Strategic Media Planning with Out of Home Ratings
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- Bertram Boone
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1 Strategic Media Planning with Out of Home Ratings Using the New Numbers 2012 TAB OAAA Out of Home Media Conference & Marketing Expo Traffic Audit Bureau for Media Measurement, Inc
2 Contents Introduction General Planning & the Buy/Sell Process From DECs to TAB Out of Home Ratings From Showings to Audience Delivery Market Definitions Planning Metrics Establishing Benchmarks From Planning to Buying TAB/OAAA New Ratings-Based Media Plan Award 1
3 Introduction For more than 75 years, the Out of Home industry has used DECs (Daily Effective Circulation) to define the number of people who pass an outdoor display. Unfortunately, we had been speaking a different language than the rest of the advertising industry. Without ratings, out of home media was not a part of the most critical part of the advertising process: strategic media planning. Living in our own world of showings, out of home at worst did not make the budget, or at best, received a small portion of the budget after the primary budget was established. We were a below the line medium. TAB Out Of Home Ratings is a giant step forward. They are audience measures that advertisers understand and can utilize as they plan and build their advertising campaigns. They provide an opportunity to make Out of Home an above the line medium. Most general planners have low awareness of our media and its new ratings. Therefore, out of home specialists and media vendors have a vital evangelical role to play. But first, you must be prepared. You need to fully understand what the strategic media planning process is and how ratings are utilized within that process. As the process continues from planning to buying and selling, consistency builds confidence, value, and trust. That is why ratings must be the only audience metric used throughout the entire process. For those of us who have used DECs over the years, the transition can be daunting. But it is time to stop using these antiquated numbers and move on. This workbook begins by illustrating how general planning leads into the overall advertising process. It also focuses on specific transitional steps that will help you migrate to the successful use of ratings in your day to day business practices. 2
4 General Planning & the Buy/Sell Process For most of you, what is new in the process outlined below is General Planning. Your knowledge of general planning objectives will help you communicate out of home s value more strategically; thus enhancing out of home s role in advertising campaigns. Ratings play an integral part of an enhanced dialogue with current, as well as new advertisers to the medium. 3
5 From DECs to TAB Out of Home Ratings A Comment on TAB Out Of Home Ratings TAB's ratings estimates are built on a solid foundation. They originate with an accurate count of traffic and people passing out of home media displays. Trip information is then used to identify the demographic composition of the people passing each display. Then visibility adjustments are made to convert the number of people passing a display to the audience who actually sees its advertising. That makes TAB Ratings the first measurement system based on commercial audiences who see advertising. The DEC Dilemma The triangle below provides an example of how numbers change as we move from gross traffic counts to a measure of audience. Here are a few things to consider about DECs: - TAB converts the count from vehicles to Persons The counts are then reduced to include only roads and directions from which the unit can be seen. - Finally the length of time a display is illuminated is used to refine a final TAB audited DEC. The continued use of DECs disadvantages the industry. Some plants feel the need to use DECs to compete with plants who are not members of the TAB. This can disadvantage the audited plant. Non-audited circulation counts, as shown above, range from the correct DEC of 40,666 to a gross count of traffic, 57,013. Buyers lose confidence in out of home when comparable numbers vary widely. Two numbers do not make a measurement currency. All other media have a primary measurement currency. The use of two numbers confuses both buyers and sellers. Ratings are more refined and a true measure of audiences who see the ad. They are more credible and can be used in combination with the ratings of other local media. Most importantly, only ratings can be used in general planning. 4
6 From Showings to Audience Delivery What is a Showing? Everyone in the Out of Home industry knows what a showing is. However, hardly anyone in the world of general advertising is familiar with this term. Here is the common definition from the OAAA s glossary of industry terms: Showing : The traditional way of selling Out of Home media; a level of delivery that directly relates to the population of the market. Typical showing levels are: #100, #75, #50 and # 25 GRP/Showings. The number of panels involved in the actual showing varies by market population and the average DEC of the market s inventory. Every plant used its own definitions of the market. This made it nearly impossible for buyers to evaluate their Out of Home media options. An even bigger problem was that advertisers could not use DECs nor the GRPs calculated from DECs in their media plans. Most showings were based on Adults 18+, whereas planners tend to use smaller demographic breaks. Also, the numbers they were presented were so large they weren t