Question 5 (1 point)

You work for Burger in Toledo, Ohio. Your competitors are McDonalds, Wendy's, Sonic, and Culver's. The market share (SOM) breakdown is as follows:

Burger Kind: 20%

McDonalds: 40%

Wendy's: 15%

Sonic: 15%

Culver's: 10%

The four competitors spend $8 million on advertising (competitors' SOS).

How much should you spend on advertising in dollars, given that your SOM = SOS?

QUESTION HINTS AND DIRECTIONS:

First, remember that your share of market (SOM) often mirrors your share of spending (SOS). Simply put, your SOM is equal to your SOS. What is your SOS, based on the information that you have about your SOM?

Now, you know your SOS (percentage) and you know how much your competitors spend in dollars in total, but you don't know the SOS (percentage) for all your competitors cumulatively. If the total you and your competitors spend on advertising = 100%, and you know your SOS, you can calculate the SOS for competitors in percentages.

Alternatively, you could just sum the SOMs of all your competitors to find the cumulative SOM (percentage) for them and, using the rule the SOM = SOS, get the percentage.

Now, you know how much your competitors spend on advertising dollar wise and percentage wise. You can calculate a dollar value of 1% SOS. Divide the dollar amount your competitors spend (8 million) by the percentage SOS your competitors hold cumulatively.

Last, now that you know the 1% SOS value in dollars, you can calculate how much you should spend on advertising. Multiple the dollar value of 1% SOS by your brand's SOS.

Question 5 options:

$1 million

$2 million

$4 million

$6 million

Question 6 (2 points)

You need to estimate the cost of advertising on television in the largest 20 markets during late news, with a goal of 50 gross rating points (GRPs) per market. Use the information below. Select the cost of 50 GRPs.

QUESTION HINT AND DIRECTIONS

Pick a line in the table that corresponds to top 20 markets. Note that the cost of advertising is provided for 20 markets cumulatively (e.g., the cost of 1 GRP (or 1 rating point) for advertising during prime time on television in top 20 markets is $3,200, etc.).

Find the price of 1 GRP (1 rating point) for top 20 markets for the late news advertising on television.

You need to buy 50 GRPs and you know the price of 1 GRP. You can calculate the total cost of 50 GRPs.

Question 6 options:

$5,000

$105,000

$500,000

$600

Question 7 (1 point)

A table of reach estimates for late evening spot television indicates that it requires 50 late evening GRP per week to achieve a 60 percent reach in an average market. SRDS Media Solutions (Standard Rate & Data Service) indicates that the average cost of a late evening 30-second spot television announcement in Des Moines, Iowa, is $150, and the average late evening station rating is 3.0 during late evening in that city.

Estimate the cost of using late evening spot television to achieve a 60 percent reach of Des Moines television homes for a 26-week period.

QUESTION HINTS AND DIRECTIONS

Hint 1: "A table of reach estimates for late evening spot television indicates that it requires 50 late evening GRP per week to achieve a 60 percent reach in an average market." Simply put: you want to achieve the 60% reach by buying 50 GRPs. 60% should not be part of your calculations. Base your calculations on the 50 GRPs that you will be buying.

Hint 2: From the data provided, you can calculate how much one rating point costs (CPP). If you know the price of the ad and you know the rating of the program, you can calculate CPP.

Hint 3: Now that you know how much you are paying for one rating point (one GRP), you can calculate how much you need to pay for 50 GRPs.

Hint 4: Don't forget that you are buying 50 GRPs in one week, and you need to calculate how many GRPs you will be buying in 26 weeks. At the end, don't forget to calculate how much you will be paying for the total GRPs for all 26 weeks.

Question 7 options:

$65,000

$2,500

$5,000

$100,000

Question 8 (1 point)

You have been given a $4,500,000 annual advertising budget by your client for media advertising expenditures. You estimate that your overall CPM for all media will be $15 for the whole year.

Approximately how many TAI could be purchased with this budget?

QUESTION HINT AND DIRECTIONS

Hint 1: CPM in this context means cost per 1,000 impressions. Every time you pay $15, you get 1,000 impressions.

Hint 2: How many times will you be able to pay $15 if you have the budget of $4,500,000?

Hint 3: The number of instances when you pay $15 should be multiplied by 1,000 because every time you pay $15, it guaranteed 1,000 impressions.

Hint 4: We usually get very large numbers when we calculate impressions. That's okay

Question 8 options:

300,000,000 impressions

500,000,000 impressions

1,000,000,000 impressions

20,000,000 impressions

Question 9 (1 point)

Using your calculation of the TAI from Question 8, answer the following:

If your target audience contains 60,000,000 adult females, how many times, on average, will each person be exposed to your commercial messages during the year?

QUESTION HINTS AND DIRECTIONS

Hint: Now that you have the TAI and the size of the audience (60,000,000), you can calculate the average frequency.

Question 9 options:

5

100

2

10