Media planners make three crucial decisions: where to advertise (geography), when to advertise (timing), and what media categories to use (media mix). Moreover, they make these decisions in the face of budget constraints. The actual amount of money that an advertiser spends on marketing communications can vary widely, from billions of dollars for multinational giants such as Procter & Gamble, to a few thousand dollars for local “mom-n-pop” stores. In general, companies spend as little as 1% to more than 20% of revenues on advertising, depending on the nature of their business. Regardless of the budget, some media options are more cost effective than others. It is the job of media planners to formulate the best media strategies — allocating budget across media categories, geographies, and time. Let’s look at each of these three decisions in turn, and then consider cost effectiveness.
3.1. Media Mix Decisions
Which media should the advertiser use? Media planners craft a media mix by considering a budget-conscious intersection between their media objectives and the properties of the various potential media vehicles. That is, they consider how each media vehicle provides a cost-effective contribution to attaining the objectives, and then they select the combination of vehicles that best attain all of the objectives.
When making media mix decisions, planners look to a whole spectrum of media, not just to traditional media vehicles such as TV, radio, and print. That is, media planners consider all the opportunities that consumers have for contact with the brand. These opportunities can be non-traditional brand contact opportunities such as online advertising, sweepstakes, sponsorships, product placements, direct mail, mobile phones, blogs, and podcasts. The scale and situations of media use are especially important when evaluating suitable brand contact opportunities. For example, product placement in a video game makes sense if the target audience plays video games. Sweepstakes make sense if many of the target audience find sweepstakes attractive.
3.1.1 Mix Strategy: Media Concentration vs. Media Dispersion
A media planner’s first media mix decision is to choose between a media concentration approach or a media dispersion approach. The media concentration approach uses fewer media categories and greater spending per category. This lets the media planner create higher frequency and repetition within that one media category. Media planners will choose a concentration approach if they are worried that their brand’s ads will share space with competing brands, leading to confusion among consumers and failure of the media objectives. For example, when Nestle launched its 99% fat-free cereal Fitnesse, the similarity of ads actually increased the sales of the competing Kellogg’s Special K Cereal.
Media planners can calculate or measure share of voice to estimate the dominance of their message in each category of media they use. Share of voice is the percentage of spending by one brand in a given media category relative to the total spending by all brands that are advertising in that media category.
A company can create a high share of voice with a concentrated media strategy. That is, the company can be the dominant advertiser in a product category in the chosen channel. Moreover, because only one set of creative materials will need to be prepared, a concentrated media strategy lets advertisers spend a higher percentage of their budget on frequency and reach. But a concentrated strategy is also an “all-eggs-in-one-basket” strategy. If the particular ad is not well received or the particular media category only reaches a fraction of the intended target audience, then it will perform poorly.
In contrast, media planners choose a media dispersion approach when they use multiple media categories, such as a combination of television, radio, newspapers and the Internet. Media planners will use dispersion if they know that no single media outlet will reach a sufficient percentage of the target audience. For example, a concentrated approach using only ads on the Internet might reach only 30% of the target consumers because some consumers don’t use the Internet. Similarly, a concentrated approach using national news magazines might reach only 30% of the target audience, because not every target customer reads these magazines. But a dispersed approach that advertises in print magazines as well as on Web sites might reach 50% of the target audience. Media planners also like the dispersion approach for the reinforcement that it brings — consumers who see multiple ads in multiple media for a given brand may be more likely to buy.
Table 5 illustrates the media concentration and media dispersion approaches to the media category allocations for three hypothetical brands of fatigue relief medication. Advertisers of Zipium took a media dispersion approach by allocating the budget relatively evenly across all four media categories, while advertisers of Pepzac and Enerzid took a media concentration approach by spending the budget in one or two media categories.
The media concentration approach is often preferable for brands that have a small or moderate media budget but intend to make a great impact. For example, GoDaddy.com, an Internet hosting service, bought two spots in the Super Bowl in 2005. Because of the controversial nature of the ad, Fox Networks canceled the second run of the ad. The controversy over the pulled ad resulted in more than $11 million of free publicity. The single paid ad plus heavy media coverage of the incident greatly increased the awareness of GoDaddy. The spot also earned GoDaddy a 51% share of voice, a percentage which some say is the largest share of voice attributed to any Super Bowl advertiser ever.