MEDIA BUYING 101RADIO TV CABLE

Presented by: Cyndy Murrieta, BVKOctober 21, 2014

SOME TOPICS IN

We’ll cover General Media Terminology

What’s the lingo? How is broadcast planned? Basics of TV, Radio and Cable

TODAY’S PRESENTATION

WHAT IS A RATING POINT?

So, if The Voice does a 5 rating in Orlando with Women 25-54 on one particular night, that means......?

...that 5 % of all women 25-54 in Orlando are watching The Voice on that night.

WHAT IS A SHARE?

And so...If Scandal does a 12 share in Orlando with Women 25-54 on one particular night, that means......?

The percentage (%) of the target universe that are watching TV at that moment who are watching that particular show.

1 Share Point =1% of the target universe actually watching TV at that moment

...that 12% of all women 25-54 in Orlando who are watching TV that night are watching Scandal that night.

RADIO AND TVGRPS

Gross Rating Points If we are buying 5 spots in a show that

does a 2 rating, that is 10 GRPs If we are buying 100 GRPs/week for 4

weeks, that is 400 GRPs for the total campaign.

Can the Rating be higher than 100%?No, maximum of 100% of the target audience can watch a program at a particular time

AND THE GRPs?Yes, as a cumulative figure, can easily go above 100

RADIO AND TVREACH AND FREQUENCYREACHPercentage of our target universe that was exposed at least once to an advertising schedule. Usually measured over 1 or 4 week period, and only for the whole campaign, not one station. Measure different viewers with no duplication. Example:

Target Universe = 1,000,000 A campaign achieves 80% reach in 1 week 80% of the target have seen the commercial at least once 800,000 of the target have seen the commercial at least once

FREQUENCYThe average number of times that each person is exposed to a brand’s advertising campaign or schedule. Example:

Average Frequency of 4.0 means that, as an average, every person reached has seen the commercial 4 times.

This is an average, which means that some people have seen the commercial more times, and some less.

IMPRESSIONSTHE GREAT EQUALIZER

Once we know how many GRPs we are buying in a market, and we know the population for our demo, we can calculate the gross impressions

1% of the Population of the target audience in the market x GRPs

There are 426,500 age 25-54 women in Orlando

We reach 1% of that number with 1 rating point, or 4,265

4,265 x our total GRPs in our campaign of 400 = 1,706,000 Gross Impressions

Impressions are the one measurement that can be used across all mediums

RADIO AND TV

Reach X Frequency = Gross Rating Points GRPs / Reach = average frequency Examples:

100 GRPs divided by 33% reach = 3 times average frequency impact

65 reach x 4 frequency = 260 GRPs

BORING MEDIA MATHWe want to reach listeners at least three times, for effective frequency impact.

PLANSO HERE’S HOW WE

Knowing our CPP in the market, we can estimate costs for a schedule in that market General rules of thumb that most media planners believe:

You should plan for no less than 100 GRPs/week in a market for TV You should plan for no less than 75 GRPs/week in a market for radio

If TV is in the plan, generally you would price out the TV first before looking at all media allocations because it will gobble up the most money

Variables such as extra promotion can help “fluff up” lower GRP levels

So we know that if a CPP for radio in Atlanta is $325, and we buy 100 GRPs for 4 weeks, that will cost us...?

ENTER STAGE LEFT: THE FLOWCHART

$130,000

(Adds up, doesn’t it?)

BUT BEFORE WE BUY

First: Quantitative Research A radio ranker of

Orlando stations This lists top 20

stations for Women 25-54

We can have this report run for any combination of dayparts and demographics Example: who

has the top morning drive show?

WE NARROW OUR OPTIONS

QUALITATIVE RESEARCH

Station rankings could change substantially when we add qualitative factors

NEXT:

BUT BEFORE WE BUY TV CAN BE MUCH MORE COMPLICATED

QUALITAP™ Target ProfileATLANTA - Release 1 2013 Feb12-Jan13 ScarboroughQualitative Criteria: Adults 65 +DMA Survey AreaVisited Florida Panhandle (yr)

