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Increasing advertising effectiveness through better selection of media.

As the nation's demographics, lifestyles, and family life-cycle stages change, assumptions about the effectiveness of a specific advertising vehicle are being challenged[11,13,14]. In particular, the challenge for the retailer is strong in the area of consumer media exposure habits.

Today no longer can a large number of consumers be easily identified on a basis of once-powerful segmentation variables such as values, attitudes, opinions and motivation; nor can they be reached as easily as before using the same traditional media vehicles.

Although addressing the target audience is the primary concern of retailers, advertising cost is also an issue. Depending on their availability (the time and space the ad can be placed) and reach the number of people exposed to the ad), some media vehicles are more expensive than others. Obviously it is very important to the advertiser to select the appropriate media vehicles with the necessary weight given to cost effectiveness.

Thus the question raised: Can the urban daily newspapers, the advertising vehicle expensively used by retail businesses, remain cost effective in the light of these changes? This paper will evaluate the effectiveness of urban newspapers as compared to suburban weeklies, and radio broadcasts as advertising vehicles for retail businesses.

Selecting Alternative Media Vehicles

Most retail businesses usually commit a large portion of their advertising dollars to newspapers, with the balance allotted to radio and television spot advertisements. They rely on newspapers to bring the customer in and make the business visible in the minds of the consumer. Once the budget is determined, the only question left is how frequently to advertise. Other important considerations include: the strength of the competition and the effect of the pricing policy adopted by the firm.

The adoption of local newspapers as the primary advertising vehicle is seldom questioned. Newspapers have, naturally, asserted that repeated, consistent advertising in their papers brings consumers into the store and helps promote a positive image of a business.

Retailers say that the equation, "Retail business; therefore, newspaper advertising," is a false premise forced on them by traditional practice and by newspaper advertising departments. Nevertheless, many of these retailers continue to use local daily newspapers as the primary vehicle for advertisements. For example, supermarket-style liquor stores generally spend a high proportion of their media budget on newspaper advertisements. Their product offerings, discount specials and sales are thus mainly communicated via newspaper advertisements[10,3].

Supermarket-style liquor stores, or for that matter liquor stores in general, have shunned the use of television and radio because of the National Association of Broadcaster's Code and the fear of possible public outcry against such advertisements[5]. Consequently, their advertising budgets, which often range between one and two percent of their sales revenues, are fully committed to print medium, specifically newspapers.

Where newspapers are used, the advertisements of one store are practically indistinguishable from those of others. To be sure, the advertisements are sale-specific, with very little in either subject matter or form (since most use very little open space between the block-style displays) to distinguish one from another.

The implementation of the recent liquor industry policy that allows television and radio advertising of certain categories of distilled spirits[9; p.6], coupled with the dissolution of the National Association of Broadcasters' Radio and Television Codes [4], gives advertisers an additional choice that was not available in the past. Since the change, liquor retailers, as well as some national advertisers, have begun to use new and different media vehicles in an attempt to custom-build their advertisements to their clientele's changing demographics and psychographics. In the wake of these changes, it is important to investigate whether or not supermarket-style liquor stores should develop a different media mix. This study was therefore designed to determine the effectiveness of the various media vehicles being used experimentally by a chain of supermarket-style liquor stores.

Methodology

The study is based on a telephone survey and a field experiment conducted in a large metropolitan area in New England.

Telephone Survey. In an effort to understand the target market a telephone survey was conducted among a stratified random sample of 2100 households (N = 110,500), selected from telephone directories, representing the diverse communities in the metropolitan area. The listing was further improved and made more complete by including the unlisted telephone numbers (estimated at 7 percent) using the add-a-digit dialing technique [6]. In terms of specific subsamples, 1200 households were selected from the city proper (N = 56,500) and 900 households were selected from the communities within 15 miles radius of the city proper (N = 54,000).

The major objective of the telephone survey was to complement the experimental study by providing demographics, psychographics, media awareness and exposure habits, and other purchase-related data on consumers and prospective consumers. To this end, members of the selected households were asked screening questions to determine whether they purchased beverages at any liquor stores, and then the qualifying households were asked to identify the person who normally made these purchases. Telephone interviews were conducted only with those who made most of the liquor purchases within a household and were willing to participate in the study. The interviews were conducted over a period of four consecutive evenings. The total number of useable questionnaires obtained this way was 797, with 300 from urban and 497 from suburban areas. This will make the overall response rate approximately 40 percent.

Specifically, the participants were asked questions which pertained to their shopping habits and demographics. Shopping habits questions were asked, on one hand, to determine who shopped where and when and what was purchased and, on the other hand, to assess the effects of advertisements on their purchase decisions. The demographic component was added to find out whether the suburban target market was significantly different from the urban target market.

