A media buying agency has recommended the following 3 options to a marketing manager for his advertising campaign with a budget of $ 1 million. The 3 options utilize different amounts of the budget. The sales of this product are $24 million in a market of $200 million and the total advertising expenditure in the category is $8.33 million. The product is not a new product but a brand leader in the market for some years. The 3 options are:Option 1 Option2 Option 3GRPs 600 800 900Reach 70% 60% 65%CPM $20 $20 $20SOV 8% 12% 16%Which option should the marketing manager choose? Explain your choice.
Question
A media buying agency has recommended the following 3 options to a marketing manager for his advertising campaign with a budget of 24 million in a market of 8.33 million. The product is not a new product but a brand leader in the market for some years. The 3 options are:Option 1 Option2 Option 3GRPs 600 800 900Reach 70% 60% 65%CPM 20 $20SOV 8% 12% 16%Which option should the marketing manager choose? Explain your choice.
Solution
To determine the best option, the marketing manager should consider several factors: Gross Rating Points (GRPs), Reach, Cost Per Thousand (CPM), and Share of Voice (SOV).
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GRPs: This measures the total volume of delivery of your message to your audience. Option 3 has the highest GRPs at 900.
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Reach: This is the percentage of the target market that will be exposed to the media vehicle at least once. Option 1 has the highest reach at 70%.
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CPM: This is the cost of reaching one thousand potential customers with the advertising message. All options have the same CPM at $20.
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SOV: This is the percentage of total advertising in a category spent by the brand over a defined period. Option 3 has the highest SOV at 16%.
Given these factors, Option 3 seems to be the best choice as it has the highest GRPs and SOV, indicating a higher overall exposure and presence in the market. However, it's important to note that Option 1 has a higher reach, meaning it could potentially expose the advertisement to a larger percentage of the target market.
The final decision should also consider the specific goals of the campaign. If the goal is to maximize exposure and presence in the market, Option 3 would be the best choice. If the goal is to reach a larger percentage of the target market, Option 1 might be a better choice.
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