1 Chapter 15 Media Planning and Analysis Media Planning and Analysis EBM203 INTEGRATED MARKETING COMMUNICATIONS Calculations Lecturer: B Gray

2 CALCULATIONS COST-PER-THOUSAND METRIC TEXTBOOK EXAMPLES Chapter 12 & 15 Slides 3-12 CLASS EXAMPLE Slides SG EXAMPLE – SU 5 Slide 31

3 TEXTBOOK EXAMPLES COST-PER-THOUSAND METRIC (CPM) Calculation of cost-per-thousand metric (CPM) Ch 12 p 358 Ch 15 p 449 CPM= Ad Cost x Circulation = $300 x = $3,75 Or Cost of ad ÷ Number of total contacts $300 ÷ 80 $3,75 CPM is the cost, on average, of exposing 1000 people to an advertisement in a particular vehicle (TV program, radio program, magazine, outdoor billboard)

4 INTERPRETATION CPM Stadium capacity spectators Motivation for using a vehicle: spectators are potentially exposed, ie., have an opportunity to see (OTS) an advertising message trailing from an aeroplane. Interpretation: It costs, on average, $3,75 to expose football spectators to an advertisement using an aeroplane advertising message service. Ad for Brand X, is exposed on a trailing device extended behind the aeroplane.

5 Or Cost of ad ÷ No. of target market (TM) contacts $300 ÷ 20 $15,00 COST-PER-THOUSAND METRIC (CPM-TM) Calculation of cost-per-thousand metric (CPM-TM) Ch 15 p 449 CPM-TM= Ad Cost x Target Audience = $300 x = $15,00 CPM-TM is the cost of reaching 1000 members of the target audience, excluding those people who fall outside the target market

6 INTERPRETATION CPM-TM student spectators Motivation for using a vehicle: students sitting in the stadiums stands will potentially be exposed (have an OTS) to an advertising message trailing from an aeroplane. Interpretation: It costs $15,00 to expose members of the student spectator target audience using an aeroplane advertising message service. Advertising message for the opening of the new student bookstore will be exposed on a trailing device extended behind the aeroplane.

7 TARGET RATINGS TV PROGRAMS CPM Number of households in USA= m HH 1 rating point= 1% Therefore = m HH ERs GRP rating (1 wk in Feb)= 17.9 (ie 17,9%) Target audience= x.179 Therefore= m HH m were tuned into ER in its timeslot of Thurs on 2/2/2001 and had an OTS any TV commercial aired during that program (ER) A 30 sec commercial costs $ on this program during the season

8 TARGET RATINGS TV PROGRAMS CPM (cont.) CPM is calculated as follows: ÷ Total viewership = m HH [÷ 1000] 30 sec commercial= $ ÷ CPM= Cost of ad ÷ No. of total contacts (viewership) ÷ = $ ÷ = $23,25

9 INTERPRETATION CPM TV Programme: ER Motivation for using a vehicle: 18,3m HH potentially had an OTS any TV commercial aired on this programme on Thurs 2 Feb Interpretation: It costs, on average, $23,25 to expose viewers to an advertising message on the TV programme, ER on Thursday 2 Feb 2001.

10 TARGET RATINGS TV PROGRAMS CPM-TM Assume the target market for Brand X consists of women aged years, ie., 63% of the total audience. Calculate the CPM-TM Target market= Target audience x % representation = m x 63% = m female TM

11 ÷ CPM-TM= Cost of ad ÷ No. of total contacts ÷ = $ ÷ = $36,91 TARGET RATINGS TV PROGRAMS CPM-TM cont

12 INTERPRETATION CPM-TM Female target market watching ER Motivation for using a vehicle: m female viewers will potentially be exposed (have an OTS) to an advertising message while watching the TV programme ER on Thurs 2 Feb Interpretation: It costs $36,91 to reach 1000 members of the female target market (TM) to an adverting message on the TV programme ER, on Thurs 2 Feb 2001.

13 CLASS EXAMPLES Answer the following questions based on the information provided. All calculations, including formula, must be shown. Answers must be rounded off to two decimal places.

14 COST-PER-THOUSAND DATA Cost-per-thousand data are useful in making media vehicle selection decisions, in particular magazines. However, such decisions are made in conjunction with many other marketing- related factors which also need to be taken into account.

