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• Approx 99% of all U.S. households have a tv. Television viewing is particularly popular with many market segments that are primary target markets for advertisers.
• TV’s combination of color, sound, and motion offers creative flexibility for virtually any product message.
• Despite recent audience declines, TV remains extremely efficient for large advertisers needing to reach a mass audience. Advertisers are able to provide a local or regional component to national television schedules.
• Govt.-mandated moves to digital TV will open more opportunities for advertising and programming by early 2009. |
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• The TV message is short-lived and easily forgotten without expensive repetition.
• The TV audience is fragmented and skewed toward lower-income consumers. Daily viewing declines significantly as income increases.
• Shorter spots, some as short as 15 seconds, have contributed to confusing commercial clutter.
• With remote control use, channel surfing by viewers and the VCR and DVR, the amount of time spent viewing commercials by the average TV user has been greatly reduced. |
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| Average household viewing is more than ___ hours daily |
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| • According to the Television Bureau of Advertising, TV is regarded as the primary source of news by over _____% and newspapers at _____% |
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| When did the 1st commercial air? |
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| • The 1st commercial aired on July 1st,1941 during a Dodgers-Phillies game. |
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| (Federal Communications Commission)- The federal authority empowered to license radio and TV stations and to assign wave lengths to stations “in the public interest” |
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Cost:
• Advertising and promotion, regardless of the medium or methods of distribution, are expensive.
• The mostly costly TV commercial are much less expensive than print media on a CPM basis.
• Television is still cost-efficient for businesses needing to reach huge numbers of people.
Clutter:
• TV clutter is defined as any non-program material carried during or between shows. Commercials account for more than 80% of this material with other time devoted to PSA and program promotional spots.
• Advertisers also point out that not only has the total non-program time increased, but the number of commercials has grown with the use of shorter spots.
o Research has shown that the number of commercials contributes to the perception of clutter even when the overall commercial time remains constant. |
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• The basic measure of television is the rating point. The rating, expressed as a % of the population, gives the advertiser a measure of coverage based on the potential of the market.
• Ratings= program audience/total TV households |
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| Is TV advertising normally bought on a program by program basis? |
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| no, • TV advertising is rarely bought on a program-by-program basis. Advertisers schedule a package of sots that is placed in a number of programs and dayparts. The weight of a schedule is measured in terms of the total ratings for all commercial spots bought- the gross rating points (GRPs) |
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The weight of a schedule is measured in terms of the total ratings for all commercial spots bought- the gross rating points (GRPs)
• GRPs- each rating point represents 1% of the universe being measured for the market.
• Advertisers also use GRPs as the basis for examining the relationship between reach and frequency. (R*F=GRP) R= reach F= frequency
• One of the principal merits of the GRP systems is that it provides a common base that proportionately accommodates markets of all sizes.
o GRPs cannot be compared from one market to another unless the markets are of identical size.
• In addition to the problem of intermarket comparisons, GRP does not tell us the # of prospects for the product who are being reached by a program. |
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• Cost per Rating Point (CPP)- The cost per rating point is used to estimate the cost of TV advertising on several shows.
• CPP= Cost of schedule or commercial/ GRPs |
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| • Share of audience is often used to determine the success of a show. % of households using TV tuned to a particular program. |
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• Networks- Interconnecting stations for the simultaneous transmission of TV or radio broadcasts
• Networks are comprised of local stations that contract to carry network programming.
o The exceptions are the 0wned and Operated stations of the networks. These stations (KABC in LA or WNBC in NY) are located in a few major markets and make up a small minority of any network’s station lineup.
• Networks sell national advertising on the basis of station clearance. |
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• Networks sell national advertising on the basis of station clearance.
• Network clearance is expressed as the % of the networks station lineup that has agreed to clear their schedule for network programming.
• Clearance rates are crucial to the economics of the smaller networks. |
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| • Until a network reaches ____% potential coverage, it is usually not considered a national program by major advertisers. |
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| Compensation (Network TV) |
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Definition
the payment of clearance fees by a TV network to local stations carrying its shows.
o As the cost of network programming has increased and audience levels have fallen, the relationship between networks and stations over compensation have become contentious.
o Networks have taken the position that the value of a station’s local advertising spots is in large measure a result of the audience gained through popular network programming. |
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| Network Commercial Pricing and Declining Audience Shares |
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Definition
| • Prime-time spots vary according to ratings and audience demographics, but an average 30-second commercial will cost approximately $150,000 on the 4 major networks |
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• Shows are greatly influenced by the programs directly before, called the lead-in and the total daypart schedule, called a block.