Experiment. The experiment involved the manipulation of three different media vehicles (i.e., radio, urban daily newspapers and suburban weeklies) in three different retail outlets and three separate markets. The impact and effectiveness of these vehicles were measured by comparing store traffic and sales revenues of the previous quarter with the quarter during which the experimental changes were instituted. Further, to assess the impact of uncontrollable changes in the external environment, the advertising and sales promotion activities of competitors were monitored both in the pre and post experimental periods.

The major objective of the experiment was to identify any shift in attitudes and purchase behavior patterns resulting from the changes in media vehicles: (1) from urban dailies to suburban weeklies, and (2) from urban dailies to radio broadcasts (urban and suburban areas). By so doing, the effects of the independent variables (media vehicles) on the dependent variables (store traffic and sales volume) were investigated using a pre and post group design (see Figure 1).

To determine the media exposure (i.e., newspaper reading and radio listening) habits of households in the central metropolitan area and its surrounding (suburbs), the responses were categorized, the percentages computed, and the appropriate statistical tests performed.

Thus through the examination of consumer responses to the changes in media vehicles, the study attempts to address three specific issues. First, with respect to the type of newspapers regularly read by consumers, determine whether or not (1) consumers use liquor store advertisements, and (2) urban dailies and suburban weeklies are effective advertising vehicles. Second, with respect to the types of radio stations regularly listened to by the target market, determine the reach of radio broadcast in the morning and evening drive time. Third, with respect to cost effectiveness and impact of media vehicles, compare the ability of newspapers and radio to draw the public into the store.

Beyond the issue of newspaper reading and radio listening habits of suburban and urban populations, is the question of the similarities and/or differences between the two target markets. To test the difference between the two target markets, the media exposure habits of the two markets shall therefore be compared with one another using a chi-square test.

Expectations

The expectations of management (and our tentative hypotheses are rational) were as follows:

(1) Since customers and prospective customers in the urban location have a low opportunity to see advertisements in the urban dailies, a change in the choice of media vehicles may generate an increase in sales. Because they result in less than optimal media exposure (20 percent awareness), it was felt that the advertisements in urban dailies can be discontinued, and be replaced by radio broadcasts. Radio was expected to increase the urban population's opportunity to listen to the messages and therefore its exposure to the advertisements.

(2) Since the two target markets are different at least in some important aspects, initiating advertisements in suburban community weeklies may be an appropriate way to increase that target market's media exposure.

Some overlap in media exposure was expected in the reach of radio and weekly newspapers in suburban target markets, as suburban residents listen to many radio stations. Although this might confound the effect of weekly newspapers in the suburbs, we expect the crossover to have limited impact.

Results and Analysis

The findings indicate that in the central metropolitan area, 95 percent of the households in the target market read the major daily newspapers with 20 percent being aware of the regular appearance of advertisements for supermarket type liquor stores. Less than half of the target market (47 percent) listened regularly to one or two of the six most popular radio stations with no one station holding a substantial rating edge. Roughly half of this group (48 percent) were college students.

In the suburban target market, 95.3 percent read the urban dailies. Nevertheless, only 15.8 percent were aware of the supermarket-type liquor store advertisements. In terms of radio listening habits, 65.4 percent listened regularly to radio stations whose call letters they could identify. Some 12.6 percent of the people in the suburbs habitually tune to one radio station. The second most popular radio station was listened to by 1 1.7 percent of the target population, while some 10.4 percent listened to the third most popular station, and some 8.9 percent listened to the fourth. Two radio stations tied for the fifth spot with a market share of 8.4 percent. The remaining 34.6 percent of the target market audience reported occasionally listening to another of the available 34 stations.

As shown in Table 1, the results of the change to local community weeklies were quite dramatic. Compared with past sales revenue when urban newspapers were in use bench mark), the change away from urban daily newspapers resulted in an increase of 8 percent in sales revenue in one store, and an increase of 3 percent in another store. The increase in sales was significant at p<.o1 level [(x.sup.2] = 29.910). Furthermore, the change from urban daily newspapers to suburban weeklies resulted in total savings from prior advertisement expenditures of about 50 percent. Assuming an equal effectiveness in urban and suburban markets, the savings for the suburban market were roughly 25 percent. The gain for the suburban market, however, is believed to be much higher than the reported 25 percent, since the suburban target markets cannot be effectively reached through urban dailies.
Table 1
Changes in Sales and Store Traffic By Location
 As a Result of Changes in Media Vehicles
 Sales Store Traffic
Store I II I II
Print Media 8% 3%(**) 5.53% 1.8%(**)
Broadcast Media 12%(***) 6.53%(***)
Change in * Urban - Suburban Suburban - Suburban
(**) significant p <.01 level
(***) significant p <.001 level


The increase in store traffic after the change in media vehicle was substantial for one of the suburban locations (significant at p<.01 level; [x.sup.2] = 19.6381). However, the increase for the other suburban store location was not statistically significant even at p<.01 level (x.sup.2 = 2.0721).

