Understanding Advertising Reach, Frequency, and Audience Research Techniques

1. ADVERTISING

2. The Players • Advertisers • Agencies • Media • Regulators • Sales Reps • Support – research, buyers, etc.

3. Reach • The number of unduplicated exposures. • i.e. the number of different people that see or hear an advertisement

4. Frequency • The average number of duplicate exposures. • i.e. the number of times someone is exposed to an advertisement

5. Reach vs. Frequency • The best media vehicle for reach is network television. • TV penetration rates are near 100%. • With a single buy, an advertiser can reach millions of households, and tens of millions of viewers. • Too expensive for high frequency.

6. Reach vs. Frequency • Billboards and Newspapers are best for frequency. • If someone reads a newspaper, they likely read it every day. • If someone passes a billboard, they likely pass the same billboard every day.

7. Reach vs. Frequency • Generally, reach and frequency are mutually exclusive. A medium that delivers one, will not deliver the other. • Radio is possibly the best combination of reach and frequency. • Radio has high penetration, and is cheap enough to allow frequency.

8. Demographics • The more specific the demographics of the audience – the higher the cost to reach the audience. • Minimizing waste circulation. • Attracting a qualified audience of true prospective buyers for the product.

9. Cost per Thousand (CPM) • The cost of reaching one thousand households, viewers, listeners, readers, drivers, etc. • Allows advertisers to cross-compare among several media.

10. Audience Research • Began in 1929 with Archibald Crossley. • The “Hooperatings” dominated from the mid-30s to the 40s. Phone interviews. • A.C. Nielsen began audience research in the 1940s. • Arbitron (A.R.B.) established in 1949.

11. A.C. Nielsen • Originally both radio and TV. • Developed the audimeter. • Now only TV. • Use diaries, audimeters and people meters.

13. Arbitron • Now only radio. • Must rely on diaries. • Experimenting with the passive people meter (PPM).

14. Statistics • Quarter-hour people (QHP), the average number people who listen to a station for at least five minutes within a fifteen minute block.

15. Statistics • TVHH = television households. The number of households equipped with TVs. • HUT = the homes using television. The number of households with their TVs actually turned on.

16. Statistics • Shares = the percentage of the HUT. • Ratings = the percentage of the TVHH.

17. Television Households

18. Home Using Television (HUT level) = 50

19. Tuned In Rating = 25 Share = 50

20. Problems in Audience Research • Absenteeism • Hypoing • Falsifying diaries • Poor diary return rates

21. Selling advertising • Networks sell audiences. • Sales based on ratings points. • If guarantee not met – then network provides make goods.

22. Selling Advertising • Local Stations sell time. • 30s, 60s, - less often 15s, 90s, 120s • Sell by daypart. • ROS, TAP

23. Types of advertising • Co-op • Barter • Barter Syndication • Sponsorship versus spot buying