Download Investigation of Media Efficiency for Real Estate Advertising

Department of Infrastructure
Section of Building and
Real Estate Economics
Kungliga Tekniska Högskolan
Master of Science Thesis No. 310
___________________________________________
Investigation of Media Efficiency for Real Estate
Advertising
________________________________________________________________________
Author:
Thesis Supervisor:
Yuliya Zharkova
Kurt Psilander
Stockholm 2005
Acknowledgements
This thesis was written in order to fulfil the requirements for the award for M.Sc. degree
in Real Estate management at the Royal Technical University, Sweden. I want to
congratulate the almighty of God who gave me chance to receive this education and
strength to complete all needed requirements.
I am very grateful for my supervisor, Kurt Psilander for his participation in my
professional growth, for giving me right direction of establishment in my life, for his time
and advices. Many thanks to Medeleine Nobs for giving me opportunity to realize my
knowledge in practical issue, for providing me with materials and devoting her time. Also
many thanks to Åke Gunnelin for his participation in my thesis writing. Thanks to the
Swedish Institute, and Camilla Wristel, for supporting my living in Sweden during 1,5
year. Thanks to all representatives of Metro Stockholm, Hus and Hem, Radio MTG and
OMD agency for sharing their time and experience with me.
Thanks to my beloved for believing in me and giving me inspiration in the hard time.
Thanks to all friends for being with me and making staying in Sweden wonderful and
unforgettable period of my life.
Yuliya Zharkova
December 2005.
MASTER OF SCIENCE THESIS No
Department of Infrastructure
Section of Building and Real Estate Economics
_____________________________________________________________
Title:
Investigation of media efficiency for Real Estate advertising.
Author:
Yuliya Zharkova
Supervisor: Kurt Psilander
Keywords: Media, efficiency, media mix, advertising, buyers, apartments,
___________Skanska.___________________________________________
Abstract
Advertising is an important element of marketing mix. It can be used to create images
and symbolic appeals for a company, it has ability to communicate with a consumers in a
certain way in order to reach the desired result. There are many definitions of advertising,
the most common for understanding from them is:
Advertising is defined as any form of non-personal communication about an
organization, product, or idea by any identified sponsor (George E. Belch, Michael A.
Belch).
According to the paper ”Advertising experiment at the Campbell Soup Company”
O.Eastblack and G. Rao, 1989 which made a revolution in providing practical guidance
for specific advertising decisions, it was derived from 19 experiments results that
advertising budget and execution style of the ads has little or almost no impact on the
payoff, while copy strategy, media selection, media mix and targeting more often
produce a substantial payout. The finding of the most effective media for ads placing is a
general problem all companies face with. New media seems to be added almost daily,
the existing media are constantly being transformed, and consumer’s response to both new
and existing vehicles isn’t constant either. So, the media planners choice become more
and more complicated. With the increasing the media options, advertisers now expect to
see the detailed, quantifiable results for their marketing and advertising efforts that
demonstrate a positive return on their investments. They want to know which elements of
their marketing plan helped achieve their goals in the most efficient manners and which
did not, obtaining these results allow them to allocate their budgets on an ongoing basis
accordingly. According to the increased interest from the advertisers to see how their
spent money contribute to the payoff, the aspect of marketing accountability became more
advanced and important. There are new criteria of media efficiency nowadays. This
paper will outline some of them on the “Skanska” development company example.
Besides, there are some factors which affect media choice, impacts of which also will be
discussed in this paper.
Summary
This paper discusses the most efficient media vehicles for placing real estate
advertising of Skanska company, provides characteristics of using media vehicles and
advertising policy of the company. The most relevant media mix was determined by
calculation the indexes of media efficiency according to the latest American research in
this field. It was determined that Internet awareness about Skanska is sixteen times
higher than awareness from advertising in local newspapers. According to Return on
Investment index Internet is the most efficient media to use.
The right choice of efficient media depends mostly on target group. In order to know
what is the media preferences of Skanska target audience the questionnaires was sent to
100 buyers of company’s apartments. According to the results of questionnaires it was
determined that target audience media preferences are: Internet, Hem net, most of the
buyers were using this media while looking for their apartments. Next media which is
most commonly used by customers is Hus and Hem, specified real estate ads newspaper.
And the third media which can be used while looking for apartments is Dagens Nyheter.
Thus, Internet, Hus and Hem and Dagens Nyheter was recommended to Skanska as the
most relevant media mix to use. Advertising in Metro Stockholm and Radio MTG, which
have been using during 2005, is more contribute to the brand awareness and positioning in
the minds of customers, and payoff of them takes time. Using of these media is also
desirable.
Contents
1. Introduction................................................................................................1
1.1 Background and Problem Formulation ..................................................................... 1
1.2 Objectives of Study ................................................................................................... 2
1.3 Methodology ............................................................................................................. 3
2. Theoretical framework...............................................................................4
2.1 The definition of advertising company and its steps .................................................. 4
2.2 Characteristics of the Media Vehicles and Measuring their Audience ...................... 4
2.3 Media Plan.................................................................................................................. 7
2.3.1 Media objectives.................................................................................................. 8
2.3.2 Media strategy ..................................................................................................... 9
2.3.3 Media selection.................................................................................................. 10
2.3.4 Media efficiency................................................................................................ 11
2.3.5 Defining media vehicle and buying media........................................................ 12
3. Media efficiency measurements...............................................................13
3.1 Indexes of media efficiency...................................................................................... 13
3.2 Latest research of media efficiency.......................................................................... 15
3.3 Media effectiveness accountability .......................................................................... 18
3.3.1 Accountability begins with understanding the consumer.................................. 18
3.3.2 Measuring accountability. ................................................................................. 19
3.3.3 Important points in marketing mix modelling:.................................................. 21
3.3.4. Practical issues of advertising accountability................................................... 21
4. Advertising Policy and Media Vehicles of Skanska ..............................24
4.1 Advertising policy of Skanska ................................................................................. 24
4.2 Characteristics of media vehicles used by Skanska during 2005 ............................. 25
4.2.1 Metro Stockholm ............................................................................................... 25
4.2.2 Metro Hus and Hem .......................................................................................... 28
4.2.3 Radio MTG........................................................................................................ 30
5. Characteristic of Skanska media plan ...................................................34
5.1. Skanska media objectives........................................................................................ 34
5.2 Skanska media strategy ............................................................................................ 35
5.3 Media selection......................................................................................................... 36
5.4 Media efficiency....................................................................................................... 36
5.5 Comments about media vehicles .............................................................................. 36
6. Analysis of Skanska media efficiency ....................................................39
6.1.Cost per thousand (CPM) ......................................................................................... 39
6.2. Return on investment (ROI) .................................................................................... 39
6.3. Efficiency ................................................................................................................ 40
6.4. Awareness- to- Cost Index ..................................................................................... 41
6.5. Analysis of questionnaires answers......................................................................... 43
7. Discussion and Conclusions .....................................................................48
7.1 Comparison of the Media ......................................................................................... 48
7.2 Concluding Summary and Recommendations ......................................................... 49
References ......................................................................................................52
Appendix 1
Appendix 2
Appendix 3
Appendix 4
Appendix 5
List of Tables
1.
2.
3.
4.
5.
6.
Evaluation of traditional major media options……………………………………11
Characteristics of the Skanska media plan………………………………………..37
Media CPM……………………………………………………………………….39
Skanska advertising budget allocation……………………………………………39
Return on investment for two medias, used by Skanska……………………….....40
Efficiency of the media……………………………………………………….......41
List of Figures
1. Media plan………………………………………………………………………….8
2. Characteristics of scheduling methods…………………………………………….10
3. Relationship between advertising awareness and purchase intent………………..14
4. Overall effectiveness of marketing elements……………………………………..16
5. Immediacy of sales impact………………………………………………………..16
6. Impact of media mix………………………………………………………………17
7. Media preferences of consumers………………………………………………….17
8. Purchase funnel model……………………………………………………………19
9. Advertising effect on the marketing investment………………………………….21
10. Effect of the balanced media mix on the investment return………………………22
11. Media contribution throughout the purchase cycle……………………………….23
12. Percentage of each media in total advertising budget…………………………….42
13. Percentage of the total advertising awareness from each media type……………..42
14. Awareness- to- Cost index of each media…………………………………………43
15. Percentage of reading the local newspapers by Skanska customers………………44
16. The most relevant media for looking apartments, determined by customers……...45
17. Relevant media for looking apartments, determined by customers……………….45
18. Less relevant media for looking apartments, determined by customers…………..46
19. Media used by customers for buying their apartments……………………………47
1. Introduction
1.1 Background and Problem Formulation
Marketers in firms of all sizes and in all industries recognize and invest in advertising
as a potential competitive tool. Industry experts point to the fact that company leadership
appreciate that advertising is a key to driving sales and building brand value and market
share. To the average person, however, advertising is much less clearly understood or
valued. The general public’s attitude toward advertising is ambivalent. At best, the
average person sees advertising as amusing, informative, helpful and occasional hip.
Advertising often helps consumers see possibilities and meanings in the things they buy
and in the services they use. It can connect goods and services to the culture and liberate
meanings that lie below the surface. It can turn mere products into meaningful brands and
important possessions. Decades of advertising Coca-Cola helped turned this brand of soft
drink into a nearly universally recognized cultural icon. Now it has enormous cultural
capital and meaning. There are a lot of examples when advertising helps attract attention
to brands and serves marketers as an effective competitive tool. Advertising can be
enormously creative and entertaining , and it can be simply annoying. Advertising plays a
pivotal role in world commerce and in the way we experience and live our lives. It is part
of our language and our culture. It reflects the way we think about things and the way we
see ourselves. It is both communication process and a dynamic business process.
Marketing facilitates the exchange process by careful examining the needs and wants of
consumers, developing a product or service which satisfy these needs, offering it through a
particular place or channel of distribution, and developing a program of promotion or
communication to create awareness and interest. The four Ps-product, price, place and
promotion are elements of marketing mix. Marketers have long recognized the importance
of combining the elements of marketing mix into a cohesive marketing strategy. Many
companies are also recognize the need to integrate their various marketing communication
efforts, such as media advertising, direct marketing, sales promotion, and public relations,
to achieve more effective marketing communication .Nowadays, companies are mowing
toward integrated marketing communications (IMC), which involves coordinating the
various promotional elements along with other marketing activities that communicate with
a firms customers. Advertising can be used to create images and symbolic appeals for a
company, capability that is very important for companies selling products and services
that rare difficult to differentiate on functional attributes. Another advantage of advertising
is its ability to strike a responsive chord with consumers when other elements of
marketing program have not been successful.
The definitions of advertising are interpreted in the literature as:
-According to George E. Belch, Michael A. Belch advertising is defined as any form of
non-personal communication about an organization, product, or idea by any identified
sponsor. The non-personal components means advertising involves mass media that can
transmit a message to large group of individuals. The non-personal nature of advertising
means there is no opportunity for immediate feedback from the message recipient.
- According to (O’Guinn, Allen, Semenik, 2002), advertising is a paid, mass-mediated
attempt to persuade.
- Advertising is an” integral part of twentieth-century consumption” and an “important
form of representation in the contemporary world” (Nava et al.,1997:3-4). As a form of
representation, advertising takes signs and meanings extant in non-advertising culture and
transforms them, creating new representations in juxtaposition with market brands.
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- Advertising can be seen as “dynamic and sensuous representation of cultural
values”((Lears,1994 in Richards et al.,2000:1).
- Advertising can be defined as any paid form of non personal presentation and promotion
of ideas goods or services by any identified sponsor. ( Kotler1994).
The ways in which consumers interpret advertisements can reflect their culturallyderived values and our culturally-learned fantasies and aspirations. Advertising has
become such a feature of daily life in developed market economies that sometimes it
seems as if we hardly notice it.
A few remarks about advertising in Sweden. Entertainment is a frequently used
Swedish advertising form, but imagination is not an important value. The” togetherness”
feature so typical of Scandinavian culture. In all sorts of organization and privet groups,
people tend to get together for meetings in which coffee is always served.
Advertising is a uniquely modern form of communication and it is difficult to find
enlightening parallels from the past. One might infer that Plato would not appreciate
advertising, so as a member of the elite social class he had no need to respect the
imperatives of commerce. Aristotle’s view on advertising might be liberal, in the sense
that advertising would be seen as but one of the challenge individuals must face in the
world. By coming to a moderate accommodation with advertising one reaches an ethical
standards that is personal to oneself. Another more contemporary liberal view came from
John Stuart Mill, who thinks that advertising is one form of free expressions that should
not be regulated. Perhaps Mill would regarded advertising as a tyranny of the majority,
because it takes the ordinary person’s experience of daily life and reflects it back bathed in
the warm glow of consumption.
Nowadays billions of dollars are invested in advertising industry. The more common
tool of the marketing it becomes, the more difficult for advertisers to choose right kind of
media.
As soon as advertisers think they have a grip on the variety of media available to them,
some exchange makes it even more obvious that they don’t. New media seem to be added
almost daily, the existing media are constantly being transformed, and consumer’s
response to both new and existing vehicles isn’t constant either. So, the media planners’
choice becomes more and more complicated. Such changes are taking place: televisions
will soon offer up to as many as 500 channels on an interactive basis, allowing to
consumer to control their own times of exposure and perhaps offering them the option to
pay to view commercial-free programming. Advertisers are exploring the possibility of
lightning up the night sky with ads placed in the stars. Consumers may soon be able to
order through the interactive Yellow pages without ever taking a live person. Advertising
on Internet, a computer network with millions of users worldwide, is on the rise. So, what
is the best way to reach one’s audience?
Many companies face with this problematic question, and Skanska investment
development company in Sweden, is not exception. My paper will be devoted to
investigation the efficiency of the advertising media placement, which Skanska uses, and
indication the most efficient types of the media. Analysing and determining the most
efficient media investment will help to improve Skanska’s marketing communication and
profitability of the whole company.
1.2 Objectives of Study
The objective of this study is to give explanation of different types of the advertising
media, including their advantages and disadvantages. Investigate the media plan and it’s
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parts. To define criteria of evaluation the effectiveness of the media types. In addition the
objectives are:
-determine advertising strategy of the Skanska company and it’s trends;
-determine media types which Skanska uses;
-investigate the target audience’s media preferences by sending them questionnaires;
-calculate indexes of effectiveness each media used;
-analyse effectiveness of each media and discuss the most relevant media mix for
Skanska company.
