Report 66: Ehrenberg-Bass Institute Key Media Principles

Byron Sharp, Kellie Newstead, Virginia Beal, Arry Tanusondjaja and Rachel Kennedy July 2014

there are few of them and they have no consumers who do not matter, who are of activations are very likely to have worked
INTRODUCTION great capacity to buy more than they no value, has been vastly over-stated. for heavier buyers as well.
This report provides some best-practice media principles based largely on already do. Instead, brands grow (and
Total reach of category buyers is a key See Report: 31, 41, 42, Ehrenberg 1988,
Ehrenberg-Bass Institute research. This research stretches over 40 years and decline) largely due to changes in buying
media evaluation metric for brands that Stern and Ehrenberg 2003, Harrison 2013,
amongst their many light buyers. Such
has been released in reports for our Corporate Sponsors, scientific journal are interested in maintenance and growth. and chapters 4 and 5 of “How Brands
growth is reflected in a brand’s
articles, and books (e.g. Goodhardt et al 1975, 1987, Barwise & Ehrenberg Grow”
penetration metric as many customers This reach recommendation applies also
1988). Many findings have held across countries and time, and have been for seldom purchased categories such as
move from not buying during the period
replicated in the past decade. More recently, our media research has expanded cars and financial services. The brands in Total reach of category
to buying just once. For maintenance or
to investigate online and social media. these categories need to reach large buyers is a key media
growth a brand’s advertising must reach
These are the current ‘best practice’ evidence-based principles along with its entire customer base. numbers of people who are currently ‘not evaluation metric for brands
in the market’. Because when they do that are interested in
recommendations for purchasing and scheduling advertising space. These All people who buy the category are
enter ‘buying mode’ they typically consider maintenance and growth.
recommendations fit with what is known about how brands grow (see Sharp potential buyers of your brand, and it is
2010, 2013, 2014). very few brands, and it is astonishingly
not possible to become a large brand
difficult to catch these buyers if the brand WHERE TO ADVERTISE :
without recruiting many of the category’s
has not established mental availability
lightest buyers. So advertising should
beforehand, perhaps many years THINK BIG
TARGET THE MARKET Traditional marketing theory encourages “target the whole market”, that is, all
beforehand. Short-term activations like
MEDIA DECISIONS, EFFECTIVE ADVERTISING

consumers who buy from the category, or 2. Look first to BIG media
skewing spend towards the brand’s most search advertising and cookie targeting
1. Media investment should aim frequent buyers, or heaviest category could be reasonably considered potential Media that deliver large audiences are
are important nudging mechanisms but
to reach all category buyers, buyers (‘golden households’ or ‘super category buyers. usually best for reaching all category
work best for brands that already have
from the very heaviest to the consumers’), however this is not a growth Category buyers often turn out to be established mental availability. buyers without having to waste money
very lightest strategy. Reaching light buyers is essential more diverse than expected. Even very on high levels of frequency in order to
for both brand maintenance and growth. Lighter buyers are harder to talk to than achieve the reach. The advantage of big
The advertising budget should be spent highly priced luxury goods need to reach
heavy buyers. They are less engaged media, like high rating television
in a manner that delivers the most reach Any brand’s customer base is made up quite broad audiences – more luxury
with the brand, and the category, and as channels and websites, is that the cost
for every week, month, and quarter of mostly of light buyers, with far fewer goods are bought by people who are not
a consequence, have less well-developed per person reached is usually lower and
the year. With due allowance for the medium buyers and only very few heavy millionaires than are bought by
mental structures devoted to the brand. the cumulative reach far greater than
quality of the exposures (i.e. a text ad on buyers (following a Negative Binomial millionaires (simply because there are
So it is harder for them to ‘take in’ a smaller alternatives. Also, media with
a busy web page is not equal to 30 Distribution). Heavy buyers are, by many more non-millionaires). The concept
brand’s advertising, and easier for them small audiences simply cannot deliver
seconds of video1). definition, worth more per customer, but of wastage in media planning, i.e.
to mistake ads for a rival brand. This complete market reach, and certainly not
needs to be considered carefully when quickly and not without (charging for)
1
To make these comparisons between the likely sales impact of different exposures (e.g. a 30 sec TV ad compared with a 30 sec of sound-only crafting advertising. The good news is hitting the same consumers many times.
radio ad) we currently recommend pooling management judgement. If 30 second TV ads are the main sort of spot you buy then set this as your that if you reach these people, with
benchmark index of 100, then ask managers to independently rate other media spots you are thinking of including in your mix, for example 30 The highest reach media vehicle for the
interesting well-branded advertising, your
second radio spots might be rated at 15, website banner ads might then be rated as 10, and so on. The results of this survey can be used with (a) particular product category or market
cost per reach and (b) % of OTS that result in actual exposure together to make media buying decisions.

