end infrastructure for some form of consumer response by return mail, telephone or Internet. Rich media ads on the Internet can combine the best of TV-style ads with interactive response via a clickthrough to the brand's own Web site. Media planners need to consider which media categories provide the most impact for their particular brand. The costs of developing creative materials specific to each media category can also limit media planners' use of the media dispersion approach.
In addition to allocating advertising by media category, media planners must allocate advertising by geography. In general, a company that sells nationally can take one of three approaches to geographic spending allocation: a national approach (advertise in all markets), a spot approach (advertise only in selected markets), or a combined national plus spot approach (advertise in all markets with additional spending in selected markets).
Media planners will choose a national approach if sales are relatively uniform across the country, such as for Tide laundry detergent or Toyota automobiles. A national approach will reach a national customer base with a national advertising program. For many other products, however, a company's customers are concentrated in a limited subset of geographic areas, which makes a spot approach more efficient. For example, the sales of leisure boats are much higher in markets such as Florida, California and Michigan due to the large water areas in these markets. A spot approach will target these states. For example, a leisure boat manufacturer such as Sea Ray might use a spot approach to target Florida, California and Michigan while not advertising in other states like Iowa or Nebraska.
Media planners perform geographic analyses by assessing the geographic concentration of sales in two ways. The first method is called the Brand Development Index (BDI) of a geographic region. BDI measures the concentration of sales of a company's brand in that region.
The second method is called the Category Development Index (CDI) and measures the concentration of sales of the product category (across all brands) in that region.
Media planners use BDI to measure a brand's performance in a given market in comparison with its average performance in all markets where the brand is sold. Mathematically, BDI is a ratio of a brand's sales in a given geographic market divided by the average of its sales in all markets. BDI is calculated for each geographic area (Market X) using the following formula:
Market X's Share of Total Brand Sales
BDI = ----------------------------------------------- X 100
Market X's Share of U.S. Population
Consider the BDI for visitors to the state of Louisiana -- the geographic concentration of people who travel to Louisiana for business or pleasure. The BDI for Houston is 658 because Houston is 1.8% of the U.S. population, but Houstonians make up 11.8% of visitors to Louisiana (100 * (11.8%/1.8%) = 658). Because Houston's BDI is higher than 100, it means that many more Houstonians come to Louisiana than the average from other cities. In contrast, the New York City area has a very low BDI of only 10 because even though New York City has 7.2% of the U.S. population, this city contributes only 0.7% of visitors to Louisiana.
This disparity in BDI influences Louisiana's advertising strategy. Media planners will tend to allocate more resources to high BDI markets (greater than 100) than to low BDI markets. The point is that even though New York City has a much larger population, it has a much lower concentration of travelers to Louisiana. Given that the cost of advertising is often proportional to the population it reaches, advertising in New York City will be far more expensive than advertising in Houston. Because such a low percentage of New Yorkers travel to Louisiana, advertising to New Yorkers will be less effective than advertising to Houstonians.
BDI doesn't tell the whole story, however, because BDI only measures the concentration of current sales. BDI doesn't reflect the concentration of potential sales as measured by sales of the entire product category. So, media planners use another number, CDI, in addition to BDI when allocating resources for spot advertising. CDI is a measure of a product category's performance in a given geographic market in comparison to its average performance in all markets in the country. The sales of a product category include the sales of all the brands (the company's and competitors' brands) or at least all major brands that fall in the category. The CDI formula is:
Market X's Share of Total Category Sales
CDI = ---------------------------------------------------- X 100
Market X's Share of U.S. Population
Notice the similarities and differences of the CDI formula compared to the BDI formula. The denominator of the CDI formula is the same as that of the BDI formula, but the numerator for CDI is the share of the product category in a given market. For example, if the sales of the product category in Market X account for 2 percent of its total sales in the U.S. and the population in that market is 3 percent of the U.S. population, then the CDI for that market will be 67, which is 33 percent below the average of 100. That means a poorer-than-average consumption of the product category, which means that Market X may be less promising for spot market advertising. On the other hand, markets with a high CDI (higher than 100) may be a better market for that product category.
