Phoenix Media Planning Project

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Phoenix Media Planning Project

• April 3, 2008

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Regional Marketing Managers

• First Point of Contact
• Prepare Market Specific Marketing Plans
• Performance goal review
• Customer Tracking Research
• Advertising effectiveness
• Recommendations
• Quarterly Ad Council Meetings
• Invitation open to single franchise market
  attendance at Ad Council Meetings
• Individual meetings with new franchisees during
  training

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Planning Process Objectives

• Growing the HomeVestors brand in the market
• Brand recognition
• Brand preference
• Profitably growing each franchisees business

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Develop Market Specific Advertising Plans

• Establish Market specific buy goals
• Develop plan to achieve those goals
• Review progress vs. goals quarterly
• Use key metrics (cost/lead, cost/buy, close
  ratio, lead trends, buys vs. goals, etc.) to
  determine effectiveness of advertising plan
• Makes changes as necessary to help franchisees
  achieve goals

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HVA System Training

• Types of Advertising
• Billboards (Outdoor)
• Television
• Radio
• Direct Mailers
• Yellow Pages
• Newspaper

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Outdoor
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Outdoor Buying Guidelines

• Primarily Deal with 3 national vendors
• CBS Outdoor (formerly Viacom), Clear Channel and
  Lamar
• Posting Times vary by vendor and type of board
• 30 and 8 Sheets
• 28 days for CBS Outdoor and Clear Channel
  (13-4week periods)
• Bulletins
• Full month for smovevendors (Most are now 13-4wk
  periods)
• Residual postings may result in clustering of
  boards this is OK since it is FREE space
• If boards are pre-empted we either receive a
  make-good or a credit

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Broadcast
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Fundamentals of Broadcast

• Reach
• Frequency
• TRPs (Targeted Rating Points)
• A35
• Efficiency (CPP and CPM)

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What is Reach?
90 85 80 75 70 65 60 55 50 45 40 35 30
25 20 15

• of target universe exposed to any advertising
  vehicle in the schedule
• Unduplicated measurement
• Individuals in target counted only once
• Cannot exceed 100

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WHAT IS FREQUENCY?
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GOOD DOG!
SOME MESSAGES JUST HAVE TO BE REPEATED
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On-Air Advertising Response Patterns Look Like
This
As frequency builds, results increase. The
response is true for every campaign on any media.
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Many anxious advertisers bail out before they
get out of the Valley of Death.
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Formula-Remember Algebra?

• Reach and Frequency work hand in hand

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What Are TRPs

• Target Rating Points

Segment watching television or listening to radio
HUT/PUT
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Radio/Television Formats/Timing

• M-W Strongest Lead Generation
• Strong Radio Formats
• Oldies
• Country
• News/Talk
• Classic Rock/Soft Adult Contemporary when
  efficient
• Strong Television Programming
• Current Daypart Distribution is
• 15 Early Morning, 50 Daytime, 20 Early
  Fringe, 15 Early News
• Judge Shows
• Talk/Interview
• Game Shows
• Early Morning News
• Noon News
• Early Evening News

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Radio Station Selection
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Recap of Station/Programming Selection process

• Receiving Information from stations
• Viewing and listening patterns analysis
• Appropriateness of content/format
• Analysis of historical data
• Identifying Efficiencies Opportunities
• Negotiations
• Stewardship

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Cause and Effect of Television Pricing

• Hypothetical Example
• When are the broadcast sellers most vulnerable?

Sold as of December February 1
January 40 N/A
February 40 90
March 30 85
April 20 70
May 20 70
June 20 70
July 10 40
August 10 40
September 10 40
October 0 20
November 0 25
December 0 25
17 53
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Yellow Pages
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Yellow Pages

• HomeVestors works directly with DCG Yellow
  Pages, a national Yellow Pages representative.
• DCG offers a national rate that will meet or beat
  all local rates.
• Susie Sadowski is our DCG rep and will contact
  you prior to cutoff date for publication.
• Yellow Page advertising provides a return on your
  investment and is a requirement of your Franchise
  Agreement.

