Marketing

Management
MK323

[revised version as of 10/21/07]

MK323 Awareness Tutorial
You are a small firm with limited resources and must think creatively to generate awareness and
likely use many communication tools to achieve your goals.

For your Integrated Marketing Communications (IMC) plan, you will use a mix of different
advertising vehicles including public relations, event marketing, magazines, newspapers,
television, radio, outdoor, point of purchase, and word-of-mouth. You are expected to develop
“out-of-the-box” ideas for building awareness that are low cost and fit with your product’s
benefits.

It is important to realize that one vehicle alone does not create awareness. It is the TOTAL of
ALL the impressions from ALL your marketing vehicles which create awareness. Impressions
are not the same as awareness. To calculate an overall awareness % within a target segment,
you should use the formula:

Total # of Impressions Created with Target Market

AWARENESS % = ___________ 4______________
Size of Target Segment

Even though awareness exists from the combination of all your vehicles, teams must
understand how impressions are generated (and thus awareness created) from any particular
vehicle they decide to use. The method used to examine individual aspects of your IMC is called
a Quick Test, which will be described later in this tutorial. Whenever you are evaluating your
marketing decisions, you must always ask yourselves, “Does this make sense”.

For Core, we differentiate between two major types of awareness-generating vehicles:

Traditional and Non-traditional.

TRADITIONAL VEHICLES AND AWARENESS CALCULATION:

For the Core project, magazines, newspapers, television, radio, the Internet, and outdoor (and
any vehicle that has published circulation rates) are considered traditional IMC vehicles. For
these vehicles your impressions are based on figures provided by the media or organizations
which collect data on circulation.

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Based on the profilje of your target market, you will want to research all of the potential choices
among the traditional media vehicles to analyze which ones may best reach your target
audience for the least cost to you.

Once you have made some preliminary determinations on which traditional vehicles are
appropriate, you can then calculate the awareness for each of them. To do this you will find
circulation and then make two adjustments to it.

1. Find the published circulation rate for the particular media vehicle you have chosen.

2. Make an adjustment for % of circulation in your target market

Using the example of a girls hair accessory product, suppose want to target girls age 12-16.
We believe that teenVogue magazine would be a good choice to reach them. We found the
circulation of teenVogue to = 1.1 million.

However, that circulation figure must be adjusted by the % that is actually in our target
market. Thus, based on reviewing the teenVogue circulation profile data, we estimate the
% of teenVogue circulation in our target = 75%. Perhaps 25% of teenVogue readers are
older than 16 or younger than 12 (the 75% is estimated by you based on reviewing
teenVogue’s readership profile data). Therefore our target circulation for teenVogue is 1.1
million x 75% = 825,000

3. Make an adjustment for “impact” of the ad

We assume that not all advertising impacts people in the same way. For example, a full page
color ad is likely to receive more attention than a ½ page black & white ad. A 60 second
commercial is likely to receive more attention than a 30 second ad. Due to this effect, you must
adjust the impact of your ad. This adjustment percent is determined by the ratio of the ad costs
for a full impact ad and the actual ad type you have chosen.

Again, using our example in teenVogue magazine, the Core team decides to use a ½ page
color ad as opposed to a full page color ad since they have limited finds. The price of a full
page color ad is $71,000 and the price of a ½ page color ad is $43,000. Therefore, if we
choose a ½ page ad, we need to adjust our impressions by 43,000/71,000 or 60%. Our total
impressions is our targeted circulation from above, 825,000 readers x 60% = 495,000
targeted impressions from our ½ page color ad in teenVogue

Cost per Thousand (CPM)

in order to be able to compare traditional media vehicles effectiveness, you will calculate a cost
per thousand (CPM).

When comparing the costs of different media, it is best to consider CPM. This is the cost to
reach 1,000 viewers of that media. CPM is calculated as follows:

Cost of an Ad X 1,000 = CPM

targeted circulation

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For the teenVogue magazine example, the cost of the full page ad is $71,000 and the targeted
circulation for full impact (full page color) is 825,000. Therefore the CPM is 71,000/825,000 x
1,000 = $86.