Because BDI and CDI can vary independently, media planners use both numbers to guide allocation decisions. In general, BDI reflects the concentration of existing sales while CDI reflects the concentration of potential sales in a geographic region. Returning to the example of leisure boats, we find that states such as California, Florida, and Michigan have high CDIs. Yet the maker of a line of small boats that aren't suitable for the ocean may have very high BDI in Michigan but a very low BDI in California and Florida. Because a BDI or a CDI for a given market can each be either above or below the average, there will be four possible combinations, as shown in Table 6. The four combinations represent two extreme cases and two mixed cases. At the one extreme, in a market with both a high CDI and a high BDI (both above 100), media planners will seek to maintain high market share (implied by high BDI) and might even consider more advertising to gain market share because of the good category potential (implied by high CDI) of the market. At the other extreme, in a market with both a low CDI and a low BDI, media planners may eschew spending their advertising dollars there due to the low concentration of potential consumption -- the small boat maker may ignore New Mexico.
The mixed cases represent situations in which the percentage of brand sales in a region differs significantly from the percentage of category sales. A market with a high CDI and a low BDI deserves serious consideration because it suggests a large opportunity for increased sales. Before devoting advertising dollars, the company will want to understand why it has such poor sales of its brand (low BDI) in an area with high category sales. For example, the maker of small boats may learn that Californians don't buy the brand's boats because the boats are unsuitable for the ocean. If the causes of the poor brand performance can be identified and solved (such as by changing the product or finding better distribution), then more advertising should be worthwhile.
A low CDI and high BDI represents the enviable position of selling well in a market that does not otherwise buy products in that category. A market with low CDI and a high BDI requires continued advertising support to maintain the superior brand performance.
One approach to resource allocation uses a weighted sum of BDI and CDI -- spending money in each geography in proportion to a combined BDI plus CDI score. With this approach, media planners need to first assign a weight to the BDI and to the CDI. These two weights represent the relative importance of the BDI and CDI, and the sum of two weights should equal 1. On the one hand, media planners might choose a high weight on CDI if they feel their brand is representative of the broader category and they expect their brand to attain a geographic pattern of sales that matches that of the category. On the other hand, they might place a high weight on BDI if their brand is unique, the category is very diverse, or the company wants to grow sales among current customers.
Consider a hypothetical example in which a media planner thinks the BDI is three times more important than the CDI in allocating spending. He or she would use a weight of .75 with the BDI values and .25 with the CDI values of each geography to calculate a weighted sum and a percentage for each of the markets. Then, she can use the percentage as a base for spending allocation in each market, as show in Table 7. That is, Market A will receive 16 percent of the media spending, Market B will receive 22 percent, and so on. All the percentages added together will equal 100 percent.
|Geographic Market||BDI||CDI||75% Weighted
Media planners can use another index -- growth potential index (GPI) -- to assess growth opportunities in geographic markets. GPI is simply the ratio of the CDI over the BDI and is one way of quantifying the discrepancy between category sales (the potential sales for the market) and brand sales (current sales) to measure of the growth potential of a brand in a market. The formula of the GPI is as follows:
Market X's CDI
GPI = ---------------------- X 100
Market X's BDI
For example, if Market X has a CDI of 120 and a BDI of 80, then the GPI will be 150. This high value of GPI suggests a growth potential of 50% in this market -- that if the brand sold as well in that market as it does nationwide, sales would grow 50%. Of course, media planners should examine the specific conditions of a high GPI market before allocating resources to assess the true possibilities for growth. When a brand sells in many markets, the GPI can facilitate the selection of markets for additional spot advertising spending.
Having decided how to advertise (the media mix) and where to advertise (allocation across geography), media planners need to consider when to advertise. Given a fixed annual budget, should all months receive equal amounts of money or should some months receive more of the budget while other months receive less or nothing? Media planners can choose among three methods of scheduling: continuity, flight, and pulse. Continuity scheduling spreads media spending evenly across months. For example, with an annual budget of $1,200,000 a year, continuity scheduling would allocate exactly $100,000 per month. This method ensures steady brand exposure over each purchase cycle for individual consumers. It also takes advantage of volume discounts in media buying. However, because continuity scheduling usually requires a large budget, it may not be practical for small advertisers.