trusted Converting Showing Levels to Audience The first step to embracing ratings is the conversion from legacy showing levels to rating point delivery goals. It really isn t that difficult because historical daily Showings have a number of displays used in a campaign. The number of panels is all you need to make the conversion using the Showing Converter available at tabonline.com. Atlanta DMA: 50 Showing, Posters Input Number of Panels: 90 Conversion: Adults 18+ Average Weekly Impressions: 4,833,368 Average Weekly GRPs: In other words, the traditional 50 showing in this Atlanta example can now be expressed as a universally understood weekly rating point goal of 100 Adults 18+ GRP s. TAB s Showing Converter can also make the conversion to target demographics such as Adults or Adults, Income $75K+. The Atlanta DMA and these three demographics will be used throughout the workshop to introduce TAB Out Of Home Ratings metrics and outline how they are used. Actual conversions will vary for each market. Establishing Benchmarks The transition from DECs and Showings will take time. As buyers and sellers begin to use TAB Out Of Home Ratings, they will need to develop new, corresponding benchmarks of audience weight required to meet a brand s advertising objectives. Agencies already have these objectives for other media. Now, for the first time, they can be built for Out of Home. The process begins with developing an understanding of the components of the new system. 5
7 Market Definitions DMAs and CBSAs DMAs and CBSAs are primary markets definitions used by planners. TAB Out Of Home Ratings are currently available in 203 DMAs and 879 CBSAs throughout the country. DMA Designated Market Area: A television market area defined by Nielson Media Research that is also used by advertisers for multi-media planning. DMAs are non-overlapping and cover the entire United States. CBSA (Core Based Statistical Area): Defined by the United States Office of Management and Budget. A metropolitan area(s) within larger markets (e.g. DMAs) containing a substantial population nucleus, together with adjacent communities having a high degree of economic and social integration with that core. Market Selection As illustrated in this Atlanta example, the market definition: Sets the geographic definition Has a specific standard population Defines the inventory to be reported and Impacts the average audience estimates of that inventory. Market Definitions and Audience Examine the impressions and ratings for the three demographics targets in these tables and you will note how the numbers vary using the DMA and CBSA definitions. The use of established definitions that are meaningful to advertisers provides a standardization and consistency that is required to assess available media options. Note: Media companies and advertisers will also use smaller custom definitions of markets, defined as a county or a group of counties to highlight more targeted geographic delivery. 6
8 Planning Metrics The Planner s Numbers General planners need to assess all options to determine what combination of media will best meet the advertising objectives of a brand. The following example from the Nielsen/IMS Outdoor Planner identifies the planning metrics. Market: Planners can select DMAs or CBSA. A list of markets can be examined altogether and they can be combined to form regions. Formats: All Out of Home formats (measured by TAB) are available. They can be examined independently or in combinations (mixes) of formats. Demographics: The demographics include age/sex, race and ethnicity, and income. These categories can also be combined. Panels: The average number of panels required to deliver the media weight (e.g. 100 GRPs, Adults 18+). Weeks: The number of weeks in the schedule. The default value is 4 weeks (the common unit for selling Out of Home media). Planners can use any length of time (e.g. 4, 8, 12 weeks). Estimated Cost: Costs in the Nielsen/IMS and Telmar systems were supplied by TAB. They are based on rate cards. It should be noted that the costs are market averages across all suppliers. Some costs were statistically adjusted to align with market norms and will vary from actual rate cards. Inventory: The total number of units of the specified format in the market. Weekly GRPs: Gross Rating Points delivered for a specified demographic audience for a week. Weekly GRPs replace Showings as the new standard for defining a basic out of home package Total Impressions: Total Impressions is the total number of times people who pass out of home displays in the schedule are likely to see an ad on the display. Total Impressions include all persons who notice the ad, regardless of the origin of their trips. 7
9 Planning Metrics In-Market Impressions: In-market Impressions are a subset of total impressions that include only those from people who live in the specified markets. In-market Impressions are used to calculate ratings and GRPs. Target GRPs: The total number of In-market Impressions delivered by an out of home campaign expressed as a percentage of the market population. One GRP represents impressions equal to 1% of the population. CPM: Cost per Thousand is the cost required to deliver 1,000 impressions. Note CPP or Cost Per rating Point can also be reported Target Reach: The number of unique people (that live in the market) who see an ad at least one time during the campaign. Reach is expressed as a percent of the market population. Average Frequency: The average number of times a person will see the ad 3+ Reach: The number of unique people (that live in the market) who will see an ad three or more times during the campaign. 