ADVERTISINGADVERTISING

The PlayersThe Players

• AdvertisersAdvertisers• AgenciesAgencies• MediaMedia• RegulatorsRegulators• Sales RepsSales Reps• Support – research, buyers, etc.Support – research, buyers, etc.

ReachReach

• The number of The number of unduplicatedunduplicated exposures. exposures.• i.e. the number of i.e. the number of differentdifferent people that people that

see or hear an advertisementsee or hear an advertisement

FrequencyFrequency

• The average number of duplicate The average number of duplicate exposures.exposures.

• i.e. the number of times someone is i.e. the number of times someone is exposed to an advertisementexposed to an advertisement

Reach vs. FrequencyReach vs. Frequency

• The best media vehicle for reach is The best media vehicle for reach is network television.network television.

• TV penetration rates are near 100%.TV penetration rates are near 100%.• With a single buy, an advertiser can With a single buy, an advertiser can

reach millions of households, and tens reach millions of households, and tens of millions of viewers.of millions of viewers.

• Too expensive for high frequency.Too expensive for high frequency.

Reach vs. FrequencyReach vs. Frequency

• Billboards and Newspapers are best for Billboards and Newspapers are best for frequency.frequency.

• If someone reads a newspaper, they If someone reads a newspaper, they likely read it every day.likely read it every day.

• If someone passes a billboard, they If someone passes a billboard, they likely pass the same billboard every likely pass the same billboard every day.day.

Reach vs. FrequencyReach vs. Frequency

• Generally, reach and frequency are Generally, reach and frequency are mutually exclusive. A medium that mutually exclusive. A medium that delivers one, will not deliver the other.delivers one, will not deliver the other.

• Radio is possibly the best combination Radio is possibly the best combination of reach and frequency. of reach and frequency.

• Radio has high penetration, and is Radio has high penetration, and is cheap enough to allow frequency.cheap enough to allow frequency.

DemographicsDemographics

• The more specific the demographics of The more specific the demographics of the audience – the higher the cost to the audience – the higher the cost to reach the audience.reach the audience.

• Minimizing Minimizing waste circulationwaste circulation..– Attracting a Attracting a qualifiedqualified audience of true audience of true

prospective buyers for the product.prospective buyers for the product.

Cost per Thousand (CPM)Cost per Thousand (CPM)

• The cost of reaching one thousand The cost of reaching one thousand households, viewers, listeners, readers, households, viewers, listeners, readers, drivers, etc.drivers, etc.

• Allows advertisers to cross-compare Allows advertisers to cross-compare among several media.among several media.

Audience ResearchAudience Research

• Began in 1929 with Archibald Crossley.Began in 1929 with Archibald Crossley.• The “Hooperatings” dominated from the The “Hooperatings” dominated from the

mid-30s to the 40s. Phone interviews.mid-30s to the 40s. Phone interviews.• A.C. Nielsen began audience research A.C. Nielsen began audience research

in the 1940s. in the 1940s. • Arbitron (A.R.B.) established in 1949.Arbitron (A.R.B.) established in 1949.

A.C. NielsenA.C. Nielsen

• Originally both radio and TV.Originally both radio and TV.• Developed the Developed the audimeteraudimeter..• Now only TV.Now only TV.• Use diaries, audimeters and people Use diaries, audimeters and people

meters.meters.

ArbitronArbitron

• Now only radio.Now only radio.• Must rely on diaries.Must rely on diaries.• Experimenting with the Experimenting with the passive people passive people

meter (PPM).meter (PPM).

StatisticsStatistics

• Quarter-hour people (QHP), the Quarter-hour people (QHP), the average number people who listen to a average number people who listen to a station for at least five minutes within a station for at least five minutes within a fifteen minute block.fifteen minute block.

StatisticsStatistics

• TVHH = television households. The TVHH = television households. The number of households equipped with number of households equipped with TVs.TVs.

• HUT = the homes using television. The HUT = the homes using television. The number of households with their TVs number of households with their TVs actually turned on. actually turned on.

StatisticsStatistics

• Shares = the percentage of the HUT.Shares = the percentage of the HUT.• Ratings = the percentage of the TVHH.Ratings = the percentage of the TVHH.

Television Households

Home Using Television (HUT level) = 50

Tuned In

Rating = 25 Share = 50

Problems in Audience Problems in Audience ResearchResearch

• AbsenteeismAbsenteeism• HypoingHypoing• Falsifying diariesFalsifying diaries• Poor diary return ratesPoor diary return rates

Selling advertisingSelling advertising

• Networks sell audiences.Networks sell audiences.• Sales based on ratings points.Sales based on ratings points.• If guarantee not met – then network If guarantee not met – then network

provides provides make goods.make goods.

Selling AdvertisingSelling Advertising

• Local Stations sell time.Local Stations sell time.• 30s, 60s, - less often 15s, 90s, 120s30s, 60s, - less often 15s, 90s, 120s• Sell by daypart.Sell by daypart.• ROS, TAPROS, TAP

Types of advertisingTypes of advertising

• Co-opCo-op• BarterBarter• Barter SyndicationBarter Syndication• Sponsorship versus spot buyingSponsorship versus spot buying