For traditional vehicles acceptable CPM costs tend to fall between $15 - $150. CPM’s much
higher than $150 should give you reason to evaluate that particular media more carefully for its
cost effectiveness. Ad cost data and circulation data for CPM calculations can be found in the
SRDS database available online through the Pardee library link. Additional data on circulation
demographics can be found in the MRI database also through the Pardee library link.

If you have decided on a magazine that reaches your target market well, it is recommended that
you purchase at least 2-3 insertions in the magazine during the year. This allows you to
generate some critical mass with that magazine.

NOTE: Due to their extremely large circulation and the unrealistic effect of these
numbers on your calculations, AARP Publications (American Association for Retired
Persons) are not allowed.

Internet and Online: Calculating impressions and awareness from online activities is not similar
magazines and other traditional marketing activities. Even those in the online industry cannot
agree upon metrics (page views, unique visitors, reach, paid search, banner ads, organic
search, etc) that they should use (see Web Numbers: What's Real? Sarah Lacy, Business
Week; 10/23/2006, p. 98-103).

As you know for traditional media we adjust for “impact” by using the ratio of the cost of an ad
over the cost of a full page color ad. For different types of online advertising the impact is
expected to be much smaller

Paid Search (Pay Per Click): Available on search engines. Fees are based on auction and the
most of the desirable words are expensive. For paid search you control how often the words are
to be “served” based on your budget. If your sponsored link is shown but not clicked on, you can
assume it creates NO awareness - this is because the impact of keywords is expected to be low
since many web users do not “see” sponsored links.

If your link is clicked by a user, you can assume the consumer is now aware. Your team must
find the average click through rates (CTR) for paid search terms in your product category. You
must also demonstrate that your link will be shown on the first page of results, based on your
level of keyword spending (it is well documented that many web searchers do not click on paid
search keywords beyond the first page of results).

Organic Search: This is your listing on Google, Yahoo! and other search engines based on
unpaid, or organic search. You may want to investigate optimizing your web site for search. You
will need to estimate your CTR (click through rate) on organic search based on your own
research, in some instances organic search rates may be higher than paid search, and
sometimes they are lower. Whatever number you determine, the team should ask themselves:
Does This Make Sense?

Banner Ads: Banner ads are bought on a CPM basis with the advertiser deciding upon the
number of times the banner is served. It is estimated that banner ads have a impact of about 1-
5%. For example, if you purchase 1,000,000 impressions of a banner ad for a CPM of $3, you
will have 1,000,000 X .05 = 500 impressions. If you target market is 5,000,000 then you have
generated .01% awareness from the banner ads.

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NON- TRADITIONAL VEHICLES AND AWARENESS CALCULATION

For the Core project, public relations, event marketing, point of purchase (POP), word of mouth,
and product placement are considered non traditional IMC vehicles. Calculate the awareness
for these vehicles is made on a series of assumptions. Remember, these are estimates and
finding exact figures are not possible.

Point of Purchase (POP): You must first determine if it is realistic for the type of retailer to
place your POP. Next, you must consider the costs for the POP displays. Marketers typically
have two costs -- the cost to create the display and the cost to place it in the store. These are
the total cost for your POP. To calculate awareness for a POP, consider the following:

1. How many people come into an average store (you might need to observe a store for an
hour and estimate a day with this data). What percent are in your target? This is your
first number. You might also be able to find the number of visitors to a store based on
secondary research.
2. Of the people who go into a store, what % do you estimate go to that aisle or pass that
end-cap display? Make an adjustment for this percentage.

3. Multiply this number by the number of stores which will carry your POP.

4. Multiply this by the number of days you will be in the store.

5. This is the number of impressions you will generate.

6. To determine the awareness from the POP take this number, divide by 4, divide by the
size of your target market size

Example:
 100 people enter the store in the hour you observe. The store is open 12 hours a day so
1,200 people enter a day.
 Your target market is young girls and from your observation they make up 20% of the
people who enter the store so 240 girls enter each store.
 Your POP display is in the hair aisle, and you estimate only 50% of the girls go down this
aisle on a given visit. You now have 120 girls per store per day who will see your display.
 Your POP will be in 3 large chains, each with 200 stores. At this point, all the stores plan
to carry the display for a total of 600 stores. With 120 girls per store and 600 stores you
can expect 72,000 girls to see your display per day.
 The display will be up for 2 weeks or 14 days so the total number of impressions will be
72,000 x 14 = 1,008,000
 For your target market of 15,000,000 girls, the POP will add an awareness of 1.68%
(1,008,000/4/15,000,000)

Remember, you need to check with those types of retailers with whom you hope to place your
product. Do they take POP displays? If so what kinds? Typically, smaller retailers rarely carry
POP displays – but it varies by industry.