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 Report 66: Ehrenberg-Bass Institute Key Media Principles

should be the foundation media for any A media schedule must reach light different environment (outdoors for 4. Be wary of media that claims Specialist magazines are different in that
multi-media campaign. For consumer viewers if it is to achieve high reach. Light example); or people who are accessible at low wastage and tight targeting more of their readers are genuinely
goods this is often television, and viewers skew toward viewing TV during different times of day (e.g. shift workers). interested in that genre/topic and may be
evidence shows that campaigns including peak times in the evening and weekends. Many media options look attractive from a particular demographic (e.g.
Use additional media that increase because they claim ‘low wastage’; heavier
TV in their multi-platform media mix Consequently they make up a higher magazines on fly-fishing are rarely bought
cumulative reach. buyers of the category (or even just
outperform those that don’t. Even ‘old proportion of audiences of high rating by people to who don’t fish whereas all
media’ like newspapers that have seen programs. Scheduling during prime-time Young people are generally harder to buyers of the brand!). This can be much sorts of people end up watching a bit of a
declines in audiences in recent years, still helps to reach these light viewers more reach with most media, this has been less attractive than it sounds because TV program on fly fishing (if it is on while
deliver considerable reach in many cost effectively if reach has to be gained true for many decades. Young people are such buyers are often the easiest to reach they scanning for something to watch)).
much lighter readers of print, as they with any media. Even though these
markets. The lesson here is to not make quickly. Fortunately, light viewers aren’t However, in spite of this targeting,
were before the arrival of the internet. heavier brand buyers are valuable they
assumptions but carefully check the consistently light, i.e. the proportion of specialist magazines usually deliver low
Young people also watch less TV, again, don’t warrant extra exposures as they are
audience data for your market. light viewers stays the same at an reach, even into their target.
about twice as likely as light buyers to be
aggregate level, but the people within this is not new. They are heavier users of
The total time spent consuming able to ‘take-in’ and thus recall advertising Another consideration is how well the
the group varies from week-to-week and mobile devices but for many different
commercial media has increased for the brand. They are also typically the magazine cumulates reach over time,
even from day-to-day. This means that uses, most which do not involve viewing
somewhat. However, there are far more consumers who are fans on Facebook, some media will do better than others.
employing a continuous scheduling advertising. The best way to reach them seek out information on websites and so
media, so audiences have fragmented, Specialist magazines that largely sell to
strategy over time will eventually reach is often by advertising in the highest on, again making them easy to reach.
which makes popular channels, programs, subscribers are unlikely to cumulate reach
most ‘light’ viewers. rating TV programs in the early evening.
magazines even more valuable as at a reasonable rate, so buying advertising
We recommend carefully researching how ‘Earned media’ (e.g. a Facebook fan base,
advertising spots that can quickly reach Data: UK, USA, Australia, 1974, 2001, or loyalty club members) in particular space in this magazine will end up talking
well the likes of social media, mobile at
vast audiences have become rarer. 2002, 2006 and Australia, 2010 skews to existing loyal buyers of a brand to many of the same consumers (a fraction
point-of-sale, and cookie targeted
See Report: 15, 49, 55, Planning for and is not suited to building substantial of the market) over and over again; a high
Plan your main media carefully to gain campaigns are at reaching and selling to
MEDIA DECISIONS, EFFECTIVE ADVERTISING

