Media Strategy, Tactics, and Budget Decisions

Media Terminology Publications such as newspapers, magazines, direct mail, outdoor, etc. The specific carrier within a medium category Number of different audience members exposed at least once in a given time period The 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 period The potential audience that might receive the message through the vehicle Number of different audience members exposed at least once in a given time period The specific carrier within a medium category Publications such as newspapers, magazines, direct mail, outdoor, etc. Print Media Print Media Media Vehicle Reach Coverage Frequency

Developing the Media Plan Selecting Media Within Class Selecting Broad Media Classes Determining 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 Class Determining Media Strategy Selecting Broad Media Classes Setting Media Objectives Marketing Strategy Plan Creative Strategy Plan Marketing Strategy Plan Situation Analysis Creative Strategy Plan Situation Analysis

Media Planning Challenges Measurement Problems Measurement Problems Lack of Information Inconsistent Terms Inconsistent Terms Lack of Information Measurement Problems Measurement Problems Challenges in Media Planning Challenges in Media Planning

Media Strategy Decisions Reach vs. Frequency Scheduling Geographic Coverage Target Market Coverage Media Mix Scheduling Geographic Coverage Target Market Coverage Media 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 Target Market Proportion Full Market Coverage Partial Market Coverage Exceeding Market Population excluding target market Target market Media coverage Media 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 Canadian sales in market Percentage of total Canadian population in market BDI =X 100 Brand Development Index

Our brand is Tim Horton’s Coffee. We would like to compare our brand development in Ontario vs. Alberta. Let’s say that: 50% of our sales come from Ontario 30% of our sales come from Alberta 58% of the Canadian population lives in Ontario 29% of the Canadian population lives in Alberta Calculate the BDI for each province. What does this mean?

Brand Development Index Ontario BDI = 50/58=.862X100=86.2 Alberta BDI = 30/29 = x100=103.45

Brand and Category Analysis Percentage of total product category sales in market Percentage of total Canadian population in market CDI =X 100 Category Development Index

Tim Horton’s example: 40% of sales of all takeout coffee come from Ontario 30% of sales of all takeout coffee come from Alberta 58% of the Canadian population lives in Ontario 29% of the Canadian population lives in Alberta Calculate the CDI for Ontario and Alberta

Category Development Index Ontario = 40/58 =.689x100 = 68.9 Alberta = 30/29 = x 100 =

Brand and Category Analysis High market share Good market potential High market share Good market potential High market share Good market potential High market share Good market potential Low CDI High CDI High BDI Low market share Good market potential Low BDI High market share Monitor for sales decline High market share Monitor for sales decline High market share Monitor for sales decline High market share Monitor for sales decline Low market share Poor market potential Low market share Poor market potential

Brand and Category Analysis The market usually represents good sales potential for both the product and the brand. Low CDI High CDI High BDI The product category shows high potential but the brand isn’t doing well; the reason should be determined. Low BDI The category isn’t selling well but the brand is; may be a good market in which to advertise but should be monitored for sales decline. Both the product category and the brand are doing poorly; not likely to be a good place to advertise.

4. Scheduling Three Scheduling Models Continuity Pulsing Flighting JanFebMarAprMayJunJulAugSepOctNovDec

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 cannot be sure an ad placed 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 Levels Figure 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 Frequency

Gross Rating Points GRPs refer to the weight of a media schedule against a pre-determined target audience. GRP = Reach (%) x Frequency = 50 x 3.5 = 175

Determining Effective Reach Figure 9-15

Marketing Factors Determining Frequency Target Group Brand History Share of Voice Purchase Cycles Brand Loyalty Brand Share Usage Cycle Purchase Cycles Share of Voice Brand History Usage Cycle Brand Share Brand Loyalty Marketing Factors

Message Factors Determining Frequency Message Complexity Message Uniqueness New Vs. Continuing Campaigns Image Versus Product Sell Message Variation Wearout Advertising Units Wearout Message Variation Image Versus Product Sell New Vs. Continuing Campaigns Message Uniqueness Message Complexity Message or Creative Factors Message or Creative Factors

Media Factors Determining Frequency Clutter Number of Media Used Repeat Exposures Editorial Environment Scheduling Attentiveness Number of Media Used Editorial Environment Repeat Exposures Clutter Media Factors

Media Tactics Decisions 1. Media Vehicle 2. Budget Adjustments 3. Blocking Chart

Determining Relative Cost of Media Cost of ad space (absolute cost) Circulation CPM =X 1,000 Cost per thousand (CPM)

Homemakers Magazine ChatelaineCanadian Living One time, 1 page, 4 colour $20,640$35,695$27,222 Circulation 1,290,000802,714561,102

Homemakers Magazine ChatelaineCanadian Living One time, 1 page, 4 colour $20,640$35,695$27,222 Circulation 1,290,000802,714561,102 CPM $16$44.47$48.57

