Tag: Media Planning & Management Mumbai University BMS Notes

International marketing though it has certain distinct characteristics, is similar to domestic marketing in terms of certain technical attributes. Marketing can be concerned as an internal part of two processes, viz. technical and social. International marketing and Domestic marketing are identic.al, so far as technical process is concerned.

It includes non-human factors such as product, price, cost, brands etc. The basic principles regarding these variables are of universal applicability. But the social aspects of marketing are unique in any given stratum, because it involves human elements, namely, the behaviour pattern of customers and the given characteristics of a society, such as consumers attitude, values etc. It is obvious that marketing, to the extent it is visualized as a social process, will be different from domestic marketing.

Kotler has defined marketing as, “Marketing is the analysis, planning, implementation and control of programmes designed to bring about desired exchanges with target audiences for the purpose of mutual or personal gain. It relies heavily on the adoption and co­ordination of product, price, promotion and place for achieving effective response.”

There are two sets of variables in this definition. One is markets and other one is human needs and wants and a process or techniques to convert potential exchanges into realized exchanges. The techniques involved are more or less similar in both domestic and international marketing. But the variables involved are totally different in case of International Marketing.

Major dimensions to the spills of international marketing:

1. Competence in marketing, with a sound grasp of marketing concepts, tools and techniques.
2. Ability to perceive patterns of consumer behaviour in different countries and the ability to evaluate the essential differences and similarities between markets.
3. Management skill to organise, plan, co-ordinate and control an operation of considerably greater complexity particularly in its human relationships than that involved in the home market.

Features of International Marketing

1. Different Legal System:

Every Country has its own legal system. Some of the countries follow English Common Law while others follow the civil law. Some of the European countries are having their own legal system. This difference in the legal system among different countries increases the difficulties of businessmen.

It is not sure for the businessmen that which legal system will be applicable to their business transactions. There must be uniform legal system. However some of the agencies are trying to make it uniform for all countries. The United Nations Commission on International Trade Law is also supporting the opinion of uniformity and is doing, its efforts to bring uniformity in International trade Law.

2. Market Characteristics:

The Market Characteristics of every Country is different due to the environmental factors, demand patterns, Government Controls etc. In some countries like India and USA the market characteristics are found different from state to state. It is because of all above factors responsible for the market characteristics.

3. Monetary System:

The monetary system of each country is decided by the government of that country and the exchange value of country’s currency is being determined by the forces of supply and demand.

4. Procedure and Documentation:

Every country has its own procedure of documentation requirements for the purpose of experts. Every business house has to comply with these rules and regulation for the purposes of export and imports.

Need and Drivers of International Marketing

1. Survival:

Most of the countries in the world are lacking of market size, resources and opportunities. Therefore, it is their compulsion to trade with other countries for their survival. Since the European Countries are small in size therefore without overseas markets their firms would not have sufficient economies of scale to be competitive with U.S. based firms. It is pertinent to mention here that international competition may not be a matter of choice when the survival is at stake.

Will Mitchell, J. Myles Shaver and Yeung Bernard conducted a study on “Performance following changes in International Presence in Domestic and Transition Industries. In a study of five pharma-sector industries, he found that international expansion is necessary when overseas firms enter a domestic market. He revealed that the firms having substantial market share and international experience expanded their business activities successfully. And all those firms disappeared that retrenched after an international expansion.”

2. Growth of International Market:

Despite having numerous problems like economic and marketing problems, the developing nations are considered be an excellent market to do business. The vast potential of international markets can never be ignored. According to one survey total world market is four time longer in comparison to U.S. Market.

A slow growth of U.S. population and changing life style viewed the growth of other markets with a critical eye. It is evident that Russian smokers show no concern about the health risks. And International giants Philip Moris Co, R.J. Reynolds, Tobacco International SA and British-American Tobacco Co. have entered the market very aggressively.

3. Sales and Profits:

It is clear that there is a large potential to sell the products in the international market. The International Market constitutes a large amount of share of the total business of many firms. Further it is evident that many large U.S. based companies have performed very well in the overseas market. IBM and Compaq are the best examples in this regard.

Both of them have maximized their sales in abroad in comparison to their domestic market. In case of Cocacola it is important to mention here that 80 percent of the total operating profit is contributed by the international sales account of the company. Thus, market is on saturation level, where as there is still a great potential for its future growth in other countries. Thus, it can be concluded that international market provides huge potential to increase sales value and profits of the firms.

4. Benefit from Diversification:

The investors can be benefited from global diversification. It is evident that the demand of certain products is affected by cyclical factors like recession and seasonal factors like climatic change. The sale of such products fluctuates adversely due to all these variables. It is the only solution for such kind of risks, to diversify a company’s risk and to consider foreign market as only solution to overcome with variable demand.

Such markets can provide outlets for excess production capacity and can easily counter such fluctuations. Seasonal factors, for instance, may affect consumption level of soft drinks. And keeping in mind such limitation, the soft drink industries are spreading their marketing activities throughout the global market. It has been observed that global selling has enabled the company to carry on with production throughout the year and help the companies to stabilize their business.

5. Inflation and Price Modernization:

The benefits of international trade are readily self-evident. Exports are always considered beneficial to a country. On the other hand, imports can also be highly beneficial to a country. Because there is not any incentive for domestic firms to moderate these prices. The lack of alternatives in imported products may compel consumers to pay more for the products to local firms, resulting in inflation and excess profits for local firms.

It is evident that in Europe, when the prices of orange Juice were jumped up, their customers switched over to other alternative drinks. Finally, it took ten years for citrus industry to win back these consumers. The U.S. orange growers finally compromised to live with import as they found that alternative juice is able to keep consumers by minimizing the price increases.

6. International Marketing and Standard of Living:

International marketing helps the countries and their citizens to increase their standard of living. On the other hand, without trade, there may be product shortage and which may force people to pay more or less. International trade makes easy for industries to get specialization and gain access to raw materials.

And at the same time, it fosters competition and efficiency. In overall it leads to the conclusion that international trade is helpful to provide their citizen higher standard of living.

International marketing is the application of marketing principles by industries in one or more than one country. It is possible for companies to conduct business in almost any country around the world, thanks to the advances in international marketing.

Marketing your brand at a global level is a complicated thing to do since you have to take care of a lot of things. Every business firm wants to develop a successful international marketing process. However it is totally a different thing to do so as compared to local marketing where you understand the audience very well.

