Last week in this column we discussed the changing media environment and how the communications planning process has become ever more complex over the past decade and a half. While rules of thumb can and often should be modified to reflect the evolving media marketplace, one common tactical question that seems to arise every so often is: When planning and buying on a local market basis, how do you determine when to stop? In other words, how many of the 210 DMA markets should I buy to effectively and efficiently achieve my client’s communication goals? The answer may vary somewhat depending on the category, brand and daypart to be purchased. However, one rule that’s occasionally cited is that it’s more efficient to buy national broadcast rather than continuing to purchase additional spot markets once you have reached the top 56 DMAs or so.
One might then ask, how was this parameter established? For starters, the top 56 Designated Market Areas represent approximately 72% of the U.S. adult population. But more importantly, at around the 57th DMA (Richmond-Petersburg, VA) the cumulative spot market primetime cost-per-point ($38,154) begins to surpass that for national broadcast ($37,898), making it less efficient on a CPM basis to add on additional markets (i.e., $23.81 cume CPM for the top 57 DMAs versus $23.65 for national coverage on the television networks).
Of course, what and how many markets you buy will also depend on other factors, not the least of which will be product distribution, category and brand development indices (CDIs and BDIs). For example, when planning in the personal computer category, one can narrow down the market candidates and select only geographic areas of significant category opportunity rather than the entire list of the top 56 DMAs. These include markets with Claritas-defined CDIs in the 120-plus range including: Los Angeles (133), Chicago (172), Philadelphia (143), San Francisco (137), Phoenix (165), Seattle (158), San Diego (125), Salt Lake City (178), West Palm Beach (166), Austin (345) and Greensboro, NC (129). In the food service and beverage category, the opportunity market list becomes even smaller. CDIs for only eight DMAs index at 120-plus: San Francisco (121), Boston (137), Washington, DC (130), Orlando (136), San Diego (132), Columbus, OH (121), Las Vegas (171) and West Palm Beach (123).
Merkle's TargetLab™ product will provide marketers with the ability to plan on a local market as well as on a national basis. Based on client customer name and address data by target set, Merkle is currently able to match product purchasers and prospects back to the zip codes in which they live on the company's National Consumer Database and then aggregate those zips by DMA for reporting purposes. Given that media data have been scored and appended by names and addresses as well, local usage of various national media properties can be attributed to client customers living in specific DMAs. Local usage of local media properties will also be able to be identified once Scarborough and Nielsen NSI local data have been scored and appended to the Merkle NCD.
In summary, while CDIs and BDIs may help media professionals determine market selectivity for advertising a particular category or product, the intersection of cumulative local market costs-per-point with that for the national broadcast CPP, can help media professionals eliminate inefficiency in planning by geography. Merkle's TargetLab™ is available to help provide media practitioners with the tools they need to plan both locally and nationally.
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