Developing & Utilizing Electronic Media Chapter 7 Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall

Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall Please Note: Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall

Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall Opening Vignette Smithfield Foods Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall

Forms of Electronic Media Television Radio Telephone Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall

Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall Broadcast Facts Most universal of all media There are more radios than people in the U.S.! Virtually every American household has at least one television Over 84% of U.S. homes have cable Average TV is “on” for 6 hours per day TV is still the primary source for news Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall

Broadcast Media Spending on Direct Response Advertising In 2007, all direct response advertising spending amounted to $173.2 Million DR Television spending = $22.8M DR Radio spending = 5.0 M DR Television and Radio spending amounted to $27.8M in 2007, or 16% of all DR advertising spending Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall

Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall Television A measurable and accountable means of advertising Provides immediate response Special-Interest channels have allowed an increase for market segmentation Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall

Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall Market Segmentation Who are the viewers? 2 types: entertainment vs. information How receptive are they to a direct offer? It depends! Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall

Measurements of Advertising Response Gross Rating Points (GRP) – used as a measure for “general” advertising Areas of Dominant Influence (ADI) – also considered by “general” advertisers Cost Per Response (CPR) Response vs. recall! Best for direct marketers Direct marketers must always relate advertising results to advertising costs! Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall

Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall Cost Per Response Formula to calculate “cost per response” CPR = Total Promotion Budget_________ Total No. of Order/Inquiries Received Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall

How TV Is Used In Direct Response Advertising 1. To Sell Products 2. To Get Inquires 3. To Give Support to Other Media Length varies based on use! Infomercials – great for Direct Marketing Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall

Common Types of Businesses Using Infomercials   Common Types of Businesses Using Infomercials Business Opportunity Beauty Health and Fitness Household Entertainment Kitchen Not for Profit Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall  

Using Television Advertising Advantages Provide a wide choice of cost alternatives Quick responses Large impacts in short time periods Disadvantages Short-lived responses High cost to produce and place TV ads Limited time Lack of tangible response devices Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall

Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall Radio Became a major medium for direct response advertising in the 1920s Allows advertisers to segment listeners, e.g., by types of music, all-news, sports only, etc. Still a strong medium today, but not widely used Radio listeners tune into less then 3 stations regularly, while TV viewers continuously switch channels Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall

Using Radio Advertising Advantages Relatively low cost Message can be melded with disc jockey chatter Can be up to 15 minutes Per inquiry arrangements Little preparation Changes can be made up to the very last minute More flexible than TV Disadvantages No permanent response device No visual impact People listening are often in their vehicles and can not respond to the ad right away = NOISE!! Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall

Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall The Telephone Can be viewed both as a marketing medium and a response mechanism Telemarketing is a medium that uses sophisticated telecommunications and information systems combined with personal selling and servicing skills to help companies keep in close contact with present and potential customers, increase sales, and enhance business productivity. Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall

Inbound Vs. Outbound Calls Inbound Calls (where customers are calling in) - reactive telemarketing Applications: Ordering or inquiring Clarifying or requesting assistance Responding immediately to an advertisement Expediting processing Making pledges or contributions Obtaining financial data, stock prices, etc.. Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall

Inbound Vs. Outbound Calls Outbound Calls(where firms call the customers) - Proactive telemarketing Applications: Generating new sales, including reorders and new product introductions Generating leads Serving present accounts Reactivating old customers Surveying customers, members, voters Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall

Advantages/Disadvantages of Telemarketing Two-way communication Immediate feedback Very flexible medium Most productive medium Cost-effective medium Disadvantages Intrusive marketing medium Lacks visual enhancement Does not provide a permanent response device Retaining highly trained telephone operators Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall

Telemarketing Technology DNIS (dialed number identification system) Allows any organization that has multiple 800 or 900 numbers to differentiate incoming calls based on the number dialed by the caller. Can be used to track media performance and accountability Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall

Telemarketing Technology ANI( automated number identification) Identifies the number of the person calling The number can be matched against a database Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall

Telemarketing Technology Predictive Dialers Machines dial and connect only when a “live caller” is reached Short Messaging Service (SMS) Text message alerts to cellular phones Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall

Planning a Telemarketing Program Preparing the telephone scripts Aids the telephone operator, like an outline Training the telephone operators – 6 qualities: Experience, computer literacy, people skills, reliability, organization & problem-solving skills Integrating with other media Television, direct mail, catalogs, print, radio, yellow pages, Internet Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall

Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall Media Measurement Inbound calls are generally less expensive than outbound calls. 3 components that make up the cost of telemarketing calls are: Personnel (50% of costs) Equipment and overhead (30% of costs) Telecommunications service (20% of costs) Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall

Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall Case Study GEICO: Direct Response TV Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall