What are sources of electric potential?
Advertising Chapter 13 Notes: The present and future world of traditional mass media o Advertisers believe that digital media offers a more cost effective way to reach target audiences o Digital/interactive media is now about $30 billion/year, about 14% of total worldwide media spending – up 4% from 2004 o Traditional mass media (ie newspapers) are losing placement to digital media o TV has been hit by the shift to digital but is responding to partnerships with digital organizations Which media: strategic planning considerations 1. Advertisers need media to reach target audiences 2. Advertisers’ media choices result in billions of dollars of revenue to media companies 3. Print media, newspapers, and magazines have inherent advantages and disadvantages 4. Broadcast media, TV and radio, also have inherent advantages and disadvantages Newspaper advantages: o Reach over 100 mil households per year – but declining o Geographic selectivity is good – primarily about local news; limited message o Timeliness – out everyday, readers get to stay current o Creative opportunities but limited, o Credibility is high o Audience interest and demographic o High interest and upscale demographics o *Cost is lower than any other type of print Disadvantages: o Limited segmentation – same types of people reading o Creative constraints – thin paper is difficult to work with/print quality, size, o Poor reproduction – generally and particularly color o Cluttered environment – multiple stories and ads on one page o Short life – news cycle is more 6hours now vs. 24hrs (daily) Categories of Newspaper Advertising: 1. Display Advertising a. Co-op advertising –manufacturer pays part of the media cost 2. Inserts a. Preprinted insert – ie printed by advertiser and then placed in packing b. Free-standing insert – ie Red Plum coupon inserts 3. Classified Advertising Costs and buying procedures for newspaper ads o Rate Cards Cost determined by: Size of ad, use of color, size of audience, extent of coverage Space is sold in column inches or SAU sizes Rates are lower for ROP (run of paper – wherever there is space) rather than preferred position or full position Measuring Newspaper audiences o Circulation Paid circulation – subscriptions Controlled circulations – number of copies newspaper gives away for free Total number of circulation = paid + controlled o Readership Circulation multiplied by number of readers Future of Newspapers o Survival of newspapers depends on ability to evolve o In the future newspapers will have to: Provide in-depth coverage of local issues – hyper localism Pursue a pay-for inquiry advertising model Provide follow up reports of news Maintain role as local source for consumer information Provide more “eBay” like classified ads Use bloggers to cover local events The evolution of Newspapers o Cincinnati enquirer changes Smaller curated format, less ad space Higher quality graphics Digital version available, multiple platforms Magazines o Revenues down sharply o Several big name casualties – gourmet magazine no longer in print o Shift to digital Advantages: o Audience selectivity – psychographics o Audience interest o Plenty of creative opportunities- use of color, white space, foldouts o Long [shelf] life – dentists office (around for years) Disadvantages: o Limited reach and frequency – monthly vs. daily o Filled with clutter – lots of ads o Longer lead times – ie need to submit in march to be placed in June o Cost – dependent on size of audience ie $100,000 for good housekeeping Ads can skew male/female and be placed in specialized magazine (car and driver) or general (sports illustrated) Categories of Magazines: o Consumer Publication Cost determined by o Circulation o Size of ad o Use of color o Position in publication Measuring magazine audiences: o Rates are based on guaranteed circulation Stated min number of copies that will be delivered to readers o Publishers also estimate pass along readership (sharing on Facebook) o Estimates are verified by Audit Bureau of Circulations Future of magazines Last 20 years has been a roller coaster for magazines: Currently: revenue and ad pages are up despite some publication casualties Advertisers fine magazines useful for selectivity and color capabilities o Continued success related to Adapting new media E-readers/subscriptions Some are turning to e-commerce Some marketers successfully publishing own magazines Television o For many, TV defines what advertising is – audio visual, color o Send about $65 billion Categories: o Network television – ABC, CBS, National reach, broadcast with affiliates across US Cable television Reaches individuals with cable subscription Video on demand capability Syndicated Television – original programing on network then rebroadcast on off network; no longer on primetime Off-network syndication First-run syndication Barter syndication Local television Independent stations, local market Ie parent network is channel 5 – local is my 64 Satellite and closed-circuit television Web/iPod/smartphone TV Over 100 billion video streams annually Ipad emerging as viewing device Advantages of television o Creative opportunities o Coverage, reach, and repetition – reaches over 90% of households in US o Cost per contact – expensive media to get into, but reaches millions o Audience selectivity Narrowcasting – better selection/control to deliver well devised program to select set of audience Disadvantages: o Fleeting message – no guarantee it will be seen/heard o High absolute cost o Poor geographic selectivity – ie Kroger wouldn’t post TV ad o Poor audience attitude and attentiveness o DVR/TiVo ad avoidance o Clutter Buying Procedures for Television Advertising o Sponsorship o Participation o Spot Advertising o Choosing a day-part: Morning (most expensive, highest viewership) Daytime Early fringe Prime-time access Prime time (most expensive) Late news Late fringe Measuring TV Audiences: o Sources for network and local audience information Nielson Arbitron – provides network information o Controversy in measurement o DVR effect on “commercial” viewership vs. program viewership o Television households – number of households in a market owning a TV o Households using a TV (HUT) o Program rating – percentage of TV households in a market that are tuned to a program during a time period o Program Rating = TV households tuned to a program / Total TV households in the market o CSI Rating = 19,500,000 / x = 20 Rating o Share of audience – proportion of households using TV (HUT) in a specific time period that are tuned to a program o TV households tuned to a program / Total TV households Future of television o Interactive era o DVRs increase viewer satisfaction o Increase in direct broadcast by satellite o