Electronic Media: TV & Radio

12-2

Class Objectives

Describe advantages and drawbacks of broadcast TV as

an ad medium

Discuss advantages and drawbacks of cable/satellite

TV as an ad medium

Explain the process of buying cable and broadcast TV time

Evaluate different types ofTV advertising

Describe the process of TV audience measurement

Discuss the main factors to consider when buying TV time

Explain major factors to consider when buying

radio timeAnalyze pros and cons of

using radio in the creative mix

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TELEVISION

The Power of TV:• % of U.S. households that possess

at least 1 television: 99

• Number of TV sets in the average U.S. household: 2.24

• % of U.S. homes with 3 or more TV sets: 66

• Number of hours per day that TV is on in an average U.S. home: 6 hours, 47 minutes

• % of Americans that regularly watch television while eating dinner: 66

Source: Dr. Norman Herr, CSU-Northridge. “Television & Health,” 2007.

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Television as an Advertising Medium

The Power of TV:• TV passed newspapers as

the top mass-communication medium in 2004 (1)

• In 2009, 57% of ad spending in the U.S. went to TV (2)

• Total TV ad spending in 2009: $67 billion (2)

Sources: 1) “Marketing,” Advertising Age. January 1, 2007. 2) “Nielsen Snapshot of Ad Spending,” Media Info SLC. October 11, 2010.

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Recent TV Audience Trends

• More than half of U.S. households now have HDTV

• More than 1/3 have DVR’s, allowing them to watch time-switched programming and skip commercials

• Americans surf the web and watch TV simultaneously, about 3 hours and 41 minutes per month

• Though we are watching more video online and via mobile phone, TV is dominant at 67 hours watched per month

Photo c/o ehomeupgrade.com Source: Nielsen Wire Blog, “What Consumers Watch: Nielsen’s Q1 2010 Three Screen Report,” June 11, 2010

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Broadcast Television

Logos c/o screenrant.com Source (1): domainshane.com

• The U.S. has over 1370 commercial TV stations

• Can be independent or affiliated with 5 national networks

• Broadcast generates about $40 billion in advertising revenues

• Most broadcast advertising is from national companies

• Average price for a 30-second spot in 2010: $104,051 (1)

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The Pros of Broadcast TV

• Prestige. TV was voted the most authoritative, influential, persuasive and exciting medium.

• Social dominance. 95% of Americans watch TV every day.

Photo c/o tv.gawker.com

• Relatively low cost. Despite huge production outlays, CPM is generally between $2-$10.

• Impact. TV brings sight, sound and motion. No other medium besides the internet can appeal to 3 senses at once.

• Creativity. The format of TV commercials permit infinitely original and imaginative appeals.

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The Cons of Broadcast TV

Photo c/o en.wikipedia.org

• High production costs. Producing a national commercial can cost $200,000-$1 million.

• High airtime costs. For popular shows, 30-second commercials can cost over $200,000 per run.

• Limited targeting. Broadcast TV is a mass medium, reaching a wide spectrum of viewers.

• Transience. 30 seconds isn’t much time, and studies show viewers can’t remember details about commercials just watched.

• DVR’s and remote controls. Many viewers will skip a program’s commercials or change channels during ad breaks.

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Cable/Satellite Television

• About 90% of U.S. TV households subscribe to cable or satellite TV

• Over 150 channels available, though most viewers watch only 15 or so

• Most niche sites are independently owned

• Cable/satellite ad revenues make up about 1/3 of the TV total

• Each channel or network sells its own advertising

Logos c/o directstartv.com

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The Pros of Cable TV

Photo c/o deadspin.com

• Targeting. Specialized channels reach specific types of viewers.

• Demographics. Cable viewers are younger, educated and wealthier.

• Flexibility. Cable commercials can be as long as 2 minutes, and they don’t have the strict standards of broadcast.

• Testability. Cable is a good place to experiment with advertising campaigns to see what frequency and creative approach work best.

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The Cons of Cable TV

Photo c/o popwatch.ew.com

• Audience fragmentation. With over 160 channels, overall viewership for shows is low.

• Quality. Cable, especially local cable, can have lower production quality than broadcast.

• DVR’s and remote controls. Many viewers will skip a program’s commercials or change channels during ad breaks.

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Local Cable TV Commercials

Providence Café Commercial produced by Time Warner Cable

http://www.youtube.com/watch?v=JTDZmTRcgKA

BB&T campaign by LGA

http://lgaadv.com/portfolio/detail/bbt

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Types of TV ads: Sponsorship

Camaro photo (left) c/o imcdb.org Cruze photo (right) c/o constantmotioncm.com

Sponsorship: an advertiser underwrites the cost of a program in exchange for advertising and visibility within the program.

Sponsorships can be sole sponsorships (one), like Chevy’s, or shared sponsorships (multiple), like those for NFL games.

Example: Chevy Sponsorship of Hawaii 5-0

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Types of TV ads: Participation, Spots

Most network advertising is sold on a participation basis, where many advertisers purchase 30- or 60-second commercials within a program.

