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

2. 2 CALCULATIONS COST-PER-THOUSAND METRIC TEXTBOOK EXAMPLES Chapter 12 & 15 Slides 3-12 CLASS EXAMPLE Slides 13-30 SG EXAMPLE – SU 5 Slide 31

3. 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 1 000 Circulation = $300 x 1 000 80 000 = $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. 4 INTERPRETATION CPM Stadium capacity 80 000 spectators Motivation for using a vehicle: 80 000 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 1 000 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. 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 1 000 Target Audience = $300 x 1 000 20 000 = $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. 6 INTERPRETATION CPM-TM 20 000 student spectators Motivation for using a vehicle: 20 000 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 1 000 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. 7 TARGET RATINGS TV PROGRAMS CPM Number of households in USA= 102 200 000 m HH 1 rating point= 1% Therefore = 1 022 000 m HH ERs GRP rating (1 wk in Feb)= 17.9 (ie 17,9%) Target audience= 1 022 000 x.179 Therefore= 18 293 800 m HH 18 293.8m 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 $425 400 on this program during the 2001- 2001 season

8. 8 TARGET RATINGS TV PROGRAMS CPM (cont.) CPM is calculated as follows: ÷ Total viewership = 18 293 800 m HH [÷ 1000] 30 sec commercial= $425 400 ÷ CPM= Cost of ad ÷ No. of total contacts (viewership) ÷ = $425 499 ÷ 18 293.8 = $23,25

9. 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 2001. Interpretation: It costs, on average, $23,25 to expose 1 000 viewers to an advertising message on the TV programme, ER on Thursday 2 Feb 2001.

10. 10 TARGET RATINGS TV PROGRAMS CPM-TM Assume the target market for Brand X consists of women aged 18-49 years, ie., 63% of the total audience. Calculate the CPM-TM Target market= Target audience x % representation = 18 293.8m x 63% = 11 525.1m female TM

11. 11 ÷ CPM-TM= Cost of ad ÷ No. of total contacts ÷ = $425 400 ÷ 11 525.1 = $36,91 TARGET RATINGS TV PROGRAMS CPM-TM cont

12. 12 INTERPRETATION CPM-TM Female target market watching ER Motivation for using a vehicle: 11 525.1 m female viewers will potentially be exposed (have an OTS) to an advertising message while watching the TV programme ER on Thurs 2 Feb 2001. 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. 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. 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. 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. 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)= R39 900 Latest Audit Bureau of Circulation (ABC) copies 2005= 89 600 Actual readership according to AMPS 2004= 719 000 (Note the high for this magazine readership:@ 8 per copy) 719 000 ÷ 89 600

17. 17 Question 1 (contin.) COST-PER-THOUSAND METRIC (CPM) CPM= Ad Cost x 1 000 Circulation = R45 486 x 1 000 719 000 = R63,26 Or Cost of ad ÷ Number of total contacts R45 486 ÷ 719 R63,26

18. 18 Question1 (contin.) INTERPRETATION CPM Motivation for using a vehicle such as Mens Health: A 719 000 readership (readers) are potentially exposed to a print advertisement in Mens Health, ie., 719 000 readers have an OTS an advertising message in this magazine (a print ad). Interpretation: It costs, on average, R63,26 to expose 1 000 readers of Mens Health to an advertising message for LaCoste Essential.

19. 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. 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 15.7. 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. 21 Question 2 (contin.) TARGET RATINGS TV PROGRAMS VIEWERSHIP Number of households in SA= 9 000 000m HH Generations GRP rating = 15.7 Target audience= 9 000 000 x.157 Therefore= 1 413 000m HH 1 413 000m were tuned into Generations in its timeslot and had an OTS any TV commercial aired during this programme.

22. 22 Question 2 (contin.) COST-PER-THOUSAND METRIC (CPM) CPM= Ad Cost x 1 000 Circulation = R28 000 x 1 000 1 413 000 = R19,82 Or Cost of ad ÷ Number of total contacts R28 000 ÷ 1 413 R19,82

23. 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 1 000 viewers to an advertising message on the TV programme, Generations in its weeknight timeslot.

24. 24 Question 4 CPM-TM The marketers of LaCoste Essential have set the target market for the brand as trendy, young male consumers aged 18-24 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. 25 Question 4 (contin.) TARGET RATINGS TV PROGRAMS CPM-TM Target market= Target audience x % representation = 1 413 000 x 27% = 381 510 male TM

26. 26 CPM-TM= Ad Cost x 1 000 Target Audience = R28 000 x 1000 381 510 = R73.39 Question 4 (contin.) TARGET RATINGS TV PROGRAMS CPM-TM cont Or Cost of ad ÷ Number of total contacts R28 000 ÷ 382 R73,30

27. 27 Question 4 (contin.) INTERPRETATION CPM-TM Male target market watching Generations Motivation for using a vehicle such as Generations: 381 510 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. 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. 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 18-24 age category. From the following information calculate the GRPs. Reach= 75 Frequency= 4,6

30. 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. 31 Answers to Study Guide Questions Study Unit 5 Question 3 – page 119 CPM = R43,75 Question 4 – page 122 4.1 Rating audience = 1 960 000m HH 4.2 CPM = R229,59 4.3 Target audience = 1 215 200m HH 4.4 CPM-TM = R370,31