Advertising Budgeting, Media, and Media Planning

Aravind LEAD College of Management

Setting the BudgetPercentage of SalesPayout PlanCompetitive BudgetingThe Task or Objective Method What’s the objective? What type and how much media needed? Can we afford it?

ArbitraryAdministering and Protecting the Budget

The Advertising Budget

Media DefinedThe 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?

Different Media

The Local Media MixNewspapersRadioTelevisionMagazines

Out-of-homeYellow Pages/DirectoriesDirect MediaNew Media

Newspapers as Local MediaUsing regular sections Sports, Business,

Entertainment, etc.Using special sections Gardening, Back-to-school,

etc.Zoned editionsPreprint distributionWeeklies, Shoppers,etc.

Newspapers as Local MediaAvailable space for detailed copyMinimal lead times for faster turnaroundGeographic targeting selectivity by area and zip code zoning

Radio as Local MediaDemographic target selectivity by station formatTime-of-day selectivity available Morning and afternoon drive Midday shopping Nighttime entertainment

Radio as Local MediaSpecific advertiser applications to build local traffic Straight advertising Sponsored promotions Sponsored events Remote broadcasts

Magazines as Local MediaCity Magazines

Allow advertisers geographic emphasis in many larger cities

Regional Magazines Allow emphasis in regions of

the countryEven National Magazines

Special city and geographic zoning available for higher circulation magazines

Out-of-home as Local MediaAlmost exclusively local, Place-based media Pick your place

Directional messaging Reach the target on the go, going your

directionLimited to only short messages More about simple

exposure

Directories as Local MediaYellow Pages and other directories Always on hand Consulted for product/service optionsSimple listing or display alternatives Listing right for some advertisers Display needed for other advertisersAnnual media buy Take care to get the info right!

Direct as Local MediaDirect mail to reach customers and neighbors in their homeDatabase Marketing on a local, business specific basis Proprietary Purchased

New Media LocallyAudiotext – sponsored phone messaging used by retail stores (BB, Planet fashion)In-store advertising and couponingInteractive kiosks and teller machines in stores

Social Media

Local Media PlanningMatching media with markets Broad and narrowThe local market profile Knowing your marketResearch on a local level Primary techniques Secondary sources

Matching Media With MarketsEven on a local level Some media reach a broader audience Some media reach a narrower audienceEspecially 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 MarketsDeLuxe Cleaners 90% of the business lives in the

neighborhoodBetters’ Better Gourmet Neighborhood market for weeknight

take-out business Broader market for weekend and

“freezer food” shoppers

Different Media PlansDeLuxe 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 PlanDeLuxe Cleaners Typical of many local businesses 90% of the business generated within a 10-

minute radius of the store locationMedia 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 ProfileKnow your market, be the expert Population/Consumer base Economic Base Behavior patterns Media alternatives

Population/Consumer BasePopulation statistics and trendsDemographic characteristics and trends Age, income, education, etc.Lifestyle variables and trends Home ownership, neighborhood

development, etc.

Economic BaseTax basis and trendsRetail sales by area and trendsEmployment statistics and trendsTourism trends (if any)

Behavior PatternsShopping 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 researchSecondary Research Government reports Industry reports

Primary Research LocallySurveysFocus GroupsMall Intercept questionnairesOne-on-one Interviews

Secondary Research LocallyGovernment Reports Chamber of Commerce research Survey of Buying Power Government Studies Statistical Abstract

Secondary Research LocallyIndustry Reports Trade magazines Trade associations Specialized reports

Organization of the Media Function

Media plannerMedia buyerMedia researcher

Important Trends in Media

ConvergenceInteractivityCreativityOptimization

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 ExampleCPM = Cost

Audience X 1,000

A-- :30 TV Commercial in “Friends”Which is more cost efficient on a CPM basis?

CPM = $250,00020,000,000

X 1,000 = $12.50

B-- :30 TV Commercial in “Monday Night Football”

CPM = $300,00030,000,000X 1,000 = $10.00

Media SelectionMedia 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 SchedulingReach

(% 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 Reach and 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 Terms Rating point: the % of a given population group that

uses a specified media vehicle. Share: Households/persons using television (HUT,

PUT): % of homes or people watching TV at a given time.

Gross rating point (GRP): total number of ratings for different media vehicles.

Gross impression: translation of GRPs into people; number of audience exposures x number of times they will see or hear vehicles.

Cost per rating point (CPP): cost of buying one rating point in a given media vehicle or type.

Audience: number or % of homes or persons using a media vehicle.

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

Circulation: Total number of copies of a publication sold through various forms of distribution.

Readers per copy: average number of people who read each issue of publication.

Types of Media Plans

Geographic Local, spot, key market Regional National International

Selective Combination

Sample Flowchart of a Media Plan

Evaluating the Media Plan Follow up—getting make-goods,

tearsheets. Measuring the impact:

Test consumer awareness of campaign before, during, and after.

Sales data. Compare actual reach/frequency figures to

proposed estimates.Syndicated Media Research Services

Nielson, Arbitron, Simmons, Audit Bureau of Circulation