Chapter 7 - Chapter 7 Quick Facts Average cost of 30-second...

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Chapter 7 Quick Facts Average cost of 30-second Super Bowl spot in 1976: $125,000 Average cost of 30-second Super Bowl spot in 2006: $2.5 million Amount of money spent on Internet display ads (2005): $8.3 billion Total sponsorship revenue for National Public Radio (2005): $37.7 million Cost of a 30-second spot on Katie Coric’s final Today Show: $110,000 Total spot TV advertising in Los Angeles TV market (2004): $2.1 billion What is the Business of Broadcasting? Broadcasting and cable are ways of linking viewers with advertisers while entertaining and informing an audience. Stations attract audiences because of their programming. Advertising revenue generates the profits that make programming possible. Broadcast stations and cable have different revenue streams. The Business of Broadcasting Mass media technology - an economical way to link large numbers of people with advertisers In electronic media there is an interplay between (The 3 Elements That are in Play all the time) technology the consumer economics of each medium Economic Models for Electronic Media Television and Radio model - Single Revenue Stream The audience is the product that media delivers to an advertiser. Cable model - Dual Revenue Stream Like broadcasting cable delivers an audience to an advertiser Cable charges a monthly subscription fee for receiving the program Competition and Electronic Media Electronic media all face competition ("Text Makes A Point") Government oversight is tied to how competitive the media Radio - 11,000+ commercial stations - fewer regulations Television - 1,300+ commercial stations - more regulations Cable - Local franchise - local mandates for serving the community Competition and Electronic Media
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(TREMS) MONOPOLY - where there is no practical competition OLIGOPOLY - there are a limited number of competitors - Best describes the electronic media. PURE COMPETITION - few market barriers allow many players to enter Competition among Different Media Types People use various forms of media differently Competition for radio listeners - radio is personal medium, meaning you are usually alone in the car, ect. Other portable devices (Walkman’s, CDs) compete with radio Radio programs music, news, and talk Competition for television viewers - TV competes with cable, movie rentals, etc Television programs dramas, stories, news and talk Advertisers will buy different media to reach listeners/viewers during different times of the day If you are trying to advertise a toy, you will do it at a certain time of the day and along with a certain program. Media Usage Per Year Per Person-- 2006 (Chart) Determining a Medium to Buy (Buying Advertisements) The triangular relationship in the media business between Programmers Media sellers Media buyers Successful programs develop audiences Media buyers buy time from sellers within or near those programs Determining a Medium to Buy Marketers and advertisers develop a buying plan based on Population or market size Effective buying income
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Chapter 7 - Chapter 7 Quick Facts Average cost of 30-second...

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