Download A. Preferred position

SEM I 3.08
SELECTING ADVERTISING MEDIA - DETERMINING REACH CALCULATING MEDIA COSTS
ADVERTISING – SLIDING SCALE
RATES
 Sliding-scale rates are discount rate structures offered
 by newspapers to advertisers willing to purchase a
large volume of advertising space over a one-year
period.
 Split-runs are a printing technique that allows publishers
to print different advertisements for the same product in
alternating copies of the publication.
 Preferred position is newspaper/magazine space
thought to attract the greatest audience attention. Color
requirements in ads increase their cost, as do split-runs
and preferred position.
RADIO ADS – # OF LISTENERS
REACHED
 The costs of radio spots will increase or
decrease depending upon the length of the
advertisement, the time at which the
advertisement is broadcast, the number of
listeners, and how often the ad is run.
 Most production costs are a small part of the
actual charges for broadcast time. The size of
the business and the type of information
being aired do not effect the advertising rate.
OUTDOOR ADVERTISING VISIBILITY
 Higher rates will be charged for outdoor
advertising that is placed in areas where it will
be highly visible to pedestrians/motorists.
 Outdoor advertising is not difficult to replace,
is set up to be seen over a period of time,
and is often felt to be an eyesore rather
than to have artistic appeal.
COST EFFICIENCY OF A MEDIA
VEHICLE
 Cost per thousand measures the cost efficiency of a
media vehicle based on the cost of exposing 1,000
people to a promotional message.
 To calculate cost per thousand, multiply the cost of
the ad by 1,000, then divide by the number of
listeners in the audience: CPM = cost of ad x 1,000
($500 x 1,000 = $500,000) ÷ audience of 200,000
($500,000 ÷ 200,000 = $2.50).
GROSS RATING POINTS
 Gross rating points (GRPs) is the % of people
reached by a media vehicle, multiplied by the
frequency of exposure to the advertisement.
 The cost per GRP is calculated by dividing
the total advertising expense by the number
of gross rating points ($117,000 ÷ 240 =
$487.50).
DIRECT MAIL
 Direct mail is a promotional medium that
comes to consumers' homes in the form of
letters, catalogs, postcards, and folders. It
allows the advertiser to target a specific
market.
 Newspapers, billboards, and Yellow Pages
will not be cost-effective because they will
reach many people who may/may not be
interested in the advertiser's product(s).
RADIO SPOT COMMERCIALS
 Radio requires a relatively short lead time for
placing ads, and it is considered an effective
medium for local and regional markets.
 Point-of-purchase displays would reach only
those customers who came into the business.
A direct-mail campaign must be prepared
well in advance and may not be delivered on
time.
IMPACT OF ADS
 Impact is the impression an advertisement
will make on the average consumer in a
target market. Impact is created by the
credibility, prestige, and editorial environment
of a media vehicle.
 Reach, frequency, and cost per thousand are
quantitative factors used in media selection.
LOCAL NEWSPAPER
 The target market for a local hardware store
is adults in the local area.
 Network television and a national news
magazine also target adults, but the national
media provide too much wasted coverage for
a local business. The local rock station's
audience is generally teenagers, not adults.
CONTINUOUS STRATEGY - ADS
 Food is a product bought on a regular basis;
thus, it needs a continuous scheduling
strategy which provides steady, regular
advertising.
 A flighting strategy would be inappropriate
since buying food is not a seasonal activity.
Although a pulsing strategy offers regular
advertising, it is not steady, but intermittent. I
VOLUME DISCOUNTS - ADS
 Newspapers frequently offer volume
discounts to advertisers who purchase
repeated amounts of space for ads. Offering
volume discounts encourages advertisers to
purchase more ad space because they receive
a better price.
 Newspapers usually charge flat rates for ads
that appear only one time. Advertisers usually
pay a higher rate to obtain a preferred
position in the newspaper.
TV SHOW RATINGS - ADS
 Businesses that buy broadcast advertising try
to purchase time when a large segment of their
target market is watching television. These
businesses need information about the ratings
for certain shows in order to determine which
ones attract a high volume of viewers.
 The ratings for each show indicate approx. how
many households in the viewing area watched
the show on a given day.
TV SHOW RATINGS - ADS
 Businesses do not need information about
the ownership of the stations, the
qualifications of management, or the
popularity of newscasters in order to
purchase advertising time.
PACKAGE RATES – RADIO ADS
 Radio stations offer reduced rates to
advertisers who agree to purchase a series
of commercials over a certain period of
time.
 The package rates cost less than single
commercials and provide considerable
savings to advertisers. The stations also
benefit because they have sold a block of
time.
PACKAGE RATES – RADIO ADS
 Display is a kind of newspaper and
magazine advertising which includes
several elements such as illustrations,
headlines, white space, and type.
 Transit is a form of out-of-home media found
in various modes and locations of mass
transportation.
CIRCULATION
 Circulation is defined as the number of
people reached by a media vehicle. A
company with a well-known brand might want
to reach as many people as possible. As a
result, it places ads in nationally distributed
publications instead of local publications.
 Motivation is an influence/reason that causes
someone to take action.
REPUTATION OF PUBLICATION
 Reputation often refers to the image/status of an
entity. Businesses often consider a publication's
reputation when buying advertising; however, a
business's reputation does not always
indicate details regarding the publication's
readership or reach.
 For example, it is possible for a magazine to
have a good reputation & small reach.
REPUTATION OF PUBLICATION
 It is also possible for a publishing company to
have some negative aspects in terms of overall
reputation and still maintain a sizable reach.
 Participation is the ability or willingness to take
part or share something. A publication's
participation in a variety of activities does not
necessarily reflect its circulation in terms of size
and demographics.
PREFERRED POSITION
 When requesting preferred positions,
advertisers place their ads in the newspaper
location that generates optimal exposure
for their target market.
 For example, an athletic shoe retailer might
request placement in the sports section of
the newspaper instead of the home and
garden section. Because the advertiser is
requesting a specific placement location, the
advertiser pays a higher rate.
RUN OF PAGE RATES - ADS
Run-of-page rates do not allow advertisers
to specify advertisement placement and are
generally lower than the preferred-position
rate.
Contract rates are negotiated rates & are
often lower than preferred-position rates.
When ads are placed more than once, the
advertiser often receives a frequency rate.
The higher the frequency of ad placement,
the lower the rate.
CIRCULATION - REACH
 Reach is a quantitative measure of the
number of different people in the target
audience who are exposed at least once to
an advertising message.
 Circulation is the number of people reached
by a media vehicle. Magazine circulation
includes subscription and newsstand sales.
.
CIRCULATION - REACH
 To determine the % of reach for a radio ad,
divide the actual # of message exposures
(393,750) by the target audience of 18-30 yr.old-males (875,000) (393,750/875,000 = .45
or 45%)
.
CIRCULATION - REACH
 To determine the percentage of reach for a
local cable-television advertisement, divide
the actual number of message exposures
(313,000) by the target audience of 16- 36year-old females (939,000) = .33 or 33%).
.
MOVABLE BILLBOARD
 Sport/Event marketers choose the media
vehicles that will most effectively reach their
target audiences. One vehicle is a movable
billboard that drives throughout the area
promoting a specific event.
 These billboards are large and attract
attention. As a result, they have proven to be
a good promotional tool because they are
seen by a lot of people.
MEDIA VEHICLES
 Airplane banners are often used to promote
OTHER products during an event rather than
to promote an upcoming event.
 Internet advertising is NOT as effective
because people must have access to the
Internet in order to see the advertising.
 Stadium posters reach ONLY those people
who visit the stadium.
.
MEDIA VEHICLES
 The most effective way to reach the public to
promote a local event (e.g., charity
fundraiser) is by running local television
commercials.
 Oftentimes, the television station will help
sponsor the event by providing low cost or
free airtime to run the commercials. The
advantage to running local television
commercials is they reach a lot of people for
a low cost per exposure.
.
MEDIA VEHICLES
 Direct mail is sent to consumers' homes and
businesses and is often very expensive.
 It is possible that many members of the local
target market do not read national
newspapers or consumer magazines.
.
COVER PRE-EVENT EXPENSES
 By selling tickets for sport/events in advance
(e.g., season ticket holders, groups),
sport/event organizations obtain revenues
before the sport/event occurs. These
revenues can be used to cover expenses
such as purchasing supplies, printing costs,
and personnel salaries.