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Word of Mouth: Word of mouth (WOM) impressions can be based on the previous year’s sales.
The percent of the people you can assume will create word of mouth will depend on the nature
of your product. A very public product (e.g. hair accessory) is one which is usually seen and
discussed by the target market. A very private product (e.g., underwear organizer) would be
rarely seen and rarely discussed by the target market and may generate 0% word of mouth.

To calculate WOM you should determine the previous year’s buyers and multiply by the WOM
factors given on the chart below:

WOM Factors
Type of Public Semi public Semi private Private
Product product product product product

Serving
Example Hair Credit card Serving bowl Picture
accessory holder bowl hanger

# users who 75% 50% 25% 10%

generate buzz

# of
impressions 4 3 2 1
per user

Event Marketing: Events usually include festivals, expos, street teams, traveling vans and
shows. Events are similar to POP, you need to determine the amount of people in your target
market who are exposed to your message. You will want to consider direct and secondary
impressions for event marketing. Secondary impressions are those that might be generated
through media coverage tied to the event. To calculate direct impressions for Event Marketing
you need to know:

1. How many people come to the event? What percent are in your target?
2. Of the people who come to event, are they all exposed to your message? Make an
adjustment for this percentage.

3. Does your message have full impact, or is it small, cluttered, or otherwise hard to see. If
so, make an adjustment for impact.

4. Multiply this number by the events.

5. Multiply this by the number of days for the event.

6. This is the number of impressions you will generate.

7. To determine the awareness from the event take this number, divide by 4, divide by the
size of your target market size

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 For ideas on cause marketing organizations see MK323 Blackboard – documents –
exercises readings and tutorials - readings

Example 1 – Road Race Sponsorship:

 You are sponsoring a road race with approximately 6,000 runners and an audience of
18,000. As a sponsor you are listed on the banner, and have a table set up at the finish
to style girls hair and market your product.
 Of the 24,000 in attendance about 30% are in your target which is 7,200 consumers.
 For your booth, you estimate that about 90% come to the finish line, and since it is
crowded, about 50% will be exposed to your table so 7,200 x .90 x .5 = 3,240
impressions will occur through your booth.
 Your name is on a banner, with about 50 other sponsors at the start. Although all 24,000
consumers will look at the banner, it is crowded so you estimate the impact at only 75%.
Therefore the impressions from the banner are 18,000
 The one road race brings you the 3,240 impressions from the booth and the 18,000 from
the banner for a total of 21,240
 You plan to sponsor 30 road races of this type throughout the U.S. for a total of 21,240 x
30 = 637,200 impressions
 The awareness from this is 637,200/4/15,000,000 = 1%

Example 2 – Street Teams

 You plan to have street teams in 20 major cities designing hair styles of girls and selling
your product.
 Each street team will be set up in each city from 10-6 on a Saturday and Sunday and will
run for 2 months in each city – a total of 16 days for each city.
 You expect 300 people to pass each hour with 40% in your target market. Each day
would give you 300 x 40% x 8 hours = 960 impressions.
 The street teams would then total 960 x 16 days per city x 20 cities = 307,200
impressions

Your total awareness through events would be 1.5%

Public Relations: For small firms who want to get “mentions,” coverage, or a story written
about their product, they typically send press releases or press kits to television or radio
stations, magazine editors, etc. This activity is considered public relations (PR). Many PR
activities are based on a “numbers” game.

Therefore, many firms, particularly start ups, try to get the word out to as many media outlets as
possible in the first few years of their existence. Since your product is “new,” you have the
highest chance of getting your “story” picked up (written about) in these first few years. Each
team should plan to send press kits and NOT just a press release

Understanding Awareness from PR (for magazines):

The awareness from PR is based on the number of media to which you send your press kit as
well as the probability of having your product chosen to be highlighted or written about. You
should plan to send to at least 50 large magazines (circulation over 1,000,000) and at least 25
smaller magazines (magazine can also include newspapers). The magazines you choose
should be a good match for your target market and for they type of product you are marketing.
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To keep your product in the forefront of the editor/writer’s mind, you should plan to send your
press kit twice a year for your first two years.