In simple words, international marketing is trading of goods and services among different countries. The procedure of planning and executing the rates, promotion and distribution of products and services is the same worldwide.

Process of International Marketing

1. Motivation for International Marketing: For an organisation the motivation for entering international market can be any or all of the following:

• Growth
• Profitability
• Economies of Scale
• Risk Spread

4. Research and Analysis: Market research is done to Analyse the organization’s strength and weakness, opportunities available in international markets, and threats in international markets.
5. Decision to Enter International Markets: After identification of potential opportunities in international market decisions are taken to enter international market. Such decisions include identification of potential buyers in international markets, demand measurement and forecasting, market segmentation, market targeting and market positioning.
6. International Marketing Mix: At this step international marketing mix is developed. Marketing mix identifies four key areas; Product, Price, Place, and Promotion for developing a well coordinated marketing strategy.
7. Consolidate Marketing Efforts: Developing a good marketing program is not enough a marketing organisation need to manage the international marketing effort properly. Marketing organisations also need proper analysis, planning, implementation and control of their marketing efforts.

Phases of International Marketing

Deciding to Internationalize

The first decision is whether the firm should take up international marketing or not. This decision is based on number of important factors:

• Present and future overseas opportunities
• Present and future domestic opportunities
• Resources of the company
• Company objectives

International marketing offers a number of advantages. At the same time, international marketing is subject to a number of risks. The decision to internationalize requires the evaluation of international strengths, weaknesses, opportunities and threats. This is done by SWOT analysis. If the SWOT analysis is favourable to the firm, the firm should decide to venture into the foreign market.

Market Selection

Once it has been decided to internationalize, the next important step is the selection of most appropriate market i.e., identifying the target customers. For this purpose, a thorough analysis of the potentials of the various overseas markets and their respective marketing environments is essential. A careful exercise to shortlist overseas markets becomes necessary since all products cannot be sold by the firm to all countries at all times. It is considered better to exert maximum pressure on a minimum area to achieve the best results.

Important criteria which may be used in the market selection:

Geographical proximity: The first criterion of market selection is the geographical proximity. Geographical proximity facilitates a firm to reach the product fast to a nearby country and service the market quickly and more effectively. Besides, there will be low transportation cost leading to lesser price of the product.

Market potential of the country: A company may select its target markets on the basis of market potential of the country. Market potential of the country can be assessed by the prosperity of the country, the size and growth of its imports, etc.

Market Access: Another yardstick that a country may use in market selection relates to the market access. A country’s import policy is an important factor, because it may be biased in favour of some items and/or some countries. It is advisable for a company to select countries which do not discriminate against the country of the firm and whose import policy is not restrictive.

It would be highly beneficial for a company if it selects countries having good political and economic relationships with home country or having some preferential trading arrangement also or having least restrictions on imports.

Market characteristics: Another factor to be considered in the selection of the market is the market characteristics of the country. A company would like a market having similar cultural factors, trade practices and customs.

Product Selection

Once the market selection decision has been made, the next important task is to determine the products for export. Following are some important criteria which may be used in the product selection:

Elasticity of supply: A company would not face any supply constraint in exporting the products having elastic supply. Elastic supply is the result of natural resource endowment or acquired skills and assets. A company may also select a product because the product is unique i.e., it has developed it by research and development and it is likely to take some time before competitors come out with a suitable substitute. A company should not prefer exports of the products which are heavily dependent on imported inputs.

Demand of the Products: A company should identify the products that are in demand and likely to continue to be in demand in an overseas country. For this the company has to make the analysis of a country’s imports and production of various commodities including substitutes and the likely future policies and plans regarding such commodities.

Selection of Entry Mode

After the selection of market and product, the next important decision is to determine the appropriate mode of entering the foreign market. At one extreme a company may decide to produce the product domestically and export it to the foreign market. In this case, the company need not make any investment overseas.

On the other extreme, the company may establish manufacturing facilities in, the foreign country to sell the product there. This policy requires direct foreign investment by the company. In between these two extremes, there are several options each of which demand different levels of foreign investment.

Following are various entry modes in the foreign markets:

Exporting: Exporting means sale of domestically produced goods in other country without any marketing or production or organization overseas. Exporting may be of two types: Direct exporting and Indirect exporting. Direct exporting means sale of goods abroad without involving middlemen. In case of indirect exporting, a firm sells its products abroad through middlemen.

Licensing: Under licensing an international business firm (licensor) allows a foreign company (licensee) to manufacture its product for sale in the licensee’s country and sometimes in other specified markets.

Franchising: Franchising is a special form of licensing in which an international business company (franchiser) grants another independent company (franchisee) right to do its (franchiser’s) business in a prescribed manner. Franchiser makes a total marketing programme available to the franchisee.

Contract Manufacturing: Under contract manufacturing, an international marketing company enters into contract with a local enterprise abroad to manufacture its product and undertakes the marketing responsibility on its own.

Joint Venture: An international joint venture is an enterprise formed abroad by the international business company sharing ownership and control with a local company in that foreign country.

Strategic Alliance: Under strategic alliance, two or more competing firms pool their resources in a collaboration to leverage their critical capabilities for common gain. Although a new entity may be formed, it is not an essential requirement.

Assembly: Under assembly an international business firm produces most of the components or ingredients in one or more countries and carries out the labour-intensive assembling in the foreign country where labour is cheap and abundant.

Mergers and Acquisitions: Under merger an international business firm absorbs one or more enterprises abroad by purchasing the assets and taking over liabilities of those enterprises on payment of an agreed amount. Under acquisition, an international business enterprise takes over the management of an existing company abroad by taking the controlling stake in the equity of that company at a predetermined price.

Each of these strategies has certain advantages and disadvantages. Each of these strategies require different levels of investment ranging from no additional investment to full investment in manufacturing facilities abroad, and the risks also increase with increase in the investment level Similarly, control over the market may be higher if the company involves itself directly in manufacturing by investments in production facilities.

Various entry strategies must be analysed in following respects:

• Expected sales
• Costs of operations in a foreign country
• Assets
• Profitability
• Risk factors

The selection of a company’s best method of entry into foreign markets depends on following factors:

• Number of markets covered
• Level of penetration within markets
• Degree of feedback available
• Possibility of sales volume over a period of time

Selection of Marketing Strategy or Marketing Mix Decision

The foreign market is characterized by a number of uncontrollable variable Marketing mix consists of internal factors which are controllable. The success of the international marketing therefore, depends to a large extent on the appropriateness of the marketing mix.