Profile ranked by index Target Persons Base Persons IndexTypically watched television programs are reality - adventure 8,137 51,028 162Typically watched television programs are sports 41,767 282,172 151Typically watched television programs are Mystery/suspense/crime 37,844 259,406 148Typically watched television programs are national/network news 31,888 224,067 145Typically watched television programs are documentaries 26,622 210,345 129Typically watched television programs are comedies 24,741 207,896 121Typically watched television programs are movies 44,184 400,654 112Typically watched television programs are local news - morning 41,598 384,699 110Typically watched television programs are reality - talent 8,416 83,323 103Typically watched television programs are game shows 17,159 174,265 100Typically watched television programs are local news - evening 42,809 473,971 92Typically watched television programs are dramas 19,312 214,084 92Typically watched television programs are local news - late 17,378 209,558 84Typically watched television programs are science fiction 6,839 85,912 81Typically watched television programs are daytime soap operas 5,293 73,520 73

Programming selection varies substantially by demographic

CABLE BY NETWORKBEFORE WE BUY

QUALITAP™ Target ProfileDALLAS-FT. WORTH - Release 1 2013 Mar12-Feb13 ScarboroughQualitative Criteria: Women 25 - 49 DMA Survey AreaVisited Orlando (yr) or visited other places in Florida (yr)

Profile ranked by index. Target Persons Base Persons IndexWatched We TV (wk) 24,091 70,526 260Watched TCM (Turner Classic Movies) (wk) 26,200 78,828 253Watched Golf Channel (wk) 6,359 22,680 213Watched Hallmark Channel (wk) 35,226 126,031 213Watched FS Southwest/FOX Sports Southwest (wk) 14,229 51,160 212Watched FSN/FOX Sports Net (wk) 14,229 51,160 212Watched Boomerang (wk) 7,820 28,302 210Watched GSN (Game Show Network) (wk) 4,877 17,706 210Watched CMT (Country Music Television) (wk) 16,786 61,037 209Watched AMC (wk) 39,337 147,916 202Watched VH1 (wk) 41,705 167,143 190Watched Spike (wk) 28,593 117,666 185Watched NFL Network (wk) 12,335 51,784 181Watched CN (Cartoon Network) (wk) 15,370 65,795 178

Network selection, and individual programming selection, varies substantially by demographic

RADIO

RADIO Arbitron was for years the primary

radio research firm but was bought by Nielsen last year

Methodology Diaries in smaller markets PPMs in larger markets

PPMs Portable People Meters Looks like a pager Detects radio stations that PPM

carriers are exposed to Passive data collection, versus

trying to remember what you actually listened to

NIELSEN

RADIO

Dayparts Morning Drive: 6a-

10a Midday: 10a-3p PM Drive: 3p-7p Evening: 7p-12m Overnights: 12m-6a Weekends ROS = run of station

LINGO - DAYPARTS

Primetime for radio is 6am-7pm

RADIO

Radio is purchased in Nielsen-designated metro areas.

There are 302 radio metros in the U.S. Most radio metros cover two to four

counties Some rural areas of the U.S. are not in

radio metros. Those areas are called “non-metro.”

LINGO - GEOGRAPHY

QUESTION:WHO CAN GUESS WHAT RANK ORLANDO IS?

NIELSEN RADIO MARKETRANKINGS

Radio metro covers Orlando; Daytona, Melbourne, etc. are separate radio metros.

RADIO

AC = adult contemporary CHR = contemporary hits Hot AC, Jack, Alice, etc. Rhythmic CHR (includes HipHop,

Rap) Urban Contemporary Country, Young Country, Modern

Country, Classic Country Rock, Album Rock (aka AOR),

Classic Rock, AAA, Alternative News/Talk, Talk, All News Christian – music, ministry,

gospel Classic Hits, aka Oldies

LINGO - FORMATS

QUESTION:What is the top radio format in the US?

HISPANICFORMATS

There are about 15 Hispanic radio formats, including;• Mexican Regional• Spanish AC• Pop• Spanish CHR• Rhythmic• Reggaeton• Rhythmic Crossover • Caribbean Tropical• Tejano

• Popularity of formats varies widely by region

RADIO

Young audiences CHR, Mix, Alice, Jack, urban, rock

Females CHR, AC, Mix

Males Rock, classic rock, sports talk

Broad reach Country

Older listeners AC, classic hits, news/talk, talk

Niche Fine arts/classical Christian/various religious National Public Radio (underwriting

mentions only)

TARGETING BY FORMAT

RADIO

Bigger the market, higher the CPP Different target demos, different CPPs CPP varies by daypart. Drive times

cost more. Weekends and evenings cost less.