1.3 Methodology
This paper is based on the literature analysis and own investigation. Theoretical
background was derived from advertising management books, the latest articles and
editions. In order to fulfil the aim of the work to propose the most relevant media mix,
reductive research strategy was used. It enables to use many sources of advertising and
reduce the number to the most effective one. Case study methodology, fieldwork in the
form of data collection method was chosen in order to know target audience media
preferences. Also, triangulation method, like one of the case study methods was used,
which assumes using several methods to gather data about one phenomena: by sending
questionnaires to customers and collecting secondary data from newspaper’s publishing
offices. Interview with advertising agencies stuff, media promotion office representative,
newspapers authorities were used like a case study techniques. For making interview and
collecting true information which was used for deriving the final result, questionnaires
were made. In order to place effectively advertising, the target audience’s media choice
should be determined. It was done by arranging short questionnaires on Swedish with
alternative questions to choose the media, and sent to the 100 buyers of Skanska
apartments in such projects as: Gashåga Pirar Lidingo, Silverdal Trädgårdar in
Sollentuna, Körsbärsbacken in Vallentuna, Utblicken Tomsvalan in Tyreso, Brunnsgården
in Sundbyberg, it was received 64% of answers. Results were analyzed and media
preferences of the customers from four projects were determined. This data was used for
proposition the most relevant media mix for Skanska company. In addition to these
results, comparative analysis of the media used in 2005 by Skanska company according to
certain media characteristics was done. All results are assembled and represents in the
figures of this paper.
Limitation of the study: this research provides practical guidelines for improving
Skanska company advertising strategy. It is relevant for 2005 year media used by Skanska
in Sweden, Stockholm. The improving recommendations which were proposed in the
summary of this paper are relevant for next year.
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2. Theoretical framework
2.1 The definition of advertising company and its steps
In order to exist today in a such intense market it is not enough anymore just to develop
a good product, pricing it effectively and make available to the potent ional buyers.
Companies must to communicate effectively with their customers. For this purpose
advertising campaign should be arranged. According to (O’Guinn, Allen, Semenik, 2003):
advertising campaign is a series of coordinated advertisements and other promotional
efforts that communicate a reasonably cohesive and integrated theme. Successful
advertising campaigns can be developed around a single advertisement placed in multiple
media, or they can be made up of several different advertisements with a similar look,
feel, and image.
When the company decided to make an advertising company, marketing management
must take five important decisions ( Kotler1994):
First step in developing an advertising company is to set advertising objectives, which
are: inform, persuade and remind customer about product.
Next step is the making advertising budget. The role of advertising is to affect demand
for product. Four commonly used methods for setting and advertising budget:to spend
what the company can afford, the percentage of sales method, competitive parity method,
the objective and task method which is most logical budget setting method, where
company set its budget based on what it wants to accomplish with promotion.
Third step is creating the advertising message. Studies show that creative advertising
message can be more important than the number of dollars spent. Advertisers go through
three steps to develop a creative strategy: message generation, message evaluation,
message selection and message execution. The appeals used in messages should have
three characteristics: they should be meaningful, distinctive and believable. The message
can be presented in different execution styles such as: slice of life, lifestyle, fantasy, mood
or image, musical, personality symbol, technical expertise, scientific evidence and
testimonial evidence. Advertise must also choose a tone, words, format, illustration and
headlines, which is the very important and setting in the mind of the customer.
Next step is the selecting advertising media to carry the message. The major steps in
media selection are: deciding on reach, frequency and impact of the message, then
choosing among media types, different type of the messages may require different types of
the media, selecting specific media vehicles, which is the most used by target group, and
deciding on media timing, whether message will have continuity scheduling evenly within
a given period or pulsing scheduling ads unevenly over a given time period.
Final step is the advertising evaluation. The advertising program should evaluate both
the communication effect and the sales effect of advertising.
2.2 Characteristics of the Media Vehicles and Measuring their Audience
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According to the defined task of my work to determine the most efficient media source,
I will highlight characteristics of the different media types, which is often used by
companies
(O’Guinn, Allen, Semenik2003).
Newspapers.
Newspaper is the medium that is most accessible to the widest range of advertisers. It is
ideally suited to reaching a narrow geographic area and precisely the type of audience
which is desired to reach. Newspapers offer such advantages to advertisers:
-geographic selectivity,
-timeliness;
-creative opportunities;
-credibility;
-audience interest;
-cost.
Like every other media options, newspapers have some significant disadvantages:
-limited segmentation;
-creative constrains;
-cluttered environment;
-short life.
The newspaper has creative limitations, but what the average newspaper does it does
well. If the goal is to achieve a local audience with simple black and white ad in a timely
manner, then the newspaper is the superior choice. Newspapers are categorizes by target
audience, geographic coverage, and frequency of publication. There are categories of
newspaper advertising:
Display advertising: includes headline, body copy, and often illustration. Pre-printedinsert- newspaper: fully printed and ready for insertion into the newspaper. Free –standing
insert-which contains cents-off coupons for a variety of products. Classified advertising:
advertising appears in all-copy messages under categories such as sporting goods etc
( G.Belch, A. Belch 1995).
Measuring newspaper audience ( O’Guinn, Allen, Semenik 2003): the reach of
newspaper is reported as the newspaper’s circulation, which is the number of newspaper
distributed each day or each week. Paid circulation reports the number of copies sold
trough newspaper distribution. Controlled circulation refers to a number of copies of the
newspaper that are given away free. Readership of a newspaper is a measure of circulation
multiplied by a number of readers of a copy. This number provides a total audience figure
on which advertisers base advertising rates.
Magazines.
Magazines have many advantages relative to newspapers, which make them an ideal
print medium:
-audience selectivity;
-audience interest;
-creative opportunities;
-long life.
The disadvantages of magazines as a media choice have to do with their being too
selective in their reach with the recent proliferation of magazines:
-limited reach and frequency;
-clutter;
-long lead times;
-cost.
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Magazines can be categorized by major target audience: consumer, business and farm
publication.
Measuring magazine audience ( O’Guinn, Allen, Semenik 2003): most magazines
based their publishing advertising rates on guaranteed circulation, which is state minimum
number of copies of particular issue that will be delivered to readers. In addition,
publishers estimate pass-long readership, which is additional number of people, who may
see the publication.
Television.
Television presents extraordinary opportunities for advertisers. The diversity of
communication possibilities allows for outstanding creative expression of brand’s value,
and it can be disseminated to millions of consumers, often at a fraction of a penny per
contact.
There are four options for television advertisements: network television, cable
television, syndicated television, local television, satellite.
The specific advantages of this medium are as follows:
-creative opportunities;
-coverage, reach and repetition;
-cost per contact;
-audience selectivity.
Television has great capabilities as an advertising medium, but it is not without
limitations:
-fleeting message;
-high absolute cost;
-poor geographic selectivity;
-poor audience attitude and attentiveness;
-clutter.
Measuring televisions audience ( O’Guinn, Allen, Semenik 2003).
Measurements of television audience identify the size and composition of audience for
different television programming. These measures also set the cost for television time, the
larger the audience or the more attractive the composition, the more costly the time will
be. This information used to measure television audience: Television households-is an
estimate of the number of households that are in a market and own a television.
Households using television, referred as a set in use, is a measure of the number of
households turned to a television program during a particular time period. Program rating
is the percentage of television households that are in a market and are tuned to a specific
program during a specific time period. (O’Guinn, Allen, Semenik,2003):
Expressed as a formula, program rating is:
Program rating=TV households turned to a program/total TV households in the market.
Rating point indicates that 1 percent of all television households in an area were tuned
to a program measured.
Share of audience provides a measure of the proportion of households that are using
televisions during a specific time period and are tuned to a particular program.
Share of audience can be expressed as a formula:
Share of audience=TV households tuned to a program/total TV households using TV.
Radio.
Radio offers to advertisers several options for reaching target audience. The basic split
of national and local radio broadcast presents an obvious, geographic choice. More
specifically, though advertisers can choose among the following categories, network,
syndication, and AM versus FM. There are three basic choices in radio advertising: local
spot radio advertising, where advertisements place directly with individual stations and
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national spot radio advertising, which offers the opportunity to place advertising in
national radio programming.
Radio has some distinct advantages over newspapers, magazines, and television
(O’Guinn, Allen, J. Semenik 2003):
-cost;
-reach and frequency;
-target audience selectivity;
-flexibility and timeliness;
-creative opportunities.
Radio also suffers from some severe limitations as an advertising medium:
-poor audience attentiveness;
-creative limitations;
-fragment audience;
-chaotic buying procedures.
Measuring radio audiences: the quantity of radio audience can be derived from several
sources such as Arbitron ratings which covers over 260 local radio markets and print its
results in special newspapers and RADAR( Radio’s All Dimensions Audience Research)
which is also make available in media it’s results.
Internet.
The advertising spending is growing to the high-profile internet sites. Marketers
discovered using the internet as a key component of their advertising campaign. But
internet will obviously not replace all other forms of advertising.
The advantages of internet advertising are ( O’Guinn, Allen, J.Semenik2003):
-target market selectivity;
-tracking;
-deliverability and flexibility;
-interactivity;
-cost;
-integration.
The top advertisers, based on both impressions and the most-viewed banner ads, are
either exclusively Web organizations or those with significant Web presence. This will
have to change internet advertising to really challenge traditional media.
Besides the most important types if the media, which were mentioned above, there are
some kind of support media, which include outdoor advertising, transit advertising,
Yellow Page advertising and can be used by marketers as a effective vehicles of media.
Important fact which companies have to take into consideration while making
advertising campaign that the final consumer decision affects not only by advertising with
effective media type use, but also it influences by peer groups, lifestyle, attitudes and
believes of customers.
2.3 Media Plan
The wealth of media options requires incredible attention to detail in the mediaplanning process. A media plan specifies the media in which advertising message will be
placed to reach the desired target audience. ( O’Guinn, Allen, J. Semenik 2003). A media
plan includes objectives, strategies, media choices and a media schedule for a placing a
message (See figure below) .
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The Media plan
1.Media objectives
-reach the target audience;
-geographic scope of media placement;
-message weight.
2. Media strategies.
-reach and frequency;
-continuity: continuous, flighting, pulsing;
-audience duplication;
-length and size of advertising.
3. Media choices
-media mix: concentrated, assorted;
-media efficiency: cost per thousand(CPM),
cost per thousand target market(CPM-TM),
cost per rating point(CPRP);
-competitive media assessment.
4.Media scheduling and buying
Figure 1: Media plan Source: Tomas C. O’Guinn, Chris T. Allen, Richard J. Semenik
2003.
2.3.1 Media objectives
Media objectives set specific goals (Tomas C. O’Guinn, Chris T. Allen, Richard J.
Semenik 2003) for media placement: reach the target audience, determine the geographic
scope of placement, and identify the message weight, or the total mass of advertising
delivered against a target audience. The first and the most important media objective is
that the media chosen reach the target audience, which can be demographic, geographic,
or based on lifestyle or attitude dimensions. Another critical element in setting advertising
objectives is determining the geographic scope of media placement. It is merely enough to
identify media that covers the same geographic area as the advertiser’s distribution
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system. When certain geographic market demonstrates high purchasing tendencies, then
geo-targeting should be used. Geo –targeting is the placement of ads in geographic regions
where higher purchase tendencies are evident. I think it can be appropriate for attracting
more customers in real estate business. The final media objective is the message weight,
the total mass of advertising delivered. Message weight is typically expressed in terms of
gross impressions, which is represents the sum of exposures to the entire media placement
in a media plan.
2.3.2 Media strategy
The media strategy is expressed in decisions made with respect to a media vehicle’s
reach and frequency, the continuity of media placement, the audience duplication, and the
length and size of advertisements. Developing media strategies involves matching the
most appropriate media to this market by asking the question, ”Trough which media and
media vehicles can I best get my message to prospective buyers?” the issue here is to get
coverage of the market. The goal of media planner is to extend media coverage to as many
of the members of the target audience as possible while minimizing the amount of waste
coverage. First element in media strategy is Reach- refers to the number of people or
households in a target audience that will be exposed to a media vehicle or schedule at least
one time during a given period of time. Frequency is the average number of times an
individual within a target audience is exposed to a media vehicle in a given period of time.
An important measure for media planners related to both reach and frequency is gross
rating points (GRP) (George E. Belch, Michael A. Belch 1995) shows how many
potential audience members might be exposed to a series of commercials. GRP is the
product of reach times frequency (GRP=r*f).The GRP number is used as a relative
measure of the intensity of one media plan versus another. David Burger, vice president
and director of research at the Foote, Cone and Building advertising agency, has
determined that 2500 GRPs are likely to lead to approximately a 70 percent probability of
high awareness, while 1000 to 2500 would be about 33 percent likely, and less than 1000
would result in almost no likelihood.(George E. Belch, Michael A. Belch 1995)
Effective frequency is the number of times target audience needs to be exposed to a
message before the objectives of advertisers are met. It is possible to be exposed to more
than one media vehicle an ad, resulting in frequency. To determine effective frequency,
(George E. Belch, Michael A. Belch 1995) one must consider marketing factors, message
factors, and media factors. If the consumer exposed once is the reach, unduplicated reach.
Some people would see the ad twice, it would be duplicated reach. Both unduplicated and
duplicated reach figures are very important. Unduplicated reach indicates potential new
exposures, while duplicated reach provides an estimate of frequency. (E. Belch, A.Belch
1995).
Effective reach is the number or percentage of consumer in the target audience that are
exposed to an ad some minimum numbers of times. The minimum number estimate for
effective reach is based on a determination of effective frequency (George E. Belch,
Michael A. Belch1995).
Next element of media strategy is continuity.
9
Continuity
Advantages:
serves as a constant reminder to a consumer; covers the entire buying
cycle; allows for media priorities (quantity discounts, preferred locations etc.)
Disadvantages: higher cost; potential for overexposure; limited media allocation
possible.
Flighting
Advantages: Cost efficiency of advertising only during purchase cycles; may allow for
inclusions of more than one medium or vehicle with limited budgets;
Disadvantages: Lack of awareness, interest, retention of promotional message during no
scheduling times; vulnerability to competitive efforts during no scheduling times.
Pulsing
Advantages: All of the same as the previous two methods;
Disadvantages: Not required for seasonal products (or other cyclical products).
Figure_2 Characteristics of scheduling methods. Source: George E. Belch, Michael A.
Belch 1995.
Continuity is the pattern of placement of advertisements in a media schedule.
Continuous scheduling is a pattern of placing ads at a steady rate over a period of time.
Flighting is another media scheduling strategy, is achieved by scheduling heavy
advertising for a period of time, usually two weeks, then stopping advertising for a period
of time, only to come back with another heavy schedule. Pulsing media strategy assumes
scheduling continuously in a media over a period of time, but with periods of much heavy
scheduling.
Length and size of advertising. Some researches show an increase in recognition scores
of print advertising with increasing image size. It calls ”square root law”, that is, ”the
recognition of print ads increase with the squire of the illustration”. The decision about the
length or size of an advertisement depends on the creative requirements for the ad, the
media budget, and the competitive environment, within which the ad is running.