Following are the elements of the marketing mix:

Product strategy: In the present day competitive global market environment marketing begins with customer and ends with the customer. The importers will import only those items which are in demand from the customers.

The exporters have to, therefore, identify what the consumers in the overseas markets require. It is imperative that the product selected for exports should be unique, creative and innovative in comparison to the similar item being offered by the competitors. As the, consumer preferences, tastes and regulations governing product, quality, safety, health, environment protection, packaging and packing vary from one market to another, same item cannot be offered in all the markets.

An analysis should be made of any modifications required in the products, packaging changes needed, labelling requirements, brand name and after-sales services expected.

Many products must undergo significant modifications if they are to satisfy consumer and market requirements abroad. Other products require changes at the discretion of the producer only to enhance their appeal on export markets. Products may be modified in respect of quality, size, shape, colour, material etc. Product strategy includes packaging, branding and product service.

Pricing strategy: Pricing decision is one of the basic marketing decisions. Most importers would decide to buy the product finally on the basis of comparison of price of competing products. Pricing, strategy is closely linked to the cost of the product and other factors influencing the cost. In setting the export price, the business firm should consider additional costs that do not enter into pricing for the domestic market.

These include such items as international freight, insurance charges, product adaptation costs, import duties, commissions for import agents and foreign exchange risk coverage. A company should decide whether it should charge the same net price for a particular product in all its markets or different prices in different markets.

Export pricing analysis should begin with these questions: What value does the target market segment place on the business firm’s product? How do differences in the product add to, or to detract from its market value? In practice, these are difficult questions to research but analyzing the prices and product characteristics of existing competitive products may reveal critical information.

In practice, it is not the cost that determines the product’s price but the customer’s perception of that value. A firm may not have much choice in export pricing beyond a point because it has to match competitor’s price. Extension of credit is part of the pricing strategy.

Distribution strategy: A company should work out its distribution strategy very carefully so that its product reaches the consumer at the right place and right time with reasonable cost. The potential exporter should consider the following distribution on options:

• Exporting through a domestic exporting firm that will take over full responsibility for finding sales outlets abroad.
• Setting up its own export organization.
• Selling through representatives abroad.
• Using warehouses abroad.
• Establishing a subsidiary.

The choice of distribution channel will depend on the firm’s export strategy and export market. A company should be very clear about the division of risks, responsibilities and privileges between it and the distributors and the cost of distribution. Part of the distribution strategy relates to agency arrangements in overseas countries.

When it is intended to create greater awareness of the product, it is better to appoint an agent who does not handle many products and can allocate the time needed to promote that product.

Promotion strategy: The company should decide on the optimum promotion mix i.e., advertisement, personal selling and sales promotion. The export marketing plan should provide details on the following aspects of the promotional strategy:

• Publicity methods
• Advertising (who will be responsible for it and how much the firm can allocate to it)
• Trade missions
• Buyer’s visits
• Local export assistance

Promotion strategy to be adopted by the exporter should be in tune with the environmental rules and regulations of the host country. Further, promotion strategy should take into account the culture of the target segment in terms of its practices, beliefs, likes and dislikes, religion etc.

International Organization Decision

The last step involved in the international marketing process involves decision regarding the international organization. There are different organizational structures for doing international business.

The Structure is determined by the following factors:

• Extent of commitment of the organization to the international business.
• Nature of international orientation.
• Size of international business and expansion plans.
• Number and consistency of product lines
• Characteristics of the foreign markets.

A firm may organize its international marketing operations in three ways:

• Creation of export department
• Setting up an international division
• Development of a global organization

The export department is the simplest form of export organization and easiest to establish. A separate export department is established to take effective care of all the activities connected with the export business. The internal organizational structure of the export department may be based upon functions, territory, product or a combination of these. A separate export department may be located at the most suitable place which may not be the headquarters of the company.

A wholly owned subsidiary is a company whose common stock is 100% owned by another company, the parent company. Whereas a company can become a wholly owned subsidiary through an acquisition by the parent company or having been spun off from the parent company, a regular subsidiary is 51% to 99% owned by the parent company.

When lower costs and risks are desirable or when it is not possible to obtain complete or majority control the parent company might introduce an affiliate, associate, or associate company in which it would own a minority stake.

A wholly owned subsidiary is a business operation in a foreign country that a firm fully owns. A firm can develop a wholly owned subsidiary through a greenfield venture, meaning that the firm creates the entire operation itself. Another possibility is purchasing an existing operation from a local company or another foreign operator.

Regardless of whether a firm builds a wholly owned subsidiary “from scratch” or purchases an existing operation, having a wholly owned subsidiary can be attractive because the firm maintains complete control over the operation and gets to keep all of the profits (or losses) that the operation makes. A wholly owned subsidiary can be quite risky, however, because the firm must pay all of the expenses required to set it up and operate it.

Advantages

• Easy to manage as the strategic decision-making lies with the parent company.
• Due to 100% control, it is easier to follow the parent company policies and procedures thus helping the group to achieve synergies.
• The subsidiary company gets a tag of the parent group since it is merged in the group fully due to the 100% acquisition.
• Results are been grouped under the parent company at each balance sheet date.
• It increases the valuation of the subsidiary company since now it is under the umbrella of the parent group which is a big brand in the market.
• The subsidiary company gets a good brand name by getting acquired by the top brand thus increasing the valuation and the market share of the parent company by acquiring an established player in the market.
• Building relations with customers and investors become easy if the parent has strong connections in the market.

Disadvantages

• Identification of M&A opportunities in the industry is a tough task.
• Establishing relationships among vendors, regulators, bankers, investors, lenders take a lot of time since they are unaware of the functioning of the subsidiary.
• Acquiring a new company or an existing company requires a lot of time working on the diligence process and finally closing the transaction.
• Company operations and cultural differences can be a major concern.
• In the case of a cross border acquisition, there are many regulatory laws that affect the functioning of the subsidiary. eg: In the parent company, a particular project might be permissible however in the subsidiary company, the local laws in the country may not permit it.

