Target Audience & Advertising Essentials

Purpose: improve efficiency and effectiveness of advertising
Effectiveness: target the group most likely to buy; avoid tiny, costly audiences
Efficiency: reach the largest receptive audience for the least cost; buy the most with the least

Demographics: easily quantified descriptors (age, gender, education, income)
Psychographics: values, attitudes, lifestyle; harder to quantify
Geographics: where they live, shop, or use the product
Technographics: how they interact with technology (devices, online payment, online shopping)
Buyer behavior: purchasing patterns (one-at-a-time vs. bulk; online vs. in-store)

Average household income example: $70{,}000$ to $80{,}000$ (HHI proxy)
Core idea: $0.15 imes ext{placed ext{ }media cost}$ to agency; $0.85 imes ext{placed ext{ }media cost}$ to media
Adage: buy the most with the least; start with a large receptive audience

MacBook advertising: audiences include college students (primary) and businesses; benefits of ecosystem and ease of use; messages tailored to each group
Chipotle: target around lunch; likely 16–30 year olds near campus; media choices vary by time and location
26-year-old construction worker example: 26, Colorado; outdoorsy (fishing, snowboarding, bike); shops at Walmart/Costco; likely to favor practical vehicles (e.g., $ext{F-150}$ ) for gear; geographics and shopping channels influence media
38-year-old female executive: LA-advertising pro; tech-savvy; online and mall shopping; brand preferences; work life and convenience shape media and messages

Paid media: channels you pay to advertise (TV, online, print, outdoor)
Owned media: channels you control (website, blogs, podcasts, YouTube channel)
Earned media: third-party PR and influencer coverage
Shared media: social media content and engagement (overlaps with earned/owned)
Advertising triangle (50k view): Advertiser (client) ↔ Agency ↔ Media; audience sits in the middle; agencies match media to consumers

Account management: liaison with clients; project management
Creative: art directors, copywriters, producers; creation of ads
Media: planning and buying; placement decisions
General & Administrative (G&A): support staff; operations
Agency of Record (AOR): main agency handling a client; large holding groups (examples): WPP, Omnicom, Publicis, Dentsu, IPG

Traditional model: advertiser pays the placed media cost; media keeps 85%, agency earns 15%
Example: placed media cost = $1{,}000{,}000$ ; agency = $1{,}000{,}000 \times 0.15 = 150{,}000$ ; media = $1{,}000{,}000 - 150{,}000 = 850{,}000$
Big campaigns can run multiple times; agency earns 15% on each placement; the math scales with spend
Real-world note: a single campaign (e.g., NFL/college football) can involve multi-million dollar spends; agency commissions still apply on each placement

John Wannamaker: "Half of all my advertising is wasted. I just don't know which half."
Early advertising: evolution from newspaper/magazine ad creation to agency-based planning and placement; 15% commission model established

Paid media ≈ traditional advertising; Owned media ≈ brand-owned channels; Earned media ≈ PR/influencer/third-party coverage; Shared media ≈ social media content
Geotargeting: radius-based or zip-code targeting; increasingly precise online targeting

Target audience = demographics + psychographics + geographics + technographics + buyer behavior
Effectiveness vs. efficiency: tailor to receptive audiences to maximize impact while minimizing cost
Advertising ecosystem involves advertisers, agencies, and media; agencies earn primarily on placement via commissions
Remember Wanamaker quote as a common historical reference