SEM I 3.08

SELECTING ADVERTISING MEDIA - DETERMINING REACH - CALCULATING MEDIA COSTS

ADVERTISING – SLIDING SCALE RATES

Sliding-scale rates are discount rate structures offered by newspapers to advertisers willing to purchase a large

volume of advertising space over a one-year period.

Split-runs are a printing technique that allows publishers to print different advertisements for the same product in alternating copies of the publication.

Preferred position is newspaper/magazine space thought to attract the greatest audience attention. Color requirements in ads increase their cost, as do split-runs and preferred position.

RADIO ADS – # OF LISTENERS REACHED

The costs of radio spots will increase or decrease depending upon the length of the advertisement, the time at which the advertisement is broadcast, the number of listeners, and how often the ad is run.

Most production costs are a small part of the actual charges for broadcast time. The size of the business and the type of information being aired do not effect the advertising rate.

OUTDOOR ADVERTISING - VISIBILITY

Higher rates will be charged for outdoor advertising that is placed in areas where it will be highly visible to pedestrians/motorists.

Outdoor advertising is not difficult to replace, is set up to be seen over a period of time, and is often felt to be an eyesore rather than to have artistic appeal.

COST EFFICIENCY OF A MEDIA VEHICLE

Cost per thousand measures the cost efficiency of a media vehicle based on the cost of exposing 1,000 people to a promotional message.

To calculate cost per thousand, multiply the cost of the ad by 1,000, then divide by the number of listeners in the audience: CPM = cost of ad x 1,000 ($500 x 1,000 = $500,000) ÷ audience of 200,000 ($500,000 ÷ 200,000 = $2.50).

GROSS RATING POINTS

Gross rating points (GRPs) is the % of people reached by a media vehicle, multiplied by the frequency of exposure to the advertisement.

The cost per GRP is calculated by dividing the total advertising expense by the number of gross rating points ($117,000 ÷ 240 = $487.50).

DIRECT MAIL

Direct mail is a promotional medium that comes to consumers' homes in the form of letters, catalogs, postcards, and folders. It allows the advertiser to target a specific market.

Newspapers, billboards, and Yellow Pages will not be cost-effective because they will reach many people who may/may not be interested in the advertiser's product(s).

RADIO SPOT COMMERCIALS

Radio requires a relatively short lead time for placing ads, and it is considered an effective medium for local and regional markets.

Point-of-purchase displays would reach only those customers who came into the business. A direct-mail campaign must be prepared well in advance and may not be delivered on time.

IMPACT OF ADS

Impact is the impression an advertisement will make on the average consumer in a target market. Impact is created by the credibility, prestige, and editorial environment of a media vehicle.

Reach, frequency, and cost per thousand are quantitative factors used in media selection.

LOCAL NEWSPAPER

The target market for a local hardware store is adults in the local area.

Network television and a national news magazine also target adults, but the national media provide too much wasted coverage for a local business. The local rock station's audience is generally teenagers, not adults.

CONTINUOUS STRATEGY - ADS

Food is a product bought on a regular basis; thus, it needs a continuous scheduling strategy which provides steady, regular advertising.

A flighting strategy would be inappropriate since buying food is not a seasonal activity. Although a pulsing strategy offers regular advertising, it is not steady, but intermittent. I

VOLUME DISCOUNTS - ADS Newspapers frequently offer volume

discounts to advertisers who purchase repeated amounts of space for ads. Offering volume discounts encourages advertisers to purchase more ad space because they receive a better price.

Newspapers usually charge flat rates for ads that appear only one time. Advertisers usually pay a higher rate to obtain a preferred position in the newspaper.

TV SHOW RATINGS - ADS

Businesses that buy broadcast advertising try to purchase time when a large segment of their target market is watching television. These businesses need information about the ratings for certain shows in order to determine which ones attract a high volume of viewers.

The ratings for each show indicate approx. how many households in the viewing area watched the show on a given day.

TV SHOW RATINGS - ADS

Businesses do not need information about the ownership of the stations, the qualifications of management, or the popularity of newscasters in order to purchase advertising time.