Dysfunctional Card Rate, Secondary and Effective Rate

A rate card is a document provided by a newspaper or other print publication featuring the organization’s rate for advertising. It may also detail any deadlines, demographics, policies, additional fees, and artwork requirements. The smaller the publication, the less information that may be available on the rate card.

Some larger newspapers may have a rate card for a particular kind of advertisement. They may have their rates broken down by classified ads, retail advertising, and even national ad rates.

Rate cards help the retailer understand what types of ad sizes, discounts, and other advertising the publication have to offer. When choosing a newspaper or print media, you can use rate cards to compare ad rates based on circulation before you buy advertising space.

Before placing an ad, be sure you understand the terms and conditions of advertising with the publication. In many cases where there may be a conflict between the insertion order and the rate card, the rate card will be the deciding factor. This does not mean the prices on the rate card are fixed. Most retailers will find the paper’s sales rep will offer special rates for first time advertisers or other discounts.

If you’re interested in advertising within a particular publication, check their website or call the office and ask for a copy of their current rate card. Many newspapers and magazines have their rate cards available online in a PDF format for quick reference. Of course, these rates are always negotiable.

Deal Composition

It is not just enough to evaluate effective rates but the structure of the deal or buy plays a very important role as well. Composition of a buy such as prime time second age deals for an Advertisers & Weekday vs Weekend split. Weekday primetime shows get highest TRP followed by weekends throughout the day, afternoons suitable for female TG, News channel morning slots work more efficiently than an afternoon on weekdays.

Cost Per Rating Point (CPRP)

Cost per rating point measures the price paid for GRP’s delivered. Eg: 2 media buys with the same total rates may have varying CPRP’s. One may have second age in all prime time shows, another may have second age in only shows. Technically afternoon slots deliver ratings even in male TGs. While some buyers deliver CPRPs regardless of the time slots, but an efficient planner decides not to take time slots on blind attempt but to consider CPRP on time slots.

Reach Delivered by the Buy

Reach and frequency buying is an alternative method for buying ads that lets you book campaigns in advance with predictable, optimised reach and controlled frequency.

A high-frequency strategy may be beneficial for brands that are new, have a low market share or are running shorter campaigns. Many factors influence the effective frequency level. Your market, message and media should be considered during the campaign planning process.

Reach and Frequency campaigns are fixed reservations, with set costs, dates and reach. The aim of this type of campaigns is to fulfil the prediction, but you will be unable to change these parameters under any circumstance. This is also true for bids. The only change allowed for this type of campaign is at the creatives level. Any other change will cause an alteration in the reservation.

Keep in mind that Reach and Frequency campaigns don’t ensure a final cost per results or CPM, but a determined cost and reach within set dates.

Visibility Spots

A plan often delivers the reach, but the spread of the message about their campaign is important. This is very true for low budget brands who need to maximize their on-air presence. For instance, a small FMCG brand to be able to follow a large FMCG brand’s 52-week advertisement scheduling strategy, it too will need to maximize its presence as much as possible. Hence it chooses a low-cost afternoon TV spot to maintain a constant presence along with bursts of mass channel activity to increase its potential reach.

Bonus Percentage

Also known as “value adds,” this term is relevant to sites that sell their display ad inventory directly to advertisers. Generally, bonus media is a consideration only for line items priced on a cost-per-thousand-impressions (CPM) basis.

It is relatively common for advertisers or agencies to request that publishers include bonus media wherever possible in order to make the most competitive proposal possible when being considered for a campaign. These are basically $0 CPM (i.e., free) ad impressions that a publisher includes with paid media in order to maximize the appeal of the overall proposal.

In some cases, a proposal template will have a column marked “Bonus Media” or “Value Add.” In this case, the appropriate value is either Yes or No, depending on whether or not there is a cost associated with the line item (this column is somewhat duplicative, since any line item with a CPM of $0 would be bonus media).

There are pros and cons to including bonus media on an ad proposal, regardless of whether the advertiser or agency explicitly asks for it to be included. Giving away something of value (ad impressions) at zero cost obviously results in a direct loss of revenue. But in some instances, the inclusion of bonus media may make the overall proposal including paid line items seem more appealing.

Some advertisers or agencies focus on the overall effective CPM of a campaign when evaluating the competitiveness of a publisher. If this is the case, a strategic use of bonus media can help to make your proposal seem like a great value to the advertiser.

Upgrades and Spot Fixing

Another brilliant way to sweeten a media deal is to fix ROS (Run of the site) spots for direct buying to ensure higher deliveries. Advertisers do not specify the position of Ad placement in return for low rates. Ads may be placed randomly in unsold, less valuable portions of the target. And spots in a particular category can be upgraded to a higher category time slots based on the Ads previous results. Upgrades and spot fixes are done as it adds value to a deal.

Sponsorships

Program sponsorships are added on to a deal in order to deliver added value. The value of sponsorships is benefitted when the brand name is used in the program content Eg: Honda Star Voice of India. These programs are promoted throughout the day and people remember the name of the show along with sponsor name. (Vivo IPL). A program on a TV can have multiple sponsors apart from the main sponsor who acts as an associate sponsor.

Gross Rating Points (GRP)

In advertising, a gross rating point (GRP) measures impact. GRPs help answer how often “must someone see it before they can readily recall it” and “how many times” does it take before the desired outcome occurs.

Gross rating points are a measure of the impact by a campaign using a specific medium or schedule. It quantifies impressions as a percentage of the target population, multiplied by frequency. This percentage may be greater, or in fact much greater, than 100.

Target rating points express the same concept, but with regard to a more narrowly defined target audience.

GRPs are used predominantly as a measure of media with high potential exposures or impressions. Nielsen Media Research is an example of a company which uses GRPs.

With “today’s fragmented media world” the value of GRP is, according to the Advertising Research Foundation’s Journal of Advertising Research, even greater than in the pre-Internet era. Since “the required frequency changes with the product and the competitive climate it is in”, the purpose of the GRP metric is to measure impressions compared to the number of people in the target for an advertising campaign. GRP values are commonly used by media buyers to compare the advertising strength of components of a media plan.

For conventional media such as radio and TV, multi-tasking has reduced the value per GRP, and a measure named Persuasion Rating Point (PRP) was proposed in mid 2020.

“One GRP is one percent of all potential adult television viewers (or in radio, listeners) in a market.” If they are exposed to the ad three times, then that is 3 GRPs.

