Topic 9:Using Television
The word “advertising” has become synonymous with television and it is clear why that
has occurred. First of all, the medium of television allows for the fullest creative
expressions with its multisensory stimulation (sight, sound, color, music, action, and
special effects).
Advertisers recognize the power of television and in 2005 invested over $40 billion
dollars for time buys in this medium that reaches all demographic, socioeconomic and
ethnic lines.
But don’t think of television as a single type of broadcast medium. In fact we have
several distinct versions that have evolved from which we can choose. These four
alternatives are network, cable, syndicated and local.
Network broadcast programming over the airwaves to affiliate stations across the US
under a contract agreement. There are five major networks (ABC, NBC, CBS, Fox and
WB/UPN). There are approximately 220 affiliates per network and they are provided
with 90 hours of network programming a week. The network has imbedded some
advertising into the programming and leaves some available space for the affiliate to
place.
Network advertising is sold months in advance, (during Premier Week in May for the fall
lineup) but an advertiser can still place spots in network programming by buying
individual placements with the local affiliate. Local clearance is when a station clears
time for network programming. High clearance rates are important as they allow the
networks to offer advertisers national coverage. Most network programs have a 95-100%
clearance. Shows below the high 90s will probably be cancelled.
Buying network time requires enormous amounts of money and is concentrated among
few advertisers. There are three considerations in buying network time: negotiations,
scatter plans and availabilities. Unlike other media, there are no rate cards for network
costs. Rather, the agencies determine what level of cost per rating point they are willing
to pay and the networks negotiate. Scatter plans use ads over a variety or network
programs and stations to reach as many viewers as possible. Finally, the avails of a
popular show are limited and often sold before the season.
An up-front buy is when an advertiser buys time when first offered by the networks. This
is often the most expensive pricing during the spring and summer after the fall schedules
are announced. The advantages include better avails for the highly rated shows, a rate
guarantee that might not be available later and possibly lower pricing during this up-front
period.
Make goods are refunds made to an advertiser when a guaranteed rating is not procured.
Normally these are given in time rather than money.
Cable television began with community antenna television (CATV) in the 1940s and has
grown into a worldwide communications force. Community antenna was a way by which
low lying communities could cable signals in from an antenna set at a higher elevation.
Cable’s power as an advertising option has grown enormously although the initial
perception was that there would be little if any advertising since the medium was being
supported by the subscribers who paid for the service. Cable differs from network
television in that the audience is high defined. Cable operators know who is tied into
their system as they bill them every month. This demographic information and some
psychographic information is available to the advertiser.
Syndicated television is either original programming or programming that first appeared
on network television. It is then rebroadcast on either network or cable stations.
Off-network syndication refers to programs that were previously run in network prime
time (The Cosby Show, CSI, Law and Order) while first-run syndication refers to
programs developed specifically for sale to individual stations (Star Trek: The Next
Generation,, Baywatch).
Barter syndication takes both off-network and first-run syndication shows and offers
them free or at a reduced rate to local television stations with some national advertising
presold within the programs. Local stations can then sell the remainder of the time to
generate revenues. This option allows national advertisers to participate in the national
syndication market (Jeopardy, Wheel of Fortune).
Cooperative advertising (where the costs for production and placement are shared by the
manufacturer and the retail outlet) is primarily placed through local buys.
Local television is programming other than network broadcast that independent stations
and network affiliates offer local audiences. Completely independent stations broadcast
old movies, sitcoms, or children’s programming. Network affiliates do received 90 hours
a week of programming from the network, but they are free to broadcast other
programming beyond that provided. News, movies, syndicated programs, and
community interest programs round out their schedules. The advantages of spot buys
include the ability to reach uneven product distribution regions and no waste circulation
in areas not covered as well as lowering costs rather than placing network. If spot and
network are combined, then the sales potential of an advertiser’s best market can be
enhanced.while still providing exposure to all markets through the network buy. A
national advertiser can identify the unique viewing habits of a local market and address
that within the buy.
The advantages of television include the expanded creative opportunities available with
sight, sound, good quality film and special effects. Certainly of all media, television
offers the greatest reach in that it is available in 98% of US households and reaches every
demographic, economic and ethnic segment. No other medium allows an advertiser to
repeat a message as frequently. The cost per contact is the most effective way to reach
millions of members of the target audience. An average prime time show reaches more
than 20 million households. There is audience selectivity in that programming is
delivered to well defined audiences (i.e., MTV, ESPN, Cartoon Network).
