Chapter 14Using Electronic Media:

Television and Radio

William F. Arens Michael F. Weigold Christian ArensMcGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

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Chapter Overview

Factors to evaluate when considering radio & television in the creative mix

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Chapter Objectives

Describe pros & cons of broadcast TV as an ad medium

Analyze pros and cons of using radio in the creative mix

Evaluate the available types of television advertising

Explain the process of buying cable and broadcast TV timeDescribe the process of TV audience measurement

Evaluate cable TV as an advertising medium and explain how it differs from broadcast TV

Discuss factors to consider when buying TV timeDiscuss factors to consider when buying radio time

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TV Viewers

Heaviest viewersMiddle income, high school grads and families

Increased viewing hoursAverage American spends 4 hours/day watching TV

World wide, older women watch mostAverage 36 hours/week

Broadcast vs. cableHomes with cable watch less broadcast TV

Many channels causes audience fragmentationDVD viewing has increased

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Broadcast vs. Cable Viewer Characteristics

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TV Audience Advertising Beliefs

How adult viewers rate various media

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Compete for Ads

The Medium of Television

Broadcast TV Cable TV

VHF and UHF

Independent Stations

Network Affiliates

Many Stations, some PPV

Special Interest Stations

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Q. 1. What are the various TV audience trends?

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TV Audience Trends

Demographics

DVD Rental

Cable households

Viewing patterns

TV viewing hours Audience fragmentation

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Major Cable Networks

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Q. 2. What are the pros and cons of TV advertising?

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The Medium of Television

Pros Cons

Mass coverage

Relatively low cost

Some selectivity

High production cost

High airtime cost

Limited selectivity

Impact

Creativity

Prestige

Brevity

Clutter

Zipping and zapping

Social dominance

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Q. 3. What are the pros and cons of Cable TV advertising?

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Cable TV Pros and Cons

Pros Cons

Selectivity

Audience demographics

Low cost

Limited reach

Fragmentation

Quality

Flexibility

Testability

Zipping and zapping

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Digital TV Advantages

Improved picture and sound

Increased number of channels

Interactive video and data

Efficiency through multicasting

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Use of TV in IMC

TV

Niche medium

Cost effective

Imparts brand

meaning

Leverage Tool

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Q. 4. How do advertisers buy time on TV?

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Types of TV Advertising

Sponsorship

Spot ads

Direct response

Syndication

Local – LaVerge Beverage Depot

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TV Ad Spending (Billions)

Network TV dominates, but is losing ground

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Most Expensive 30-Second Spots

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Types of TV Advertising

Prime time’s most expensive 30-second spotshttp://www.frankwbaker.com/2006_2007_ad_rates.htm

How much for a 30-second spot?

Insert ex. 16-7, p. 517

Ad cost per 30-sec spot

Position = 2.9”horiz., 1.5” vertical

Size = 4.6” TALL

Resolution: 300 dpi

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TV vs. Magazine Cost Comparison

TV Cost of Ad = $700,00.00 Reach = 4,000,000 Cost Per thousand (CPM) = 700,000/4,000,000/1000 Cost Per thousand (CPM) = $175.00

Magazine Cost of Ad = $100,00.00 Reach = 200,000 Cost Per thousand (CPM) = 100,000/200,000/1000 Cost Per thousand (CPM) = $500.00

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Network & Syndication Distribution

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Why Direct Response Works

Consumers pay attention; respond immediately

Competitive advantage for brand managersSufficient time for brand differentiationResults measurable and accountableAd campaign can pay for itselfCombines power of advertising, direct

response, and sales promotion

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Defining Television Markets

DMA- designated market area for local stations

Columbus, Georgia designated market area

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Q. 5. How do advertisers measure their audience?

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TV Audience Measurement

DaypartsRating Services

Defining TV Markets

Audience Measures

Nielsen & Others

Cable Ratings

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TV Audience Measurement

DaypartsRating Services

Defining TV Markets

Audience Measures

Nielsen & Others

Cable Ratings

Designated Market Areas

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Designated Market Area

Columbus, Georgia designated market area

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TV Audience Measurement

Daytime 9 a.m. – 4 p.m.

Early Fringe 4 – 5:30 p.m..

Early News 5 or 5:30 – 7:30 p.m.

Access 7:30 – 8 p.m.

Prime Time 8 – 11 p.m.

Late News 11 – 11:30 p.m.

Late Fringe 11:30 – 1 a.m.

DaypartsRating Services

Defining TV Markets

Audience Measures

Nielsen & Others

Cable Ratings

Designated Market Areas

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TV Audience Measurement

DaypartsRating Services

Defining TV Markets

Audience Measures

Nielsen & Others

Cable Ratings

Designated Market Areas

TV Households

Households Using TV

ProgramRating

AudienceShare

Total TVHH in areaTVHH tuned to program

=Rating

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Defining Television Markets

Dayparts

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TV Audience Measurement

Audience MeasuresTV

Households

TVHH

Households Using TV

HUT

Program Rating

Audience Share

Total TVHH in area

TVHH tuned to program

HUT

# of viewers

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Buying TV Time

Cost per Point =CPP Rating

Cost

Cost per Thousand

Thousands of People

=CPM Cost

Gross Rating Points

Reach (avg rating) × Frequency

=GRP

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Buying TV Time

2. Analyze program efficiency

3. Negotiate price

1. Determine program availability 5. Sign

broadcast contracts

6. Review performance affidavits

4. Determine reach and frequency

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The Medium of Radio

Who uses radio?

93% of U.S adults listen each week

72% of U.S. adults listen every day

Average time is 2.5 hours per day

Radio’s reach exceeds other media

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Use of Radio in IMC

Involves people

Establishes intimate

relationshipFavors

integrated

marketingTarget

demographic group

Maintain strategic

consistencyStretch media dollars

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Most Popular Program Formats

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Q. 6. What are the pros and cons of Radio advertising?

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Pros and Cons of Radio Ads

Pros Cons

Reach & frequency

Selectivity

Cost efficiency

Limitations of sound

Segmented audiences

Short-lived, half heard

Testability

Timeliness & immediacy

Clutter

Local relevance

Creative flexibility

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Mini-network Programming

Each network targets a specific demographic group

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Q. 7. How do Radio advertisers buy time?

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Buying Radio Time

LocalNetwor

kSpot

Radio stations can

increase market

share with special

programming

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Key Radio Terms

Morning drive 6 a.m. – 10 a.m.

Daytime 10 p.m. – 3 p.m.

Afternoon drive 3 p.m. – 7 p.m.

Nighttime 7 p.m. – midnight

All night Midnight – 6 a.m.

DaypartsCumesAverage

quarter-hour audiences

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Ratings Based on Dayparts

Gross Rating Points (GRP)

Average Quarter-Hour (AQH)

Total Audience Plan (TAP)

Run-of-Station (ROS)

AQH RatingPopulation

=AQH Persons × 100

GRPAQH Rating × No. of Spots

=

Cume EstimatesCume Rating

=Population

Reach Potential × 100

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Satellite Radio

Sirius & XM are major players

Over 16 million listeners

Many program choices

Exclusive programming

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Preparing a Radio Schedule

1. ID stations with greatest concentration (cume) of target audience

2. ID stations whose format offers highest concentration of buyers

3. Determine which dayparts offer the most potential buyers

4. Construct schedule with strong mix of best times5. Assess proposed buy in terms of reach and

frequency6. Determine cost/1000 target people7. Negotiate and place the buy