The flight scheduling approach alternates advertising across months, with heavy advertising in certain months and no advertising at all in other months. For example, a board game maker like Parker Brothers might concentrate its advertising in the fall when it knows that many people buy board games as gifts for the holidays. Or, with the same budget of $1,200,000, for example, a different brand could spend $200,000 per month during each of six months -- January, March, May, July, September and December -- and spend nothing during the other months, in hopes that the impact of advertising in the previous month can last into the following month.
Pulse scheduling combines the first two scheduling methods, so that the brand maintains a low level of advertising across all months but spends more in selected months. For example, an airline like United Airlines might use a low level of continuous advertising to maintain brand awareness among business travelers. United Airlines might also have seasonal pulses to entice winter-weary consumers to fly to sunny climes. In budget allocation terms, a consumer goods brand may spend $5,000 in each of the twelve months to maintain the brand awareness and spend an additional $10,000 in January, March, May, July, September and December to attract brand switchers from competing brands. The pulse scheduling method takes advantage of both the continuity and flight scheduling methods and mitigates their weaknesses. However, this does not mean it is good for all products and services. Which method is the most appropriate for a given campaign depends on several important factors.
How do media planners select among continuity, flight, and pulse scheduling approaches? The timing of advertising depends on three factors: seasonality, consumers' product purchase cycle, and consumers' interval between decision-making and consumption.
The first, and most important, factor is sales seasonality. Companies don't advertise fur coats in summer and suntan lotions in winter. Likewise, some products sell faster around specific holidays, such as flowers on Mother's Day, candy on Halloween, and ornaments around Christmas. Companies with seasonal products are more likely to choose flight scheduling to concentrate their advertising for the peak sales season. Other goods, however, such as everyday products like milk and toothpaste, may lack a seasonal pattern. Everyday goods may be better served by a continuity approach. Media planners can use a breakdown of sales by month to identify if their brand has seasonal fluctuations, which can serve as a guide for the allocation. They can allocate more money to high-sales months and less to low-sales months.
The second factor that affects when advertising is scheduled is the product purchase cycle: the interval between two purchases. Fast-moving consumer goods such as bread, soft drinks and toilet paper probably require continuous weekly advertising in a competitive market to constantly reinforce brand awareness and influence frequently-made purchase decisions. In contrast, less-frequently purchased products such as carpet cleaner or floor polisher may only need advertising a few times a year.
A third factor that affects media scheduling is the time interval between when the purchase decision is made and when a product or service is actually bought and consumed. For example, many families who take summer vacations may plan their trips months before the actual trips. That is, they make purchase decision in advance. Thus, travel industry advertisers will schedule their ads months before the summer, as we saw in the Wyoming example. Destination advertising has to be in sync with the time of decision making, instead of the actual consumption time.
New product launches usually require initial heavy advertising to create brand awareness and interest. The launch period may last from a few months to a year. As mentioned earlier, P&G launched its Gillette six-bladed Fusion shaving system with advertising on Super Bowl XL, the most expensive form of advertising in the world. If consumers like the product, then personal influence in the form of word-of-mouth or market force (brand visibility in life and media coverage) will play a role in accelerating the adoption of a new brand. Personal influence and market force are "unplanned" messages, which often play an important role in new product launches. Media planners should take advance of these "unplanned" messages in a new product launch campaign.
Establishing media objectives and developing media strategies are the primary tasks of media planners. Designing media tactics is largely carried out by media buyers. Media buyers select media vehicles to implement established media strategies. Among the major factors that affect media vehicle selection are reach and frequency considerations.
As a major component of media objectives, the planned level of reach affects not only media mix decisions but also what media vehicles are used in each media category. High levels of reach will require a different set of media vehicles than low levels of reach. That is, high levels of reach can be better served with a mix that includes multiple media vehicles with different audiences so that cross-media duplication of audience is minimal. For example, if there are three magazines that each reach a portion of the target audience but that have few readers who read more than one magazine, advertising in these three magazines would reach the widest target audience possible because of the low overlap of the readers of the these magazines.
