MARK 2063:

Integrated Marketing
Communications #2

                     Week 4
 LO2

Today
 Media Math & Audience Concepts
 Understand media planning terminology and metrics
 Learn to Calculate, Percentages, Indexes,
Weighting, Reach, Frequency, Impressions, GRPS,
Share of Voice, CPM, Primary Audience, Pass-along
Readership, Impressions, Clicks, Page Views,
Unique Visitors, Conversion, Cost per Acquisition as
it relates to media planning
 Analyze and draw conclusion from media metrics
 Complete Media Math workbook
 Assignment
Media Planning

Process of developing a plan of action for

communicating messages
 to the right people (target)
 at the right time
 with the right frequency.

 Efficiency in media planning can be loosely defined as gaining

maximum impact or exposure at minimum cost to the client.

 Media choices must align with communication objectives

 Focus on engagement vs. just
reach and frequency

• Traditionally, media planners have focused only

on reach and frequency
• Reach = how many people receive the message
• Frequency = how often they receive it

• With the digital era, engagement becoming more

important

4
 Media Brief (Client Responsibility)

Client provides background information to agency in the form

of a media brief containing:
• Market Profile
• Brand Media Profile
• Competitor Media Usage
• Target Market Profile
• Media Budget
• Initial Media Objectives (just a basic description – the
agency will refine later)

5
 The Media Plan (Agency Responsibility)

Document that outlines all relevant details of how a client’s

budget will be spent. The document includes:
1. Clearly defined objectives
2. Rationalized strategies
3. Precise execution details

6
Before all of that you need:

 A basic understanding of media metrics,

media math and audience concepts

 To be able to assess the variables that affect

media plans and drive decisions
By the end of this lecture you should
be comfortable with and be able to
perform basic calculations including:
 Percentages
 Indexing
 Weighting
 Reach
 Frequency
 Impressions
 GRPS
 Share of Voice
 CPM
 Primary Audience
 Pass-along Readership
 Digital Impressions, Clicks, Page Views, Unique Visitors, Conversion,
Cost per Acquisition
Percentages

USED IN ALL FACETS OF MEDIA PLANNING

 Marketing and media audience information rely on percentages.

 Percentages can be expressed as fractions or decimals.

 Media planners and buyers often have to calculate percentages

from a set of raw numbers.

For example, if you knew there were 1 million adult viewers for a
television program and that 650,000 of those viewers were adult
women you could calculate that 65% of adult watching the show
were women.
WORKBOOK Q#1:
List 3 findings you
can derive from
percentages by
looking at the
Canadian Living data
(5 minutes)

Source: Canadian Living Reader Data 2014

WORKBOOK Q#2:
Complete the Percentage exercise
(5 minutes)
% Breakout of Media Spending
Per Brand

MD 13 28%
Tim's 11 24%
Wendy’s 6 13%
BK 5 11%
Other 11 24%
  46 100%
Calculating an Index

The index is a very important mathematical

tool used to analyze and understand
numerical data. The index gives us a way to
relate two numbers.

The formula for calculating an index is simple:

 For Number A and Number B: Index AB = (Number A /
Number B) x 100
 After calculating, simply round the number to the
nearest ones place
Indexing

 Media planners frequently index certain

numbers to other base numbers
 This is used to determine how far a number is
above or below a benchmark
 Index numbers are shown as whole numbers
and the base number is always indexed at 100

Source: Ronald Geskey, Media Planning and Buying in the 21 st Century 3rd Edition, 2015
Indexing
Example:
If 35% of 18 to 34-year-old adults (this is the subset %) used hot
sauce in the past six months and 20% of all adults (this is the base %)
used hot sauce in the past six months and you wanted to know how
much more likely 18 to 34's were to use hot sauce you could index the
two numbers by dividing the subset percentage by the base %

= 35/20 * 100
= 175

Therefore the incidence of hot sauce use in 18-34 is 75% higher than
the general population. You might conclude from this that they are a
desirable target for this condiment.
Indexing

 Indexes can also be developed against an

average. The following example indexes
actual quarterly sales to the quarterly average.

