10Media Strategy, Tactics, and Budget Decisions

Chapter Objectives

• Understand the key terminology used in media planning.

• Know how a media plan is developed.

• Understand the process of deciding and implementing media strategies and tactics.

• Know the theoretical and managerial approaches for media budget setting.

Media Terminology

Publications such as newspapers, magazines, direct mail, outdoor, etc.Publications such as newspapers, magazines, direct mail, outdoor, etc.

The specific carrier within a medium categoryThe specific carrier within a medium category

Number of different audience members exposed at least once in a given time periodNumber of different audience members exposed at least once in a given time period

The potential audience that might receive the message through the vehicleThe potential audience that might receive the message through the vehicle

The number of times the receiver is exposed to the media vehicle in a specific time periodThe number of times the receiver is exposed to the media vehicle in a specific time period

The potential audience that might receive the message through the vehicleThe potential audience that might receive the message through the vehicle

Number of different audience members exposed at least once in a given time periodNumber of different audience members exposed at least once in a given time period

The specific carrier within a categoryThe specific carrier within a category

Newspapers, magazines, direct mail, outdoor, etc.Newspapers, magazines, direct mail, outdoor, etc.

PrintMediaPrintMedia

Media VehicleMedia

Vehicle

ReachReach

CoverageCoverage

FrequencyFrequency

Developing the Media Plan

Selecting Media Within ClassSelecting Media Within Class

Selecting Broad Media ClassesSelecting Broad Media Classes

Determining Media StrategyDetermining Media Strategy

Media Use Decision— Print

Media Use Decision— Print

Media Use Decision— Broadcast

Media Use Decision— Broadcast

Media Use Decision— Other Media

Media Use Decision— Other Media

Selecting Media Within ClassSelecting Media Within Class

Determining Media StrategyDetermining Media Strategy

Selecting Broad Media ClassesSelecting Broad Media Classes

Setting Media ObjectivesSetting Media ObjectivesSetting Media ObjectivesSetting Media Objectives

Marketing Strategy PlanMarketing

Strategy PlanCreative

Strategy PlanCreative

Strategy PlanMarketing

Strategy PlanMarketing

Strategy PlanSituation Analysis

Situation Analysis

Creative Strategy Plan

Creative Strategy Plan

Situation Analysis

Situation Analysis

Media Planning Challenges

Measurement Problems

Measurement Problems

Lack of Information

Lack of Information

InconsistentTerms

InconsistentTerms

Lack of Information

Lack of Information

Measurement Problems

Measurement Problems

Challengesin MediaPlanning

Challengesin MediaPlanning

Media Strategy Decisions

Reach vs. FrequencyReach vs. Frequency

SchedulingScheduling

Media MixMedia Mix

SchedulingScheduling

Geographic CoverageGeographic Coverage

Target Market CoverageTarget Market Coverage

Media MixMedia Mix

1. Media Mix

• Generally a number of alternatives

• Decisions are based on:

– Objectives

– Product/service characteristics

– Budget

– Preferences

– Creative strategy

2. Target Audience Coverage

TargetMarket

Proportion

FullMarket

Coverage

PartialMarket

Coverage

CoverageExceeding

Market

Population excluding target marketTarget marketMedia coverageMedia overexposure

3. Geographic Coverage

• Firms should maximize the effectiveness of advertising and promotion dollars by spending in markets where they will achieve the desired objectives.

• Useful calculations examined by marketers to make this decision:

– Brand Development Index (BDI)

– Category Development Index (CDI)

Brand and Category Analysis

Percentage of brand to total sales in market

Percentage of total population in market

BDI = X 100

Brand Development Index

Brand and Category Analysis

Percentage of total product category sales in market

Percentage of total population in market

CDI = X 100

Category Development Index

Brand and Category Analysis

High market shareGood market potential

High market shareGood market potential

High market shareGood market potential

High market shareGood market potential

Low

CD

IH

igh

CD

I

High BDI

Low market share Good market potential

Low market share Good market potentialLow market share Good market potential

Low market share Good market potential

Low BDI

High market shareMonitor for sales decline

High market shareMonitor for sales decline

High market shareMonitor for sales decline

High market shareMonitor for sales decline

Low market sharePoor market potential

Low market sharePoor market potential

4. Scheduling

Three Scheduling Models

Continuity

Pulsing

Flighting

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

4. Scheduling

Figure 9-10

5. Reach vs. Frequency

Reach

• Exposing potential buyers to the message.

• There is no known way of determining how much reach is required to achieve levels of awareness, attitude change, or buying intention.

– We can’t be sure an ad in a vehicle will actually reach the intended audience.

5. Reach vs. Frequency

Frequency• The number of times one is exposed to a

media vehicle.• Advertiser has no way of knowing if exposure

to a vehicle results in exposure to ad.• Therefore, one exposure to the vehicle

constitutes reach.• This does not help determine frequency

required to make an impact.– Precise determination requires consideration of

creativity of ad, receiver involvement, noise, etc.

5. Reach vs. Frequency

Establishing Reach and Frequency LevelsFigure 9-12

5. Reach vs. Frequency

• Gross Rating Points (GRPs)

– Based on the total audience the media schedule may reach.

– Use a duplicated reach estimate.

GRP = Reach x FrequencyGRP = Reach x Frequency

The Effects of Reach and Frequency

Determining Effective Reach

Message Factors Determining Frequency

Message ComplexityMessage Complexity

Message UniquenessMessage Uniqueness

New Vs. Continuing CampaignsNew Vs. Continuing Campaigns

Image Versus Product SellImage Versus Product Sell

Message VariationMessage Variation

WearoutWearout

Advertising UnitsAdvertising Units

WearoutWearout

Message VariationMessage Variation

Image Versus Product SellImage Versus Product Sell

New vs. Continuing CampaignsNew vs. Continuing Campaigns

Message UniquenessMessage Uniqueness

Message ComplexityMessage ComplexityMessageor Creative

Factors

Messageor Creative

Factors

Media Factors Determining Frequency

ClutterClutter

Number of Media UsedNumber of Media Used

Repeat ExposuresRepeat

Exposures

Editorial Environment

Editorial Environment

SchedulingScheduling

AttentivenessAttentivenessAttentivenessAttentiveness

Number of Media UsedNumber of Media Used

Editorial Environment

Editorial Environment

Repeat Exposures

Repeat Exposures

ClutterClutter

Media FactorsMedia

Factors

Balancing Objectives and Money

Dollars Goals

What we’re willing and

able to spend

What we need to achieve our

objectives

Theoretical Approaches in Budget Setting

Marginal Analysis

• As advertising and promotional expenditures increase, sales and gross margins increase to a point.

• A firm should spend money as long as the marginal revenues exceed the incremental costs.

Marginal Analysis

Advertising / Promotion in $

Sale

s in

$

Point A

Profit

Sales Gross Margin

Ad. Expenditure

Competition-based strategy

Decrease–find a Defensible NicheDecrease–find a Defensible Niche Increase to DefendIncrease to Defend

Attack With Large SOV Premium

Attack With Large SOV Premium

Maintain Modest Spending Premium

Maintain Modest Spending PremiumC

om

peti

tor’

sS

hare

of

Voic

e

Hig

hLo

w

HighLowYour Share of Market