--%>
Assignment Help - homework help

Modeling Cases DRAFT TV COMMERCIALS

Source: O'Conner, G. C., T.R. Willemain, and J. MacLachlau, 1996. "The value of competition among agencies in developing ad compaigns: Revisiting Gross's model." Journal of Advertising 25:51-63.

Modeling Cases

DRAFT TV COMMERCIALS - Your client directs TV advertising for a large corporation that currently relies on a single outside advertising agency. For years, ads have been created using the same plan: The agency creates a draft commercial and, after getting your client's approval, completes production and arranges for it to be aired.

Your client's budget is divided between creating and airing commercials. Typically, about 5 percent of the budget is devoted to creating commercials and 95 percent to airing them. Lately the client has become dissatisfied with the quality of the ads being created. Along with most advertising people, he believes that the ultimate profitability of an advertising campaign is much more strongly influenced by the content of the advertisement than by the level of expenditure on airing or the media utilized (assuming reasonable levels of expenditure). Thus, he is considering increasing the percentage of his budget devoted to the first, "creative" part of the process.

One way to do this is to commission multiple ad agencies to each independently develop a draft commercial. He would then select the one for completion and airing that he determines would be most effective in promoting sales. Of course, since his budget is essentially fixed, the more money he spends on creating draft commercials the less he has to spend on airing commercials. He will have to pay up front for all of the draft commercials before he has a chance to evaluate them.

The standard technique for evaluating a draft commercial involves showing it to a trial audience and asking what they remembered about it later (this is known as "next day recall"). Ads with higher next day recall are generally those with higher effectiveness in the marketplace, but the correlation is far from perfect. A standard method for assessing the effectiveness of a commercial after it has been aired is to survey those who watched the show and estimate "retained impressions." Retained impressions are the number of viewers who can recall the essential features of the ad. Ads with higher retained impressions are usually more effective in generating sales, but again the correlation is not perfect. Both the effectiveness of a commercial (the number of retained impressions it creates) and the exposure it receives (the number of times it is aired) will influence sales.

How would you advise your client on the budget split between creating and airing a commercial?

Solution need: Design a spreadsheet to determine the impact on ad quality of paying for three draft commercials.

   Related Questions in Financial Accounting

  • Q : Define the term Debtor Define the term

    Define the term Debtor. Is they our client?

    		•
  • Q : What is Liability Management Liability

    Liability Management: The procedure by which financial institutions balance outstanding liabilities, like deposits, CDs, and so on, with suitable liquidity reserves. Banks and other lenders employ liability management to decrease liquidity risks and u

    		•
  • Q : Workings and nature of the financial

    Assume that you are really interested in investing in the shares of Nokia Corporation of Finland that is a world leader in the wireless communication. However, before making the investment decision, you might like to learn about company. Take a look of the website of

    		•
  • Q : Causes of current account deficits

    United States has experienced constant current account deficits since early 1980s. List some of the major causes of the deficits? What could be the consequences of these constant U.S. current account deficits?

    		•
  • Q : Explain Project Accounting Project

    Project Accounting: It is sometimes termed to as job cost accounting and is the practice of making financial reports particularly designed to track financial growth of projects, which can then be utilized by managers to support project management.

    		•
  • Q : Objective Questions on Sociology 1)

    1) Which large European city declined significantly in population over the past century? A) Paris B) London C) Rome D) Madrid 2) The industrial city was characterized b A) decentralization B) corporate growt

    		•
  • Q : Find the expected dividend for each of

    Suppose a firm's common stock paid a dividend of $1.75 yesterday. You expect the dividend to grow at the rate of 8% per year for the next 3 years, if you buy the stock, you plan to hold it for 3 years and then sell it.

    Q : Accounting Required parts are clearly

    Required parts are clearly describes at the end of the questions and additional resource contains the journal article related to question three.. Approx 2000 word assignment.. First Question is of not more than 1000 words to make memorandum and its example is given at end of assignment and require

    		•
  • Q : Global expansion Write an article on

    Write an article on Global expansion's strategy followed during 1990.

    		•
  • Q : Real gross profit ratio and standard

    Is real gross profit ratio is bigger than standard gross profit ratio?

    		•