The urban target market where radio was used as a vehicle of communication, replacing the urban daily newspapers, showed a significant change both in store traffic and sales. Measured during the quarter before and after the experiment, sales for the urban store registered an increase of 12 percent. The increase in traffic counts (i.e, the number of people visiting the store) was 6.53 percent. Compared to the earlier quarter, these changes were statistically significant at p <.001 level ([x.sup.2] = 200.3773 for sales, [x.sup.2] = 27.7859 for store traffic).

The change in media vehicles therefore appears to bring about a better fit between the target audience's media exposure habits and the new media vehicles.

Discussion

The results of this study suggest that the responsiveness of some target markets can be enhanced by changing the advertising vehicles.

Clearly, the increase in sales revenue and store traffic would not have come without the prerequisite change in media vehicles. The increase in sales in the suburban store suggests that the new vehicles created a better opportunity for the message to be seen and heard by the target population than did urban daily newspapers. However, it was also possible that the change in consumer purchase behavior in the metro area resulted from the fact that the radio advertisements received greater attention because they were a new phenomenon. But do consumers pay that much attention to advertisements? Is a liquor ad, because it was inserted in a community weekly paper for the first time, likely to arouse the curiosity and interest of the public?

We do not discount the possibility that the change in advertising format plus the change in vehicles may have brought about a change in message awareness among the public. However, the fact that sales and store traffic remained steady for more than 90 days is an indicator that the change in the advertising vehicle was of tremendous value in creating a better fit with the lifestyles of the target market.

If the chosen radio station provides the public with a better opportunity to listen to an advertisement, it may subsequently fit better with the target market's psychographics. Based on this principle, an effort was made to increase the reach of radio broadcasts by fine-tuning the selection of stations. This strategy may have reinforced the awareness created by previous newspaper advertisements.

For a multi-store operator with outlets in urban as well as suburban locations, the desire to use an urban paper is based on tradition and on lesser advertisement preparation costs. It is cheaper to prepare a message that is repeated time and again. It may also seem to be cost effective in that both markets can be addressed in one vehicle. However, it may not generate the desired media exposure. In our field experiment, advertising exclusively in urban daily newspapers decreased the power of the media budget.

Long Term Media Decisions

Nevertheless, before the chain-store decides to change its media vehicles in the future, it should examine the similarities between the urban and suburban target markets. Such an investigation should give the advertiser the best opportunity to have his or her messages seen or heard by the target population. If, for example, the demographics are different, then the issue of media appropriateness and fit will become the central question. Following this reasoning, the demographics and media exposure habits of the urban and suburban target markets were compared.

Notably, the findings from the study indicated that there were mainly in the sex composition of the two target markets. There were also significant differences in the age composition ([x.sup.2] = 14.7220, p <.01) and in the incomes ([x.sup.2] =23.4547, p<.01) of the urban and the suburban target markets. When the two target markets' exposures to radio commercials and newspaper advertisements were compared, there were also significant differences between the urban and suburban populations in exposure habits (x.sup.2] = 64.137; significant at p<.01 level).

These differences between the urban and suburban target populations raise the important question: Should the traditional advertising vehicle (i.e, urban daily newspapers) continue to be used, ignoring the apparent differences in both media exposure opportunities and actual media exposure habits in the target market? Should the vehicles be changed to fit the exposure habits of the population?

In this study, the retailer/advertiser felt that the changes in media vehicles promised some acceptable exposure levels. Therefore the adjustments made assumed two different forms: change in media vehicles[7], and/or change in message content, and the frequency of the message[12,8,2,1].

Summary and Conclusion

In a field experiment involving three retail outlets in three distinct markets, the effects of urban dailies, suburban weeklies and urban radio stations on store traffic and sales volume were investigated. Before and after changes in advertising vehicles were evaluated by comparing sales records and store traffic counts for the quarter before and the quarter during the experiment.

Systematically changing the media vehicles used in store advertisements resulted in better responsiveness in terms of store traffic and sales volume. The savings to the advertiser were considerable. The suburban weeklies were found to be an excellent media vehicle in reaching the suburban target segment while radio appeared to create a better fit with the lifestyle of urban residents. Urban dailies, despite their popular use, were not as cost effective as the other media vehicles.

