There's No One Right Answer
Which is a better advertising buy: radio or television? How many times should an ad appear in the newspaper? How long should an advertising campaign last? These are questions financial services marketers must ask. Unfortunately, there is no one right answer.
What Are Marketers to Do?
Placing advertising in the media has become such a complex activity that hiring a professional is often the smartest and most cost-effective route to take. It takes time to make media placement decisions, and an expert will know how to spend valuable marketing budget dollars judiciously. However, you can do it yourself if you're willing to invest the time to familiarize yourself with the ins and outs of media placement. Here's what you need to know when buying media or working with a media buyer.
Each advertising medium has a unique way of "proving" its worth. To make an "apples-to-apples" comparison of media effectiveness, you must look at what the industry calls reach and frequency.
Reach is the number of people an advertising message reaches. The more people who hear or see the message, the greater the reach and the higher the advertising rate will be. In the industry, reach is often expressed as a "rating." The reach rating formula is:
Number of people reached ÷ by population = reach rating
Reach should be as targeted as possible, both geographically and demographically. Your institution's size and location determines the geographic target. A demographic target is determined by identifying which customers or prospects would most likely buy your products.
Frequency is the number of times the targeted audience sees or hears your message, and is usually expressed as an average. An advertising message is normally placed more than once, which means, in any given audience, some people will see/hear the message only one time while others will see/hear it a number of times.
A common rule of thumb in advertising is that just about the time an advertiser can't stand to hear his advertising message repeated, is when the audience is finally noticing it!
Audience Measurement Tools
Media outlets use a variety of means to monitor the size and characteristics of their audience. Here's an overview of the most common measurement tools.
Broadcast Television. ACNielsen is the major research company for broadcast television audience measurement. It assembles a "representative" sample of viewers and asks them to keep a viewing diary. The company then extrapolates national data from the sample.
Radio. Measurement ratings for radio audiences are determined using the diary system much like those for local television stations. Arbitron is the industry leader in measuring radio station listenership.
Newspaper. Circulation is often cited as a means of calculating how many people read a particular newspaper. Keep in mind, however, that a delivered or purchased paper may or may not be read, or read entirely, and a single issue might be read by more than one person, all of which make it very difficult to determine exact readership numbers. The Audit Board of Circulation (ABC) is a national organization that verifies circulation figures.
The "Yesterday-Reading Technique," a system used in markets with more than one publication, is an attempt to gather readership data. In this technique, a random sample of subscribers is asked which newspaper they read the day before.
Outdoor. Billboard companies estimate exposure based on traffic patterns. However, this measure doesn't indicate how many drivers or their passengers actually read the billboard.
Media impact attempts to "weigh" the effectiveness of the advertising message and the medium. Some media vehicles have more impact than others.
A good media buy takes into account both reach and frequency. Media buyers use "gross rating points" (GRP) as a measuring tool. GRPs are calculated as follows:
GRP = reach (rating number) x frequency
A basic knowledge of reach and frequency -- coupled with a hefty dose of common sense and the advice of a media buying professional -- can help a financial institution marketer ask the right questions, and receive the right answers, when spending valuable media dollars.
Making the Right Media Choice
Before making any media decisions, spend time exploring your competition, your market, and your media options. The following three-step outline will help you gather the information you need to make the best decision for your institution.
Step One: Situation Analysis.
- Who/what is your competition?
- How do their products compare to yours?
- What makes your accounts and services stand out?
- Who is your target market?
- Where can you reach your target market?
Step Two: Advertising Analysis
- What results do you expect from your advertising efforts?
- What is your budget for the campaign?
- Do your ads clearly explain the main product benefits?
- Is the pricing clear, and does it meet regulations?
- Is your staff aware of the campaign?
Step Three: Evaluating Media Pros and Cons. An overview of the unique qualities of each advertising medium follows:
|
Medium |
Pros |
Cons |
|
Newspaper |
Tangible Fairly flexible scheduling Provides means to give detailed info |
Cluttered environment Doesn’t always allow specific placement Not always completely read |
|
Radio |
Can target audience Allows for multiple, daily messages Relatively inexpensive |
Short message capability Isn’t tangible Can’t deliver complicated messages well |
|
Television (Broadcast) |
Delivers to an extensive audience Good visual- and audio- impact Can demonstrate product |
Very expensive Allows commercial zapping by remote Does not narrowly target audience |
|
Television (Cable) |
Typically costs less than broadcast TV Good visual and audio impact Delivers to a more targeted audience |
Doesn't reach large audiences Can't give exact viewer numbers Covers small geographic areas |
|
Outdoor |
Has impact due to size Can be used to build frequency Allows specific geographic targeting |
Can’t give detailed message No scheduling flexibility Can be defaced |
|
Direct Mail |
Most highly targeted Allows tangible, detailed message Provides for direct response |
Cluttered environment Not always completely read |
How Media Is Purchased
Media is purchased by the amount of time or space, but the specifics vary from medium to medium.
Radio and television ads are typically are purchased as 30- and 60-second spots.
Newspaper ads are available in two sections: display advertising and classified advertising. Display advertising is sold per column inch, which is the width of the ad in newspaper columns multiplied by the ad's height in inches. Classified ads are sold by the line.
Outdoor ads are purchased by "showings." A showing equals the percentage of the total population who pass a billboard each day. The price is also affected by the size of the board, which include:
- Posters are the most familiar board. They are 259" x 115" and comprise 30 printed sheets pasted side by side.
- Bulletins are referred to as "paint boards" because the ad art is painted onto huge boards.
- Spectaculars can be made in any shape or size, often lighted dramatically, and sometimes involve special effects of some sort.
Direct mail costs are usually expressed by the piece. Costs may include printing, inserting, sorting, and postage.
Dealing With Media Sales Representatives
If you're like most marketers, you are regularly approached by media sales people, all offering the "best media buy for your money." Before you bite, remember these tips:
- Rely on facts.
- Stay objective.
- Negotiate rates.
- Ask about cooperative advertising, which can lower the costs of advertising by matching advertisers with common goals.
Seeking Professional Guidance
Media buyers are trained professionals, experienced in buying and placing advertising campaigns.
Most advertising agencies have media buyers on staff. Agencies also have full-service advertising personnel who can assist bank marketers in all phases of the creative process.
If you're considering hiring an agency, here are a few questions you should ask:
- Do they have one (or more) persons on their staff who understands my business?
- Are they the right size for my budget?
- How good are they at creative problem-solving?
- How responsive are they?
- Do you like them?
Frequently Used Media Buying Terms
ADI (Area of Dominant Influence). The geographic boundaries of each television market.
Agency Commission. In addition to a monthly retainer, agencies charge for their expertise through a commission, or a percentage of the total buy placed by a media buyer.
Camera-ready. Artwork that is ready for a publication to photograph it for print.
Copy. The words that make up an ad either for print or broadcast.
CPM (Cost Per Thousand). A way to measure how cost effective a particular buy is:
|
cost of ad space or time x 1000 |
|
|
|
Number of people who see or hear the ad |
Dub. Duplications of audio- or videotape made from a master tape, created so that the same spot can run on more than one station at the same time.
Flight. Scheduled buy for a unified series of ads from beginning to end.
Open Rate. The highest amount a newspaper can charge for space.
Rate Card. Established rates for space and time purchased. Also gives ad and spot production specifications as well as deadline information.
ROP (Run of Paper). Newspaper ads are purchased, but without specific placement. The publication decides where the ads run.
ROS (Run of Schedule or Station). Radio or TV ads are purchased, without designating specific time slots. The station decides when the ads run.