Gross Rating Point (GRP) is a measure of the size of an advertising campaign by a specific medium or schedule. GRP is calculated by multiplying the number of Spots by Rating.

GRPs are simply total impressions related to the size of the target population: They are most directly calculated by summing the ratings of individual ads in a campaign.

Mathematically:

GRPs (%) = 100 * Impressions (#) ÷ Defined population (#)

GRPs (%) = 100 * Reach (%) × Average frequency (#)

Two examples:

• If an average of 12% of the people view each episode of a television program, and an ad is placed on 5 episodes, then the campaign has 12 × 5 = 60 GRPs.
• If 50% view three episodes, that’s 150 GRPs.

Gross Impressions (GI)

Gross Impressions (GI) is a quantity denoting the number of GPRs in thousands. GPR (Gross Rating Point) while expressing the cumulative viewership of a specific ad in a given target group. Advertising agencies often place an order with a number of GIs with advertising space providers, usually paying for every thousand impressions.

Gross Impressions are used to track ads and serve as an easy way to negotiate terms when purchasing an ad. Unique user who have viewed the ad are counted as units in the GI, while duplicate impressions are not counted. Measurement methods may vary from company to company, so when concluding contracts, you need to be interested in the way measurement results are obtained.

• AQH x number of spots in a schedule.
• AQH persons estimate as a percentage of the population.

Share of Voice (SOV)

Share of voice (SOV) is a measure of the market your brand owns compared to your competitors. It acts as a gauge for your brand visibility and how much you dominate the conversation in your industry. The more market share you have, the greater popularity and authority you likely have among users and prospective customers.

Divide a target metric that represents your brand by the total in your market or industry. Multiply that number by 100 to get your percentage of market share for that particular metric.

Your brand metric / Total market metric x 100

Examples of metrics to calculate for SOV include:

• Organic keywords
• Pay per click (PPC) keywords
• Impressions
• Reach
• Revenue
• Mentions
• Hashtags

Pros of Measuring Share of Voice

• Perform competitive analysis on a market-wide scale. Get the big picture of how competitive the market is and whether you’re an up-and-comer or the dominant player in the industry.
• Use SOV as a way to segment your target audience. Calculating SOV is a powerful way to analyze your audience, but you can take further steps to organize this data into segments for more insight into your strengths and weaknesses. Look at your SOV within crucial regional markets, demographics and more.
• Evaluate the success of your marketing campaigns. If you launched a campaign recently, determine whether you made gains in your SOV that indicate your marketing message and tactics were effective.
• Improve future campaigns based on findings in SOV reports. Use the insight from your analytical reports to expand your reach, get involved in social conversations and ensure your voice is amplified across marketing channels.

There are numerous methods for measuring out of home media effectiveness, usually in relation to OOH viewing compared to radio listenership, television viewership, newspaper and magazine readership, and internet usage. OOH metrics often includes demographic and psychographic information to help advertisers determine who is being exposed to advertising, rather than how many people are being exposed to a message. A cornerstone of OOH metrics is Geopath’s Audience Measurement Ratings. They are a standardized, quantitative and reliable measurement that is consistent with other common media metrics.

Out of home advertising types include:

Street furniture: Street furniture advertisements place ads at eye-level with potential customers. Street furniture advertisements use infrastructure like bus stops, newsstands and kiosks, transit shelters, phone kiosks, and more.

Commuters, pedestrians, and motorists are the most common targets of street furniture advertising.

Billboards: This traditional form of media is most commonly displayed next to freeways, interstates, highways, and other heavily travelled areas where consumers can see them from passing cars or trains.

Wallscapes: Wallscapes are advertisements that use the exterior surfaces of existing buildings to promote brands. These ads may be painted on or be temporary, but they’re often quite beautiful, which makes them part of the urban beautification process. Consumers often view these advertisements as an enhancement rather than as an annoyance, which helps place the product in a positive light.

Transit advertising: Transit advertising includes wraps placed on the sides of busses, trains, subway rail cars, and taxis. Both users of public transportation and commuters within the city, as well as anyone else in the vicinity of these vehicles, are considered targets of the advertisements. Because they’re not stationary, transit advertisements may be able to reach more people than other forms of media.

Wildpostings: Cities are synonymous with flyers that promote events, concerts, and special appearances and seem to be plastered to every available surface. These advertisements are called wildpostings, and they’re a popular and low-cost way to get the word out about things like events, album releases, and appearances in urban areas.

Well, the first method of measuring OOH is also the simplest. Known as the before and after method, you simply look at sales figures before and after running the ad. If sales increased, the likelihood is that the ad is working. Compare the cost of running the ad against how much additional profits were generated and you can calculate your return on investment (ROI). This, however, is a rather crude methodology for measuring the effectiveness of your campaign and if conducted in isolation, it may not be producing accurate results.

Measuring OOH Impressions

With OOH, you can measure with great accuracy how many people will walk or drive past your advertisement and see its content. Impressions can be measured using travel surveys, data modelling and census data, amongst others.  However, today, there are even more accurate ways to calculate impressions that can provide information to advertisers in real time. This is achieved through Location Data or location based mobile data.

Traffic Audit Bureau (TAB)

OOH advertising is predominantly measured in four different ways.

Demographics: Census information and surveys are used to provide demographic and psychographic information that measures OOH advertising. The data is modelled into millions of trip paths, which helps advertisers understand who is being reached by their content.

Impressions: Impression’s gauge who your ad is reaching, and are typically provided in the form of weekly figures. Impressions measure the average number of times an individual consumer views an advertisement. Impressions include information about traffic data, which helps estimate the number of vehicles that have passed an advertisement. Impressions may also include travel surveys, data modelling, and census data.

Digital trails: Digital trails are a simple way to track OOH advertising. They include things like promo codes, social media accounts, links, and other online information that is incorporated into an advertisement. Each of these items can be tracked based on the number of people using a promo code, for example, or following a social media account.

Visibility research: Visibility research is calculated using contact zones that determine the distance from which an advertisement can first be seen and how fast traffic moves past the advertisement each hour. Another calculation is the time in which people “dwell” in an area while sitting in traffic, waiting for a train, or waiting for a bus. Visibility research helps to determine a person’s likelihood of actually noticing an ad based on their opportunity to see it.

