1. Advertising Budgeting, Media,
and Media Planning
Aravind
LEAD College of Management

2. The Advertising Budget
Setting the Budget
Percentage of Sales
Payout Plan
Competitive Budgeting
The Task or Objective Method
 What’s the objective?
 What type and how much media needed?
 Can we afford it?
Arbitrary
Administering and Protecting the Budget

3. Media Defined
The vehicles that carry the ads to the
target market.
Which is most important? Picking the
correct media or having great creative?
What are the types of media?

4. Different Media

5. The Local Media Mix
Newspapers Out-of-home
Radio Yellow
Television Pages/Directories
Magazines Direct Media
New Media

6. Newspapers as Local Media
Using regular sections
 Sports, Business,
Entertainment, etc.
Using special sections
 Gardening, Back-to-school,
etc.
Zoned editions
Preprint distribution
Weeklies, Shoppers,etc.

7. Newspapers as Local Media
Available space for detailed copy
Minimal lead times for faster turnaround
Geographic targeting selectivity by area
and zip code zoning

8. Radio as Local Media
Demographic target selectivity by
station format
Time-of-day selectivity available
 Morning and afternoon drive
 Midday shopping
 Nighttime entertainment

9. Radio as Local Media
Specific advertiser applications to build
local traffic
 Straight advertising
 Sponsored promotions
 Sponsored events
 Remote broadcasts

10. Magazines as Local Media
City Magazines
 Allow advertisers geographic emphasis in many larger cities
Regional Magazines
 Allow emphasis in regions of the
country
Even National Magazines
 Special city and geographic zoning
available for higher circulation
magazines

11. Out-of-home as Local Media
Almost exclusively local, Place-based media
 Pick your place
Directional messaging
 Reach the target on the go, going your direction
Limited to only short
messages
 More about simple
exposure

12. Directories as Local Media
Yellow Pages and other directories
 Always on hand
 Consulted for product/service options
Simple listing or display alternatives
 Listing right for some advertisers
 Display needed for other advertisers
Annual media buy
 Take care to get the info right!

13. Direct as Local Media
Direct mail to reach customers and
neighbors in their home
Database Marketing on a local, business
specific basis
 Proprietary
 Purchased

14. New Media Locally
Audiotext – sponsored phone
messaging used by
 retail stores (BB, Planet fashion)
In-store advertising and couponing
Interactive kiosks and teller machines in
stores
Social Media

15. Local Media Planning
Matching media with markets
 Broad and narrow
The local market profile
 Knowing your market
Research on a local level
 Primary techniques
 Secondary sources

16. Matching Media With Markets
Even on a local level
 Some media reach a broader audience
 Some media reach a narrower audience
Especially on a local level
 Some advertisers need a broader audience
 Some advertisers need a narrower
audience

17. Case Study:
Same Location – Different Markets
DeLuxe Cleaners and
Betters’ Better Gourmet
 Same strip mall location
 Different business models
 Different target markets
 Different media plans

18. Different Target Markets
DeLuxe Cleaners
 90% of the business lives in the
neighborhood
Betters’ Better Gourmet
 Neighborhood market for weeknight take-
out business
 Broader market for weekend and “freezer
food” shoppers

19. Different Media Plans
DeLuxe Cleaners
 Neighborhood weekly newspaper
 Neighborhood flyers
 Direct mail by zip code and customer database
Betters’ Better Gourmet
 Daily city newspaper food day and weekend
entertainment
 Specialty papers arts/entertainment
 Customer database mailings

20. The 10-Minute Media Plan
DeLuxe Cleaners
 Typical of many local businesses
 90% of the business generated within a 10-minute
radius of the store location
Media used should be in the same radius
 Store-front signage
 Zip code and neighborhood flyers
 Partnerships with other neighborhood stores
 Local neighborhood newspaper or billboard location
where available

21. Local Market Profile
Know your market, be the expert
 Population/Consumer base
 Economic Base
 Behavior patterns
 Media alternatives

22. Population/Consumer Base
Population statistics and trends
Demographic characteristics and trends
 Age, income, education, etc.
Lifestyle variables and trends
 Home ownership, neighborhood
development, etc.