REVIEW
28 (2). Which of the following decreases
the costs to a business of using
newspaper advertising:
A. Color requirements
 B. Sliding-scale rates
 C. Preferred position
 D. Split runs
28 (2). Which of the following decreases
the costs to a business of using
newspaper advertising:
A. Color requirements
 B. Sliding-scale rates
 C. Preferred position
 D. Split runs
29 (2). The cost to a business of radio
spots will vary with the:
A. Basic production costs
 B. Size of the business
 C. Number of listeners being reached
 D. Type of information being aired
29 (2). The cost to a business of radio
spots will vary with the:
A. Basic production costs
 B. Size of the business
 C. Number of listeners being reached
 D. Type of information being aired
30 (2). An important factor in
determining rates for outdoor advertising
is its:
A. Short life
 B. Ease of replacement
 C. Visibility
 D. Artistic appeal
30 (2). An important factor in
determining rates for outdoor advertising
is its:
A. Short life
 B. Ease of replacement
 C. Visibility
 D. Artistic appeal
31 (2). A radio station sells a 30second spot for $500. If the number of
listeners is 200,000, calculate the cost
per thousand (CPM).
A. $50.00
 B. $5.00
 C. $25.00
 D. $2.50
31 (2). A radio station sells a 30second spot for $500. If the number of
listeners is 200,000, calculate the cost
per thousand (CPM).
A. $50.00
 B. $5.00
 C. $25.00
 D. $2.50 : CPM = cost of ad x 1,000 ($500 x
1,000 = $500,000) ÷ audience of 200,000
($500,000 ÷ 200,000 = $2.50).

32 (2). An advertiser spent $117,000
for 12 television spots with a total of 240
GRP (gross rating points). What was the
cost per GRP?
A. $975.50
 B. $585.50
 C. $712.50
 D. $487.50
32 (2). An advertiser spent $117,000
for 12 television spots with a total of 240
GRP (gross rating points). What was the
cost per GRP?
A. $975.50
 B. $585.50
 C. $712.50
 D. $487.50
($117,000/240 = $487.50)
33 (2). When an advertiser wants to
reach specific target markets, which type
of print medium would be most costeffective?
A. Newspapers
 B. Billboards
 C. Direct mail
 D. Yellow pages
33 (2). When an advertiser wants to
reach specific target markets, which type
of print medium would be most costeffective?
A. Newspapers
 B. Billboards
 C. Direct mail
 D. Yellow pages
34 (2). Your business wants to sell a
shipment of goods by the end of the
current work week at the lowest
advertising cost. Which of the following
promotional media would be best:
A. Ad in next Sunday’s paper
 B. Direct-mail campaign
 C. Point-of-purchase displays
 D. Radio spot commercials
34 (2). Your business wants to sell a
shipment of goods by the end of the
current work week at the lowest
advertising cost. Which of the following
promotional media would be best:
A. Ad in next Sunday’s paper
 B. Direct-mail campaign
 C. Point-of-purchase displays
 D. Radio spot commercials
35 (2). Which of the following is a
qualitative media factor used in the
selection of promotional media:
A. Reach
 B. Frequency
 C. Impact
 D. Cost per thousand
35 (2). Which of the following is a
qualitative media factor used in the
selection of promotional media:
A. Reach
 B. Frequency
 C. Impact
 D. Cost per thousand
36 (2). Which of the following is the
most appropriate promotional medium
for a local hardware store:
A. Local newspaper
 B. Network television
 C. Local rock station
 D. National news magazine
36 (2). Which of the following is the
most appropriate promotional medium
for a local hardware store:
A.
 B.
 C.
 D.
Local newspaper
Network television
Local rock station
National news magazine
37 (2). What is the most appropriate mediascheduling strategy for advertising food and
other frequently purchased items?
A. Continuous
B. Flighting
C. Pulsing
D. Intermittent
37 (2). What is the most appropriate mediascheduling strategy for advertising food and
other frequently purchased items?
A. Continuous
B. Flighting
C. Pulsing
D. Intermittent
38 (2). A business owner saved money by
contracting with the local newspaper to
purchase a series of ads over a period of time
which entitled the business to a
A. Flat rate
B. Volume discount
C. Free insert
D. Preferred position
38 (2). A business owner saved money by
contracting with the local newspaper to
purchase a series of ads over a period of time
which entitled the business to a
A. Flat rate
B. Volume discount
C. Free insert
D. Preferred position
39 (2).
Businesses that buy broadcast
advertising time often ask for information
about the __________ before purchasing the
time.
 A. Qualifications of management
 B. Ownership of the stations
 C. Popularity of newscasters
 D. Ratings for certain shows
39 (2).