What are some ways to maximize the levels of reach? One way is to analyze the audience composition of media vehicles by using syndicated media research. For example, cross-tabulations of Simmons data can be conducted to identify several magazines that reach the target audience of women aged 35 to 55, with little cross-title duplication -- few readers of one magazine also read other the magazines. These magazines can be used to implement high levels of reach in the media plan. When audience data are not available for cross-vehicle comparisons, you can select competing media vehicles in the same media category, because there is usually less duplication among the competing media vehicles. For example, most people who are interested in news may read one of the three major news weeklies: Newsweek, Time, and U.S. News and World Report; few people read all three of them. Therefore, running a print ad in all the three news magazines can reach a wide audience.
In television, media buyers sometimes use roadblocking, which means the placement of commercials in all major television networks in the same period of time. No matter which television channel an audience member tunes in at that time, they have the opportunity to watch the commercial. The roadblocking approach has become more expensive and less effective recently because of increasing fragmentation of television audience. The term has been extended to the online world, however, where it has been very effective. To roadblock in the online world, a media planner can buy all the advertising on a Web site for a 24-hour period, such as Coke did for its launch of C2 and Ford did for its launch the F-150. Each company bought all the ad space on the front page of Yahoo for a 24-hour period. The Yahoo front page draws 25 million visitors a day. Alternatively, media planners can roadblock Yahoo, MSN, and AOL all on the same day, as Coke and Pepsi have both done. The results can produce "an astonishing, astronomical amount of reach," said Mohan Renganathan of MediaVest Worldwide, one of the biggest services for buying ad space.
In contrast to high levels of reach, high levels of frequency can be effectively achieved through advertising in a smaller number of media vehicles to elevate audience duplications within these media vehicles. A commercial that runs three times during a 30-minute television program will result in higher message repetition than the same commercial that runs once in three different programs.
Broadcast media are often used when high levels of frequency are desired in a relatively short period of time. Broadcast media usually enjoy a "vertical" audience, who tune in to a channel for more than one program over hours. Another phenomenon in broadcast media is audience turnover, which refers to the percentage of audience members who tune out during a program. Programs with low audience turnover are more effective for high levels of frequency.
With reach and frequency considerations in mind, media buyers will compare media vehicles in terms of both quantitative and qualitative characteristics. Quantitative characteristics are those that can be measured and estimated numerically, such as vehicle ratings, audience duplication with other vehicles, geographic coverage, and costs. Media buyers will choose vehicles with high ratings and less cross-vehicle audience duplication when they need high levels of reach. Media buyers also evaluate the geographic coverage of media vehicles when implementing spot advertising such as heavy advertising in certain geographic regions. Finally, media buyers pay attention to the costs of each media vehicle. When two media vehicles are similar in major aspects, media buyers choose the less expensive media vehicle.
There are two basic calculations of media vehicle cost. The first one, cost per rating point (CPP), is used primarily for broadcast media vehicles. To derive the CPP, divide the cost of a 30-second commercial by the ratings of the vehicle in which the advertisement is placed.[SIDEBAR DEFINITION: CPP: The cost of a broadcast ad per rating point (1% of the population) provided by the media vehicle that shows the ad.] The formula for calculating CPP is as follows:
Cost Per Rating Point = Cost of the Ad / Rating of the Vehicle
For example, if the cost for a 30-second commercial ABC's "Grey's Anatomy" television program is $440,000 and the rating of the program is 9.7, then CPP for this buy will be $25,360.
Another media cost term is cost per thousand impressions (CPM), which is the cost to have 1000 members of the target audience exposed to an ad.[[SIDEBAR DEFINITION for CPM: Cost Per Thousand (M is the Latin abbreviation for 1000): the cost per 1000 impressions for an ad]] As you recall, the impressions are simply opportunities to see the ad. one difference between CPP and CPM is that CPM also contains the size of a vehicle audience. CPM is calculated in two steps. First, the gross impressions that an ad may get is calculated using the rating of the program and the size of the market population. Second, CPM is calculated using the cost and gross impressions. The two formulas are as follows:
Gross Impressions = Audience size * Rating / 100
CPM = Cost / Gross Impressions * 1000
Using the previous example, the rating of a television program is 10 and the cost for a 30-second commercial is $25,000. If there are 5,000,000 adults in the market, then CPM for the buy will be as follows:
Gross Impressions = 5,000,000 * 10 / 100 = 500,000
CPM = $25,000 / 500,000 * 1000 = $50
Thus, CPM for this media buy is $50.