15 Question 1 Consider Mens Health as a candidate magazine for LaCoste Essential, the new fragrance for men. LaCoste Essential Advert removed – copyright restrictions

16 Question 1 (contin.) Use the following information to calculate the CPM for Mens Health. Cost of a full colour full page advertisement (exc. 14% VAT)= R Latest Audit Bureau of Circulation (ABC) copies 2005= Actual readership according to AMPS 2004= (Note the high for this magazine 8 per copy) ÷

17 Question 1 (contin.) COST-PER-THOUSAND METRIC (CPM) CPM= Ad Cost x Circulation = R x = R63,26 Or Cost of ad ÷ Number of total contacts R ÷ 719 R63,26

18 Question1 (contin.) INTERPRETATION CPM Motivation for using a vehicle such as Mens Health: A readership (readers) are potentially exposed to a print advertisement in Mens Health, ie., readers have an OTS an advertising message in this magazine (a print ad). Interpretation: It costs, on average, R63,26 to expose readers of Mens Health to an advertising message for LaCoste Essential.

19 Question 2 The brand manager for LaCoste Essential is considering other media options in which to advertise the new fragrance. Cost comparisons between several candidate vehicles will be considered before accepting the media planners recommendations.

20 Question 2 (contin.) Popular local production, Generations, on SABC1 between 20:00-20:30 on weekday nights, is another candidate vehicle for the fragrance. Generations has a rating of The latest AMPS figures for 2004 show that approximately nine million households in the country own television sets. If a 30 second TV commercial on this channel costs R28 000, what will the CPM be for Generations? All calculations must be shown.

21 Question 2 (contin.) TARGET RATINGS TV PROGRAMS VIEWERSHIP Number of households in SA= m HH Generations GRP rating = 15.7 Target audience= x.157 Therefore= m HH m were tuned into Generations in its timeslot and had an OTS any TV commercial aired during this programme.

22 Question 2 (contin.) COST-PER-THOUSAND METRIC (CPM) CPM= Ad Cost x Circulation = R x = R19,82 Or Cost of ad ÷ Number of total contacts R ÷ R19,82

23 Question 3 INTERPRETATION CPM TV Programme: Generations Motivation for using a vehicle such as Generaions: 1 413m HH in South Africa potentially had an OTS any TV commercial aired on this programme. Interpretation: It costs, on average, R19,82 to expose viewers to an advertising message on the TV programme, Generations in its weeknight timeslot.

24 Question 4 CPM-TM The marketers of LaCoste Essential have set the target market for the brand as trendy, young male consumers aged years. Research figures supplied by the media planner indicated that this group represents 27% of Generations total audience. Calculate the CPM-TM for this programme.

25 Question 4 (contin.) TARGET RATINGS TV PROGRAMS CPM-TM Target market= Target audience x % representation = x 27% = male TM

26 CPM-TM= Ad Cost x Target Audience = R x = R73.39 Question 4 (contin.) TARGET RATINGS TV PROGRAMS CPM-TM cont Or Cost of ad ÷ Number of total contacts R ÷ 382 R73,30

27 Question 4 (contin.) INTERPRETATION CPM-TM Male target market watching Generations Motivation for using a vehicle such as Generations: male viewers will potentially be exposed (have an OTS) to an advertising message while watching the TV programme Generations in its timeslot. Interpretation: It costs R73,39 to reach 1000 members of the male target market (TM) to an adverting message on the TV programme Generations in its weeknight timeslot.

28 Question 6 Calculating reach and frequency Two very important, if somewhat misleading, concepts in media planning are: Reach (how many people?) and Frequency (how often?) NB: See Shimp for difference between R & F The performance of a media schedule is therefore measured in terms of reach and frequency.

29 Question 6 (contin.) According to the media planner, GRPs are used to describe the gross weight of a given media effort against a defined target market. In the case of LaCoste Essential, trendy young men in the age category. From the following information calculate the GRPs. Reach= 75 Frequency= 4,6

30 Question 6 (contin.) From the following information calculate the GRPs. Reach= 75 Frequency= 4,6 GRPs= Reach (R) x Frequency (F) = 75 x 4.6 = 345

31 Answers to Study Guide Questions Study Unit 5 Question 3 – page 119 CPM = R43,75 Question 4 – page Rating audience = m HH 4.2 CPM = R229, Target audience = m HH 4.4 CPM-TM = R370,31