Advertising & Marketing Blogosphere

2006-09-15T07:41:00.000-07:00

Is the Cost of Advertising in the Super Bowl Good Business or an Ego Trip?

At $2.7 million for one :30 commercial in theSuper Bowl-- are 21st century advertisers just confirming the truth of John Wanamaker's famous old line, "I know that half of my advertising is wasted, I just don't know which half?" Or, is the Super Bowl actually a cost effective and profitable investment?

The Super Bowl is replacing the Addy Awards as the Creative Awards Show where ad agencies, ad managers and television networks showcase their creativity to a huge audience which is believed to be viewing with higher attentiveness and involvement than usual. Research has even found that some viewers enjoy (some) of the commercials in the Super Bowl as much as the game itself.

But at $2.5 million per :30 spot in 2005, and $2.7 million in 2006-- plus millions more to create spectacular effects commercials-- can the Super Bowl possibly be cost effective? Or, is this media buy mostly an ego trip?

To help answer this question we interviewed Ron Geskey, CEO of 2020:Marketing Communications LLC, who is a consultant and publisher of the Thumbnail Media Planner and AdMediaStore.com.

Q: Why does Super Bowl advertising cost so much in relation to other media buys?

A: The short answer is, supply and demand; the networks will always charge as much as advertisers will pay. This year advertisers were willing to pay an average of $2.7 million for one :30 which is almost four times more than the rating justified. Budweiser had four spots which could have cost them $10 million, plus many millions more in commercial production and promotional programs. You need to add up all of the costs, not just the cost of the time.

Q: What would be Super Bowl be worth if it was a normal media buy?

A: It depends on what kind of programming and timing you benchmark it against. In 2004, the Super Bowl on CBS delivered an average household rating of 41.4, meaning that 41.4 percent of the nation's TV households were tuned to the Super Bowl at the 'average time.' Using the first quarter network TV costs found in the 2005 Thumbnail Media Planner, a spot in the Super Bowl, if priced like first quarter prime time, would sell for about $840,000 rather than $2.5 million. If a mix of other dayparts was included, 41 rating points could be purchased for much less than $840,000. Also, if the cost of special commercial production is included, the cost of running one Super Bowl spot could easily exceed $3.5 million, plus the cost of promotions which try to leverage the Super Bowl. Or looked at another way, a $3.5 million investment would buy over 200 rating points or nearly 12 four color pages in Time Magazine.

Q: Are there other factors which make the Blue Sky a good investment?

A: Clearly many advertisers with deep pockets think so. The reality is that the Super Bowl requires up to $2.8+ million in Blue Sky (media & production) for every spot purchased. Is it worth it?

Every sponsor will have to answer that question for themselves. To answer the question, I think it's important to visualize how that great commercial actually works in a media buy. First, the program generates a measured audience of households tuned at the average time. Depending on how much attention they are paying (or out of the room) and how involved they are in the program, will determine what percentage of the tuned audience will even be exposed to the commercial. In terms of attention levels (used as an indicator of the probablility that the commercial will be seen), it is unlikely that the Super Bowl will have higher attention levels than certain prime time shows which are in the 70-80% full attention range. Next, since program involvement is related to commercial recall, the Super Bowl would likely have an advantage over most alternative programming, but not all, especially good dramas. Finally, once the commercial is exposed to viewers who are watching with some degree of attention and involvement, the commercial breaks through and engages the audience in varying degrees. Recall tests have found above average scores in the Super Bowl for some brands and commercials, but not universally.

"Using projected prime time network TV costs from the Thumbnail Media Planner, we see that the $3.4 million investment in the Super Bowl would have purchased about 215 rating points in prime time shows-- 5.3 times more. So, while the Super Bowl has a big rating, its price is extremely high in relation to its rating. If the Super Bowl was priced like prime time, it would have cost around $640,000 for time and production. So, just be aware that the 'blue sky' is $2.8 million per spot in the Super Bowl. (Blue Sky is like the value of good will). So the question is whether there is other communications or marketing value associated with this media buy which is worth a premium of $2.8 million per :30 spot.

Will a larger percentage of potential viewers actually see your commercial in the Super Bowl than in prime time? Not necessarily, although attention levels differ among prime time shows and the Super Bowl.

Are Super Bowl commercials just better and more effective? Not necessarily, studies of last year's spots did not find high average performance.

Does the environment of the Super Bowl enhance the communication of the commercial in some way? Some studies have found that spots in the Super Bowl can have above average recall. Other studies have found no lift in effectiveness due to the hyped environment.

If commercial recall in the Super Bowl is a high 50% above average and promotional activities provide another 50% lift, advertising in the Super Bowl is pretty hard to justify with logic.

So it must be the egos of advertisers and their agencies who like the showcase the Super Bowl provides for their creative work? Hmmm.

