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Chapter 12
Paid Media
CHAPTER CONTENT
CHAPTER KEY POINTS
1. What should marketers know to make effective decisions about advertising in
published media, such as newspapers and magazines?
2. How do radio and television work as marketing communication media?
3. What factors do media planners consider when making place-base (out-of-home)
media advertising decisions?
4. How do marketers use movies and other video formats, such as video games, for
brand communication?
5. How does online advertising work?
CHAPTER OVERVIEW
This chapter will review the paid media category. It will discuss the traditional
advertising media industries, sometimes called legacy media, which dominate the paid
media category. The chapter also discusses the role and impact of online advertising and
other not so traditional media types.
The chapter provides an overview of traditional media, their characteristics, and their
strengths and weaknesses. It also discusses how traditional media is changing. Not only
are these traditional media formats changing, so are the ads that appear in them. The
chapter details how all media have some type of digital and interactive component and
this will only make media selection more challenging. The chapter looks at newspaper,
magazines, directories, as well as radio and television,in all of its varied forms. The uses,
structure, audiences, advantages, disadvantages and the advertising sales of each media
are also explored. The chapter also provides a review of film, video formats and place
based media. And finally, the chapter closes with an indepth look at online advertising.
CHAPTER OUTLINE
TRADITIONAL PAID MEDIA OF ADVERTISING
Traditional advertising media includes print, broadcast, out-of-home, and online
media as well as other nontraditional or alternative forms. Those are the major
groups of the paid media category used in brand communication, and they usually
demand a big share of the brand communication budget. They also play a huge
role in creating brand visibility.
There are also specific media tools from the marketing communication areas of
public relations, promotions, sales, and merchandising that are traditional in the
sense that they’ve been around for a long time and are widely used.
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Paid media are used primarily in advertising. Advertisers pay a fee to media in
order to present brand messages in their various vehicles—usually space and time
in print, broad- cast, out of home, or online. Paid media can provide wide reach,
as in television audiences, or they can be tightly targeted, as in outdoor boards or
magazines directed to small niche audiences.
The advertiser controls the size and timing of the message placement, but has no
control over whether readers or viewers will notice the ad. There tends to be lots
of clutter in traditional media. This can lead to avoidance by the media user—
turning the page, leaving the room when television ads come on, changing
channels, or zipping through television ads.
Published Print Media
Print media vehicles include newspapers, magazines, brochures, and other printed
surfaces, such as posters and outdoor boards. Magazines and newspapers have
expanded their message delivery online but billions of dollars are still spent on
traditional print media.
In terms of our Facets Model of Effects, print media are often used to generate
cognitive responses. If you want someone to read and understand something new,
a newspaper or magazine ad is useful since readers can take as much time as they
need
Principle: Print media generally provide more information, rich imagery, and a
longer message life than other media forms.
Consumers also find that reading a print publication is more flexible than
watching or listening to broadcast because they can stop and reread, read sections
out of order, or move through the publication at their own speed and on their own
time. Because the print message format is less fleeting than broadcast and more
concrete, people tend to spend more time with print and absorb its messages more
carefully. Print is also highly engaging when targeted toward audiences that have
a special interest in the publication’s content.
Published Media: Newspapers
Newspapers’ primary function is to carry news. Marketers with news to
announce, such as a special sale or new product, may find newspapers to be a
comfortable environment.Studies have found that people consider many ads—that
is, commercial information—to be news too.
Principle: A basic principle of newspaper publishing is that people read
newspapers as much for the ads as they do for the news stories.
With more than 6,400 national and local papers in the United States, newspapers
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remain an important but primarily local medium. However, big dailies in the 500
largest markets account for only 1,400 of those papers, which means that most
newspapers are small, and many of them are rural and suburban weeklies.
The problem with the major daily newspapers is that readership has been
declining, especially among young people, for years, as readers have moved
online. Complicating the readership problem, the recession of the late 2000s
brought double-digit- percentage declines in advertising that caused a rash of
newspaper closures.
Other sources of revenue besides advertising include reader subscriptions and
single-copy sales at newsstands. Circulation is the primary way newspapers’ reach
is measured and compared with the reach of other media.
The primary characteristic of circulation is geography—whether the publication is
national, regional, or local. The Wall Street Journal and USA Today are national
newspapers and have the two highest circulations. Both have gone through major
redesign programs to update their looks and appeal more to younger audiences.
Newspapers are used by advertisers trying to reach a local market, as most
newspapers, other than USA Today and the Wall Street Journal, are identified by
the geography of the city or region they serve. The New York Times serves the
New York region, but it also has a national circulation, particularly for its Sunday
edition. Local papers are struggling to survive but their readers still value them for
their coverage of local politics, education, crime, sports stories, local events,
church news, and local people features.