The study suggests that advertising in local, weekly community papers may be a better alternative than urban dailies for two reasons: first, because it is difficult to reach the suburban market using radio (the audience's listening tendencies are spread over several radio stations); second, because urban dailies, as an alternative media vehicle, offer lower advertisement exposure opportunity to suburban residents.

Radio presents a unique alternative. As judged from the media exposure habits of the target market, radio broadcasts appear to fit best with the psychographics of urban residents. The change to radio was thus viewed as desirable in creating synergy and in increasing the target market's opportunity to listen to the messages. This is further manifested by the improvements in store traffic and sales revenue for the store in the urban location.

Thus, whether it is a one-store or a multi-store operation, this field experiment suggests that, in spite of cost advantages promised by urban daily newspapers, it may be strategically unwise to exclusively use one medium in a major market with overlapping suburban-urban target markets. The emphasis should be on creating a fit with the target market's demographics and psychographics. What may be a good choice at one or two locations may be unwise at others.

This study is valuable in showing that the appropriate choices of media vehicles result in better media exposure and reach; however, it has some limitations. First, the findings may not be sufficient to generalize to other markets, retailers, or classes of trade. Second, the study could have been affected by the first time use of radio broadcasts.

These shortcomings may be overcome by replicating this study in other regions of the country. It would therefore be of great research interest to analyze the differences in consumer responses as a result of the changes in advertising vehicles in other parts of the country.

Despite these limitations, this field experiment is of value to multi-store operators in showing that the absence of demographic differences between urban and suburban consumers does not mean that the same media vehicles can be used in all markets. The underlying differences among target markets have to be investigated.

References

[1.] Albaum, Gerald and Hawkins, Del I., "Geographic Mobility and Demographic and Socioeconomic Market Segmentation, "Journal of the Academy of Marketing Science, Vol. I 1, No. 2, Winter 198 3, pp. 97 -113. [2.] Behrmann, William, "Putting Effective Frequency to Work in Media Planning," in Effective Frequency: 7he State Of the Art, Advertising Research Foundation, Key Issues Workshop, New York, June 4, 1982. [3.] "Despite Ban Liquor Marketers Find New Ways to Get Products on Television," Wall Street Journal, March 14, 1988, p. 29. [4.] Fritts, Edward O., President, National Association of Broadcasters, statement before the subcommittee in Alcohol Advertising: Hearing Before the Subcommittee on Children, Family, Drugs and Alcoholism of the Committee on Labor and Human Resources, U.S. Senate, 99th Congress, 1st Session (February 7, 1985), p. 184. [5.] Gardner, Fred, "Will Liquor Break the Broadcast Barrier?" Marketing & Media Decisions, Vol. 17, No. 10, September 1982, pp. 66-67, 197. [6.] Landon, E.L., Jr., and Banks, S.K., "Relative Efficiency and Bias of Plus-one Telephone Sampling," Journal of Marketing Research, Vol. 14, No. 3, August 1977, pp. 294-299. [7.] Lesser, J.A. and Hughcs, M.A., "The Generalizability of Psychographic Market Segments Across Geographic Locations," Journal of Marketing Research, Vol. 50, 1980, pp. 18-27. [8.] Naples, Michael J., Effective Frequency: The Relationship Between Frequency and Advertising Effectiveness. New York: Association of National Advertisers, 1979. [9.] "New Liquor Policy to Give Bacardi a Shot at TV Spots," Advertising Age, March 14, 1988. [10.] "Newspapers Remain Top Retail Ad Medium," Marketing News, Vol. 21, March 13,1987, p. 13. [11.] Rogers, Everett M. and Balle, Francis, The Media Revolution in America and Western Europe. Norwood, New Jersey: Ablex Publishing Corp., 1985. [12.] "Use Optimization Modeling to Identify Target Markets, Design Market Plans," Marketing News, Vol. 17, No. 2 (January 21, 1983), p. 21. [13.] Vaccaro, Joseph and Kassaye, W. Wossen, "T.V. Syndication: A Managerial Perspective," Journal of Media Planning, Vol. 5, No. 1, Spring 1990, pp. 10-16. [14.] "|Zapping' of TV Ads Appears Pervasive: Study Details Viewing Habits To the Second," Wall Street Journal, April 25, 1988, p. 29.
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Author:Kassaye, W. Wossen; Vaccaro, Joseph P.
Publication:Review of Business
Date:Dec 22, 1991
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