1. What is the difference between media planning and media buying?

Briefly describe the various tasks of media planners and buyers.

Ans. Media Planning is the process of determining how to use time and space to achieve
advertising objectives. One of those objectives is always to place the advertising message before a
target audience. A medium is a single form of communication (television, billboards and online
media). Combining media (using TV, Radio and magazines) is a media mix. A media vehicle is a
single program, magazine, or radio station.

Media planning demands the biggest portion of the advertiser’s budget (cost for space and
time). Media planning is systematic and complex. But in fact, a media plan may be quite simple and
somewhat haphazard. A psychotherapist operating out of his home may purchase small Yellow Pages
along with a much smaller ad in the local newspaper, when his finances permit. That’s it-say $ 590
per year on media. Even a small sporting goods store may focus on a somewhat larger directory ad,
along with a print ad placed biweekly in the local newspaper. The latter is likely paid for the various
manufactures whose brands he carries. Total media costs, say $2,850 per year.

Regardless of whether a company is spending a few hundred dollars on one medium or

millions of dollars on thousands of media alternatives, the goal is still the same: to reach the right
people, at the right time, with right message. The same principles of media planning apply. the media
planner uses specific measurements to evaluate media plan: group’s impressions and gross rating
points. Even through a carpenter is building your home, it would still be important for you to
understand the jargon so that you could discuss the project in an intelligent manner. Likewise,
everyone working on an ad should understand the language of the media planner.

Gross Impression: An impression is a person’s opportunity to be exposed to a program,

newspaper, magazine, or outdoor location anywhere in an ad. Impressions are a measure of the size
of the audience either for one media (one announcement or one insertion) or for a combination of
vehicles as estimated by media research. If the David Letterman Show has an audience of 100,000
viewers, then each time the advertiser buys time on that program to advertise (usually a 30-second
commercial) in each of four consecutive broadcasts, the total viewer impressions would be 100,000
times 4, or 400,000.

Gross Rating Points: Gross impression figures become very large and difficult to remember.
The gross rating (percentage of expose) is an easier measurement to work with because it converts
the raw figure to a percentage. The sum of the total exposure potential expressed as a percentage of
the audience population is called gross rating points (GRPs). GRPs are calculated by dividing the
total number of impressions by the size of the audience multiplying by 100.

Media Buying functions: Media buyers have specific skills to implement these duties. In this
section, we example the most important buyer functions: providing information to media planners,
selecting the media, negotiating costs, monitoring the media choices, evaluating the media choice
after the campaign, and handling billing and payment.

Providing Inside Information to the Media Planner: Media buyers are close enough to day-
to-day changes in media popularity and pricing to be a constant source of inside information to media
planners. For example, a newspaper buyer discovers that a key newspaper’s delivery staff is going on
strict; a radio time buyer learns that a top disk jockey is leaving a radio station; or a magazine buyer’s
source reveals that the new editor of a publication is going to change the editorial focus dramatically.

Selecting Media Vehicle: One essential part of buying is choosing the best media vehicles to
fit the target audience’s aperture (the time and place at which the audience is most receptive to the
message). The media planner lays out the direction, but the buyer is responsible for choosing the
specific vehicles.
Armed with the media plan directives, the buyer seeks answers to a number of difficult
questions: Does the vehicle have the right audience profile? Will the program’s current popularity
increase, stabilize, or decline? How well does the magazine’s editorial format fit the brand? Does the
radio station’s choice of music offer the correct atmosphere for the creative theme? How well does the

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newspaper’s circulation pattern fit the advertiser’s distribution? The answers to those questions bear
directly on the campaign’s success.