2.3.3 Media selection
The next stage of the media planning process focuses on media selection (See table
below).
10
Table 1: Evaluation of traditional major media options. Source:( Tomas C. O’Guinn,
Chris T. Allen, Richard J. Semenik 2003).
Characteristics
Broadcast
TV
Cable
TV
Radio
Local
National
Frequency
M
H
H
M
H
H
H
L
H
Audience
Geographic
M
L
H
M
H
H
Involvement
Acceptance
Audience
data
Clutter
Creative
flexibility
L
M
M
M
M
L
L
M
L
H
H
H
H
H
H
Per contact
L
L
L
Absolute
H
H
M
cost
H=High; M=Moderate; L=Low.
Newspaper
Magazines
Direct
Mail
Outdoor
Transit
Directory
H
M
L
H
L
M
H
L
M
M
M
L
H
H
L
H
L
H
L
H
M
L
H
L
M
L
L
M
L
H
H
M
M
M
M
M
M
L
L
L
H
L
Cost factors
M
M
M
H
H
H
L
M
L
M
M
M
Reach
H
L
L
H
M
L
Selectivity
L
H
H
M
Audience reactions
M
H
H
M
M
H
M
L
This table gives general ratings for the major media and can be used for setting up
effective media mix. Media mix-is the blend of different media that will be used to
effectively reach the target audience. There are two types of media mix: concentrated
media mix, which focuses all media placement dollars in one media, and assorted media
mix, which employs multiple media alternatives to reach target audience. The
disadvantages and advantages of different media vehicles were mentioned above.
2.3.4 Media efficiency
Because it is so hard to measure the effectiveness of advertising and promotion in
general, it also difficult to determine the relative effectiveness of various media or media
vehicles. The media planners must usually guess at the impact of these alternatives.
Because of these problems, not all media decisions are quantitatively determined. And
even the results are quantitative, it is important to consider specific characteristics of the
media as the vehicle in the decision.
Each medium under consideration in a media plan must be scrutinized for the
efficiency with which it performs. A common measure of media efficiency is cost per
thousand (CPM), which is the dollar cost of reaching 1000 members of an audience using
a particular medium. The CPM calculations can be used to compare the relative efficiency
11
of two media choices within a media class or between media class. (O’Guinn, Allen,
Semenik, 2003) CPM= (cost of media buy/total audience)*1000
Cost per thousand-target market (CPM-TM) = (cost of media buy/target
audience)*1000.
An advertisement with a lower CPM-TM and CPM will be better choice for marketer.
Cost per rating point (CPRP) calculation provides a relative efficiency comparison
between media options.
CPRP=dollar cost of ad placement on program/ program rating.
Program rating is equivalent to 1 percent of the target audience. This kind of efficiency
assessment is based solely on cost and coverage. When media efficiency measures such as
CPM and CPM-TM are combined with an assessment of media objectives and media
strategies, they can be quite useful (Tomas C. O’Guinn, Chris T. Allen, Richard J.
Semenik 2003).
When a target audience is narrow and attracts the attention of several major
competitors, it is needed to asses competitor’s spending, the share of voice calculations
can be used, (Tomas C. O’Guinn, Chris T. Allen, Richard J. Semeni2003) which show one
advertiser’s brand expenditures relative to the overall spending in a category.
Share of voice=one brand’s advertising expenditure in a medium/total product
category advertising expenditure in a medium. This can be done to determine a brand’s
share of product category spending on particular advertising medium.
2.3.5 Defining media vehicle and buying media
When an overall media plan is completed, the focus must turn to media buying, which
entails securing the electronic media time and print media space specified in a schedule.
Next issue which has to be decided is which type of media better to choose? Even great
advertising can’t achieve communications and sales objectives if the media placement
misses the target audience. Despite the many opportunities that the new media options
offer, print and broadcasting media will likely for the foundation of most advertising
campaigns for years to come. Both newspapers and magazines have inherent capabilities
and limitations that advertisers must take into consideration in building a media plan.
Describing of characteristics different media type see Chapter 2.2.
12
3. Media efficiency measurements
3.1 Indexes of media efficiency
There are several common methods of measuring media efficiency.
Cost per thousand (CPM), which is dollar cost of reaching 1000 members of an
audience using a particular medium. It can be used for comparing relative efficiency of
two media between media classes.
CPM =cost of media buy/total audience)*1000.
Calculation CPM has some of its disadvantages:
The cost per thousand may underestimate or overestimate the actual cost effectiveness.
Overestimating occurs because there is situation always when waste coverage is
inevitable. The circulation exceeds the target market. Even when during calculation we
received the low cost of reach audience, they can be not appropriate to our target audience.
For this purpose better to use CPM-TM (target market). Which can be derived:
(CPM-TM)= cost of media buy/target audience)*1000.
Advertising with a lower CPM and (CPM-TM) will be better choice for marketer, but
a medium with a much higher cost per thousand may be a wiser to buy if it is reaching
more potential buyers.
The actual reach can be underestimated, because magazine advertising sellers have
argued for years that they want to know true circulation or readers per copy. This will
include a pass-along rate, estimating the number of people who read the magazine without
buying it. Consider a family which has 3 members, and they all will read one newspaper,
so the actual reach should be multiplied by 3.
In additional to the potential for over-or underestimate of cost efficiency, CPMs are
limited in that they make only quantitative estimates of the value of media. There are
many differences of the media which show their other qualities.
Cost per rating point(CPRP)-calculations provides a relative efficiency comparison
between media options.
CPRP=dollar cost of ad placement on program/program rating.
Program rating is equivalent to 1 percent of the target audience. This kind of efficiency
assessment is based solely on cost and coverage.
When a target audience is narrow and attracts the attention of several major
competitors, it is needed to asses competitor’s spending, the share of voice calculations
can be used, which show one advertiser’s brand expenditures relative to the overall
spending in a category.
Share of voice=one brand’s advertising expenditure in a medium/total product
category advertising expenditure in a medium. This can be done to determine a brand’s
share of product category spending on particular advertising medium.
Over the last few years, Magazine Publishers of America has commissioned and
conducted numerous studies that demonstrate the accountability of print advertising in
driving sales of print-advertised products and services. The media mix modelling study,
which was carrying by American association of Publishers, Hudson River Group proved
the magazines effectiveness in the marketing mix across a variety categories and brands.
13
In their latest comprehensive study “How Media Measures Up” they used two
measurement to express effectiveness: return on investment and efficiency.
Return on investment (ROI) - is the incremental profit driven by an activity relative
to the cost of that activity, expressed in percent/index. ROI is based on the investment in
each medium individually. Return on Investment1 can be determined like actual or
perceived future value of an expense or investment. Ad campaign ROI is a metric that
attempts to determine what the advertiser receives in return for the cost of the advertising,
usually in terms of new sales. Advertisers want the amount of money made to exceed the
money spent, ROI is the figure which depicts this amount.
Efficiency is defined the percent of incremental advertising volume in a medium
relative to the percent of spending in the medium, expressed as a percent/index. In order to
examine the percent of volume contributed by media relative to the percent of budget
invested in the medium, efficiency is based on only cases with combinations of the media.
Awareness to cost index. According to the benchmark study of advertising awareness
from Millward Brown2, American advertising competitive reporting, there is a measure for
dollar- to- dollar comparison in delivering by media advertising awareness level.
Awareness cost index is derived like dividing total percent of awareness attributed to
each medium by the percent of spending. Millward Brown in his studying was analyzing
the relationship between awareness and purchase intent. He proved that 61% of analyzing
by him brands showed a relationship between a change in advertising awareness and a
corresponding change in purchase intent. See figure_3 below:
Figure 3: Relationship between advertising awareness and purchase intent. Source: A
Benchmark Study on Advertising Awareness from Millward Brown.
The author proved that using a media mix is more effective than using one media, he
calls it Media-Multiplier Effect. Millward Brown concluded that in a media mix reaching
a certain level of awareness will cost less than reaching the same level of effectiveness
using one media type. The author discovered that in the durable goods category, like real
estate industry, magazines deliver on the dollar-for-dollar basis, more than four times as
much advertising awareness as television. The awareness-to GRP index reveals that GRP
1
2
http://www.adserversolutions.com/adserver/adterms3.html
http://www.magazine.org/content/Files/Millward%5FBrown%5FStudy.pdf
14
for GRP magazines deliver significantly higher advertising awareness than television. In
fact the relationship is almost three to one.
There is no greater cliché in media planning today than “you get what you pay for”.
There is behavioural model, which explains how CPM relates to value. In print media
these have focused on soft measures of reader involvement, like “one of my favourites”,
or highly inferential measures of value-to-the reader such as average price paid.
Recent proposals for an “Involvement Index” have also argued that reading time is a
good measure for involvement. However, scientists noted, reading time is not good neutral
with regard to editorial format. Magazines with more pages, or with more words and
fewer pictures, will generate higher reading times, but not necessarily higher levels of
involvement.
More problematic still have been the recent attempts to use ABC’s newest statistic,
average price paid, as a proxy for quality of reader involvement. While making an
experiments it became clear that price paid variables bear no discernible relationship to
any available measure of involvement or of reader value to the advertiser.
American researchers believe the most useful universal model of media value relates
directly to the greater or lesser probability of the ad itself being seen by the consumer.
Such a model called “Quads” has been developed for television but also can be applied
for print media.
The Quads approach can provide a behavioural model of communication value for
print media.
It can analyze comparable estimates of Loyalty (number of issues read of average
reader) and Persistence (percent pages exposed by an issue reader).
A Quad-type analysis for print media produces something even more useful for
planning: the average issue reach and frequency patterns of the average ad. It can
distinguish ad readers from issue readers, (thus providing an estimate of the reach of the
advertising campaign, not the magazine schedule), and it can show the distribution of
repeat exposures to the advertising carried in the issue (thus providing a better estimate of
the probability that an ad will actually be seen by a reader.) These are important
dimensions of media value not reflected in a CPM.
Development of the media strategy involves a number of factors. On of the researcher,
Ostrow, may be right when he calls “this process an art rather than a science”, as so much
it requires going beyond the numbers.
3.2 Latest research of media efficiency
Marketing Management Analytics (MMA)3, a leader in the field of predictive sales
modelling , by conducting a quantitative analysis proved that those brands that spent a
higher percent of their marketing budgets on advertising, as evidenced by their media
spending (vs. promotion), received a higher return on their overall marketing investment.
While determining the individual effectiveness of media mix MMA , by calculating the
percent of incremental sales volume attributable to each element and dividing by actual
spending allocated to marketing and media drivers , proved the following fact. Behind
trade promotion, magazine advertising was more effective than any other element in the
marketing mix. Among media, magazines were approximately 40% more effective than
TV, and 60% more effective tan radio.
3
http://www.magazine.org.
15
Figure 4: Overall effectiveness of marketing elements. Source: Measuring Magazines
Effectiveness.4
MMA also quantified the synergy of magazine and television advertising working
together and generating incremental sales, it is shown on the figure 5 below.
Figure 5: Immediacy of sales impact. Source: Measuring Magazines Effectiveness.
MMA analyzed the media allocation by quintiles to determine brands with the lowest
vs. the highest ROI.
MMA calculated the average media effectiveness of two different media mix scenarios.
The results demonstrate that for those brands with a higher percent of magazines in the
media mix, total media effectiveness was substantially higher5. It is evident on the figure
6 below.
4
5
http://www.magazine.org/content/files/marketing_mix.pdf
http://www.magazine.org/Advertising_and_PIB/Accountability/
16
Figure 6: Impact of media mix. Source: Measuring Magazines Effectiveness
The findings of the MMA study clearly demonstrate that magazine advertising is
effective at improving marketing ROI, and that magazines play a synergistic role in
combination with the other elements of the overall marketing and media mixes.
In today’s cluttered marketplace, consumers are bombarded by countless information
sources. According to Media Choices 2000 - a Multimedia Involvement Study which was
carrying by Erdos & Morgan the media preferences of consumers are following6:
Figure 7: Media preferences of consumers. Source: Multimedia Involvement Study 2000.
6
http://www.magazine.org/content/files/media_choices_topline.pdf
17
Conclusions
From this research it is evident that print media is more contribute to the marketing
investment than other media vehicles. This latest research can be used like base for
improvement media budget allocation.
3.3 Media effectiveness accountability
There’s a new accountability in marketing that hasn’t been there in the past. Companies
beginning to realize that it’s important for their marketing strategies to be aligned with
their business strategies. With corporations under increased pressure to show that every
dollar they spend delivers result, marketing expenditures now being held to the same level
of accountability as other investments. Such increasing highlight of media profitability
control can be explained by the fact that consumers are more difficult to reach now than
ever. The reasons for this include: increasing media options available to consumers,
technologies that have been designed to suit consumer’s growing desire to be in control of
what they see and hear have given consumers the option to reject advertising message.
There are plenty of the definitions for the accountability. And it is rather controversial
topic, ultimately “accountability” means insuring that advertising performance achieves
results-whatever the desired objectives might be.
3.3.1 Accountability begins with understanding the consumer
Making effective marketing decisions requires understanding how the consumer
processes information as he or she moves toward a purchase decision. To that end,
several organizations have developed purchase decision models7 (also called purchase
funnel models) that show how marketing and advertising efforts affect consumer attitudes
and behaviour. The model below, an example supplied by Dynamic Logic, represents one
framework for illustrating the consumer-advertising interaction during the purchase
process, but all such models typically recognize the following sequences:
-consumers have brand awareness levels and perceptions that precede advertising
marketing efforts (except for new products);
-consumers must associate a message with a brand if that message is to influence
consumer attitudes and behaviour toward the brand;
-a positive attitude toward a brand precedes and contributes to purchase consideration.
Each phase of the consumer decision-making process offers advertisers opportunities to
gauge how well their advertising message is being received and then adjust their plans
based on findings.
7
www.magazine.org/accountability
18
Figure 8: Purchase funnel model8 Source: A guide to measure ROI and ROO across the
media 2005.
3.3.2 Measuring accountability.
Even as the consumer decision-making process provides advertisers with a framework
for looking at accountability, ultimately advertisers need to quantify results. The major
ways results can be measured are by looking at:
Proof of Advertising Performance, which tracks the delivery of advertising against
expected goals.
Return on Objective (ROO), which examines marketplace response for advertising and
marketing programs against preset objectives.
Return on Investment (ROI), which measures the relative efficiency of various
marketing tactics (such as advertising promotion mix, media mix, scheduling options, etc.)
against marketplace performance (typically reported as sales results).
Measuring Proof of Advertising Performance:
8
http://www.magazine.org/Advertising_and_PIB/Accountability/
19
The measurement of advertising performance is essentially an audit function, which
tracks whether advertising ran when and where was expected and whether advertising
delivered the projected audience or circulation. It provides answers to questions, such as:
Did an advertiser’s ads actually run? Did the ads run in the scheduled time
periods/issues? Did the ads run in all the anticipated markets?