23. Economic Base
Tax basis and trends
Retail sales by area and trends
Employment statistics and trends
Tourism trends (if any)

24. Behavior Patterns
Shopping behaviors
 Time of day
 Day of week
 Week of month

25. Market Research:
How do you find this stuff?
Primary Research
 Store or customer research
 Media research
Secondary Research
 Government reports
 Industry reports

26. Primary Research Locally
Surveys
Focus Groups
Mall Intercept questionnaires
One-on-one Interviews

27. Secondary Research Locally
Government Reports
 Chamber of Commerce research
 Survey of Buying Power
 Government Studies
 Statistical Abstract

28. Secondary Research Locally
Industry Reports
 Trade magazines
 Trade associations
 Specialized reports

29. Organization of the Media Function
Media planner
Media buyer
Media researcher

30. Important Trends in Media
Convergence
Interactivity
Creativity
Optimization

31. Key Media Terms
Media plan: document that establishes how
media will be used to disseminate an advertiser’s
message, including objectives and strategy.
Media objective: statement in media plan that
explains the goals of the plan; usually states how
many of the target will be exposed to advertising
messages in a given time period, and how often.
Media strategy: statement in media plan that
outlines how objectives will be accomplished;
shows where and when advertising messages will
appear, and at what cost.

32. Media Planning
Media Planning = Selection + Scheduling
Factors Influencing Media Planning Decisions
Target Market Profile
Looking at Brand/Product Dynamics
The Creative Execution
Budget Considerations and Media Deals
The Competitive Situation
Availability and Timing Considerations
Cost Efficiency (CPM = Cost per thousand (CPM): cost
of reaching 1,000 members of target audience with media
vehicle(s) or plan.)

33. CPM Formula and Example
Cost
CPM = X 1,000
Audience
Which is more cost efficient on a CPM basis?
A-- :30 TV Commercial in “Friends”
$250,000
CPM = X 1,000 = $12.50
20,000,000
B-- :30 TV Commercial in “Monday Night Football”
$300,000
CPM = X 1,000 = $10.00
30,000,000

34. Media Selection
Media are evaluated based on selectivity.
There are two types of selectivity:
 Class Selectivity is the ability of a medium to reach
the target market without waste.
 Geographic Selectivity is the ability of a medium to
cover a particular geographic area without spillover.
How would you rate the different major media
in terms of class and geographic selectivity?

35. Media Scheduling
Reach
(% of target audience with opportunity for exposure to
media vehicle(s) or media plan in a given time frame)
+
Frequency
(average number of times target is likely to be exposed to
the ad in a given time frame)
100%

36. The Difference between Reach
and Frequency

37. Media Scheduling (continued)
Reach
+
Frequency
+
Continuity
(how long the campaign runs—
continuous vs. flighting vs. pulsation)
100%

38. Reach, Frequency, and Continuity Relationships with a
Fixed Budget

39. Media Scheduling (continued)
Reach
+
Frequency
+
Continuity
+
Dominance/Impact
(the attention-getting ability of the media vehicle(s)
selected to run the ad)
100%

40. Evaluating the Media: Key Terms
y Rating point: the % of a given population group that uses a
specified media vehicle.
y Share: Households/persons using television (HUT, PUT): %
of homes or people watching TV at a given time.
y Gross rating point (GRP): total number of ratings for different
media vehicles.
y Gross impression: translation of GRPs into people; number of
audience exposures x number of times they will see or hear
vehicles.
y Cost per rating point (CPP): cost of buying one rating point in
a given media vehicle or type.
y Audience: number or % of homes or persons using a media
vehicle.
y Coverage: Same as reach – the % of homes or persons
receiving broadcast signal within specified area, or receiving
specific magazine or newspaper.

41. Evaluating the Media: Key Terms,
Continued
y Circulation: Total number of copies of a publication sold
through various forms of distribution.
y Readers per copy: average number of people who read
each issue of publication.

42. Types of Media Plans
yGeographic
y Local, spot, key market
y Regional
y National
y International
Selective
Combination

43. Sample Flowchart of a Media Plan

44. Evaluating the Media Plan
y Follow up—getting make-goods, tearsheets.
y Measuring the impact:
l Test consumer awareness of campaign before,
during, and after.
l Sales data.
l Compare actual reach/frequency figures to
proposed estimates.
l Syndicated Media Research Services
l Nielson, Arbitron, Simmons, Audit Bureau of
Circulation