How to Achieve Your Objectives AND Improve ROI

1. 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

2. How to Achieve Your Objectives AND Improve ROI John Olson V.P., Director of Product Development MediaMixNet, Inc.

3. 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)

4. 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

5. 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

6. 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)

7. Agenda • Media planning considerations that can increase effectiveness • Media buying strategies that can reduce costs

8. 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

9. 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

10. 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: $ 65 • Women 25-54: $ 55

11. 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

12. 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?

13. 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

14. 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? • Reachobjective

15. Setting Media Objectives • How many weeks must we be advertising? • Continuity objective

16. Setting Media Objectives • More is better than less

17. 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

18. Setting Media Objectives • And more (almost always) costs more than less • So, most advertisers have to make tradeoffs among the three objectives

19. 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

20. 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

21. Setting Media Objectives • Setting reach goal • 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….

22. 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

23. 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)

24. 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?

25. 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)

26. 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 60% reached, 4x each on average or 40% reached, 6x each on average

27. Setting Budgets • Objective/Task Method • Set frequency/reach/continuity goals • Develop a plan to achieve them • Cost out the plan

28. 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

29. 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

30. 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

31. 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

32. 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

33. 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

34. Setting Budgets • Plan to budget • Spend down available budget • Maintain reach and frequency goals • Cutweeks, cut secondary media types if necessary • Consider narrowing your target audience • Don’t fall below minimum frequency or reach levels

35. Setting Budgets • Meet or Match Competition • Estimate media spending of key competitors • Budget to match or exceed competitors

36. 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?

37. 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

38. 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

39. 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)

40. Developing media strategies • The ideal • Dominate (with high frequency)

41. Developing media strategies • The ideal • Dominate (with high frequency) • in enough media types and vehicles to • achieve high reach of the target audience

42. 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)

43. 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

44. Developing media strategies • The more realistic strategy • Dominate (with high frequency)

45. Developing media strategies • The more realistic strategy • Dominate (with high frequency) • at least one medium or vehicle

46. Developing media strategies • The more realistic strategy • Dominate (with high frequency) • at least one medium or vehicle • on an ongoing basis (continuity)

47. 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

48. Developing media strategies • The minimum • Advertise in one medium or vehicle consistently throughout the year (continuity)

49. Evaluating Alternative Plans • Variables to consider • Budget • Target Audience • Commercial Length/Ad Sizes • Daypart Mix • Media Mix

50. Evaluating Alternative Plans • Alternative plans should be compared based on: • Budget • Frequency • Reach • Continuity • Use of desired media • Daypart Mix • Unit Mix