Since this section of TelevisionWeek is subtitled “The Idea Exchange for Planning TV Spots,” it strikes me that it should, indeed, talk about how to plan spot television. While the subject is far more complex than can be adequately covered in 900 words, a brief discussion of its main components can give a roadmap to the process.
Ultimately the spot television plan says the advertiser will buy X target rating points in selected dayparts on certain weeks in a given list of markets. How do we get to that point? The planner must first decide between national and local media. Assuming spot TV will be used, the next step is to determine which markets to include and how much weight to place in each. The following explores these core processes.
National vs. Spot
Spot TV is the obvious choice for local and regional advertisers. But for brands with national distribution, planners must first decide whether to use national or local television. The question is, “At what point does it make more sense to use national television than to add spot markets?”
In the classic analysis, planners rank markets by size and obtain their cost-per-rating-point (CPP) from the SQAD database or the broadcast buyers. Crossover occurs at the point where the cumulative CPP of the spot markets equals that of national television. Every market beyond that point is essentially free.
While this made sense in the past, when the comparison was limited to network versus spot prime time, today’s national television would consist of a mixture of cable, syndication and broadcast network, weighted by their expected proportion of the buy. The analysis could also be done separately for each venue. In spot, because of prime’s high cost and limited inventory, planners use a mixture of local dayparts such as early news, late news and prime access that build reach at a rate comparable to prime but at a lower cost. These efficient dayparts make spot an attractive medium in a longer list of markets.
Determining the List
For some products, the market list is determined by regional sales patterns. Cold-weather markets will get spot TV for winter products such as snow tires. Insecticides run in markets with heavy mosquito or fly infestations. Products that appeal to ethnic groups place spot in markets with high ethnic populations.
Most brands use a base of national television with supplemental spot weight in key markets. A number of factors can be used to determine the list. Brand and category development indices (BDI and CDI) show each market’s relative strength for the brand and category. BDI is calculated as a market’s percentage of a brand’s sales divided by its percent of U.S. households. CDI uses the same math applied to category sales.
The BDI/CDI snapshot can be supplemented by trend information reflecting each market’s year-to-year change in volume and share, indexed to the average market. Some planners consider media efficiency expressed as impressions per dollar indexed to the average market. (With this math, the higher the index the better.) Many other factors can be considered, depending on the brand’s marketing strategy and the availability of data.
Once all the factors have been selected, they must be consolidated into a single number. In our example, we judgmentally assigned a weight to each factor and then ranked the markets by their weighted index. Those with a score above 110 were selected to receive spot TV. We judgmentally added San Francisco, Philadelphia and New York because of their size, even though their indices were below the 110 cutoff.
Setting GRP Levels
Planners might choose to run the same weight in each market at a level determined by the reach/frequency objectives and the number of weeks the brand must be on-air. A common alternative is to group markets into tiers according to their weighted index.
In our example, markets with indices above 150 (Group 1) would get the most gross ratings points; Group 2 (markets with indices between 120 and 150) would get a middle level; the remainder would fall into Group 3 and get minimum spot TV weight.
For seasonal products with a fixed number of weeks on air, the higher index markets would get more GRPs. For products with flat sales over the year, these markets would get extra weeks of support to maximize continuity.
As this brief example shows, spot television planning is highly judgmental. The planner’s role is to provide an objective framework for the process. The advertiser will take this recommended plan and adjust it to reflect a variety of other (sometimes confidential) considerations, including sales force strength, current or expected competitive activity and even the desire for exposure in a key account’s home market.
Designated market areas may be added, deleted or moved from one group to another according to the advertiser’s needs. Planners should expect this and be ready to adjust the plan as necessary to meet the marketing objectives. n
Roger Baron is senior VP, media research director, Foote Cone & Belding.