In determining whether advertising ran as expected, advertisers examine actual or
reported delivery by reviewing schedules and/or a physical representation of the medium
(tapes, copies, etc.).
In assessing overall delivery, advertisers and agencies take the schedule that ran and
examine the audience/circulation, looking at: Number of Announcements or Insertions x
Audience or Circulation = Actual Delivery.
They then compare the actual delivery to expected goals.
Measuring ROO.
When measuring return on objective (ROO), the basic question asked is “Were my
marketing/advertising goals achieved?” The measurement of ROO can include a variety of
objectives, such as:
Changes in Consumer Attitudes, based on tracking attributes that could include
awareness, message association, brand favourability and purchase intent.
Shifts in Consumer Behaviour or Marketplace Response, based on examining metrics,
such as: sales, coupon redemption rates, website visits, amount of store traffic,
recommendations to others, phone responses. Surveys are commonly used to measure
ROO.
Measuring ROI
Measuring results such as changes in consumer attitudes and reported behaviour are
important, but often the foremost result that interests advertisers is return on investment or
“ROI,” which examines questions such as: What did I get back (“return”) for the money I
was asked to spend? Am I making or losing money for each dollar invested?
What is the relative payback (or loss) of each element that I am using? Techniques such
as marketing mix modelling were introduced in the 1990s and have expanded to meet the
increased ROI measurement demand from marketers. As part of the process, marketing
mix modelling quantifies the contribution and efficiency of each marketing element
relative to incremental sales, while controlling for and measuring non marketing elements
that influence sales, such as weather, economy, etc. Media mix modelling, a subset of
marketing mix modelling studies, includes only the influence of advertising media, not the
full marketing mix, on results.
The inputs for marketing mix modelling can include both incremental and baseline
sales drivers, incremental sales, baseline sales. Incremental sales drivers can be adjusted
by marketers to influence sales and include: magazines, TV, newspapers, radio, outdoor,
promotions, creative messages. Baseline drivers include purchase seasonality, competitive
activity, distribution, public relation, word of mouth. Incremental sales are attributable to,
or a result of, the specific marketing elements being analyzed in the marketing mix.
Baseline sales or “non marketing influenced sales” are not directly attributable to
marketing.
A marketing mix modelling requires such data: three years of marketing activity data,
amount of money spent for each activity, GRPs/TRPs, when available.
Companies that fully implement marketing mix modelling into their approach change
the way they plan, implement and assess their marketing programs. Changes in their
marketing can include: amount of overall marketing investment, allocation among
marketing elements, media allocation. Companies who use marketing mix modelling have
20
cited a range of benefits, including more efficient promotions and advertising, improved
margins, the ability to out-promote the competition.
3.3.3 Important points in marketing mix modelling:
- Marketing mix modelling is based on historical data;
-Marketing mix modelling as a technique does not tell a marketer what to do, it provides
insights that can be used in guiding future actions;
-Modelling provides better understanding regarding marketing and media elements’
ability to work more or less effectively based on scheduling patterns;
-The relative contribution of each marketing element is a function of both its effectiveness
and the amount of findings behind the marketing;
-Larger brands receive a significant advantage, because of its scale, the larger brand need a
smaller increase in sales to recoup its advantage outlay;
-Saturation occurs at different points for different media and depends on the size of the
relevant target and how much weight applied against it;
-Marketing impact varies for the different elements: some elements have longer lasting
effect, while for others, effect erode more quickly;
-Marketing mix alone is not always the main reason for its performance-other factors
related to the brand and its particular circumstances can affect results, like, creative
messaging or competitive activity.
3.3.4. Practical issues of advertising accountability
Advertising usually works better than expected. One of the most important findings
from accountability research is that it demonstrates that advertising generally works—it
effectively influences consumer attitudes and behaviour. In a study entitled “Measuring
the Mix,”9 researchers from Marketing
Measurement Analytics (MMA) analyzed 140 brands. Results demonstrated that brands
that spent a higher percent of their marketing budgets on advertising received a ten times
greater return (3.0 versus 0.3) on their overall marketing investment (based on 59 brands
with sufficient data). See the diagram below.
Figure 9: Advertising effect on the marketing investment.
Source: Measuring the Mix, Marketing Management Analytics, 2002.
9
http://www.magazine.org/Advertising_and_PIB/Accountability/
21
A More Balanced Marketing Mix Is Likely to Improve Results.
Accountability studies show that when the marketing mix is allocated among a larger
set of marketing/media elements, results often improve. Another example demonstrating
the benefits of a more balanced media mix was seen in MMA’s media mix modelling
study “Measuring the Mix.”10 This study demonstrated that ROI increased when the
advertising budget was more fully represented across media. In “Measuring the Mix,” a
separate analysis compared the effect of changing the media mix for the same brands over
time.
When five percent of the media mix shifted from television to magazines, average
media effectiveness more than doubled for the same brands.
Figure 10: Effect of the balanced media mix on the investment return. Source: Measuring
the Mix, Marketing Management Analytics, 2002.
Media Saturation Affects ROI.
If a media mix shows saturation (the point at which advertising no longer drives sales),
it shows that allocation to another medium would improve results; in fact, it demonstrates
that there was “wasted money”—money that could have been better used in other media
to grow sales.
Each Medium in the Media Mix Contributes to Results in Its Own Way.
A recent study from Dynamic Logic11 tracked how each of the media studied affected
advertising’s impact at various stages of the purchase process. Their findings stated that
three media studied contributed similarly to increasing brand awareness12:
-TV and magazines were best at advancing ad awareness;
-TV and the Internet were best at aiding message association (which could be a
function of creative effectiveness);
-magazines and the Internet influenced positive brand favourability the most;
-magazines excelled at increasing purchase intent: 64 percent of purchase intent was
attributed to magazine advertising.
10
http://www.magazine.org/content/Files/Accountability
Source: Dynamic logic Cross Media Research, 2004.
12
http://www.magazine.org/Advertising_and_PIB/Accountability/
11
22
Figure 11: Media contribution throughout the purchase cycle. Source: Dynamic Logic
Cross Media Research, 2004.
According to the Figure 11 “Media contribution throughout the purchase cycle”, it is
evident how each of the media type affects consumer purchase behaviour.
As the conclusions, this study showed that four in ten respondents are currently
performing some form of ROI and/or ROO analysis, with nearly 20 percent of respondents
expecting to increase their marketing mix modelling spending. While accountability starts
with proof of performance assessments, ROO and ROI analysis methods take it further,
offering companies valuable insights on how to use their marketing dollars to get the best
results—and ultimately, increase profits.
23
4. Advertising Policy and Media Vehicles of Skanska
4.1 Advertising policy of Skanska
Information about advertising policy was received form interviewing the authorities of
“Figmont” agency which is making ads for Skanska.
In order to receive the best effect of advertising, it is important to determine the target
audience, which vary greatly according to new built projects. Some projects which
Skanska built has not very big apartments, but modern and can be considered for young
family, another project has apartments for big families etc. Each of these projects has its
own target group, in general Skanska target group can be determined from 25 to 60 years.
Advertising messages, which Skanska place in the media is not greatly differ from each
other, because of advertising agencies rules to make messages according to certain
patterns. Skanska message is quite simple, with objective to inform people about coming
project, it’s place and price of apartments. Usually, these two factors are the key in the
choice of customers. Because of oversupplying in the Real Estate market and due to the
reason of not making mass in the vast of projects’ advertising, there is no tendency for
special creativity in the execution style of an ads, agencies just follow the common
patterns of Real Estate messages. Skanska executes not very big size ads. Headlines and
logotype of the company have more conservative character, being promoted Skanska
company throughout the world for 20 years.
Company almost never practises outdoor advertising and ads on the full page in the
newspaper. It can be explained by the fact that Skanska in Sweden delivered only 5% of
the profit by selling apartments, the rest 95% of the profit includes building of the bridges
and other construction throughout the world. According to the marketing policy of the
company, each projects has its own budget, and it is not sensible to spend money for brand
promotion by deriving funds from apartments projects’ in order other construction will
benefit from this advertising. Thus, company placing ads in local newspapers, internet,
radio and planning to be in television next year. The necessity of being in the press is
determined by customers’ evident choice of this media type while looking for new
apartments. During 2005 it was invented and executed radio spots of Skanska advertising,
with a contents of revealing real feelings of the company’s customers, which was derived
by interviewing people. Most common, people expressed great satisfaction of being living
in Skanska apartments and it was transformed with a soft background to the radio spots.
Being on the radio is explained by its low cost and frequent listening by different target
group. The efficiency of the apartments’ selling can be achieved by describing and
popularisation of the area where coming project will be. For this purpose radio is very
relevant. Knowing the area people easily will use the internet and find new built
construction which offered by certain company.
Advertising budget is derived from the particular project’s budget on the method “To
spend what the company can afford”.
Ads which “Figmont” agency creates for Skanska are not evaluated before execution,
but agency can practises it if customer requires.
24
4.2 Characteristics of media vehicles used by Skanska during 2005
During 2005 Skanska used newspapers, radio and internet media vehicles for
advertising its new built apartments. Among press media it was local newspapers Metro
Hus and Hem and Metro Stockholm. Skanska placed its ads also on the web page “Nya
Hem” which is very popular source about dwellings information in Stockholm and
commercial radio MTG. Further in this chapter is detailed information about each media
used, which was derived by personal interview with media representatives.
4.2.1 Metro Stockholm
About Metro Stockholm
First issue of Metro was published in 1995 in Stockholm. There are 57 publishing
offices in 18 countries of the Europe, North and South America, Asia. Metro as a
morning newspaper is read by 15 million readers throughout the world daily.
Audience
Total number of the Metro Stockholm readers in Sweden is 1 362 000 per day. There
are 696 000 readers in Stockholm daily. Number of readers has increased according to the
last year, Metro is number two in audience amount in Stockholm, after Dagens Nyheter.
This newspaper using its advantage to catch fresh mind of the readers due it’s morning
time of issuing.
Circulation
Circulation is considered to be 340 000. The distribution idea is to be on the place
where the most people are, and in Stockholm 70% of people passing where trains are
leaving. Today, hand distribution is used very seldom by Metro, except the traffic way
distribution in order do not loose audience which is drivers of the cars. There are
newspapers in boxes where trains are leaving, according to the special agreement with
Swedish Subway and also in the schools, hospitals and hotels. Stockholm City is the very
strong competitor for the Metro, it has lower prices, and hand distribution mostly.
According to the Stockholm City research which was done by interviewing people:
Metro is the most updated newspaper in the city, contains the latest news and the most
tediously read newspaper. See the Appendix 1. 43% of the readers said that they read
almost everything in the newspaper, according to the DN and SD which has lower
percentage of the readings the whole issue, Metro is in winning situation.
Reach and frequency
Among inhabitants of Stockholm Metro has 575 000 daily readers and that is a reach
of 41%. In the target group below 40, reach is 46% which is 264 500 readers. Reach in
the group who wants to change their housing is 43% which is 247 250 readers.
Among the readers of Metro Stockholm in the target group 20-49 years, 30% of them
prefer to have an own flat, 40% want to rent a flat, and 22% prefer to buy villas .
According to the Stockholm SIFO Orvesto 2005 survey, 43,7% of the target group
readers wants to change their houses in two years, and 41,1% of them want to move to
own apartments,51,8% want to rent a flat and 32,5% prefer to live in villas. See
Appendix 1.
Frequency
OTS( “Opportunity to See”) is what papers use in combination with reach to
determine the impact on target group. Metro uses this number instead of GRP and TRP.
25
OTS is calculated like this using Metro as a total: 3 insertions in a week results in a
gross reach of 123%, number of contacts with the target group. OTS is then 123% divided
with the net reach, which is contacts with target group minus duplicates (unique contacts),
which is 59% for three insertions. OTS=2,08
OTS for target group below 40 is then 2,12 (46%*3/65%). Thus 264 500 readers has
seen it 2,12 times. However, it was made 939 600 contacts with target group and reached
a total of 452 400 unique readers at least one time.
Readers
Metro readers represent the average of Stockholm with somewhat more readers below
the age of 40. Metro’s target readers are 15-39 years, with a metropolitan mindset. They
are urban, active, well educated and spend the majority of their income on personal items.
Thus, they are in an early stage of their lifecycle. For real-estate that means buying first
flat, upgrading to a bigger and/or starting a family.
Stockholm Metro has 696 000 daily readers, 49% male and 51% female readers.
Stockholm City, as a competitor, has the same audience, the same news to read about,
they are really smart and do everything in order do not loose the readers. The amount of
people who read the news are increasing and newspapers simply splited up the readers.
Metro audience is the people who are in a big hurry and interesting in the most updates
news .In the category of catching audience up to the 49 year Metro is the strongest.
Dagens Nyheter, one of the big competitor of the Metro, has the older audience, and
considered like traditional, more elaborated newspaper, full of articles for the different
interests and can be relevant for reading not only one day.
According to the Appendix 1, with the increasing number of insertion of the issue the
percentage of reaching new readers is significantly increasing in Metro, according to
others city’s newspapers. DN and SD are not catching so many readers per insertion like
Metro does. According to the SIFO they do not have so many readers who read them so
frequently.
Target audience
Skanska’s target audience depends on kind of project. Apartments can be less modern
but more practical, it will attract more mature audience while small apartments will be
occupied by another type of audience. Metro Stockholm has very diverse audience of
readers, which will help to inform more people about Skanska apartments.
Advantages of Metro for advertisers
Key success factors for Metro:
1. New time for media consumption. “fresh reach”
2. New way of distribution. Where people are, Metro is.
3. Short news. In twenty minutes readers should have been able to get an update on
news; local, domestic and international. Thus, summary of news.
The main advantage of the morning newspaper, like Metro, is that it catches fresh
morning mind of the readers. People can see the information in the morning and then use
it in the evening through the internet, creating positive simultaneous effect by using
several media. In newspaper you can be sophisticated in creating and delivering an
advertising. See the Appendix 1. According to the data from SIFO, which were collected
form the Metro readers, 40% of the readers see the full page, 26% read headlines of the
articles, and 9% of the Metro readers read the text of the articles. Other local newspapers
have the lower percentage in this categories of comparison.
Metro standpoint is: It is better to do something powerful during a limited timeframe
towards a limited target, rather than something weaker and less frequent towards a larger
target.
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It is better to have 3 full pages in Metro Stockholm, during a week than 1 in Metro
Stockholm, 1 in Dagens Nyheter, 1 in Svenska Dagbladet.
Example:
Target group below 40 years Stockholm: 3 full pages MetroStockholm gross reach:
138% net reach 65% OTS: 2,12 thus: 793 500 contacts has been made with the target
group and of which 560 740 have had the opportunity to see the ad at least twice and 373
750 unique readers have seen it at least once.
