MKTG 477 1st EditionExam #3 Study Guide Lectures: 26 - 38April 3, 2015 – Reach/Frequency/GRP problems handoutMedia – of all the topics covered in this class, “media” tends to be the one most foreign to students (even though it appears to be intuitively simpleLingo- Reach - Gross impressions- Frequency- GRPs- Rating- Share- Flighting, Pulsing- CPM, CPM-TM- Up front- Scatter- Sweeps- Spot buysTypical media decisions1. How can I effectively reach my target market?a. Matching target markets to media audiences, considering costs and relative effectiveness2. Which media should I use?a. Media mix = proportion of ads placed on/in TV, radio, magazines, newspapers, outdoors,web, etc.b. Considering strengths and weaknesses of each medium3. Which media vehicles should I use?a. Vehicles = TV programs, magazine titles, radio shows, etc.4. When should I run/place my ads?a. Time of yearb. Time of day5. How often should I run/place my ads?a. How many times?b. Frequency of exposuresMedia relationships- Advertiser  Ad agency or media buyer  Media representative Reach – the number or percentage of homes (or individuals) from a target market that have been exposed to an ad at least once during a certain time period- Unduplicated audience – not double counting individuals who have been exposed more than once - Expressed as either a raw number (number of homes or individuals) or, expressed as a percent (a% of the target market)April 6, 2015 – Media part 2A. Reach (# of households) = 17 million householdsB. Reach (% of the target market) = 17/30 = 56.7% of the target market was reached at least one time, using this media planC. Frequency = 29/17 = 1.7 timesD. GRP = 56.7% x 1.7 times = 96.4 GRPsFrequency – Of the homes/individuals reached, frequency is the average number of times they have been exposed to the ad (frequency can never be less than one)- Of those households that were exposed to the ad, they were exposed an average of 1.7 timesTo understand frequency, we must first understand gross impressions- Gross impressions – the total number of exposures in a media scheduleo Duplicated audienceo 29 millionGross ratings points (GRP) – a summary measure of the intensity of a media schedule- GRP = Reach (%) x Frequency- The GRP figure is a “relative” number that is influenced by both reach and frequency (bigger doesn’t always mean better)o Consider a GRP of 300o Reach 100% of the target market 3 timeso Reach 50% of the target market 6 timeso Reach 25% of the target market 12 timeso Reach 10% of the target market 30 times- It may be compared to other media schedules generating greater or few GRPsReach strategy – a media strategy that attempts to reach as many individuals or households from the target market as possible - Place ads in multiple vehicles, multiple timesFrequency strategy – a media strategy that attempts to reach individuals or households from the target market as many times as possible - Place the ad in a couple media, running it all the timeApril 8, 2015 – Media part 3Answers to question 2 of handoutA. 6 millionB. 6/17 = 35.3%C. 270/35.3 = 7.6 timesD. 270Answers to question 3 of handoutA. 13 millionB. 13/27 = 48.1%C. 2/27 = 7.4%D. 23/13 = 1.8 timesE. 48.1 x 1.8 = 86.6 Media concepts- Rating – the percentage of all TV homes in America tuned to a particular programo = # of homes tuned to a particular program/# of TV homes in Americao Denominator includes homes with TVs on or offo Sunday Night Football (10.7 rating) 12.3 million/114.9 million = 10.7- Share – of all homes with TVs turned on a specific time, share is the percentage of these homes tuned to a particular programo = # of homes tuned to a program/# of homes in America with TVs ono Sunday Night Football (17% share) 12.3 million/72.4 million = .17 = 17%April 13, 2015 – Interpreting a rate cardGrey’s Anatomy - P18+ = persons 18+ years old- Rate of $2,000 = cost of showing one 30 second ado Rate is a lot less than a national buy- Rtg. of 10.5 = percentage of homes in the Spokane area tuned in to Grey’s Anatomy- Shr. Of 25 = percentage of homes in Spokane area tuned into Grey’s Anatomy out of those with TVs turned ono Of the homes that have a TV turned on between 9 and 10 o’clock on Thursday, 25% of those homes were watching Grey’s AnatomyRating/Share – National example (not on rate card)- TV viewing households (millions) at 8pm on Thursdayo ABC = 20o CBS = 16o NBC = 31o Fox = 8o Others = 4 - Assume there are 114.9 million households with TVs in America- What is ABC’s rating?o 20/114.9 = 17.4%- What is ABC’s share?o 20/(20+16+31+8+4) = 25.3%Back to the rate card…Designated Market Area (DMA)- 210 in the United States- Spokane is the 73rd largesto TV households = 426,690o Percentage of total US households = 0.372% (426,690/114,700,000)- Approximately how many households in the Spokane DMA watch Grey’s Anatomy?o 10.5 x 426,690 = 44,802 households- How many individuals? 82,000 (given)- Share of 25o .25 = 44,802/x o Homes watching anything = 179,208- CPP of $190.48 o Media cost/program rating o $2,000/10.5 = $190.48- (000) of 82o 82,000 individuals watching- CPM of 24.39o The media cost to reach 1000 customerso (Cost of placing the ad in the medium/# of individuals reached) x 1000o (2,000/82,000) x 1000 = $24.39, or (2,000/82)April 15, 2015 – Media 1. What other media concept is a rating equivalent to?a. Rating = # of individuals/homes tuned into a program / # of homes with a TV (on or off)i. This is the same as Reach as a percent (Reach %)2. GRP = Reach (%) x Frequencya. (Reach % same thing as rating)3. CPM (cost per thousand)a. The media cost to reach 1,000 consumersi. Grey’s Anatomy (on rating sheet handout)1. (2,000 / 82,000) x 1000 = $24.392. ^ = (2,000 / 82) = $24.39b. Note how the cost to reach 1,000 viewers increases as you refine (more narrowly define)your target marketi. e.g. P25 – 54 vs. P18+ on rating sheet1. ($2,000 / 55,000) x 1,000 = $36.364. CPM-TM (cost per thousand target market)a. Media cost to reach 1,000 consumers from target market (TM)i. (Cost of placing ad in medium / # of target market individuals reached) x 1,000ii. Always going to more expensive than CPM 1. CPM-TM > CPM5. Calculate GRP for the following media plan for Spokane market:a. Target market is Men and Women, ages 25-54b. Buy 4 ads on Grey’s Anatomyc. Buy 2 ads on Super Nannyd. Buy 2 ads on Extreme Makeovere. Buy 1 ad on Desperate Housewivesi. Calculations:13.2 x 4 = 52.84.8 x 2 =