Newspaper Cost Calculation Newspaper rates are based on a per line rate There are two ways to calculate lines – MAL and Agate Some newspapers use one way, some use another Usually, the line rate goes down as you advertise more = Volume discounts

Calculating Newspaper Costs The Globe and Mail Assuming you spend only $25,000 per year Find the cost of: 320 line ad in the National Paper on Saturday for four Saturdays

Calculating Newspaper Costs The Globe and Mail Assuming you spend only $25,000 per year Find the cost of: 320 line ad in the National Paper on Saturday for four Saturdays Answer: 320 X $23.39 x4 = $29,939.20

Calculating Newspaper Costs The Toronto Star A 3000 line ad in the Saturday edition for 2 Saturdays

Calculating Newspaper Costs The Toronto Star A 3000 line ad in the Saturday edition for 2 Saturdays Answer: 3000 x $20.78 x 2 = $124,680

Factors Influencing Newspaper Rates Position Charge Position Charge Colour Inserts A request for a specific page or section increases the cost. Colour increases cost but it also increases awareness. Rates are quoted on a CPM basis and are influenced by number of pages.

Buying Magazine Space The cost of the ad is determined by multiplying the page rate (by size) by the frequency. If a 1P, 4C ad costs $20,000 and it runs in 6 consecutive issues of a monthly magazine, the total cost would be: $20,000 x 6 = $120,000.

Magazine Cost Calculation Plan Canadian Geographic 1 Page 4 Colour 4 insertions Plan Canadian Geographic 1 Page 4 Colour 4 insertions The base rate would be the 3-5 times rate on the rate card. Cost Calculation: $10,755 x 4 = $43,020

Magazine Cost Calculation Find the cost of the following ad in Canadian Living 1 page, 4 times in the National edition What is the cost of the ad? What is the CPM?

Magazine Cost Calculation Find the cost of the following ad in Canadian Living 1 page, 4 times in the National edition Answer: $28,575 x 4 = $114,300 What is the CPM ($114,300/551,884) X 1000 = $207.11

Magazine Discounts Frequency Continuity Corporate The number of times the ad is run. The length of time during one year period. Total pages bought by all company brands during one year period.

Colour and Position Charges Colour advertising is the norm in magazines so rates are usually quoted as 4-colour rates. Higher rates are charged for cover positions and specific page requests. Covers Inside Front (IFC), inside back (IBC), and outside back (OBC). About 20% more. Position Charge Position Charge A specific page request increases the cost per page by 15 – 20%.

Comparing Magazines for Efficiency SpecificationsCanadian LivingFlare 1P, 4C Circulation CPM Both magazines have different rates and circulations but the CPM is almost identical.

Comparing Magazines for Efficiency SpecificationsCanadian LivingFlare 1P, 4C$29,160$15,600 Circulation551,884172,362 CPM$52.84$90.51 Both magazines have different rates and circulations but the CPM is almost identical.

Media Budget: Balancing Objectives and Budget Dollars Goals What we’re willing and able to spend What we need to achieve our objectives

Managerial Approaches in Budget Setting Factors Influencing the Budget Decision 1. Market Size 2. Market Potential 3. Market Share Goals 4. Economies of Scale in Advertising 5. IMC Tools

Ad Spending and Share of Voice Decrease–find a Defensible Niche Increase to Defend Attack With Large SOV Premium Maintain Modest Spending Premium Competitor’s Share of Voice High Low HighLow Your Share of Market

Top-Down Budgeting The Promotion Budget Is Set to Stay Within the Spending Limit Top Management Sets the Spending Limit

Top-Down Budgeting Methods Affordable Method Competitive Parity Percentage of Sales Percentage of Sales Return on Investment Return on Investment Arbitrary Allocation Percentage of Sales Percentage of Sales Competitive Parity Arbitrary Allocation Top Management Top Management

Bottom-Up Budgeting Total Budget Is Approved by Top Management Total Budget Is Approved by Top Management Cost of Activities are Budgeted Activities to Achieve Objectives Are Planned Activities to Achieve Objectives Are Planned Promotional Objectives Are Set Cost of Activities are Budgeted Activities to Achieve Objectives Are Planned Activities to Achieve Objectives Are Planned Promotional Objectives Are Set

Objective and Task Method Estimate Costs Associated with Tasks (determine costs of advertising, promotions, etc…) Estimate Costs Associated with Tasks (determine costs of advertising, promotions, etc…) Determine Specific Tasks (advertise on market area television and radio and local newspapers) Determine Specific Tasks (advertise on market area television and radio and local newspapers) Establish Objectives (create awareness of new product among 20 percent of target market) Establish Objectives (create awareness of new product among 20 percent of target market) Determine Specific Tasks (advertise on market area television and radio and local newspapers) Determine Specific Tasks (advertise on market area television and radio and local newspapers) Establish Objectives (create awareness of new product among 20 percent of target market) Establish Objectives (create awareness of new product among 20 percent of target market)