3 full pages Dagens Nyheter gross reach: 105% net reach 49% OTS: 2,14 Thus: 632
100 contacts have been made with the target group of which 450 898 readers have had the
opportunity to see the ad at least twice and 294 980 unique readers have seen it at least
once.
Metro Stockholm efficiency and Creative aspects
Efficiency depends on the frequency of advertising placement in such type of
newspapers like Metro. The more frequent placement of the ads, the more percentage of
covering of the audience, the bigger the desirable result. Metro can offer now for
advertisers special view of placement, like placement in the middle of the page colourful
image or insertion in the text article colourful advertising, which can create more
visibility.
Cost
CPT is calculated on the cost for a full page divided with the number of readers times
1000. Thus the CPT for Skanska depends on where they have had the ad whether under
the heading ”bostad” or in advertorial placement.
Metro CPT for advertorial is 201 SEK.
Metro CPT for ”Bostad” is 119 SEK
Since Skanska so far this year has had ads in both placements, average CPT including
their discount. CPT: 71 SEK.
There are expenditures for Skanska advertising placement during 2005:
18/2 254x182mm (half page)
Placement advertorial
24/2 254x370 mm (full page)
Placement advertorial
20/5 114x145mm
Placement “bostad”
17/8 144x360mm
Placement “bostad”
24/8 144x360mm
Placement “bostad”
27/8 125x370mm (half page)
Placement advertorial
17/8 254x180mm
Placement “bostad”
24/8 254x180mm
Placement “bostad”
Total expenditure: 198 662 SEK
This gives Skanska a market share in the segment real-estate advertisements in Metro
of 8%.
Media objective
The aim of advertising is more informative. Skanska used the Metro Stockholm
advertising placement before, then in 1995 Metro Hus and Hem established, which has
more specific audience of potential apartments buyers. Metro Stockholm and Metro Hus
and Hem has totally different audiences, and for Skanska it is challenge to reach both of
the audience in order do not miss any informative possibility for the potential buyers.
Distribution area
Stockholm.
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Scheduling of the advertising
Advertising scheduling can be defined like flightning. Skanska has started advertising
in Metro Stockholm only recently, and they are planning to use continuous scheduling in
the future.
Skanska advertising
Metro has nothing to do with the actual composition of the ad, that’s the creative
agency’s responsibility.
The efficiency of the advertising depends on frequency of placement and contents of
the message. Skanska has more informative ads. When the company is big it is assumes
that it has to place big size advertisings, and it is investment more in brand than in
advertising. Skanska has to be careful with using its logotype while advertising different
type of apartments.
Advices to the Skanska advertising message creative part: it has to create more
feelings about brand. What is “Nya” Hem about? Why I should buy only in Skanska?
Customers should find the answers easily in advertising spots. Through the paper
communication is not very well, better to use sound, like JM, another big real estate
company in Sweden, created a very good warm feelings about it’s brand. Skanska’s ads
should not play informative role only, but also it has to evoke feelings of the potential
customers.
Metro possibilities for advertisers
Metro Stockholm can offer the newest methodology of advertisings for customers.
They are all depending on preferences of customers in area of distribution of newspaper
and advertising. They did it once for Skanska, the newspapers were distributed on the
Odenplan and Fridhemsplan subway station, where Skanska thought can be more potential
buyers. In the future Metro is planning to intrude advertising with stickers, but it is very
costly and they are not allowed to do it now according to the agreement with subway
authorities.
In order to publish an ads, it is necessary to book it in two days before, and to bring a
message one day before. If it is preferable, the message can be changed two days before
noon in the middle of the advertising campaign even. Payment is 10 days after publishing.
Evaluation of the advertisement: Metro can offer an evaluation of advertising
campaign and it costs minimum 25 000 SEK. It is not an in-house operation. Skanska did
not required to do such evaluation
4.2.2 Metro Hus and Hem
Audience
Metro Hus and Hem is issued once a week, every Friday. Each week is distributed
889 000 copies. The number of copies is equal to amount of all Stockholm’s households.
Circulation is 889 000 copies.
Readers
According to the latest survey of SIFO, Autumn 2004, 55% of total readers are
women. Prevailing of women amount can be based on the auditoria contents of
newspaper, which is taking first several pages and shows the information about newest
houses design, things for home, some news about construction. The rest amount of pages
real estate advertising are occupied. Newspaper has it’s own specified target group of
potential apartments’ buyers.
The number of readers are based on certain period and weekly circulation, and it is
706 000 according to the last survey of Autumn 2004, age profile is 15-80 years.
28
Metro Hus and Hem received prise for the Best New newspaper 2004. Age of
newspaper is 1 year 9 months.
Advertising efficiency
Metro Hus and Hem does not carry any responsibilities of creative advertising contents.
The way of perception and delivering the ads, understanding it’s in desired way by
customer, choosing the most effective colour, size and style-are all in the charge of
marketing group.
This newspaper helps to catch buyers for houses, to show selling houses.
As the prevailing part of newspaper is consist of different real estate companies
advertising, there is a big chance to be overlap by majority of competitors. New changes
in advertising placing were noticed: there are fewer advertising objects on the pages are
situated now before it was 16, now it is decreased to 12. All objects are following with
short, describing information: photo, location, environment, price and contacts.
Advertisers are tending copy each other tendency of designing advertising page.
It was noticed, that Metro Hus and Hem encourage buyers to use internet. Where
buyers see information first was not determined, but there are more visitors on the internet
apartments advertising web site.
Advantages of placing advertisings in Metro Hus and Hem:
Most of readers of this newspaper are potential buyers of apartments, so they can be
Skanska’s target group. And the purpose is to reach the audience as wide as possible.
This issue covers all households in Stockholm. Readers are interesting in reading the issue
and advertising. The stage of reading the issue was determined like: read almost all per
issue.
Cost
Skanska has been placing advertising weekly during 2005. Prices of the placing
advertising depend on year volume, which is big for Skanska, and the company has a
good discount. CPT=170 SEK, which is based on gross. It is costs 70 öre to reach one
reader. Usually, the price of the ads placing depends on the size of media audience, the
bigger the audience of media the more it is expensive to advertise. But companies usually
receive discounts according to the volume of advertising.
Media Objective
Skanska wants to show selling apartments and promote its brand. The media objective
is more tend to be informative.
Skanska ads can occupy half or all page, with photos of selling objects and short
description information, dates of possibility to visit selling houses, open hours.
Target audience
Skanska target audience is 20-65 years. Young people is the very good audience for
Skanska to achieve, apartments buying is the long process, being informing all the time
young generation about itself, Skanska increases it’s chances to have them like adult
buyers in the nearest future.
It is distributed 889 000 copies every Friday. According to SIFO, number of readers
exposed to information in newspaper are 706 000.Reach is considered to be 79% of the
readers. But it is not sure that readers were exposed to an ads.
Company “Advertising rate foundation” made up an Advertising rate stair, which is
common used by every media:
Media deals with
st
1 step: media by itself;
2nd step: distribution (number of copies distributed);
3rd step: number of readers (in charge of media to be interesting issue for readers);
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Marketing group deals with
4th step: message creative part (have you seen the message?);
5th step: message (have you understand the message? Easy to get it?);
6th step: result of an ads (was the desired result of ads company achieved?).
Metro Hus and Hem has an agreement with Swedish post, which is delivering their
newspaper in every box in Stockholm, every area.
Distribution area
Metro Hus and Hem distribute its issues to the all Stockholm suburbs(län).
In 2004 there were 865 000 households, in 2005 it is increased to 889 000. Number of
new households appeared as a result from new construction of Real Estate companies like
Skanska, NCC, etc. Post offices gives information to Metro Hus and Hem about new
households, and making control of its quantity changing. Swedish post charging Metro.
Scheduling
Skanska has been placing advertising weekly during the whole year, there is no chance
advertise more often, because Metro Hus and Hem issued once a week. When Skanska
has many houses to sell, it usually advertises all of them with increasing advertising
room, when they are sold, no reason for advertising.
Scheduling can be characterized like flightning or continuous.
Effective size of advertising
There is the common fact, the bigger format of advertisement the more effective it is.
Each project has its own budget for media advertising, on which frequency and size of
advertising depends. Skanska has a big frequency of placement, this can explain common
using of part page advertising versus full page.
Skanska’s advertising among competitors
Skanska is considered to be pretty aggressive in advertising in comparison with NCC,
JM. Advertising program is active, placing ads continuously.
Hus and hem opportunities to advertisers:
Newspaper can offers to advertisers any colour, placement, size of the ads. Publishing
dead line is Tuesday afternoon, until this time it is possible to make some changes in the
message.
If it is desirable, newspaper can arrange special way of distribution with promotion
tools like giving to drink a cup of coffee to the readers or distribution on the special area.
Hus and Hem does not have any limits, can afford any space for ads, has very flexible
scheduling of placing.
Efficiency of the newspaper is measured by the amount of readers, the more the readers
the more efficient the issue. Hus and Hem has a big audience of readers. Skanska CPM
including discounts is 150sek
4.2.3 Radio MTG
Audience
On the daily basis the MTG’ radio audience is 20% of total population of Stockholm,
on the weekly basis is 60-65%.Total audience is 1 589 529. MTG is the most popular
radio in Stockholm and contains RIX.fm station, Lugna favoriter, Banadit
(fd Power),Svenska favoriter, Energy Stockholm(NRJ). Skanska placing advertising on
Rix.fm, Lugna favoriter, Svenska favoriter, because the audience is more prone to be
adults, which is desirable audience. Lugna favoriter audience is more consist of
female,average 30years, prime time is considered from six o’clock p.m., because it is
night station with soft music. Lugna favoriter is historically the most popular radio station
30
in Stockholm since 1950. Age profile is from 9 till 79years. Rix.fm audience is 15-55
years, and it is about 25 000 listeners on the Friday evening 6p.m.,and in the daily
morning is 30 000-35 000 audience. Prime time is considered from 7 till 18 o’clock.
Energy station age profile is 30-35 years.
On the daily basis in the third quarter of 2005 Rix fm, took 9,5% of the total
population of Stockholm, which is 150,500 people. Lugna favoriter took 9,8% of the total
population, which is 156 000 people. Svenska favoriter took 4,5% which is 71,600 people.
On the weekly basis Rix. fm takes 24,9 % of the all population which is 396 000
people, Lugna favoriter 36,9% of all Stockholm which is 587000people, Svenska favoriter
22,3%,which is 354000 people of the total population of Stockholm.
Rix.fm has been awarded with a prize for the best morning show for 3 years in a row.
Also it took prize for the most popular radio in Sweden, and it has more listeners than
public radio. Rix.fm competitor is Mix.Megapol, and Energy Stockholm(NRJ) competitor
is the Voice station. Stockholm radio market considered like one of the toughest market in
Europe, because there are 10 radio station for two million population.
According to the SIFO survey 2005, target audience of 25-54 years, 28% of the MTG
radio listeners live in private owned apartments,30% in rental apartments, and 34,9%
prefers to live in private owned houses. See Appendix 1. During nearest 2 years 28,2% of
the listeners are planning to move to new houses, while71,8% of them are staying in their
previous apartments see Appendix 1. 11,6% of the listeners are planning to move to
private owned apartments, 8,8% want to move to villas,10,3% is moving to rental
apartments see Appendix 1.
Cost of ads
Cost per thousand (CPR) is 40 SEK.Reaching 1% of target demo will cost 2457 SEK.
For the Skanska advertising campaign which duration was 8weeks during summer,
with a target demographic group of 30-60 years base CPT was 33 000 SEK for all stations
and target CPT for Svenska favoriter station is 47890SEK, Lugna favoriter is 47270SEK,
Rix.fm 50600SEK. Total target CPT for demographic group is 48 860 SEK.
Reach and frequency
For the age profile of 30-60 years(which is our target demo), during campaign length of
8 weeks reach of Svenska favoriter listeners is 20,24%(165 000people),Lugna favoriter is
37,11%(303 000), Rix, fm is 23,87%(195 000).Average frequency for Svenska favoriter
listeners 8,84, Lugna favoriter is 9,82, Rix.fm is 18,28. Number of ads spots is 300 for
each station. Total frequency for campaign population is 18,57, such number is explained
by ads product, which requires repetition of ads many times. Net reach is 70% (total
awareness) because each person listen to the more than one station thus 38 spots were
listened two times per week.
Media objective of Skanska advertising campaign
Media objective of Skanska advertising campaign is more to inform people, to tell
everybody, that Skanska has apartments to sell. Radio evoke people to use a company’s
web site. Traffic is increasing due to the radio, which evidence of positive simultaneous
effect.
Distribution area
Primarily Stockholm, Uppsala.
Number of exposures(gross impressions)
Number of people who was exposed to an ads determined by special RBP program. It
is 976 000. Total amount of ads which was produced by advertising agency of Skanska
(Figmont) is 40 different ads. They remind each other. In one day there are four different
spots can be listen.
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GRP
Total demo target GRP is 213600. During all campaign total GRP for Svenska favoriter
is 178,800, Lugna favoriter GRP is 364400, Rix fm GRP is 436400.On the weekly basis
GRP Svenska favoriter is 22,7%, Lugna favoriter GRP is 46,3%, Rix.fm GRP is 55,5%.
Day part time of advertising
As the target demo is very diverse, in order to reach them, ads is exposed from 7
morning till 10 night. Even if you work, you listen to the radio, information is perceives
with some of the minds function, unconsciously, this is one of advantages of the radio ads
placement. By questionnaires it was determined that radio listeners intension (Rix.fm) to
buy apartments is as high as Dagens Nyheter readers or even higher. When you have a lot
of spots like Skanska has, it does not matter when to execute them. There is no bad time,
the purpose is to reach a lot of people, so radio executes spots as much as possible.
Advertising efficiency
It is needed to be creative as much as possible. Buying apartments is a long process,
radio is good for this case, because being used for a long time it convinces listeners why
to go to Skanska. Creative side: creativity gives you opportunity to talk to people emotion.
Advertising agency, Figmont, produces ads for Skanska, 40 spots, with duration of 10-15
second and some of them are 45 second. They are more emotion ads, show feelings of
people when coming to Skanska’s apartments, which is very comfortable, without any
noise. The spot execution style is very soft, with a specific signal din-don, which became
Skanska’s noise logotype.
Scheduling of continuity
It is more flightning scheduling. It is planning ads campaign in the latest autumn
October-November 2005, for 3-8 weeks, which is connected with construction.. In the
2004 it was campaign from May-August. In the 2005 January-February, June-August
2005, which was connected to new construction opportunities to buy apartments in Solna
Sundbyberg.
