SBM 338Lanny Wilke

Two ways to categorize advertising costs• Absolute cost – actual total cost required to

place the message• Relative cost – the relationship between the

price paid for advertising time or space and the size of the audience delivered Used to compare media vehicles

Determining relative cost of media• Cost per Thousand (CPM)

Cost of ad space (absolute cost)CPM = Circulation X 1,000

• Cost per ratings point (CPRP)

Daily inch rate - newpapers

Cost of commercial timeCPRP = Program Rating

Cost of ad space X 1,000 Circulation

• Television

Most media buyers rely on target CPM (TCPM) – calculates CPM’s based on target audience, not overall audience.

Cost of 1 unit of time X 1,000 Program Rating

Magazines would like to use the number of readers per copy as their true circulation figures.• Includes a pass-along rate

Must consider two factors• How well did these strategies achieve the

media objectives?• How well did this media plan contribute to

attaining the overall marketing & communications objectives?

RadioAdvantages Disadvantages

Local coverage

Low cost

High frequency

Flexible

Low production costs

Well-segmented audiences

Audio only

Clutter

Low attention getting

Fleeting message

Magazines

Advantages Disadvantages

Segmentation potential

Quality reproduction

High info content

Longevity

Multiple readers

Long lead time for ad placement

Visual only

Lack of flexibility

NewspapersAdvantages Disadvantages

High coverage

Low cost

Short lead time

Ads can be placed in interest sections

Timely (current ads)

Reader controls exposure

Can be used for coupons

Short life

Clutter

Low attention-getting capabilities

Poor reproduction quality

Selective reader exposure

Outdoor Advantages Disadvantages

Location specific

High repetition

Easily noticed

Short exposure time requires short ad

Poor image

Local restrictions

Direct mailAdvantages Disadvantages

Highly selective

Reader controls exposure

High info content

Opportunities for repeat exposures

High costs/contact

Poor image (junk mail)

Clutter

Internet & Interactive MediaAdvantages Disadvantages

User selects product info

User attention & involvement

Interactive relationship

Direct selling potential

Flexible message platform

Limited creative capabilities

Websnarl (crowded access)

Technology limitations

Few valid measurement techniques

Limited reach