Module IIIAdvertising media and agencies

Media Versus Vehicles • Media are the general communication methods that carry

advertising messages—television, magazines, newspapers, and so on.

• Vehicles are the specific broadcast programs or print choices in which advertisements are placed.

• For example, television is the media, and American Idol is the

vehicle.

• Each medium and vehicle has a unique set of characteristics and virtues.

The Media-Planning Process

Media planning

The design of a strategy that shows howinvestments in advertising time and space will

contribute to the achievement of

marketing objectives.

Model of the Media Planning Process

Advertising Strategy

Advertising

ObjectivesAdvertising

BudgetMessageStrategy

MediaStrategy

Media Strategy• Target Audience

Selection• Objective Specification• Media and Vehicle• Media Buying

Marketing Strategy

Selecting the Target Audience

Four major factors

(1) Buyographics

(4) Lifestyle/psychographics

(2) Geographic

(3) Demographic

Specifying Media Objectives

1. What proportion of the population should be reached with advertising message during specified period (reach)

2. How frequently should audience be exposed to message during this period (frequency)

3. How much total advertising is needed to accomplish reach and frequency objectives (weight)

Specifying Media Objectives

4. How should the advertising budget be allocated over time (continuity)

5. How close to the time of purchase should the target audience be exposed to the advertising message (recency)

6. What is the most economically justifiable way to accomplish objectives (cost)

Reach

Percentage of target audience that isexposed to an advertisement, at least

once, during a certain time frame(usually four weeks)

Frequency

Average number of times, on average, during the media-

planning period that members of the target audience are exposed to the media vehicles that carry a

brand’s advertising message.

Weight

How much advertising volume is required to accomplish advertising objectives

Three weight metrics:

• Gross ratings

• Target ratings

• Effective ratings

What Are Ratings?

Ratings, in an advertising sense, simply mean the percentage of an audience that has an opportunity to see an advertisement placed in a particular vehicle.

Weight: Gross Rating Points

Gross rating points, or GRPs, arean indicator of the amount of grossweight that a particular advertisingschedule is capable of delivering

GRPs=Reach(R) X Frequency(F)

Determining GRPs in Practice

• GRPs are the sum of all vehicle ratings in a media schedule

• Rating: proportion of the target audience presumed to be exposed to a single occurrence of an advertising vehicle in which the advertiser’s brand is advertised

Weight: Target Rating Points (TRPs)

Adjust a vehicle’s rating to reflect just those individuals who match the advertiser’s target audience

The Concept of Effective Reach• How often does the target audience have

an opportunity to be exposed?• Effective reach is based on the idea that

an advertising schedule is effective only if it does not reach members of target audience too few or too many times

Effective Reach in Advertising Practice

• 3-10 exposures during a media-planning period (typically 4 weeks)

• Using multiple media• Subjective factors must be considered

An Alternative: Frequency Value Planning

• The objective is to select the media schedule that generates the most exposure value per GRP.

ContinuityHow advertising is allocated during the course of

an advertising campaign: how should the media budget be distributed?

Continuous advertising schedule: an equal number of ad dollars are invested throughout the campaign

Pulsing: some advertising is used during every period of the campaign, but the amount of advertising varies from period to period.

Flighting: the advertiser varies expenditures throughout the campaign and allocates zero expenditures in some months.

Recency Planning (a.k.a. The Shelf-Space Model)

(1)Consumers’ first exposure to an advertisement is the most powerful

(2)Advertising’s primary role is to influence brand choice

(2) Achieving a high level of weekly reach for a brand should be emphasized over acquiring heavy frequency

Optimizing Weekly Reach• Advertising teaches consumers• Influence brand selection• Messages are most effective when close to

purchase time• Cost-effectiveness of first exposure is greater

than subsequent• Allocate budget to reach consumers often• Reach target audience continuously rather

than sporadically

Cost considerations

Cost per Thousand (CPM)

Target Market (TM)

CPM= Cost of ad # of contacts (expressed in thousands)

CPM-TM= Cost of ad # of TM contacts

(expressed in thousands)

Tradeoffs

• Tradeoff must be made because media planners operate under the constraint of a fixed advertising budget

Media Planning Software

1. User develops a media database2. User selects criterion for schedule

optimization3. User specifies constraints4. User seeks out the optimum media

schedule

TYPES OF MEDIA

• Newspapers• Radio• Television• Magazines• Web and new media• Video

ADVERTISING BUDGETTING Budget is Crucial to Ad Strategy Target Audience

Advertising Objectives

****Advertising Budget****

Creative Strategy Advertising Media and Programming Schedules Implement and Evaluate

Strategy Effectiveness

Three Ad Budget Methods

Budgeting Method 1 # Percentage of SalesThe Percentage of Past Sales Method • A2 = ƒ (S1)

Where:• A2 is the total ad budget for NEXT year (year 2 or quarter 2)• Ƒ is a percentage figure • S1 is sales for period 1 (or last year’s sales)

The Percentage of Forecasted Future Sales Method • A2 = ƒ (S2)

Where:• A2 is the total ad budget for NEXT year (year 2 or quarter 2) • ƒ is a percentage figure (see NAA industry norms) • S1 is sales for period 1 (or last year’s sales)

Budgeting Method 2 # Competitive-Parity Method • ASV = (AF)

______

Ac + AF

Where:• ASV is the firm’s advertising share of voice (S.O.V)

• AF is the firm’s advertising expenditures for the period in question

• Ac is all competitors’ advertising expenditures for the period in question

Budgeting Method 3# Objective and Task A = ƒ (objectives)Where:• A is advertising investment (the firm’s advertising expenditures for the period in question) Objectives are things that you want to achieve in said time period (awareness, trial

use, etc.)

