MediaMix

8/7/2019 MediaMix

http://slidepdf.com/reader/full/mediamix 1/11

Media-Mix & TheMedia-Mix & TheNatural LawsNatural Laws

of Advertisingof Advertising

8/7/2019 MediaMix


One Iron Law of AdvertisingOne Iron Law of Advertising

Ad dollars follow consumers.Ad dollars follow consumers. Often this Iron Law works sluggishly.Often this Iron Law works sluggishly. Ten years ago, few consumers used theTen years ago, few consumers used the

online medium.online medium. Today consumers spend more time onlineToday consumers spend more time online

than reading newspapers or magazines.than reading newspapers or magazines. But, although the fastest growing medium,But, although the fastest growing medium,

online still receives fewer dollars thanonline still receives fewer dollars thannewspapers or magazines (about half innewspapers or magazines (about half in2007, according to TNS).2007, according to TNS).

8/7/2019 MediaMix


Media’s Natural LawsMedia’s Natural Laws

Herschel discovered Celestial Mechanics; NewtonHerschel discovered Celestial Mechanics; Newton

the Laws of Gravity.the Laws of Gravity.

We are just discovering Media’s own naturalWe are just discovering Media’s own natural

Laws.Laws. Recency, Optimizers and Marketing-Mix ModelingRecency, Optimizers and Marketing-Mix Modeling

all give the same advice: adding too much of all give the same advice: adding too much of

anything in media brings lessened response.anything in media brings lessened response.

This phenomenon is called “diminishing marginalThis phenomenon is called “diminishing marginalutility” and affects everything that is done inutility” and affects everything that is done in

planning.planning.

8/7/2019 MediaMix


*John Philip Jones, The Ultimate Secrets of Advertising (August publication)

Diminished Marginal UtilityDiminished Marginal Utility

Regardless of the strength of a medium, addingRegardless of the strength of a medium, adding

dollars will usually produce a lessened consumerdollars will usually produce a lessened consumer

response - diminishing marginal utility.response - diminishing marginal utility.

The sales effectiveness of a medium relates almostThe sales effectiveness of a medium relates almost

inversely to its share of the ad budget.*inversely to its share of the ad budget.*

The more dollars spent, the less response per dollar.The more dollars spent, the less response per dollar.

This is why any single medium alone cannot produceThis is why any single medium alone cannot produce

the most cost-effective media plan, and it’s why Mediathe most cost-effective media plan, and it’s why Media

Mix is at the top of every media planners list.Mix is at the top of every media planners list.

8/7/2019 MediaMix


28.4

48.1

68.0

79.1

88.5

100

16.7 33.3 50.0 66.7 83.3 100

Source: Media Mentor; Target: Persons 12-64

% of Schedule’s Total GRPs

%

o f

S c h

e d u

le ’s

Po

t e nt ia

lRe

a c

h

+69%

+41%+16%

+12%

+13%

Extra Reach Is ExpensiveExtra Reach Is Expensive

8/7/2019 MediaMix


Media Response CurveMedia Response Curve

As dollars increase, the curve starts toAs dollars increase, the curve starts to

flatten until the last dollars produceflatten until the last dollars produce

very little added response.very little added response.

As reach increases, dollars buy lessAs reach increases, dollars buy less

reach and more frequency.reach and more frequency.

Re s p o ns e

Media dollars

Medium A

8/7/2019 MediaMix


Mixing media is a simple way to improveMixing media is a simple way to improve

response.response.

As response starts to weaken, the mediaAs response starts to weaken, the media

planner shifts to the next medium.planner shifts to the next medium.

R

e s p o ns e

Media Dollars

Online

Television

Magazines

The Media MixThe Media Mix

8/7/2019 MediaMix


In the media mix, television starts buildingIn the media mix, television starts building

reach cost-effectively.reach cost-effectively.

Adding a second medium will build more reachAdding a second medium will build more reach

for less money.for less money. It will duplicate television less than televisionIt will duplicate television less than television

will duplicate itself.will duplicate itself.

Build Reach More Cost-Build Reach More Cost-Effectively WithoutEffectively Without

DuplicationDuplication

8/7/2019 MediaMix


The Cost of IncrementalThe Cost of Incremental

ReachReach

A 30 reach costs$15.00 Reach CPM

Five additionalreach points - cost

more than doublesto $33.00 ReachCPM

Five additionalreach pointscost $44.50

Reach CPM

30

$15.40

$33.20

$44.5040

35

Source: X*Pert Reach Optimization

8/7/2019 MediaMix


Source: The Ephron Consultancy

R

e a

c h%

$ Investment

Television 1. After a certain reach point, each additionalmedia dollar achieves less consumer response andbuilds reach at a much slower, and costlier rate

Magazines

Internet

2. When the reach of onemedium starts to flatten in

relation to the dollar investment, an effectivecampaign incorporatesanother medium, buildingreach in a cost efficientmanner

CPM vs. Cost PerCPM vs. Cost PerIncremental Reach PointIncremental Reach Point

8/7/2019 MediaMix


SummarySummary

When CPM’s reasonably represent mediaWhen CPM’s reasonably represent media

value, spreading the dollars will usuallyvalue, spreading the dollars will usually

produce a more cost-effective plan.produce a more cost-effective plan.

The unprecedented growth of the Internet -The unprecedented growth of the Internet -fastest of any ad medium on record - has leftfastest of any ad medium on record - has left

many advertisers trailing in the consumer’smany advertisers trailing in the consumer’s

dust.dust.

Why should media dollars be spread as farWhy should media dollars be spread as far

as online? Because it’s where consumersas online? Because it’s where consumersare and it’s where the action is (and onlineare and it’s where the action is (and online

costs less).costs less).

Add reach and increase efficiency.Add reach and increase efficiency.

MediaMix

Documents

Transcript of MediaMix