How Should I Buy Time on the Radio?

Like a newspaper, each radio station has its own advertising staff. Each wants you to believe that their station is the absolute best buy for your money...and many will go to great lengths to prove it. But if you've done your research, or you are using an advertising agency, you probably have a good idea of the station you want to buy time on and when. If you don't know which stations you want to use, ask each station for its own research, that is, the type of programming, musical format, geographic reach, number of listeners and station ratings.

By getting the station ratings and the number of people it reaches, you can figure out the cost-per-thousand people (CPM) by simply dividing the cost of a commercial by the thousands of people you are reaching.

Example: Cost of commercial = $35.00, Audience reached = 45,000 people.

Cost of commercial per 1000 people = 35/45 = $0.78 per 1000

Without getting complicated, here are two cardinal rules for radio advertising:

1. It's better to advertise when people are listening than when they are not.

2. It's better to bunch your commercials together than to spread them apart.

A lot of radio sales reps will try to talk you out of advertising during specific times. They'll offer you a reduced rate called TAP (Total Audience Plan) that splits your advertising time into 1/3 drive, 1/3 mid-day and 1/3 night. This may sound like a good deal, but airing commercials during times when your audience isn't listening is bad advertising. If however, you are sponsoring a show such as Paul Harvey or the Morning Farm Report, it makes sense to advertise once or twice a day on a regular basis, since those programs have regular listenership. Frequency is a vital element for effective radio advertising.

Since you can't automatically recall the radio commercial and hear it again, you may have to hear the same commercial two, four, or maybe six times before the message sinks in. If you missed the address the first time, you consciously or subconsciously are hoping the commercial will be aired again so you can get the information you need. That's the way radio advertising works. And that's also the way you buy it.

Most of the time, radio advertising should be bought in chunks. High frequency over a short period of time is much more effective than low frequency over a longer period of time. It's important for your audience to hear your spot again to get more information out of it. For example, if you wanted to advertise a two week campaign and you could afford 42 radio commercials, the following buy would serve you well: On Tuesdays, Wednesdays and Thursdays, place three spots between 7-9 a.m. and four spots between 3-6 p.m. for two weeks. Notice that both day and hour periods are concentrated.

By advertising in concentrated areas in tight day groups, you seem larger than you really are. And people hearing your concentrated campaign for two or three days will think you're on all the time. The radio sales reps may try to sell you three spots everyday on the station for 14 days (a total of 42 spots). But your campaign won't be nearly as effective.

Here are a few tips to help you plan your commercials:

If you're including your address in the commercial, simplify it. Instead of "134525 East Pines," say "at the corner of First & Pines, next to Gumbies." It's easier to remember.

Don't use phone numbers in your commercial. If you have to mention your phone number, refer to the Yellow Pages in the local phone book.

Radio works better when you combine it with other advertising media.

Check out the price differences between 60-second and 30-second commercials. Normally, 30-second commercials are only 1/3 less than 60's, which makes a 60-second commercial a better buy.

Be creative with your radio advertising, too. If it sounds like all the rest of the commercials, it won't stand out. Your message won't be heard nearly as well. Advertising agencies are usually quite good at producing creative radio commercials.

If you decide to write your own radio scripts, remember these basic copy writing rules:

Get your listener's attention immediately.

Write in conversational style.

Avoid using buzz words or jargon.

Repeat your important points.

Make your ending strong and positive with call-to-action for response.

TELEVISION MARKETING MRDIA

Television is often called "king" of the advertising media, since a majority of people spend more hours watching TV per day than any other medium. It combines the use of sight, color, sound and motion...and it works. TV has proven its persuasive power in influencing human behavior time and time again. But it's also the "king" of advertising costs.

Advantages in Television Advertising Media

Television reaches very large audiences-audiences that are usually larger than the audience your city's newspaper reaches. The area that a television station's broadcast signal covers is called A.D.I., which stands for "Area of Dominant Influence."

Some advantages of television advertising include the following:

Advertising on television can give a product or service instant validity and prominence.

You can easily reach the audiences you have targeted by advertising on TV. Children can be reached during cartoon programming, farmers during the morning agricultural reports and housewives during the afternoon soap operas. A special documentary on energy sources for heating homes and business will also attract viewers interested in heating alternatives.

