308 Determine ADVERTISING REACH and MEDIA COSTS ADVERTISING REACH WHAT Number of PEOPLE THAT ARE EXPOSED to your message CALCULATION Divide the target audience exposed to an ad by the total target audience ID: 1033040
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1. Manage media planning and placement to enhance return on marketing investment3.08
2. Determine ADVERTISING REACH and MEDIA COSTS
3. ADVERTISING REACHWHAT: Number of PEOPLE THAT ARE EXPOSED to your message:CALCULATION (%):Divide the target audience exposed to an ad by the total target audienceThere are 1,500,000 fans of Tar Heel Football. A recent advertisement was viewed by 375,000 of them. (375,000/1,500,000 = 25% ADVERTISING REACH)WHY: Determines if ad targeted the right audience effectively.HOW: RESOURCESCirculation numbers, subscriptions or rating points
4. FREQUENCY and REACHFREQUENCY :Number of times you expose each person to your messageReach WITHOUT Frequency = Wasted Money
5. NEWSPAPER MEDIA COSTSFactors affecting COSTS (Lower than most media):Position and color of adSplit-runs (print different ads for the same product)National ads cost more than localTypes of RATES:PREFERRED POSITION: ads placed in location with best exposure for their target market (Ex: Sports ad in the Sports section instead of Garden section)Flat: one time onlySliding scale/ VOLUME DISCOUNTS: more published = cost less per adCombination: ads and inserts
6. MAGAZINE MEDIA COSTSFactors affecting COSTS (Higher than Newspaper):CIRCULATION: Number of people reachedPreferred PositionSpreadsSplit-runsTypes of RATES:SizeFrequencyCombination
7. TELEVISION MEDIA COSTSFactors affecting COST:RATINGS FOR CERTAIN SHOWSDetermines which shows attract a high volume of viewersTime availability High demand for time during peak winter seasonsLength of commercialsTypes of RATES:Set according to “GROSS RATING POINTS” (GRPs)GRPS = REACH X FREQUENCYRUN OF SCHEDULE (ROS)Ad is run at the station’s convenience for lower cost
8. RADIO MEDIA COSTSFactors affecting COST:“DAYPART”Morning drive time, Evening drive time, Daytime, NighttimeLengthNUMBER OF LISTENERSTypes of RATES:RUN-OF-SCHEDULE (ROS)TOTAL AUDIENCE PLANS (TAPs)PACKAGED PLANS offer reduced rates when purchase a series of commercials instead of just one
9. INTERNET MEDIA COSTSFactors affecting COST:Creative type (Text, image, sound, etc.)Size Placement Types of RATES:COST-PER-THOUSAND (aka) COST-PER-MILE (CPM)COST-PER-CLICK (CPC)
10. OTHER MEDIA COSTSOUT OF HOMEFactors affecting COST:Size of the spaceLength of time Production costsTypes of RATES:Determined by:VisibilityLocationPopulationDIRECT MAILFactors affecting COST:Production costsMailing list costsLabor costsTypes of RATES:PostageShippingCAN TARGET A SPECIFIC MARKET
11. ABSOLUTES vs. RELATIVE MEDIA COSTSABSOLUTE COSTSTOTAL COST to run an ad= Cost of production + Cost for time/space purchasedRELATIVE COSTSDetermines which one media is most cost effectiveCOST PER THOUSAND (CPM)Cost per GROSS RATING POINT (GRP)
12. “You Do”- FOLDABLES: How are Media Costs Determined?Circulation (size of the audience)Circulation is the most significant factor affecting media costs.In most cases, the larger the media vehicle’s audience, the higher the cost of advertising space or time will be. RATE CARDS: Price lists showing rates for space or timeProduction costsHigh-quality television and magazine advertisements can cost a great deal to produce.On the other hand, local radio and newspaper advertisements are relatively inexpensive to produce.Preferred space positionsAiring an advertisement at a specific time or running it on a particular page generally costs more.Available discountsDiscounts are often offered on the basis of size, frequency, or dollar volume.Demographic makeup of the medium’s targeted audienceYou can typically expect to pay higher advertising rates in media vehicles that have narrowly defined audiences than in ones that are targeted at general audiences.Reproduction qualityMagazines with excellent reproduction quality, such as The New Yorker, can command higher rates than publications with lower-quality reproduction.Gross Rate Point (GRP) = Reach x FrequencyCost Per Thousand (CPM) =(Cost of the ad × 1,000) ÷ Target audience
13. SELECT ADVERTISING MEDIA
14. IMPORTANCE OF SELECTING ADVERTISING MEDIAMedia cost is the largest cost of advertisingComplex selection processMust select the most effective media to reach target market
15. SITUATIONAL FACTORS to CONSIDER OBJECTIVES (Goals) of the advertisementTARGET MARKETIdentify what media the target market uses to most Limit WASTE CIRCULATION (Number of people exposed to an advertising message who are not target market)COMPETITIONUse the same advertising media to reach same target marketBUDGETHow much money can you spend?PRODUCTDISTRIBUTION
16. MEDIA FACTORS to CONSIDERCostMedia CoverageEXTENSIVE COVERAGE: reaching a large audience (REACH)INTENSIVE COVERAGE: reaching a smaller audience more often (FREQUENCY)Geographic CoverageLead TimeAmount of time required to place an ad by the media Radio has shortestTV and Magazines have longest
17. QUANTITATIVE & QUALITATIVE FACTORSQuantitativeQualitativeReachFrequencyCost-per-thousand (CPM)IMPACT Impression an ad will makeCredibilityEDITORIAL ENVIRONMENT Management and talents of staff
18. STEPS TO SELECTING ADVERTISING MEDIAIdentify SITUATIONAL FACTORSIdentify MEDIA FACTORSSELECT the MEDIA OUTLET4. Determine the TIMING STRATEGYCONTINUOUS (Steady, regular pattern)Frequently used/purchased productsFLIGHTING (During peak sales periods ONLY)PULSING (Bursts of advertising)
19. “You Do”: PROJECTEach group will be assigned one of the following: Radio, Direct Marketing, Outdoor, Newspaper or Magazine Advertising.You will need to research and identify the following information:Pros of using your media for advertisingCons of using your media for advertisingTypes of Costs using your media advertisingOrganize information above in a POWERPOINT Presentation to be presented to the class.CREATE an advertisement for your mediaRadio- Needs to be a SCRIPT read to the class Identify which station it will be on and what time of day it will be played. WHY? (Hint- needs to reach your target audience)Magazine- Needs to be a full-page ad. Identify which magazine it will be in and what day/month subscription. WHY? (Hint- needs to reach your target audience)Direct Marketing- Who is on your mailing list and when will you be mailing it out? (Define the target market) (Hint- needs to reach your target audience)Outdoor- Which road/physical location will it be located and for how long and what time of year? (Hint- needs to reach your target audience)Newspaper- Needs to be a full-page ad. (You chose if it is color or not) Which newspaper will it be in and on what day? (Hint- needs to reach your target audience)