1. Broadcast and Interactive Online Media
Chapter 10
Broadcast and Interactive Online Media

2. Learning Objectives
Learn about television, radio, and Internet in terms of the overall trend, advantages and disadvantages as an advertising medium.
Understand the reality of Internet as an advertising medium.

3. The Structure of the Television Industry (Fig. 10.1)

4. Changes in Broadcast Television
Cable is Firmly Entrenched Worldwide and Is Still Growing
Battle Raging Over Who Will Control Digital TV Technology
Network TV’s Viewership Has Declined
Television is Now a Fragmented Medium

5. Television Advertiser’s Media Choices (Fig. 10.3)

6. Forms of Television Advertising
Sponsorships
Advertiser assumes the total financial responsibility for producing the program and providing the commercials.
Participations
Advertisers pay for 15, 30, or 60 seconds of commercial time during one or more programs.
Spot Announcements
Appear in the breaks between programs, usually local buyers.

7. Measuring the TV Audience
A.C. Nielsen Provides the Most Commonly Used Measures of National and Local TV Audiences:
Audimeter
Records When
The TV Set is Used
& Which Station
Watched
Viewing Diary
Provides Data On
Who is Watching
Shows
People Meters
Which TV Shows Are Being
Watched, Number of
Households Watching,
& Which Family
Members Are
Viewing

8. Pros and Cons of Broadcast TV Advertising
Mass coverage
Low cost
Some selectivity
Impact
Creativity
Prestige
Social dominance
High production costs
High air-time costs
Limited selectivity
Brevity
Clutter
Zipping and Zapping
Pros
Cons

9. Pros and Cons of Cable Advertising
Selectivity
Audience demographics
Low cost
Flexibility
Testability
Limited reach
Fragmentation
Quality
Zipping and zapping
Pros
Cons

10. Advantages of Television
Reach a Large Audience in
A Cost-Efficient Manner
Use of Sound and Moving
Images Creates a Strong
Impact
Medium’s Influence on
Consumers’ Taste and
Perceptions is Pervasive

11. Disadvantages of Television
High
Cost of
Producing
&
Running
Commercials
High
Level Of
Commercial
Clutter
Television Is
Nonselective
Suffers
From a
Lack of
Flexibility In
Scheduling

12. Infomercial Watchers Exhibit 9-4 Page 290 Ever purchased
Male % % %
Female
Age
Income ($)
under $15,
15,000-20,
20,000-30,
30,000-40,
40,
Region
Northeast
North central
South
West
Total % $ %
Seen on
infomercial in
the past year?
Ever purchased
anything using a
toll-free number
at the end of an
infomercial?
anything in a store
based on information provided in an
Exhibit 9-4
Page 290

13. Radio Can be Classified According to Transmission and Power.
Structure of Radio
AM Radio
FM Radio
Radio Can be Classified According to Transmission and Power.
Web Radio
Cable & DAB Radio

14. Radio Advertising
Network Radio is a Group of Local Affiliates Connected to One or More National Networks Through Telephone Wire and Satellites and Has Increased in Popularity Because of:
Complete Market Coverage
Consolidation That Produced
4 Major Networks
Increase in Syndicated Shows
Emergence of Unwired Networks

15. The Radio Audience Radio is a Highly Fragmented Medium Station Fans
46%, Clear Preference for One or Two Stations, Listen Up to 8 Hours a Day.
Radio Fans
34%, Listen to Four or Five Stations With No Preference for One Station.
Radio is a Highly Fragmented Medium
Music Fans
11%, Listen Exclusively for the Music Being Played.
News Fans
Choose Stations Based on a Need for News and Information.

16. Measuring the Radio Audience
Measure of the number of people listening to a particular station at a given time:
Station’s coverage, which is the geographic area that can pick up the station clearly.
Better measure is circulation, which measures the number of homes that are actually tuned in to the particular station.
Arbitron is an audience rating service.
RADAR is another rating service.
Birch/Scarborough-VNU conducts random phone interviews asking listening preferences.

