Questions and Answers
What is the ratio of patrons to advertising dollars if Memorial Stadium spent $2.5 million on advertising for 100 events with 18.5 million patrons?
7.4:1
How much is spent on radio advertising if an entertainment venue has a $5 million advertising budget with 30% on social media, 25% on traditional media, of which 35% is on radio?
$437,500
How much does a promoter spend in traditional media advertising if he purchases three units of broadcast TV, two units of cable TV, one unit of radio, and one unit of newspaper ads at $25,000 each?
$175,000
How much should Malia plan to spend on advertising next week if she spent $13,000 last week, three times as much this week, and wants to spend 60% of the total from the previous two weeks?
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What was the stadium's profit margin last month if it had fixed expenses of $20,000 per event and spent $50,000, $35,000, and $40,000 in advertising for three events, earning $500,000 in total revenue?
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What percentage of the advertising expenditures is spent on cable TV if a stadium manager spends $50,000 on TV ads and $37,000 on cable TV ads?
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How much should the arena spend if the ratio of patrons to advertising dollars is 8.65:1 and it wants 15,000 attendees?
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How many ticket sales would be expected if a radio ad runs 8 times daily for 15 weeks, generating 2,100 ticket sales when run for a week?
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Which advertising method should Bob use to get 500 people to attend a show based on the attendance generated per ad spend?
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How much can a promoter expect to increase sales if he spends $25,000 in advertising based on the estimated attendance of 32 patrons for every $100 spent?
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Study Notes
Advertising Effectiveness and Ratios
- Memorial Stadium has a patron-to-advertising dollar ratio of 7.4:1 after spending $2.5 million over 10 years for 100 events, attracting 18.5 million patrons.
- A venue with a $5 million advertising budget allocates 30% to social media and 25% to traditional media, with radio advertising budgeted at $437,500 (15% of traditional media).
Advertising Expenditure Scenarios
- A promoter's traditional media advertising costs total $175,000 by purchasing three units of broadcast TV, two units of cable TV, one unit of radio, and one unit of newspaper ads ($25,000 each).
- Malia's planned advertising spending for next week totals $31,200, calculated by spending three times her previous week’s $13,000, then planning 60% of the accumulated spending.
- A stadium has fixed costs of $20,000 per event, leading to a profit margin of $315,000 after generating $500,000 in revenue from three events with varying advertising expenditures.
Percentage and Expected Outcomes
- 42.5% of a stadium manager's advertising budget is spent on cable TV ads, totaling $37,000 out of $87,000 in expenditures.
- An arena with a patron-to-advertising dollar ratio of 8.65:1 needs to spend $1,734 to attract 15,000 attendees for a basketball game.
- Running a radio ad daily for a week resulted in 2,100 ticket sales, projecting 31,500 sales if the advertisement runs for 15 weeks under the same conditions.
Comparative Advertising Effectiveness
- For promoting a show to attract 500 attendees, a $4,000 newspaper ad is more effective than a $5,000 TV ad, as it yields more attendees (280) for less cost.
- Each $100 spent in advertisement results in 32 patrons, allowing a potential sales increase of $600,000 if a promoter invests $25,000 in advertising with $75 ticket prices.
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Test your knowledge on advertising metrics using traditional media through engaging math problems. This quiz will help you understand the relationship between advertising spending and audience reach, making it essential for marketing studies.