 This type of analysis might help schedule

media weight throughout the year.
Source: Ronald Geskey, Media Planning and Buying in the 21 st Century 3rd Edition, 2015
WORKBOOK Q#3 and Q#4:
Complete the Indexing exercises
(10 minutes)
Brand X Index vs. 2000
Year 2000 2005 2010 2015

Sales Index 100

120 180 240

Profit Index 100

150 250 500

Ad Spend Index 100

208 375 583
Means:
• Sales, profit and ad spend growing every year compared to 2000
• Ad spend growing at a much faster rate than sales
• Profit has grown in a pattern similar to ad spend (perhaps ad spend has been
focused on higher-margin units)
Weighting

 When conducting media analysis it is often necessary to weigh or

adjust raw numbers so that the numbers you are working with
more accurately represent true media marketing values on which
to make decisions. This is called weighing.

 You should consider weighting raw numbers whenever they don't

provide an accurate or realistic estimate of the value you are
trying to measure.

 target audience segments

 geographic market areas
 seasonal periods etc.

Source: Ronald Geskey, Media Planning and Buying in the 21 st Century 3rd Edition, 2015
 Weighted Audience Example

Magazine A reaches 1 million women and 1 million men but women are
5x more likely to buy the product you are advertising in that magazine it
would be a good idea to weigh this information.

So, the 1 000 000 women that read the magazine will be weighed at
100% and the 1 000 000 men will be weighed at 20% given the
information above (women are 5x more likely to buy the product you
are advertising).

Therefore the weighted audience is (1000 000*100%)+(1000000*.20%)

The weighted audience would be 1 200 000

Source: Ronald Geskey, Media Planning and Buying in the 21 st Century 3rd Edition, 2015
WORKBOOK Q#5:
Complete the Weighting exercise
(5 minutes)
Media Variables Continued…

Media planners often define the communication goals of

a media plan using the interrelated concepts of reach,
frequency, impression and gross rating points, and
frequency.

 Reach: how many?

 Frequency: how often?
 Impressions
 Gross rating points
Reach

 Reach: total unduplicated audience

exposed to a message one or more times
in a period (usually a week)
 Reach can be expressed as individuals or
households, and can be expressed as a
absolute number or a percentage.
2
Reach

 Simple math:
 If there were 10 people in your target market
and 4 tuned in what would be your reach? As a
percentage?

4 or 40%
Reach Formula

Reach = # of target group tuned in

# of target group in area
= 4
10
= 40%
Frequency

 Frequency: average number of times an audience is

exposed to a message over a period of time (week).

 Advertiser has no way of knowing if exposure to a vehicle

results in exposure to ad
 Precise determination requires consideration of creativity of ad,
receiver involvement, noise, etc.

2
Frequency
 Simple math:
 If there were 10 people in your target market and of
the 4 tuned in, they were exposed to the ad the
number of times indicated below, what would be
your average frequency?

2
4
12
6
4+2+12+6=24
24/4=6
Avg. Freq = 6
Frequency Formula

Frequency = Total Exposures

Reach

= 24
4

= 6
Reach vs. Frequency:
What to Consider ?

 Reach – whether the message should be

seen or heard by more people
 Frequency – whether the message should be
heard less people (reach) but more often
(frequency)

2
Marketing Factors
Determining Frequency

Marketing Factors
Marketing Factors

Brand Loyalty Brand Share Usage Cycle

Brand Loyalty Brand Share Usage Cycle
High L=Low F High BS=Low F High Usage=High F
High L=Low F High BS=Low F High Usage=High F

Brand
BrandHistory
History Purchase
PurchaseCycles
Cycles
Share of Voice
New
New
Share of Voice
High Comp=High F
High Comp=High F
Short Cycle=High
Short Cycle=High Target Group
Target Group

Brands=High
Brands=HighFF FF

2
© 2007 McGraw-Hill Ryerson Limited
Impressions

Impressions, or total exposures, are the

total number of ad exposure occasions
multiplied by the total target audience
potentially exposed to each occasion.
Impressions
 Simple math:
 If there were 10 people in your target
market and the 4 tuned in were exposed to
the ad an average of 6 times what would be
your Total Impressions?

