Chapter 10
Broadcast and Interactive Online
Media
1
Learning Objectives
Learn about television, radio, and
Internet in terms of the overall trend,
advantages and disadvantages as an
advertising medium.
Understand the reality of Internet as an
advertising medium.
2
The Structure of the Television
Industry (Fig. 10.1)
3
Changes in Broadcast
Television
Cable is Firmly Entrenched Worldwide and Is
Still Growing
Battle Raging Over Who Will Control Digital
TV Technology
Network TV’s Viewership Has Declined
Television is Now a Fragmented Medium
4
Television Advertiser’s Media
Choices (Fig. 10.3)
5
Forms of Television
Advertising
Sponsorships

Advertiser assumes the total financial
responsibility for producing the program and
providing the commercials.
Participations

Advertisers pay for 15, 30, or 60 seconds of
commercial time during one or more programs.
Spot Announcements

Appear in the breaks between programs, usually
local buyers.
6
Measuring the TV Audience
A.C. Nielsen Provides the Most Commonly Used Measures of
National and Local TV Audiences:
Audimeter
Viewing Diary
Records When
The TV Set is Used
& Which Station
Watched
Provides Data On
Who is Watching
Shows
People Meters
Which TV Shows Are Being
Watched, Number of
Households Watching,
& Which Family
Members Are
Viewing
7
Pros and Cons of Broadcast TV
Advertising
Pros
Cons
Mass coverage
High production costs
Low cost
High air-time costs
Some selectivity
Limited selectivity
Impact
Brevity
Creativity
Clutter
Prestige
Zipping and Zapping
Social dominance
8
Pros and Cons of Cable
Advertising
Pros
Cons
Selectivity
Limited reach
Audience demographics
Fragmentation
Low cost
Quality
Flexibility
Zipping and zapping
Testability
Advantages of Television
Reach a Large Audience in
A Cost-Efficient Manner
Use of Sound and Moving
Images Creates a Strong
Impact
Medium’s Influence on
Consumers’ Taste and
Perceptions is Pervasive
10
Disadvantages of Television
High
Cost of
Producing
&
Running
Commercials
High
Level
Of
Commercial
Clutter
Television
Is
Nonselective
Suffers
From a
Lack of
Flexibility
In
Scheduling
11
Infomercial Watchers
Seen on
infomercial in
the past year?
Sex
Male
Female
Age
18-24
25-34
35-49
50-64
65+
Income ($)
under $15,000
15,000-20,000
20,000-30,000
30,000-40,000
40,000+
Region
Northeast
North central
South
West
Total
57%
54
Ever purchased
anything using a
toll-free number
at the 9-4
end of an
Exhibit
infomercial?
Page 290
8.0%
9.0
70
63
58
55
33
4.0
9.0
12.0
10.0
3.0
53
52
62
63
Ever purchased
anything in a store
based on information
provided in an
infomercial?
20.0%
19.0
19.0
19.0
20.0
26.0
13.0
4.5
11.0
8.0
9.0
22.5
24.0
21.0
25.0
60
11.0
16.0
65
52
57
55
55%
7.0
9.0
8.0
10.0
8.5$
24.0
14.0
21.0
17.0
19.0%
Structure of Radio
Radio Can be Classified According to Transmission and Power.
AM Radio
FM Radio
Web Radio
Cable & DAB Radio
13
Radio Advertising
Network Radio is a Group of Local Affiliates Connected to One
or More National Networks Through Telephone Wire and
Satellites and Has Increased in Popularity Because of:
Complete Market Coverage
Consolidation That Produced
4 Major Networks
Increase in Syndicated Shows
Emergence of Unwired Networks
14
The Radio Audience
Station Fans
46%, Clear Preference for One or Two
Stations, Listen Up to 8 Hours a Day.
Radio Fans
Radio is a
Highly
Fragmented
Medium
34%, Listen to Four or Five Stations With
No Preference for One Station.
Music Fans
11%, Listen Exclusively for the Music Being
Played.
News Fans
Choose Stations Based on a Need for News
and Information.
15
Measuring the Radio
Audience
Measure of the number of people listening to a
particular station at a given time:





Station’s coverage, which is the geographic area that can
pick up the station clearly.
Better measure is circulation, which measures the
number of homes that are actually tuned in to the
particular station.
Arbitron is an audience rating service.
RADAR is another rating service.
Birch/Scarborough-VNU conducts random phone
interviews asking listening preferences.
16
Pros and Cons of Radio
Advertising
Pros
Cons
Reach and Frequency
Limitations of sound
Selectivity
Segmented audiences
Cost-efficiency
Short-lived and halfheard commercials
Timelessness
Immediacy
Local relevance
Creative flexibility
Clutter
Radio
Advantages
Disadvantages
Target Audiences
Inattentiveness
Flexibility
Lack of Visuals
Affordability
Clutter
Mental Imagery
Scheduling & Buying
Difficulties
High Levels of
Acceptance
Lack of Control
18
Interactive Media
Interactive technology
(media) is a new form
of broadcast media.
Estimate that Internet
will capture 50 million
users by 2000.
Formats for delivering
ads:



