Advertising and the media industry Comm 3444 Advertising Society Estimating Your Personal Expenditures on the Media 1 Estimate How much money do you spend on all forms of media per year 2 Now itemize Cable bill monthly X 12 Magazine subscriptions or individual purchases Newspapers Movie tickets Movie rentals and or Netflix Buying DVDs Buying CDs or i tunes Buying video computer games Internet service Buying hardware computer TV DVD player ipod etc How much do you spend on media Average person spends 800 year directly to media companies Buying books music movie tickets cable etc 1600 year indirectly Buying advertised products Ad budget Per capita Expenditures Per Person 3 447 Food 937 936 778 584 307 225 114 Clothing Physicians Household utilities gas water etc Auto Higher ed Furniture Air travel Direct Media spending 800 The Role of Mass Media What do we use the media for News information Political speech Entertainment democracy Why is a mass communication important for Blurring the line between content and advertising advertorial Blurring the lines between content and advertising First Day by Kmart The Greatest Movie Ever Sold The Media Industry Players Consumers Advertisers Media companies Media employees Interrelated system of players Suppose a radio station needs to increase revenue What might they do Sell more ad space Will this Increase profits Consider short and long term Audience response Ratings slip Demand for ad space decreases Ad rates decrease Decreased profit for radio station Consumers Give Time money Receive Entertainment information Aggregate power high Individual power low Media employees Bring talent skill Receive income Type Creative Technical Administrative Advertisers Give Money Receive Seek Media time space to reach target Lowest cost relevant audience member Audience structure becomes extremely important Media Companies Give money media content audiences Receive Profit Their primary customer Advertisers comes from advertisers not viewers Create content to deliver the right audience Advertising is the engine Media revenue linked to audience Audience size Audience composition Bottom line TV Bait TV business selling audiences to advertisers Constructing Audiences Media construct audiences and rent them out Various strategies Maximize total eyeballs Attract a niche audience Advertising Ratings Nielsen rating based on size composition Rating percentage of people watching out of whole TV population Share percentage of people watching out of the people watching TV at the time Advertisers pay based on CPMs CPMs cost per thousand people reached Example Total cost 15K estimated audience 2 4 million 15 000 2 400 000 1000 6 25 Ratings Sampling and Recruiting Meters People Meter Diaries self record viewing Sweeps periods Ratings data collection Viewing information what s being viewed by whom Process 10 million viewing minutes day based on 25 000 metered households Relayed via phone lines to the Nielsen operations center In addition 1 6 million diaries during sweeps These lists are compiled on a weekly monthly or quarterly basis RANK PROGRA NETWOR RATING VIEWERS M K 000 1 2 3 4 5 6 7 8 9 10 UNDER THE DOME AMERICA S GOT TALENT WED NCIS 60 MINUTES AMERICA S GOT TALENT TUE SAT NIGHT FOOTBALL UNFORG NCIS LOS ETTABLE ANGELES BROTHER 15 WED BIG CSI CBS NBC CBS CBS NBC ABC CBS CBS CBS CBS 6 8 5 9 5 7 5 5 5 3 4 8 4 4 4 2 4 0 3 9 11 115 9 845 8 470 8 359 8 699 8 137 6 937 6 212 6 364 5 742 Top Broadcast TV Ratings These lists are compiled on a weekly monthly or quarterly These lists are compiled on a weekly monthly or quarterly basis basis Week of Aug 26 2013 Source playback on the Same Day defined as 3am 3am Ratings The Result RANK NETW RATIN VIEWE RAM ORK G RS 000 1 2 3 4 5 6 7 8 9 10 PROG DUCK RIZZOL DYNASTY I ISLES R SPRINT CUP L ATLANTA GE FOOTBALL PRIME L VIRGINIA TECH ALABAMA LONG MIRE WWE ENTERTAINMENT WWE RAW GE FOOTBALL AFT L RICE TEXAS A M ING BAD 512 RABID DOG WWE ENTERTAINMENT WWE RAW WWE ENTERTAINMENT WWE RAW NASCA ESPN COLLE ESPN COLLE ESPN BREAK AMC AEN TNT AEN USA USA USA 5 4 3 9 3 2 3 0 2 7 2 7 2 7 2 7 2 7 2 6 9 601 5 997 5 323 5 169 4 419 4 291 4 208 4 413 4 151 4 129 Top Cable TV Ratings These lists are compiled on a weekly monthly or quarterly basis The Result Top TV Ratings by Audience RANK PROGRA NETWOR RATING VIEWERS M K 000 1 2 3 4 5 6 7 8 9 10 SAT NIGHT FOOTBALL UNDER THE DOME PERSON OF INTEREST TUE OVER BOSS CSI UNDERC MOTIVE MASTERC HEF WED 9P 60 MINUTES NCIS LOS ANGELES BLUE BLOODS ABC CBS CBS CBS CBS ABC FOX CBS CBS CBS 6 7 6 4 5 2 4 6 4 5 4 3 4 2 4 2 4 1 4 1 1 284 1 263 971 916 854 821 1 039 785 726 767 New Developments in Ratings Data Integrating TV and Internet Nielsen NetRatings Tracking portable media devices TV outside the home At work the gym airports etc Go Meters identify viewing by collecting audio signatures MP3 based and cell phone based Its not all about audience SIZE In 2002 ABC made a bid to replace Nightline with David Letterman even though Nightline had higher ratings Why would ABC do such a thing Why did ABC want Letterman to replace Nightline 1 Letterman audience is younger more valuable early adopters trend setters Lifetime potential Hard to reach 2 The humorous content of Letterman More conducive to consuming Nightline is serious and serious is riskier for advertisers This happens fairly regularly Popular TV shows cancelled for having the wrong audience Financial news shows have low ratings but continue affluent audience Potentially offensive content Effect of advertising on media content 1 General aversion to risk Repeat what has worked May avoid offensive content 2 Avoid negative portrayal of advertisers News magazines entertainment Example NYT and Tiffany s Magazines In summary Advertising influences our economy Economic effects of advertising have particularly salient influence on the media industry More on this specific types of content in coming weeks