Distribution in the Advertising Industry

psychographic data information that links demographic categories to personality characteristics of an audience

in-store media the print and audiovisual ads that people see when they walk into retail spaces

cost per thousand (CPM) the basic measurement of advertising efficiency in all media; it is used by advertisers to evaluate how much space they will buy in a given medium, and what price they will pay

environment the media material surrounding the ad

visibility putting the ad in a place where it is most likely to be seen

pod a group of television advertisements in succession

gatefold a foldout from the back or front cover of a magazine or book

Creating a series of ads and spending money to test them would be totally useless if the ad agency had no Idea how and where to distribute them. Deciding how to distribute ads has been affected by improvements in technology. Because of cooperation between ad agencies and media firms, ad practitioners can now actually send finished print and television ads directly to media outlets by satellite. In some cases, print ads can be sent in digital form directly to the computers of the magazines or newspapers in which they will appear. From that standpoint, distribution of ads is constantly getting easier.

Because media fragmentation has dramatically increased the number of ad vehicles, however, deciding where to place advertisements is not getting easier; instead, it is becoming more and more challenging. Making these decisions is the work of an agency’s media planners. To get an idea of the challenges they face, think of where you would place Geico's TV commercials, and also Web ads that aim to convey the same message about the company to young adults.

The short answer is that planners would choose media that attract the young adult audience that Geico wants to reach with the commercials. But does this mean that any channel or website that reaches a lot of 21- to 34-year-old males is acceptable? What general criteria do ad planners use when they decide on media? The answers are important, as purchasing media can be expensive. If an ad agency uses its media- buying budget to advertise in places that do not reach the target audience, or in places that reach that audience along with many other people who are not relevant to the ads, the advertiser will be wasting a lot of money. If Martin’s planners and Geico’s media-planner and buyer, Horizon Media, did that and Geico executives found out about it (as they undoubtedly would), both firms would lose an important client.

To avoid such disasters, media planners track computerized data about the number and kinds of people that various media outlets (specific magazines, radio stations, or TV networks) reach. Much of this information about individual media outlets is collected in syndicated studies by audience research firms such as Nielsen (for television and cable) and comScore and Nielsen NetRatings (for the internet); the Traffic Audit Bureau and Nielsen Outdoor (for billboard advertising); Arbitron and RADAR (for local and network radio); Audit Bureau of Circulation (for newspapers and magazines); and Simmons and MRI (for magazines). Sometimes the planners pay attention to custom research findings presented to them by individual media firms that want to impress them with further details. The custom research may add to the demographic data that syndicated research provides; for example, it might explore the religious affiliations or occupations of an audience. The research might present psychographic data, information that links demographic categories to personality characteristics of an audience—for instance, whether they are "materialistic” or “confident” or people who want to lead rather than follow.

The research might also provide details about the lifestyles of the audience that could impress potential advertisers: how many vacations they took last year, what cars they drive, whether they play golf regularly. Seventeen magazine executives, for example, might commission research about how many of their teen readers have begun to use cosmetics or go to the movies each week or own cars. They would present these data to potential cosmetic, movie, and car advertisers in the hope of convincing them to include Seventeen in their media plan—that is, in the list of media outlets in which they advertise their products.

Outdoor and in-store media are of increasing importance for some marketers, and an insurance company such as Geico may be one. Outdoor media encompass a great variety of stationary billboards and signs as well as moving media such as buses and trains. The term in-store media refers to a raft of print and audiovisual ads that people see when they walk into retail spaces. In a growing number of supermarkets, a company called MediaCart sells ads on grocery carriages. Supermarkets show videos and ads at checkout too. In stores like Wal-Mart and Best Buy, PRN Corporation (owned by Thomson) sells ad space on checkout screens. Captivate Network, a company owned by Gannett, sets up office-building elevators with screens that run ads along with entertainment, weather, or news. AccentHealth, a company owned by Discovery Holdings, has TV screens with CNN clips and targeted ads in more than 10,000 doctors’ offices across the country. And supermarket firms fill their stores with the audio announcements of sales, shelf signs, floor mats with ads, and video screens showing ads at checkout. The locations for ads seem to be boundless. To hype its shows during 2007, CBS even had a company stamp 35 million supermarket eggs with its trademark “eye” logo, as well as the names and logos of the programs in its fall television line-up.

In evaluating a media outlet, media planners examine syndicated and custom demographic, psychographic, and lifestyle research to decide whether the audience segment they are aiming at can be found at that outlet. If it can, the planners then ask the following questions:

• What is the outlet's reach with respect to (ad planners use the term “against”) the target audience? That is, what percentage of the entire target audience (say, teenage girls) will the outlet reach?

• Considering the costs of running an ad there, how efficient is the outlet in reaching that audience compared with other outlets?

In studying Seventeen for a makeup client, ad planners may find that it sells 22 million copies, the overwhelming percentage of which are sold to teenage girls. Moreover, Seventeen provides lifestyle research that contends that many of these readers are trying makeup for the first time. Just as important, the planners leam that, although the cost of buying space for a four-color, full-page ad in Seventeen is similar to the cost of buying such an ad in women’s magazines with larger circulations, the cost per thousand (CPM) of teenage girls is quite a bit lower. That is because of the selectivity of the magazine: magazines such as Glamour reach lots of teenage girls, but an advertiser would not be able to target an edition directly to them, and so much of the ad money would be wasted. Because Seventeen reaches virtually only teenage girls, the CPM of the target audience is lower.

This factor makes Seventeen an efficient buy compared with women’s magazines, but how does Seventeen compare with Teen Vogue, for example, or with MTV? Ad planners have to study their own research, their syndicated research, and the research presented to them by the magazine and cable companies to make a decision. They might decide to see whether one or another of the teen magazines would give them a discount for the bulk of the makeup ad money. Or they might discuss the pros and cons of splitting their ad purchases equally among major teen periodicals and teen-oriented cable networks.

Considerations such as these constantly occupy media planners. They also worry about the placement of print ads, TV commercials, and Web ads. Placement concerns involve the environment of the ad as well as its visibility. Environment refers to the media material surrounding the ad. If you’re advertising lipstick, you might want your ad placed in the vicinity of articles or TV programming that portrays good-looking people who might well be wearing makeup. You don’t want it placed in the vicinity of articles celebrating a grunge look that avoids cosmetics. Visibility simply means putting the ad in a place where it is most likely to be seen. In a group (or pod) of TV commercials, the first commercial is likely to be the one that is most noticed. Similarly, the back cover of a magazine is a good place to be; a foldout from the back or front cover (called a gate- fold) may draw even more attention.