Reaching a Wide Audience in a Fragmented Market: A Lesson from the United Kingdom

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1 Reaching a Wide Audience in a Fragmented Market: A Lesson from the United Kingdom Arry Tanusondjaja, University of South Australia, arry.tanusondjaja@unisa.edu.au Rachel Kennedy, University of South Australia, rachel.kennedy@unisa.edu.au Jennifer Taylor, University of South Australia, jennifer.taylor@unisa.edu.au Erica Riebe, University of South Australia, erica.riebe@unisa.edu.au Abstract Television audiences across the world are becoming increasingly fragmented as the number of channels proliferates, which makes media planning very challenging. This research considers two UK consumer goods campaigns conducted in 2008 and Matching spot reports with actual television viewing data, the impact on cumulative reach of allocating spots differently (i.e. different campaign length, spot allocation) is analysed. The research explores Ephron s shelf-space advertising principles and confirms that a high level of reach is possible through spot dispersal across many channels in fragmented markets. The research also finds that using additional spots does not automatically equate to more reach great variations in the reach achieved are possible depending upon the way in which spots are placed. Tactics to guide media planning are therefore suggested.

2 Reaching a Wide Audience in a Fragmented Market: A Lesson from the United Kingdom Introduction Television audiences in countries such as the United States, United Kingdom and Australia have experienced rapid fragmentation. In the United States, there were only three major broadcast networks in 1977 ABC, CBS, and NBC which accounted for 90% of all the primetime television watched by Americans at that time. In comparison, the total viewership of these three channels had dropped to 29% in the season, caused by the proliferation of networks, with other countries also exhibiting similar patterns in viewership (Webster, 2005). In the UK, the market has also undergone an enormous shift from three-channels in the 1980 s to a multichannel environment today. Based on the data obtained from the Broadcasters Audience Research Board (BARB), the share of viewing in the television market in 1981 was: ITV (49%), BBC1 (39%) and BBC2 (12%). In 2009, the share of viewing changed dramatically: ITV (18%), BBC1 (21%) and BBC2 (8%) with 41% shared by various pay television channels. In Australia the market is also becoming increasingly fragmented. By the end of 2009, 84% of the households viewed free-to-air TV with around 65% of this viewing shared by the three major commercial stations (FreeTV, 2010). In recent years, the number of free-to-air channels has grown with three additional commercial and three additional governmentsponsored channels, with pay television also contributing to the audience fragmentation. OzTAM data shows that pay television held more share of television viewing (24%) for the first five months in 2010 than in previous periods. (This percentage being shared across many small subscription channels available to the audience). A similar trend is also apparent in New Zealand where after a long period of one or two television channels domination in 1970 s, there are currently 18 free-to-air television channels available to the New Zealand population through Freeview along with numerous pay television channels. Faced with such situations, it is a challenge for advertisers to reach their intended audience. They now have to spread their advertising across the larger number of channels in order to reach the same audience that was once available by just advertising on a few channels. The paper evaluates reach-based media tactics, as prescribed by Ephron (1995), in a fragmented or multi-channel television market comparing the results of two advertising campaigns conducted by a consumer goods brand in the UK in 2008 and The paper is intended as a detailed case study investigation of campaign performance in a fragmented media market. The results will assist media planners and strategists to schedule advertising to obtain the optimal level of reach in such an environment. Background With limited marketing budgets, advertisers are faced with the challenge of allocating resources within and across various media. One key challenge they face is how to reach a wide target audience in a cost-effective manner. In searching for such cost efficiency, advertisers and media planners seek to improve reach and minimise wastage for their budget.

