Media Strategy

1
Media Strategy

• Business 9318, Fall 2001
• Dr. Katherine Gallagher

2
Objectives

• To discuss five interrelated media strategy
  activities
• budget setting
• target audience selection
• objective specification
• media vehicle selection
• media buying

3
Setting Media Budgets

• I know half the money I spend on advertising is
  wasted, but I can never find out which half.
• John Wanamaker, department store founder
• In our experience, 49 percent of the time, TV
  advertising heavy-up plans successfully increased
  sales relative to a lower of base advertising
  weight level. In other words, in these cases
  brand sales showed a positive relationship to TV
  advertising spending.
• George Garrick (Information Resources, Inc.),
  commenting in 1989 on the results of ten years of
  experience from BehaviorScan field test of TV
  advertising budgets

4
Media Budgeting in Theory

• Invest until MR MC
• if X is invested, will gtX revenue be generated?
• advertising response curve
• Problems
• assumes media is the only variable affecting
  sales
• ignores message strategy
• ignores media selection
• ignores other marketing activities
• ignores competitive actions
• ignores macroenvironment
• assumes immediate response
• ignores lagged effects

5
Media Budgeting in Practice

• Decision rules
• percentage of sales
• all you can afford
• competitive parity and share-of-voice
• objective and task
• Estimate the advertising-response function
• field experiments
• split-cable testing
• multiple regression

6
The Budweiser Experiment (1960s)

• Seven treatments, in in six areas
• - 100 change (i.e., no advertising)
• - 50 change
• 0 change (i.e. media unchanged)
• 50 change
• 100 change (i.e. media doubled)
• 150 change
• 200 change
• Results
• - 100 change yielded no change in sales
• - 50 change yielded an increase in sales

7
Selecting the Target Audience

• Goal
• minimize wasted exposures
• Target audience definition
• segment on product usage
• define on geographic, demographic, psychographic
  variables

8
Specifying Media Objectives

• Reach
• Frequency
• Weight
• Continuity
• Cost

9
Reach

• Percentage of target audience exposed at least
  once to the message during a four-week period
• 1
• net coverage
• unduplicated audience
• cumulative audience (cume)
• increased by
• multiple media
• number and diversity of media vehicles
• diversifying dayparts

10
Frequency

• number of times, on average, within a four-week
  period, that members of the target audience are
  exposed to the message
• average frequency

11
Weight

• gross coverage
• duplicated audience
• GRP (Gross Rating Points)
• GRP Reach (r) x Frequency (f)
• r GRP/f
• f GRP/f

12
Weight (2)

• Determining GRPs in practice
• sum ratings obtained from individual vehicles in
  a (prospective) media schedule
• rating of target audience presumed to be
  exposed to a single occurrence of an advertising
  vehicle in which the advertisers brand appears

13
Weight (3)

• ERP (Effective Rating Points)
• effective reach of target audience reached
  optimum number of times
• effective frequency
• effective exposure
• optimum number of exposures depends on
• competitive position (of both brand and ad)
• audience brand and product loyalty
• message creativity
• communications objectives
• Usually 3 to 10 exposures per 4-wk period

14
Continuity

• timing of media expenditures
• continuous
• pulsing
• flighting

15
Measures of Media Efficiency

• Cost per thousand reached
• CPM Cost of Ad
  .
• Total Number of Contacts (in 000s)
• Cost per thousand target market members reached
• CPM-TM Cost of Ad
  .
• Number of TM Contacts (in 000s)
• Cautions
• efficiency is not effectiveness
• lack of comparability across media, ? media
  vehicles ?

16
Tradeoffs

• Given a budget constraint, cannot simultaneously
  optimize reach, frequency, and continuity
• Go for effective frequency (3 exposures/4wk) if
• new brand
• repositioning established brand
• complex message
• Go for reach if
• well-establish, well-known brand

17
Media and Vehicle Selection

• Value of a medium depends on
• advertising objectives
• target audience
• budget

18
Media and Vehicle Selection (2)

• Value of a media vehicle depends on
• audience
• cost
• qualitative source effects
• target concentration index
• number of compatible pages
• unbiasedness
• expertness
• editorial fit
• prestige
• mood created
• audience involvement