Reach and frequency are termstypically used when planning an advertisingcampaign. Reach is the number of people who

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Reach and frequency are termstypically used when planning an advertisingcampaign. Reach is the number of people who areexposed at least once to an advertising message over a specificperiod of time, usually four weeks. Frequency isthe number of times a person is subjected to an advertising messageover a certain interval of time. You added that it is important todetermine which is more effective, to touch 100 viewers once or 25viewers four times? Impressions refer tothe total number of exposures to your advertisement (i.e., reachmultiplied by frequency). The media cost is theprice you pay the TV channel to broadcast your advertisement.The target market is the total number of peoplewho could potentially be exposed to your advertisement.The rating is a number, ranging between 0 and100, that corresponds to the amount of estimated viewers of aparticular television program (or, the target market size reachedby a campaign when it is broadcasted on a local TV program). Thesedata are sourced from surveys or research companies such asNielsen.

Using the data below, you worked with Grazyna to calculate therevenue per ad dollar of the three TV campaigns beingbroadcast to Sacramento viewers during various programs.

Television Campaign: Local News Program

Number of Spots: 5

Rate (Ad Cost per Spot): $80,000

Target Market (Sacramento, CA): 466,488

Rating (Obtained from Nielsen Data): 3.8

Revenue per Impression (Obtained from Company Data): $65

Television Campaign: Local Sitcom

Number of Spots: 8

Rate: $35,000

Target Market: 466,488

Rating (Obtained from Nielsen Data): 2.5

Revenue per Impression: $45

Television Campaign: Local Talk Show

Number of Spots: 10

Rate: $15,000

Target Market: 466,488

Rating (Obtained from Nielsen Data): 1.6

Revenue per Impression: $25

Component	News Program	Sitcom	Talk Show
Frequency (No. of Spots)
Rate
Media Cost (Frequency x Rate)
Target Market
Rating
Reach (Target Market x Rating) /100
Impressions (Reach x Frequency)
Revenue Per Impression
Total Revenue (Impressions x Revenueper Impression)
Revenue per Ad Dollar(Total Revenue / Media Cost)

1. What is the media cost of each ofthe three campaigns?

Local News Program:

$420,000
$400,000
$370,000
$380,000

Sitcom:

$310,000
$250,000
$270,000
$280,000

Talk Show:

$175,000
$135,000
$150,000
$155,000

2. What is the reach of each of the three TVcampaigns?

Local News Program:

17,777
17,727
17,714
17,735

Sitcom:

11,688
11,674
11,626
11,662

Talk Show:

7,662
7,644
7,410
7,464

3. What are the impressions of each of thethree TV campaigns?

Local News Program:

88,635
88,645
88,630
88,764

Sitcom:

95,198
93,296
93,982
96,297

Talk Show:

74,368
74,640
76,832
76,438

4. What is the revenue per ad dollar of eachof the three TV campaigns?

Local News Program:

Sitcom:

Talk Show:

5. You also explained to Grazyna the example of acompany that generates $1,000 for every $500 invested in a TVcampaign has a revenue per ad dollar of 2. If it generates $10,000for every $1,000 invested in another TV campaign, then it has arevenue per ad dollar of 10. Which of Grazyna’s TV campaigns is themost effective?