Audience valuation

What about audience valuation?

• Advertisers pay according to the value of the audience .

• Media institutions rely on content criteria to create lucrative audiences
• Valued audience segments are served better by content producers
• Success/failure of audience markets depend on success or failure of content markets and vice versa.
• Failure to provide good content leads to failure to attract lucrative audiences.
• Failure to develop lucrative audiences reduces profitability, which affects media institutions ability to
provide good content.

Poor quality
Low value audiences
content

Low value
Reduced profits
audiences

Reduced
Poor quality content
profitability
 Factors affecting audience value

1. Market factors
Nature of
Geographical
measuremen
factors
t

Level of
Product competition
characteristic within the
Market market
factors
• i). Product characteristics- various product factors determine audience value on
markets, e.g. KBC and Kiss 100 do not participate in the same product markets as
their audiences are different based on the programs aired and positioning of the two
channels. Kiss 100 is likely to have more valuable audiences
ii. Geographical factors:
Audience markets can be
local, national or international
iii. Level of competition within the market
• The number of channels determine audience value as more channels means the same audience can be reached through a variety
of routes.
• The law of supply and demand apply- fewer channels means high audience value
• Audiences can be substituted when several channels are available, that is, similar audiences are available through other channels
iv. Nature of measurement
system
• Markets with clear
measurement systems are
more expensive, for example
social media audiences are of
higher quality since they are High value Low value
well known in comparison to
traditional media audiences.
• Low levels of accuracy and
reliability reduces prices
advertisers are willing to pay.
• Poor quality measurements
means lower levels of
congruence between
measured and actual
audience.
How do you measure exposure?
2. Media Factors
• Media outlets affect
the value of their
audiences Outdoor

• For example TV is Social Newspapers/

magazines

more expensive than

newspapers because
TV is both visual and
Television Transit media

audio making it more

effective
Radio
Media Point of sale

factors
• Efficiency of advertising differs based on media channel used.
• For example due to poor reception by A.M radio, the value of their is low
• Some content attracts more attention than others, thus ads placed
immediately after exciting TV programs score higher in audience
attention.
• Some programs are able to hold audiences for longer periods than
others, for example soccer can hold audiences for more than. Comedy is
as good in holding attention, but not 24hour TV news.
• In print media, readers who buy newspapers/magazines are more valued
than those who read free publications. Price paid can be used to
estimate attention.
• The Audit Bureau of Circulation does not include free
magazines/newspapers in calculating audiences
3. Demographic factors
• Demographic variables are presumed to
serve as effective proxies for measuring
product-purchasing intentions and
Age
behaviors.
• Advertiser values demographic groups on
the assumption that members the group
exhibit a certain type of product-purchasing Demographic
behavior. factors

• Demographics function as an effective Gender Income

substitute for the data that advertisers
require to estimate product-purchasing
habits and product-purchasing intentions.
• Demographics act as an
indirect method of
targeting consumers in the
audience
•  involves examining the
demographic composition
of entire media markets
(e.g., average age or
income levels within
geographically defined
markets) and the effects of
these demographic factors
on what advertisers pay for
audiences within these
markets.
Income: look for higher
income
Education: more
education more
value
Age: Youths have
high value
Racial/ethnic identity:
some races have more
disposable income
Gender: women are more
valuable
• Age: Younger audiences (e.g. 18 to 40) are more highly valued than older audience
members partly because consumers in the 18-to-49 age bracket are believed to spend
more on various consumer goods, while older audiences are characterized as savers
• Younger consumers are valuable because they are likely to be influenced by advertisements.
• But these valuations can change over time as the nature of the population changes, for
instance the current generation is likely to remain valued even as it ages more than previous
generations of seniors because of their different spending habits and more active lifestyles.
• The other factors is the presumption that older consumers already have established high levels of
loyalty for specific brands of products, whereas younger audiences have not established such
strong allegiances.
• Thus advertisements are believed to be less likely to sway older consumers.
• Capturing and retaining younger consumers, with their multiple decades of product
purchasing ahead of them represents a much more lucrative accomplishment than capturing
older consumers who, even if they are persuaded to switch brands, will purchase that brand
for a much shorter period of time.
• When conventional media dominated, older audiences were less valued because they had
higher levels of media consumption and could easily be reached than younger audiences.
• Gender:
• Although the effects of gender are highly dependent upon the nature of product being advertised, advertisers often value
women because they typically make the majority of household purchasing decisions.
• However, since women can be easily reached as they consume more media, these greater ease associated with reaching
women exerts downward pressure on their value, while the greater scarcity of men raises their value to many advertisers.
• Income
• Advertisers typically value audiences with higher incomes. Some products and services
are likely to be purchased only by consumers of certain income levels.
• However, low income audiences can also be valuable for low income products/services.

Highly valuable for social marketing

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