Negotiating Media Prices/ Authorizing the Buys: Aside from finding the aperture of target
audiences, nothing is considered more crucial in media buying than securing the lowest possible price
for placements. Time and space charge make up the largest portion of the advertising budget, so
there is continuing pressure to keep costs as lows as possible. To accomplish this, buyers operate in
a world of negotiation.
In an ideal world, every vehicle on the campaign schedule would perform at or above
expectations. Likewise, every advertisement, commercial and posting would run exactly as planed. In
reality, underperformance and schedule problems are facts of life. The buyer’s response to these
problems must be swift and decisive. Poorly performing vehicles must be replaced or cost must be
modified.

Campaign Analysis: Once a campaign is completed, the planers’ duty is to compare the
plan’s expectations and forecasts with what actually happened. Did the plan actually achieve GRP,
reach, frequency and CPM objectives? Did the newspaper and magazine placements run in the
positions expected? Such analysis is instrumental in providing the guidance for further media plans.

Payment: Bills from various customers come in continuously. Ultimately, it is the

responsibility of the advertiser to make these payments. However, the agency may be contractually
obligated to pay the initial invoice; or, because of various negotiations between the agency and
selected media, it may be advantageous for the agency to make the payment and then bill the client.
Keeping track of it and paying the bills is the responsibility of the media planner in conjunction with the
Accounting Department.

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2. Compare the different approaches to setting advertising budgets, in
terms of their relative advantages and disadvantages.
Ans. Selecting the Right Advertising Approach
Once a company decides what type of specific advertising campaign it wants to use, it must decide
what approach should carry the message. A company is interested in a number of areas regarding
advertising, such as frequency, media impact, media timing, and reach.

1. Frequency: Frequency refers to the average number of times that an average consumer is
exposed to the advertising campaign. A company usually establishes frequency goals, which can vary
for each advertising campaign. For example, a company might want to have the average consumer
exposed to the message at least six times during the advertising campaign. This number might seem
high, but in a crowded and competitive market, repetition is one of the best methods to increase the
product’s visibility and to increase company sales.

2. Media Impact: Media impact generally refers to how effective advertising will be through
the various media outlets (e.g., television, Internet, print). A company must decide, based on its
product, the best method to maximize consumer interest and awareness. For example, a company
promoting a new laundry detergent might fare better with television commercials rather than simple
print ads because more consumers are likely to see the television commercial.

3. Media Timing: Another major consideration for any company engaging in an advertising
campaign is when to run the advertisements. For example, some companies run ads during the
holidays to promote season-specific products. The other major consideration for a company is
whether it wants to employ a continuous or pulsing pattern of advertisements. Continuous refers to
advertisements that are run on a scheduled basis for a given time period. The advantage of this tactic
is that an advertising campaign can run longer and might provide more exposure over time.

4. Reach: Reach refers to the percentage of customers in the target market who are exposed
to the advertising campaign for a given time period. A company might have a goal of reaching at least
80 percent of its target audience during a given time frame. The goal is to be as close to 100 percent
as possible, because the more the target audience is exposed to the message, the higher the chance
of future sales.
In order to keep the advertising budget in line with promotional and marketing goals, an
advertiser should answer several important budget questions:
1. Who is the target consumer? Who is interested in purchasing the advertiser’s product or service,
and what are the specific demographics of this consumer (age, employment, sex, attitudes, etc.)?
Often it is useful to compose a consumer profile to give the abstract idea of a "target consumer" a
face and a personality that can then be used to shape the advertising message.
2. Is the media the advertiser is considering able to reach the target consumer?
3. What is required to get the target consumer to purchase the product? Does the product lend itself
to rational or emotional appeals? Which appeals are most likely to persuade the target consumer?
4. What is the relationship between advertising expenditures and the impact of advertising campaigns
on product or service purchases? In other words, how much profit is earned for each dollar spent on
advertising?

Budgeting Methods
There are several allocation methods used in developing a budget. The most common are
listed below:
· Percentage of Sales Method
· Objective and Task Method
· Competitive Parity Method
· Market Share Method
· Unit Sales Method
· All Available Funds Method
· Affordable Method
It is important to notice that most of these methods are often combined in any number of
ways, depending on the situation. Because of this, these methods should not be seen as rigid, but
rather as building blocks that can be combined, modified or discarded as necessary.

