Welcome!
Media Planning and Budgeting
Dr. Satyendra Singh
Professor, Marketing & International Business
University of Winnipeg, CANADA
Which one? How to select? $? How long? #?
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Depends on ad objectives
Creating brand awareness is easier than brand image
Media Selection
Objective dictates media, scheduling and timing…
Radio
TV
Magazine
Outdoor
Newspaper
Internet
…
Ad scheduling methods: Continuous, Flighting, Pulsing
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Advertising sales/response function
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Concave-downward response function
The S-shaped response function
Ad expenditures
Ad expenditures
Incremental
sales
Incremental
sales
Range A B C
Terminology
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Reach: # of people watching TV/ # of people in Canada = 3.8m/38m = 10%
Frequency: how many time exposure in a given time
Effective Frequency: # of times must be exposed to achieve ad objective
Effective Reach: % of audience must be exposed to achieve an objective eg. brand awareness
Random Reach: Eliminates duplicate reach between media.
TV reach is 7 and Newspaper 5. Effective Reach? Duplicate?
How many exposure? Reach vs frequency. Debatable
Total exposure versus Effective exposure of a prime-time TV schedule
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Marginal Analysis
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Ad Total sales ($) Marginal sales ($) Ad costs ($)
0 0 - -
1 3,000 3,000 1,000
2 5,000 2,000 1,000
3 6,200 1,200 1,000
4 6,800 600 1,000
5 7,000 200 1,000
TV Rating
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TV Rating 1 = 1% of the population of HH with TV
Rating: % of household (HH) with TV tuned to specific program.
2m watch CNN in Canada. 20m have TV in Canada (not population).
Share: % of household (HH) with TV tuned to specific program/total TV turned on
2m watch CNN in Canada. 10m have TV turned on.
Q Rating/Score
Measures popularity of shows and personalities ie opinion of audience rather than size of audience; you may be familiar with it but may not like it. Q Score = FAV / FAM * 100
30% rank ABC as favorite (FAV) show. 50% of population is familiar (FAM) with ABC.
Calculate Q score. What does the number mean?
Gross Rating Point (GRP)
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GRP = reach x frequency
1 GRP = 1 % reach x 1 time exposure to target audience
Measures size of audience by a vehicle’s reach.
It shows relative intensity of one media over another
Trade-off between reach and frequency.
For the given data, calculate frequency to achieve objective of 100 reach.
TV program Rating Cost Spot GRPs
A 8 $15,000 20 160
B 8 $15,000 20 160
C 7 $15,000 10 70
D 7 $15,000 10 70
Total GRPs (Weights) 460
To achieve 100% reach, frequency should be 4.6
How much media needed to meet our objective?
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Source: © 2015 McGraw-Hill Education
Cost Per Rating Point (CPP)
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How to decide how many GRP we need.
It depends on experience and ad objective. Say, 100 to 150 GRP/week is a good baseline.
Market TV Homes Cost/Spot Rating
Toronto 4m $3,000 20
Winnipeg 2m $2,000 20
Suppose we buy only 3 spots to save ad budget, so we get 60 GRP (3 spot x rating) in each city
2.4m (ie. 60 GRP * 4m) Impression in Toronto @$9,000 (ie. 3 spot at $3,000)
1.2m (ie. 60 GRP * 2m) impressions in Winnipeg @$6,000 (ie. 3 spot at $2,000)
CPP Toronto = $9000/60 GRP = $150. CPP Winnipeg = $6000/60 GRP = $100
1 rating (ie 1% of Household HH) in Toronto = 40,000 HH, and 20,000 HH in Winnipeg
Toronto, for $150, we get 40,000 HH exposure. In Winnipeg, for $100, we get 20,000 HH exposure
Advertising in Toronto is more efficient than Winnipeg!
Media planning: $2m ad budget for 20 markets
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Markets Sales (%) Pop (%) Budget by pop BDI (sales/pop) Ad Budget
A 12 8 $160,000 1.5 $240,000
B 8 12 $240,000 .67 $160,800
C 6 6 $120,000 1 $120,000
…
20 100 100 $2,000,000 $2,000,000
For Market B, if we go by population, ad allocation budget should be $240,000 (12%x2m).
But sales potential (sales/population) for Market B is only .67.
So media planer will reduce ad budget for the market B to $160,800 (.67x240,000) and reallocate funds to market with greater market potential such as Market A.
Brand Development Index (BDI) = sales potential = % sales / % population
Category Development Index (CDI) – product-based (cream) or interest-based (make up)
Radio Rating (AQH)
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Average Quarter-Hour (AQH) person
= # of people listening to a radio station for at least 5 min in a quarter (15-min period)
Average Quarter-Hour (AQH) Rating
= (AQH Persons / Population) * 100
Average Quarter-Hour (AQH) Share
= (AQH Persons / AQH persons to all station) * 100
Cume Estimates
Cume Person = # of diff people who listened for at least 5 minutes
Cume rating = (Cume persons / population) * 100
Time Spent Listening (TSL) = (# AQH Person * # of Quarters / # Cume) / 4 = hr
Outdoor Rating
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24-hr traffic: 36,000 (suppose)
Daily Effective Circulation (DEC) = audience of the billboard
= For illuminated poster/billboard, multiple by .65; for non-illuminated .45
50 GRP = 50% of the population will see the ad once (ie daily)
Impressions = DEC * showing period
Showing period = how long the ad stays on the billboard/outdoor
Bunching and gapping: underutilization versus overcrowding
Headway: gap between 2 buses’ scheduling. Less gap means more frequency on the same route eg. # buses plying / hour. More impressions
Magazine Ad Rates
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Frequency discount
Volume discount
Remnant Space
Short Rate
Paid for 6 pages ad, but ran (ie advertise) only 5.
6-time rate $30,000 per page
1-time rate $40,000 per page
Short rate due $20,000 to magazine (ie $30,000 * 6 – $40,000 * 5)
Cost Per Mille (CPM)
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Compares media costs among vehicles with different circulations
CPM = Ad $ x 1000 / circulation
Magazine A has a circulation of 5m and ad costs $60,000/page.
If only .5m women read the magazine, demographic CPM.
Magazine Efficiency
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Magazine circulation = 400
Cost per page is $20
CPM = ($20 / 400) * 1000 = $50
If pass-along rate is 3,
CPM = ($20 / (400 + 3 * 400)) * 1000 = $12.5
If target for 20-40 age group is 65% of the circulation, demographic CPM?
Calculate breakeven point for the promotions. Assume missing data logically.
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Direct Marketing �cost benefit analysis: 200m worldwide, 50 countries, 30 languages. 7m in canada
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Digital ad performance
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Source: einsteinmarketer.com/google-ads-tactics-roi/quality-score
Digital media response rate and profitability��Relationship between contribution margin, CPM, CTR, Conversion ratio and success of campaign��CPM = Cost per mill for the impression, CTR = Click through rate (ie those who saw, clicked)�
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Source: citypng.com/photo/9486/hd-social-media-black-outline-round-icons-png
icon-icons.com/icon/world/125099, flaticon.com/free-icon/shopping-cart_263142
CPM >>>
Conversion Ratio >>>
CTR >>>
Questions?�S.singh@uwinnipeg.ca