1 chapter 10 broadcast and interactive online media
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Chapter 10
Broadcast and Interactive Online Media
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Learning Objectives
Learn about television, radio, and Internet in terms of the overall trend, advantages and disadvantages as an advertising medium.
Understand the reality of Internet as an advertising medium.
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The Structure of the Television Industry (Fig. 10.1)
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Cable is Firmly Entrenched Worldwide and Is Still Growing
Cable is Firmly Entrenched Worldwide and Is Still Growing
Battle Raging Over Who Will Control Digital TV Technology
Battle Raging Over Who Will Control Digital TV Technology
Network TV’s Viewership Has DeclinedNetwork TV’s Viewership Has Declined
Television is Now a Fragmented MediumTelevision is Now a Fragmented Medium
Changes in Broadcast Television
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Television Advertiser’s Media Choices (Fig. 10.3)
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Forms of Television Advertising
SponsorshipsAdvertiser assumes the total financial
responsibility for producing the program and providing the commercials.
ParticipationsAdvertisers pay for 15, 30, or 60 seconds of
commercial time during one or more programs.
Spot AnnouncementsAppear in the breaks between programs, usually
local buyers.
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AudimeterAudimeter
Records When The TV Set is Used
& Which StationWatched
Viewing DiaryViewing Diary
Provides Data OnWho is Watching
Shows
People MetersPeople Meters
Which TV Shows Are BeingWatched, Number of
Households Watching, & Which Family
Members AreViewing
A.C. Nielsen Provides the Most Commonly Used Measures of National and Local TV Audiences:
Measuring the TV Audience
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Pros and Cons of Broadcast TV Advertising
Mass coverage
Low cost
Some selectivity
Impact
Creativity
Prestige
Social dominance
High production costs
High air-time costs
Limited selectivity
Brevity
Clutter
Zipping and Zapping
Pros Cons
Pros and Cons of Cable Advertising
Selectivity
Audience demographics
Low cost
Flexibility
Testability
Limited reach
Fragmentation
Quality
Zipping and zapping
Pros Cons
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Medium’s Influence on Consumers’ Taste and
Perceptions is Pervasive
Medium’s Influence on Consumers’ Taste and
Perceptions is Pervasive
Reach a Large Audience in A Cost-Efficient Manner
Reach a Large Audience in A Cost-Efficient Manner
Use of Sound and Moving Images Creates a Strong
Impact
Use of Sound and Moving Images Creates a Strong
Impact
Advantages of Television
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HighCost of
Producing&
RunningCommercials
HighCost of
Producing&
RunningCommercials
HighLevel
OfCommercial
Clutter
HighLevel
OfCommercial
Clutter
TelevisionIs
Nonselective
TelevisionIs
Nonselective
SuffersFrom aLack of
FlexibilityIn
Scheduling
SuffersFrom aLack of
FlexibilityIn
Scheduling
Disadvantages of Television
Infomercial Watchers
Exhibit 9-4
Page 290 SexMale 57% 8.0% 20.0%Female 54 9.0 19.0Age18-24 70 4.0 19.025-34 63 9.0 19.035-49 58 12.0 20.050-64 55 10.0 26.065+ 33 3.0 13.0Income ($)under $15,000 53 4.5 22.515,000-20,000 52 11.0 24.020,000-30,000 62 8.0 21.030,000-40,000 63 9.0 25.040,000+ 60 11.0 16.0RegionNortheast 65 7.0 24.0North central 52 9.0 14.0South 57 8.0 21.0West 55 10.0 17.0Total 55% 8.5$ 19.0%
Seen oninfomercial in the past year?
Ever purchasedanything using atoll-free numberat the end of aninfomercial?
Ever purchasedanything in a storebased on information provided in aninfomercial?
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AM Radio
Web RadioWeb Radio
FM RadioFM Radio
Cable & DAB RadioCable & DAB Radio
Structure of RadioRadio Can be Classified According to Transmission and Power.
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Network Radio is a Group of Local Affiliates Connected to One or More National Networks Through Telephone Wire and
Satellites and Has Increased in Popularity Because of:
Complete Market CoverageComplete Market Coverage
Consolidation That Produced4 Major Networks
Consolidation That Produced4 Major Networks
Increase in Syndicated ShowsIncrease in Syndicated Shows
Radio Advertising
Emergence of Unwired NetworksEmergence of Unwired Networks
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Radio is a Highly
Fragmented Medium
Radio is a Highly
Fragmented Medium
Radio Fans
34%, Listen to Four or Five Stations With No Preference for One Station.
Radio Fans
34%, Listen to Four or Five Stations With No Preference for One Station.
Music Fans
11%, Listen Exclusively for the Music Being Played.
Music Fans
11%, Listen Exclusively for the Music Being Played.
News Fans
Choose Stations Based on a Need for News and Information.
News Fans
Choose Stations Based on a Need for News and Information.
The Radio AudienceStation Fans
46%, Clear Preference for One or Two Stations, Listen Up to 8 Hours a Day.
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Measuring the Radio Audience
Measure of the number of people listening to a particular station at a given time: Station’s coverage, which is the geographic area that can
pick up the station clearly. Better measure is circulation, which measures the
number of homes that are actually tuned in to the particular station.