2006-08-27T11:43:00.000-07:00

Email Campaigns: 101

"How do I start an email campaign to get targeted people on my site buying my stuff?"

Laugh if you will, but you know you are asking the same thing, or did, at least, at one time. The answer CAN be email campaigns, which, provided one has a good opt-in list to start with, can take a site from no sales to lots of sales in just one campaign. The key is in the list, and the key to any good list is quality filtering. A good list should be culled from opt in lists by confirmed purchases by industry. This is the only way to ensure to have the best possible leads. These leads in turn will more likely become interested in the offering put out for them, if it matches their previous buying history.

Who the list is purchased from is also important. Not just anyone can provide a good list. Internet marketing agencies usually have the goods on email lists. Even if an agency isn't going to tell you a lot about how or where they get their bread and butter (their lists!), ask questions about the quality of the lists and why their lists will bring you sales. The more questions a client asks about this, the more likely that client will know if the agency knows email or is just barking up a strange tree.

There is no secret to email campaigns, it's just a matter of starting and following some basic guidelines. To really excel, one may have to discover tricks of the trade from experienced marketers. This can be done through email campaign how-to ebooks that lay out what to do, how to do it, and how to experiment to improve ROI results with each campaign blast or launch.

2006-08-27T11:39:00.000-07:00

Media Buying for Entrepreneurs

How do you decide what media to buy and when? Many do not find the right medium for their message until late in the game, if at all. Understanding what you can manipulate to your advantage what to steer clear of makes all the difference.

Doing it yourself is the hallmark of many an entrepreneur just starting out. But this situation was not meant to last forever. Eventually, a business needs a marketing manager, meaning a person who knows how to run the whole shebang. The internet is the perfect place to run a small cost marketing campaign for a startup business. Local business can rely more on radio and TV spots, as well as newspaper ads and magazine space.

The great thing about advertising on the internet is that internet advertising can be of two kinds: short-term and long-term. Content is the way to create long-term advertising that does not require one to pay! Short-term ads all are marked by the fact that one DOES have to pay for a space to place the ad, and the ad eventually ends. With content, however, the ad opportunity lasts as long as desired, and one can change or update the content. Content plays into search engine optimization. Say you have a press release writing business in Houston, TX. Now let's say you want to create 50 new clients per month. By creating winning content and landing pages (the pages search engine users and others are desired to land on first, esp. to make a sale), one can achieve this end and rely less heavily on media purchases. That said, for any profitable business, a healthy mix of all internet ad mediums is typically the recipe for success. Without diversity, the full audience for an offering in a particular industry may not be addressed.

2006-08-27T11:38:00.000-07:00

The Web Consulting Agency: 101

Why is it some do big volume and some hardly any? It usually depends on the outfit, the staff, and the intentions of the agency owner(s) and their availability for the business. Most agencies have hands that do more than one consulting or related gig ongoing. For this reason, agencies often limit their time to the clients most likely to pay off in the short run. Many take a longer view, but the general wisdom in many such agencies is that the average client has a short life expectancy as a client. Dissatisfaction or the pursuit of more profitable ways to do promotions often land a client in one agency's lap after another.

Thus is the life of an agency. How do we get clients? How do we keep the ones with high revenue potential? How do we spot the low revenue clients and toss them out and move on? These questions are usually the purview of someone at the top of the agency, but are also played out on the individual level of the consultant, as well.

Ad and marketing agencies tend to seek out big clients to offset the short-term nature of many of their clients. Ultimately, the equation of effort vs. revenue potential is and should be the chief measure of a prospective client.

In the end, those who consistently bring their business to an agency and have low maintenance as their trademark will tend to become long-term clients. These loyal clients make up the foundation income of any agency and at least allow projections into the future with some small bit of accuracy in an otherwise often specious industry.

2006-08-27T11:28:00.000-07:00

Can an On Line Agency Raise ROI?

Online Marketing-- one would be hard-pressed to do it yourself. Unlike a local pizza chain just getting started, you can't just get a phonebook listing and do a direct mail and newspaper ads campaign and expect to grow a following. Online marketing, or web marketing, or internet marketing, involves such needs as email (the virtual direct mail) campaigns, as well as networking and sponsorships, search engine optimization, and affiliate sales programs. Most sites selling a mass distributed product need all of these to actually maximize profits. Reliance on just one or two of these methods will not see as much profit in the long run as using all will.

Saturation of the internet with your product can substantially increase your rate of monthly sales over time. Other factors such as traffic coming in are actually a product of networking and search engine optimization, as well as the pay per ads and clicks. It's generally best to ensure you have organic search results traffic coming in to offset the long-term cost of pay per click, sponsorships and email campaigns. The ideal situation for any site selling a product or easily distributed service subscription is to invest in search engine optimization on a monthly basis, building organic relevance on your top keywords over time, as well as submitting the site to directories and other sites that can then link to your site in relation to your keywords. Without this component, a site owner may not be able to sell the business for a substantial profit later on. Much of the value in a website actually comes form the organic traffic streaming through.