• The importance of lead-ins can be seen in the investment local stations make to schedule the most popular programming they can buy prior to their early evening news shows.
• The hammock position- a new show that is scheduled between 2 popular returning program. |
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| What 3 factors largely determine buying decisions? |
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Definition
| Demographics, CPM, and Demand |
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| Demographics (Network TV advertising) |
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Definition
Advertisers place major emphasis on the demographics of TV audiences.
o The makeup of the audience of potential network buys has become more important than the size of the audience. |
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| CPMs (Network TV advertising) |
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Definition
Advertisers are driven primarily by cost considerations.
o There are a number of advertisers who evaluate cost efficiencies and CPM levels on an equal basis with audience demographics
o Advertisers of widely distributed package goods are more likely to take this approach than are advertisers for a product with more limited appeal. |
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| Demand (Network TV advertising) |
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Definition
| Demand is a function of both demographics and CPMs, but there are qualitative factors- such as a special event of a final episode or a guest star. |
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• purchase of network TV time by national advertisers during the first offering by networks. The most expensive network advertising.
Major up-front trends
o Greater demand for time
o Globalization- Agencies are having to position their U.S. up-front buys in a context of global media for their multinational clients
o Special event- Ex political campaigns or summer Olympics |
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Definition
| follows up-front buying. Usually bought on a quarter basis throughout the year, they are designed for larger advertisers that want to take advantage of changing marketing conditions, or more often, for smaller advertisers that are shut out of up-front buys. |
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Definition
• Negotiation is the key to network buying.
Change in rate negotiation
o The decline in network ratings and share levels has created a more contentious atmosphere
o Advertisers are con-currently negotiation for time across a number of television operations |
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When a medium falls short of some audience guarantee, advertisers are provided concessions in the form of make-goods.
• Usually take the form of future commercials- most commonly used in TV and magazines |
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Purchasing of time from a local station, in contrast to purchasing from a network.
• Spot advertising is extremely competitive. |
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Term
| primary disadvantages of spot tv |
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Definition
| • Primary disadvantages of spot TV are that it requires a great deal more planning and paperwork than network because each market must be bought on a one-to-one basis and it is more costly on a CPM basis than network buys |
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An individual or organization representing a medium selling time or space outside the city or origin.
o Commission is negotiable, but it usually ranges from 5% to 10% depending on the size of the station. |
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Groups of radio and TV stations whose advertising is sold simultaneously by station representatives.
o Commercials bought on a nonwired network are not necessarily broadcast at the same time or on the same programs.
o The nonwired concept is simply a means of providing buying efficiency and convenience for spot advertisers. |
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| Primary purposes for spot buys |
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Definition
• To allow network advertisers to provide additional GRPs in those markets with the greatest sale potential.
• To provide businesses with less than national or uneven distribution a means of avoiding waste circulation incurred by network TV.
• To allow network advertisers to control for uneven network ratings on a market-by-market basis.
o One reason that rating can vary widely between markets is the viewing patterns of different racial and ethnic groups.
• National advertisers can use spot advertising to support retailers and provide localization for special marketing circumstances.
o Top 5 spot television advertisers are automobile companies |
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Term
| Defining the TV coverage area |
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Definition
• TV research uses 3 levels of signal coverage to designate potential station coverage of a market area:
o Total survey area, Designated Market Area, Metro Rating Area |
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| The largest area over which a station’s coverage extends |
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DMA
A term used by the A.C. Nielsen Company to identify those counties in which home market stations receive a preponderance of viewers |
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| An area that corresponds to the standard metropolitan area served by a station |
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TV advertising is increasingly purchased by local advertisers. A significant portion of the dollars invested in local TV is placed by local franchise outlets of national companies.