3+ Reach is expressed as a percent of the market population. Some Comments About Planning Metrics and Planning Systems All of the numbers used by planners are based on market averages. Planners can now examine audience delivery using all of the metrics used by other local media. Formats are the primary way to profile out of home options. Planners can now look at out of home delivery in all markets important to the advertiser. Multi-Media Planning This screen from the Telmar planning system integrates an out of home plan with plans from other local media. It is but one example of many multimedia scenarios that can now include out of home in the planning process. Out of home is now an Above the Line Media. Planners can plan out of home using the same metrics as measured media. Out of home can be incorporated into multi-media plans. 8
10 Establishing Benchmarks The Need for Benchmarks When any new audience measurement system is introduced, the industry must establish new benchmarks. Advertisers have had to re-calibrate their historical standards and objectives in radio and television as their measurement systems changed from diaries to meters. From DECs to Audience The chart to the right shows how reach builds over 8 weeks at 4 different GRP levels for Adults 18+. This information can now be examined for various demographics in any market. It is rich, and new! It is one example of the need to establish new benchmarks for setting meaningful advertising goals and objectives. It will take some time. For other media, these transitions have taken several years. They require building campaign history and relating that history to marketing objectives. The exiting news for out of home is that it can now be part of every planner s media mix. 9
11 From Planning to Buying Most planners are not familiar with Out of Home media. Its unique capabilities are best understood by out of home specialists and the sales representatives of out of home media companies. Their knowledge of the medium and local markets can insure that an actual buy meets or exceeds the objectives set by planners. Market Averages vs. Inventory Detail While planners are using market average data, Out of Home specialists and sales representatives can use panel by panel ratings to refine a planner s specifications. Here is an example of the 100 GRP (Adults 18+) Atlanta poster plan. The advertiser s objective was to optimize delivery of Adults and People with $75K+ income. Using panel by panel ratings and Reach & Frequency functionality in the Telmar TOP system, the Out of Home specialist identified a package of 78 panels (10% fewer panels than originally planned) that delivered more weight to the target groups. This is dramatically illustrated by the reach curves where reach for Adults and Adults Income $75K+ increased 12 and 23% respectively. For other media, a schedule is priced based on audience delivery (not the number of units in the schedule) and the Out of Home industry should determine how to price its inventory to mirror this general media standard 10
12 New Ratings-Based Media Plan Award In recognition of the importance of integrating out of home into the general planning process, TAB and OAAA are pleased to announce a new category in the OAAA s Media Plan of the Year Awards. A new level of accountability! This year, TAB's Out of Home advertising exposure ratings became the industry's official currency, bringing an unprecedented level of accountability to the medium. The level of evaluation made possible by TAB's out of home advertising exposure ratings increases our knowledge of the medium's true communication potential. In doing so, it benefits current Out of Home advertisers while opening the door for new advertisers to the medium to build more effective and more profitable multimedia campaigns. Actual exposures to each board in an Out of Home campaign are measured and reflected in demographic audience, $CPM, and multi-media reach and frequency systems used by advertising agencies for media planning. These data also may be used to fuel major national and local marketers' media mix modeling of return on investments (ROI) which help make future advertising campaigns even more effective. A new challenge! There is a unique challenge associated with making the most out of this opportunity... advertising agency multi-media planning strategists and Out of Home media specialists are each masters of only half of the new equation. The new data and evaluation tools empower multi-media planning strategists to discover the true value and power out of home will bring to their media plan. And media specialists' knowledge of each market's own out of home jewels can help design custom tailored uniquely powerful solutions to achieve advertisers' goals. Working together, OOH specialists and agency media planners are in the best position to deliver true innovation and creativity for their clients. A new award for excellence! To encourage this collaboration, and to honor accountability-driven media planning creativity, the TAB created the OOH Ratings Innovation Award. This award is designed to recognize when innovative use of the new ratings system reveals eye-opening strategic insight resulting in more effective media campaigns using Out of Home. It also celebrates agency media planning and OOH specialist "teams" whose collaborative efforts lead to these breakthroughs. For more information, contact Larry Hennessy at the TAB or Stephen Frietas at the OAAA. 11
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