Advantages & Disadvantages of Budgeting Method Percentage of Sales

Advantages• Fixed percent of sales, often based on past expenditure patterns.• Can help with franchising. Disadvantages Arbitrary. Budget may be too high when sales are high Budget may be too low when sales are low.

Comparative- ParityAdvantages- Budget is based largely upon what competition is doing. Disadvantages - Differences in marketing strategy may require different budget levels.

Objective and TaskAdvantages- Set objectives and then determine tasks (and costs) necessary to meet the

objectives. Disadvantages- The major issue in using this method is deciding the right objectives so

measurement of results is important.

Whichever method you choose, budgets vary due to:

Target Market(s) Desired Positioning

Role of Promotion in Positioning Product Characteristics

Stage of Life Cycle Situation Specific Factors

Recent Trends in Ad Budgeting Decisions • More Promotions/Less Ads

• International Markets mean more competition and harder to measure market share

• Clutter. Clutter. Clutter.

• Signaling Theory

• Short-term pressure to brand managers

• Less umbrella branding strategy (more narrow)

• Advocacy ads

• CSR movement

• Green movement

• Online ads a 25$ BILLION a year industry (young, mobile, and measurable

• Experiential/Event Marketing gaining prominence

MEASURING ADVERTISING EFFECTIVENESS• Media research—assesses how well particular medium delivers message, where

and when to place the message, and the size of the audience.

• Message research—tests consumer reactions to an advertisement’s creative message.

• Pretesting—assessing an advertisement’s likely effectiveness before it is completed.

• Post testing—assessing advertisement’s effectiveness after it has appeared.• Recognition test

- Respondents are shown the actual advertisement and asked whether they recognize it

• Unaided recall test- Respondents identify advertisements they have seen recently but are not shown any clues to help them remember

• Aided recall test- Similar to unaided recall tests but respondents are shown a list of products, brands, company names or trademarks to jog their memories

ADVERTISING BUSINESS IN INDIA • The Media & Entertainment Industry in India is expected to reach Rs 1,457

billion by 2016 as per the FICCI-KPMG report. • The industry achieved a growth of 12% in 2011 and is projected to grow at a

CAGR of 15 percent over the next five years. • The spends on leisure and entertainment are greater than the economic growth,

this is a result of favorable demographics and increasing disposable incomes. • The Indian Media & Entertainment (M&E) sector is growing rapidly, especially

with new age technology and the rapid rise of digital media.  • Digital media includes cable digitization, wireless broadband, direct-to-home

(DTH), digitization of film distribution and internet usage.

Some of the key factors that have driven the growth of the M&E industry are:

• Rise in digital content consumption,• Launch of innovative content delivery platforms, • Higher penetration in tier II and tier III cities, • Greater reach of regional media and regulatory shifts.

Top leading Companies• Ogilvy and Mather• J Walter Thompson India• Mudra Communication Pvt. Ltd• FCB-Ulka Advertising Ltd• Rediffusion-DY&R• McCann-Erickson India Ltd• RK Swamy/BBDO Advertising Ltd• Grey Worldwide (I) Pvt. Ltd• Leo Burnett India Pvt. Ltd• Contract Advertising India Ltd

Key players • The media industry can be categorized into the following categories; films, television, music, radio and print. • Television remains the dominant medium in this sector. However new media as

animation & VFX, digital advertising, and gaming - are fast grabbing a larger share of the market. 

• Radio is estimated to continue at a good growth rate. • Print, though on a decline in terms of growth rate, continues to be the second

largest medium of this industry. • Also, the film industry has witnessed multiple movies go beyond the Rs 100

crore mark in domestic theatrical collections, and Rs 30 crore mark in Cable & Satellite rights. 

• Advertising spends across media amounted to Rs 300 billion in 2011, which was 41 percent of the M&E industry’s revenues.

• Advertising revenues saw a growth of 13 percent in 2011, versus 17 percent witnessed in 2010.

Television• Valued at Rs 329 billion (US$ 5.76 billion) in 2011, the television (TV) industry

is expected to expand at a compounded annual growth rate (CAGR) of 17 per cent through 2011-16 to touch Rs 735 billion (US$ 13 billion), according to report by FICCI-KPMG. 

Radio• The radio industry with around 36 FM radio operators, is estimated at Rs 1,200

crore (US$ 210 million).• The Government plans to increase number of private FM radio channels to

around 839, from the present 245,  through e-auctions starting Dec 2012 over next three years. This plan would cover 227 cities with population of over 0.1 million.

• All India Radio (AIR) proposes to set up 385 new FM transmitters, under the Twelfth Plan, so as to provide FM coverage to 90 per cent of the population. Currently AIR reaches out to about 41per cent of the population. 

Digitization• Flourishing DTH, cable digitization and launch of new digital platforms for content

delivery have completely changed the face of media distribution over the last 5 years. These media along with other online platforms have made digital advertising a major player in the market. Digital advertising is expected to grow at a CAGR of 30 per cent during 2011-16.

Print•  Print media is being driven mainly by growth in the regional markets, with an increasing

literacy rate in this market. An estimated growth of 10 per cent is anticipated till 2015. EMPLOYMENT OPPORTUNITIES • The opportunities include that of account planner, executive, copywriter, visualizer,

creative art director, animator, multimedia expert, photographer, printer, TV producer, media planner, web developer jobs, web planner, and marketing professional.

• Candidates qualified in Commercial Art have great opportunities. • MBAs can also play a significant role in client servicing. • However, individual creativity and ability for innovation are more important than academic

degrees. • The advertising industry always has a perennial demand of talent.