Media Math Workbook

Estimating Market Demand

Spin Master Toys would like to introduce a new battery powered adventure toy called “Bongo
Bumpers” targeted to boys aged 5-9 in Canada. It is a unique new toy that is expected to be a
Christmas season hit this year. The toy will sell for $25.
Using the following information, forecast the demand in retail dollars for the new “Bongo
Bumpers” toy in Canada for its first year of launch. Please state any assumptions that you make
and show all your calculations.
• Past experience with their marketing campaigns estimates that 65 % of boys in the target in
Canada would either see advertising or learn about the toy from friends within its first year
of launch.
• A Spin Master survey estimated that 80% of boys in the target who saw the toy in action or
heard about it from other sources would ask their parents to purchase it.
• Spin Master has learned that, in general, 50 % of parents or others in the family will
purchase a Spin Master toy that their child requests within a year, as Spin Master has a
strong reputation for toys that have lasting play value.

Statistics Canada – age group by gender

2016

Canada Male Female Canada Male Female

Age group Persons (thousands) % of total of each group

Total 32,270.5 15,979.5 16,291.0 100.0 100.0 100.0

0–4 1,698.4 868.4 830.0 5.3 5.4 5.1

5–9 1,882.3 963.0 919.3 5.8 6.0 5.6

10–14 2,104.8 1,079.1 1,025.7 6.5 6.8 6.3

15–19 2,145.8 1,099.7 1,046.2 6.6 6.9 6.4

20–24 2,243.3 1,147.5 1,095.8 7.0 7.2 6.7

25–29 2,194.3 1,110.5 1,083.8 6.8 6.9 6.7

Percentages
1.

List 3 finding you can derive from percentages by looking at the Canadian Living data.

Target: 963 000 boys in Canada 5-9

65% or 625,950 boys will see ad or learn from friends about the toy

80% or 500,760 will want to purchase

50% or 250,380 out of them will actually purchase

The demand is $6,259,500

2. You have completed research on competitive media spending for major brands in the fast food
burger restaurant category. You have found that McDonald’s spent $13 million last quarter while Tim
Hortons spent $11 million. Wendy’s spending was $6 million, Burger King spent $5 million and all other
fast food burger advertisers spent a total of $11 million in the same quarter.

What is the percent breakout of media spending during the quarter for each brand?

13+11+6+5+11=46

McDonald’s 28.26% (13/46x100)

Tim Hortons 23.91%

Wendy’s 13.04%

Burger King 10.87%

Other 23.91%

Indexes
3. Using 2000 as the base year calculate indices for Brand X sales, advertising expenditures and
profits for 2005. Then use 2005 as a base year for 2010 and so on.

Year 2000 2005 2010 2015

Sales ($MM) 250 300 450 600
Profit ($MM) 12 18 30 60
Ad Spend ($$MM) 12 25 45 70
 Year 2000 2005 2010 2015
Sales Index 100 120 150 133.33
Profit Index 100 150 167 200
Ad Spend Index 100 208 180 156

What are some key things this analysis tells us? In 2005. 20% more products were sold than in 2000. In
2010. 50% more products we sold than in 2005.

4. Buffet Magazine reaches 1.2% of all adults in Canada and 5.5% of people classified as “Big
Eaters”.

Calculate the index of Buffet Magazines target of big eaters and explain what the index is measuring.
What does this number mean?

5.5/1.2x100 = 458 Buffet Magazine is 4.58x more likely to reach Big Eaters than regular adults.

Weighting
5. If a television program has and audience of 1 000 000 people with 65% of the viewers being in
your target for your product (18-34 year olds). Of the other audience members only 25% of
them will be interesting in your product.

What is the weighted audience?

650,000 + (350,000 x 0.25) = 737,500

Reach, Frequency, Impressions and GRPs
6. Calculate the Reach, Frequency, Impressions and GRPs in the following scenario.

Scenario 1 Scenario 2 Scenario 3

# of target exposed 75 000 155 000 100 000

(Reach as #)

# of target group in 100 000 500 000 700 000

area

Impressions 450,000 310,000 800,000

RxF

Reach % 75% 31% 14.3%

Frequency 6 2 8

Weekly GRPs 450 62 112

R(%)xF
 7. Calculate the Share of Voice for the following grocery retailers.

Share of
Voice
Advertising
Impressions SOV
Sobey's 250000 35%
Metro 125000 17%
Longos 350000 48%
Total
Impressions 725000 100

CPM
8. Calculate the CPM for these three magazines. Which one is most efficient?

Home and House and Canadian

Garden Home Design
Monthly
Circulation 375000 285000 220000

Full Page Ad Cost $45,000 $38,000 $25,000

CPM 120 133 114

Recalculate the CPMS with the new readers per copy information using a readers per copy weighing at
50%

Home and House and Canadian

Garden Home Design
Monthly
Circulation 375000 285000 220000
Readers Per Copy 0.5 1.1 1.3
Full Page Ad Cost $45,000 $38,000 $25,000
Total Audience 468,750 441,750 363,000
New CPM 96 86 69
 CPP

9. If it costs 8,000 to place an ad on the radio and the program has a reach of 9%, the target
market what is the cost per point?

8,000/9=888,89

Digital Metrics
10.

Example Definition
Impressions 100 000 exposure to the ad
Clicks 2000 click on the ad
Visitors 2000 land on the site
Page Views 6000 pages viewed by the visitor
Conversion 400 request information or buy

a) What is the conversion rate in this example? (the % of visitors that took some action on the
site) 400/2000x100=20%

b) What is the click through rate (CTR) in the table?

2000/100000x100=2%

c) A company is trying to calculate the cost of conversion for its on-line advertising campaign. It is
placing 4 ads in total. Fill in the following chart to see what their cost per conversion is for their
campaign

Which of the ads is most effective?

CTR
Ad Impressions % Clicks Cost/Click Total Cost Conversions Cost/Conversion
1 10000 2.50% 250 $0.50 125 10 12.5
2 50000 1.50% 750 $0.25 187.5 12 15.63
3 40000 0.50% 200 $0.75 150 10 15
4 15000 0.25% 38 $0.30 11.25 2 5.63
Total 115000 0.96% 1104 $0.38 419.52 34 12.34
Market demand: Market Demand for strollers:

331,000 X 0.5 (first child) X 0.6 (buy stroller) X $180 = $17,874,000

Frequency = Total Exposures

Reach

Impressions = Reach x Frequency

GRP = Reach % x Frequency

Cost Per Thousand

Cost of ad space
CPM = X 1000
Circulation (Reach)

• CPP=Cost to Place an Ad /Program Rating