MARKETING STRATEGY

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MARK2038 Data Base Marketing Strategies II
Week 5 Instructor Santo Ligotti Email
sligotti_at_gbrownc.on.ca
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This week

• Direct-response Advertising
• The production planning/fulfillment
• Media Print, Broadcast
• Costing, production plans
• Assignment 3 (in-class)

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Why use DR Advertising?

• Many good prospects
• Rarely give out their contact info
• Do not buy through mail-order
• Do not answer their phone
• Do not buy on the Internet
• DR advertising represents a way to acquire
  hard-to-find prospects.

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DR Advertising Media

• Magazines
• Newspapers
• Television
• Radio
• Outdoor, In-Theatre, etc.

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Magazines

• A wide variety of magazines exist in Canada and
  the U.S.
• Two general types of publications are used for
  direct-response media
• Consumer Publications
• Trade Publications

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Trade vs. Consumer Magazines
TRADE CONSUMER
CIRCULATION smaller larger
SUBSCRIBER/Paid Circulation/Controlled Circulation Mostly subscriber-based Subscriber, or mixed
TYPE OF ADS FOUND Lead generation ads are common Mail-order ads are common
REGIONALIZATION Most are national/ international Some offer regional editions
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Selection Criteria

• Compatibility
• Size
• Position
• Frequency of Publication
• Use of Colour

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Compatibility

1. Is our target market attainable through this
   publication?
2. Is our product category/offer relevant to the
   readers of this publication?
3. What is the competitive environment in this
   publication?

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Compatibility

• For each of the following magazines, answer the
  following capability questions
• What type of individual would read the magazine?
  Provide some high level targeting
• List some potential products that might be
  appropriate advertising choices, given the target
  market of the publication

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Size

• Rules of thumb
• The more complex the product the larger space
  you need.
• The more involved consumers are in the purchase
  decision, the larger space you need.
• Ads with a buy Call to Action need more space
  than an more info Call To action.
• The larger the ad, the more it costs, therefore
  the more responses you need.

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Position

• Rules of thumb
• The closer to the front, the better the response.
• Inside back, back cover and inside front cover
  are excellent positions.
• Space opposite related editorial increases
  response.
• Right side page pulls 15 better than left side.

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Use of Colour

• Rules of thumb
• Full-colour ads increase response rates.
• However, responses often need to increase 20 or
  more to compensate for additional cost of colour
  processing.
• Usually the cost of adding one extra colour to
  black is not worth the increase in profit.
• Consider use of colour by other advertisers.
• Copy is the key to success.

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Bind-In Insert Cards

• Insert cards fold-open the magazine directly to
  the ad for greater exposure.
• can increase response by 6x to 8x

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Business Reply Card (BRC)

• form of reply card which includes numbers for
  specific advertisement
• cards are mailed to publisher, who then forwards
  to marketer

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Magazine - Testing

• Run two different ads in same magazine/newspaper
  issue equally dividing circulation
• For a new ad, count the responses every day to
  predict pattern.
• Project final responses after the ad. has run its
  third week

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Newspapers

• One of the best mediums for direct-response
  advertising
• A wide variety of newspapers exist
• High reach
• High frequency is possible
• High degree of consumer involvement
• Local newspapers are an integral part of average
  consumer lifestyle

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Newspapers vs. Magazines

• How are newspapers different from magazines?
• Strong coverage in local markets
• Circulation is mostly geographic
• Low shelf-life
• Lower secondary readership
• Reproduction quality

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Types of Newspapers

• Local
• Regional/National
• Sunday papers

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Newspaper Ad Options

• Run of paper (ROP)
• Display
• Classified
• Supplements
• Syndicated supplements (comics)
• Free-standing inserts (FSI)
• Premium placement

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Newspapers - Timing

• Rules of thumb
• Tuesdays are a favourite for advertisers
• Shopping reference papers are full of weekend
  advertising supplements
• Seasonal variations may also apply

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Newspapers - Use of Colour

• Advertiser performs a split-run test within a
  newspaper and discovers
• Two-colour ads increase response 58 vs. a 21
  increase in price over b w
• Full-colour ads increase response 78 vs. a 25
  increase in price over b w

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Example Comics

• Who reads the comics?
• Median age ______________
• Income ______________
• College grads ______________

• 39 vs. 40 years
• 32k vs. 22k
• 39 vs. 33

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Broadcast TV (DRTV)

• DRTV delivers an offer to the customer that
  invites viewers to respond.
• It is measurable
• It is flexible
• It is selective
• Unlike other DR media, pervasive

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Types of DRTV

1. Commercials
2. Infomercials
3. Videocassettes/DVD

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Commercials

• Commercial Lengths
• 60 - 90 seconds for a lead generation offer
• 90 - 120 seconds for a direct sale offer

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Infomercials

• Usually 30-45 minutes long
• Run 24 hrs. a day, 7 days a week nationally and
  internationally
• Cost up to 500,000 to produce
• Include 1-800 offers

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Videocassettes/DVD

• Mailed to interested prospects
• e.g. Disney World promotional video
• Sponsor videos that are related to the product
• movie trailers

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Commercial DRTV Options

• 1. Network
• 2. Spot TV
• 3. Network Cable
• 4. Local Cable
• 5. Syndication

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Characteristics of a Good DRTV Offer

• a) Immediacy
• b) Clarity
• c) Only available from Commercial
• d) Increased Value
• e) Limited Options
• f) Early Close
• g) Less is More
• h) Show and Tell

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Media Measurement

• Reach the total number of households exposed to
  the advertisement within a given time period.
• Frequency how many times an average viewer sees
  the advertisement over a number of weeks.

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Broadcast Measurement

• Ratings share of total TV households viewing
  show.
• Higher rated show higher advertising cost
• GRP Gross Rating Point
• 90 GRPs per week 90 of households

Source A.C. Nielsen
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Primetime Ratings
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Measurement Organizations
Media Organization Specialty
Print Print Measurement Bureau (PMB) NADbank Nonprofit research group reporting circulation, readership stats per publication
Television Nielsen Media Research (VNU) Ratings per network, station, timeslot, show
Radio Bureau of Broadcast Bureau Measurement (BBM) Nonprofit research group for radio audience stats
Outdoor Canadian Outdoor Measurement Bureau (COMB) Impartial outdoor viewership stats (Pattison, Viacom)
Internet ComScore Media Metrix Digital media measurement
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True/False

• Direct-response print advertising works because
  print has a long shelf life, pass-along
  readership, and regional and demographic
  segmentations. (T/F)

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True/False

• While consumer magazines reach large numbers of
  people, the majority of business-to-business
  magazines reach smaller numbers of people. (T/F)

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True/False

• The ability to acquire new customers is a good
  reason to use direct-response magazine
  advertising. (T/F)

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True/False

• It is not possible to test offers using
  direct-response magazine advertising. (T/F)

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Multiple Choice

• Which of the following statements about the
  position of a magazine ad is most true?
• the position of an ad does not influence response
  rates
• The value of the position can be best judged by
  what it costs
• The value of the position can be determined
  through testing
• Placement directly adjacent to competitive ads is
  most effective

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Multiple Choice

• Which of the following is a limitation of
  newspapers for direct-response advertising?
• They are discarded the day after publication.
• They only reach a small percentage of the
  potential audience.
• They are infrequently published.
• They are very flexible with respect to
  advertising formats.

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Assignment 3 (In class)

• Refer to the handout
• You have 60 minutes
• This assignment is worth 10