Examples from SQAD, our cost per point service Orlando: Adults 25-54, AM Drive:

$162 Chicago: Adults 25-54 PM Drive:

$642 NYC: Adults 25-54, AM drive:

$1,188 Daytona Beach: Adults 25-54, PM

Drive: $53

SQAD CPPs are usually very high; radio is usually somewhat negotiable

PRICING, COST PER POINT

RADIO

“Tight market” = not much availability, high prices. Typically Apr-Jun and Nov-Dec. Prices are high during these times.Political campaigns could affect demandLow-demand periods – usually first quarter, January through early March. Prices are negotiable in low-demand periods.Demand periods vary by market

Jan-Feb – low demand in cold weather markets

Jan-Feb – could be high demand in destinations that have seasonal population fluctuations

PRICING, SUPPLY & DEMAND

SPOT RADIO VS.

Spot – specific markets, stations individually purchased, or purchased in ownership groups.

Local networks – typically news/weather/traffic networks

Regional – statewide networks, agricultural networks, sports

National – coast-to-coast coverage, such as ABC Radio Networks, Westwood One, Siriux/XM

RADIO NETWORKS

RADIO

Strong medium for promotions Live endorsements are a possibility Nimble with messaging/creative Frequent, loyal listening can lead to

high frequency impact Emotional connection to listeners Works well in conjunction with other

media – digital, TV, print, etc. Low production cost compared to

many other media. Stations will often produce spots at no charge, if we supply a script.

WHY RADIO?Radio reaches

91% of Americans 12+

every week

TELEVISION

TELEVISION

Nielsen is the primary TV research firm

The world’s largest market research firm

It’s spelled N-I-E-L-S-E-N Methodology

Diaries in smaller markets Meters and diaries in medium-size

markets LPMs in larger markets

LPMs Local People Meters Passive viewing measurement,

similar to Arbitron’s PPMs Since Nielsen recently purchased

Arbitron, it’s expected that very soon the PPM and LPM technology will merge

NIELSEN

TELEVISION

Dayparts Early Morning: 6a-9a Daytime: 9a-3p Early Fringe: 3p-5p Early News: 5p-6:30p / 6p-7:30p Prime Access: 6p-7p / 7p-8p Prime Time: 7p-10p / 8p-11p Late News: 10p-10:30p / 11p-11:30p Late Fringe: 10:30p-12m / 11:30p-1a Overnight: 12m-6a / 1a-6a Weekend a.m. news: 6a-11a

Daypart definitions change by time zone

LINGO - DAYPARTS

Definitions are a little loose.

Early news can run at 4p, early morning can start at 5a, Late fringe can start at 11pm on

stations with no 11pm news, etc.

TELEVISION

TV is purchased in Nielsen-designated DMAs – “Designated Market Areas”

DMA essentially means “this is where you get your TV from.” For example, Wilmington, Delaware is in the Philadelphia DMA.

There are 210 TV DMAs in the U.S. TV DMAs can range from just one or two

counties (St. Joseph, MO) to entire states (Salt Lake City, UT).

LINGO - GEOGRAPHY

WHO CAN GUESS WHAT RANK ORLANDO IS?

NIELSEN MARKETRANKINGS

TV DMA covers 9 counties, Orange, Seminole, Osceola, , Flagler, Volusia, Brevard, Lake, Marion, and Sumter

HOW ABOUT FOR HISPANIC MARKET RANKINGS?

NIELSEN HISPANIC MARKET RANKINGS

TELEVISION

Network – usually refers to national networks, such as NBC, CBS, ABC, Fox

Regional networks – typically sports networks

Spot – runs in one market A spot that runs on the CBS affiliate

in Indianapolis is not a “network spot.” More correctly, that’s a spot that ran on a “network affiliate.”

SPOT VS NETWORK

TELEVISION

Many options, much more refined targeting than radio

Local stations have limited avails in prime time and other network-feed areas, which often leads to high prices.

Local programming, such as news areas, usually has much more inventory and rate flexibility.

Questions to be addressed: Does this program reach the right demographic? What is the tone of this program? Is it correct for

what we’re selling? Is it image-appropriate? Are we paying an efficient rate to be in this specific

show?

