Chapter 9 Through 11

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CHAPTER NINE: USING RADIO  The Contemporary Radio Industry o FCC limited ownership of radio stations to 7 FM and 7 AM stations with one in each market o Radio and New Technology  HD radio: Offers terrestrial radio stations the ability to deliver additional programming on the same amount of bandwidth with higher-quality sound. It requires a special receiver.  May revitalize AM stations  Satellite Radio: Available by subscription and contains few, if any, commercials. It requires a special rec
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  CHAPTER NINE: USING RADIO    The Contemporary Radio Industry o   FCC limited ownership of radio stations to 7 FM and 7 AM stations with one in each market  o   Radio and New Technology    HD radio: Offers terrestrial radio stations the ability to deliver additional programming onthe same amount of bandwidth with higher-quality sound. It requires a special receiver.    May revitalize AM stations    Satellite Radio : Available by subscription and contains few, if any, commercials. It requiresa special receiver but offers near-CD-quality sound.    The future of radio is as an Internet business. The size of the audience listening to radiostations over the internet is growing.    More internet radio listeners are becoming habitual listeners    Most teens prefer to listen to music online    Features and Advantages of Radio o   Radio Advertising Bureau (RAB): Association to promote the use of radio as an advertisingmedium. o   An ideal medium for the segmented marketing o   Radio Targets- easy to target a very selective audience on the radio o   On average, radio reaches Americans (12+) more than 2.6 hours a day – 600 million radios in the US    95% of adults with a college degree tune into the radio over the course of a week  o   Radio advertising influences consumers closest to the time of purchase – reaches prospects as theyapproach a purchase decision o   Radio reaches light users of other media o   Radio works well with other media – fills in gaps in a media schedule o   Much of radio listening takes place on an out-of-home basis – can reach customers where no othermedia can o   Radio delivers consistent listening patterns – high audience levels throughout the day o   Radio delivers its messages at a very low CPM level o   Radio provides advertisers with both immediacy and flexibility    Limitations and Challenges of Radio o   Four major problems of using radio: (1) number of stations = fragmented environment (not good if trying to meet a general audience) (2) clutter (3) no visual (4) increased use of MP3 players o    Audience Fragmentation: The segmenting of mass-media audience into smaller groups because of diversity of media outlets    Audience levels for most situations are so small that it’s difficult to reach a brand’s core    Still remains among the most effective means of achieving the target market desired o   Clutter    The more content, the less likely listeners will recall any particular message    Time devoted to commercials has steadily increased o   Lack of a Visual Element     Have to find other ways to be memorable – jingles o   Increased use of Mp3 Players    39% of 12-17 year olds choose an MP3 as their primary source of music    Technical Aspects of Radio o   The signal – electrical impulses that are broadcast by radio o   Frequency – all signals are transmitted by electromagnetic waves called radio waves    AM: 540 to 1700 kHz    FM: 88.1 to 107.9 MHz o   Amplitude – the height of the electromagnetic wave     Amplitude Modulation (AM): Method of transmitting electromagnetic signals by varyingthe amplitude (size) of the electromagnetic wave, in contrast to varying its frequency.Quality is not as good as frequency modulation but can be heard farther, especially at night     Frequency Modulation (FM): A radio transmission wave that transmits by the variation inthe frequency of its wave rather than by its size. An FM wave is 20 times the width of an AMwave, which is the source of its fine tone. To transmit such a wave, it has to be placed high  on the electromagnetic spectrum, far from AM waves with their interference and static,hence its outstanding tone.    Selling Radio Commercial Time o   Local advertising continues to dominate industry revenues. o   A media buyer in a streamlined environment could negotiate time availability and rates forhundreds of stations while dealing with a single person and submitting one insertion order. o   Network Radio    Demise of network radio began when TV was introduced    Minor source of advertising dollars    As a source of program services, with its ability to target narrow audience segments, it willcontinue to play an important role for some advertisers o   Spot Radio : Buying radio time on local stations on a market-by-market basis by nationaladvertisers    Can provide added weight in selected regions or individual markets    Most buys are made through reps o   AM versus FM as an advertising medium    FM dominates the overall listening audience    AM stations searching for niche audiences    Types of Programming    Media overwhelmingly devoted to music    Only the strongest radio stations survive    Second and third tier stations are searching for niche formats    Quasi-Mass medium    Radio Rating Services o    Abitron Inc: Syndicated radio ratings company    Measures radio audiences in approximately 300 markets through listener diaries o   Radio’s All -Dimension Audience Research (RADAR): Service of Statistical Research, Inc., that isthe primary source of network radio ratings. o   The funds available to solve an advertising research problem are directly related to the level of advertising expenditures by major advertisers    Buying Radio o   Advertising inventory is perishable o   Radio is normally used as a supplement to other media. o   Every radio buy is unique. — advertising is usually sold in packages o   Fixed rate card rarely exists for radio advertising    Using Radio Ratings o   Geographic patterns of radio ratings    Metro Survey Area – includes a city or cities whose population is specified as that of thecentral city together with the country in which it is located    Total Survey Area – geographic area that encompasses the MSA and certain counties locatedoutside the MSA that meet certain minimum listing criteria. o   Definitions of the radio audience     Average Quarter-Hour (AQH): Manner in which radio ratings are presented. Estimatesinclude average number of people listening (AQHP), rating (AQHR), and share (AQHS) of audience. The MSA population can be used to determine share.    (AQH persons/population) x 100 = AQH rating    (AQH persons to a station/AQH persons to all stations) x 100 = AQH share    Cume estimates are used to determine the number of percentage of different people wholisten to a station during several quarter-hours or dayparts    (Cume persons/population) x 100 = Cume rating  CHAPTER TEN: USING NEWSPAPERS    Pros of Newspapers: o   Reaches an upscale household and opinion leaders. Reaches all demographics the best. o   Significant flexibility of advertising formats and audience coverage o   Easier to measure newspaper response rates o   Environment of credibility and immediacy    Cons of Newspapers: o   Few advertisements are read since most newspapers have 60%+ advertising content  o   Newspaper circulation has gone down o   Advertising costs have risen    Threats that pose challenges for newspapers: o   Circulation –   younger people don’t read, older people don’t have time   o   Advertising Revenues –   Retail chains are using direct mail, newspapers don’t support national advertisers o   Changing technology – method of distribution changed    The National Newspaper o   Originally there was no national newspaper, now some are nationally circulated o   The Wall Street Journal  and USA Today  are profitable national publications    Marketing the Newspaper o   Newspaper circulation skews towards the oldest portion of the population o   Readers are obtaining information from multiple sources o   No real marketing strategies o   Marketing to Readers    Need to maintain a good circulation    Editorial product shouldn’t be directed by advertising or business concerns      Explore creative approaches to demonstrate the newspaper can provide desirable audiences    Newspaper’s website is a distinctive product  , not a spin-off of the printed paper    Give readers a choice and market to diverse audience segments    Invest in research and explore ways to make internet site compliment info provided o   Marketing to Advertisers    70% of newspaper revenue, 50% total newspaper space    Newspapers need to convince advertisers that they are efficient means of meeting a variety of marketing and advertising objectives.    Provide more information about readers than other media    Newspaper Association of America (NAA): The marketing and trade organization for thenewspaper industry o   Newspaper Inserts, Zoning, and Total Market Coverage    Preprints are popular with some advertisers and have replaced traditional advertising or run-of-paper (ROP) for newspapers o   Preprinted inserts allow newspapers to compete with direct mail o   Problems with inserts:    Less profitable than ROP advertising    Newspaper is no more than an advertising delivery system for these inserts    As ROP advertising decreases, the space for news and editorial matter decreasestherefore changing the character of the newspaper    Zoning: Newspaper practice of offering advertisers partial coverage of a market, oftenaccomplished with weekly inserts distributed to certain sections of that market  o   Can have zoning but still have run-of-paper advertising which has greater prestige andcredibility    Total Market Coverage (TMC): Newspapers augment their circulation with direct mail orshoppers to deliver to all households in the market.   o   Weekly delivery of a nonsubscriber supplement    o   Using newspaper-supported direct mail to nonsubscribers   o   Delivering the newspaper free to all households once a week        Categories of Newspaper Advertising o   Classified Advertising: Found in columns so labeled, published in sections of a newspaper ormagazine that are set aside for certain classes of goods or services – for example, help wantedpositions.    Commonly referred to as “want ads” are usually ignored unless you’re looking for it       Classified revenues account for $10 billion    Competition for classified advertising constitutes one of the most serious financial threats to thenewspaper industry    Classified in three areas: employment, real estate, and automotive    The initial competition for newspaper classified advertising came from online services    Newspapers are still an important source for notices o   Display Advertising: Newspaper ads other than those text-only ads in the classified columns. Displayads are generally larger and can include color, photos, or artwork to attract reader attention to theproduct.    Local Advertising o   The financial structure of the newspaper industry is built on retailers support  o   Newspapers are the most popular local advertising medium o   Consolidation of general merchandising and discount retailers will continue to reducethe number of retail advertising therefore reducing the amount of total retail dollars o   Created a concentration of services not usually associated with these types of outlets(mega-stores like Wal-Mart) o   Retailers have added more shopping options like online marketing and catalogs o   Emphasis on store brand and private-label merchandising    National Advertising o   A success in newspapers advertising is the increase in national advertising o   Standard Advertising Unit (SAU): Allows national advertisers to purchase newspaperadvertising in standard units from one paper to another. o   The Newspaper National Network (NNN) provides a network of participatingnewspapers, which could be bought using one insertion order and one invoice. o   Overcoming buying procedures has helped newspapers to market the medium moreeffectively nationally    Cooperative (Co-Op) Advertising: Joint promotion of a national advertiser (manufacturer) and a local retail outlet on behalf of the manufacturer’s product on sale in the retail store.   o   Placed by a local advertiser but paid for by a national advertiser. The national manufacturer usually provides the advertisements, allowing space for each participating retailer’s logo   o   A source of building goodwill with distributors and retailers and exercising some creative control overlocal advertising    The Rate Structure o   Discounts    Flat Rate: A uniform charge for space in a medium, without regard to the amount of space usedfor the frequency of insertion. When flat rates do not prevail, time discounts or qualitydiscounts are offered    Open Rate: In print, the highest advertising rate at which all discounts are placed o   The most common discounts are based on frequency or bulk purchases o   ROP and Preferred-Position Rates    The basic rates quoted by a newspaper entitle the advertisement to an ROP position anywherein the paper that the publisher chooses to place it     An advertiser can buy a choice position by paying a higher, preferred-position rate o   Combination Rates    The advantage of greatly reduced rates for purchasing advertising in several papers as a group    Most common combination rate: when the same publishers have morning & evening editions    The Rate Card o   A starting point for negotiation. o   Newspapers can adjust quickly to whatever advertising space is needed
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