17. Pros and Cons of Radio Advertising
Reach and Frequency
Selectivity
Cost-efficiency
Timelessness
Immediacy
Local relevance
Creative flexibility
Limitations of sound
Segmented audiences
Short-lived and half- heard commercials
Clutter
Pros
Cons

18. High Levels of Acceptance Scheduling & Buying Difficulties
Radio
Target Audiences
Flexibility
Affordability
Mental Imagery
High Levels of Acceptance
Advantages
Inattentiveness
Lack of Visuals
Clutter
Scheduling & Buying Difficulties
Disadvantages
Lack of Control

19. Interactive Media
Interactive technology (media) is a new form of broadcast media.
Estimate that Internet will capture 50 million users by 2000.
Formats for delivering ads:
Web page,
Banner ad, .

20. Adoption Curves for Various Media
‘26 ‘30 ‘34 ‘38 ‘42 ‘46 ‘50 ‘54 ‘58 ‘62 ‘66 ‘70 ‘74 ‘78 ‘82 ‘86 ‘90 ‘94 ‘98 Est
120 80 60 50 40 20
Millions of Users
Radio TV
Cable
Internet
The Internet is the fastest growing medium in history
* Launch of HBO in 1976 was used to estimate the
beginning of cable as an entertainment/ad medium.
** Morgan Stanley Technology Research estimate
(Chart shows the Internet beginning as an entertainment/ad
medium in 1994 because its earlier use was restricted to
governmental activities)
Years to reach 50 MM users
Radio 38
TV 13
Cable 10*
Internet 5**

21. Who Values the Internet’s Offerings?7 7

22. Consumers’ Use of Interactive Media
Types of Use Percent
Respondents making interactive purchases
within one year %
Of these:
Number who shopped via online service
Of these, number who used credit card
Number that shopped via Internet Of these, number who used credit card
Number that switched to 800 number
Number that shopped via 8
Number that shopped via CD-ROM
Number making 2-4 purchases in last 6 months
Number making 5-10 purchases in last 6 months
Number who spent $26-$50 on each interactive purchase
Number who spent over $100 on each purchase
Types of products purchased
Books, music CDs, and videos
Computer related equipment
Flowers
Clothing
Travel
Respondents also making purchases from catalogs/TV shopping Channels 50

23. Broadcast and Interactive Media Strategies
Advertiser Should Ask About:
How Targeted
The
Audience Is
Cost of the
Medium
Ability to Meet
Advertising
Objectives
Ability to
Accommodate the
Style of
Message

24. Online Products Mix in 2000 Other 5% Food and drink 5%
Gifts and flowers 10%
Apparel 5%
Entertainment 19%
Computer products 32%
Travel 24%

25. Pros and Cons of Internet Advertising
Truly Interactive
Enormous audience
Immediate response
Affluent market
In-depth information
Rapid-growth industry
Business-to-business
Advertorials
Virtual storefront
Untested medium
Targeting costs
Slow downloads
Net yet mainstream
Ad may be placed inappropriately
Unproved security and privacy
Global marketing limitations
Pros
Cons

26. Internet Advertising: Pros
Truly Interactive
Enormous audience
Immediate response
Affluent market
In-depth information
Rapid-growth industry
Business-to business
Advertorials
Virtual storefront

27. Internet Advertising: Cons
Untested media
Targeting costs
Slow downloads
Net yet mainstream
Ad may be placed inappropriately
Unproved security and privacy
Global marketing limitation

28. Internet Advertising: Reality
Advertising spending (Advertising Age 2001)
1999: $2.8 million (1.3%)
2000: $4.3 million (1.8%)
61% of AA’s top 100 megabrands online (Forrester Research)

29. Internet Advertising: Reality
Advertising spending (Advertising Age 2001)
1999: $2.8 million (1.3%)
2000: $4.3 million (1.8%)
61% of AA’s top 100 megabrands online (Forrester Research)

30. Various Forms of Internet advertising
Banner ads (55%): average click-through rate 0.3 to 0.5%
Sponsorships (27%)
Interstitials (4%): Rich media – average click-through rate just below 6%
(2%)
Others (12%)

31. Performance-based advertising predicted to make up 50% of all revenues by 2003 (Forrester Research)

32. Challenges
Can we go beyond current banners to create ads that are exciting, fun, and dynamic?
Can we increase ad impact through contextual relevancy?
Can we combine entertainment with brand equity?
Can ads be intrusive without being annoying?
Can ads communicate product superiority?

33. Review
Learn about television, radio, and Internet in terms of the overall trend, advantages and disadvantages as an advertising medium.
Understand the reality of Internet as an advertising medium.