Combining cinema and TV advertising to boost ROI

The Cinema Advertising Council, the trade association of cinema advertising companies that represent 82% of U.S. movie screens, unveiled the results of a research study conducted on behalf of its members by Integrated Media Measurement Inc., provider of consumer behavior and audience exposure data to media companies and advertisers. According to the study, the results of a combined television and cinema ad campaign more than doubled the conversion rate as compared to television alone. The combined cinema-television buy also provided double the lift; extended incremental reach; and the ability to target key demographics including ‘ad-avoiders.’

Some advertisers and marketing specialists believe that the period of the silver screen is finishing and most people lose interest in going to the cinema. I believe there are various opinions about this issue. Some pessimistic views say nowadays, the era of many things like silver screen, tape recorder, walkman, ordinary TV sets, analog satellite …etc. are coming to an end and we will have to replace them with completely different hi-tech instruments. They usually say that we have to renew our life with new technological achievements and ignore before. In contrast, there is an optimistic view and I personally prefer it! This view believes in improvement process not elimination or extinction... .

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Systematic & Unsystematic Risk (Non-diversifiable and Diversifiable risk)

Diversifiable risk (also known as unsystematic risk) represents the portion of an asset’s risk that is associated with random causes that can be eliminated through diversification. It’s attributable to firm-specific events, such as strikes, lawsuit, regulatory actions, and loss of a key account. Unsystematic risk is due to factors specific to an industry or a company like labor unions, product category, research and development, pricing, marketing strategy etc.

While the non-diversifiable risk (also known as systematic risk) is the relevant portion of an asset’s risk attributable to market factors that affect all firms such as war, inflation, international incidents, and political events. It cannot be eliminated through diversification and the combination of a security’s non-diversifiable risk and diversifiable risk is called total risk.

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A wonderful cycle!

It is the month of April, on the shores of the Black Sea . It is raining, and the little town looks totally deserted. It is tough times, everybody is in debt, and everybody lives on credit.

Suddenly, a rich tourist comes to town. He enters the only hotel, lays a 100 Euro note on the
reception counter, and goes to inspect the rooms upstairs in order to pick one.

The hotel proprietor takes the 100 Euro note and runs to pay his debt to the butcher.

The Butcher takes the 100 Euro note, and runs to pay his debt to the pig grower.

The pig grower takes the 100 Euro note, and runs to pay his debt to the supplier of his feed and fuel. The supplier of feed and fuel takes the 100 Euro note and runs to pay his debt to the town’s prostitute that in these hard times, gave her “services” on credit.

The hooker runs to the hotel, and pays off her debt with the 100 Euro note to the hotel proprietor to pay for the rooms that she rented when she brought her clients there.

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Why is profit maximization, by itself, an inappropriate goal? What is meant the goal of maximization of shareholders wealth?

Traditionally, finance teaches that managers should act according to the interest of the firm’s owners or its stockholders. There are different viewpoints in this case. Some agree with pure profit maximization and some not. I personally think here the goal is the main keyword .I mean what you want determines what you have to do.

What should you as a financial manager try to maximize?

Some people believe that the manager’s main goal always should be to try tomaximize profits. To do it, they should take only those actions that expected to increase revenues more than costs. It means maximizing in EPS (Earning Per Share). It seems a reasonable objective but as a goal suffers from several flows:

• First of all, figures for EPS are always historical so reflect past performance rather than what is happening now or what will happen in the future. If you as a manager seek only to maximize profits in a limited period, you may ignore the timing of those profits. Large profits that pay off many years in the future may be less valuable than smaller profits received next year.

• Second, Different accounting principles result differences in profit computing. It means when firms compute profits, they follow certain accounting principles which focus on accrued revenues and costs. A firm that is profitable according to accounting principles may spend more cash that it receives and an unprofitable firm may have larger cash inflows than outflows. There is a famous expression in finance saying:” you cannot pay your bills with earning, only with cash!!” In finance, we place more emphasis on cash than on profit or earning.

• Finally, as a manager you have to include variability or risk. Focusing only on earning may ignore them. When comparing two investment opportunities, we must consider both the risk and the expected return of the investment and we face a trade-off between risk and expected return.

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What is MBA?

The Master of Business Administration (MBA) is an internationally-recognized degree designed to prepare students and further develop the skills required for careers in business and management. The value of the MBA, however, is not limited strictly to the ‘business’ world. An MBA can also be useful for those pursuing a managerial career in the public sector, government, private industry, and other areas. MBA programs can provide graduates with the preparation and practical skills needed to excel in management and leadership positions.

The MBA is currently the most popular professional degree program in the world. Today there are over 2,500 MBA programs offered worldwide. First introduced at American universities around the turn of the 20th century, MBA programs have evolved in order to keep up with the demands of the times. While traditional two-year MBA programs are still common, especially in the United States, one-year programs have become increasingly popular. Part-time and distance-learning programs are also widely available. Most MBA programs are taught in English, and are therefore attractive to international students wishing to study abroad. Many institutions in non-English speaking countries offer MBA programs in English, as well as in the country’s native language.

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