Reach # * Frequency
= 4*6
=24
Impressions Formula

Impressions = # Reached x Frequency

=4 x 6
= 24
Gross Rating Points (GRPs)

 A measure of the size of an advertising

campaign by a specific medium or schedule
 GRP is calculated by multiplying Rating
(Reach %) by Frequency
 Based on the total audience the media
schedule may reach
2

GRP
GRP==Reach
Reach%%xxFrequency
Frequency
Example
 If your TV schedule reaches an average of 30%
of total TV homes six times over a one-week
period, your schedule would deliver 180 GRPs:
 30 * 6 = 180
 Assume your TV schedule ran six times at a
different level of reach as follows: 20 percent
reach, 25 percent, 35 percent, 40 percent, 23
percent and 37 percent. Your schedule would
also deliver 180 GRPs:
 20+25+35+40+23+37= 180
Gross Rating Points -
GRPs

 Simple math:
 If there were 10 people in your target
market and 4 tuned in were exposed to
the ad an average of 6 times, what would
your GRPs be?

Reach = 40
2 Avg. Freq=6
4
12 40*6=240
6 GRPs=240
WORKBOOK Q#6:
Complete the Reach, Frequency,
Impressions and GRPs exercise
(15 minutes)
Solutions!
Scenario 1 Scenario 2 Scenario 3

# of target 75 000 155 000 100 000

exposed
# of target 100 000 500 000 700 000
group in area
Impressions or 450 000 310 000 800 000
Total
Exposures per
week 6-9
Reach % 75 31 14

Frequency 6 2 8

Weekly GRPs 450 62 112

Share of Voice
 The share of total advertising impressions that a
brand gets
 It’s a way to measure a brand’s presence and to
gauge how visible a brand was within an advertising
medium during a specific time period
 Usually represented as a % of the total exposures
 The equation is:
________Ad impressions__________
Total ad impressions available for category during
relevant period
Share of Voice Example

Advertising
April 2016 Impressions SOV

The Hilton 1000000 49%

The Sheraton 600000 29%

The Marriot 450000 22%

Total Impressions 2050000 100%

WORKBOOK Q#7:
Complete the SOV exercise
(5 minutes)
Solutions:
15 Minute
Break
Relative Cost Estimates

 The value of any strategy can be determined

by how well it delivers the message to the
audience with the lowest cost and least
waste.
 Relative cost: Cost paid for the ad relative
to the audience reached.
 2 metrics:
2
 CPM
 CPP
CPM

 Cost-Per-Thousand (CPM) is a method of

evaluating media efficiency.
 CPM is a ratio based on how much it costs to
reach a thousand people.
Relative Costs Useful for
Particular Medium Selection

 For example, to help media planners select

the specific publications to go in for Print
executions they use a CPM analysis.

Cost Per Thousand

Cost of ad space
CPM = X 1000
Circulation (Reach)
Example
 If an ad costs $38,000 to place in a
magazine that has a monthly circulation of
400,000 readers per copy the CPM is:

CPM = _$38,000_ X 1000

400,000
= $95

 This means: the cost incurred in delivering a

message to 1000 people is $95 (this is the
CPM)
 Comparing Magazines

CPM = Unit Cost of Message

Circulation (in thousands)

• Which option is more efficient at reaching the target?

Cost (S) Circulation

(1page, 4-colour) among Target
(000’s)
The Economist $60,000 560
Forbes $55,000 490

48
   Home And Garden House and Home Canadian Design

Monthly Circulation 375,000 285,000 220,000

Full page (4C) $45,000 $38,000 $25,000

Ad Cost
 

CPM

WORKBOOK Q#8:
Complete the CPM exercise – 1st
chart only
(5 minutes)
Solutions:

 
Home And House and Canadian
Garden Home Design
Monthly 375,000 285,000 220,000
Circulation

  Full page (4C) $45,000 $38,000 $25,000

Ad Cost

CPM $120 $133.33 $113.63

 Primary Audience

• The primary audience is the audience

generated by subscribers or news stand buyers
and their families
• Primary readers see a large percentage of
an issue, spend more time reading it, are
interested in the content, and also have the
highest probability of ad exposure
 Secondary Audiences

• Pass along readers are those outside the

purchasers family who are exposed to a
publication (eg. hair salons doctors offices and
libraries)
• Pass along readers may not read the
publication as thoroughly
• They tend to spend less time with the
magazine so the advertising exposure is
probably much lower
Calculations with Both Primary &
Secondary Audiences
Sometimes you have additional information that allows
you to weigh the data to get a more accurate CPM

Example
If a magazine has a circulation of 150 000
and a pass along reader ship of 1.2 per copy what is the
total audience if the pass along readers have a 50%
weighting?