Arbitron is an audience rating service. RADAR is another rating service. Birch/Scarborough-VNU conducts random phone
interviews asking listening preferences.
Pros and Cons of Radio Advertising
Reach and Frequency
Selectivity
Cost-efficiency
Timelessness
Immediacy
Local relevance
Creative flexibility
Limitations of sound
Segmented audiences
Short-lived and half- heard commercials
Clutter
Pros Cons
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Target AudiencesTarget Audiences
FlexibilityFlexibility
AffordabilityAffordability
Mental ImageryMental Imagery
High Levels of Acceptance
High Levels of Acceptance
Advantages
InattentivenessInattentiveness
Lack of VisualsLack of Visuals
ClutterClutter
Scheduling & Buying Difficulties
Scheduling & Buying Difficulties
Disadvantages
Lack of ControlLack of Control
Radio
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Interactive MediaInteractive technology (media) is a new form of broadcast media.Estimate that Internet will capture 50 million users by 2000.Formats for delivering ads: Web page, Banner ad, E-mail.
Adoption Curves for Various Media
1922 ‘26 ‘30 ‘34 ‘38 ‘42 ‘46 ‘50 ‘54 ‘58 ‘62 ‘66 ‘70 ‘74 ‘78 ‘82 ‘86 ‘90 ‘94 ‘98 Est
120
80
60
5040
20
0
Mil
lio
ns
of
Us
ers
Radio TV Cable Internet
Years to reach 50 MM users
Radio 38TV 13Cable 10*Internet 5**
The Internet is the fastest growing medium in history
* Launch of HBO in 1976 was used to estimate the beginning of cable as an entertainment/ad medium.** Morgan Stanley Technology Research estimate (Chart shows the Internet beginning as an entertainment/ad medium in 1994 because its earlier use was restricted to governmental activities)
Who Values the Internet’s Offerings?
Community services
Banking
Buying & selling
Entertain-ment
Advertising & marketing
Education
Communica-tions
Information access
0% 10% 20% 30% 40% 50% 60% 70% 80%
50 and older
30 to 49
Under 30
Consumers’ Use of Interactive MediaTypes of Use Percent
Respondents making interactive purchases
within one year 58%Of these:
Number who shopped via online service 86 Of these, number who used credit card 83
Number that shopped via Internet 43 Of these, number who used credit card 70
Number that switched to 800 number 16 Number that shopped via e-mail 8
Number that shopped via CD-ROM 5 Number making 2-4 purchases in last 6 months 47 Number making 5-10 purchases in last 6 months 12 Number who spent $26-$50 on each interactive purchase 46 Number who spent over $100 on each purchase 11
Types of products purchasedBooks, music CDs, and videos 57Computer related equipment 55 Flowers 20Clothing 18 Travel 14
Respondents also making purchases from catalogs/TV shopping Channels 50
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Cost of the Medium
Cost of the Medium
Ability to MeetAdvertisingObjectives
Ability to MeetAdvertisingObjectives
Advertiser Should Ask About:
Broadcast and Interactive Media Strategies
Ability toAccommodate the
Style ofMessage
Ability toAccommodate the
Style ofMessage
How TargetedThe
Audience Is
How TargetedThe
Audience Is
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Online Products Mix in 2000
Other 5%Food and drink 5%
Gifts and flowers 10%
Apparel 5%
Entertainment 19%
Computer products 32%
Travel 24%
Pros and Cons of Internet Advertising
Truly Interactive
Enormous audience
Immediate response
Affluent market
In-depth information
Rapid-growth industry
Business-to-business
Advertorials
Virtual storefront
Untested medium
Targeting costs
Slow downloads
Net yet mainstream
Ad may be placed inappropriately
Unproved security and privacy
Global marketing limitations
Pros Cons
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Internet Advertising: Pros
Truly Interactive
Enormous audience
Immediate response
Affluent market
In-depth information
Rapid-growth industry
Business-to business
Advertorials
Virtual storefront
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Internet Advertising: Cons
Untested media
Targeting costs
Slow downloads
Net yet mainstream
Ad may be placed inappropriately
Unproved security and privacy
Global marketing limitation
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Internet Advertising: Reality
Advertising spending (Advertising Age 2001)1999: $2.8 million (1.3%)2000: $4.3 million (1.8%)
61% of AA’s top 100 megabrands online (Forrester Research)
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Internet Advertising: Reality
Advertising spending (Advertising Age 2001)1999: $2.8 million (1.3%)2000: $4.3 million (1.8%)
61% of AA’s top 100 megabrands online (Forrester Research)
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Various Forms of Internet advertisingBanner ads (55%): average click-through
rate 0.3 to 0.5%Sponsorships (27%) Interstitials (4%): Rich media – average
click-through rate just below 6%Email (2%)Others (12%)
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Performance-based advertising predicted to make up 50% of all revenues by 2003 (Forrester Research)
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Challenges
Can we go beyond current banners to create ads that are exciting, fun, and dynamic?
Can we increase ad impact through contextual relevancy?
Can we combine entertainment with brand equity?
Can ads be intrusive without being annoying?
Can ads communicate product superiority?
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Review
Learn about television, radio, and Internet in terms of the overall trend, advantages and disadvantages as an advertising medium.
Understand the reality of Internet as an advertising medium.
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