Measurements:

Slogan Analytics

If you used a particularly catchy slogan or phrase on a recent OOH advertisement, you can use slogan analytics to get an idea of the ad’s effectiveness. Look on your website’s analytics tool to see how many times the keywords or tagline from your slogan has been entered into search engines.

While people might not be able to remember a promo code or a website, if the slogan stuck with them, they may try to find your brand by searching for the words they remember.

Hashtag Metrics

Hashtags are a great way to measure the success of a billboard or wildposting campaign. Include a campaign-specific hashtag on your ad and check for its use on different social media platforms.

If you notice people starting to engage with the hashtag, you’ll get an idea of the impressions of your advertisement. Hashtags also enable you to search across social media platforms to get an idea of the number of people connecting with your brand.

Before and After

If you’re only running one OOH advertising campaign at a time, the before and after method is an obvious way to measure the effectiveness of your campaign. Take a look at sales immediately prior to starting a campaign, and then look at sales after the campaign begins. If you notice a significant increase in sales, it’s likely due to your OOH advertising campaign.

The tricky thing about using the before and after method of measurement is that it requires you to keep all other forms of marketing the same. Otherwise, the variability may be attributable to other campaigns.

Promo Code Campaigns

Adding a promo code to a billboard or flyer helps to measure the impressions of your OOH campaign. Assign a campaign-specific promo code, discount voucher, or QR code to the campaign, and run the promo code only during the period of the campaign. This will enable you to track the number of people who enter the campaign-specific code on the website, giving you an idea of how many sales your campaign has generated.

Campaign-Specific URL

Placing a campaign-specific URL on your OOH advertisement is another way to measure impressions.

Survey

Perhaps the simplest measure of all is to give customers a short survey during or after a purchase that asks them where they heard about your brand.

If they tell you that they first learned about your company on a billboard, then you have your answer about the effectiveness of your OOH campaign.

In this era of a la carte online advertising, it’s easy to forget about the enormous power of print. After all, a campaign should not be limited to just one medium but instead diversified to appear anywhere and everywhere customers might be looking. Advertising began with ink and paper and, although it has evolved, print is still a highly-effective means of conveying a message to your intended audience.

A newspaper’s circulation is the number of copies distributed on an average day. Circulation corresponds to paid circulation that is not always the same as copies sold since some newspapers are distributed without cost to the reader. In many countries, circulations are audited by independent bodies such as the Audit Bureau of Circulations (ABC) in India to assure advertisers that a given newspaper does indeed reach the number of people claimed by the publisher.

Circulation

Circulation is a count of how many copies of a particular publication are distributed. Print circulation is the average number of copies of a publication. Number of copies of a nonperiodical publication such as a book called usually print run. Circulation is not always the same as copies sold, often called paid circulation, since some issues are distributed without cost to the reader. Readership figures are usually higher than circulation figures because of the assumption that a typical copy is read by more than one person.

Print circulation is one of the principal factors used to set advertising rates. In many countries, circulations are audited by independent bodies such as the Audit Bureau of Circulations to assure advertisers that a given newspaper does reach the number of people claimed by the publisher. There are international open access directories such as Mondo Times, but these generally rely on numbers reported by newspapers themselves.

In many developed countries, print circulation is falling due to social and technological changes such as the availability of news on the internet. On the other hand, in some developing countries circulation is increasing as these factors are more than cancelled out by rising incomes, population, and literacy.

Average Issue Readership (AIR)

Readership is an estimate of how many readers a publication has. As most publications have more than one reader per copy, the NRS readership estimate is very different from the circulation count.

Readership estimates also show:

• The demographic profile of readers.
• What else they read and do.

The relationship between readership and circulation is known as readers-per-copy.

AIR is no of copies read within the period equal to periodicity of Publication. AIR might be bumped up by a special issue that everyone goes out and buys. TR may include a lot of subscribers. They might be the same revenue and the same numbers for a given period, but TR may be more indicative of sustained readership.

Total or Claimed Reader

Not loyal readers of the publication but have consumed it in the past. Lower the gap between TR & AIR; more loyal the readership base of the publication

Sole or Solus reader

They read only 1 particular publication in that frequency. Most dedicated and loyal readers of a publication.

A particular challenge with radio is that consumers tend to misattribute radio advertising memories to other media, particularly TV. This is particularly likely to happen where there is a strong executional link between the two media and/or where there is an established history of TV advertising for the brand.

The tendency to misattribute can be offset by using matched samples of listeners and non-listeners. This way, if the increase in advertising awareness is greater among listeners than it is among non-listeners, then the effect can be attributed to radio fairly confidently even if the listeners think the advertising was in another medium. This is the approach we use for Radiogauge.

To evaluate the success of a campaign based on specific business outcomes such as response or sales, it is best to compare data across a region that receives radio advertising and a region where no radio advertising is taking place. These regions should be broadly matched in terms of populations profile and exposure to all other media activity ideally in the same TV region.

To help you track your radio effectiveness, concentrate on the following five key performance indicators (KPIs):

1. Reach

One of the greatest benefits of radio advertising is its ability to connect with large numbers of consumers. Therefore, one of the most important KPIs to consider when purchasing airtime is reach. By looking at past records and historical data, media buyers can estimate the expected reach of broadcasts in particular markets and set conversion goals.

2. Brand Awareness

Although a specific marketing message or special offer may bring consumers to your door, brand awareness is essential if you want to keep them coming back.

You can gauge the ability of specific radio spots to build brand loyalty through a range of informal and formal initiatives. For example, pay attention when clients or customers mention a particular ad when visiting your organization. More formally, you can conduct surveys of the general population both before and after the ad airs to ask whether or not they have heard of your brand. You can also measure the effects of the ad on your brand-specific social media growth.

3. Website Traffic

When it comes to measuring overall website traffic, take a longer approach to determine overall effectiveness. Compare your total number of website visitors after you began running radio ads to your total number of website visitors during the months and years that came before. Consider the effects of changes in specific website conversion rates and general increases in branded traffic (comprised of visitors who arrive at your website after typing your brand name into a search engine).

4. Gross Sales

Conduct year-over-year and month-over-month analyses to see if sales are up or down in relation to the airing of your radio ads. A radio specific discount can be an outstanding way to track its effectiveness. When consumers ask for that discount online or in your brick-and-mortar location, you will know for certain that they heard your ad spot.

