The Whys and Hows of Media Mix

THE WHY'S AND HOW'S OF MEDIA MIX The OTS problem: Developing comparable crossmedia measures of ad exposure. The CPM target model. The value of APX in print planning. The media-weighting problem. Using attentiveness, involvement and message receptivity as media-specific values. Media-mix and campaign effectiveness: What ROI (return on investment) modeling tells us about mixing-media. Using modeling to find the price-elasticity crossover points of media effects. Cross-Platform and media synergies. Is the sum worth more than the parts?

The Media Planning Process

Media Media Planning Planning
1 2
Marketing Situation Marketing Situation Marketing Solutions Marketing Solutions Objectives Objectives Media Planning Solutions Media Planning Solutions Objectives Objectives Implementing the Media Plan Implementing the Media Plan Buying Buying Negotiations Negotiations Vehicles Vehicles Ad Placement Ad Placement Post Buy Analysis Post Buy Analysis Strategies Strategies Tactics Tactics Strategies Strategies

Media Strategy
Essential Parameters of the Plan Reach Frequency Number of Advertising Cycles for the Year Media categories to use

Trade-Offs Between Basic Parameters of the Media Plan

REACH
# of target audience individuals exposed to the advertising in an advertising cycle

Frequency

BUDGET
# of Advertising Cycles
Over the entire planning period

# of exposures per individual target audience member in an advertising cycle

It is better to sell some people completely than many people not at all.
(Rossiter and Percy, 1987,1997)

Media Selection
Three stages of the media plan implementation
Media Selection Media Vehicle Selection Development of the Schedule of Advertising Insertions in the Vehicles

Medias Natural Laws

Recency, Optimizers, and Modeling all give same advice Marketing Mix

Adding too much of anything in media brings lessened response This phenomenon is called diminishing marginal utility and affects everything that is done in planning

Diminished Marginal Utility

Regardless of the strength of a medium, adding dollars will usually produce a lessened consumer response diminishing marginal utility The sales effectiveness of a medium relates almost inversely to its share of the ad budget * The more dollars spent, the less response per dollar This is why any single medium alone cannot produce the most costeffective media plan, and its why Media Mix is at the top of every media planners list
*John Philip Jones. The Ultimate Secrets of Advertising

Extra Reach Is Expensive

% of Schedules Potential Reach
+13%
100.0

+16% +41% +69%

68.0 48.1 28.4

+12%

88.5 79.1

16.7

33.3

50.0

66.7

83.3

100.0

% of Schedules Total GRPs

Media Response Curve

As dollars increase, the curve starts to flatten
Until the last dollar produce very little added response

As reach increases, dollars buy less reach and more frequency

The Media Mix

Mixing media is a simple way to improve response As response starts to weaken, the media planner shifts to the next medium

Newspapers Online Television

Response
Media Dollars

Build Reach More Cost-Effectively Minimizing Duplication

In the media mix, television starts building reach costeffectively Adding a second medium will build more reach for less money It will duplicate television less than television will duplicate itself

CPM vs. Cost Per Incremental Reach Point

Newspapers
2. When the reach of one medium starts to flatten in relation to the dollar investment, an effective campaign incorporates another medium, building reach in a cost efficient manner

Online

Reach %

Television

1. After a certain reach point, each additional media dollar achieves less consumer response and build reach at a much slower, and costlier rate

$ Investment

Media Mix Decisions

Which media should the advertiser use?
Media mix recommendations are developed by considering a budget-conscious intersection between media objectives and the properties of the various potential media vehicles
Planners must analyze how each media vehicle provides a costeffective contribution to attaining the objectives, and then they select the combination of vehicles that best attain all of the objectives.

Media Mix Decisions

When making media mix decisions, comprehensive analysis to the whole spectrum of media is considered; not just to traditional media vehicles such as TV, radio, and print
Review all the opportunities that consumers have for contact with the brand Non-traditional brand contact opportunities such as online advertising, sweepstakes, sponsorships, product placements, direct mail, mobile phones, blogs, and podcasts The scale and situations of media use are especially important when evaluating suitable brand contact opportunities

Mix Strategy: Media Concentration vs. Media Dispersion

First Media Mix Decision

Media Concentration

vs.

Media Dispersion

Mix Strategy: Media Concentration

Media Concentration
Fewer media categories and greater spending per category

A concentrated strategy is also an "all-eggs-in-one-basket" strategy. If the particular ad is not well received or the particular media category only reaches a fraction of the intended target audience, then it will perform poorly

2. Higher frequency and repetition within that media category 3. Used when there is a concern to share space with competing brands, leading to confusion among consumers 4. High SOI/SOV. Dominant advertiser

Mix Strategy: Media Dispersion

Media Dispersion
1. Multiple media categories: TV, Radio, Print, Internet, OOH 2. There is knowledge that no single media outlet will reach sufficient percentage of the target audience 3. Brings reinforcement: consumers who see multiple ads in multiple media for a given brand may be more likely to buy A concentrated approach using only ads on the Internet might reach only 30% of the target consumers because some consumers don't use the Internet. Similarly, a concentrated approach using magazines might reach only 30% of the target audience, because not every target customer reads selected magazines. But a dispersed approach that advertises in magazines as well as on web sites might reach 50% of the target audience

Mix Strategy: Media Concentration vs. Media Dispersion Hypothetical Media Mix and Share of Investment for 3 Competing Brands
Competing Brand A B C Total Spend Television $400,000 $600,000 $0 Magazine $250,000 $250,000 $0 Direct Mail Internet $200,000 $0 $0 $200,000 $300,000 $0 $600,000 $900,000 Total Spend $1,150,000 $850,000 $600, 000 $2,600,000

$1,000,000 $500,000

Brands' SOI in Each Media Category A B C Total % 40% 60% 0% 100% 50% 50% 0% 100% 100% 0% 0% 100% 33% 0% 67% 100% 44% 33% 23% 100%

The media concentration approach is often preferable for brands that have a small or moderate media budget but intend to make a great impact.