Decreasing subscriptions, however, have been a problem as readers have migrated
to online versions and dropped their print subscription. We can’t ignore the impact
of the digital revolution on newspapers with devoted readers wondering if their
cup-of-coffee-and-morning-newspaper ritual is coming to an end. The demise of
newspapers, should that happen, also impacts the profession of journalism and the
coverage of local politics and community issues.
Industry Structure
Newspapers can be categorized according to their publication frequency, such as
dailies, weeklies, and Sunday editions. Retailers like to place ads and press
releases in daily newspapers because their lead time (the advance time needed to
produce a publication) is short. Food stores, for example, can change offers and
pricing quickly depending on product availability.
Although newspapers go to a mass audience, they offer some market selectivity,
which allows them to target specific consumer groups. Examples of market
selectivity are special-interest newspapers (e.g., for coin collectors); ethnic
editions, such as Spanish-language papers; special- interest sections (business,
sports, and lifestyle); and special editions delivered to particular ZIP codes or
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zones. Newspapers also exist for special-interest groups, religious denominations,
political affiliations, labor unions, and professional and fraternal organizations.
For example, Stars & Stripes is the newspaper read by millions of military
personnel. The Wall Street Journal and the Financial Times are considered
specialty newspapers because they concentrate on financial news.
Newspaper Advertising
Newspaper formats come in two typical sizes: broadsheet and tabloid. The
broadsheet format—think any large metropolitan or national paper, such as the
New York Times or USA Today—is typically 11 to 12 inches wide and 20 or more
inches long. Tabloids are smaller and typically measure around 11 by 17 inches.
Tabloids are popular in urban areas where readers may read them on buses or
subways.
Newspaper advertising is sold based on the size of the space. The charges are
published on rate cards, which are lists of the charges for advertising space and
the discounts given to local advertisers and to advertisers who make volume buys.
National advertisers are quoted a different, and higher, rate
Most advertising sales is handled locally by the sales staff of the newspaper,
however newspaper representatives (called “reps”) sell space for many different
newspapers. This saves an advertiser or its agency from the need to make a
multitude of buys to run a national or regional campaign in newspapers. The
system is known asone-order, one-bill. The Newspaper National Network
(www.nnnlp.com) is a partnership of newspaper companies that place ads in
newspapers across the country. Google has also gotten into this business, allowing
advertisers to buy ads in daily newspapers through its website.
In the early 1980s, the American Newspaper Publishers Association and the
Newspaper Advertising Bureau introduced the Standard Advertising Unit
(SAU) system. The latest version of the SAU makes it possible for newspapers to
offer advertisers a great deal of choice within a standard format. An advertiser can
select one of the 56 standard ad sizes and be assured that its ad will work in every
newspaper in the country.
Another alternative that allows national advertisers to pay the local rate is
cooperative (co-op) advertising with a local retailer. Co-op advertising is an
arrangement between the advertiser and the retailer whereby the retailer buys the
ad and then the manufacturer pays half—or a portion depending upon the amount
of space the manufacturer’s brand occupies.
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Types of Newspaper Advertising
Three types of advertising are found within the local
newspaper: retail/display, classied, and two types of
inserts (magazine supplements and preprints). Most of
these are found online as well as in the print form of the
newspaper:
DisplayThe dominant form of newspaper advertising is
display advertising. Display ads can be any size and
can be placed anywhere in the newspaper except the
editorial page. Display ads can even be found in the
classied section. Display advertising is further divided
into two subcategories: local (retail) and national
(brand). Advertisers who don’t care where their display
ads run in the newspaper pay the run-of-paper rate
(ROP). If they want more choice over the placement,
they can pay the preferred-position rate, which lets
them select sections in which the ad will appear.
ClassiedTwo types of classied advertising include ad-
vertising by individuals to sell their personal goods and
advertising by local businesses. These ads are arranged
according to their interest to readers, such as “Help
Wanted” and “Real Estate for Sale.” Classied ads have
represented approximately 40 percent of total newspa-
per advertising revenue in the past, but local online ser-
vices, such as Craigslist, have almost destroyed news-
paper classied advertising. That has created a huge
bottom-line problem for local newspapers.
SupplementsNewspaper supplements are maga-
zine-style publications inserted into a newspaper, espe-
cially in the Sunday edition, that are either syndicated
nationally or prepared locally. Syndicated supplements,
such as Parade and USA Weekend, are provided by an
independent publisher that sells its publications to
newspapers. These supplements also carry national ad-
vertising.
