ADVERTISING:
The Media Plan
July 17, 2016
Advertising
1
General Budget Strategies
1. Top Down
2. Bottom up (Goal Based)
3. Return on Investment
July 17, 2016
Advertising
2
3. Return on Investment Budget
MARGINAL ANALYSIS
Increase Spending . . . IF:
The increased cost is less than the
incremental (marginal) return.
Decrease Spending . . . IF:
The increased cost is more than the
incremental (marginal) return.
Hold Spending Level. . . IF:
The increased cost is equal to the
incremental (marginal) return.
July 17, 2016
Advertising
3
Marginal Analysis: An Example
Gross Margin
Sales
Ad. Expenditure
$
Profit
Point A
Advertising / Promotion in $
July 17, 2016
Advertising
4
The Complication:
Advertising Response Functions
B. S-Shaped Response
A. Concave-Downward
Response Curve
Curve
High Spending
Range B
Little Effect
Advertising
Middle Level
July 17, 2016
Range A
High Effect
Advertising Expenditures
Initial Spending
Sales
Little Effect
Sales
Range C
Advertising Expenditures
5
Concave or S-shaped?
July 17, 2016
Advertising
6
Concave or S-shaped?
July 17, 2016
Advertising
7
Developing the Media Plan
1. Analyze the Market
2. Establish Media Objectives
3. Develop Media Strategy
4. Implement Media Strategy
5. Evaluate Performance
July 17, 2016
Advertising
8
Target Market Coverage
Population excluding target market
Target market
Media coverage
Media overexposure
Target
Market
July 17, 2016
Full
Coverage
Partial
Coverage
Advertising
Coverage
Exceeding
Market
9
Media Terminology
• Reach - The number of audience members
reached at least once (per week).
• Frequency - The number of times a
receiver is exposed to the message per
time period (week).
July 17, 2016
Advertising
10
Reach
Reach of One Program
Reach of Two Program
Total market audience reached
Total market audience reached
Duplicated Reach of Both
Unduplicated Reach of Both
Total reached with both shows
Total reach less duplicate
July 17, 2016
Advertising
11
Frequency
1. Three exposures are best.
2. More exposures work, but at a decreasing rate.
3. These principles are consistent across media.
4. Wearout may depend on the message.
July 17, 2016
Advertising
12
Maximizing Effectiveness
25%
Ineffective
Reach
20%
Effective
Reach
15%
Reach
Ineffective
Reach
10%
5%
0% 0
5
10
15
Frequency
July 17, 2016
Advertising
13
Frequency: Creative Factors
• Message complexity
• Message uniqueness
• New vs. continuing campaigns
• Image versus product sell
• Message variation
• Wearout
July 17, 2016
Advertising
14
Frequency: Media Factors
• Clutter
• Editorial environment
• Attentiveness
• Scheduling
• Number of media used
• Repeat Exposures
July 17, 2016
Advertising
15
Scheduling Options
Continuity
Flighting
Pulsing
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
July 17, 2016
Advertising
16
Scheduling
What products should be scheduled:
1. Continuity?
2. Flighting?
3. Pulsing?
July 17, 2016
Advertising
17
Determining the Cost of Media
Cost per rating point (CPRP)
CPRP =
July 17, 2016
Cost of commercial time
Program rating
Advertising
18
Exercise: Comparing Costs #1
• Option #1: Wheel of Fortune
• Cost: $18,000
• Rating: 13.4
• CPM?
• Option #2: Jeopardy
• Cost: $16,095
• Rating: 11.1
• CPM?
• Which is the better buy?
July 17, 2016
Advertising
19
Exercise: Comparing Costs #2
• Option #1: Wheel of Fortune
• Cost: $18,000
• Rating - Women 18+: 6.8
• CPM?
• Option #2: Jeopardy
• Cost: $16,095
• Rating - Women 18+: 9.1
• CPM?
• Which is cheaper way to reach women?
July 17, 2016
Advertising
20
Software
• Used to optimize media buying
• helps with scheduling
• minimizes cost, waste
• optimizes frequency
• e.g., “Media Flight Plan”
• “IMC Suite”
July 17, 2016
Advertising
21
New Trend
November 18, 2002 - Strategy Media
Media auditing comes to Canada
'Would you really just hand over $50 million
Patti Summerfield
Today's new emphasis on media buying
accountability is spawning a North American
interest in a practice that's been common in the
U.K. and Europe for decades - media auditing,
or third-party examination of media buys.
July 17, 2016
Advertising
22
Bottom line
The main GOAL of Media Planning
is to find the most EFFICIENT
means to reach the target audience
• Not always the lowest $!
July 17, 2016
Advertising
23
Quote of the day
The value of an ad is in inverse
ratio to the number of times it
has been used.
• Raymond Rubicam
(Rubicam and Young)
July 17, 2016
Advertising
24