Transcript Getting the Most Out of Every Media Dollar You Spend

How to Achieve Your Objectives
AND Improve ROI
Purpose:
To provide SHSMD members with information and
resources for professional development
To help members increase value received for media
purchases
How to Achieve Your Objectives
AND Improve ROI
John Olson
V.P., Director of Product Development
MediaMixNet, Inc.
How to Achieve Your Objectives
AND Improve ROI??
 By allocating your resources smartly and
strategically (planning)
•View media expenditures as an investment
•Spend for the best return
By negotiating effectively for media time and
space (buying)
Media buying = media planning.…
Media planning is primarily concerned with
who is targeted by the advertising and
how many of them are reached
the timing and frequency in which
the audience is reached
what media types (TV, radio, etc.)
are used to deliver the message
what budget should be allocated
to achieve plan
Media buying = media planning.…
Media buying is primarily concerned with
 How much to pay for the time and
space
Who to buy it from
What specific vehicles (stations, programs,
publications) to buy
Media buying = media planning.…
Here’s an analogy….
You’re planning to throw a dinner party
You plan your menu
 You plan to serve salad, barbequed
chicken, and apple pie
You go out to buy the ingredients
Decide what store to shop
 How much to pay for the lettuce,
chicken, apples, sugar, crust and
ice cream (the pie was a la mode)
Agenda
 Media planning considerations that can
increase effectiveness
 Media buying strategies that can
reduce costs
Value of a Written Plan
 Helps you focus and allocate resources properly
• Selecting target audience
•Defining objectives and strategies
•Setting appropriate budgets
•Preparation for buying
Selecting a Target Audience
 Generally, the broader your audience, the more it
will cost to reach it
The harder to reach your target, the more it will cost
•Men harder to reach than women
•Younger harder to reach than older
Selecting a target audience
 Typical costs-per-thousand viewers,
prime time local TV, 4th quarter
•
•
Men 18-34:
$ 125
Women 18-34:$ 115
• Men 25-54:
• Women 25-54:
$ 65
$ 55
Selecting a target audience
 Generally, the broader your audience, the more it
will cost to reach it
True for geographic targets as well
• Remember the 80/20 rule – 80% of business
comes
from 20%
of customers
•Going
beyond
core audience will reduce ROI
•There may be good reasons to go beyond
core audience, or primary service are, but know the
risks
Selecting a Target Audience
While it’s tempting to expand target audience and
increase opportunity…
• Doing so will either increase costs or
decrease delivery
• Look at potential ROI
If it costs twice as much to reach an
additional segment, will that segment
bring in twice as much revenue?
Developing a Plan
A plan helps to allocate scarce resources toward
achieving objectives
• Strategic allocation of resources can minimize
waste from spending too much or too little on
media
•Strategic media planning begins with
setting media objectives
Setting Media Objectives
How often must our target see/hear our message?
• Frequency objective
What % of our target can we afford to reach with
sufficient frequency?
• Reach objective
Setting Media Objectives
How many weeks must we be advertising?
• Continuity objective
Setting Media Objectives
More is better than less
Setting Media Objectives
More is (almost always) better than less
•
Reach – The higher % we reach, the greater
the volume opportunity
•
Frequency – The higher the frequency, the more
likely the message will be noticed & remembered
 Rule-of-thumb is 3-5 exposures minimum
 There is a point of diminishing returns
•
Continuity – The more weeks of support, the less
opportunity to forget the message
Setting Media Objectives
And more (almost always) costs more than less
• So, most advertisers have to make tradeoffs
among the three objectives
Setting Media Objectives
First priority should be at least a minimum level of
frequency
• Most messages must be seen at least 3-5x per
person
•People who have seen less than that “don’t count”
•Media research (provided by media or agency)
can provide estimates of frequency
Setting Media Objectives
How much beyond minimum frequency is
necessary will vary
• The less compelling the promise …
•The less interesting the creative …
•The heavier your competitor’s advertising…
•The sooner you want a response….
…the more frequency you will need
Setting Media Objectives
Setting reach goal
1. How many people must you persuade in order
to achieve marketing goals?
• (what % of target market)
2. What % of those you reach might be persuaded?
• Could depend on a number of variables….
Setting Media Objectives
Could depend on…
 % of target actually in market now for your service
Degree of loyalty to you or competitor
Strength/believability and urgency of your offer
Newness or uniqueness of your offer
Setting Media Objectives
Setting reach goal - example
Goal of 2,500 new physician referrals
4-5% might respond to advertising
 Need to reach 50,000 - 62,500
(50,000 x 5% = 2,500)
 Convert to % of target
(i.e. if 100,000 HH in service area, we need to
reach 50 – 62.5% of them)
Setting Media Objectives
Setting continuity goals
 How many weeks of the year should be included in
the plan depends upon…
How seasonal is the business opportunity?
(The more seasonal, the less need for continuity)
How many weeks of the year do competitors advertise?
How aggressive are your goals?
How big is your budget?