Direct mail (email in our case) requires lists of likely customers. With the Can Spam act recently enacted, anyone can spam anyone, so long as the name and physical address of the spammer is attached at the bottom of the email. This said, however, one should ensure that the list used to email from on each campaign is filled only with previous buyers of such services or related services. These email addresses should reflect likely buyers of what you sell. If they do not, you are wasting money including them in the list. Purchasing a list is often the route business owners go. The lists purchased should thus be opt-in only. Again, this is in reality for the benefit of the spammer, not the receiver of the spam.

NEXT: The Web Consulting Agency 101

2006-08-27T11:22:00.000-07:00

Internet Advertising for Small & New Business

Many smaller businesses may know it exists, but have no clue how to do it. There is hope!

Internet Advertising is just like advertising on TV or radio in that it conveys a message about a service or product to the general public or to a targeted market niche. Finding the right form of internet advertising for your business may require looking at your profit potential and your overall marketing budget first to understand what you can pay each month and what the Return On your Investment will be (ROI).

Most startups immediately go to Pay Per Click programs such as AdWords, which has become a very popular and ubiquitous advertising method. AdWords employs text ads, which are treated as artificial search results in a standard Google search for keywords. The highlight results at the top and listed at the far right of the Google search engine results pages are paid Google results, that is, AdWords.

Google AdWords cost a varying price per keyword per click. Though you can measure the click and where it goes, you cannot generally recoup your costs if no sales accrue, and there lie the biggest problem with Pay Per Click. Other forms of advertising using the Per Per Action model (Pay Per Call, Pay Per Chat, etc.) have begun to take root as a backlash to this downfall of AdWords.

Click fraud, another specter on the horizon of AdWords, contributes to many estimates as more then 50% of the average click for AdWords campaigns in the more competitive industries. With this in mind, one must weigh the costs of AdWords and decide it the probable ROI outweighs such risks.

2006-08-20T10:22:00.000-07:00

Internet Advertising Primer

I am passing along an interesting presentation, Internet Advertising Primer, good for anyone needing a quick overview for themselves or to present to clients on various ways to advertise on the internet. It is available at www.admediastore.com.

Teach Clients & Staff How to Use the Internet in Advertising Plans!

The Internet Advertising Primer is a turnkey one hour “presentation in a box," covering the key aspects of how and why to use the internet in advertising plans. It answers questions about the internet universe, how internet audiences are measured now, the various types of internet advertising, pricing and cost parameters, the possible role of the internet in the advertising/media mix, including case histories, and recommendations for the future.

The Internet Advertising Primer is a powerful 37-slide PowerPoint presentation, complete with presenter notes, which you can present as is -- or customize as needed!

Use the Internet Advertising Primer for:
internal training
client education
orientation
new business
personal development
and more!

Modify and present this ready-made presentation as your own!

You may be able to develop a presentation like this yourself, but why would you, when the Internet Advertising Primer can be purchased at a fraction of what it would cost you to do it yourself! At www.admediastore.com.

2006-08-18T09:41:00.000-07:00

Create Your Own Advertising Plans
With the New Ad Planner

Here is an interview with the publisher of the Thumbnail Media Planner, a great resource for people needing quick information about advertising media costs, audiences, and research. Their website is www.thumbnailmediaplanner.com

Q: What exactly is the Thumbnail Media Planner ™ ?
A: The Thumbnail Media Planner is a pocket sized marketing-media reference focused on thousands of the most important facts about market and media trends, media availabilities, media reach, the 2006 media market/cost outlook, 2006 media pricing forecasts. It also includes demographics and major media costs for each of the top 100 markets, non traditional media, and even an insightful recap of media advantages and disadvantages. The Planner even includes reach and frequency tables and a glossary.

Q: For whom is the Planner published?
A: The Thumbnail Media Planner is published for anyone involved with planning or approving advertising and media campaigns-- ad agencies, advertisers, media, consultants, and students and professors. The Planner is helpful to agency account and media people (many of whom order copies for their staffs) in the largest agencies as well as small agencies and design firms.

Q: How can the Planner help "a planner" ?
A. There are many ways this Planner can help individuals and their companies improve quality, productivity, and client perceptions. One is that a Thumbnail Media Planner is a really great reference tool in meetings. When a client asks you, "How much would it cost to run this newspaper ad in the top 50 markets?" Or, "How many markets could we add?” now you can say, "Just a minute, I’ll give you a rough estimate..."instead of 'Let me get back to you...then having somebody spend hours answering a question that could have been eliminated in 30 seconds…' It's ideal for quick media research and estimating the cost of advertising media plans. Anyone needing fast access to media data and costs for network or spot television, magazines, radio, newspapers, the internet -- or even many non traditional media-- would find the Planner invaluable.

