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Percent of program audience retained by spot (commercial efficiency)

Percent of audience lost: out of the room

1 ^"Percent of audience lost: changing channels

Figure 10-19

Representation of reach and frequency the viewer even to have an opportunity to see the ad. Thus, the exposure figure is used to calculate reach and frequency levels. But this compromise does not help determine the frequency required to make an impact. The creativity of the ad, the involvement of the receiver, noise, and many other intervening factors confound any attempts to make a precise determination.

At this point, you may be thinking, "If nobody knows this stuff, how do they make these decisions?" That's a good question, and the truth is that the decisions are not always made on hard data. Says Joseph Ostrow, executive vice president/director of communications services with Young and Rubicam, "Establishing frequency goals for an advertising campaign is a mix of art and science but with a definite bias toward art."5 Let us first examine the process involved in setting reach and frequency objectives and then discuss the logic of each.

Establishing Reach and Frequency Objectives It is possible to be exposed to more than one media vehicle with an ad, resulting in repetition (frequency). If one ad is placed on one TV show one time, the number of people exposed is the reach. If the ad is placed on two shows, the total number exposed once is undu-plicated reach. Some people will see the ad twice. The reach of the two shows, as depicted in Figure 10-19, includes a number of people who were reached by both shows (C). This overlap is referred to as duplicated reach.

Both unduplicated and duplicated reach figures are important. Unduplicated reach indicates potential new exposures, while duplicated reach provides an estimate of frequency. Most media buys include both forms of reach. Let us consider an example.

A measure of potential reach in the broadcast industry is the TV (or radio) program rating. This number is expressed as a percentage. For an estimate of the total number of homes reached, multiply this percentage times the number of homes with TV sets. For example, if there are 102.2 million homes with TV sets in the United States and the program has a rating of 30, then the calculation is 0.30 times 102.2, or 30.66 million homes. (We go into much more detail on ratings and other broadcast terms in Chapter 11.)

Using Gross Ratings Points The media buyer typically uses a numerical indicator to know how many potential audience members may be exposed to a series of commercials. A summary measure that combines the program rating and the average number of times the home is reached during this period (frequency of exposure) is a commonly used reference point known as gross ratings points (GRPs):

GRP = Reach X Frequency

Figure 10-19

Representation of reach and frequency

A. Reach of One TV Program

B. Reach of Two Programs

Total market audience reached

C. Duplicated Reach

Total market reached with both shows

B. Reach of Two Programs

Total market audience reached D. Unduplicated Reach

Total reach less duplicated reach

GRPs are based on the total audience the media schedule may reach; they use a duplicated reach estimate. Target ratings points (TRPs) refer to the number of people in the primary target audience the media buy will reach—and the number of times. Unlike GRP, TRP does not include waste coverage.

Given that GRPs do not measure actual reach, the advertiser must ask: How many GRPs are needed to attain a certain reach? How do these GRPs translate into effective reach? For example, how many GRPs must one purchase to attain an unduplicated reach of 50 percent, and what frequency of exposure will this schedule deliver? The following example may help you to understand how this process works.

First you must know what these ratings points represent. A purchase of 100 GRPs could mean 100 percent of the market is exposed once or 50 percent of the market is exposed twice or 25 percent of the market is exposed four times, and so on. As you can see, this information must be more specific for the marketer to use it effectively. To know how many GRPs are necessary, the manager needs to know how many members of the intended audience the schedule actually reaches. The graph in Figure 10-20 helps make this determination.

In Figure 10-20, a purchase of 100 TRPs on one network would yield an estimated reach of 32 percent of the total households in the target market. This figure would climb to 37.2 percent if two networks were used and 44.5 percent with three. Working backward through the formula for GRPs, the estimate of frequency of exposure— 3.125, 2.688, and 2.247, respectively—demonstrates the trade-off between reach and frequency.

As an example of a media buy, Denny's purchased 1,300 GRPs in a 10-week period to introduce a new Grand Slam promotion. This purchase employed TV spots in 28 markets and was estimated to reach 40 percent of the target audience an average of 17 times. To determine if this was a wise media buy, we need to know whether this was an effective reach figure. Certainly, reaching 40 percent of the target market is attractive. But why was the frequency level so high? And was it likely to be effective? In other words, does this level of GRPs affect awareness, attitudes, and purchase intentions?

A number of researchers have explored this issue. David Berger, vice president and director of research at Foote, Cone & Belding, has determined that 2,500 GRPs are likely to lead to roughly a 70 percent probability of high awareness, 1,000 to 2,500 would yield about a 33 percent probability, and less than 1,000 would probably result in almost no awareness.6 David Olson obtained similar results and further showed that as awareness increased, trial of the product would also increase, although at a significantly slower rate.7 In both cases, it was evident that high numbers of GRPs were required to make an impact.

Figure 10-21 summarizes the effects that can be expected at different levels of exposure, on the basis of research in this area. A number of factors may be operating, and direct relationships may be difficult to establish.8 In addition to the results shown in Figure 10-21, Joseph Ostrow has shown that while the number of repetitions increases awareness rapidly, it has much less impact on attitudinal and behavioral responses.9

Percent reach

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Advertising With Circulars

Co-op Mailing means that two or more businesses share in the cost and distribution of a direct mail campaign. It's kind of like having you and another non-competing business split the cost of printing, assembling and mailing an advertising flyer to a shared same market base.

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