CPM can be calculated for different media, including online media. For example, an informal consensus of online media buyers agreed that a $10 CPM asking price seemed about average to pay for advertising on social-networking like Friendster, Yahoo 360 and Britain's FaceParty.
In contrast to these quantitative characteristics, qualitative characteristics of media vehicles are those that are primarily judgmental, such as vehicle reputation, editorial environment, reproduction quality, and added values. For example, media vehicles vary in reputation; newspapers such as The New York Times and The Wall Street Journal generally enjoy high reputation. Furthermore, the editorial environment can be more or less favorable for advertisers. The impact of food ads, for instance, can be enhanced when they appear around articles about health or nutrition. Likewise, some magazines are better in reproduction quality than others, which enhance the impact of the ads. Finally, some media vehicles offer added values. Added values take various forms, and they benefit advertisers without additional cost. For example, a newspaper may publish a special page whose editorial context fits an advertiser's products, or a television channel may host a local event in association with a car dealership. Media buyers can work with the media to invent creative forms of added values for advertisers.
Media buyers can use tools, like the one shown below, to make the process of selecting a media vehicle easier. To use the selection tool shown in Figure 9I, develop a list of the potential vehicle candidates you are considering. Then, select several quantitative and qualitative characteristics that are relevant to reach and frequency considerations, such as quantitative characteristics like CPM or GRP, and qualitative characteristics like reputation and added value. Next, make a table that lists the vehicle candidates in rows and the characteristics in columns. Now you can rate each of the characteristics of each vehicle on a scale of 1 to 3. Then add all the numbers in each row, dividing by the total number of characteristics (columns) to arrive at the rating for each vehicle. The best media vehicles to choose are those with the highest index numbers. In Figure 8, Vehicle 2 and Vehicle 3 are the best ways to reach the target audience.
Accountability is increasingly important in media planning, as more advertisers expect to see returns on their investments in advertising. Because media spending usually accounts for 80 percent or more of the budget for typical advertising campaigns, the effectiveness of media plans is of particular importance. As a result, media planners often make measures of the effectiveness of a media plan an integral part of the media plan. Although sales results are the ultimate measure of the effectiveness of an advertising campaign, the sales result is affected by many factors, such as price, distribution and competition, which are often out of the scope of the advertising campaign. It is important, therefore, to identify what measures are most relevant to the effectiveness of media planning and buying. We will examine the topic of measurement in more detail in chapters 21 and 22, but here is an introduction to measurement that is specific to media plans.
5.1. What to Measure
Because of the hierarchical nature of the media effects, the effectiveness of media planning should be measured with multiple indictors. The first measure is the actual execution of scheduled media placements. Did the ads appear in the media vehicles in agreed-upon terms? Media buyers look at "tear-sheets" -- copies of the ads as they have appeared in print media -- for verification purposes. For electronic media, media buyers examine the ratings of the programs in which commercials were inserted to make sure the programs delivered the promised ratings. If the actual program ratings are significantly lower than what the advertiser paid for, the media usually "make good" for the difference in ratings by running additional commercials without charge.
The most direct measure of the effectiveness of media planning is the media vehicle exposure. Media planners ask: How many of the target audience were exposed to the media vehicles and to ads in those vehicles during a given period of time? This question is related to the communication goals in the media objectives. If the measured level of exposure is near to or exceeds the planned reach and frequency, then the media plan is considered to be effective.
Several additional measures can be made of the target audience, such as:
Brand awareness -- how many of the target audience are aware of the advertised brand?
Comprehension -- does the target audience understand the advertised brand? Is there any miscomprehension?
Conviction -- is the target audience convinced by ads? How do they like the advertised brands?
Action -- how many of the target audience have purchased the advertised brand as a result of the media campaign?
