ch10-brdcst & online media mod 3 asp

8/13/2019 Ch10-Brdcst & Online Media Mod 3 ASP

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Chapter 10

Broadcast and Interactive OnlineMedia


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Learning Objectives

Learn about television, radio, andInternet in terms of the overall trend,

advantages and disadvantages as anadvertising medium.

Understand the reality of Internet as an

advertising medium.


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The Structure of the

Television Industry (Fig. 10.1)


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Cable is Firmly Entrenched Worldwide and IsStill Growing

Battle Raging Over Who Will Control DigitalTV Technology

Network TVs Viewership Has Declined

Television is Now a Fragmented Medium

Changes in Broadcast

Television


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Television Advertisers Media

Choices (Fig. 10.3)


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Forms of Television

AdvertisingSponsorshipsAdvertiser assumes the total financial

responsibility for producing the program and

providing the commercials.ParticipationsAdvertisers pay for 15, 30, or 60 seconds of

commercial time during one or more programs.Spot AnnouncementsAppear in the breaks between programs, usually

local buyers.


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Audimeter

Records WhenThe TV Set is Used

& Which StationWatched

Viewing Diary

Provides Data OnWho is Watching

Shows

People Meters

Which TV Shows Are BeingWatched, Number of

Households Watching,& Which Family

Members Are

Viewing

A.C. Nielsen Provides the Most Commonly Used Measures ofNational and Local TV Audiences:

Measuring the TV Audience


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Pros and Cons of B roadcast TVAdver t is ing

Mass coverage

Low cost

Some selectivity

Impact

Creativity

Prestige

Social dominance

High production costs

High air-time costs

Limited selectivity

Brevity

Clutter

Zipping and Zapping

Pros Cons


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Pros and Cons of CableAdvertising

Selectivity

Audience demographicsLow cost

Flexibility

Testability

Limited reach

FragmentationQuality

Zipping and zapping

Pros Cons


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Mediums Influence on

Consumers Taste and

Perceptions is Pervasive

Reach a Large Audience inA Cost-Efficient Manner

Use of Sound and MovingImages Creates a Strong

Impact

Advantages of Television


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HighCost of

Producing&

RunningCommercials

HighLevel

OfCommercial

Clutter

TelevisionIs

Nonselective

SuffersFrom aLack of

FlexibilityIn

Scheduling

Disadvantages of Television


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Infomercial Watchers

Exhibit 9-4

Page 290SexMale 57% 8.0% 20.0%

Female 54 9.0 19.0Age18-24 70 4.0 19.025-34 63 9.0 19.035-49 58 12.0 20.050-64 55 10.0 26.065+ 33 3.0 13.0Income ($)under $15,000 53 4.5 22.515,000-20,000 52 11.0 24.020,000-30,000 62 8.0 21.030,000-40,000 63 9.0 25.040,000+ 60 11.0 16.0RegionNortheast 65 7.0 24.0North central 52 9.0 14.0South 57 8.0 21.0West 55 10.0 17.0Total 55% 8.5$ 19.0%

Seen oninfomercial inthe past year?

Ever purchasedanything using atoll-free numberat the end of aninfomercial?

Ever purchasedanything in a storebased on informationprovided in aninfomercial?


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AM Radio

Web Radio

FM Radio

Cable & DAB Radio

Structure of RadioRadio Can be Classified According to Transmission and Power.


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Network Radiois a Group of Local Affiliates Connected to Oneor More National Networks Through Telephone Wire and

Satellites and Has Increased in Popularity Because of:

Complete Market Coverage

Consolidation That Produced4 Major Networks

Increase in Syndicated Shows

Radio Advertising

Emergence of Unwired Networks


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Radio is aHighly

FragmentedMedium

Radio Fans

34%, Listen to Four or Five Stations WithNo Preference for One Station.

Music Fans

11%, Listen Exclusively for the Music Being

Played.

News Fans

Choose Stations Based on a Need for Newsand Information.

The Radio AudienceStation Fans

46%, Clear Preference for One or TwoStations, Listen Up to 8 Hours a Day.


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Measuring the Radio

AudienceMeasure of the number of people listening to aparticular station at a given time:

Stations coverage, which is the geographic area that can

pick up the station clearly. Better measure is circulation, which measures the

number of homes that are actually tuned in to theparticular station.

Arbitronis an audience rating service. RADARis another rating service.

Birch/Scarborough-VNUconducts random phoneinterviews asking listening preferences.