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 Media Scheduling
Once a business decides how much money it can allocate for advertising, it must then decide
where it should spend that money. Certainly, the options are many, including print media
(newspapers, magazines, direct mail), radio, television (ranging from 30-second ads to 30-minute
infomercials), and the Internet. The mix of media that is eventually chosen to carry the business’s
message is really the heart of the advertising strategy.

Selecting Media: The target consumer, the product or service being advertised, and cost are
the three main factors that dictate what media vehicles are selected. Additional factors may include
overall business objectives, desired geographic coverage, and availability (or lack thereof) of media
options.

Scheduling Criteria: As discussed by Hiam and Schewe, there are three general methods
advertisers use to schedule advertising: the Continuity, Flighting, and Massed methods

Advertising Negotiations and Discounts

No matter what allocation method, media, and campaign strategy that advertisers choose,
there are still ways small businesses can make their advertising as cost-effective as possible. Writing
in ‘The Entrepreneur and Small Business Problem Solver’, author William Cohen puts together a list
of "special negotiation possibilities and discounts" that can be helpful to small businesses in
maximizing their advertising dollar:

Mail order discounts, Per Inquiry deals, Frequency discounts, Stand-by rates, Help if
necessary, Remnants and regional editions, Barter, Seasonal discounts, Spread discounts, An in-
house agency, Cost discounts

The choice of promotional tools depends on what the business owner is attempting to
communicate to the target audience. Public relations-oriented promotions, for instance, may be more
effective at building credibility within a community or market than advertising, which many people see
as inherently deceptive. Sales promotion allows the business owner to target both the consumer as
well as the retailer, which is often necessary for the business to get its products stocked. Personal
selling allows the business owner to get immediate feedback regarding the reception of the product.
And as Hills pointed out, personal selling allows the business owner "to collect information on
competitive products, prices, service and delivery problems."

Advertising Budget
Once an advertising objective has been selected, companies must then set an advertising
budget for each product. Developing such a budget can be a difficult process because brand
managers want to receive a large resource allocation to promote their products. Overall, the
advertising budget should be established so as to be congruent with overall company objectives.
Before establishing an advertising budget, companies must take into consideration other market
factors, such as advertising frequency, competition and clutter, market share, product differentiation,
and stage in the product life cycle.

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3. What are the differences between advertising objectives and sales
promotion objective? Give five examples of customer sales promotion
techniques, with a specific example of each.
Ans. Promotional strategy is the function of informing, persuading, and influencing a consumer
decision. Why should a company implement a promotional strategy?

· To provide information – In the early days of promotional campaigns, when many items
were often in short supply, most advertisements were designed to tell the public where they could find
a product. Today, a major portion of U.S. advertising is still informational. Promotional campaigns
designed to inform often target specific market segments.

· To differentiate – Marketers often develop a promotional strategy to differentiate their

goods or services from those of competitors. This strategy is called positioning. The idea is to
communicate to customers meaningful distinctions about the attributes, price, quality, or usage of a
good or service.

· To increase sales – Increasing sales volume is the most common objective of a

promotional strategy.

· To stabilize sales – Advertising is another tool that can stabilize sales. A stable sales
pattern has several advantages: it evens out the production cycle, reduces some management and
production costs, and makes it easier to do financial, purchasing and market planning.

· To accentuate the product’s value – Some promotional strategies are based on factors
that add value, such as warranty programs and repair services.
Advertising is a paid, non-personal sales communication usually directed at a large number of
potential buyers. Types of advertising include:

· Informative advertising – Advertising approach intended to build initial demand for a good
or service in the introductory phase of the product life cycle.

· Persuasive advertising – Used in the growth and maturity stages of the product life cycle to
improve the competitive status of a product, institution or concept.

· Comparative advertising – Persuasive advertising approach in which direct comparisons

are made with competing goods or services.