Advices to Skanska advertising efficiency
Do not work with a such a lot of spots. It is needed to use an ads once for awhile, about
2-3 spots daily. Advice to decrease amount of daily spots based on the fact ,that the
apartments buying process takes a long time, buyers have to decide which apartment to
buy, and being long time on the radio, ads remind all the time about company’s
possibilities, this information is settled up in the mind of buyers. Decreasing numbers of
spots will allow in its turn to save money and to continue radio ads placement for longer
period with increasing radio share among other competitors and increasing awareness.
Another advice is to be more aggressive when it closer to the sale dates, before week, with
a an announcement “ do not miss the chance” and others.
Radio opportunities for advertisers
Radio provide advertisers with a flexible media strategy, which gives an opportunity to
change spot during campaign, if it is not desirable effect achieved, but spot has to have
the same length as previous one. Payment is after 15 days campaign has started. Radio
specialists can suggest some changes in background tone.
Evaluation of advertising message.
Radio workers are doing observations of advertising efficiency in order to take
decisions how well they are in this job according to competitors and do the people
understand their message in a desirable way. Radio team is planning to arrange case study,
in order to test what people think in reality about Skanska’s apartments, by making an
open show-program. They are also planning to test by asking people which of the
proposed ads works the best.
32
As it is was mentioned in Chapter 2 and Chapter 3 that a more balanced marketing mix
is likely to improve results, concerning Skanska company it desirable to use several print
media, which is most contribute to the brand awareness and purchase intent and Internet is
the best at aiding message association. Existing media mix is balanced quite well, but
some recommendations about the most efficient media vehicles see further, in Chapter 7.
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5. Characteristic of Skanska media plan
According to the Tomas C. O’Guinn, Chris T. Allen, Richard J. Semenik 2003, as I
mentioned in Chapter 2.3, a media plan includes objectives, strategies , media choices and
a media schedule for a placing a message.
5.1. Skanska media objectives
The first and the most important media objective is that the media chosen reach the
target audience, which can be demographic, geographic, or based on lifestyle or attitude
dimensions.
Skanska target audience is potential apartments buyers, demographic level of which is
mostly depends on the type of the project, 20-65 years.
Audience of Skanska media vehicles:
Metro Stockholm: Metro readers represent the average of Stockholm with somewhat
more readers below the age of 40. Metro’s target readers are 15-39 years with a
metropolitan mindset. They are urban, active, well educated and spend the majority of
their income on personal items. Thus, they are in an early stage of their lifecycle. For realestate that means buying first flat, upgrading to a bigger and/or starting a family.
Stockholm Metro has 696 000 daily readers, 49% male and 51% female readers.
Metro Hus and Hem: Readers of Hus and Hem are all households of Stockholm,
evidently all potential buyers of apartments. Age profile is 15-80 years. There are 706 000
readers on the weekly basis.
MTG Radio: MTG’ radio audience is 60-65% of total population of Stockholm on the
weekly basis, which is 1 589 529 people. MTG is the most popular radio in Stockholm
and contains RIX.fm station, Lugna favoriter, Banadit(fd Power),Svenska favoriter,
Energy Stockholm(NRJ).Skanska placing advertising on Rix.fm, Lugna favoriter, Svenska
favoriter, because the audience is more prone to be adults, which is desirable audience.
Lugna favoriter audience is more consist of female, average 30years. Lugna favoriter’s
age profile is from 9 till 79years audience. Rix.fm audience is 15-55 years, and it is about
25 000 listeners on the Friday evening 6p.m., and in the daily morning is 30 000-35 000
audience. Energy station age profile is 30-35 years.
Geographic scope of media placement:
Skanska is mostly interested in message distribution throughout Stockholm.
Geo–targeting was used by Metro Stockholm according to the requirements of Skanska,
for reaching desirable audience in certain areas of Stockholm.
Message weight:
Metro Stockholm: There are 575 000 readers daily who are exposed to the information
in the newspaper. They are all inhabitants of Stockholm and can be potential customers of
Skanska.
Metro Hus and Hem: According to SIFO, number of read copies is 706 000 weekly.
MTG Radio: Number of people who was exposed to an ads determined by special
RBP program and it is 976 000.
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5.2 Skanska media strategy
Reach and frequency:
Metro Stockholm: Among the inhabitants of Stockholm Metro has 575 000 daily
readers and reach of 41%. In the target group below 40, reach is 46% which is 264 500
readers. Reach in the group who wants to change their housing is 43% which is 247 250
readers. OTS (“Opportunity to See”) is what newspapers use in combination with reach to
determine the impact on target group. Metro Stockholm uses this number instead of Gross
Rating Points and Target Rating Points. Metro Stockholm OTS=2,08. OTS for target
group below 40 is 2,12, which means 264 500 readers has seen ads 2,12 times.
Metro Hus and Hem: Reach is considered to be 79% of the readers. Newspaper is
issuing once in a week. Frequency is not used and not determined by this issue like
unnecessary.
MTG Radio: For the age profile of 30-60 years, during campaign length of 8 weeks
during summer reach of Svenska favoriter listeners was 20,24%(165000people),Lugna
favoriter was 37,11%(303000), Rix, fm was 23,87%(195000). Net reach is 70% (total
awareness) because each person listen to the more than one station. Average frequency
during advertising campaign for Svenska favoriter listeners was 8,84, Lugna favoriter was
9,82, Rix.fm was 18,28. Number of ads spots was 300 for each station. Total frequency for
campaign population was 18,57, such number is explained by ads product, which requires
repetition of ads many times. Total demo target GRP is 213600. During all advertising
campaign total GRP for Svenska favoriter was 178,800, Lugna favoriter GRP was
364400, Rix fm GRP was 436400.
Continuity of media placement:
According to the definition if continuity (George E. Belch, Michael A. Belch 1995):
Continuous scheduling is a pattern of placing ads at a steady rate over a period of time.
Flighting is achieved by scheduling heavy advertising for a period of time, usually two
weeks, then stopping advertising for a period of time, only to come back with another
heavy schedule.
Metro Stockholm: For today advertising scheduling can be defined like flightning.
Skanska is planning to use continuous scheduling in the future.
Metro Hus and Hem: Skanska is placing advertising every issue during the year,
sometimes with more intensity in amount of advertising Scheduling can be characterized
like continuous.
MTG Radio: it is tendency to have flightning scheduling on this type of the media.
Length and size of advertising:
Metro Stockholm: size is determined by Skanska itself, big advertising placements are
usually made when new project is on the beginning of its sale period, the aim is to inform
and catch people by big bright informative ads. Periods of advertising are: February 2005,
two placing, May 2005 one placing, August 2005 five placing.
Metro Hus and Hem: Skanska ads usually occupy half or full page, with photos of
selling objects and short description information, dates of possibility to visit selling
houses, open hours. Skanska has been placing advertising every week during 2005.
MTG radio: In the 2005 January-February, June-August 2005. There were planned 38
spots for weekly executing, and 300 spots for executing during the whole 8 weeks
campaign.
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5.3 Media selection
Skanska media selection can be defined like assorted media mix, which assumes
multiple media alternatives to reach target audience. Next year Skanska is planning to use
television for promoting its brand. Nowdays newspapers, radio and internet media are
used.
5.4 Media efficiency
Determining the relative effectiveness of various media or media vehicles is a very
complex work to do. In this chapter I compare media efficiency according to the most
common measurement, cost per thousand (CPT). In further chapters of my work I will
introduce some other measurements according to the newest techniques of measuring
media efficiency.
Metro Stockholm: The CPT for Skanska depends on where they have had an ads.
Under the heading ”bostad” or in advertorial placement. Metro CPT for advertorial is 201
SEK. Metro CPT for ”Bostad” is 119 SEK. Since Skanska so far this year has had ads in
both placements, average CPT including their discount. Is 71 SEK.
Metro Hus and Hem: CPT=170 SEK, which is based on gross. It is costs 70 öre to
reach one reader.
MTG Radio: CPT is 40 SEK. Reaching 1% of target demo will cost 2457 SEK.
5.5 Comments about media vehicles
Metro Stockholm target audience age profile is 15-39 years and there are 696 000 daily
readers, they are young with metropolitan mindset. Hus and Hem audience age profile is
15-80 years and there are 706 000 readers all of them are households and can be potential
buyers. MTG’ radio audience is 60-65% of total population of Stockholm on the weekly
basis, which is 1 589 529 people. That radio stations where Skanska is placing advertising
on the weekly basis takes such audience: Rix. fm 24,9 % of the all population which is
396 000 people, Lugna favoriter 36,9% of all Stockholm which is 587 000people, Svenska
favoriter 22,3%,which is 354 000people of the total population of Stockholm.
Geographic area of distribution, which is interesting for Skanska is Stockholm.
Metro Stockholm readership is 236 640*1000, Hus and Hem issues which are
definitely read by people weekly are 706 000. MTG radio listeners which were exposed to
an ads are 976 000 during the whole campaign.
Reach of Metro Stockholm is 41%. In the target group below 40, reach is 46% which is
264 500 readers. Reach in the group who wants to change their housing is 43% which is
247 250 readers. Metro Stockholm OTS=2,08. OTS for target group below 40 is 2,12,
which means 264 500 readers has seen ads 2,12 times. Hus and Hem reach is considered
to be 79% of the readers. Net reach of MTG Radio is 70%. For the age profile of 30-60
years, reach for each of the radio stations which execute Skanska ads is: Svenska
favoriter 20,24%(165 000people), Lugna favoriter is 37,11%(303 000 people), Rix, fm is
23,87%(195 000people). Average frequency during advertising campaign for Svenska
favoriter listeners was 8,84, Lugna favoriter was 9,82, Rix.fm was 18,28. Total frequency
for campaign population was 18,57.
36
Continuity for media placement in Metro Stockholm is defined like flightning, and
planning to be continuous. Hus and Hem ads placing has continuous tendency. MTG
Radio has flightning scheduling of ads placement.
Length and size if advertising in newspapers Metro Stockholm and Hus and Hem is
depends on the selling stage of the project and can occupy full or half page. MTG Radio
was executing 900 ads spots during the 8 weeks advertising campaign.
According to the CPT comparing, Metro Stockholm CPT for advertorial 201 SEK,
Metro Stockholm CPT for ”Bostad” is 119 SEK. Average CPT including discount for
Skanska is 71 SEK. Hus and Hem CPT=170 SEK, which is based on gross. MTG Radio
CPT is 40 SEK.
All these data are summarized in the table below.
Table 2. Characteristics of the Skanska media plan.
Parameters
Metro Stockholm
Metro Hus and Hem
Audience age profile
15-39 years
15-80 years
Coverage of the
696 000 readers
706 000 readers
audience
daily
Gross impression
575 000readers
706 000 readers
Reach in the target
46 %
79 %
group
Frequency
2.12
Scheduling
flightning
continuous
CPT (including
CPT=71SEK
CPT=150 SEK
discounts)
MTG Radio
9-79 years
1 589 529
listeners
976 000 listeners
70 %
18.57
flightning
CPT=40SEK
There are some comments about placing advertising in each of the three media vehicles.
Pros and cons Metro Stockholm:
This is morning newspaper and it catches fresh mind of the readers, target audience is
big, different in interests and mostly young. Due to it’s huge popularity, and being where
the most people are, Metro Stockholm
became the most fairly reading morning
newspaper. It occupies 696 000 readers daily and take 46% of their reach. According to
other media types, percentage of target audience informing is not so high and can be
defined like disadvantage, but it can be explained by the fact that readers are very diverse
in their belonging to certain target groups. There are only 264 000 readers which can be
potential buyers of Skanska. Placing ads in Metro Stockholm plays more informative role
for the whole population of the city. Investing in brand familiarity is necessary, and the
pay off of this activity is a long gradual process, which can not be evident immediately.
Taking into consideration recent advertising campaign of Skanska in Metro Stockholm
and it’s low CPT=71SEK, placing ads should be continuing with middle frequency in
order to achieve total informativeness of the Stockholm population.
Pros and cons Metro Hus and Hem:
The audience of this newspaper is very specific and the most target from all medias.
Readers are all households of Stockholm. Reach is quite big, 706 000 from all existing
889 000 households. Hus and Hem shows total supply of apartments on the real estate
market in Stockholm. Placing ads in this newspaper is like taking part in the competition
for the customers. This newspaper is the evident choice of the person who is looking for
the new apartments, and it encourage people to visit internet web site for detail
information about apartments noticed in the Hus and Hem, which is create positive
simultaneous effect from using this media.
37
Pros and cons MTG Radio:
Considering radio placing advantages like cost, which is very low, CPT=40SEK, big
frequency 18,57, target selectivity where Skanska has chosen the most popular radio
channels in the Stockholm and creative opportunities to influence human’s brain
unconsciously by certain voice, all of this contribute to big advantage for the radio
advertising placing.
“You can close up your eyes, but not ears”, Skanska’s voice logotype will set up in the
minds of the people and increase total awareness about brand, which in it’s turn will
contribute to the increasing in sales.
38
6. Analysis of Skanska media efficiency
There are several techniques for measurement media efficiency, I was characterize
them in Chapter 3.
6.1.Cost per thousand (CPM)
Cost per thousand (CPM), which is dollar cost of reaching 1000 members of any
audience using particular medium. It can be used for comparison relative efficiency
between several media classes.
According to the Skanska media vehicle efficiency, the CPM are follows:
Table 3: Media CPM
CPM (including
discounts)
Metro
Stockholm
CPT=71SEK
Metro Hus and
Hem
CPT=150 SEK
MTG Radio
CPT=40SEK
From the table above it is evident, that the most cheapest way to reach the audience is
by using radio vehicle. The most expensive media is the Metro Hus and Hem, it can be
stipulated by it’s the highest reach the target audience and specific target contents.
Skanska started to place the ads to Metro Stockholm since February 2005, the frequency
of placement is not very big, but according to the company’s discounts for being constant
client, CPM in comparison with other medias is average.
6.2. Return on investment (ROI)
Ad campaign ROI is a metric that attempts to determine what the advertiser receives in
return for the cost of the advertising. ROI is derived by dividing incremental profit , in
terms of sales, by amount of expenditures to each media. Calculation of this figure
requires such inputs as: percentage of each medium expenditures in total advertising
budget, incremental sales. According to figures which were given by Skanska’s marketing
department, the advertising budget allocation is following.
Table 4: Skanska advertising budget allocation.
Expenditures to the media since 01.01.05 to 01.10.05.
Metro
Metro Hus
MTG
Mitti
Internet
Stockholm
and Hem
Radio
198662SEK 2244454,6SEK 350000SEK 428000SEK 146300SEK
Media budget allocation in percentage,%
6%
67%
10%
12,71%
4,34%
Total
expenditures
3367417SEK
100%
Since 01.01.05 to 01.10.05 Skanska sold 800 apartments with the price 4 000 000 SEK
each according to information which was given by the head of the Skanska marketing
department.