television day
preemption rate
special features
run of schedule
package rates
product protection
scheduling spot and local time |
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Definition
| A considerable portion of spot TV advertising time is sold on a preemptible (lower-rate) basis, whereby the advertiser gives the station the right to sell a time slot to another advertiser that may pay a better rate for it or that has a package deal for which that particular spot is needed. |
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ROS
AN advertiser can earn a lower rate by permitting a station to run commercials at its convenience whenever time is available rather than in a specific position |
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| Every station sets up its own assortment of time slots at different periods of the day, which it sells as a package. |
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| advertisers want stations to set up time intervals between competitors. |
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Term
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Definition
| • TV syndication is the sale of TV programming on a station-by-station, market-by-market basis. Syndication companies have programming to sell, and they seek to sell individual programs to at least one station in every market. |
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Definition
| station obtains a program at no charge. The program has pre-sold national commercials, and time is available for local station spots. |
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| • Syndication accounts for close to $____ billion in advertising revenues and major syndicated shows provide coverage comparable to the broadcast networks |
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| syndicated programs that have previously been aired by a major network. |
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| 3-tier pricing structure for the top 50 syndicated shows |
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• 1. Top ten blockbusters. $65,000 to $215,000
• 2. Second tier includes a small number of shows that fall short of the top ten but still have sizable, loyal audience. $35,000-$85,000
• 3. Talk shows and less popular reruns from $15,000 to $31,000 |
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| will broadcast syndication surpass or fall to cable networks in achieving significant levels of audience reach? |
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Definition
| • Broadcast syndication will surpass cable networks in achieving significant levels of audience reach because the average over-the-air station has higher audience levels than cable networks. |
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| How many minutes can a station sell in a syndicated show? |
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Definition
| • In a syndicated show, the station can sell from 6 to 12 minutes of commercials depending on how the program was bartered to the station. Consequently, a syndicated program does not have to generate huge ratings to be a financial success for a station. |
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| scheduling a syndicated program on a 5 day per-week basis |
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| TV signals that are carried to households by cable. Programs originate with cable operators through high antennas, satellite disks, or operator-initiated programming |
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| Success of cable is traced to what 2 related elements? |
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Definition
• Brand identification based on unique and selective networks and programs that appeal to targeted demographic audience segments
• The investment by cable networks in first-run programming |
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| Future of Cable Advertising |
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| • One interesting trend of the last few years has been for cable networks to branch out and begin their own magazine. EX: ESPN and Nickelodeon |
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Definition
| Recording programs on a VCR for viewing at a later time. (first was in 1970-VCR...now we have DVR) |
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• DVR (digital video recorder)- digitizes all incoming signals and stores many more hours of programming than a VCR.
• Easy to skip commercials with DVR.
• It measures the households that are zapping commercials and measure actual commercial audience.
• Pay-per-view is more available with no commercials |
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Term
| Nielsen Ratings-Nielsen TV Index |
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Definition
| 1. The Nielsen Television Index provides network rating on a national basis. |
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| Device that measures TV set usage by individuals rather than by households. |
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| Problems with rating systems (Nielsen) |
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Definition
a. 1. Sweeps weeks- During these periods, ratings are taken for all television markets. In theory, sweeps are an efficient and relatively inexpensive means of estimating quarterly local market ratings. In fact, local market stations have sometime used the period to artificially distort their ratings by airing special stories.
b. 2. Diaries- A major obstacle is the cost.
c. 3. Exposure Value- Advertisers want to know who is watching, who is paying attention, and what level of attention is being given. |
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| Trying to create a Portable People Meter. Valuable in measuring the out-of-home audience of radio. |
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Definition
1. The best-known qualitative research service is Marketing Evaluations, which complies a number of “popularity” surveys called “Q” reports. The most familiar of these are TVQ and Performer Q.
2. TVQ- A service of marketing evaluations that measures the popularity (opinion of audience rather than size of audience) of shows and personalities. |
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Definition
i. Radio is a primary medium for targeting narrow audience segments, many of whom are not heavy users of other media.
ii. Radio is a mobile medium going with listeners into the marketplace and giving advertisers proximity sale.
iii. Radio, with its relatively low production costs and immediacy, can react quickly to changing market conditions.
iv. Radio has a personal relationship with its audience unmatched by other media. This affinity with listeners carriers over to the credibility it offers many of the products advertised on radio.
v. Radio, with its low cost and targeted formats, is an excellent supplemental medium for secondary building blocks to increase reach and frequency to specific target markets. |
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i. Without a visual component, radio often lacks the impact of other media. Also, many listeners use radio as “background” rather than giving it their full attention
ii. The small audiences of most radio stations require numerous buys to achieve acceptable reach and frequency. |
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| When was radio most prestigious? |
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Definition
| d. Radio was the most prestigious of the national media from 1926, when the first network (NBC) was formed. |
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| Radio ad revenues are over______ |
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Definition
Radio ad revenues are over $18 billion and the medium demonstrates impressive reach.