Audience Delivery
Gross rating points (GRPs) are the basic unit of
measurement in media plans
Two ways to understand GRPs
#1
Reach x frequency = gross rating points
80% reach
x 3.0 frequency
240 gross rating points (GRPs)
Audience Delivery
#2
GRPs = the number of advertising impressions
achieved among a target audience
expressed as a % of that target audience
240 GRPs = 240% of the target audience
i.e.
80% reached, 3x each on average
or
or
60% reached, 4x each on average
40% reached, 6x each on average
Setting Budgets
 Objective/Task Method
 Set frequency/reach/continuity goals
 Develop a plan to achieve them
 Cost out the plan
Gross Rating Points (GRPs)
 How much is enough? How much is too much?
MMN recommends the following ranges for TV:
To motivate immediate action
in a relatively short time:
125 – 225 GRPs per week
For longer term efforts:
75 -- 125 GRPs per week
Gross Rating Points (GRPs)
 How much is enough? How much is too much?

MMN recommends the following ranges for radio:
To motivate immediate action
in a relatively short time:
150 – 250 GRPs per week
For longer term efforts:
110 --175 GRPs per week
Choosing an appropriate mix
Adding another medium tends to increase budget
•Need to achieve minimum weight levels in
each medium you use
•Additional production costs and creative fees
A mix of two or more media is good
•Increases reach and frequency
•Light users of one medium (i.e. TV) tend to be
heavier users of others (i.e. radio or print)
Use of more than 2 media is best for only the heaviest
campaigns
Flighting
 “Flighting” =
Concentrating support in certain weeks, and taking
hiatus weeks.
Short hiatuses (1-2 weeks) are not detrimental
and help to extend budgets and increase continuity
Commercial Length/Ad Size
Shorter/smaller units are cheaper than longer/larger ones
in most media (radio sometimes an exception)
 Noting levels peak in newspaper ads at around ½ page –
going larger does not attract a larger audience
Recall levels somewhat better for longer commercials,
but on TV or radio, “every ad’s a full page”
Key consideration is that the ad is long/large enough to
tell your story. Maintaining effective frequency levels and
continuity will offset tradeoffs from smaller/shorter units
Daypart Mixes
Explore several alternative daypart mixes in TV or radio
to maximize your budget
Certain dayparts are bargains
•In TV, early morning news programs, daytime,
and early and late fringe
•In radio, mid-days and weekends
Also, using more dayparts will increase your reach
as well as extend your budget
The MMN Power Planner tool gives estimates of reach
and frequency for alternative daypart mixes
Setting Budgets
Plan to budget
•Spend down available budget
•Maintain reach and frequency goals
•Cut weeks, cut secondary media types if necessary
•Consider narrowing your target audience
•Don’t fall below minimum frequency or reach levels
Setting Budgets
Meet or Match Competition
 Estimate media spending of key competitors
 Budget to match or exceed competitors
Developing media strategies
What are the best times of year to advertise?
• When are the greatest opportunities to gain new
business?
• What is the competition doing?
Can I match, exceed or pre-empt them?
Use the same media or different ones?
Developing media strategies
Evaluate & compare each media type against your
objectives and budget
•Reach is easier to build in broadcast TV,
newspaper and outdoor
•Frequency is easier to build in radio, cable TV
and outdoor
Developing media strategies
Evaluate & compare each media type against your
objectives and budget
•TV and radio are more easily targeted to
demographic groups
• Newspaper, outdoor and cable more easily
targeted geographically
Developing media strategies
 Evaluate & compare each media type against
your objectives and budget
•Price-of-entry tends to be highest in broadcast
TV
•Radio, newspaper, outdoor and cable more easily
allow you to achieve sufficient frequency against a
subset of your target
(Fewer stations, board locations, smaller ads)
Developing media strategies
The ideal
•Dominate (with high frequency)
Developing media strategies
The ideal
•Dominate (with high frequency)
in enough media types and vehicles to
achieve high reach of the target audience
Developing media strategies
The ideal
•Dominate (with high frequency)
in enough media types and vehicles to
achieve high reach of the target audience
on an ongoing basis (continuity)
Developing media strategies
The ideal
•Dominate (with high frequency)
in enough media types and vehicles to
achieve high reach of the target audience
on an ongoing basis (continuity)
use support schedules in additional
media for emphasis
Developing media strategies
The more realistic strategy
•Dominate (with high frequency)
Developing media strategies
The more realistic strategy
•Dominate (with high frequency)
at least one medium or vehicle
Developing media strategies
The more realistic strategy
•Dominate (with high frequency)
at least one medium or vehicle
on an ongoing basis (continuity)
Developing media strategies
The more realistic strategy
•Dominate (with high frequency)
at least one medium or vehicle
on an ongoing basis (continuity)
use support schedules in additional media
for emphasis
Developing media strategies
The minimum
•Advertise in one medium or vehicle
consistently throughout the year (continuity)
Evaluating Alternative Plans
Variables to consider
•Budget
•Target Audience
•Commercial Length/Ad Sizes
•Daypart Mix
•Media Mix
Evaluating Alternative Plans
Alternative plans should be compared based on:
•Budget
•Frequency
•Reach
•Continuity
•Use of desired media
•Daypart Mix
•Unit Mix
Preparation for Purchasing
Your approved plan can serve as a request
for proposals from the stations
Preparation for Purchasing
This shows GRP goals by daypart and week, and
total budget for the medium
You can give this to the station and ask for proposals
for X% of the total
Media Buying Strategies
 Timing
 Start negotiations 6-8 weeks in advance, if
possible
•Negotiation advantage goes to the party
with more time
•Make the sales rep the one to get nervous
Media Buying Strategies
 Timing
• In broadcast or outdoor, last minute buying
can force you to take what’s left…
at the seller’s price.