You can also use the Planner to quickly develop rough plan concepts on advertising campaign and general media costs, also... to look at options and play out ”what if” scenarios with rough budget forecasts, without wasting excess time. This allows you to spend more time on important issues for your clients and your own company, especially crucial in this period of tighter budgets, and increased workloads.

About 2020:Marketing Communications LLC
2020 is a marketing consultant and publisher of research based advertising and media planning tools. Contact 2020 at marketing2020@aol.com or write to: 2020:Marketing Communications LLC, P.O. 82476, Rochester, MI 483078-2476. 2020's products are available on line at http://www.thumbnailmediaplanner.com/ and http://www.admediastore.com/.

2006-08-16T08:57:00.000-07:00

Video Web Advertising is the Future

The world of advertising is changing rapidly: traditional methods of advertising on network and cable television, radio, magazines, and newspapers are losing their effectiveness-- as technology offers ways to increase choice for consumers and increase marketing effectiveness and efficiencies for advertisers. In 2006, a study of leading advertisers found that 74% believe that TV effectiveness has declined and that advertisers need to find non traditional alternatives.

In fact, according to our own research, consumers want to see advertising when it is relevant to them and avoid it when it is not.

So while advertising makes products more noticeable to all people - even those not in the market for a particular product – advertising’s effect is greatly minimized if the audiences are not in the market for the product or service. That’s why technologies like TiVo, Satellite Radio, and Premium Cable Television, are designed to minimize or delete the advertising consumers don’t want.

Interest and relevance are clearly major reasons why internet search has grown so rapidly into a major advertising medium. Internet search helps consumers organize relevant information for making purchase decisions. Search is the advertisers "dream" because it efficiently targets interested prospects and eliminates wasteful ad spending.

The Future: Media Convergence
All of this leads us to the fact that one of the most important advertising media trends of this decade will be the convergence of traditional television commercials with the internet.

The communications power of television commercials (strategic brand message delivered with sight, sound, motion, and emotion), combined with the targeted delivery capabilities of the internet, will provide a considerable benefit to consumers seeking product information-–and to advertisers seeking to reduce spending waste by effectively communicating their TV messages to a relevant and interested audience.

We see this beginning already with many major advertisers putting their TV commercials on their web sites, and in some cases producing new web advertising creative. Smaller advertisers are beginning to produce inexpensive video (and audio) for their web sites and their emails. Services like Edmunds.com are making commercials and videos of vehicles available. But this is just the beginning of the beginning.

Television advertising will morph into video advertising targeted via the web, finally to the right people at the right place at the right time.

2006-08-14T06:43:00.000-07:00

How Does Advertising Work?

If you ever want to strike terror into the heart of your advertising agency, just ask them, "How does advertising actually work?" (for my company/brand).

John Wanamaker, 19th century entrepreneur, clearly didn't know when he said, "I know that half of my advertising is wasted, I just don't know which half." Unfortunately, not much has changed. At MediaPost's 2006 Forecast, a speaker speculated that up to 80% of advertising budgets are wasted-- for a variety of reasons-- not understanding who and how many people buy or what their purchase decision process is, messages which are irrelevant to the majority of the audience or media plans which do not help to engage the audience, and more.

Today's Detroit News (August 14, 2006)reinforced the point in its story evaluating the success of Chrysler's new "Ask Dr. Z" campaign featuring Dieter Zetsche, chairman and CEO of Daimler Chrysler, as spokesman. The News reported, "So far, results are mixed. Among consumers and marketing experts, the ads...are a bit like sauerkraut: some love 'em, some hate 'em. And Chrysler's still wating for a big sales spike..."

Not only has Chrysler's sales spike not arrived,Chrysler's sales were down 40% in July, the first month of the Dr. Z campaign.

A marketing professor chimed in, "...if it doesn't translate in purchased cars, then at least some of the money has been wasted." On the other hand, Chrysler spokeswoman, Eileen Wunderlich said the Dr. Z ads were never intended to be a quick fix. And Chrysler'survey of 149 people in the market for a new cars within 90 days found very high ad awareness (86%), belief that the ads were enjoyable (78%) and memorable (74%), improved perceptions vehicle safety (70%), and other high scores. Also, nearly 500,000 visitors clicked on the Dr. Z web site asking 3.1 million questions about Chrysler products.

In contrast to the research findings, Bob Garfield, a columnist for Advertising Age, panned the commercials, labling them as CHEESY.

The problem is, people inside and outside of DaimlerChrysler have different ideas about what advertising is supposed to do for this car company-- for example, get sales now or build awareness and attitudes, maybe for sales tomorrow. And the prognosticators were at odds with consumers (who are the only ones who matter, right?).