Using our girls hair accessory, some examples of small (more focused on the target market)
magazines might be Discovery Girl, American Girl, Boston Globe Fun Pages while some
examples of some large magazines might be teenVogue and Seventeen.

You can expect the following results, for every:

25 smaller publications to which you send a press kit, expect to receive 1 write up

50 larger publications to which you send a press kit, expect 1 write-up

The remaining steps are:

1. After breaking the magazines you have chosen into two groups (large and small) you
then need to calculate the average circulation of your larger magazines and the
average circulation of your smaller magazines. You can do this by collecting
circulation data on 5 of your smaller magazines and 5 of your larger magazines.
2. Be certain to adjust the average circulation by the % of readers in your target market

3. Since these are usually small articles or quick mentions, they receive only 25% impact

The calculation for total impressions for magazine PR is:

(#of large magazine write-ups) * (circulation of large) * .25 = impressions from large magazines

PLUS

(#of small magazine write-ups) * (circulation of small) * .25= impressions from small magazines

Example for Magazine PR:

Large Magazines:
Number of large magazines = 50
Circulation = 1,100,000
Target Market = 15,000,000
Impressions = 1 * 1,100,000 *.25 = 275,000 impressions
Awareness = 275,000/4/15,000,000 = .46%

Small Magazines
Number of small magazines = 50
Circulation = 800,000
Target Market = 15,000,000
Impressions = 2 * 800,000 * .25 = 400,000 impressions
Awareness = 400,000/4/15,000,000 = .67 %

Public Relations for TV, radio and newspapers: You must determine the break point in terms of
viewership between a large vs. small TV, radio and newspapers. Then use the same rationale
as for magazines for your calculations.
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Product placement: Due to consumer advertising wear-out, another vehicle that firms are
increasingly using to get their product in front of target consumers and create “buzz” is product
placement. This involves getting those on TV or in the movies to show your product or better
yet to use your product. While product placement was once mainly found only in movies, it has
now become a staple of television -- even video games and books are incorporating product
placement now.

However, few Core products are likely to lend themselves easily to product placement
opportunities as many times the shows want established brands in those “slots”. This does not
mean it will be impossible, but the team will need to decide how many press kits they would
send and to whom specifically and apply a “hit” rate and then calculate the impact of appearing
on a show or in a movie.

Assessing and Comparing Vehicles

For your project you should create a table which includes the reach of each vehicle within your
target market, the impact of the vehicle and the CPM. Impact varies from one vehicle to
another, for instance, a street team putting your product in the consumer’s hands would have a
higher impact than a picture in a magazine. The street team’s impact could be higher than 1
where a small mention of your product in a magazine could be around .25.

You should be prepared to justify your spending – for example, a nontraditional vehicle usually
has a lower CPM, but once you adjust for impact, you might find it is a more effective vehicle.

When you are done: Checking Quick Test Results

Your quick tests should give results in the ranges given below. In some instances when you
have small target markets, very expensive media, or low target CPMs, these “rules of thumb”
may NOT give results within the correct ranges. If you find you are above the “maximum
allowable awareness” for a type of media, you must adjust it down to the maximum given in the
table. If you find your awareness % is below the “minimum expected awareness“you might
reconsider the vehicle you are planning to use.

Quick Test Results Guide

Minimum Maximum
Expected Allowable
IMC Vehicle Awareness Awareness

POP 1% 5%

Events 1% 5%

PR .5% 4.5%

Word Of Mouth 0% 5%

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 Online 0% 2%

* The maximum/minimum % for any one IMC vehicle represents the total % for that vehicle. For
example, the POP % range includes ALL your POP displays for that year.

For most 323 teams, your Year 1 overall awareness may not be significant (perhaps 10%-15%
or less from all of your traditional and non traditional activities). This is not unexpected. The
most important issue is to detail the logic of how you get from exposures (or impressions) to
awareness.  Does this mean you will need to use assumptions? Yes!  But, do your best to make
them educated assumptions based on data (primary or secondary). Make sure your
assumptions make sense, are conservative, and that you have made all necessary adjustments.