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Yellow Pages
Credit Card size (not exact size)
1 bill size (not exact size)
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Newspaper
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Newspaper

• 2 Types of Ads Liner Ad, Display Ad
• Real Estate Wanted Section
• Investment Property- Rotten Wood

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Newspaper
Liner Ad
Investor Ad
WE BUY UGLY HOUSES HomeVestors 800-301-3223
Rotten Wood/Peeling Paint- Fantastic
Deals National Franchise Company will be offering
houses for sale in this area. Different sizes
and areas. Most will need repairs. For
information call 1-800-495-1911. HomeVestors
We Buy Ugly Houses
Display Ad
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Direct Mail
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Direct Mail

• Direct Mail. WHY?
• Cost Effective
• Targeted
• Supports Mass Media
• Mailers
• Letters
• Postcards

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Direct Mail Pricing

• Mass Mail Pricing
• Letters
• 53 cents over 10,000
• 58 cents 5,000-9,999
• 62 cents 3,000-4,999
• Postcard
• 38 cents
• Minimum 3,000

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Direct Marketing Letters

• Absentee Owner Letters
• Five Versions
• Owner Occupied Letters
• Four Versions
• Sales Letters
• Apartment Dwellers Letter
• Additional Letters to be added later

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Direct Mail Letters

• Specialty Letters
• Difficult Situation
• Expired Listings
• Fire
• Inherited House
• Bad Neighbors
• Foreclosure
• Repair Problems
• Seniors (two versions one with brochure, one
  without)
• Vacant Property
• Investor
• Rental Property
• Thank You - Appointment
• Thank You - Buy
• Thank You - Sell

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Letters
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Postcards
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Background
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Market Segmentation Methodology

• The market segments were developed by applying a
  statistical clustering approach utilizing the
  following variables
• Total Advertising Expenditure
• Saturation Percent Existing number of
  Offices/Optimal number of Offices
• Total number of Media Vehicles Used
• Total 104 weeks (i.e., 24 months) of data is
  utilized in this model

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Market Segmentation Methodology
Mid-Size Underdeveloped Markets - Segment 1 23
Markets 48 Offices Smaller Saturated Markets -
Segment 2 16 Markets 32 Offices Emerging
High-Potential Markets - Segment 3 13 Markets 19
Offices Mid-Size Established Markets - Segment
4 16 Markets 85 Offices Emerging Elite Markets
- Segment 5 6 Markets 45 Offices Elite
Established Markets - Segment 6 8 Markets 154
Offices

• Mid-Size Underdeveloped Markets - Segment 1
• 23 Markets 48 Offices
• Smaller Saturated Markets - Segment 2
• 16 Markets 32 Offices
• Emerging High-Potential Markets - Segment 3
• 13 Markets 19 Offices
• Mid-Size Established Markets - Segment 4
• 16 Markets 85 Offices
• Emerging Elite Markets - Segment 5
• 6 Markets 45 Offices
• Elite Established Markets - Segment 6
• 8 Markets 154 Offices

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Dependent Variables and New Data

• HomeVestors supplied data on four dependent
  variables
• Sales Calls
• Sales Referrals
• Sales Contribution
• Sales Closings
• In measuring the effect of independent variables,
  the analysis utilizes Sales Calls as the
  dependent Outcome Variable
• HomeVestors supplied additional 6-months sales
  and media data
• The analysis utilizes total 24 months data, from
  July04 to June06, to uncover the effects of
  various media vehicles

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Return on Investment by Channel Segment
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Return on Investment by Segment
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Smaller Saturated Market

• Outdoor has the highest marketing budget with
  78, followed by TV and Direct Mail
• Internet has the greatest impact in terms of
  media.
• 1,000 increase in internet expenses may generate
  9,500 revenue
• No expense on Radio. Since Radio has significant
  effect on revenue in other segments, resources
  should be allocated on Radio.

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Elite Established Market

• Outdoor has the highest marketing budget with
  42, followed by TV, Radio, and Direct Mail
• TV has the greatest impact in terms of media,
  followed by Radio, and Internet
• 1,000 increase in TV expense may generate 5,000
  revenue
• 1,000 increase in Radio may generate approx
  4,900 revenue

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Media Lifecycle
Direct Mail Radio TV Outdoor Internet Print
Awareness
Direct Mail Radio Outdoor TV Internet Print
Direct Mail Outdoor Radio Internet Print
Outdoor Direct Mail Internet Radio
Outdoor Internet Direct Mail
Penetration
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Commonalities Among the Market Segments
Direct Mail provides positive ROI
Outdoor makes-up a significant portion of media
mix
Internet demonstrates the greatest return, but
has a steep diminishing return curve
Radio is an effective media across all segments,
but is under utilized
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Diminishing Returns in Phoenix Market/Franchisee

• The maximum efficiency for Outdoor is approx.,
  34K per month within the market
• The maximum efficiency for TV is approximately
  30K per month within the market

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Diminishing Returns in Phoenix Market/Franchisee

• The maximum efficiency for radio is
  approximately, 26K per month within the market

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Diminishing Returns in Phoenix Market/Franchisee

• The direct mail has not reached its maximum
  efficiency.
• The efficiency for print declines in this market.
  

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Elite Established Market
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History
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2006 12 months-Detail
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2006 Zips
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