| Audience Comparison
Compare
the three approaches briefly. The first column compares the audience.
Media advertising, where the audience is scattered, is ordinarily
most useful for products and services that are sold to the general
public.
In direct advertising, the advertiser has relatively limited control
over a specific audience. For example, the audience for a radio
commercial is limited to the show's listeners. With a direct mail
or telephone
campaign, the advertiser has greater selectivity. The mailer can
be addressed to particular persons whose income, occupation, or
special interests indicate a desire for the product or service. Finally,
in
the case of direct selling, the audience is usually known. The
seller's
only contact is with parties who have a known need or desire for
the product or service.
Message Capability
The second column compares
the
message capability of each of the three types. Media advertising
messages must be brief -- perhaps 30 seconds of broadcast time
or a few inches
of print. Even if more space and more time are available, there
is a limit to how much the audience is willing to hear or read.
In
a
direct mail or telephone campaign, the selected audience is usually
more interested
in the particular product or service and has time available to
digest a more detailed message.
Finally, in direct selling, the
seller has
the advantage of being able to make a detailed presentation
of the product or service and address it specifically to the needs
of a
particular customer.
Cost
The third column describes the cost
per thousand persons
reached, generally
referred to as the "CPM." For example, a newspaper advertisement
that cost $50 and reached 10,000 persons would have a CPM as follows:
- CPM
= Cost divided by Thousands of Persons
- CPM = $50 divided by 10
- CPM
= $5.00
A direct
mail campaign, with its more selective audience, would have a
somewhat higher
cost, perhaps
$100 to $1,000 per thousand, as shown on the table (above). This
would include the cost of mailer preparation, envelopes, postage,
purchased
mailing lists,
and so on.
In direct selling, costs can vary widely. In fact,
the sky is the limit! Perhaps a delivery driver is the salesperson.
At each
delivery point,
the driver makes a quick sales presentation. The cost is virtually
nothing. At the opposite extreme, when selling a high priced
service or product
to industrial or commercial accounts, transportation costs,
living expenses, commissions,
and
salaries must all be considered. For a salesperson in New York
to make a
single call in Los Angeles, the cost could be $500-$600 or
more.
Sales Return
The
final column shows the expected sales return. For media
advertising, less
than 1% of
the entire audience can be expected to buy. Frequently,
even a
small fraction of 1% will more than justify the cost of the
advertisement. In a direct
mail or telephone solicitation, a somewhat higher return
is expected, perhaps 1-10%. In direct selling, where the cost of
each
call
is higher, a somewhat
higher
rate of return must be expected, usually 10% or more.
Advertising
Media
A
wide variety
of advertising media is available. Each has specific
applications to various businesses. We will examine some and see
how
they apply to
small businesses.
- Television. The biggest and most
expensive. A single network television
spot can cost tens or even hundreds of thousands
of dollars. Yet brief (10-30 seconds)
spots on local television channels can often be
a wise buy for certain small businesses.
- Magazines. While the national
news
magazines are usually far
outside the budget of small businesses, local
magazines, regional editions of national
magazines, and special interest magazines with
relatively small circulations
often fall within the budget capability of small
businesses.
Evaluating Advertising Media
In evaluating any individual
advertising medium,
you will normally
want to know three factors, as follows:
- Cost
- Audience
size
- Audience quality
Each of these factors is closely interrelated.
Let's take a closer
look at what is meant by audience quality.
Audience
Quality
To a seller, a quality audience
consists of thee people who are most
likely to buy the product. It does not
mean rich versus poor or educated versus
uneducated. To the seller of janitorial supplies,
a magazine with a high percentage of
janitors among its readers is a quality magazine. Why bother with
magazines
that reach
polo players,
yachtspersons,
or gourmets? Conversely, the furrier
would have little interest
in advertising
in
a janitors' magazine.
The question to
ask in evaluating
the quality of a particular medium is whether
or not its audience is
representative
of your
market. The
local suburban weekly may have a higher
cost per thousand readers than the metropolitan
daily, yet offer a higher quality audience
for the local retailer. The
suburb, not the entire metropolitan
area, is the retailer's primary market.
To the
seller of blue jeans, the local rock
station offers a higher quality audience than the
adult-oriented radio news show, regardless
of relative audience size or audience income.
Audience
Demographics
In
selecting an advertising medium,
it is frequently
wise to examine the demographics
of the audience. The demographics are an analysis of the audience
according
to
social and
economic factors.
For example,
the
table below shows the demographics
for
two
radio stations
serving the same geographic
area. |