5. Return on Ad Spend

After you determine your gross sales and estimate how much of those gross sales can be attributed to your radio ads, you can calculate your overall return on ad spend (ROAS) by dividing the revenue from gross sales by the total amount that you spent on the radio advertisements. This KPI will ultimately encapsulate your radio effectiveness as a whole.

Arbitron Radio Rating

Nielsen Audio (formerly Arbitron) is a consumer research company in the United States that collects listener data on radio broadcasting audiences. It was founded as the American Research Bureau by Jim Seiler in 1949 and became national by merging with Los Angeles-based Coffin, Cooper, and Clay in the early 1950s. The company’s initial business was the collection of broadcast television ratings.

The company changed its name to Arbitron in the mid‑1960s, the namesake of the Arbitron System, a centralized statistical computer with leased lines to viewers’ homes to monitor their activity. Deployed in New York City, it gave instant ratings data on what people were watching. A reporting board lit up to indicate which homes were listening to which broadcasts.

On December 18, 2012, The Nielsen Company announced that it would acquire Arbitron, its only competitor, for US$1.26 billion. The acquisition closed on September 30, 2013, and the company was re-branded as Nielsen Audio. As a condition of the deal to allow a monopoly, Nielsen must license its ratings data and technology to a third party for eight years.

Survey

Arbitron’s syndicated radio ratings service collects data by selecting a random sample of a population throughout the United States, primarily in 294 metropolitan areas, using a paper diary service 2‑4 times a year and the Portable People Meter (PPM) electronic audience measurement service 365 days a year.

The term commonly used in the radio industry for these ratings is Arbitron book, a carryover from the era when ratings were published in a softcover report that was mailed to clients. More specifically, in the diary-measured markets these reports were called the “Spring book”, “Summer book”, “Fall book”, and “Winter book”. Between these “books”, Arbitron releases interim monthly reports called “Arbitrends”, which contain data from the previous three months known as “rolling average” reports. The two interim reports would be known, for example, as “Spring, Phase I” and “Spring, Phase II”.

Arbitron recruit’s diary survey respondents to note their listening habits in a seven-day paper diary and mail it back to Arbitron. The respondents are paid a small cash incentive for their participation. Turnaround time for release of data from the end of the survey period is approximately three weeks.

After collection, the data is marketed to radio broadcasters, radio networks, cable TV companies, advertisers, advertising agencies, out-of-home advertising companies, and the online radio industry. Major ratings products include cume (the cumulative number of unique listeners over a period), average quarter hour (AQH Share the average number of people listening in a given 15‑minute period), time spent listening (TSL), and market breakdowns by age, gender, and race/ethnicity. It is important to understand that the “cume” only counts a listener once, whereas the AQH is a product of “cume” and time spent listening. For example, if you looked into a room and saw Fred and Jane, then 15 minutes later saw Fred with Sara. The “cume” would be 3 (Fred, Jane, Sara) and the AQH would be 2 (an average of two people in the room in a given 15‑minute period).

Audience measurement measures how many people are in an audience, usually in relation to radio listenership and television viewership, but also in relation to newspaper and magazine readership and, increasingly, web traffic on websites. Sometimes, the term is used as pertaining to practices which help broadcasters and advertisers determine who is listening rather than just how many people are listening. In some parts of the world, the resulting relative numbers are referred to as audience share, while in other places the broader term market share is used. This broader meaning is also called audience research.

Measurements are broken down by media market, which for the most part corresponds to metropolitan areas, both large and small.

Dairy v/s PeopIemeter

A people meter is an audience measurement tool used to measure the viewing habits of TV and cable audiences.

The People Meter is a ‘box’, about the size of a paperback book. The box is hooked up to each television set and is accompanied by a remote-control unit. Each family member in a sample household is assigned a personal ‘viewing button’. It identifies each household member’s age and sex. If the TV is turned on and the viewer doesn’t identify themselves, the meter flashes to remind them. Additional buttons on the People Meter enable guests to participate in the sample by recording their age, sex and viewing status into the system.

Another version of the device is small, about the size of a beeper, that plugs into the wall below or near each TV set in household. It monitors anything that comes on the TV and relays the information with the small Portable People Meter to narrow down who is watching what and when.

The device, known as a ‘frequency-based meter’, was invented by a British company called Audits of Great Britain (AGB). The successor company to AGB is TNS, which is active in 34 countries around the globe.

Local People Meter

Along with changing their counting methods, Nielsen also started emphasizing their sample in 2003 in reaction to census shifts and requests from some industry sectors. Nielsen’s automated Local People Meter (LPM) technology was introduced in New York and Los Angeles. The LPM improved the method of measurement from active and diary-based to passive and meter-monitored. More importantly, the LPM provides accurate measurements to particular local markets, verse a nationwide sample from the People meter. While diary-based surveys concentrated on quarterly “sweeps” periods, the industry has been pushed towards year-round measurement, due to the automated LPM system.

“Nielsen introduced the LPM as evidence of the rupturing of the network-era business model became broadly apparent, and apprehension about the future of the industry erupted on all sectors. LPM’s more accurately reported full range of what programming viewers watched, including what was observed when channel surfing, in comparison to the diary method it replaced. It allowed Nielsen to maintain established measurement practices, but do them better”.

“While Nielsen’s LPM’s presented next-day demographic analyses on television viewership in major cities, the devices led to accusations of undercounting minorities. A lot of controversy surrounding LPM’s was driven by News Corporation-funded “Don’t Count Us Out” alliance, which exploited activists’ and legislators’ foreseeable mindless reactions to any suggestion of racism”

TRP/TVR

One single television ratings point (Rtg or TVR) represents 1% of television households in the surveyed area in a given minute. As of 2004, there are an estimated 109.6 million television households in the United States. Thus, a single national ratings point represents 1%, or 1,096,000 television households for the 2004–05 season. When used for the broadcast of a program, the average rating across the duration of the show is typically given. Ratings points are often used for specific demographics rather than just households. For example, a ratings point among the key 18- to 49-year-olds demographic is equivalent to 1% of all 18- to 49-year-olds in the country.

A Rtg/TVR is different from a share point in that it is the percentage of all possible households, while a share point is 1% of all households watching television at the time. Hence the share of a broadcast is often significantly higher than the rating, especially at times when overall TV viewing is low. A low TRP can have an adverse effect on a TV program eventually leading to its closure.