3 One traditional approach to cope with a limited budget has been to define specific segments of the target audience and intensify communication to groups belonging to this target. Target segments can be defined by a range of characteristics including demographics, psychographics or the combination thereof (Millman, 1986; Onishi and Nakai, 2005; Walker, 1998). However, focusing communication on such segments limits potential for brand growth, given the importance of the light buyers to brand health (Sharp, 2010). Conversely, rather than focusing on specific targets, Ephron (1995) states that it is crucial to ensure that the advertising is available to any potential consumer when they are in the market to purchase (the advertising shelf-space model). Advertising reach should be maximised to cover potential consumers whether they are in the intended target segment or not (Ephron, 1997). Reach is defined as the percentage of the population exposed to the ad at least once during a defined period of time (McDonald, 1995). Within the realm of television advertising, Ephron (1995) argues that total target points and dispersion, and not rating levels, build reach. Ratings points (as measured by GRP (Gross Rating Points) in the United Kingdom, and TARP (Target Audience Rating Points) in Australia) are the product of reach and average frequency. It is generally difficult to ascertain when consumers are actually within this purchase decision period. Excluding seasonal goods, different consumers make their purchase(s) at different times within a year following a near-random distribution (Ephron and Heath, 2001). Advertising should, therefore, be dispersed as widely as possible to maximise reach across different parts of the consumer population, across time. In addition to spreading advertising out across time, another method for maximising reach is to disperse the advertising across multiple television channels (Ephron, 1997). Ephron (1997) further elaborates that media fragmentation and the large number of channels actually makes it easier for practitioners to advertise across channels and therefore to increase the reach of their campaigns, as additional channels may offer advertisers access to additional viewers. In a study of reach-maximising tactics used in the Australian market, Newstead tested five tactics that could assist in optimising reach (Newstead, 2010): Extending media campaign length; Distributing media across all viewing day-parts, keeping the emphasis on prime-time; Scheduling simultaneous advertising in directly competing channels ( road-blocking ); Spreading the budget across all networks according to aggregate viewing behaviour; Varying the media budget across all days of the week. Newstead found that these tactics could result in reach-efficiency gains between 2% and 46% despite only small adjustments being made to the media schedule. While an important finding, Newstead s research was limited to the Australian media context and so replication is needed in a more fragmented market, in order to further evaluate the impact of such reachmaximising tactics. Rather than implementing hypothetical adjustments to the spot reports (as in Newstead s), this research compares the cumulative reach achieved by two campaigns that were run in 2008 and 2009 by a consumer goods brand in the United Kingdom. In comparison to Newstead s research, this study specifically considers the role of campaign length and number of channels used in evaluating the impact of reach maximising tactics on reach achieved.

4 Research Methodology The research analysed two spot reports for a consumer goods brand in the UK that were on air in 2008 and The campaigns were run nationally through free to air and pay television channels. Although most of the spots were broadcast to the network coverage area, some spots were also allocated to specific locations, for example: ITV Anglia; which means that the spots were aired in the eastern part of England and broadcasted by ITV Anglia part of the ITV Network. The spot reports are matched with actual television viewing data from BARB through Kantar Media s InfoSysTV UK. The research universe is defined as the adult population (those over the age of 16). After the campaign data were coded, there are 17,498 spots for the 2008 campaign, aired in 190 specific channel and area combinations and 23,998 spots for the 2009 campaign, aired in 187 specific channel and area combinations. To isolate the impact of campaign length extension, analysis was also conducted to limit the number of spots for the 2009 campaigns to the same level as in 2008 through random selection. This is necessary for the research to differentiate the impact of additional 6,500 spots compared to the additional five weeks of campaign in Apart from the weekly reach (r), analysis was also done by comparing the Annual average weekly reach (r ), calculated using the following: r annual (r on air * n on air ) (0* n off air ) 52 where r is the average weekly reach, n is the number of weeks on-air or off-air respectively. Consistent with the principle of shelf-space advertising (Ephron, 1995), the calculation penalises campaigns that are conducted in short bursts with long periods of dormancy. Annual average weekly reach rewards campaigns that incorporate more weeks of advertising pressure and record high reach during these weeks. Therefore, campaigns that perform well on this metric will be those that obtain high reach during on-air weeks and/or reach across many weeks of the year (Newstead, 2010). Comparing the two campaigns produce the following insights: Findings 1. Consistent with the findings by Newstead (2010), longer campaign periods have a positive impact on reach. A 4% improvement in cumulative reach and 38% improvement in Annual average weekly reach (based on the same number of spots) was recorded. The campaign was run over 18 weeks throughout the year in 2008, compared to 23 weeks in The cumulative reach for 2008 was 89% compared to 94% in 2009, which translates to a 5% reach improvement. Naturally, the 6,500 extra spots in 2009 also contributed to the greater reach. When the number of spots in 2009 was kept to the same level as 2008 through random selection, the cumulative reach for 2009 was 93%, (4% improvement over the reach in 2008). In order to achieve such a high level of reach, the campaign was run through 190 stations/area combinations in 2008, and through 187 stations/area combinations in The weekly reach (r) for 2008 was 28% compared to 30% in 2009 (an 8% improvement). In terms of Annual average weekly reach ( r ) which takes into account the number of weeks that the campaign was off-air, r 2008 is 9.7% whereas r 2009 for the campaign is 13% (a 38% improvement). The findings