TV offers the greatest possibility for creative advertising. With a camera, you can take your audience anywhere and show them almost anything.

Since there are fewer television stations than radio stations in a given area, each TV audience is divided into much larger segments, which enables you to reach a larger, yet, more diverse audience.

Prior to opening your business you must decide upon the general price Level you expect to keep. Are you going to appeal to people
buying in the high, moderate, or low budget? Your choice of location, appearance of your establishment, quality of merchandise
handled, and services to be provided will depend on the clients you would like to attract, and so will your prices.

After establishing this overall price level, you are ready to cost Individual products. In general, the price of an item must
cover the cost of this item, the other expenses, and a profit. Thus, you'll need to markup the item by a specific amount to cover
costs and earn a profit. In a business that sells few things, total prices can easily be allocated to each product and a markup
immediately ascertained. With a variety of items, allocating costs and determining markup may need an accountant. In retail
operations, products are often marked up by 50 to 100 percent or more simply to earn a 5 percent to 10% profit!

Let's work through a markup example. Suppose your organization sells One product, Product A. The supplier sells Product A for you
for $5.00 each. You and your accountant determine the costs entailed in selling Merchandise A are $4.00 each item, and you want a
$1 per item profit. What's your markup? The selling price is: $5 and $4 plus $1 or $10; the markup therefore is 5. As a percent,
it's 100%. So you need to markup Merchandise A by 100% to produce a 10% gain!

Many small business managers are interested in knowing what Industry markup standards are for a variety of products. Wholesalers,
distributors, trade associations and business research firms publish a massive assortment of such ratios and business statistics.
They're useful as guidelines. Another ratio (along with the markup percent ) significant to small firms is your Gross Margin
Percentage.

The GMP is similar to your markup percent but whereas markup Identifies the percent over the cost to you of each product that you
must set the selling price so as to cover the other costs and earn profits, the GMP shows the association between sales revenues
minus the expense of the item, which is your gross margin, along with your sales revenues. What the GMP is telling you is your
markup bears a certain relationship to your sales earnings. The markup percent along with the GMP are basically the exact same
formula, with the markup speaking to individual item pricing and GMP referring to the product costs times the number of items sold
(volume).

Maybe an example will clarify the purpose. Your company sells Product Z. It costs you $.70 each and you decide to sell it for $1
each to cover costs and gain. Your markup is 43%. Let up state you sold 10,000 Product Z's Last month hence producing $10,000 in
revenues. Your price to buy Product Z was $7000; your gross margin was $3,000 (revenues minus cost of goods sold). This is also
your gross mark for your month's volume. Your GMP would be 30 percent. Both of these percentages use the same basic amounts,
differing only in branch. Both are utilized to establish a pricing system. And both are published and may be utilized as
guidelines for small businesses beginning out. Often supervisors determine what Gross Margin Percentage they'll need to make a
profit and simply go to a published Markup Table to discover the percentage markup that correlates with that margin requirement.

While this discussion of pricing might appear, in certain respects, to Be directed just to the pricing of retail merchandise it
can be applied to other kinds of companies as well. For services the markup has to cover selling and administrative costs in
addition to the direct cost of doing a specific service. If you're producing a product, the costs of direct labor, materials and
supplies, components purchased from different issues, special equipment and tools, plant overhead, selling and administrative
expenses must be carefully estimated. To compute a cost per unit needs an estimate of the number of units you plan to produce.
Before your mill becomes too large it would be wise to consult a lawyer about a cost accounting system.

Not all items are marked up by the typical markup. Luxurious articles Will take more, staples . For instance, increased sales
volume from a lower-than-average markup on a certain item - a"loss leader" - can bring a higher gross profit unless the purchase
price is reduced too much. Then the consequent increase in earnings won't increase the entire gross profit enough to compensate
for the low price.

Sometimes you Might Wish to sell a particular item or service in a lower Markup so as to increase store visitors with the hope of
increasing earnings of Regularly priced merchandise or creating a high number of new support contracts. Competitors' costs will
also govern your prices. You Can't market a Product if your competition is greatly underselling you. These and other Factors Can
make you change your markup among items and services. There's no magic Formula that will work on each item or each service all the
time. But You ought to remember the general average markup which you need to make a Gain.

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