Incremental volume is 800*4000 000= 3 200 000 000 SEK .In order to determine the
amount of sales derived by each media separately, it is needed special experiment to be
arrange by the company which takes long time and money. According to the questioning
39
which I was held with the buyers of Skanska apartments, I think it is sensible to take
percentage of awareness derived by each media, which was received from questionnaires,
and convert it to the projected amount of increasing sales due to each media. As the
purchase of the apartment is the product of advertising awareness. According to the Figure
19 “Media used by customers for buying their apartments”, which is based on the real
existing media preferences, using which the purchase of the apartments was already
completed, it is fairly to conclude that the biggest amount of sales was due to the mostly
used source of information about the apartments, if eliminate other incentives of
purchasing. Thus, 37% of sales were derived by Internet and 6% of Metro Hus and Hem
see the Figure 19 “Media used by customers for buying their apartments. According to
other media percentage contribution to sales increasing, the judgments can not be true and
relevant due to their absence in the list of media used by customers for looking the
apartments. Dynamic logic Cross Media Research, 2004 in USA13, stated that 64 percent
of purchase intent was attributed to magazine advertising while Multimedia Involvement
Study which was carrying by Erdos & Morgan in 200014 insisted on the fact that 44% of
purchases is completed due to advertising in press.
In our case, for Skanska company this statements can not be relevant because of
evident prevailing Internet media as the most used for apartments buying. The determining
of sales derived by Internet and Hus and Hem, calculated as a percentage from total
incremental volume which is 3 200 000 000 SEK, allow us to calculate the return on
investment for these two media. See the table below.
Table 5: Return on investment for two medias, used by Skanska..
Amount of sales derived by each media, SEK.
Internet
Hus and Hem
1 184 000 000 SEK
192 000 000 SEK
Return on investment for each media
8092,96
85,54
The figures of the ROI in the table above mean that profit generated from investing in
advertising in Metro Hus and Hem exceed it’s expenditures in 85,54 times. However, 6
times less expenditures in Internet media than in Metro Hus and Hem, generate 8092
times exceeding profit over expenditures for Internet advertising placement. From
economical point of view Internet is the most rational investing for advertising and it is
good fact to realize that from communication effect it is also the most best media to use.
6.3. Efficiency
The efficiency can be defined as:
-Economic efficiency is a general term for the value assigned to a situation by some
measured signed to capture the amount of waste or "friction" or other undesirable and
desirable economic features present.15
-An economic term for conditions that create the biggest possible profit with the
smallest possible costs. This is an important idea in industry, since the goal of any
13
Source: Dynamic logic Cross Media Research, 2004
http://www.magazine.org/content/files/media_choices_topline.pdf
15
http://en.wikipedia.org/wiki/Efficiency_(economics)
14
40
business is to make as much money as possible and avoid wasting anything - think of
wastefulness as the opposite of efficiency.16
-The ratio of total output power to input power expressed as a percentage17.
Efficiency is defined like ratio of percentage incremental sales derived by each media
type to percentage of media allocation in advertising budget. In the latest advertising
researches efficiency index is used like measure of media performance. The applying of
this measurement for Skanska media see in the table below.
Table 6: Efficiency of the media.
Financial services
Percent of advertising
budget
Share of advertising
incremental volume
Efficiency Index
Internet
Hus and Hem
4,34%
67%
37%
6%
853
9
Under share of advertising incremental volume assumes the percent of contribution to
the incremental sales from each media, the determining of which see in the 6.2. Internet
drove significantly more incremental sales than its share in the advertising budget. It
delivered 37% of the incremental volume driven by advertising with 4,34% of the total
advertising budget. Hus and Hem did not drive sales as efficiently as Internet did. While
67 % of advertising money was allocated towards Hus and Hem, this newspaper delivered
only 6% of the incremental volume.
6.4. Awareness- to- Cost Index
According to Millward Brown research18, which quantifies the role of each media in
media mix, he also defined awareness on a dollar for dollar basis, and call it Awareness to-Cost Index. The Awareness-to Cost Index reveals how much dollar for dollar one
media type delivers higher awareness level than another. It determined by dividing the
total percent of awareness attributed to each medium by the percent of spending, on the
SEK base comparison in our case.
16
17
18
http://www.sustainabletable.org/intro/dictionary/
http://www.systemconnection.com/downloads/poweradapterkb/glossary.html
Source Millward Brown, Competitive Media reporting.
41
Percentage of total advertising budget(3 367
417SEK)
Percentage of spending in
advertiisng budget
0,8
0,7
0,6
0,5
0,4
0,3
0,2
0,1
0
Metro
Stockholm
Metro Hus
and Hem
MTG Radio
Mitti
Internet
Media vehicles
Figure 12: Percentage of each media in total advertising budget. Source: The data about
expenditures was given by Skanska marketing department.
The percentage of awareness was determined by sending 100 letters with questions
about media preferences to the buyers of Skanska apartments. It was received 64% of
responses. On the question: ”Where you saw Skanska advertising” 20% chose “only in
newspapers”,1% chose” only in a radio”, 12% chose “only in the Skanska website”, 30%
chose “in Skanska website and newspaper”. The conclusions about awareness derived
form each media, based on the received data are: See the figure below.
Percentage of the total advertising awareness form
each media type
0,35
Percentage,%
0,3
0,25
0,2
0,15
0,1
0,05
0
Only newspaper
Newspaper and
radio
Only website
Website and
newspaper
Media vehicles
Figure:13: Percentage of the total advertising awareness from each media type.
42
In order to determine the total percentage of respondents who saw the Skanska
advertising in newspaper it is needed to summarize percentage of responds “ saw only in
newspaper”(20%) and “newspaper and radio”(1%) and “ website and newspaper”(30%),
thus percentage of awareness due to ads in newspaper is 51%. Determined percent of
awareness from Skanska website is “only website”(12%) added to “website and
newspaper”(29%) and equal 41%. From the figure 13 it is clear to see which media mix
contribute the most awareness of Skanska to the potential consumers: website and
newspaper. We have all inputs for determining the cost-awareness index by dividing
percentage of awareness from each media to percentage of expenditures in advertising
budget. See the results in the figure below.
Cos-to-awareness index
1000
900
800
700
Index
600
500
400
300
200
100
0
Newspaper
Internet
media vehicles
Figure 14: Awareness- to- Cost index of each media.
Based on the calculations demonstrated above, the awareness-to-Cost index reveals
that, SEK to SEK, Newspaper Cost Awareness index is 60 and Internet Cost awareness
Index is 944, Internet delivers higher advertising awareness level than newspaper, in
average the relationship is sixteen to one.
6.5. Analysis of questionnaires answers
All my calculations above was based on the newest techniques in advertising
accountability, but what is in reality going on with media choice of Skanska buyers who
is inhabitants of Stockholm. For determining their media preferences I was sending 100
letters with a questions,see Appendix 6, to the buyers of Skanska apartments in such
projects as: Gashåga Pirar på Lidingo,Silverdal Trädgårdar i Sollentuna, Körsbärsbacken i
Vallentuna, Utblicken Tomsvalan i Tyreso, Brunnsgården i Sundbyberg and received 64%
of answers.
In order to be precise from statistical point of view, it is impossible to state that all
Skanska customers have the same media preferences as was received from questioning,
43
but that customers which were randomly chosen from four projects mentioned above,
showed certain media choice in 2005, analysis of which is below in this section.
On the question “Which newspaper do you usually read?” 28% of the respondents
chose Dagens Nyheter, 22% chose Metro Hus and Hem, 22% prefers Svenska Dagbladet,
16% read Metro Stockholm and 15% chose the variant ”other newspapers” mostly
assuming by their choice Stockholm City. See the figure below.
Percentage of reading the local newspapers by
Skanska customers
0,3
Percentag,%
0,25
0,2
0,15
0,1
0,05
0
Dagens
Nyheter
Metro Hus
abd Hem
Svenska
Dagbladet
Metro
Stockholm
Others
Media
Figure: 15 Percentage of reading the local newspapers by Skanska customers.
From the figure it is evident, that the most readable newspaper is the Dagens Nyheter,
then Metro Hus and Hem, Svenska Dagbladet on the 6% less readable then Dagens
Nyheter, Metro Stockholm is almost on the equal percentage of the reading with it’s the
most big competitor Stockholm City.
Next question, offered to the respondents was “Which media is the most relevant for
you when you are looking for new apartments?” respondents were asked to range the
medias in the increasing level of relevance for them,1= the most relevant; 2=relevant;
3=less relevant. In the range of “The most relevant media used for looking at apartments”
35% of customers think that it is Internet, 9% think that it is Dagens Nyheter, 7% chose
Svenska Dagbladet, 6% think that it is Metro Hus and Hem, 4% think that it can be “Other
media”,1% chose Metro Stockholm as the most relevant newspaper for the apartments
advertising. Radio was not determined as the most relevant media for apartment looking at
all. See these results in the figure below.
44
et
ro
St
oc
kh
ol
m
O
th
er
s
He
m
an
d
Hu
s
M
et
ro
M
Sv
en
sk
a
Da
gb
l
Ny
he
te
r
Da
ge
ns
ad
et
0,4
0,35
0,3
0,25
0,2
0,15
0,1
0,05
0
In
te
rn
et
Percentage,%
The most relevant media for looking apartments,
determined by customers
Media
Figure 16: The most relevant media for looking at apartments, determined by customers.
The conclusion from these results is that the people are mostly using internet while
looking for apartments.
In the range “Relevant media for looking at apartments” 24 % of answers was devoted
to Metro Hus and Hem,14% respondents chose Dagens Nyheter, 7% chose Internet, 5%
determined that it is “Other media”, 4% chose Metro Stockholm, 2% chose Svenska
Dagbladet, and 1% chose Radio, as the relevant media for looking apartments at. These
results are in figure below.
Relevant media for looking apartments,
determined by customers
0,3
Percentage,%
0,25
0,2
0,15
0,1
0,05
Ra
di
o
St
oc
kh
ol
m
M
et
ro
Da
gb
l
ad
et
ed
ia
Sv
en
sk
a
O
th
er
m
In
te
rn
et
Ny
he
te
r
Da
ge
ns
M
et
ro
Hu
s
an
d
He
m
0
Media
Figure 17: Relevant media for looking apartments, determined by customers.
45
The next media, after Internet, Skanska target audience applies to Metro Hus and Hem
for looking apartments advertising.
In the range, “Less relevant media for looking apartments” 18% of the customers
determined that it is Dagens Nyheter, 13% think that it is Metro Hus and Hem, 8% think
that it is Internet, 7% chose Svenska Dagbladet, 4% think that it can be “Other media”,2%
determined Metro Stockholm as the less relevant media for looking advertising. Radio
was not determined in this range of relevance. See the results in the figure below.
St
oc
kh
ol
m
et
ro
ed
ia
M
O
th
er
m
ad
et
Da
gb
l
In
te
rn
et
Sv
en
sk
a
an
d
Hu
s
et
ro
M
Da
ge
ns
He
m
0,2
0,18
0,16
0,14
0,12
0,1
0,08
0,06
0,04
0,02
0
Ny
he
te
r
Percentage,%
Less relevant media for looking apartments,
determined by customers
Media
Figure18: Less relevant media for looking apartments, determined by customers.
These figures allow to conclude that there are three the most probable used media by
customers while looking for apartments, they are: Internet, which is prevailing, then Metro
Hus and Hem, and Dagens Nyheter, which is in the range “Less relevant media”, but still
relevant.
Next question which was offered to respondents is “Which media you used when
buying your apartments?”, 37% of the respondents said that they used internet in order to
find their current apartments, 20% used “other sources of information” like seeing
advertising of project and then visited brokers offices, 10% used Dagens Nyheter for
choosing their apartments, 10% of the respondents used recommendations of friends, 6%
of respondents found their apartments by looking at Metro Hus and Hem, and 2% used
Svenska Dagbladet for searching the apartments. The results are summarized in the figure
below.
46
Svenska
Dagbladet
Metro Hus and
Hem
Dagens Nyheter
Reccomendations
of friends
Others sources of
information
0,4
0,35
0,3
0,25
0,2
0,15
0,1
0,05
0
Internet
Percentage,%
Media used by customers for buying their
apartments
Media
Figure 19:Media used by customers for buying their apartments.
These results depict the real pictures of the media preferences of Skanska customers.
As it was said earlier in this chapter, Internet is the most common media where customers
apply for looking at the apartments, then it is interesting to know that recommendations of
friends, as it calls in marketing literature “power of mouth” play significant role for
customers’ choice of company to buy apartments at. Besides offered list of the media,
some other sources of information affect customers choice of buying apartments, it is
better for Skanska to control the quality of the information which these sources provide.
Among the newspapers, Dagens Nyheter, Metro Hus and Hem, Svenska Dagbladet play
the role of awareness about Skanska’s apartments which is going to be sold. However,
Dagens Nyheter derives more awareness than even such specified target group newspaper
as Metro Hus and Hem, Svenska Dagbladet derives not significant amount of awareness,
according to the questioning which was held on the real buyers of Skanska apartments.
47
7. Discussion and Conclusions
7.1 Comparison of the Media
Skanska company during 2005 have been using such media vehicles as: Metro
Stockholm, Metro Hus and Hem, Internet and Radio MTG for advertising placement.
According to the information which was collected, derived and analysed it is possible to
give comparative characteristics for the each media used.
Metro Stockholm.
It takes 696 000 readers in Stockholm daily, it has the biggest readers audience after
Dagens Nyheter, it is considered like the most tediously and most often reading newspaper
in the city.
Reach in the Skanska target group is 46%. Opportunity to see the ads in the target
group was determined as 2,12 times. Metro’s target readers are 15-39 years, with a
metropolitan mindset. They are urban, active, well educated and spend the majority of
their income on personal items and in the age to live in a home.There are three key
success factors of Metro, which indicate newspaper’s advantages : “new time for media
consumption “fresh reach”, “new way of distribution where people are, Metro is” and
“short news”.
Metro can offer to advertisers many new creating aspects. The CPM is 71 SEK
including discounts.
Skanska began to place it’s advertising in Metro Stockholm since February 2005 and
spent 198 662 SEK according to October 2005, which is 6% of the total advertising
budget. Metro offers to advertisers unique possibilities of the distribution techniques on
the areas the most target for clients. According to the results, received by questioning,
based on 100 respondents who is the customers of Skanska,16% of them read Metro
Stockholm. 1% of the respondents think that Metro Stockholm is the most relevant media
to put advertising in, while 4% think that it is relevant, and 2% think that it is less relevant
media for placing Skanska ads. None of the respondents used Metro Stockholm for
applying in search for their currents apartments. It can be explained by the fact that
Skanska only this year started to place advertising in Metro Stockholm.