The measured results of brand awareness, comprehension, conviction and action are often a function of both advertising creative and media planning. Even effective media planning may not generate anticipated cognitive, affective and conative responses if the ads are poorly created and not appealing to the target audience. On the other hand, ineffective media planning may be disguised when the ads are highly creative and brilliant. Thus, these measures should be reviewed by both creative directors and media planners to make accurate assessments of the effectiveness of the media plan.
The measurement of the effectiveness of a media plan can be conducted by the advertising agency or by independent research services, using methods such as surveys, feedback, tracking, and observation. Each method has its strengths and weaknesses. For example, surveys can be conducted among a sampling of the target audience in the different periods of a media campaign, such as in the beginning, the middle and the end of the campaign. Surveys can ask questions about the target audience's media behavior, advertising recall, brand attitudes and actual purchase. Radiowatch, for instance, conducts monthly surveys on advertising recall of radio commercials in England. Radiowatch surveys 1000 adults age 16-64 and asks them which radio commercials they remember hearing. In the April 2006 survey, the most-recalled ad was for T-Mobile, with 46% of respondents recalling the ad. An ad for McDonald's had 36% recall, while the ad for Peugeot received 18%.
Besides surveys, feedback can be collected to measure the media and ad exposure of the target audience. Feedback devices such as reply cards, toll-free numbers, coupons and Web addresses can be provided in ads so that tallies of the responses or redemptions can be made to estimate the impact of advertising media. Advertisers often use a different code in direct response ads to identify different media vehicles. For example, in the April 3 2006 issue of BusinessWeek, the reply card for subscribing to the magazine had a code of JS6D1, whereas the reply card bound into the May 29, 2006 issue of the magazine had a code of JS6E2. Similarly, when the Garden of Eatin' gives coupons for its tortilla chips, the UPC code on the coupon indicates which media vehicle the coupon was in, such as whether the coupon came from the 2006 Bolder Boulder promotional calendar or from the Organic and Natural Experience (ONE) 2006 Tour book of coupons. In short, by reviewing the different codes recorded, media buyers can assess the response rate of each media vehicle.
As you can see from the Radiowatch and Garden of Eatin' examples, one advantage of surveys over feedback devices is that surveys reach people who have taken no action on the product, whereas feedback devices require the consumer to mail back, click or call a toll-free number. In this way, surveys can help media buyers evaluate the effectiveness of an ad in relation to other ads, whereas feedback devices help them evaluate the effectiveness of one media vehicle over another.
Tracking is measurement method that media buyers use to track the effectiveness of online ads. When a user visits a Web site or clicks on a banner ad, Web servers automatically log that action in real time. The logs of these visits and actions are very useful for media buyers, because the buyers can use them to estimate the actual interaction of audience members with the interactive media. For example, a banner ad may have a code for each Web site where the ad is placed. Media buyers can compare the click-through rates of the banner ad across all Web sites daily, to estimate the effectiveness of each Web site. Media buyers are making more use of the tracking method given the increasing use of interactive media.
Finally, in the physical world, media buyers can use observation to collect audience reaction information at the points of purchase or during marketing events. For example, researchers can be stationed in grocery stores to observe how consumers react to in-store advertising or how they select an advertised brand in comparison of other brands. The advantage of observation is that it provides rich, detailed data on how consumers behave in real situations in response to the marketing communication. The downside is that direct observation is more costly to conduct and tabulate.
This article described the media planning process, starting from establishing media objectives through to developing media strategies and tactics and finally evaluating the effectiveness of the media plan. You've learned how to identify your target audience; evaluate different media vehicles on the basis of reach, frequency and GRPs; make prudent media mix decisions using tools like BDI and CDI and scheduling concepts like continuity, flight and pulse scheduling; make sound budget decisions using tools like CPP and CPM; and, finally, evaluate the effectiveness of your media plan through surveys, feedback devices, tracking and observation. In the next four chapters, we'll delve more deeply into the different types of media ?print media, broadcast media, out-of-home media and interactive media ?to help you understand the ad formats, strengths/weakness and cost structures of each of these advertising media.
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