= (150 000) + (1.2 (150 000)*.5)

= 150 000+90 000
Total Audience = 240 000
 Home and House and Canadian
Garden Home Design

Monthly Circulation 375000 285000 220000

Readers Per Copy 0.5 1.1 1.3

Full Page Ad Cost $45,000 $38,000 $25,000

New CPM      

WORKBOOK Q#8:
 

Complete the CPM exercise – 2nd

chart only
(5 minutes)
Solutions:

Home and House and Canadian

Garden Home Design
Monthly
Circulation 375000 285000 220000
Readers Per
Copy 0.5 1.1 1.3
Full Page Ad
Cost $45,000 $38,000 $25,000
Total
Audience 468750 441750 363000
New CPM $96 $86 $69
Cost Per Point

 CPP is a ratio based on how much it costs

to buy one rating point, or one percent of the
population in an area being evaluated.
Cost Per Point - CPP

 If it costs $50,000 to place an ad on TV and

the program has a reach of 6%, the cost
per point is:

 CPP=Cost to Place and Ad /Program Rating

 CPP=$50,000/6=$8,333
WORKBOOK Q#9:
Complete the CPP exercise
(1 minute)
Digital Media Planning

 More about consumer involvement

 the consumer controls when he or she sees the
message

 Digital media strategy focuses on timing and

engagement, rather than reach and frequency
Key Online Metrics

 Impressions
 Clicks
 Visitors
 Unique Visitors
 Page Views
 Conversion
Online Impressions

 Persons potentially exposed to your search

result ad or sponsored link visible on a web
page or the results page of a search engine

 If your ad appears before a user that counts

as an impression
Clicks

 When a mouse clicks on an ad or link,

it takes the user to a page on the
website
 # of Clicks / # of Impressions = click
through rate (CTR).
 Provides a measure of your ads
ability to provoke interest
Visitors and Unique Visitors

 Visitors: total number of Internet users who

arrive at the website, some of whom may have
visited the site more than once.

Unique visitors: those who visit a website

counting each person only once during the
reporting period.  This is relevant to advertisers
as a measure of the sites true audience size.
Page Views and Conversion

 Page views: gross number of times particular

pages are accessed without regard to the number
of different individuals accessing the page

Conversion: number or percentage of visitors to a

website who go on to take action. For example,
this could be making a purchase or filling out a
form to request information.
Conversion = # who took action/# who clicked
  Example Definition

Impressions 100 000 pass by the ad

Clicks 2000 click on the ad

Visitors 2000 land on the site

Page Views 6000 pages viewed by the visitor

Conversion 400 request information or buy

WORKBOOK Q#10:
Complete the Digital Metrics exercise
– 1st chart only
(2 minutes)
WORKBOOK Q#10:
Complete the Digital Metrics exercise
– 2nd chart only
(5 minutes)
Solutions:

Ad Impressions CTR % Clicks Cost/Click Total Cost Coversions Cost/Conversion

1 10000 2.50% 250 $0.50 $125.00 10 $12.50

2 50000 1.50% 750 $0.25 $187.50 12 $15.63

3 40000 0.50% 200 $0.75 $150.00 10 $15.00

4 15000 0.25% 38 $0.30 $11.25 2 $5.63

Total 115000 0.96% 1104 $0.38 $419.52 34 $12.34

Assignment #2

 See the assignment on Blackboard

 You will complete media math questions
 Individual – in fact, everyone has a different
assignment

 Worth 10% of final mark

 LO4

Next Week…

 Next week: 
 Client meetings
 Every group will meet with me for 15 minutes to take me
through your Client Creative Brief
 LO4

Resources:

Chicago, Illinois: 1965..A steel worker on a beam takes a coffee break high above Lakeshore Drive
in Chicago. Credit: Underwood Archives \ UIG (Britannica Imagequest)