Synergy Report (written in conjunction reach. Be careful if your focus is on frequency strategy that neglects the
maximum reach for every dollar you young people before they take a major
with CNBC) earned media (it is occasional icing on majority of category consumers.
spend. Care must be taken even with role in your media strategy.
the cake): instead manage reach and
large reach media such as TV. TV viewing The more niched a medium is, the worse
3. Then add complementary media If you have evidence that one media is weigh up the costs versus reach return.
levels follow a highly skewed pattern: it will be at cumulating reach. It will reach
more sales responsive that others
there are many light viewers and few Use your first media channel to deliver Data: Australia, UK, 2006, 2010 and the same audience over and over.
(e.g. if advertising via radio or pre-rolls
heavy viewers (i.e. most viewers watch your most cost effective reach, and most Australia, USA, 2012
consistently nudges more sales than TV is a bit more niched that it was, but
less than the average). It is much easier of it. If you have a small budget you may See Report: 55, 57, 60
equivalent exposure to outdoor less than most people realize. Single
to reach heavy viewers (people who not need to look at other media.
advertising), then this knowledge genre (or niche) TV channels can attract
spend a lot of time at home, e.g. retired, However, those with larger budgets will 5. Avoid ‘niche’ media - they’re
needs to be incorporated in planning audience profiles somewhat different
unemployed) simply because they watch find that above a certain spend level usually just small and take time
your media mix. from mainstream channels, however not
so much TV. This presents a trap for reach becomes increasingly expensive, to cumulate reach to the same degree as specialist
unwary advertisers; it is easy to pay for above this point other media gain in Data: Australia, UK, USA, 2010
Low reach, niche media vehicles can magazines because TV channels are
many exposures that reach the same attractiveness. Other media included in See Reports: 55, 56
present an illusion of cost effectiveness. typically sold to viewers in subscription
people (skewing to the heavier viewers). the mix should reach those consumers
For example, a targeted pet magazine bundles. Preferences for the same genre
Take care to measure campaigns on reach, who are difficult for your main media to
Use additional may have a reasonable CPM for reaching do cluster together but audiences are
not GRP/TRP as they become inflated by reach: for example light users of TV; or
media that increase pet owners, it will claim low wastage, rarely strongly segmented. For example,
high frequency to heavy viewers. people who are more easily found in a
cumulative reach. and a highly engaged readership. 45% of the viewers of children’s channels

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 Report 66: Ehrenberg-Bass Institute Key Media Principles

are actually adults. When planning media be people who missed this week’s be worthwhile to pay a premium for a or a week, or month). So, even with
spend, genre specific channels should episode. Therefore, advertising (or low clutter environment. different executions, avoid bunching Every week of the year you
usually be judged on their reach metrics sponsorship) in the same program each advertising exposures together. should spend about 2%
Data: Australia, 2002, 2007
not on having special or more engaged week will inevitably reach new viewers: (1/52th) of your advertising
See Report: 50 Another reason for this strategy is that
audiences. cumulating reach. budget, with due allowance for
when exposures are bunched together
seasonal changes in category
We see similar patterns when we look at The main problem with program WHEN TO ADVERTISE closely in time viewers tend to screen
demand and media costs.
viewers of programs. We might expect sponsorship is that many exposures occur them out more (as they avoid the tedium
that people who like drama series or within the same 30-60 minutes of that 8. Spread out your advertising - of repetitive stimuli); resulting in
sports watch mostly these sorts of evening. It’s not known ( probably don’t burst consumers being less attentive, which 9. Look for unique reach
programs but, while there is some unlikely) that these less effective Spending all the budget in a short period reduces mental processing of ads,
evidence of clustering, overall viewers exposures are compensated for by resulting in fewer memories. Unique reach is valuable, though not easy
leaves long gaps with no or little to find. You have to look carefully.
still seek variety in their viewing. There promises of audience engagement – advertising. Instead spread advertising A further key metric to guide your media
are some differences between research is needed. out over time. For example, at its simplest Media is usually priced in terms of
buy is the length of the gap between
demographic groups in terms of if your budget allows for 12 TV spots, then exposures (e.g. CPM). These exposures
Data: UK, USA 1979, 1984, 1985, 2002, 2003 exposures: the aim is to minimise the
preferences to program genres, for these spots should be spread out over the are made up of reach (how many people
See Report: 37 gap between exposures for even the
example men spend more time watching year, one aired per month. This continuous were exposed) and frequency (how many
lightest viewers.
sport than women however, the majority 7. Should you pay more for less scheduling strategy minimises the gap times they were potentially exposed).
of any demographic usually still watch the between a consumer making a category Spreading advertising over time also Pure reach means everyone receives only
clutter? lowers costs. A media brief that demands
big programs and big channels. This purchase and them last seeing your one exposure. All media find it hard to
suggests that scheduling for only sport or When exposed to advertising in less advertising. As a consequence you are high reach within a short time period will deliver additional reach without a lot
only drama is unlikely to generate high clutter, viewers typically remember a likely to be fresher in more people’s minds. pay a high price per reach point. By far more frequency, for example the Monday
greater proportion of the ads. However, the cheapest way to gain reach is to
MEDIA DECISIONS, EFFECTIVE ADVERTISING

