Scenario 1Pure Network
The spot runs everywhere.
Our target is adults 25-54.
We have a couple of spots.
We have a mix of about 20% early morning, 15% early news, 55% prime time and 10% late night.
We have a blended CPM of around $60 for general market.
Given our $10 million for an ad budget, this is what we could expect:
Scenario 1Pure Network
What this says is that with $10 million and a blended CPM of $60 for network, you can buy 150 million adults between 25-54. If we estimate that after every spot 5% of the audience buys (which, in my opinion, is high) and they spend the average per ticket, we will sell $45 million for an ROI of 450%.
This is OK and, considering the total chain sales of $200 million, not that bad. If Mythical Burgers were to lose 10% of its sales naturallybe it from competitive pressure, people dropping out of the market or any other reasonthe $45 million would still add $25 million in net sales.
Scenario 2Customized Communication
Now, lets say we go out and visit the stores and reach one conclusion: New Yorkers are nothing like Angelenos, and both are nothing like Miamianseach group lives in a different universe! Our network campaign addressed the lowest common denominator but not much more.
So, now instead of having a couple of spots, well have a couple of spots per DMA and increase our production budgetsomething that, by the way, most clients consider anathema. Then, for arguments sake, lets say your customized messages move one additional person per spot. Thats it, one more person.
Scenario2 – Customized Communication
Assuming you pay an incremental 5% on your CPMit might be cheaper to buy spot in some casesyou will achieve marginally increased sales.
Naturally, this is very simplified, and there are many other steps along the way:
Determining the budget allocation would need a BDI/CDI.
You could strategically decide to try to increase the average ticket (e.g., in Los Angeles) versus increasing the number of sales, or both.
However, the principle seems clear: In looking at a total market solution, we need to look behind the obvious efficiencies (e.g., of production costs) and consider the total effectiveness of the actions.
What About the Hispanic Market?
Bottom line, in looking at a total market solution, the Hispanic market, and any other ethnic group that can be surgically segmented, should be treated the same way. In the case of the Hispanic market, there are some factors that make it especially attractive:
About one-third of the population is Spanish-dominant and another third bilingual, meaning that we can segment it via language without the message bleeding into other groups.
Many networks have exclusive audiences (people who do not watch other networks but that one), meaning, again, that these audiences can be surgically segmented with different messages.
The CPMs are cheaper than for their equivalent general market audiences.
What would a total market solution look like in this context?