GRPs/TRPs

Gross rating points (GRPs) or target rating points (TRPs) are chiefly used to measure the performance of TV-based advertising campaigns, and are the sum of the TVRs of each commercial spot within the campaign. An ad campaign might require a certain number of GRPs among a particular demographic across the duration of the campaign. The GRP of a campaign is equal to the percentage of people who saw, multiplied by the average number of spots that these viewers saw. Targeted Rating Points are a refinement of GRPs to express the reach time frequency of only the most likely prospects. For example, if a campaign buys 150 GRPs for a television spot, but only half of that audience is actually in the market for the campaign’s product, then the TRP would be stated as 75 to calculate the net effective buy.

Gross rating point, a standard measure in advertising, it measures advertising impact. It is a percent of the target market reached multiplied by the exposure frequency. Thus, a program which advertises to 30% of the target market and gives them 4 exposures, will have 120 GRP.

GRPs as a measure has some limitations. People like to think of it as a measure of impact, but that is really overstated. Impact should measure sales; these measures exposures, which is in fact assumed not actual exposures.

Basics of TAM (television advertising measurement):

Universe: Universe is the total or actual number of people in a defined target audience.

Program Reach & Time Spent

Reach: Reach is the number of individuals from the universe who are exposed to the medium or vehicle.

Reach is normally expressed in terms of % (percentages)

Calculation of reach:

If universe is: 1,000,000 individuals (this is approx. data, it is usually defined through sampling through people-meter):

For a single episode of a program (30 minutes or 1 hour) If out of above 1,000,000 of individuals 600,000 saw at least 1 minute of programme then:

Reach = (600,000/1,000,000) x 100

Reach = 60%

Cumulative reach

Cumulative reach: The audiences accumulate over the time

• The number of individuals within the TG who are exposed to the medium or vehicle over a certain period of time
• Total time = Total average minutes (universe) x Universe
• Total time/reach = Avg minutes viewers
• Net reach

Net Reach

Net reach is the summation of all audiences who have been exposed to the vehicle and excludes the duplication of the viewership.

Stickiness Index

An engagement metric indicating the degree to which a program is viewed. The percent of program that has been watched. The greater the percentage of the program viewed compared to all programs of the same duration in a certain time period, the greater the stickiness index.

Sticky content refers to content published on a website, which has the purpose of getting users to return to that particular website or hold their attention and get them to spend longer periods of time on this site. Webmasters use this method to build up a community of returning visitors to a website.

Examples are chat rooms, online forums, webmail, Internet games, weather, news and horoscopes.

Sticky content is also sometimes called sticky tools or sticky gear, and websites featuring sticky content are often referred to as sticky sites.

Product Stickiness Ratio is the ratio of (Daily Active Users) DAU and (Monthly Active Users) MAU. It is one of the widely used metrics for product engagement and tells us how sticky a product is. It was popularised by Facebook and was used by it to understand the true stickiness of the Facebook app.

Daily Active Users (DAU): DAU is calculated as the total number of unique users who use your product on any given day. In other words, DAU is the total count of users who use your product at least once in a day.

Monthly Active Users (MAU): MAU is calculated as the total number of unique users who use your product in a month. In other words, MAU is the total count of users who use your product at least once in a month.

DAUs and MAUs are standalone absolute numbers which can’t be compared for various businesses because the definition of active users varies for different companies. However, DAU/MAU is a holistic metric that speaks about product success. Since it is a percentage, it can be compared for various companies as well to understand their success in reaching their user engagement goals.

Marketing Team:

To segment the users on the basis of DAU/MAU ratio and increase usage of for the segment with low DAU/MAU ratio through strategies such as push notifications, educational email campaigns etc.

To create a lookalike audience of the segment with high DAU/MAU ratio since this segment has the least likelihood of churn.

Retention Team:

To pitch plan upgrades to customers by segmenting them on the  basis of DAU/MAU ratio.

To create a retention plan for customers with low DAU/MAU ratio since customers with low average DAU/MAU ratio have higher likelihood of churn.

Ad Viewership

It refers to the number of viewers that have the opportunity to view an ad during a given time period. Advertising sales executives usually have extensive data about the reach of a show’s or network’s programming, which they then use to make decisions about when and where to air their commercials. In addition, reach is a primary component in calculating gross ratings points, which is a metric often used to evaluate broad TV ad campaigns.

Measuring Reach

The Nielsen company rates the number of viewers watching TV programs for networks, and also breaks the results down demographically so businesses have more detailed information about who those viewers are. Nielsen measures audience through different survey methods, including sophisticated set-top boxes, and categorizes results based on demographics like gender, age, race and income. Nielsen then distributes to TV networks and advertisers data on reach, including details like the percentages of the viewers in specific demographic groups, weekly and monthly averages, and the estimated total number of viewers. Business owners can usually get this information from advertising sales representatives or ad agencies.

Gross Rating Points

Advertisers, media buyers and marketers evaluate ad campaigns by looking at both reach the medium offers and the frequency at which the viewer sees the ad. The tool they use are “gross rating points,” which are calculated by multiplying the audience reached by the frequency of its exposure to the message during a given period. According to Digiday, a rating point is one percent of the potential audience, meaning a show that has a rating of 10 points gets 10 percent of the viewers. So, if a TV ad has a reach of 30 percent of its target audience, and the ad shows four time, the ad campaign has 120 gross ratings points.

Effective Reach

Another way to measure the usefulness of an ad is to measure the effective reach, which tracks the percentage of the possible audience that sees an advertisement and how often that advertisement is viewed. Advertisers use effective reach to judge the quality of the exposure to the ad. Ideally, an advertiser wants many people to see an ad at least a few times. However, if the frequency is too high, the ad is thought to produce diminishing returns. Some advertisers believe an ad must be seen a few times before it becomes effective and must balance frequency with the risks of overexposure.

Using Reach

Advertisers use information about reach to target the consumer demographics or groups that are most likely to buy the product. For instance, a toy maker would want to air ads during children’s programming rather than on late-night talk shows. To make this task easier, in addition to gender, race and region, Nielsen separates ratings into the 12-17 age group, 18-49 age group, and the 55 and older age group. For larger ad campaigns, marketers often test the ad with focus groups before broadcasting it or conduct surveys after its broadcast to determine its effectiveness.