PACKAGE RATES – RADIO ADS

Radio stations offer reduced rates to advertisers who agree to purchase a series of commercials over a certain period of time.

The package rates cost less than single commercials and provide considerable savings to advertisers. The stations also benefit because they have sold a block of time.

PACKAGE RATES – RADIO ADS

Display is a kind of newspaper and magazine advertising which includes several elements such as illustrations, headlines, white space, and type.

Transit is a form of out-of-home media found in various modes and locations of mass transportation.

CIRCULATION

Circulation is defined as the number of people reached by a media vehicle. A company with a well-known brand might want to reach as many people as possible. As a result, it places ads in nationally distributed publications instead of local publications.

Motivation is an influence/reason that causes someone to take action.

REPUTATION OF PUBLICATION

Reputation often refers to the image/status of an entity. Businesses often consider a publication's reputation when buying advertising; however, a business's reputation does not always indicate details regarding the publication's readership or reach.

For example, it is possible for a magazine to have a good reputation & small reach.

REPUTATION OF PUBLICATION

It is also possible for a publishing company to have some negative aspects in terms of overall reputation and still maintain a sizable reach.

Participation is the ability or willingness to take part or share something. A publication's participation in a variety of activities does not necessarily reflect its circulation in terms of size and demographics.

PREFERRED POSITION When requesting preferred positions,

advertisers place their ads in the newspaper location that generates optimal exposure for their target market.

For example, an athletic shoe retailer might request placement in the sports section of the newspaper instead of the home and garden section. Because the advertiser is requesting a specific placement location, the advertiser pays a higher rate.

RUN OF PAGE RATES - ADS

Run-of-page rates do not allow advertisers to specify advertisement placement and are generally lower than the preferred-position rate.

Contract rates are negotiated rates & are often lower than preferred-position rates. When ads are placed more than once, the advertiser often receives a frequency rate. The higher the frequency of ad placement, the lower the rate.

CIRCULATION - REACH

Reach is a quantitative measure of the number of different people in the target audience who are exposed at least once to an advertising message.

Circulation is the number of people reached by a media vehicle. Magazine circulation includes subscription and newsstand sales.

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CIRCULATION - REACH

To determine the % of reach for a radio ad, divide the actual # of message exposures (393,750) by the target audience of 18-30 yr.-old-males (875,000) (393,750/875,000 = .45 or 45%)

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CIRCULATION - REACH

To determine the percentage of reach for a local cable-television advertisement, divide the actual number of message exposures (313,000) by the target audience of 16- 36-year-old females (939,000) = .33 or 33%).

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MOVABLE BILLBOARD

Sport/Event marketers choose the media vehicles that will most effectively reach their target audiences. One vehicle is a movable billboard that drives throughout the area promoting a specific event.

These billboards are large and attract attention. As a result, they have proven to be a good promotional tool because they are seen by a lot of people.

MEDIA VEHICLES

Airplane banners are often used to promote OTHER products during an event rather than to promote an upcoming event.

Internet advertising is NOT as effective because people must have access to the Internet in order to see the advertising.

Stadium posters reach ONLY those people who visit the stadium.

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MEDIA VEHICLES The most effective way to reach the public to

promote a local event (e.g., charity fundraiser) is by running local television commercials.

Oftentimes, the television station will help sponsor the event by providing low cost or free airtime to run the commercials. The advantage to running local television commercials is they reach a lot of people for a low cost per exposure.

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MEDIA VEHICLES

Direct mail is sent to consumers' homes and businesses and is often very expensive.

It is possible that many members of the local target market do not read national newspapers or consumer magazines.

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COVER PRE-EVENT EXPENSES

By selling tickets for sport/events in advance (e.g., season ticket holders, groups), sport/event organizations obtain revenues before the sport/event occurs. These revenues can be used to cover expenses such as purchasing supplies, printing costs, and personnel salaries.

