Advertising Budgeting, Media,and Media Planning Aravind LEAD College of Management
The Advertising BudgetSetting the Budget Percentage of Sales Payout Plan Competitive Budgeting The Task or Objective Method What’s the objective? What type and how much media needed? Can we afford it? ArbitraryAdministering and Protecting the Budget
Media Defined The vehicles that carry the ads to the target market. Which is most important? Picking the correct media or having great creative? What are the types of media?
The Local Media Mix Newspapers Out-of-home Radio Yellow Television Pages/Directories Magazines Direct Media New Media
Newspapers as Local Media Using regular sections Sports, Business, Entertainment, etc. Using special sections Gardening, Back-to-school, etc. Zoned editions Preprint distribution Weeklies, Shoppers,etc.
Newspapers as Local Media Available space for detailed copy Minimal lead times for faster turnaround Geographic targeting selectivity by area and zip code zoning
Radio as Local Media Demographic target selectivity by station format Time-of-day selectivity available Morning and afternoon drive Midday shopping Nighttime entertainment
Radio as Local Media Specific advertiser applications to build local traffic Straight advertising Sponsored promotions Sponsored events Remote broadcasts
Magazines as Local Media City Magazines Allow advertisers geographic emphasis in many larger cities Regional Magazines Allow emphasis in regions of the country Even National Magazines Special city and geographic zoning available for higher circulation magazines
Out-of-home as Local Media Almost exclusively local, Place-based media Pick your place Directional messaging Reach the target on the go, going your direction Limited to only short messages More about simple exposure
Directories as Local Media Yellow Pages and other directories Always on hand Consulted for product/service options Simple listing or display alternatives Listing right for some advertisers Display needed for other advertisers Annual media buy Take care to get the info right!
Direct as Local Media Direct mail to reach customers and neighbors in their home Database Marketing on a local, business specific basis Proprietary Purchased
New Media Locally Audiotext – sponsored phone messaging used by retail stores (BB, Planet fashion) In-store advertising and couponing Interactive kiosks and teller machines in stores Social Media
Local Media Planning Matching media with markets Broad and narrow The local market profile Knowing your market Research on a local level Primary techniques Secondary sources
Matching Media With Markets Even on a local level Some media reach a broader audience Some media reach a narrower audience Especially on a local level Some advertisers need a broader audience Some advertisers need a narrower audience
Case Study:Same Location – Different Markets DeLuxe Cleaners and Betters’ Better Gourmet Same strip mall location Different business models Different target markets Different media plans
Different Target Markets DeLuxe Cleaners 90% of the business lives in the neighborhood Betters’ Better Gourmet Neighborhood market for weeknight take- out business Broader market for weekend and “freezer food” shoppers
Different Media Plans DeLuxe Cleaners Neighborhood weekly newspaper Neighborhood flyers Direct mail by zip code and customer database Betters’ Better Gourmet Daily city newspaper food day and weekend entertainment Specialty papers arts/entertainment Customer database mailings
The 10-Minute Media Plan DeLuxe Cleaners Typical of many local businesses 90% of the business generated within a 10-minute radius of the store location Media used should be in the same radius Store-front signage Zip code and neighborhood flyers Partnerships with other neighborhood stores Local neighborhood newspaper or billboard location where available
Local Market Profile Know your market, be the expert Population/Consumer base Economic Base Behavior patterns Media alternatives
Population/Consumer Base Population statistics and trends Demographic characteristics and trends Age, income, education, etc. Lifestyle variables and trends Home ownership, neighborhood development, etc.
Economic Base Tax basis and trends Retail sales by area and trends Employment statistics and trends Tourism trends (if any)
Behavior Patterns Shopping behaviors Time of day Day of week Week of month
Market Research:How do you find this stuff? Primary Research Store or customer research Media research Secondary Research Government reports Industry reports
Primary Research Locally Surveys Focus Groups Mall Intercept questionnaires One-on-one Interviews
Secondary Research Locally Government Reports Chamber of Commerce research Survey of Buying Power Government Studies Statistical Abstract
Secondary Research Locally Industry Reports Trade magazines Trade associations Specialized reports
Organization of the Media Function Media planner Media buyer Media researcher
Important Trends in Media Convergence Interactivity Creativity Optimization
Key Media Terms Media plan: document that establishes how media will be used to disseminate an advertiser’s message, including objectives and strategy. Media objective: statement in media plan that explains the goals of the plan; usually states how many of the target will be exposed to advertising messages in a given time period, and how often. Media strategy: statement in media plan that outlines how objectives will be accomplished; shows where and when advertising messages will appear, and at what cost.
Media PlanningMedia Planning = Selection + SchedulingFactors Influencing Media Planning Decisions Target Market Profile Looking at Brand/Product Dynamics The Creative Execution Budget Considerations and Media Deals The Competitive Situation Availability and Timing Considerations Cost Efficiency (CPM = Cost per thousand (CPM): cost of reaching 1,000 members of target audience with media vehicle(s) or plan.)
CPM Formula and Example Cost CPM = X 1,000 AudienceWhich is more cost efficient on a CPM basis? A-- :30 TV Commercial in “Friends” $250,000 CPM = X 1,000 = $12.50 20,000,000 B-- :30 TV Commercial in “Monday Night Football” $300,000 CPM = X 1,000 = $10.00 30,000,000
Media Selection Media are evaluated based on selectivity. There are two types of selectivity: Class Selectivity is the ability of a medium to reach the target market without waste. Geographic Selectivity is the ability of a medium to cover a particular geographic area without spillover. How would you rate the different major media in terms of class and geographic selectivity?
Media Scheduling Reach (% of target audience with opportunity for exposure to media vehicle(s) or media plan in a given time frame) + Frequency (average number of times target is likely to be exposed to the ad in a given time frame) 100%
The Difference between Reachand Frequency
Media Scheduling (continued) Reach + Frequency + Continuity (how long the campaign runs— continuous vs. flighting vs. pulsation) 100%
Reach, Frequency, and Continuity Relationships with a Fixed Budget
Media Scheduling (continued) Reach + Frequency + Continuity + Dominance/Impact (the attention-getting ability of the media vehicle(s) selected to run the ad) 100%
Evaluating the Media: Key Termsy Rating point: the % of a given population group that uses a specified media vehicle.y Share: Households/persons using television (HUT, PUT): % of homes or people watching TV at a given time.y Gross rating point (GRP): total number of ratings for different media vehicles.y Gross impression: translation of GRPs into people; number of audience exposures x number of times they will see or hear vehicles.y Cost per rating point (CPP): cost of buying one rating point in a given media vehicle or type.y Audience: number or % of homes or persons using a media vehicle.y Coverage: Same as reach – the % of homes or persons receiving broadcast signal within specified area, or receiving specific magazine or newspaper.
Evaluating the Media: Key Terms,Continued y Circulation: Total number of copies of a publication sold through various forms of distribution. y Readers per copy: average number of people who read each issue of publication.
Types of Media PlansyGeographic y Local, spot, key market y Regional y National y International Selective Combination
Sample Flowchart of a Media Plan
Evaluating the Media Plany Follow up—getting make-goods, tearsheets.y Measuring the impact: l Test consumer awareness of campaign before, during, and after. l Sales data. l Compare actual reach/frequency figures to proposed estimates.l Syndicated Media Research Services l Nielson, Arbitron, Simmons, Audit Bureau of Circulation