Week 5

Advertising Industry Survey ADV1000 Week 5
Professor Linda Weeks

Basic Media Strategy

  The complexity and proliferation of new technology, target marketing techniques, and the sheer number of media options have changed the advertising media function in recent years. This changing process includes increasing demands for cost control and efficiency. Accountability for advertising costs is more important than in the past. There is a trend towards localized media strategies, as well as the expansion of global markets.

Future trends in media will include:
1. media plans required to to achieve high reach levels among prospects as opposed to accumu- lating total audience.
2. how to develop media/creative strategies to utilize interactive media
3. how to measure media synergism
4. understanding that control of costs and accountability will become driving forces in media process

Organization of the Media Function

A. Media Planner. Supervises all areas of the advertising campaign as it relates to media function
1. They are also marketing specialists
2. They must anticipate future trends in a rapidly changing environment
B. Media Research The media research department coordinates both the primary and secondary research data and functions as a support group for media planners.
1. Must gauge future trends
C. Media Buying The media buying department executes the overall media plan
1. Media buyers select and negotiate specific media placements and are responsible for moni- toring post-placement executions.
2. There may be separate groups or departments for each mass media depending on the size of a media unit.

Few areas of marketing and advertising have experienced the change demonstrated by media planning in the last decade. The media has been driven by the changes in the number of media options as well as the by the increasing expenditures in media, and the financial risk associated by media-buying mistakes.

In 1999, total advertising expenditures were 185 billion. In 2005, this figure will increase to 264.3 billion, an increase of 43%. The media planner of 2010 will be dealing with media outlets that probably don’t exist today. It is an unbelievably complicated environment.

Projected Media Expenditures
(Source: Myers Group. From “Media engine gathers head of steam,” Advertising Age, 2/14/2002)

2005 (in millions)

Media Spending % Share % Growth

Newspapers
Broadcast Networks
Spot TV
Syndication
Local Broadcast
Radio
Yellow Pages
Magazines
Network Cable TV
Local/Regional Cable
Online
Outdoor
Other
TOTAL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

45.8
19.2
12.7
3.8
14.2
23.3
11.8
16.0
23.8
12.9
32.5
5.7
42.6
264.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

17.3
7.2
4.8
1.4
5.4
8.8
4.5
6.1
9.0
4.9
12.3
2.2
16.1
100.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



2.8
2.8
2.0
3.0
2.0
3.0
1.5
4.0
22.0
28.8
40.0
15.0
1.0
7.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The New Media Function

As the media adapts to new technology and methods of planning, there are a number of trends that set the tone for these changes and provide an assessment of the future of media planning and buying. Among the most important are convergence, interactivity, creativity, and optimizers.

Convergence
Convergence is the the blending of distribution, content, and/or hardware from a number of media companies to create a new or significantly expanded communication system. Example - telephone companies offering cable service, cable companies offering internet connections, or NBC and Microsoft combining to create MSNBC.

Interactivity
Technology will allow consumers to deal directly with marketers for entertainment, purchases, and other services, bypassing traditional media and marketing channels.

Creativity
Interactivity will have a dramatic effect on the creative process. In an era of “permission marketing”, the need for attention getting creative techniques and interest-building advertising formats will be greatly diminished. In the very near future, TV and the computer will merge, and truly addressable commercials will be a reality. Media strategists, not art directors, are preparing for this arrival.

 

  Optimizers
Media planners use optimizing computer programs to budget advertising funds to those commercial spots that deliver the greatest number of prospects at the lowest cost per viewer (based on a mathematical technique developed by Harry Markowitz in the 1940’s) The job of the media planner is is to make a number of qualitative decisions about audience response and demographic value of an audience. In addition to television, we will soon see optimizing programs applied to magazines, radio, and other media in the near future.

Media executives must be analytical, creative, and strategic in their approach to the media process. A knowledge of statistics, mathematical skills, and organized thinking are minimum requirements for media planners. For those with the interest and competency, media planning offers an extremely exciting, lucrative, and challenging career in advertising.

The Media Plan - The complete analysis and execution of the media component of a campaign.
A typical media plan includes:
1. Marketing analysis (sales, share of market, prime prospects, product benefit, pricing
strategy, competitive environment)
2. Advertising analysis (advertising strategy, product awareness, target audience, budget, allocation to marketing mix, media category, media vehicle)
3. Media Strategy (match media vehicles with target audience media preferences, creative and communication considerations, seasonal requirements, media compatibility with message themes)
4. Media Scheduling (print insertion dates and production requirements, broadcast allocations and availabilities, budget allocation for each medium, CPM estimates*)
5. Justification and Summary (statement of ad goals in terms of measurable results, research plan to achieve measurable results, contingencies fro media schedule adjustments.)

* CPM means cost per thousand. The CPM is a means of comparing media costs among vehicles with different circulation. Sample:

  CPM=ad cost x 1000, divided by circulation
   
 

Assume that McCall’s magazine has a circulation of 4.2 million and a four color page rate of $115,000. It’s CPM is calculated:

McCall's CPM = $115,000 x 1000 divided by 4,200,000 (circulation)

Answer - $27.38 Cost per Thousand for the ad

 

 

  Top 5 United States Media Specialist Companies (1998)

Company Billings (in millions)
1. Starcom/MediaVest $5,430.2
2. Initiative Media Worldwide $4,600.0
3. McCann-Erickson/Universal McCann $4.121.5
4. Media Edge $3,494.4
5. Optimum Media $2,700.0

Top 5 Worldwide Media Specialist Companies (1998)
1. McCann-Erickson/Universal McCann $13,206.4
2. Starcom/MediaVest $11,700.0
3. Optimum Medai Directions $10,564.3
4. Media Edge $10,277.4
5. MindShare $10,079.0

Media Tactics
The media planner deals with four primary elements in developing the final media schedule:

1. Reach (also called coverage) is the number of different people exposed to a single medium or, in the case of a multimedia campaign, the entire media schedule. It may be expressed as the number of prospects or as a percentage of your target audience.

2. Frequency is the number of times that each person in the audience is exposed to your
media schedule.

3. Continuity is the length of time over which a campaign will run or the length of time that reach and frequency will be measured.

4. Budget is the major constraint of any advertising plan. The core consideration in all
media planning.

Reach Tactics:
1. Prime time television
2. Daily newspapers
3. Large circulation magazines


Frequency Tactics
1.Cable television
2. Special interest magazines
3. Radio


Effectiveness
1. Is often hard to achieve, however, measurements and careful attention to strategy helps.

Flighting is one of the most used advertising scheduling techniques. It consists of relatively short bursts of advertising followed by periods of total, or relative inactivity.


Assignment:

In Class Assignment

1. Go to the following mass media web sites:
www.nbc.com
www.cbs.com
www.abc.com
www.cnn.com
www.fox.com

Determine what information is available about advertising on the various mass media sites. Summarize this data in a grid and present to the class.

Homework

2. Internet Search
Using a search engine of your choice, research media buying or media planning, Build a
bibliography of at least 10 sources with annotations that explain the researched topic (media buying or media planning). Use the term “media buying” or “media planning” on your search engine and note the sites that offer this service. Explore one or two and prepare a short report on what you discovered. Include your bibliography of sources at the end of your paper.

3. ***Write to a media vehicle (magazine, newspaper, local or nationalTV station) and get a media kit. You may have to try several to get one. Bring to class and present it to the class.
(It may take a while to get the information packet)
You must do this exercise to pass this class!