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Pros and Cons of Radio

AdvertisingReach and Frequency

Selectivity

Cost-efficiency

Timelessness

Immediacy

Local relevance

Creative flexibility

Limitations of sound

Segmented audiences

Short-lived and half-heard commercials

Clutter

Pros Cons


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Target Audiences

Flexibility

Affordability

Mental Imagery

High Levels ofAcceptance

Advantages

Inattentiveness

Lack of Visuals

Clutter

Scheduling & BuyingDifficulties

Disadvantages

Lack of Control

Radio


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Interactive MediaInteractive technology(media) is a new formof broadcast media.

Estimate that Internetwill capture 50 millionusers by 2000.

Formats for delivering

ads: Web page,

Banner ad,

E-mail.


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Adoption Curves for Various

Media

1922 26 30 34 38 42 46 50 54 58 62 66 70 74 78 82 86 90 94 98 Est

120

80

60

5040

20

0

MillionsofUsers

Radio TV Cable Internet

Years to reach 50 MM users

Radio 38TV 13Cable 10*Internet 5**

The Internet is the fastest growing medium in history

* Launch of HBO in 1976 was used to estimate thebeginning of cable as an entertainment/ad medium.

** Morgan Stanley Technology Research estimate

(Chart shows the Internet beginning as an entertainment/admedium in 1994 because its earlier use was restricted togovernmental activities)


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Who Values the Internets

Offerings?

Community

services

Banking

Buying &

selling

Entertain-

ment

Advertising &

marketing

Education

Communica-

tions

Information

access

0% 10% 20% 30% 40% 50% 60% 70% 80%

50 and older

30 to 49

Under 30


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Consumers Use of Interactive MediaTypes of Use Percent

Respondents making interactive purchaseswithin one year 58%

Of these:

Number who shopped via online service 86

Of these, number who used credit card 83

Number that shopped via Internet 43

Of these, number who used credit card 70

Number that switched to 800 number 16

Number that shopped via e-mail 8

Number that shopped via CD-ROM 5

Number making 2-4 purchases in last 6 months 47

Number making 5-10 purchases in last 6 months 12

Number who spent $26-$50 on each interactive purchase 46

Number who spent over $100 on each purchase 11

Types of products purchased

Books, music CDs, and videos 57

Computer related equipment 55

Flowers 20

Clothing 18

Travel 14

Respondents also making purchases from catalogs/TV shopping Channels 50


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Online Products Mix in 2000

Other 5%

Food and drink 5%

Gifts and flowers 10%

Apparel 5%

Entertainment 19%

Computer products 32%

Travel 24%


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Pros and Cons of Internet

AdvertisingTruly Interactive

Enormous audience

Immediate response

Affluent market

In-depth information

Rapid-growth industry

Business-to-business

Advertorials

Virtual storefront

Untested medium

Targeting costs

Slow downloads

Net yet mainstream

Ad may be placedinappropriately

Unproved security andprivacy

Global marketinglimitations

Pros Cons


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Internet Advertising: Pros

Truly Interactive

Enormous audience

Immediate response

Affluent market

In-depth information

Rapid-growth industry

Business-to business

Advertorials

Virtual storefront


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Internet Advertising: Cons

Untested media

Targeting costs

Slow downloads

Net yet mainstream

Ad may be placed inappropriatelyUnproved security and privacy

Global marketing limitation


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Internet Advertising: Reality

Advertising spending (Advertising Age2001)

1999: $2.8 million (1.3%) 2000: $4.3 million (1.8%)

61% of AAs top 100 megabrands online

(Forrester Research)


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Internet Advertising: Reality

Advertising spending (Advertising Age2001)

1999: $2.8 million (1.3%) 2000: $4.3 million (1.8%)

61% of AAs top 100 megabrands online

(Forrester Research)


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Various Forms of Internet advertising

Banner ads (55%): average click-throughrate 0.3 to 0.5%

Sponsorships (27%) Interstitials (4%): Rich mediaaverage

click-through rate just below 6%

Email (2%) Others (12%)


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Performance-based advertisingpredicted to make up 50% of all

revenues by 2003 (Forrester Research)


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Challenges

Can we go beyond current banners to createads that are exciting, fun, and dynamic?

Can we increase ad impact throughcontextual relevancy?

Can we combine entertainment with brandequity?

Can ads be intrusive without being annoying?

Can ads communicate product superiority?


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Review

Learn about television, radio, andInternet in terms of the overall trend,

advantages and disadvantages as anadvertising medium.

Understand the reality of Internet as an

advertising medium.

ch10-brdcst & online media mod 3 asp

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