Managing the Advertising Campaign

Message Placement Cost

Creative development is one of two major spending considerations for advertising.  The other cost is for media placement; the purchase of ad time, space or location with media outlets that deliver the message.  Advertising placement costs vary widely from very small amounts for certain online advertisements to exorbitant fees for advertising on major television programs.  For example, in the United States the highest cost for advertising placement occurs with television ads shown during the National Football League’s Super Bowl championship game where ad rates for a single 30-second advertisement exceed (US) $2.5 million.  By contrast, ads placed through online search engines may cost less than (US) $1 dollar.

Media outlets set placement cost using several factors though the most important are determined by audience size, audience type and an advertisement’s production characteristics:

• Audience Size – Refers to the number of people who experience the media outlet during a particular time period.  For example, for television outlets audience size is measured in terms of number of program viewers, for print publications audience is measured by number of readers, and for websites audience is measured by number of visitors.  In general, the more people experiencing a media outlet, the more the outlet can charge for ads.  However, actual measurement of the popularity of media outlets is complicated by many factors to the point where the media outlets are rarely trusted to give accurate figures reflecting their audience.  Today nearly all media outlets rely on third-party audit organizations to measure audiences and most marketers rely on these auditors to determine whether the cost of placement is justified given the audited audience size.
• Audience Type – As we have discussed many times in the Principles of Marketing tutorial, the key to marketing is aligning marketing decisions to satisfy the needs of a target market.  A well-defined target market is critical to successful marketing and vital to a successful advertising campaign.  When choosing a media outlet, selection is evaluated based on the outlet’s customer profile (i.e., viewers, readers, website visitors) and whether these match the characteristics sought by the marketer’s desired target market.  The more selectively targeted the audience, the more valuable this audience is to advertisers since with targeted advertising promotional funds are being spent on those with the highest potential to respond to the advertiser’s message.  The result is that media outlets, whose audience shares very similar characteristics (e.g., age, education level, political views, etc.), are in a position to charge higher advertising rates than media outlets that do not appeal to such a targeted group.
• Characteristics of the Advertisement – Media outlet also charge different rates based on creative characteristics of the message.  Characteristics that create ad rate differences include:
  • Run Time (e.g., length of television or radio ads )
  • Size (e.g., print ads size, billboard size)
  • Print Style (e.g., black-and-white vs. color)
  • Location in Media (e.g., back magazine cover vs. inside pages)