i. Radio can achieve effective creative effects at a lower production cost than virtually any other media |
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| FCC and Telecommunications Act of 1996 (Contemporary Radio Industry) |
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Definition
ii. FCC limited ownership of radio stations to seven FM and seven AM stations with only one of each in a single market.
iii. Telecommunications Act of 1996 allowed corporations or individuals to control as much as 35% of the U.S. market. The new ownership rules changed the radio industry from one of numerous small groups to one comprised of a few huge conglomerates. |
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Definition
| Offers terrestrial radio stations the ability to deliver additional programming on the same amount of bandwidth with higher-quality sound. It requires a special receiver |
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| Available by subscription and contains few if any commercials. It requires a special receiver but offers near CD-quality sound. |
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| Major trends in the radio medium |
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Definition
i. 1. The size of the audience listening to radio stations over the Internet is growing rapidly.
ii. 2. More listeners to Internet radio are becoming habitual listeners.
iii. 3. Young audience are more likely to prefer to listen to the radio via the Internet. |
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| Association to promote the use of radio as an advertising medium. |
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| Primary elements of interest to advertisers are: (9 things) |
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1. Radio targets- One of the greatest strengths of radio is its ability to deliver advertising to a very selective audience.
2. Radio reaches a majority of the population several hours a day- radio can even deliver higher-income and educational segments that are of prime importance to many advertisers.
3. Radio advertising influences consumers closest to the time of purchase.
4. Radio reaches light users of other media. Light viewers of TV spend more time with radio.
5. Radio works well with other media. Radio provides affordable repetition that delivers high levels of awareness
6. Much of radio listening takes place on an out-of-home basis.
7. Radio delivers consistent listening patterns
8. Radio delivers its messages at a very low CPM level
9. Radio provides advertisers with both immediacy and flexibility |
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Definition
| One of the greatest strengths of radio is its ability to deliver advertising to a very selective audience. |
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| 4 major problems facing advertisers using radio are |
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Definition
1. (1) The sheer number of stations which creates a very fragmented environment.
2. (2) Clutter
3. (3) the medium’s lack of a visual element
4. (4) Increased use of MP3 players and digital radio
v. Audience fragmentation- the segmenting of mass-media audiences into smaller groups because of diversity of media outlets |
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| Radio advertising dollars are very much concentrated at the local or national level? |
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Definition
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Definition
demise began in 1948 with the intro of TV.
1. Media planners continue to look to network radio as means of extending reach to working women and light users of other media and building greater brand awareness through inexpensive additional frequency to prime target segments.
2. Radio networks are basically program providers; but unlike TV, a single radio station may belong to several radio networks simultaneously.
3. In radio, the networks must depend on local ratings to garner national ad support. |
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| viii. The availability of satellite links for national radio programmers offers a number of advantages for their local station affiliates:(4 things) |
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1. 1. Stations are guaranteed quality programming based on the latest audience research for a particular format
2. 2. Radio networks bring celebrities to the medium that local stations could not afford.
3. 3. Even the smallest stations can obtain national advertising dollars as art of a network. Stations that would not be considered by national advertisers as part of a local spot buy may now be included in a network radio schedule.
4. 4. The cost efficiencies of sharing programming with several hundred other affiliates keep both personnel and programming costs to a minimum. |
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Definition
Buying radio time on local stations on a market-by-market basis by national advertisers.
i. Advertisers spend approx $3.5 billion on spot radio ads. |
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Definition
1. Spot radio can provide added weight in selected regions or individual markets for companies with a national presence
2. A second group of heavy spot radio users are national companies with extensive retail outlets. Spot radio commercials allow these companies to build on their national brand awareness with localized spots directed at the local community. |
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Definition
| i. FM is likely to continue to be the dominant radio medium as AM stations. AM news/talk, FM usually music. |
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| The typical radio station depends on what? |
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Definition
| ii. The typical radio station depends on a music format and unique talent to appeal to the largest audience in a particular listener demographic. |
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| How does darwinism play into radio? |
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Definition
| iv. One of the problems for radio stations is that they function in an environment of economic Darwinism in which only the strongest survive. |
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| What do specialty format radio stations depend on? |
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Definition
| 1. Specialty formats, such as classical or jazz, usually depend on an upscale audience that is difficult for advertisers to reach in other media. |
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Definition
| i. Radio’s All-Dimension Audience Research (RADAR)- Service of Statistical Research, Inc., that is the primary source of network radio ratings |
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