reach. Scheduling for high reach is often issue of a newspaper delivers pure reach
best done by ignoring program genre. paying a premium to air an ad in a very A simple rule is that every week of the spread advertising dollars over a longer that week, but the Tuesday edition delivers
low clutter pod may not be worthwhile, year you should spend about 2% (1/52th) time period - this will deliver more reach little extra reach with most readers being
Data: UK, USA, 1984, 2003 and USA, UK, of your advertising budget, with due
as halving clutter (which is likely to mean for less frequency (and hence a greater the same people as on Monday.
Australia, 2003, 2010 allowance for seasonal changes in
paying double) does not produce double ROI on the budget).
See Report: 15, 18, 49, 57 category demand and media costs – i.e. Look first for media that delivers the
the effectiveness.
spend a bit more in weeks when Data: 1100+ real world and lab studies highest reach per dollar/pound/Euro/Yen
6. Avoid program sponsorship While it’s ideal to minimise clutter around category sales are higher and spend less over 20 years (see meta analysis Simon – with due allowance for quality of the
unless a substantial discount your advertising, in practice the best in weeks when media costs are higher. and Arndt 1980 and Taylor, Kennedy and medium (e.g. video vs plain text). Then
is offered option is to focus mostly on cost effective Sharp 2009), Jones 1995, Ephron & Heath add media that reach as many additional
reach and ensure you have well branded Try to avoid consumers receiving multiple 2001 category buyers as possible; increasing
Program sponsorship, because it usually ads that people want to watch in order to ad exposures within a short time period See Report: 57, Planning for Synergy cumulative reach cost efficiently. The
involves placing substantial amounts of achieve impact despite the clutter. (e.g. a single evening). Traditional claims Report, Jones (1997) total media campaign should aim to
advertising in the same place, is a poor that consumers need to see an ad three
However, this recommendation may not maximise unique reach (i.e. reaching a
way to cumulate reach. However, times for it to be effective are wrong,
apply for very new brands, with no higher proportion of all category buyers
program sponsorship should not be the biggest incremental change in A key metric is the length of
existing memory structures. Such brands once) and minimise frequency. It should
entirely dismissed as week-to-week likelihood to purchase occurs when the gap between exposure
are likely to be particularly vulnerable to not be assumed that adding a media
repeat viewing levels are low (e.g. 30%). exposure increases from 0 to 1 within a & purchase: aim to reduce
advertising clutter in which case it may vehicle will achieve extra reach, adding a
Half or more of next week’s audience will particular time period (e.g. an evening, the gap for all buyers.

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 Report 66: Ehrenberg-Bass Institute Key Media Principles

media can provide more duplicated 2. Spreading advertising across 11. Spend more when more buyers HOW MUCH TO SPEND dangerous for larger brands (above 13%
audience than new audience (see commercial networks and channels - are buying share) to underspend by 4 share points,
ON WORKING MEDIA
Romaniuk, et al 2013). this delivered up to 8% higher i.e. risking sales declines ( Jones, 1990,
Advertising is more effective closer in Budgeting is a forecasting exercise –
cumulative even for longer Hansen & Christensen, 2005).
There are varying media scheduling time to the point of purchase. So if a
campaigns. forecasting how much spend is needed to
strategies that can be implemented to category sells more intensely for a period (B) Spend about 10% of gross
maintain or grow sales by a particular
enhance reach for a set budget. In the 3. Road-blocking (placing a spot on of time (e.g. Thanksgiving), then we profits on advertising
amount. Two key principles of good
first instance, if the advertising campaign each commercial TV channel at should be spending more to reach all
forecasting are to: 1) be conservative and Another simple budgeting guide is to
is not affected by seasonality or time, roughly the same time) - this those buyers in the period right before 2) use multiple data sources, ideally from relate advertising spend to what will
lengthening the campaign with lower delivered at least a further 2% they purchase. This said, the memories
different perspectives. We recommend generate most profit within the time
advertising weight will deliver greater cumulative reach and can achieve high that advertising refreshes do linger, so if averaging the 3 approaches outlined period. Here the brand should set its
unique reach. Having longer campaigns unique reach, fast. media spots in the lead up to peak below to arrive at a final media budget advertising budget as its gross profit
means there is a greater probability that period(s) are more affordable it is
These strategies can be implemented for figure. Drawing on knowledge from multiplied by their advertising elasticity,
light users of the medium will also see advisable to spend more during these
comparable budgets, which debunks the media experiments will also be useful this is the budget optimization theorem
the advertising. In TV scheduling times. Maintaining some continuity
belief that further unique reach can only (ideally linked to sales response). as determined by Wright (2009). Research
experiments in Australia and the UK this across the year in most categories is likely
be gained by spending more money. suggests that a typical advertising
lengthening strategy consistently delivers to still be needed because different (A) To maintain sales brands need
Data: USA, Australia, 2006, 2007, 2009, elasticity is about 0.10, but they do vary
3% greater cumulative reach for the buyers come into the market at different a share-of-voice appropriate for
campaign, compared to the original 2012 UK 2008, 2009, 2010 Greece, Japan, e.g. for new vs. established brands; and
times. Experimentation is strongly their market share
Russia, South Africa, South Korea, Spain, by market (Europe generally higher and
campaign, with equivalent spots. For encouraged to determine the right
seasonal campaigns or for advertising Taiwan 2009, 2012 There is a simple, but non-linear, America lower).
balance to maximise sales.
that is time sensitive, further unique See Report: 55, 57, Planning for Synergy relationship between share-of-voice and Gross profits are the contribution to
MEDIA DECISIONS, EFFECTIVE ADVERTISING

