Study Guide for Exam #2
Formulas to remember
CPM/CPP, Reach, Frequency, GRPs, GIs, SOV, and Random Combination Method
Important Concepts
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CPM: Cost per ad/circulation x 100
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CPP: Cost per ad/rating
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Rating: impressions/target audience x 100
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GI: Gross impressions, total # of people/ HH exposed to a vehicle or schedule,
add all exposures- duplicated, GRP x Universe/ 100, add ratings for each vehicle x #
insertions, Reach (#) x avg frequency, Reach + Duplication
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GRPs: Gross Rating Points, summation of rating points, duplicated audience
GI/ universe x 100, or add the ratings for each vehicle x # of insertions, or
GRP= Reach (%) x frequency
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Reach: take out duplication, total HH exposed/total HH, unduplicated audience,
GRP- Duplication, as # of insertions goes up, reach accumulation goes down b/c its ahrd
to attract new viewers, a percentage or # under 1
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Frequency: the avg # of times a person or HH is exposed to a vehicle in a given
period of time, measure of repetition, expressed as an average or distribution
Total # of exposures (GI)/ total # of HH reached or GRP/Reach
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Average Frequency: GRP= Reach x Frequency, Avg F= GRP/Reach, small #,
Total # Exposures/ total # of HH reached
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Rating: points/universe x 100
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Duplication: the # of individuals of HH exposed to more than one advertising
message through a media schedule, between is when you place ad on 2 dif
vehicles, triplication is on 3 dif publications, within dup is place ad in Grey’s 10
times
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Multi-media Reach Formula to calculate combined reach
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Random combo method: doesn’t estimate actual duplication but assumes 2
vehicles are watched independently, Reach= (Rating A +Rating B)-(Rating A x
Rating B), rating is a %
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K factor & combined reach for 3 or more vehicles: K is correction factor, so is
30% of audience usually watches both shows the correction factor (K) would be 3
Rating A + Rating B – K(Rating A x Rating B)
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Average Reach: reached HH/ # of HH
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Average Frequency: GRP= Reach x Frequency, Avg F= GRP/Reach, small #
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Rating: points/universe x 100
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Construct frequency distribution
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Effective Reach: % of population reached a # of times
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Effective Frequency: the # of exposures necessary to ensure the desired
communication effect is achieved
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2 Response Functions: S-shaped: means didn’t catch on right away but after 3
hit theory, shows effective frequency b/c consumer didn’t catch on right away but
responded after exposed a few times
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Convex: means people immediately responded to ad but eventually drops
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Ostrow Model (p29, MFP): estimated effective frequency based on combo of
marketing (old/ new brand), copy (simple/complex) and media (low/high clutter)
factors, accepted 3 hit theory as benchmark
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Components of Media Plan: executive summary, budget summary, into/
situation analysis, marketing/advertising objectives, media objectives, strategies
and tactics, acid test: compare place to competitor or alternatives, flowchart of
media schedule should include weight levels, reach, frequency, GRP, cost by
month for each TA, appendix is frequency distributions, any other supplementary
data, analysis of TV ratings etc
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Recommended media objectives: target audience, reach and frequency, timingscheduling, geography, special marketing problems, budget
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Strategic use of Reach & Frequency (when to emphasize either or)
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Concentrated media mix: rather use concentrated but ideally assorted works
better, frequency oriented, impact on specific target group, dominance over at
least one medium, increase of familiarity, by using an exclusive vehicle, volume
discount and promo support may be given, impossible to overcome drawback of
one medium
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Assorted media mix: reach oriented, covers variety of target groups, proven to be
more effective than single medium usage, make up for the weakness of other
media, requires more budget )both media and production cost)
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Components of media strategies
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Tactics: which vehicle are recommended in each media or not, recommended
timing for each vehicle, precise plans about it- vehicle recommendation, ad size,
when and where ads will run
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Competitive Spending Analysis using CMR: Competitive Media Reporting,
Ad$pender,18 measures of media, compiles ad rate info from media owners and/
or ad agencies, monitors across 18 media, applies advertising rate info to
advertising monitored,
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SOV (%): share of expenditures in market, who is speaking louder, % of total
category advertising contributed by each brand, used as a measure of brand
health, market share often affected by SOV, useful for new brand planning
Spending of each brand/total spending in category in percentage, down column
For a new brand: add your ad budget to the category total and recalculate your ad
total based on the new total, so spending of brand/ your ad budget + total ad spending
of category
Peckhams Formula: used when planning ad budget for new product, for the first 2
years, your plan to capture ad share (SOV)= about 1.5 times the market share you
hope to gain (SOM), so desired market x 1.5= necessary SOB, then apply this % to
total estimated category ad expenditures to get your budget
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Media Mix (%): across, concentrated or assorted, new media, branded contents
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Online Advertising 6-13: types are SEM Search engine marketing,
banner/display, ads, e-mail blasts, social marketing, blogs, rich media,
email/permission marketing, SEA search engine optimization, online ad sources:
pay per click, email/ database marketing, specials section on the side, rich media/
banner ads, blogs embedded with ads