Advertising Spending Analysis 2021

Learning Objectives

• Define key terminology in media planning
• Explain how to develop a media plan
• Describe the purpose of media objectives
• Describe how to develop and implement media strategies
• Compare the characteristics of various media

Overview of Media Planning

• Media selection has numerous options for delivery
• Media selection is complicated due to the nature of various media
• Each media option offers distinct advantages
• Media selection relies on the product or service being advertised
• Companies often utilize integrated marketing communications (IMC) and multiple media vehicles

Some Basic Terms and Concepts

• Media planning is the series of decisions involved in delivering a promotional message to prospective consumers
• Media objectives are objectives crafted to structure a media plan
• Media strategies outline plans of action for attaining set media objectives
• A medium is a general category for available delivery systems

Some Basic Terms and Concepts (continued)

• Media vehicle is a specific carrier within a medium category
• Reach is a measure of distinct audience members exposed to a media vehicle during a specific period
• Coverage refers to the potential audience that might receive a message via a particular vehicle
• Frequency is the number of times a receiver is exposed to a media vehicle in a defined period

Ad Age's Leading National Advertisers

• (Figure 10-1) Lists top advertisers by 2021 U.S. spending, from Amazon to Charter Communications, categorized by total U.S. ad spending and measured-media ad spending.

The Media Plan

• Determines the most effective method for delivering a message to the market
• Aims to strategically combine media channels to promote messages efficiently and reach the largest potential customer base at the lowest cost

Problems in Media Planning

• Insufficient information
• Sweeps periods (February, May, July, and November) are used for measuring TV audiences and setting advertising rates
• Inconsistent terminology
• Time pressures
• Difficulty measuring effectiveness

The Relationship between Engagement and Ad Recall (Figure 10-3)

• Shows a positive correlation: as program engagement increases, ad recall also increases

Developing the Media Plan (Figure 10-4)

• A sequential process, starting with market analysis, followed by establishing media objectives, media strategy development and implementation, and ending with evaluation and follow-up

Market Analysis and Target Market Identification 1

• Primary and secondary research determine target groups
• Index number reflects the potential of a target market, calculated as (percentage of users in a segment / percentage of population in the same segment) x 100
• High index values suggest a potentially lucrative market.

How High Indexes Can Be Misleading (Figure 10-7)

• Demonstrates that high index values don't always mean a potentially lucrative market, even if a segment has a high index value compared to the population, the index does not indicate a strong market, and a further analysis is required.

Market Analysis and Target Market Identification 2

• Internal factors (e.g., media budget, agency capabilities) and external factors (e.g., economy, technology, competition) influence media planning
• A thorough market analysis is critical

Market Analysis and Target Market Identification 3

• Indexes aid in determining suitable promotion locations
• Survey of buying power index evaluates metro areas, counties, or cities relative to the U.S. as a whole.
• Brand development index (BDI) incorporates product usage into market evaluation
• Category development index (CDI) focuses on the overall product category potential.

Using CDI and BDI to Determine Market Potential (Figure 10-9)

• CDI formula: (Percentage of product category sales in a region / Percentage of total U.S. population in that region) × 100
• BDI formula: (Percentage of a specific brand's sales in a region / Percentage of total U.S. population in that region) × 100

Using BDI and CDI Indexes (Figure 10-10)

• Combines BDI and CDI to better understand the potential for brands and product categories in specific markets
• High BDI and High CDI generally signify a lucrative market
• High BDI and low CDI indicates a possible market to advertise in, but monitoring declining sales is prudent

Establishing Media Objectives

• Media situation analysis defines specific media objectives
• Media objectives support communications and marketing objectives
• Media objectives are limited to achievable goals via media strategies

Criteria Considered in the Development of Media Plans (Figure 10-11)

• Details crucial elements for media plans, encompassing elements like the medium mix, target market coverage, geographic coverage, scheduling, reach & frequency, recency, creative aspects & mood, flexibility, and budget considerations.

Developing and Implementing Media Strategies 1

• Media mix adds versatility to strategies, enhancing coverage, reach, and frequency
• Media mix improves the likelihood of achieving overall communication and marketing objectives

Developing and Implementing Media Strategies 2

• Target market coverage accurately matches the most suitable media channels to reach the target audience while minimizing wasted media coverage.
• Waste coverage is when media reaches people who aren't potential buyers or consumers.
• Geographical coverage entails strategically focusing media in areas most relevant to the product.