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Preprints Preprints are a type of supplement, freestanding inserts (FSI) are
advertisements, such as the grocery or department store ads, that are inserted into
the newspaper. Also called circulars, these preprinted advertisements, which
range in size from a single page to more than 30 pages, are often printed
elsewhere and then delivered to the newspaper. Newspapers charge the advertiser
a fee for inserting a supplement. Next to local ads, preprints are the second largest
revenue stream with estimates of up to 70 percent of the Sunday newspaper
revenues coming from preprints. Preprints, however, are threatened not only by a
shift to online digital formats but also by a Postal Service rate cut that will make it
cheaper to mail certain types of national retail preprints.
Self promotion, or house ads, is the type of advertising used by newspapers—and
other media—to promote themselves. House ads in newspapers are usually set up
in advance to help fill the layout where there is space left after the news stories
and other ads have been placed. But newspapers may also use other media forms
to promote themselves.
Published Media: Magazines
Most American adults read at least one magazine per month, and they spend more
time with magazines than with other print media. Similar to other mass media,
magazines were hurt by the recession but seem to be slowly bouncing back.
The more than 6000 magazines published in the United States appeal to every
possible interest. Most magazines aim at niche markets with a focus on a
particular hobby, sport, age group, business category, or profession. These
special-interest publications generally have small circulations but there are
exceptions. The number-one magazine in terms of circulation is AARP, The
Magazine, which is sent free to anyone over age 50.
Quality of reproduction is one of the biggest strengths of magazines. It allows the
advertiser’s products and brand image to be presented in a format superior to the
quality of newspapers.
Principle: People spend more time with magazines because the ads and articles
usually are more relevant to their interests.
Readers also spend more time reading a magazine than they do reading a
newspaper, so there is a better opportunity to provide in-depth information.
The Magazine Industry
The magazine industry hasn’t suffered as much from the recession and
changing media environment as newspapers, although, like most print media,
it has been threatened by the digital revolution. A number of well-respected
magazines have disappeared, but one of the most surprising was the
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announcement in 2012 that Newsweek would no longer appear in print, only
online.
Despite the high risks associated with the magazine business, new
publications continue to emerge, especially those that target business markets
and growing market niches.
Magazine revenues come from advertising, subscriptions, and single-copy
sales. According to the Magazine Publishers Association, advertising
contributes 55 percent of magazine revenue and circulation is 45 percent
(subscriptions 32 percent; single-copy sales 13 percent). Some publications,
such as People, are more dependent on single-copy sales, which tend to be
impulse buys.
Traditional delivery, called controlled circulation, is through newsstand
purchases or home delivery via mail. These are measured media, and their
circulation or sales can be determined.
Nontraditional delivery, referred to as uncontrolled circulation, means that
the magazine is distributed free to specific audiences. In addition to mail,
other nontraditional delivery methods include hanging bagged copies on
doorknobs, inserting magazines in newspapers (such as Parade magazine),
delivering through professionals’ offices (doctors and dentists), direct delivery
(company magazines or those found on airplanes), and electronic delivery,
which is being used by organizational and membership publications, such as
university alumni magazines.
Sophisticated database management lets publishers combine the information
available from subscriber lists with other public and private lists to create
complete consumer profiles for advertisers. These databases, combined with
new technologies, have made personalized publishing a reality. For example
oSelective binding combines information on subscribers kept in a
database with a computer program to produce magazines that include
special sections for subscribers based on their demographic profiles.
oInk-jet imaging allows a magazine such as U.S. News & World Report
to personalize its renewal form so that each issue contains a renewal
card already filled out with the subscriber’s name, address, and so on.
Personalized messages can be printed directly on ads or on inserts
Satellite transmission, along with computerized editing technology, allows
magazines to print regional editions with regional advertising. This
technology also permits publishers to close pages (stop accepting new
material) just hours before press time (instead of days or weeks, as in the past)
so that advertisers can drop up-to-the-minute information in their ads.
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Types of Magazines
The focus of the audience interest is the number one factor in classifying magazines. The
two main types of audiences that magazines target are consumer and business audiences.
Consumer magazines are directed at consumers who buy products for personal
consumption.
An important principle to remember is: If you want to start a successful
magazine, create a special-interest publication aimed at a narrow or niche
audience.
Business magazines target business readers; they include the following types of
publications:
Trade papers aimed at retailers, wholesalers, and other distributors
Industrial magazines aimed at manufacturers
Professional magazines aimed at physicians, lawyers, and other
professionals
Farm magazines are aimed at those working in agriculture
Corporate publications produced by companies for their customers and
other stakeholders
Business magazines are also classified as vertical or horizontal publications.