Spot announcements run in clusters between programs or when networks haven’t purchased all available time. They are concentrated by geographic area (DMA), which is why you might see a local advertiser during a national program.

Spots are less expensive and more flexible than network ads. They may run 10, 15, 30 or 60 seconds.

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Types of TV ads: Syndication

Syndication: sale of programs on station-by-station, market-by-market basis.

Two and a Half Men photo c/o tvbythenumbers.zap2it.com Dr. Phil photo c/o blog.newsok.com

Off-network syndication rebroadcast of popular

network shows

First-run syndication original programming for the syndicated markets

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Types of TV ads: Infomercials

Program-length ads, or infomercials: A long-form television commercial that might last as long as an hour.

Micro S’mores photo c/o nj.com P90x photo c/o workoutjourney.com

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Alternative: Product Placement

Product placement: When brands or products are showcased within a show, rather than in a commercial.

Days of our Lives photo c/o tvsquad.com 30 Rock photo c/o supernaturalunderground.blogspot.com

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DaypartsRating

ServicesDefining TV

MarketsAudience Measures

Nielsen & Networks

Cable Ratings

TV Audience Measurement

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DaypartsRating

ServicesDefining TV

MarketsAudience Measures

Nielsen & Networks

Cable Ratings

Designated Market Areas

TV Audience Measurement

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Designated Market Area (DMA)

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The Charlotte 22-County DMA

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Early MorningDaytime

6 – 9 A.M.9 A.M. – 4:30 P.M

Early Fringe 4:30 – 7:30 P.M.

Prime Access 7:30 – 8 P.M.

Prime Time 8 – 11 P.M.

Late News 11 – 11:30 P.M.

Late Fringe 11:30 – 2 A.M.

DaypartsRating

ServicesDefining TV

MarketsAudience Measures

Nielsen & Networks

Cable Ratings

Designated Market Areas

TV Audience Measurement

12-23

DaypartsRating

ServicesDefining TV

MarketsAudience Measures

Nielsen & Networks

Cable Ratings

Designated Market Areas

TV Households

Households Using TV

ProgramRating

AudienceShare

Total TVHH in areaTVHH tuned to program

=Rating

TV Audience Measurement

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TV Audience Measurements

Total TVHH in area

TVHH tuned to program=Rating

1,147,910 (CLT DMA)

50,000=4.36

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TV Audience Measurements

HH with TV on

TVHH tuned to program=Share

537,955 (50% of TV’s in market)

50,000=8.71

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Cost per Thousand

Cost per Point

Gross Rating Points Reach (avg. rating) × Frequency=GRP

=CPPRating

Cost

Thousands of Viewers=CPM

Cost

1. Select most efficient program

2. Negotiate prices and contracts

Buying TV Advertising

Gross rating points: total rating points achieved by a media schedule over a specific period of time.

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Example

An auto dealership wants to run 30 TV ads in May on a local news station that generally reaches 50,000 viewers with each 6 p.m. newscast.

In this market that equates to an average rating of 5.

Each 30-second commercial costs $500.

Calculate the gross rating points, cost per point and cost per thousand.

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RADIO

Who uses radio?

93% of U.S adults listen each week

72% of U.S. adults listen every day

Average time is 3 hours per day

Radio photo c/o electronics.howstuffworks.com

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The Pros of Radio

Photo c/o tv.gawker.com

• Audience. 93% of Americans listens to the radio each week, spending 3 hours per day doing so.

• Targeting. Radio station formats enable advertisers to reach specific markets.

• Cost efficiency. Radio offers one of the lowest CPM’s in media. And production costs are 10% of TV’s.

• Visualization. Creative radio spots can create visual imagery so the listener can “see” what the ad is talking about.

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The Cons of Radio

Photo c/o en.wikipedia.org

• Limitations of sound. Radio is heard and not seen. Ads can be difficult for products that must be seen.

• Segmented audiences. If a market has several stations of the same format, advertiser may have to buy many or all of them to reach the target.

• Multi-tasking listeners. Radio listeners are often doing things other than just listening to the radio, so they don’t always comprehend ads.

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Programming Formats

Percentage of stations in the most common programming formats

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Morning drive 6 A.M. – 10 A.M.

Daytime 10 A.M. – 3 P.M.

Afternoon drive 3 P.M. – 7 P.M.

Nighttime 7 P.M. – midnight

All night Midnight – 6 A.M.

Local Radio

NetworkSpotRadio

Dayparts

Buying Radio Time

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=Cume RatingPopulation

Reach Potential × 100Cume Estimates

Gross Rating Points (GRP)

Average Quarter-Hour (AQH)

Ad Rating Based on Dayparts

Total Audience Plan (TAP)

Run-of-Station (ROS)

=AQH RatingPopulation

AQH Persons × 100=

Buying Radio Time

GRP AQH Rating × No. of Spots=

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Example

A jewelry store plans to run 20 radio spots for a necklace sale in April. They will run spots on a radio station that reaches 20,000 in an average quarter hour.

The Charlotte DMA has approximately 2 million people.

Calculate the station’s AQH rating and the ad campaign’s gross rating points.