REVIEW

28 (2). Which of the following decreases the costs to a business of using newspaper advertising:

A. Color requirements B. Sliding-scale rates C. Preferred position D. Split runs

28 (2). Which of the following decreases the costs to a business of using newspaper advertising:

A. Color requirements B. Sliding-scale rates C. Preferred position D. Split runs

29 (2). The cost to a business of radio spots will vary with the:

A. Basic production costs B. Size of the business C. Number of listeners being reached D. Type of information being aired

29 (2). The cost to a business of radio spots will vary with the:

A. Basic production costs B. Size of the business C. Number of listeners being reached D. Type of information being aired

30 (2). An important factor in determining rates for outdoor advertising is its:

A. Short life B. Ease of replacement C. Visibility D. Artistic appeal

30 (2). An important factor in determining rates for outdoor advertising is its:

A. Short life B. Ease of replacement C. Visibility D. Artistic appeal

31 (2). A radio station sells a 30-second spot for $500. If the number of listeners is 200,000, calculate the cost per thousand (CPM).

A. $50.00 B. $5.00 C. $25.00 D. $2.50

31 (2). A radio station sells a 30-second spot for $500. If the number of listeners is 200,000, calculate the cost per thousand (CPM).

A. $50.00 B. $5.00 C. $25.00 D. $2.50 : CPM = cost of ad x 1,000 ($500 x 1,000 =

$500,000) ÷ audience of 200,000 ($500,000 ÷ 200,000 = $2.50).

32 (2). An advertiser spent $117,000 for 12 television spots with a total of 240 GRP (gross rating points). What was the cost per GRP?

A. $975.50 B. $585.50 C. $712.50 D. $487.50

32 (2). An advertiser spent $117,000 for 12 television spots with a total of 240 GRP (gross rating points). What was the cost per GRP?

A. $975.50 B. $585.50 C. $712.50 D. $487.50 ($117,000/240 = $487.50)

33 (2). When an advertiser wants to reach specific target markets, which type of print medium would be most cost-effective?

A. Newspapers B. Billboards C. Direct mail D. Yellow pages

33 (2). When an advertiser wants to reach specific target markets, which type of print medium would be most cost-effective?

A. Newspapers B. Billboards C. Direct mail D. Yellow pages

34 (2). Your business wants to sell a shipment of goods by the end of the current work week at the lowest advertising cost. Which of the following promotional media would be best:

A. Ad in next Sunday’s paper B. Direct-mail campaign C. Point-of-purchase displays D. Radio spot commercials

34 (2). Your business wants to sell a shipment of goods by the end of the current work week at the lowest advertising cost. Which of the following promotional media would be best:

A. Ad in next Sunday’s paper B. Direct-mail campaign C. Point-of-purchase displays D. Radio spot commercials

35 (2). Which of the following is a qualitative media factor used in the selection of promotional media:

A. Reach B. Frequency C. Impact D. Cost per thousand

35 (2). Which of the following is a qualitative media factor used in the selection of promotional media:

A. Reach B. Frequency C. Impact D. Cost per thousand

36 (2). Which of the following is the most appropriate promotional medium for a local hardware store:

A. Local newspaper B. Network television C. Local rock station D. National news magazine

36 (2). Which of the following is the most appropriate promotional medium for a local hardware store:

A. Local newspaper B. Network television C. Local rock station D. National news magazine

37 (2). What is the most appropriate media-scheduling strategy for advertising food and other frequently purchased items?

A. Continuous

B. Flighting

C. Pulsing

D. Intermittent

37 (2). What is the most appropriate media-scheduling strategy for advertising food and other frequently purchased items?

A. Continuous

B. Flighting

C. Pulsing

D. Intermittent

38 (2). A business owner saved money by contracting with the local newspaper to purchase a series of ads over a period of time which entitled the business to a

A. Flat rate

B. Volume discount

C. Free insert

D. Preferred position

38 (2). A business owner saved money by contracting with the local newspaper to purchase a series of ads over a period of time which entitled the business to a

A. Flat rate

B. Volume discount

C. Free insert

D. Preferred position

39 (2). Businesses that buy broadcast advertising time often ask for information about the __________ before purchasing the time.