Selection of Media Vehicles

Suggested methodology to facilitate the selection of media vehicles
List the potential vehicle candidates under consideration Select several quantitative and qualitative characteristics that are relevant to reach and frequency considerations
CPM, GRP, Reputation, Added Value, etc...

Develop a table that lists the vehicle candidates in rows and the characteristics in columns Rate each of the characteristics of each vehicle on a scale of 1 to 3 and obtain an average index. The best media vehicles to choose are those with the highest index numbers
Selection of Media Vehicle Based on Quantitative and Qualitative Characteristics V1 V2 V3 V4 Qn1 3 1 1 1 Qn2 2 2 3 1 Qn3 1 2 3 2 Ql1 3 2 1 1 Ql2 1 2 1 2 Ql3 1 3 3 1 Index 1.8 2.0 2.0 1.3

Media Category Selection

Whether media concentration or media dispersion is selected, the media category(ies) are yet to be chosen for the media plan
Different media categories suit different media objectives

Most media options can be classified into three broad categories:

Mass Media Direct response Media Point-of-Purchase Media

Media Category Selection

Choice will depend on the media objectives
To create broad awareness or to remind the largest possible number of consumers about a brand
mass media such as television, radio, newspaper and magazine

To build a relationship with a customer or encourage an immediate sales response, then:

direct response media such as direct mail, the Internet and mobile phone are good choices

Media Category Selection

Choice will depend on the media objectives
Online ads for car insurance such as link directly to the application process to capture the customers right at the time they are interested in the service If the strategy is looking to convert shoppers into buyers, then use of point-ofpurchase media such as sampling, coupons and price-off promotions is recommended

All three categories of media (mass, direct response, and point-ofpurchase) serve a different role in moving the customer from brand awareness to brand interest to purchase intent to actual purchase and then to re-purchase
An integrated campaign, can combine different categories such as TV ads to introduce the product, Internet media to provide one-to-one information, and instore displays to drive sales

Media Category Selection

The creative requirements of a media category also affect media mix decisions. Each media category has unique characteristics. For example:
Television offers visual impact that interweaves sight and sound, often within a narrative storyline. Magazines offer high reproduction quality but must grab the consumer with a single static image. Direct mail can carry free samples but can require compelling ad copy in the letter and back-end infrastructure for some form of consumer response by return mail, telephone or Internet. Rich media ads on the Internet can combine the best of TV-style ads with interactive response via a click through to the brand's own website. Media planners need to consider which media categories provide the most impact for their particular brand. The costs of developing creative materials specific to each media category can also limit media planners' use of the media dispersion approach

Advertising Media

(Ma

Brand A Mainstream Advertising Medium Television Cable TV Radio Newspapers Magazines

Brand Recognition YES YES NO Lim (c) YES

Primary Media for Achieving Combi

Brand
Low Involvement /Informational Television Cable TV Newspapers Magazines

(Media for Ad

Prepurchase IMC Media Selec

Prepurchase IMC Medium PR Distribution Outlet (External) Sponsorship Event Marketing Publicity Sampling Brand Recognition Lim (f) Lim(rp) YES Lim (rp) Lim (vis) Lim (rp)

Br Re Lim Lim Y Lim Lim Lim

Note: These are delivery media for corporate advertising communicatio

Point-of-Decision IMC Media Sele

Media Selection Considerations

Secondary media are used for 3 reasons:
1. There might be some significant proportion of the target audience that the primary medium does not reach or cannot reach at the effective frequency level 2. There might be one or two communication objectives that can be attained equally effectively, but at al lower cost. May be used in the role of boosting particular communication objectives such as increased brand awareness, maintained brand attitude, or reminded purchase intentions 3. There may be a timing advantage near or at the point of purchase or usage, that is, close to the target audience's decision, offered by a secondary medium

Consumer

(Primary m Secondary Media to Boost Single Comm

Communication E Brand Awareness Reco Brand Recognition News Maga Outdo FSI (f POP Brand Recall Radio News Brand Attitude Reco Low Involvement/Informational Radio

Media Selection for Direct Response Advertising

Nature of Product and target audience Any product or service sold to a broad or Product or service that is well known and Products or services with broad target au

Products or services whose target audien

Popular Inc. Media Mix

Medium Radio AM Internet Magazines

Negotiated Medi Mix $ $ $ $

25,365.

48,950.

81,554.

Popular Inc. Detailed Media Mix

Available Flow charts A cceso ET A % MM A ho rro D irecto % MM A m ex Black % MM C om m ercial % MM C om p ro m iso Pop ular % MM D ep sito Directo % MM Esp ecial R afael Hernndez N ew spapers R adio

$27,812.00 100%
$103,277.00 $82,382.00

29%
$128,951.00

23%

100%
$251,520.88 $84,000.00

64%
$53,700.96

21%
$69,000.00

44%
$59,646.00

56%

70%
$9,391.00