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SBM 338Lanny Wilke
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Two ways to categorize advertising costs• Absolute cost – actual total cost required to
place the message• Relative cost – the relationship between the
price paid for advertising time or space and the size of the audience delivered Used to compare media vehicles
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Determining relative cost of media• Cost per Thousand (CPM)
Cost of ad space (absolute cost)CPM = Circulation X 1,000
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• Cost per ratings point (CPRP)
Daily inch rate - newpapers
Cost of commercial timeCPRP = Program Rating
Cost of ad space X 1,000 Circulation
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• Television
Most media buyers rely on target CPM (TCPM) – calculates CPM’s based on target audience, not overall audience.
Cost of 1 unit of time X 1,000 Program Rating
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Magazines would like to use the number of readers per copy as their true circulation figures.• Includes a pass-along rate
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Must consider two factors• How well did these strategies achieve the
media objectives?• How well did this media plan contribute to
attaining the overall marketing & communications objectives?
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RadioAdvantages Disadvantages
Local coverage
Low cost
High frequency
Flexible
Low production costs
Well-segmented audiences
Audio only
Clutter
Low attention getting
Fleeting message
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Magazines
Advantages Disadvantages
Segmentation potential
Quality reproduction
High info content
Longevity
Multiple readers
Long lead time for ad placement
Visual only
Lack of flexibility
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NewspapersAdvantages Disadvantages
High coverage
Low cost
Short lead time
Ads can be placed in interest sections
Timely (current ads)
Reader controls exposure
Can be used for coupons
Short life
Clutter
Low attention-getting capabilities
Poor reproduction quality
Selective reader exposure
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Outdoor Advantages Disadvantages
Location specific
High repetition
Easily noticed
Short exposure time requires short ad
Poor image
Local restrictions
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Direct mailAdvantages Disadvantages
Highly selective
Reader controls exposure
High info content
Opportunities for repeat exposures
High costs/contact
Poor image (junk mail)
Clutter
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Internet & Interactive MediaAdvantages Disadvantages
User selects product info
User attention & involvement
Interactive relationship
Direct selling potential
Flexible message platform
Limited creative capabilities
Websnarl (crowded access)
Technology limitations
Few valid measurement techniques
Limited reach
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