A. Qualifications of management B. Ownership of the stations C. Popularity of newscasters D. Ratings for certain shows

39 (2). Businesses that buy broadcast advertising time often ask for information about the __________ before purchasing the time.

A. Qualifications of management B. Ownership of the stations C. Popularity of newscasters D. Ratings for certain shows

40 (2). A business owner who wants to obtain a reduced rate for a series of local radio commercials might contract for what type of promotion?

A. Package B. Display C. Transit D. Contingent

40 (2). A business owner who wants to obtain a reduced rate for a series of local radio commercials might contract for what type of promotion?

A. Package B. Display C. Transit D. Contingent

41 (2). When a business places print ads in a magazine that has a specific readership reach, it is basing its buying decisions on the publication’s:

A. Motivation. B. Reputation. C. Circulation. D. Participation.

41 (2). When a business places print ads in a magazine that has a specific readership reach, it is basing its buying decisions on the publication’s:

A. Motivation. B. Reputation. C. Circulation. D. Participation.

42 (2). Businesses generally pay more for newspaper advertisements when purchasing space at a __________ rate.

A. Preferred position B. Run of page C. Contract D. Frequency

42 (2). Businesses generally pay more for newspaper advertisements when purchasing space at a __________ rate.

A. Preferred position B. Run of page C. Contract D. Frequency

69 (2). A sport/event organization can determine advertising reach of a magazine by analyzing the publication’s:

A. Billing cycle B. Circulation C. Finances D. Response mode

69 (2). A sport/event organization can determine advertising reach of a magazine by analyzing the publication’s:

A. Billing cycle B. Circulation C. Finances D. Response mode

70 (2). What is the % of reach for a local radio sporting-goods ad if the target audience is 875,000 18 to 30 yr. old males and 393,750 of the target audience is exposed to the message:

A. 45 B. 40 C. 35 D. 30

70 (2). What is the % of reach for a local radio sporting-goods ad if the target audience is 875,000 18 to 30 yr. old males and 393,750 of the target audience is exposed to the message:

A. 45 (393,750/875,000 = .45) B. 40 C. 35 D. 30

72 (2). Which of the following media vehicles might a sport/event marketer choose to promote a celebrity baseball game to many people throughout a metropolitan area:

A. Internet advertising

B. Airplane banners

C. Movable billboard

D. Stadium posters

72 (2). Which of the following media vehicles might a sport/event marketer choose to promote a celebrity baseball game to many people throughout a metropolitan area:

A. Internet advertising

B. Airplane banners

C. Movable billboard

D. Stadium posters

73 (2). Which of the following types of media should an event planner use to promote an upcoming local charity event to the general public:

A. Direct mail B. Local television C. National newspaper D. Consumer magazine

73 (2). Which of the following types of media should an event planner use to promote an upcoming local charity event to the general public:

A. Direct mail B. Local television C. National newspaper D. Consumer magazine

97 (2). The Fit and Lively Fitness Center wants to increase its membership, so it is planning to run a television ad to promote lower membership fees for a limited time. If the target audience is 939,000 16- to 36-year-old females, and 313,000 of the target audience is exposed to the message, what is the % of reach for a local cable-television advertisement?

A. 36 B. 33 C. 39 D. 30

97 (2). Fit & Lively Fitness Ctr. wants to increase its membership. It is planning to run a TV ad to promote lower membership fees for a limited time. If the target audience is 939,000 16- to 36-year-old females, and 313,000 of the target audience is exposed to the message, what is the % of reach for a local cable-television ad?

A. 36 B. 33 (313,000/939,000) C. 39 D. 30

98 (2). One reason it is important for professional sport/event organizations to develop advance ticket sales plans is because the generated revenue helps organizations to:

A. Increase general admission ticket sales

B. Decrease operational costs

C. Cover pre-event expenses D. Reduce the risk of ticket scalping activities

98 (2). One reason it is important for professional sport/event organizations to develop advance ticket sales plans is because the generated revenue helps organizations to:

A. Increase general admission ticket sales

B. Decrease operational costs

C. Cover pre-event expenses D. Reduce the risk of ticket scalping activities