ADVERTISINGADVERTISING

The PlayersThe Players

• AdvertisersAdvertisers

• AgenciesAgencies

• MediaMedia

• RegulatorsRegulators

• Sales RepsSales Reps

• Support – research, buyers, etc.Support – research, buyers, etc.

ReachReach

• The number of The number of unduplicatedunduplicated exposures. exposures.

• i.e. the number of i.e. the number of differentdifferent people that people that see or hear an advertisementsee or hear an advertisement

FrequencyFrequency

• The average number of duplicate The average number of duplicate exposures.exposures.

• i.e. the number of times someone is i.e. the number of times someone is exposed to an advertisementexposed to an advertisement

Reach vs. FrequencyReach vs. Frequency

• The best media vehicle for reach is The best media vehicle for reach is network television.network television.

• TV penetration rates are near 100%.TV penetration rates are near 100%.

• With a single buy, an advertiser can With a single buy, an advertiser can reach millions of households, and tens reach millions of households, and tens of millions of viewers.of millions of viewers.

• Too expensive for high frequency.Too expensive for high frequency.

Reach vs. FrequencyReach vs. Frequency

• Billboards and Newspapers are best for Billboards and Newspapers are best for frequency.frequency.

• If someone reads a newspaper, they If someone reads a newspaper, they likely read it every day.likely read it every day.

• If someone passes a billboard, they If someone passes a billboard, they likely pass the same billboard every likely pass the same billboard every day.day.

Reach vs. FrequencyReach vs. Frequency

• Generally, reach and frequency are Generally, reach and frequency are mutually exclusive. A medium that mutually exclusive. A medium that delivers one, will not deliver the other.delivers one, will not deliver the other.

• Radio is possibly the best combination Radio is possibly the best combination of reach and frequency. of reach and frequency.

• Radio has high penetration, and is Radio has high penetration, and is cheap enough to allow frequency.cheap enough to allow frequency.

DemographicsDemographics

• The more specific the demographics of The more specific the demographics of the audience – the higher the cost to the audience – the higher the cost to reach the audience.reach the audience.

• Minimizing Minimizing waste circulationwaste circulation..– Attracting a Attracting a qualifiedqualified audience of true audience of true

prospective buyers for the product.prospective buyers for the product.

Cost per Thousand (CPM)Cost per Thousand (CPM)

• The cost of reaching one thousand The cost of reaching one thousand households, viewers, listeners, readers, households, viewers, listeners, readers, drivers, etc.drivers, etc.

• Allows advertisers to cross-compare Allows advertisers to cross-compare among several media.among several media.

Audience ResearchAudience Research

• Began in 1929 with Archibald Crossley.Began in 1929 with Archibald Crossley.

• The “Hooperatings” dominated from the The “Hooperatings” dominated from the mid-30s to the 40s. Phone interviews.mid-30s to the 40s. Phone interviews.

• A.C. Nielsen began audience research A.C. Nielsen began audience research in the 1940s. in the 1940s.

• Arbitron (A.R.B.) established in 1949.Arbitron (A.R.B.) established in 1949.

A.C. NielsenA.C. Nielsen

• Originally both radio and TV.Originally both radio and TV.

• Developed the Developed the audimeteraudimeter..

• Now only TV.Now only TV.

• Use diaries, audimeters and people Use diaries, audimeters and people meters.meters.

ArbitronArbitron

• Now only radio.Now only radio.

• Must rely on diaries.Must rely on diaries.

• Experimenting with the Experimenting with the passive people passive people meter (PPM).meter (PPM).

StatisticsStatistics

• Quarter-hour people (QHP), the Quarter-hour people (QHP), the average number people who listen to a average number people who listen to a station for at least five minutes within a station for at least five minutes within a fifteen minute block.fifteen minute block.

StatisticsStatistics

• TVHH = television households. The TVHH = television households. The number of households equipped with number of households equipped with TVs.TVs.

• HUT = the homes using television. The HUT = the homes using television. The number of households with their TVs number of households with their TVs actually turned on. actually turned on.

StatisticsStatistics

• Shares = the percentage of the HUT.Shares = the percentage of the HUT.

• Ratings = the percentage of the TVHH.Ratings = the percentage of the TVHH.

Television Households

Home Using Television (HUT level) = 50

Tuned In

Rating = 25 Share = 50

Problems in Audience Problems in Audience ResearchResearch

• AbsenteeismAbsenteeism

• HypoingHypoing

• Falsifying diariesFalsifying diaries

• Poor diary return ratesPoor diary return rates

Selling advertisingSelling advertising

• Networks sell audiences.Networks sell audiences.

• Sales based on ratings points.Sales based on ratings points.

• If guarantee not met – then network If guarantee not met – then network provides provides make goods.make goods.

Selling AdvertisingSelling Advertising

• Local Stations sell time.Local Stations sell time.

• 30s, 60s, - less often 15s, 90s, 120s30s, 60s, - less often 15s, 90s, 120s

• Sell by daypart.Sell by daypart.

• ROS, TAPROS, TAP

Types of advertisingTypes of advertising

• Co-opCo-op

• BarterBarter

• Barter SyndicationBarter Syndication

• Sponsorship versus spot buyingSponsorship versus spot buying