Web page,
Banner ad,
E-mail.
19
Millions of Users
120
Adoption Curves for Various
Media
80
60
50
40
Radio
TV
Cable
Internet
20
0
1922 ‘26 ‘30
‘34 ‘38 ‘42 ‘46 ‘50
‘54 ‘58 ‘62 ‘66 ‘70 ‘74 ‘78
The Internet is the fastest growing medium in history
* Launch of HBO in 1976 was used to estimate the
beginning of cable as an entertainment/ad medium.
** Morgan Stanley Technology Research estimate
(Chart shows the Internet beginning as an entertainment/ad
medium in 1994 because its earlier use was restricted to
governmental activities)
‘82 ‘86 ‘90 ‘94 ‘98 Est
Years to reach 50 MM users
Radio
TV
Cable
Internet
38
13
10*
5**
Who Values the Internet’s
Offerings?
Information
access
Communications
Education
Entertainment
Banking
Advertising &
marketing
Buying &
selling
Community
services
0% 10% 20% 30% 40% 50% 60% 70% 80%
50 and older
30 to 49
Under 30
Consumers’ Use of Interactive Media
Types of Use
Percent
Respondents making interactive purchases
within one year
Of these:
Number who shopped via online service
Of these, number who used credit card
Number that shopped via Internet
Of these, number who used credit card
Number that switched to 800 number
Number that shopped via e-mail
Number that shopped via CD-ROM
Number making 2-4 purchases in last 6 months
Number making 5-10 purchases in last 6 months
Number who spent $26-$50 on each interactive purchase
Number who spent over $100 on each purchase
Types of products purchased
Books, music CDs, and videos
Computer related equipment
Flowers
Clothing
Travel
Respondents also making purchases from catalogs/TV shopping Channels
58%
86
83
43
70
16
8
5
47
12
46
11
57
55
20
18
14
50
Broadcast and Interactive
Media Strategies
Advertiser Should Ask About:
Cost of the
Medium
Ability to Meet
Advertising
Objectives
How Targeted
The
Audience Is
Ability to
Accommodate the
Style of
Message
23
Online Products Mix in 2000
Other 5%
Food and drink 5%
Computer products 32%
Gifts and flowers 10%
Apparel 5%
Travel 24%
Entertainment 19%
24
Pros and Cons of Internet
Advertising
Cons
Pros
Truly Interactive
Untested medium
Enormous audience
Targeting costs
Immediate response
Slow downloads
Affluent market
Net yet mainstream
In-depth information
Ad may be placed
inappropriately
Rapid-growth industry
Business-to-business
Advertorials
Virtual storefront
Unproved security and
privacy
Global marketing
limitations
Internet Advertising: Pros
Truly Interactive
Enormous audience
Immediate response
Affluent market
In-depth information
Rapid-growth industry
Business-to business
Advertorials
Virtual storefront
26
Internet Advertising: Cons
Untested media
Targeting costs
Slow downloads
Net yet mainstream
Ad may be placed inappropriately
Unproved security and privacy
Global marketing limitation
27
Internet Advertising: Reality
Advertising spending (Advertising Age
2001)
1999: $2.8 million (1.3%)
 2000: $4.3 million (1.8%)

61% of AA’s top 100 megabrands online
(Forrester Research)
28
Internet Advertising: Reality
Advertising spending (Advertising Age
2001)
1999: $2.8 million (1.3%)
 2000: $4.3 million (1.8%)

61% of AA’s top 100 megabrands online
(Forrester Research)
29
Various Forms of Internet advertising
Banner ads (55%): average click-through
rate 0.3 to 0.5%
 Sponsorships (27%)
 Interstitials (4%): Rich media – average
click-through rate just below 6%
 Email (2%)
 Others (12%)

30
Performance-based advertising
predicted to make up 50% of all
revenues by 2003 (Forrester Research)
31
Challenges
Can we go beyond current banners to create
ads that are exciting, fun, and dynamic?
Can we increase ad impact through
contextual relevancy?
Can we combine entertainment with brand
equity?
Can ads be intrusive without being annoying?
Can ads communicate product superiority?
32
Review
Learn about television, radio, and
Internet in terms of the overall trend,
advantages and disadvantages as an
advertising medium.
Understand the reality of Internet as an
advertising medium.
33