Targeting, Budgeting in Advertising and Media Scheduling

By the end of this topic student should be able to:

1. Define targeting and budgeting in advertising;
2. Explain targeting and budgeting in advertising;
3. Describe the various forms of targeting and budgeting in advertising.
4. Describe how media scheduling is done.

All forms of advertising communications should be directed to a particular target market,

clearly positioned and created to achieve a specific objective. Targeting is the key element in
effective advertising. Targeting advertising to deliver messages precisely and prevent
wasted coverage on audience outside the targeted market. Targeting thus ensures efficiency
in advertising. Targeting, focuses on audience-defining characteristics that influence how
people respond to advertising. Targeting is done through behaviorgraphics, psychographics,
demographics, and geodemographics.

The “graphics,” the suffix for each of these consumer characteristics, is a term that refers to
measurable characteristics of target audiences. The prefix to each type of targeting
represents how the audience is measured. Specifically, behaviorgraphics represents
information about the audience’s behaviour— in terms of past purchase behaviour or online
search activity—in a particular product category or set of related categories.
Psychographics captures aspects of consumers’ psychological makeup and lifestyles
including their attitudes, values, and motivations. Demographics reflect measurable
population characteristics such as age, income, and ethnicity. And geodemographics is
based on demographic characteristics of consumers who reside within geographic clusters
such as areas and neighbourhoods.

Budgeting is mostly done after, targeting, positioning and setting advertising objectives.
Budgeting is a critical decision inasmuch in advertising because if too little is invested, sales
volume will not achieve its potential and profits will be lost and if too much is spent,
unnecessary expenses will reduce profits. The practical budgeting methods frequently used
in advertising and promotions are the-percentage-of-sales, objective-and-task,
competitive parity, and affordability methods.

The-percentage-of-sales: Due to its simplicity, the percentage of sales method is the most
commonly used by small businesses. When using this method an advertiser takes a
percentage of either past or anticipated sales and allocates that percentage of the overall
budget to advertising. But critics of this method charge that using past sales for figuring the
advertising budget is too conservative, that it can stunt growth. However, it might be safer for
a small business to use this method if the ownership feels that future returns cannot be
safely anticipated. On the other hand, an established business, with well-established profit
trends, will tend to use anticipated sales when figuring advertising expenditures. This
method can be especially effective if the business compares its sales with those of the
competition (if available) when figuring its budget.

Objective-and-task

Because of the importance of objectives in business, the task and objective method is
considered by many to make the most sense and is therefore used by most large
businesses. The benefit of this method is that it allows the advertiser to correlate advertising
expenditures with overall marketing objectives. This correlation is important because it keeps
spending focused on primary business goals. With this method, a business needs to first
establish concrete marketing objectives, often articulated in the "selling proposal," and then
develop complementary advertising objectives articulated in the "positioning statement."
After these objectives have been established, the advertiser determines how much it will
cost to meet them. Of course, fiscal realities need to be figured into this methodology as
well. Some objectives (expansion of area market share by 15 percent within a year, for
instance) may only be reachable through advertising expenditures beyond the capacity of a
small business. In such cases, small business owners must scale down their objectives so
that they reflect the financial situation under which they are operating.

Competitive parity

While keeping one's own objectives in mind, it is often useful for a business to compare its
advertising spending with that of its competitors. The theory here is that if a business is
aware of how much its competitors are spending to advertise their products and services,
the business may wish to budget a similar amount on its own advertising by way of staying
competitive. Doing as one's competitor does is not, of course, always the wisest course and
matching another's advertising budget dollar for dollar does not necessarily buy one the
same marketing outcome. Much depends on how that money is spent. However, gauging
one's advertising budget on other participants' in the same market is a reasonable starting
point.
Affordability methods

With this method, advertisers base their budgets on what they can afford. Of course, arriving
at a conclusion about what a small business can afford in the realm of advertising is often a
difficult task, one that needs to incorporate overall objectives and goals, competition,
presence in the market, unit sales, sales trends, operating costs, and other factors.

MEDIA SCHEDULING

Once a business decides how much money it can allocate for advertising, it must then
decide where it should spend that money. Certainly the options are many, including print
media (newspapers, magazines, direct mail), radio, television (ranging from 30-second ads
to 30-minute infomercials), and the Internet. The mix of media that is eventually chosen to
carry the business's message is really the heart of the advertising strategy.

Selecting Media
The target consumer, the product or service being advertised, and cost are the three main
factors that dictate what media vehicles are selected. Additional factors may include overall
business objectives, desired geographic coverage, and availability (or lack thereof) of media
options. The three common rules used are:

Rule number 1: eliminate waste. The key to selecting the right media source is to choose
the source "that reaches the largest percentage of your particular target audience with the
least amount of waste." Paying to reach a larger number of people may not serve well if the
audience reached has only a small percentage of likely customers of your product. It may be
preferable to advertise in a paper or magazine with a smaller distribution if the readers of
that paper or magazine are more likely to be in the market for your product or service.

Rule number 2: follow your customer. Here again, the objective is to go to the sources
used most by your target market, especially a source that that audience looks to for
information about your type of product or service.

Rule number 3: buy enough frequency. We are constantly bombarded with

advertisements and images and in order to penetrate the consciousness it is important to be
seen with some frequency. Gordon emphasizes that it is "essential to advertise consistently
over a protracted period of time to achieve enough frequency to drive your message home."
SCHEDULING CRITERIA

The timing of advertisements and the duration of an advertising campaign are two crucial
factors in designing a successful campaign. There are three methods generally used by
advertisers in scheduling advertising. Each is listed below with a brief explanation.

Continuity—this type of scheduling spreads advertising at a steady level over the entire
planning period (often month or year, rarely week), and is most often used when demand for
a product is relatively even.

Flighting—this type of scheduling is used when there are peaks and valleys in product
demand. To match this uneven demand a stop-and-go advertising pace is used. Notice that,
unlike "massed" scheduling, "flighting" continues to advertise over the entire planning period,
but at different levels. Another kind of flighting is the pulse method, which is essentially tied
to the pulse or quick spurts experienced in otherwise consistent purchasing trends.

Massed—this type of scheduling places advertising only during specific periods, and is most
often used when demand is seasonal.

References

1. Doyle, P., & Saunders, J. (1990). Multiproduct advertising budgeting. Marketing

Science, 9(2), 97-113.
2. Blasko, V. J., & Patti, C. H. (1984). The advertising budgeting practices of industrial
marketers. Journal of Marketing, 48(4), 104-110.
3. Rossiter, J. R., & Percy, L. (1987). Advertising and promotion management.
McGraw-Hill Book Company.
4. Iyer, G., Soberman, D., & Villas-Boas, J. M. (2005). The targeting of advertising. Marketing
Science, 24(3), 461-476.