The disadvantages of television include such limitations as a fleeting message, high
absolute cost, poor geographic selectivity, poor audience attitude and attentiveness and
clutter. Clutter is referred to as any nonprogram material carried during or between
shows. Networks average 13 minutes of nonprogram material per hour during prime time
with almost 10 minutes devoted to commercials. Fox leads all the networks with the
most time used in this manner. Daytime programming often has move than 18 minutes of
nonprogram material per hour, whereas early morning and late night contain
approximately 16 minutes.
Research has indicated that a :30 spot is 72% as effective as a :60 whereas a :15 is only
52% as effective as a :60. Thus the industry has adopted the :30 as the standard unit
verses the :60 which had been the standard prior to the 1970s.
A sponsorship arrangement allows an advertiser to agree to pay for production of a
program and then has placement options within the program. This is not as popular as in
the early days of television as the costs have escalated to such a great extent. Hallmark
will still sponsor dramatic programs for special occasions. Participation sponsorship
means that several advertisers to buy time during programming. Spot advertising refers
to all time purchased from and aired through local stations. To place in the spot market
allows marketers to adjust messages for different markets or intensify schedules in
markets. This is the primary manner by which local advertisers target audiences (car
dealerships, retail stores) .
Measuring audiences refers to the way in which audience size and composition are
determined for different programming. Advertisers choose where to buy based on these
factors. Nielson supplies this information, with limitations to the public and fully to
clients who subscribe to the service. Nielson has “people meters” installed in
approximately 5,000 metropolitan homes. The families who participate will place a code
into the remote upon turning the television on and this will allow Nielson to track who is
watching what programming. Nielson claims no greater than a 2 point error although
detractors of Nielson claim that it undercounts minorities and both the poor and the rich.
Arbitron is another source for network ratings gathered through diaries prepared by
participants.
During “sweeps” weeks, Nielson will collect data from numerous locations through the
use of diaries.
Preemptive rates are one of the most economical ways to buy time on television. This
rate allows the station to sell the time slot to another advertiser who may pay a higher rate
if they need that particular spot. Some stations have two versions of this buy – one
allows for the sale up until the time of the telecast and is called immediately preemptible
(IP) which is the lowest rate. The other requires two weeks’ notice. Otherwise an
advertiser may purchase time on special features, often sold at a premium rate.
A run-of-schedule buy is a package rate where assorted spots over different time periods
are purchased at the station’s discretion for placement and offers a lower rate for these
placements.
Road blocking is when an advertiser purchases the exact same time slot on several
stations so that if the viewers attempt to surf, they will repeatedly come upon the spot.
Advertising on videocassettes first occurred in 1987 with a Diet Pepsi ad on the video
release of Top Gun and since then many have followed. We now have not only
advertising but also promos for movies. Video placement can cost as much as $600,000
depending on the success of the film. Again audience segmentation is used when
selecting vehicle placement.
Direct Marketing on Television
The range of direct response offers continues to expand including high-ticket products
and services such as home mortgages, insurance and exercise equipment. Moreover
many Fortune 500 companies have started incorporating television direct response into
their marketing mix (American Express, Time-Life).
White Castle began a successful campaign “Hamburgers to Fly. Call 1-800-Wcastle and
sold over 10,000 burgers a week with a minimum order for 50 burgers costing $57.
The infomercial is one form of direct response advertising presented in a long form
ranging from 1 minute to 60 minutes, though the common length is 30 minutes.
Infomercial production is more like a television show than a commercial, but the
information is about selling. A critical factor becomes the testimonials from satisfied
customers,. Often the infomercial contains a celebrity endorsement thatcan catch a
viewer who is channel surfing. Moreover the viewer seldom stays tuned for the entire
program. Remember this is a sales pitch and not a narrative presentation and the call to
action is placed throughout the show. Within a 30 minute infomercial, the classic format
is to divide the program into 10 minute segments and close the show three times, each
closing featuring the 1-800 number and allowing the viewer to either order the product or
request more information. Information should be quickly followed up the leads
generated (within 24 hours). Many different products and services have been marketed in
this manner (equipment, self-help videos, exercise equipment, makeup and even the state
of Ohio ending with 1-800-Buckeye!) Companies including Avon, KitchenAid and
Mattel have used this format.
Though a versatile tool, in order to be profitable the primary goal should be order
solicitation and it is difficult to make a profit from items priced below $40. due to the
costs involved in production as well as air time. If a product can only support a $19.95
price tag, then sell it in sets of three for $49.99. 80% of all calls generated by the
infomercial occur within five minutes of the call to action.