Marketing Coverage possibilities (Figure 10‐12)

• The different possible scenarios for marketing coverage: Full Market, Partial Market, and Coverage exceeding the target market, based on the proportion of the target audience relative to the entire market.

Developing and Implementing Media Strategies 3

• Scheduling factors involve aligning promotional efforts with peak buying periods
• Continuity, Flighting, and Pulsing are different scheduling methods.

Figure 10‐14 Three Methods of Promotional Scheduling

• Visual representation of continuity, flighting, and pulsing promotional schedules over a one-year period.

Characteristics of Scheduling Methods (Figure 10‐15)

• Advantages and disadvantages of each scheduling method (Continuity, Flighting, Pulsing) are detailed, including cost-efficiency, audience reach, and potential for exposure fatigue.

Developing and Implementing Media Strategies 4

• Reach vs Frequency analyzes how much reach is necessary to reach potential buyers and the required frequency level
• Reach: Exposures to potential buyers to promote a message
• Frequency: Number of times target audience members are exposed to a media vehicle

Developing and Implementing Media Strategies 5

• Establishing reach & frequency objectives
• Unduplicated reach: Count of unique individuals exposed by media on single occasion
• Duplicated reach: Count of individuals exposed by varied media, potential for overlap

Developing and Implementing Media Strategies 5 continued

• Program rating: Measurement of potential broadcast reach
• (Figure 10-16) Efficiency of spots in news and sports programs are visually represented.

Developing and Implementing Media Strategies 6

• Use gross ratings points (GRPs) to assess reach and frequency
• Target ratings points (TRPs) are utilized to calculate the number of people in a target audience

Developing and Implementing Media Strategies 6 continued

• (Figure 10‐18) Displays reach estimations based on network TRPs, illustrating the connection between the quantity of target ratings points and potential reach increase with increasing networks.

Developing and Implementing Media Strategies 7

• Determine effective reach and frequency levels
• Effective reach: Percent of audience reached at each successful exposure level, presumes that a single exposure may be inadequate to convey the desired content
• Effective reach (exposure) numbers between 3‐10
• (Figure 10‐20) A graphic demonstration of the connection between the increasing number of exposure and the diminishing rate of effective reach.

Developing and Implementing Media Strategies 8

• Effective frequency. A frequency level of 10 (or more) may be necessary to improve audience engagement and attitudes (recall grows linearly to this point, then stagnates)

Developing and Implementing Media Strategies 9

• Recency Planning: Strategy to maximize reach close to the purchase decision. A short-interval reach at minimum frequency helps optimize promotional timing around purchase decisions

Developing and Implementing Media Strategies 9 continued

• Continuous schedule: Allows for a regular period of exposure over time
• Reaching as many potential customers as possible is the goal

Developing and Implementing Media Strategies 10

• Creative Aspects and Mood: Creative aspects need to be well-suited to the chosen media channel, needing a close collaboration between media and creative professionals to optimize the audience impact. An appropriate mood in the media strengthens the effectiveness of the marketing message.

Developing and Implementing Media Strategies 11

• Flexibility: Media plans must be adaptable to changing market opportunities and threats

Developing and Implementing Media Strategies 12

• Budget Considerations: Absolute cost is the total cost of the creative message while relative cost is the relationship between the price of an advertising platform and the associated audience impact

Developing and Implementing Media Strategies 13

• Digital Pricing models: Digital pricing structure involves bidding
• Programmatic: Automated bidding process for digital ad placement

Budget Considerations continued (14)

• Target CPM (TCPM): Calculates CPMs based on target audience, not overall audience
• Readers-per-copy: Calculation of the number of individuals able to read a given media (e.g., magazine) given its number of copies (copies may not necessarily be read by one person only)
• Pass-along rate: the number of people who read a publication without buying it. Can be imprecise.

Evaluation and Follow-Up

• Evaluate media strategies towards media objectives and overall marketing/communication objectives
• The success of the implemented media plan in contributing to reaching the intended marketing and communications objectives should be measured

Characteristics of Media (43)

• Media must match markets because each medium has distinct characteristics
• Each situation and available media option needs analysis

Media Characteristics (Figure 10-26)

• Tables provide the advantages and disadvantages of different media types (Television, Radio, Magazines, Newspapers, Outdoor advertising, Direct mail, Digital/Interactive media)
  • Examples of advantages include wide reach for television, local coverage for radio, and long life for magazines.
  • Examples of disadvantages include short life for newspapers, short exposure for outdoor advertising, and privacy concerns for digital media.