In Marketing Priority #1 Is Effectiveness

Scenario 1—Pure 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 1—Pure 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 “naturally”—be it from competitive pressure, people dropping out of the market or any other reason—the $45 million would still add $25 million in net sales.

Scenario 2—Customized Communication

Now, let’s say we go out and visit the stores and reach one conclusion: New Yorkers are nothing like Angelenos, and both are nothing like Miamians—each 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, we’ll have a couple of spots per DMA and increase our production budget—something that, by the way, most clients consider anathema. Then, for argument’s sake, let’s say your customized messages move one additional person per spot. That’s it, one more person.

Scenario2 – Customized Communication

Assuming you pay an incremental 5% on your CPM—it might be cheaper to buy spot in some cases—you 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?