Metro Hus and Hem.
It is specified newspaper, mostly consists of advertisements from Stockholm real estate
companies, and some pages about newest apartment’s design, new construction etc. It
issues one a week, circulation is equal to the number of households in Stockholm which is
889 000 copies. The number of readers are 706 000 according to the last survey of autumn
2004. Age profile is 15-80 years. Newspaper has it’s own specified target group of
potential apartments’ buyers. It makes its privilege in the list of media to choose for Real
Estate company ads. The stage of readiness was determined as: read almost all per issue.
Metro Hus and Hem encourage readers to use internet for detail features of apartments’
recognition, this create positive mix of two media.
Skanska has been placing advertising weekly during 2005, CPT= 150 SEK including
discounts, according to the October 2005 company spent 2 244 454,6SEK which is 67%
of the advertising budget. Reach is considered to be 79% of the readers. Hus and Hem can
provide very flexible conditions to advertisers: distribution on desirable areas, any size,
colour of ads, possibility to change the message two days before publishing.
ROI( return on investment) of this newspaper is 85,54. According to my calculations it
derives 6% of the Skanska sales. Efficiency Index is 9. The results from questioning
showed that 22% of the Skanska customers read Metro Hus and Hem, next option after
Dagens Nyheter. 6% of the customers think that it is the most relevant newspaper for
48
Skanska advertisements, 24% think that it is relevant media, and 13% of the customers
ranged it like less relevant media for company advertising. For buying currents apartments
6% of the customers used Metro Hus and Hem.
Internet.
Skanska placing it’s advertising to ”Nya Hem” web page. According to the October
2005, Skanska spent to the internet advertising 146 300 SEK, which is 4,34 % of the
advertising budget. According to my calculations, Internet delivers 37% of the incremental
sales, with ROI 8092,96, which means that sales exceed the expenditures to this amount of
times. Efficiency Index is also very big 853. My calculations allowed to determine that
level of awareness on the money base, which Internet provide to customers, it is sixteen
times higher than newspapers bring. Internet Cost-to Awareness index is 944. According
to the questioning results, 35% of the customers think that the most relevant media for
Skanska advertising is Internet, while 7% chose it like relevant and 8% determined like
less relevant media for advertising. Internet was used in the most cases for choosing the
current apartments of customers, 37% buyers used Internet for purchasing, this fact and
the figures of it’s efficiency mark out Internet like the most efficient media for
advertising.
Radio MTG.
Skanska placing advertising on Rix.fm, Lugna favoriter, Svenska favoriter stations
which are all under commercial Radio MTG. Radio audience is 60-65% of total
population of Stockholm on the weekly basis, which is 1 589 529 people. MTG is the
most popular radio in Stockholm, age profile is 9-79 years. Reach is 70%. During the
advertising campaign with duration of 8 weeks in summer,976 000 people was exposed to
an ads. Total number of spots for campaign was 300, average frequency was 18,57. Every
week it was exposed 38 spots and each of them was listened two times. CPT=40 SEK,
according to the October 2005 it was spent 350 000 SEK to the radio advertising, which is
10% of the budget. Total demo target GRP is 213 600. According to questioning 1% of
the respondents determined Radio as the relevant media to advertise. Information from the
radio perceives with some of the minds function, unconsciously, this is one of advantages
of the radio ads placement. By questionnaires it was determined that radio listeners
intension (Rix.fm) to buy apartments is as high as Dagens Nyheter readers or even higher.
7.2 Concluding Summary and Recommendations
The aim of my work was to determine which media type for Skanska company is the
best for advertising. The media choice depends on the target group of the project. Skanska
target group is from 20 to 60 years. Age and status of the target group affect media choice.
Young people are more tending to use the internet and TV, while more mature generation
prefers newspaper. In order to determine the most efficient media type for each of the
target group it is needed to follow, to know the life style of the each group of people, what
is their hobby etc. All this information will draw a picture of the particular target group
preferences in general, and then it is easy and clear to intrude desired ads to the definitely
used aspects of target group life.
According to the calculations in Chapter 6 and results of questioning, Internet is the
most efficient media to use with ROI 8092,96 , Efficiency Index 853, and Cost- toAwareness Index 944 which in sixteen times higher than newspapers. But it is well known
fact in advertising policy that it is not profitable to use one media, due to the decreasing
return to scale, which can be explained by the point in advertising cycle, in which each
increasing in investment in one media accompanied by decreasing in sales. Thus, it is
49
more efficiently to use media mix. For Skanska company newspaper and Internet is the
most effective media mix. Internet web page “hem net” is used commonly by specific
audience of potential buyers of apartments and with a new project construction it is
sensible to place ads on the web page. Sweden is on the top of the list of the countries
where people the most often read the newspapers and use internet. For that part of the
audience, who are not using the internet, newspaper is the source of any information, and
it is the right decision to place ads in the press. The limitation of the morning press ads
placing is its high cost. Disadvantage of the press that there is probability of not paying
attention by the readers to the ads. Media preferences of Skanska target audience are:
Internet, Hem net, Metro Hus and Hem, Dagens Nyheter Dei Bostad. All of this three
medias contain apartments’ ads and definitely can be used by the potential buyers, this can
be considered like the most relevant media mix for Skanska company.
Metro Stockholm was not designated as the efficient media, which increases sales, as
well as the radio. But these media vehicles more contribute to the brand awareness and
positioning in the minds of customers, the pay off effect of them takes time. It is necessary
to build image of the company among customers in order such incentives of purchase like
”recommendations of others” and “other source of information” which are taking decent
percent in options of sources information about Skanska see Figure 19, will contribute to
positive effect. Thus, using of these media is desirable. One of the disadvantages of radio
is that it like a background for every listeners, and it can be not appreciated very carefully,
the right way to put ads when it is driving time, when the person is alone in the car and
probability of the catching the ads increasing.
Some recommendations for improving Skanska ads in some media:
-Radio: decrease the amount of execution daily spots based on the fact, that the
apartments buying process takes a long time, buyers have to decide which apartment to
buy, and being long time on the radio, ads remind all the time about company’s
possibilities, this information is settled up in the mind of buyers. Decreasing numbers of
spots will allow in its turn to save money and to continue radio ads placement for longer
period, increasing radio share among other competitors and awareness. Another advice is
to be more aggressive when it comes closer to the sale dates, before a week, with an
announcement “ do not miss the chance” and others. Also for reaching the higher level of
selling apartments is relevant to advertise the area of the project through the radio in order
to inform customers if it is not well known district or emphasize the advantages of it.
-Newspapers: Skanska has to create more feelings about brand: “What is “nya” hem
about?” “Why I should buy only in Skanska?” Customers should find the answers easily
in advertising spots. Skanska’s ads should not play informative role only, but also it has
to evoke feelings of the potential customers.
For future TV ads placement it is important to remember, that for Skanska it is possible
to put ads on the local TV channel only, not on the national TV with Stockholm project, it
will be waist full money. On the national channel it makes sense to put ads for brand
familiarity, as well as on the radio. The most important drawback for TV placement is it’s
cost and existing chance of being zipping.
So, the conclusion is, the right choice of efficient media depends mostly on target
group. It is important to specify the surrounding of it and to be with the information where
people mostly are. For Skanska company newspaper and Internet is the most effective
media mix. Determined media preferences of Skanska target audience are: Internet, Hem
net, Metro Hus and Hem, Dagens Nyheter Dei Bostad. All of these three media contain
apartments’ ads and definitely can be used by the potential buyers, this can be considered
like the most relevant media mix for Skanska company. Metro Stockholm and Radio
50
MTG should be considered like media vehicles which is contribute more the brand
awareness and positioning in the minds of customers, the pay off effect of them takes time
and using of them is desirable.
51
References
Philip Kotler, Gary Armstrong, sixth edition,1994. Principles of marketing.
Tomas C. O’Guinn, Chris T. Allen, Richard J. Semenik, third edition,2003. Advertising
and integrated brand promotion.
George E. Belch, Michael A. Belch, third edition, 1995. Advertising and promotion: an
integrated marketing communications perspective
Online Advertising Ad Terminology: Ad Terms Part 3.
http://www.adserversolutions.com/adserver/adterms3.html.
A Benchmark Study on Advertising Awareness from Millward Brown. “Documenting the
Effectiveness of Magazines in the Media Mix.”
http://www.magazine.org/content/Files/Millward%5FBrown%5FStudy.pdf
Measuring Magazines Effectiveness. Quantifying Advertising and Magazine Impact on
Sales2005.
http://www.magazine.org.
Measuring Magazines Effectiveness. Quantifying Advertising and Magazine Impact on
Sales2005.
http://www.magazine.org/Advertising_and_PIB/Accountability
Multimedia Involvement Study, Erdos & Morgan 2000.
http://www.magazine.org/content/files/media_choices_topline.pdf
A guide to measure ROI and ROO across the media 2005.
http://www.magazine.org/Advertising_and_PIB/Accountability/
Dynamic logic Cross Media Research, 2004.
www.magazine.org
Marieke de Mooij, 1998. Global marketing advertising: understanding cultural paradoxes
Rijkens, Rein, 1992. European advertising strategies. The profiles and policies of
multinational companies operating in Europe. British library cataloguing in publication
data. ISBN 0-304-31796-9.
Chris Hackley,2005. Advertising and promotion communication brands. Library of
congress number:2004114267.
W. Duncan Reekie 1981.The economics of advertising.
Julian L. Simon. 1970. Issues in economics of advertising.( University of Illinois press,
urban Chicago London)
52
Albert N. Greco 1991.Advertising management and the business publishing industry:
marketing notes and cases.(Library of Congress Cataloging-in-Publication Data)
Joseph O. Eastlack Jr.;Ambar G. Rao .”Advertising experiment at the Campbell Soup
Company” Marketing Science, vol.8 No. 1 (Winter, 1989),57-71.
Malcolm A. McNiven. “ Commentary on “Advertising experiment at the Campbell Soup
Company” Marketing Science, vol.8 No. 1 (Winter, 1989),74-75.
Joe Dodson commentary on “Conducting Advertising Experiments in the Real World: the
Campbell Soup Company Experience”. Marketing Science, vol.8 No. 1 (Winter, 1989),7273.
53
Appendix 1
Percent of people who said that they read almost
everything in newspaper
5
4
Metro Stockholm
3
Citypaketet (Dagens
Nyheter+Svenska
Dagbladet)
2
1
0
0,1
0,2
0,3
0,4
0,5
Percentage,%
Source: Metro Stockholm information brochure
Living situation today.Readers of newspapers 20-49
years
40%
35%
30%
25%
20%
private owned apartments
rental apartments
15%
private owned houses
10%
5%
0%
Metro
Stockholm
Dagens
Nyheter
Svenska
Dagbladet
Newspapers in Stockholm
Source: SIFO Orvesto 2005:1
54
Percentage of readers who planning to change housing in
coming 2 years
0,5
0,45
0,4
Percentage
0,35
0,3
0,25
0,2
0,15
0,1
0,05
0
Metro Stockholm
Dagens Nyheter
Svenska Dagbladet
Newspapers of Stockholm
Source SIFO Orvesto 2005:1
Readers 20-49 years of local newspapers would change
housing to.....
60,00%
50,00%
40,00%
private owned apartments
30,00%
rental apartments
20,00%
private owned houses
10,00%
ad
et
Da
gb
l
Sv
en
sk
a
Ny
he
te
r
Da
ge
ns
M
et
ro
St
oc
kh
ol
m
0,00%
Newspapers of Stockholm
Source SIFO Orvesto 2005:1
Correlation of frequency in insertion and reaching the number of readers
Newspaper
1
2
Frequency of insertion
3
6
9
53
59
70
76
41
Metro
Stockholm
43
50
Dagens
Nyheter
21
25
Svenska
Dagbladet
Source : SIFO Orvesto 2005:1
12
80
54
61
65
68
28
33
36
39
55
Percentage of readiness the newspaper
Percentage of readiness the local newspapers
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Metro Stockholm
nc
em
en
ts
"
an
no
u
an
d
te
xt
an
d
"R
ea
d
"R
ea
d
ru
br
ic
s
"W
at
ch
th
e
an
no
u
an
no
un
c
em
en
ts
nc
em
en
ts
"
"
Other local newspapers
Source: Metro Stockholm brochure
Living situation today. Listeners of MTG radio 25-54 years
0,4
0,35
0,3
Percentage
0,25
0,2
0,15
0,1
0,05
0
Private owned apartments
Rental apartments
Source SIFO Orvesto 2005:1
56
Own villas
Percent of listeners MTG who planning to change their houses
next two years
80,00%
70,00%
60,00%
50,00%
40,00%
30,00%
20,00%
10,00%
0,00%
Yes
No
Source SIFO Orvesto 2005:1
Next two years listeners of MTG are planning to
move to....
0,14
0,12
Percentage
0,1
0,08
0,06
0,04
0,02
0
Private owned
apartments
Rental apartments
Source SIFO Orvesto 2005:1
57
Own villas
Appendix 2
Enkät om lägenhetsannonsering
Jag studerar vid Tekniska Högskolan, Fastigheter och Byggande. Jag arbetar nu med mitt
examensarbete som handlar om hur konsumenter uppfattar annonsering i media av
bostäder. Examensarbete sker i samarbete med Skanska som också givet mig Ditt namn
tillsammans med många andra namn.
Jag skulle vilja fråga om Du kunde vara vänlig att svara på följande fem frågor, samt
återsända dem till mig. Bifogas frankerat kuvert som är bara att lägga i gula postlådan.
Jag studerar på ett internationellt program och min studietid löper ut i november. Det är
därför så viktigt för mig att Du vill ta Dig tid att besvara denna enkät. Frågorna är enkla att
besvara och det tar inte många minuter. De finns på omstående sida.
Med vänliga hälsningar
Yuliya Zharkova
58
Enkät om lägenhetsannonsering
Vilken/vilka av följande tidningar läser oftast?
Dagens Nyheter
Svenska Dagbladet
Metro
Metro Hus och Hem
Andra
Vilka media är viktigast för Dig när Du söker lägenhet? Rangordna så att 1 är viktigast, 2
är näst viktigast och 3 är tredje viktigast.
Dagens Nyheter
Svenska Dagbladet
Metro
Metro Hus och Hem
Internet
Radio
Andra
När Du hyrde/köpte Din nuvarande lägenhet, vilken av följande källor använde Du?
Dagens Nyheter
Svenska Dagbladet
Metro
Metro Hus och Hem
Internet
Radio
Rekommendation av bekanta
Andra
Välj ETT alternativ där du tagit del av Skanskas marknadsföring?
Bara i tidningar
I tidningar och på radio
Bara på radio
På Skanskas webbsida
På Skanskas webbsida och i tidningar
På Skanskas webbsida och på radio
59