Vertical publications present stories and information about an
entire industry. Women’s Wear Daily, for example, discusses the
production, marketing, and distribution of women’s fashions.
Horizontal publications deal with a business function that cuts
across industries, such as Direct Marketing.
In terms of vehicle selection, the following factors influence how media
planners fit magazines into their media.
Geography.Geographic editions help encourage local retail support by
listing the names of local distributors in the advertisements. Most national
magazines also offer a zoned edition that will carry different ads, and
perhaps different stories, depending on the region of the country.
Demographics.Demographic editions group subscribers according to age,
income, occupation, and other classifications.
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Editorial content. Each magazine emphasizes a certain type of editorial
content. The most widely used categories are general editorial, women’s
service, shelter, business, and special interest.
Physical Characteristics. Media planners and buyers need to know the
physical characteristics of a magazine because ads containing various
elements of words and pictures require a different amount of space.
Media planners look for readership patterns that match their target audience
and positioning strategy. For both female and male targeted magazines, their
positions are different relative to their readership. The patterns in both the
male and female magazine category are equally competitive and complex.
Magazine Advertising
Advertising in magazines is generally highly targeted because most magazines are
designed to reach consumers through their special interests. Magazine advertising
benefits from much higher production values than in newspapers, and that makes
them good for brand-image advertising, although the format is also good for long
messages since readers spend more time reading magazines than newspapers.
The emphasis on graphics encourages creativity, good design, and interesting
production technique.
Magazine ad costs are based on the size of the ad and the circulation of the
magazine. Although the format may vary from magazine to magazine, all
magazines share some format characteristics. For example, the back cover and
inside front cover are the most costly for advertisers because they have the highest
level of exposure compared to all the other pages in a magazine. The inside back
cover is also a premium position.
Normally, the largest unit of ad space that magazines sell is the double-page
spread, in which two ad pages face each other.
A double-page ad design must bridge or jump the gutter, the white space running
between the inside edges of the pages, meaning that no headline words can run
through the gutter and that all body text is on one side of the spread or the other.
A page without outside margins, in which the color extends to the edge of the
page, is called a bleed page.
Magazines can sometimes offer more than two connected pages that fold in on
themselves. This kind of ad is called a gatefold.
Another popular format is a special advertising page or section that looks like
regular editorial pages but is identified by the word “advertisement” at the top.
Called advertorials, the content is usually an article about a company, product, or
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brand that is written by the corporation’s publicity department. The idea is to
mimic the editorial look in order to acquire the credibility of the publication’s
articles. Multiple-page photo-essay ads are also common in magazines.
A single page or double page can be broken into a variety of units called
fractional pagespace (for example, vertical half-page, horizontal half-page,
half-page double spread, and checkerboard in which an ad is located in the upper
left and the lower right of a double-page spread).
Published Media: Directories
Directories are books like the Yellow Pages that list the names of people or
companies, their phone numbers, and their addresses. In addition to this information,
many directories publish advertising from marketers who want to reach the people
who use the directory.
Corporations, associations, and other organizations, such as nonprofits, also publish
directories either in print or online that include members as well as other
stakeholders. These are often provided as a service to members as part of a corporate
communication program.
Directory advertising is designed to get attention, communicate key information
about the organization, reinforce the company’s brand image and position, and drive
behavior, the hardest of all facets of advertising effects to achieve.
One of the biggest advantages of advertising in directories is that if people have taken
the initiative to look for a business or service, then the listing is reaching an audience
already in the market for something and ready to take action. Directory advertising
doesn’t have to create a need because it is a number one shopping aid.
Directory advertising’s biggest advantage is directional advertising: it tells people
where to go to get the product or service they want.As the Matter of Principle feature
in the textbook explains, directory advertising is the main medium that prospects
consult once they have decided to buy something they need or want.
The key difference between directory advertising and brand-image advertising is this:
Directory advertising reaches prospects, people who already know they have a need
for the product or service, whereas brand-image advertising seeks to create a need as
well as an attractive personality for a brand.
Almost 90 percent of those who consult the Yellow Pages follow up with some kind
of action.
Principle: The principle behind directory advertising is that it is directional—it tells
people who already are in the target market where to go to get the product or service
they want.
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The biggest change for this medium is the advent of online directory information as
well as the decline in landline phones because of the increase in cell phones.
Directories are expensive to print, so it is becoming harder for phone companies to
justify the costs of community-wide distribution of the residential books. Some
directory providers are using an “opt-in” program for those customers who prefer the
book to the computer, but the Yellow Pages and business White Pages are still in
business, although U.S. spending on Yellow Pages advertising has been on a steep
slide.
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