Businesses that buy broadcast
advertising time often ask for information
about the __________ before purchasing the
time.
 A. Qualifications of management
 B. Ownership of the stations
 C. Popularity of newscasters
 D. Ratings for certain shows
40 (2).
A business owner who wants to
obtain a reduced rate for a series of local radio
commercials might contract for what type of
promotion?
 A. Package
 B. Display
 C. Transit
 D. Contingent
40 (2).
A business owner who wants to
obtain a reduced rate for a series of local radio
commercials might contract for what type of
promotion?
 A. Package
 B. Display
 C. Transit
 D. Contingent
41 (2). When a business places print ads in a
magazine that has a specific readership reach,
it is basing its buying decisions on the
publication’s:
 A. Motivation.
 B. Reputation.
 C. Circulation.
 D. Participation.
41 (2). When a business places print ads in a
magazine that has a specific readership reach,
it is basing its buying decisions on the
publication’s:
 A. Motivation.
 B. Reputation.
 C. Circulation.
 D. Participation.
42 (2). Businesses generally pay more
for newspaper advertisements when
purchasing space at a __________ rate.
A. Preferred position
 B. Run of page
 C. Contract
 D. Frequency
42 (2). Businesses generally pay more
for newspaper advertisements when
purchasing space at a __________ rate.
A.
 B.
 C.
 D.
Preferred position
Run of page
Contract
Frequency
69 (2). A sport/event organization can
determine advertising reach of a
magazine by analyzing the publication’s:
A. Billing cycle
 B. Circulation
 C. Finances
 D. Response mode
69 (2). A sport/event organization can
determine advertising reach of a
magazine by analyzing the publication’s:
A. Billing cycle
 B. Circulation
 C. Finances
 D. Response mode
70 (2). What is the % of reach for a
local radio sporting-goods ad if the
target audience is 875,000 18 to 30 yr.
old males and 393,750 of the target
audience is exposed to the message:
A. 45
 B. 40
 C. 35
 D. 30
70 (2). What is the % of reach for a
local radio sporting-goods ad if the
target audience is 875,000 18 to 30 yr.
old males and 393,750 of the target
audience is exposed to the message:
A. 45 (393,750/875,000 = .45)
 B. 40
 C. 35
 D. 30
72 (2). Which of the following media
vehicles might a sport/event marketer
choose to promote a celebrity baseball
game to many people throughout a
metropolitan area:
A.
B.
C.
D.
Internet advertising
Airplane banners
Movable billboard
Stadium posters
72 (2). Which of the following media
vehicles might a sport/event marketer
choose to promote a celebrity baseball
game to many people throughout a
metropolitan area:
A.
B.
C.
D.
Internet advertising
Airplane banners
Movable billboard
Stadium posters
73 (2). Which of the following types
of media should an event planner use to
promote an upcoming local charity
event to the general public:
A. Direct mail
 B. Local television
 C. National newspaper
 D. Consumer magazine
73 (2). Which of the following types
of media should an event planner use to
promote an upcoming local charity
event to the general public:
A. Direct mail
 B. Local television
 C. National newspaper
 D. Consumer magazine
97 (2).
The Fit and Lively Fitness Center wants
to increase its membership, so it is planning to run a
television ad to promote lower membership fees for
a limited time. If the target audience is 939,000 16to 36-year-old females, and 313,000 of the target
audience is exposed to the message, what is the % of
reach for a local cable-television advertisement?
A. 36
 B. 33
 C. 39
 D. 30
97 (2).
Fit & Lively Fitness Ctr. wants to
increase its membership. It is planning to run a TV
ad to promote lower membership fees for a limited
time. If the target audience is 939,000 16- to 36year-old females, and 313,000 of the target audience
is exposed to the message, what is the % of reach for
a local cable-television ad?
A. 36
 B. 33
 C. 39
 D. 30
(313,000/939,000)
98 (2). One reason it is important for
professional sport/event organizations to
develop advance ticket sales plans is
because the generated revenue helps
organizations to:
A.
B.
C.
 D.

Increase general admission ticket sales
Decrease operational costs
Cover pre-event expenses
Reduce the risk of ticket scalping
activities
98 (2). One reason it is important for
professional sport/event organizations to
develop advance ticket sales plans is
because the generated revenue helps
organizations to:
A.
B.
C.
 D.

Increase general admission ticket sales
Decrease operational costs
Cover pre-event expenses
Reduce the risk of ticket scalping
activities