5 confirm that improved results may not necessarily require larger resources as more optimal reach can be achieved by better scheduling. 2. Steady spot scheduling produces better results compared to heavy spot peaks. As the campaigns tested here advertised already established brands, we would expect a continuous advertising approach to scheduling to be more effective (McDonald, 1994). We acknowledge that this situation may be different for new brands, which may be justified in scheduling to obtain initial high frequency. McDonald also states that a high frequency will increase response, but extra response may become wasteful. The 2008 campaign was conducted in a principle that is more aligned with this reach was built more slowly with the reach after week-4 being 55%. However, the campaign in 2009 started with a burst achieving 42% reach in week-1, and 65% reach by the end of week-4. As a high level of reach was already achieved early in the year, subsequent bursts did not provide much additional reach, for example, a burst of 2,002 spots in the second week of May 2009 only delivered 1.5% additional reach. 3. Strategic selection of channel/area combination produces better reach efficiency. Although Ephron (1997) suggests that planners should buy a lot of spots on different television channels and disperse them across lower-cost day parts, some strategising will also improve the reach efficiency. Allocating a large number of spots on stations with limited reach will produce greater wastage, as it does not contribute more unique viewers. For example, for the 2008 campaign, the second largest number of spots (315) were allocated to a pay TVchannel targeting female viewers that only produced 0.5% of reach for the whole year. In comparison, only 132 were allocated to a pay TV channel catering for year olds, generating 11% reach. The results show that there might be greater overlap in audience composition between the TV channel which targets female viewer with other channels that were selected before, compared to the one catering for year olds. 4. Time-delayed channels do not produce the same level of reach as the actual channels. Some subscription television channels in the UK are repeats of the actual channels with a one-hour to two-hour delay. Some spots were allocated to the channels as well as to timedelayed channels. Across various channels that were analysed (Discovery vs. Discovery+1 and Discovery+1.5; Dave vs. Dave ja vu, to name a few), reach is consistently lower on time-delayed channels compared to the actual channels with the same number of spots were allocated. The pattern was consistent across the two years. 5. Media fragmentation limits the practicality of road-blocking. Due to the number of television channels in the market, running simultaneous advertising ( road-blocking ) in competing channels means allocating spots across a large number of stations in a fragmented market. Partial road-blocking is still possible by targeting a number of the channels and running the advertising within a similar short time period (for example, within one to 10 minutes). Conclusion As the television market in Australia and New Zealand is undergoing further fragmentation, some lessons can be learned from the two campaigns in the United Kingdom. The results suggest that high level of reach can be obtained in a media fragmented market through wide spot dispersal to a large number of television channels. The research also confirms that longer advertising shelf-space has positive impact on reach. Although the

6 2009 campaign was conducted with 6,500 extra spots which had a positive impact on reach, when the numbers are kept constant for analysis (17,498 spots), a 4% improvement on cumulative reach is still achieved by extending the campaign from 18 weeks in 2008 to 23 weeks in Taking into account the number of weeks that the campaign was off air also affected the Annual Average Weekly Reach in 2008 compared to figure in 2009 (9.7% vs. 13%, which translates to 38% increase in 2009). The results also emphasise the importance of spot placement strategies additional spots do not automatically produce greater reach, as illustrated through the research: heavy spot placements that cannot be sustained in the subsequent weeks will mean greater wastage for brands with typical diminishing returns. Another consideration is whether media planners should place large number of spots in a large television network or build reach steadily over time through a combination of smaller channels and large networks. Media planners should also evaluate previous campaign execution to assess whether the investment in spot placement in specific channels is warranted through the level of reach generated. Contrary to the belief that fragmentation makes it difficult to reach large number of different consumers quickly, this research provides further proof that it is possible through spot dispersal across a large number of channels. Acknowledgements The authors acknowledge the generous assistance from Mars, Incorporated for the provision of spot data, as well as the usage of BARB data through InfoSysTV UK as provided by Kantar Media.

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