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MC 4040 ADVERTISING PROBLEMS

Media Planning and Strategy10/03/2013

Copyright © 2013 Yongick Jeong

+Today’s Agenda

Media Planning PrinciplesMedia Types – Paid, Earned, and

Owned MediaRecent Media TrendsStrategic Decisions

Reach vs. Frequency Regionality & Seasonality Media selection Media Selection: Considerations

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Media Planning Principles

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Is the process of designing a course of action for using advertisign time and space to achieve the ad and mkting objectives

How an ad budget will be used to buy media that will reach the maximum number of prospects with the greatest effectiveness at the lowest cost

Media Plan

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Media Types:Paid Media, Earned

Media, & Owned Media

+Paid Media Marketing media you spent to push a

message to a consumer

E.g. Display ads, paid search, sponsorships Advantages

Immediate Impact Mass reach Control

Disadvantages Advertising clutter Financial burden- esp… in a recession Poor credibility

+Owned Media Marketing efforts to represent corporately your

brand

Owned media is a channel you control Fully-owned media (e.g., website) Partially-owned media (e.g., Facebook or Twitter)

Owned media can create brand portability Extend brand presence beyond a corporate web site

Advantages Control Cost efficiency Longevity Brand loyalty

Disadvantages No guarantees Long term effect Hard to measure

+Earned Media

Marketing media that cost only the time of those who create, propagate, and maintain it

Earned media is an old PR term that essentially meant getting your brand into free media rather than having to pay for it through advertising. Has the merit of third party credibility, and it reaches

people when they are opted in and value the information.

Earned media is a result of brand behavior E.g.,Electronic word of mouth (EWOM) through social

media, blogs, social networks

+Earned Media

Advantages Builds a Climate of acceptance for the brand Makes brand’s claims credible breaks through clutter Reaches the hard-to-reach Cost effective

Disadvantages Less control over message Media may not cooperate No repetition

+Relationship among Paid, Owned, and Earned Media

Owned media Produce compelling propietary content

Earned media Attract the attention of traditional media and

extend it to social mediaPaid media

Amplify the exposure via advertising.

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Recent Media Trends

+Mobile Media 279 million subscribers (2010)

Mobile surpasses

More time spent on

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Reach vs. Frequency

+Reach and Frequency

Reach Refers to how many different people are

exposed to a vehicle at least once

Frequency Refers to how often they are reached in a

given period (often four weeks)

Inverse relationship b/w R & F They usually must trade off reach and

frequency in a fixed GRPs

+Reach and Frequency

Reach weighting Whenever anything New is being planned E.g., new distribution, new features of a

product, new packaging, new models

Frequency weighting To compete in a highly competitive market When a brand is sold frequently

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Reach objective - use various media vehicles using different dayparts

Frequency objective - concentrate fewer number of vehicles with reasonable reach

For new products, use a “heavy introductory weighting ” strategy

Start advertising earlier in “hot sales” seasons than others

Reach and Frequency: General Guidelines

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Strategic Decision:

Regionalisty

+Where to Promote?

Defensive Strategy Focus on the markets where you have strong

brand sales_potential Offensive strategy

Advertising in markets where a brand’s sales are low

Advertise on the weak sales markets This requires more heavy advertising than

defensive strategy

+Where to Promote?

Geographic considerations Advertise wherever the brand is distributed

Determine Market Potential Brand Development Index (BDI) Category Development Index (CDI) Higher than 100> Good and potential market

+Buying Power Indices: BDI & CDI Brand Development Index (BDI)

How strong a brand‘s sales is in relation to its population size: the percentage of your brand’s sales compared to the percent of population in a certain market

Category Development Index (CDI) Percentage of category sales compared to the

percentage of the population Use the CDI as a measure of potentia,

while the BDI is a mesure of actual brand strenght

High BDI Low BDI

High CDI

High share of market Good market potential

“A promising market”

Low share of marketGood market potential

“room for the brand to grow”

