SEM I 3.08

1
SEM I 3.08

• SELECTING ADVERTISING MEDIA - DETERMINING REACH
  - CALCULATING MEDIA COSTS

2
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.

3
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.

4
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.

5
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).

6
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).

7
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).

8
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.

9
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.

10
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.

11
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

12
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.

13
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.

14
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.

15
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.

16
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.

17
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.

18
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.

19
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.

20
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.

21
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.

22
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.
• .

23
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)
• .

24
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).
• .

25
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.

26
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.
• .

27
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.
• .

28
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.
• .

29
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.
  

30
REVIEW
31
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

32
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

33
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

34
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

35
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

36
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

37
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

38
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).

39
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

40
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)

41
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

42
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

43
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 Sundays paper
• B. Direct-mail campaign
• C. Point-of-purchase displays
• D. Radio spot commercials

44
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 Sundays paper
• B. Direct-mail campaign
• C. Point-of-purchase displays
• D. Radio spot commercials

45
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

46
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

47
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

48
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

49
37 (2). What is the most appropriate
media-scheduling strategy for advertising food
and other frequently purchased items?

• Continuous
• Flighting
• Pulsing
• Intermittent

50
37 (2). What is the most appropriate
media-scheduling strategy for advertising food
and other frequently purchased items?

1. Continuous
2. Flighting
3. Pulsing
4. Intermittent

51
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

• Flat rate
• Volume discount
• Free insert
• Preferred position

52
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

• Flat rate
• Volume discount
• Free insert
• Preferred position

53
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

54
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

55
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

56
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

57
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
publications

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

58
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
publications

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

59
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

60
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

61
69 (2). A sport/event organization can determine
advertising reach of a magazine by analyzing the
publications

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

62
69 (2). A sport/event organization can determine
advertising reach of a magazine by analyzing the
publications

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

63
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

64
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

65
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

66
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

67
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

68
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

69
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

70
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

71
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

72
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