TARGETING BY PROGRAM

Sunday Night Football was the

top rated show on broadcast TV

last week. Who can guess the

top rated sitcom last week?

TELEVISION

“Tight market” = not much availability, high prices. Typically tight during ratings sweeps periods, when the best new programming is on: May and November. Political seasons can be HELL to local TV marketsInventory can also be tight in September-October, when the new shows are rolled out, and December, prior to holidaysOther sweeps: February and July.Low-demand periods – usually first quarter, January through early March, and summer, June through August, when lots of reruns are aired. Prices are negotiable in low-demand periods.

PRICING, SUPPLY & DEMAND

TELEVISION

Bigger the market, higher the CPPDifferent target demos, different CPPsCPP varies by daypart. Prime time costs the most. Late news can often be pricey. Early morning, daytime, and early fringe cost less.Examples from SQAD, our cost per point service

Orlando: Late News $560New York: Prime $5,696Chicago: Early News $1,059Kansas City: Prime $311

SQAD CPPs are usually very high; TV is usually somewhat negotiable

PRICING, COST PER POINT

TELEVISION

TV avails – essentially, a menu of what’s available, listing costs and projected ratings per spot

I usually ask for a proposal as well for the rep to give it their best shot

We negotiate down to a level that will run. . . . . . because if we negotiate too low, our

spots will get bumped out by advertisers who pay higher rates for that time.

Work on the buy in our media software system (Strata) to finesse all the stations submissions to meet the “specs” of CPP and total GRPs

BUYING PROCESS

TELEVISION

Reps contact buyer regarding preemptions – spots that didn’t run sports programs that ran long weather bulletins other advertisers willing to pay more

for the time We negotiate make-goods – equal or

better programs and ratings to make sure we deliver GRPs and impressions in the end

POST-BUY

TELEVISION Vivid imagery – color, sound, motion A strong direct response medium – you

can see the URL or phone number Wide array of programming selections

= high degree of target-ability Good creative can lead to strong

viewer engagement TV remains the #1 influencer across

the purchase funnel

WHY TV?

Source: TVB/The Futures Company; “Purchase Funnel 2012”

A WEEK IN THE LIFE FOR THE TOTAL U.S. POPULATION

Q1 2014: Weekly Time Spent (Hrs:Min)

CABLE TELEVISION

CABLE TV

Nielsen is “challenged” by cable measurement.

Many individual shows do not meet minimum reporting standards; it is difficult to obtain viewership data.

Cable “footprint” does not match TV DMA, making ratings calculation difficult – leading to “Cable DMA” ratings.

MEASUREMENT

CABLE TV

Dayparts Same as TV Cable prime time ROS is 6p-12m.. Cable is often sold on a broad rotation

basis. Limited local avails make it difficult to

purchase specific shows.

Interconnect – a consortium of local cable operators. Example: the cable operator that covers the east side of town, purchased in conjunction with the operator that covers the west side.

LINGO

Comcast just bought Time Warner Cable.

CABLE TV

National network – runs nationwide on networks such as USA, A&E, ESPN

Regional networks – typically sports networks; occasionally news networks

Spot – runs in one market Cable networks are always referred to

as “networks” rather than “stations”

SPOT VS NETWORK

Targeting by Program Great way to target specific

audiences Local operators have limited avails. It can be very high CPPs to buy

individual shows, especially if they’re top-rated.

Cable operators often sell in broad rotations, to help with inventory issues.

WHY CABLE?

Who can guess the top ad-

supported rated cable

program last week?

CABLE TV

Spot cable CPPs are usually much higher than broadcast CPMs. . .

. . . But there are several reasons why we buy local cable:• Lower out-of-pocket cost can lead

to greater frequency impact• Can target specific neighborhoods• Niche networks or programming

can be a good fit• If broadcast availability is tight,

cable can be a reasonable alternative

PRICING, WHY BUY LOCAL?

SO..... Ideation: Decide on ideal media mix based on goals and strategy

Costing: If broadcast is on the plan, price out TV and

radio first

Allocate: Determine what other media should bring to table and

allocate budgets for each

Develop: Think about how you should maximize each medium

(tactics, meet with various vendors to explore options)

Finesse: Finalize to budget goal, ensure final plan is on strategy,

obsess about flowchart and formulas

THIS is the part that takes the longest and where the creativity comes in!