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How To Understand Basic Advertising Terms

If you want to start advertising for your company or hire an advertising company to do the work for you, it is important you start understanding the basic advertising terms you will be faced with.

By familiarizing yourself with these terms you will have the tools and general overview to create your own media plan for advertising your business.

CPM is the term you will be coming up with more frequently than others. It refers to cost per thousand and is the analysis and method media buyers use to convert rate and circulation options to relative terms.

This term refers to how much it costs to reach one thousand people via different media types. This kind of information is useful as when you calculate this figure you will have a comparison with a numerical ranking.

Publications will give you a circulation figure which is calculated on the basis of the number of subscribers and the print advertising prices are based on the circulation of this publication.

Audited circulation figures are checked by specific monitoring organizations, who may try to include free copies that are meant to raise audience and readers

Audience is the equivalent to the circulation when talking about broadcast media. Audience size varies throughout the day as people tune in and tune out.

Therefore, the price for advertising at different times of day will vary, based on the audience size that the day-part delivers.

Penetration is related to circulation. Penetration describes how much of the total market available you are reaching.

What degree of penetration is necessary for you depends on whether your strategy is to dominate the market or to reach a certain niche within that market.

Reach and frequency are key media terms used more in broadcast than in print. Reach is the total number of people exposed to a message at least once in a set time period, usually four weeks.

(Reach is the broadcast equivalent of circulation, for print advertising.) Frequency is the average number of times those people are exposed during that time period.

To make reach go up, you buy a wider market area. To make frequency go up, you buy more ads during the time period.

Usually, when reach goes up, you have to compromise and let frequency go down. You could spend a lot of money trying to achieve a high reach and a high frequency.

The creative part of media planning comes in balancing reach, frequency, and budget constraints to find the best combination in view of your marketing goals.

In developing your media plan, you will:

  • – Review your marketing objectives through the “lens” of media planning.
  • – Review the options available.
  • – Evaluate them against your objectives.
  • – Set your minimum and maximum budget constraints.
  • – Create alternative scenarios until you uncover the strategy that accomplishes your objectives within those constraints.
  • – Develop a schedule describing ad appearances in each medium.
  • – Summarize your plan in the form of a calendar and a budget.
  • – Negotiate with media representatives to execute your plan.

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