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Media Planning & Measurement

Media Planning & Measurement. MKT 3850 Dr. Don Roy. Measuring Direct Mail Results. Response Rate - What % of customers contacted gave feedback (i.e., responded) to our message to them? # of Responses Response Rate = # of Contacts Made Example:

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Media Planning & Measurement

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  1. Media Planning & Measurement MKT 3850 Dr. Don Roy

  2. Measuring Direct Mail Results • Response Rate - What % of customers contacted gave feedback (i.e., responded) to our message to them? # of Responses Response Rate = # of Contacts Made Example: Direct mail campaign in which 50,000 pieces were mailed and 1,550 people responded: • 1,550/50,000 = .031 = 3.1% Response Rate

  3. Measuring Direct Mail Results (cont’d) • Cost per Response - How much does it cost for each customer who gives the desired feedback? Total Costs of Campaign Cost per Response = # of Responses Generated Example: A direct mail campaign with total costs of $120,000 (including printing, postage, ad agency fees, etc.) and resulted in 1,500 sales: • $120,000/1,500 = $80 per sale

  4. Key Media Planning Measures • Cost per Thousand (CPM) • Cost per Point (CPP) • These are measures of cost effectiveness

  5. A Cost Effectiveness Analogy #5 – Media Costs vs. Price: $3.49 Size: 13 oz. CPO = .27 Price: $3.99 Size: 17 oz. CPO = .23

  6. Cost Per Thousand (CPM) • CPM is a measure of advertising cost effectiveness; it allows an “apples to apples” comparison of different media vehicles (The Tennessean vs. Nashville Scene). • It is the primary benchmark used by the advertising industry to assess cost effectiveness.

  7. Calculating CPM Total Cost of an Advertisement CPM = Number of people in audience (in thousands) $5,000 = 300,000/1,000 = $16.67 per thousand

  8. CPM Example Time People Per-page cost $353,000 $ 181,000 Circulation 3.3 million1.4 million CPM $107 $129 • Given the information above, which magazine would you recommend for an ad buy? Why?

  9. Cost Per Point (CPP) • CPP is a measure of advertising cost efficiency for television; it allows an “apples to apples” comparison of different communication vehicles (ex.- Dancing with the Stars vs. The Voice)

  10. Calculating CPP Cost of commercial time CPP = Program rating

  11. Calculating CPP Cost of commercial time CPP = Program rating

  12. Calculating Program Rating • TVHH Tuned to a Specific Program • Program Rating = • Total TVHH in Area • *TVHH = TV Households (# households that own TV sets) • View recent TV ratings (http://tv.zap2it.com/news/ratings/) • Rating is a percentage measure but is expressed as a whole number

  13. A Ratings Swoon

  14. CPP Example $56,338 $59,322 • Given the information above, which TV program would be the more cost efficient an ad buy?

  15. Closing Thoughts • Media planning = Get best “bang for the buck” • Cost effectiveness can be positioned creatively by media advertising salespeople • Buyer Beware!

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