reach can be delivered by applying the Report, Ephron, 1997 (Admap), Romaniuk, Once again, a simple rule is that every market share. This suggests that for overheads after direct costs are deducted
following media scheduling tactics: Beal & Uncles 2013 week of the year you should spend about maintenance of share, smaller brands
from the sale price. Advertising
2% (1/52th) of your advertising budget, need to spend slightly more than expenditure, as a % of gross profit,
1. Spreading the advertising across 10. Use 15 second ads with due allowance for seasonal changes expected given their size, while large
different times of the day throughout should be at a level where net profit can
in category demand and media costs – i.e. brands can survive with a share-of-voice
Research suggests that 15 second TV ads no longer be improved by changing
the campaign - this delivered an spend a bit more in weeks when slightly less than their market share. This
average 9% further cumulative reach generate 80% of the recall of one 30 expenditure up or down; that is, the
category sales are higher and spend less is because larger brands have greater
second ad. Given the cost advantages of marginal return to change in advertising
in the UK, a television market that is in weeks when media costs are higher. physical and mental availability, so while
heavily fragmented. This also means 15 second spots it is getter value to expenditure is zero. This means that a
In highly seasonal categories, reach of they have to spend more to maintain brand with a negative gross profit should
that if the advertising is screened in schedule two 15-sec advertisements at
category users preceded by a recent their larger sales, each dollar they spend not advertise - as every unit they sell will
selected television channel(s), further different times rather than one 30-sec ad.
is a little more effective.
reach can simply be gained by Being seen more often, by more people exposure is also key to maximise. increase their losses. There will be
is better than being seen for a longer Most of the evidence regarding this situations however when this is a
adjusting the ad placements in
different times across the day. time by fewer people. Try to reduce your non-working pattern comes from established consumer deliberate business strategy (e.g. to build
media. Spend you dollars on brands in developed markets. The scale and thereby improve profit
Data: USA, Australia, 2007 margins), which brings us to the third
reaching more consumers with evidence suggests that brands with less
See Report: 48 approach to setting an advertising
fewer better advertisements. than 13% market share should spend to
achieve a share of voice at least equal to budget.
their market share; and it is even

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 Report 66: Ehrenberg-Bass Institute Key Media Principles

Data: Wright 2009; advertising elasticity For an independent audit

Recall." Journal of Advertising Research 53(1): Taylor J., Kennedy, R. and Sharp, B. (2009)
from 50+ studies from 1996-2008 (see 181-185 “Marketing generalizations about advertising
of your media plans or to
convex sales response function: is once really
meta analysis Sethuraman, Tellis and work out your ad budget Jones JP (1995) “Single-source research begins to
enough?” Journal of Advertising Research, 49(2),
Breisch 2011), Danaher et al., 2008 contact us:
fulfill its promise” Journal of Advertising Research
198-200
[email protected] Jones, J. P. (1990). Ad Spending: Maintaining
(C) Cost from the bottom up for Wright, M. 2009. A new theorem for optimizing
Market Share. Harvard Business Review, 68(1),
the advertising budget. Journal of Advertising
the task required of the 38-43
Research, 49, 164-169
advertising (Task Objective) Jones JP (1995) “Advertising exposure effects

This bottom up approach involves costing REFERENCE LIST under a microscope” Admap

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MEDIA DECISIONS, EFFECTIVE ADVERTISING

“How well does advertising work?

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