Low CDI

High share of market Monitor of sales declie

“Markt with caution”

Low market share

Poor market potential

“Dying market”

BDI & CDI: The Relationship

+BDI/CDI Relationships

High BDI &CDI Ideal situation, promising market Both category and brand sales/usage are above

average Typically want to want to defend market

Low BDI & High CDI Could be a good market for offensive ad strategy Might be might be potential to grow -- need to

research reasons brand sales are weak A brand recently introduced in a market

+BDI/CDI Relationships

High BDI and low CDI Brand sales are above average, but there is little growth

potential May call for defensive strategy Need to monitor market to see whether brand sales

decline or category declines further

Low BDI & Low CDI Probably not worth risking an offensive strategy Consider why the category is weak

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Strategic Decision:

Seasonality

+When to Advertise?

Depend on a number of important considerations When sales are greatest or lowest When competitors advertise Availability of the product Promotional requirements

+ Continuity A continuous pattern of advertising Covers the entire purchase cycle

E.g., Food products, laundry detergents Strategy used when:

Product used year-round Product has a short product cycle Top of mind awareness is the advertising objective

Advantages Works as a “message reminder” Extra discounts by buying heavy slots--- raise cost-

efficiency Disadvantages

high cost overexposure or underexposure

+ Flighting

An intermittent pattern with gaps of time, hiatus_ when no advertising is done

Placing advertising at the most favorable times relative to competition

Achieve much higher levels of reach/frequency than with continuity

Match advertising for certain time

+ Flighting

Advantages Efficient with budget limitation and or sales fluctuations Can outspend competitors over certain periods of times

Disadvantages May not be appropriate for products used year round Ad effect can be worn out if it is too heavy over a short

period of time Targets audience might forget the selling pit of an ad

over the hiatuses

Competitors can take over the market during hiatus

+Pulsing

A combination of continuity and flighting Continuous ad throughout the year and “ heaviest

up” at various favorable times

Sacrifice amount of advertising during peak sales compared to flighting

Depends on product nature and purchase cycle: Ice cream, soup, coffee

All of the advantages of continuity and flighting Typically used with a year-round products that are

sold all year round, but have heavier concentrations of sales during intermittent periods

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Media Selection

+Coverage & (Target) Composition Coverage: a percent of the medium’s total

audience the number of prospects delivered by a

given medium

Differently used in different media Audience (Target) Composition: a percent

of the target audience among subscribers

+Index

Comparison of a product’s usage within a demographic group against usage within the total population

To discover whether a particular demographic group is more or less likely to consume a product/brand than the total population

One weakness – doesn’t consider the number of people (population) in the segment and users in that segment

Rules of thumb If index number is higher by 10 points or more__,

use the index as the initial criterion for target selection

Consider the raw number and user size

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Media Selection: Strategic

Considerations

+Strategic Considerations Target audience’s use of media class

Quintile ranking from MRI (or Simmons) Consider media classes that have high quintile

rankings in Quintile 1 & 2 high index in Quintile I and II Low index in quintile VI and V

Is your advertising objective met better with a set of

media mix than others? Network TV – to maximize reach quickly Radio – to increase frequency among selected Newspapers / magazines –

+Strategic Considerations

Advertising Objective Does your client’s creative tactics require certain media

than others? Demonstration - television Vivid color - mag and HD TV Jingle and catchy phrases - radio and TV

Consider the cost to buy time and space in each medium Consider the general cost efficiency (CPM)

Network TV:

Consumer magazines: expensive (than NPs) to purchase and not cost efficient (high CPM) but necessary o reach selective target audience

+Next Classes – October 8 - 17 October 8

Case Analysis 5 – Agency 4 & 5 Read – New case and additional memo posted

on Moodle October 10

Advertising in Special Condition 2 – Crisis Management

Read – New case and additional memo posted on Moodle

October 15 Midterm exam

October 17 Account Planning (Guest lecture)