· Reminder-oriented advertising – Method used in the late maturity or decline states of the
product life cycle that seeks to reinforce previous promotional activity by keeping the name of the
good or service in front of the public.
The following are some of the most popular forms of advertising media:

· Newspapers, Television and radio, Direct mail, Magazines and trade journals, Yellow
pages, Internet
Following are some of the key techniques used in consumer-oriented sales promotions.

Price Deals
A consumer price deal saves the buyer money when a product is purchased. The main types
of price deals include discounts, bonus pack deals, refunds or rebates and coupons. Price deals are
usually intended to encourage trial use of a new product or line extension, to recruit new buyers for a
mature product, or to convince existing customers to increase their purchases, accelerate their use, or
purchase multiple units. Price deals work most effectively when price is the consumer’s foremost
criterion or when brand loyalty is low.

Buyers may learn about price discounts either at the point of sale or through advertising. At
the point of sale, price reductions may be posted on the package, on signs near the product, or in
storefront windows. Many types of advertisements can be used to notify consumers of upcoming
discounts, including fliers and newspaper and television ads. Price discounts are especially common

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in the food industry, where local supermarkets run weekly specials. Price discounts may be initiated
by the manufacturer, the retailer, or the distributor. For instance, a manufacturer may "pre-price" a
product and then convince the retailer to participate in this short-term discount through extra
incentives. For price reduction strategies to be effective, they must have the support of all distributors
in the channel. Existing customers perceive discounts as rewards and often respond by buying in
larger quantities.

Contests/Sweepstakes
The main difference between ‘contests’ and ‘sweepstakes’ is that contests require entrants to
perform a task or demonstrate a skill that is judged in order to be deemed a winner, while
sweepstakes involve a random drawing or chance contest that may or may not have an entry
requirement. At one time, contests were more commonly used as sales promotions, mostly due to
legal restrictions on gambling that many marketers feared might apply to sweepstakes.

But the use of sweepstakes as a promotional tactic has grown dramatically in recent decades,
partly because of legal changes and partly because of their lower cost. Administering a contest once
cost about $350 per thousand entries, compared to just $2.75 to $3.75 per thousand entries in a
sweepstake. Furthermore, participation in contests is very low compared to sweepstakes, since they
require some sort of skill or ability.

Special Events
First, events tend to attract a homogeneous audience that is very appreciative of the
sponsors. Therefore, if a product fits well with the event and its audience, the impact of the sales
promotion will be high. Second, event sponsorship often builds support among employees—who may
receive acknowledgment for their participation—and within the trade. Finally, compared to producing a
series of ads, event management is relatively simple.

According to the consulting firm International Events Group (IEG), businesses spend over $2
billion annually to link their products with everything from jazz festivals to golf tournaments to stock
car races. In fact, large companies like RJR Nabisco and Anheuser-Busch have special divisions that
handle nothing but special events.

Premiums
A premium is tangible compensation that is given as incentive for performing a particular act –
usually buying a product. The premium may be given for free, or may be offered to consumers for a
significantly reduced price. Some examples of premiums include receiving a prize in a cereal box or a
free garden tool for visiting the grand opening of a hardware store. Incentives that are given for free at
the time of purchase are called direct premiums. These offers provide instant gratification, plus there
is no confusion about returning coupons or box tops, or saving bar codes or proofs of purchase.

Sampling
A sign of a successful marketer is getting the product into the hands of the consumer.
Sometimes, particularly when a product is new or is not a market leader, an effective strategy is giving
a sample product to the consumer, either free or for a small fee. But in order for sampling to change
people’s future purchase decisions, the product must have benefits or features that will be obvious
during the trial.

There are several means of disseminating samples to consumers. The most popular has
been through the mail, but increases in postage costs and packaging requirements have made this
method less attractive. An alternative is door-to-door distribution, particularly when the items are bulky
and when reputable distribution organizations exist.