•Save some budget to take advantage of last
minute opportunities
Media Buying Strategies
 Maximizing Clout
•
Combine as many of your buys as possible
into a single negotiation
 Makes your business larger and more attractive
to the media
 Gives the media only one chance to win
your business
Media Buying Strategies
The Art of Executing the Plan
• Negotiation Skills:
 Don’t ask, don’t get.
 Be prepared to walk away.
• “Shopping around” the plan
• Ask for value added opportunities
Local Media Planning and Buying –
Informed Execution
•
Newspaper
•
Radio
•
Television
•
Cable Television
•
Outdoor
Newspaper Buying Strategies
 Take time to read the rate card and
understand hidden opportunities
•
•
Only buy what you can afford.
 Flexible medium with many sizes to
accommodate any budget
Master contract for system or multiple
service lines
 Ex. BJC Healthcare
Newspaper Buying Strategies – cont’d.
•
•
•
•
•
•
Reduced costs for special sections
 Health section/TV guide
 Shelf life
Drop circulation (and cost!) with zoned
editions
Frequency discounts/Weekly repeat
rate discounts
Multi-paper discounts
“Upfront” vs. remnant
Position
Radio Buying Strategies
 Share plan costs with your rep to
help reach goals
• Look at all day parts
 Fringe drive time; overnights
• Narrow hours to achieve savings
• Guarantees on rotations
• Reduce demographic waste on
stations
• Spectrum buying
• Balancing target
• Avoid key buying times of year
Radio Buying Strategies (cont’d)
 Multi-station negotiations vs. individual
stations
• Be sure it still achieves overall strategy for
targeting a certain demographic
• Look at stations other than the leader
• Be prepared to leverage one station’s
ability to deliver to plan’s goals against
another station’s
 Value added opportunities
Television Buying Strategies
 Look outside “the box”
•
Avoid spending on highly rated shows
to deliver to target, others do just as
well
 Look at new programming
 Communicate top 3 desires and
then let the reps show what else
they have. Otherwise, you pay top
dollar for picks.
Cable TV Buying Strategies
•
•
•
Take all bonus runs
 Make a 10 second spot and logo tag
available to stations
Request auto-fill at no charge
Ask for no-charges to be scheduled into
order
Cable TV Buying Strategies
•
Buy program specific when available
•
Look at demographics of network
Outdoor Buying Strategies



Location.
Location.
Location.
How to Achieve Your Objectives
AND Improve ROI??
 By touching more consumers and physicians,
more often for the same or lower budget
By spending less money to touch the same number
of consumers with the same frequency
How to touch more consumers
and physicians more often
for the same or lower budget?
Try out alternative strategies……
Look at variations in
 Daypart mix
 Unit mix
 Media mix
Compare differences in
Reach
Frequency
Continuity
Comparing alternative strategies
 Hypothetical example – using real data – in a
market with population of 600,000 households
Client’s traditional TV daypart mix is
20% early news
40% prime
30% late news
10% late fringe
4-week campaign
$50,000 budget
MMN/Barnes-Jewish Hospital Case Study
Buying Results Comparison
Previous Plan
Radio
TRP’s
Radio
Cost-perrating
point
Total
Radio
Cost
MMN Plan
MMN Difference
1050
1248
+19% more TRPs
$99.00
$68.10
-31% lower CPP
$104,060
$85,000
$19,060 savings
MMN/Barnes-Jewish Hospital Case Study
Buying Results Comparison
Previous Plan
MMN Plan
MMN Difference
Newspaper
# papers
used
2
7
5
Key newspapers added to schedule
# insertions
per
newspaper
4 in Post-Dispatch
and 5 in News
Democrat
10 each in Post-Dispatch
and News-Democrat,
6 in the Telegraph
Double the # insertions in largest
newspapers
8 each in the St. Charles,
South County, OakvilleMehlville and Southwest
Journals
Strong frequency in 5 additional papers
Total
Newspaper
Cost
$11,500
$31,100
Radio savings
Invested in
additional newspaper
Total
Campaign
Cost
$115,560
$116,108
Significantly more media weight for the same
budget
Media Planning
Local Media Planning Tool – Power Planner ™
 Accurate cost estimates for all local media
 Accurate audience delivery data for TV and radio
 Instant planning based on established rules
 Full glossary of media terms and tutorials to guide
you through the process seamlessly