1. Businesses use advertising because it does work

2. No one is yet quite sure how it works

Objectives

Describe what advertising is and discuss the major types of advertising

Describe the process of developing an advertising campaign

Explain how marketers evaluate advertisingUnderstand direct marketingExplain the future of m-commerce

It’s an Ad Ad Ad Ad World

Advertising is nonpersonal communication paid for by an identified sponsor using mass media to persuade, inform, and remind an audience.

Types of Advertising

Product advertising - message focuses on a specific product

Institutional advertising - message focuses on activities, personality, or point of view of a company– advocacy advertising– public service advertisements (PSAs)

Who Does Advertising?

An advertising campaign is a coordinated, comprehensive plan that carries out promotion objectives and results in a series of advertisements placed in media over a period of time

Agencies– limited-service– full-service

The Body of Campaign Creation

Account management (soul)Creative services (heart)Research and marketing services

(brains)Media planning (legs)

Developing the Advertising Campaign

Identify the Target MarketEstablish Objectives, Message, and

BudgetDesign Ad CampaignPretest CampaignChoose Media and Schedule

1. Merchandise – what is it that we have to promote?

2. Markets – to whom are advertising ?

3. Motives – why do these consumers buy?

4. Messages – what appeals will work best?

5. Money – how much should we spend and when?

6. Media – where and when should we reach our audience?

7. Measurement – how can we learn to do better?

Goals reactions or responses

perceived message

delivered message actual advertisement

intended message

Advertiser consumer

I

II

III

IV

V

VI

Channel

(=)

(=)

(=)

Advertising and persuasive communication system

Stages in Advertising and persuasive communication system

Stage I advertising goals

•Persuasion (convincing of a Brand superiority)•Reinforcement (assisting favorable consumer evaluation

following a purchase)

•Reminder (to keep it alive)

•Purchase precipitation ( encouraging consumers to buy now)

Stage II Intended message deals with the strategy by which the

stated goals can be achieved

Stage IIIActual advertisement

•Encoding of the message this reflects art of advertising•Conversion of mental strategy into physical reality

•Thousands of interacting decisions – exact words, models colors music timing etc. Etc.

•Selection and purchase of MEDIA time , space in specific channels to facilitate delivery of ads to the final consumer.

Stage IVDelivered ads .

•Deals with the consumer reception process•Delivery of ad from channel to the consumer

•Conditions under which it is received or even not received by the target audience

Stage VPerceived message .

•Post delivery has the message been perceived by the consumer•Is the message being decoded as intended by the sender

Stage VIReactions or responses

•Do the responses match the goals

Goalsreactions or responses

perceived message

delivered message

actual advertisement

intended message

Advertiser consumer

I

II

III

IV

V

VI

(=)

(=)

(=)

Potential gap 1

Potential gap 2

Potential gap 3

Potential gap 4

Potential gap 5

Potential Gaps and Pitfalls

Potential Gaps 1The ad strategy is not able to achieve the goals

Could be due to • goal are unrealistically high

•Lack clarity •Or the strategy chosen (intended message)

Potential Gaps 2Recognizes the thousands of tactical decisions that go together to make up the actual advertising campaign. The gap will occur in those cases in which the actual

advertising does not capture the intended strategy for the campaign, or for the mistakes in the ad itself

If This Is Their Best. . . !Sometimes advertising deadlines cause problems in local media as well. This happened in one ad run by a car dealership that had the bold headline "Here's Our Best to You! Obviously an

untrained assistant had handled the art, which showed no wheels on th right side of the luxury auto (a different brand than in our mock-up shown here!), am some tires on the left that give a new

meaning to the term "flat tire!" How many autos d you think that ad might have sold?

Potential Gaps 3Reflects any problem that may occur in the physical

transmission or delivery of the ad to the consumer for whom it is intended

•Zapping •Zipping

Potential Gaps 4Refers to any problem that occurs during consumer’s

perception of each ad as it is delivered to them. Consumers must be able to understand the

language and symbols as they have been used by the sender

Potential Gaps 5The final potential gap refers to the advertiser’s goal that

the perceived message leads to particular response or reaction on the consumer’s part.

This gap involves two important processes 1. Retention of message after the ad exposure is over.

(message recall by having stored it in LTM)2. Consumers need to be persuaded or influenced by the

advertising (to be persuaded or being reminded or purchase precipitation)

Messagepresentation

comprehension

YieldingTo

conclusions retention

OfNew belief

Attention to message

Behavior on

New belief Successful completion

No

No

No

No

No

No

Yes

Yes

Yes

Yes

Yes

Yes

P

A

C

Y

R

B

Hierarchy of advertising effects

P = P(P) X P(A) X P(C) X P(Y) X P(R) X P(B)

=0.5X0.5X0.5X0.5X0.5X0.5

=0.0156

OVERALL IMPACT OF THE ADVERTISEMENT

PROBABILTIES •Will be product class specific

•Probabilities for systems stages are not likely to be equal

•Repetition effect will change the probabilities•Probabilities need to be applied to huge consumer

market

Establish Objectives

Message goalsBudget

Design the Ad

Creative strategy is the process that turns a concept into an advertisement

Creatives try to develop a “big idea”Creatives:– art directors– copywriters– photographers

Advertising Appeals

Reasons Why (USP)&(UVP)

Comparative Advertising

DemonstrationTestimonial

Slice-of-LifeLifestyleFear SexHumorSlogans/Jingles

Pretest What Will Be Said

Copy testing measures ad effectiveness– Concept testing– Test commercials (with animatics or

storyboards)– Finished testing

Choose the Media

Media planning is a problem-solving process for getting a message to a target audience in the most effective fashion–Where to say it–When to say it

Television

Pros– Creative and flexible– Prestigious– High impact messages– Network TV is cost effective

for reaching mass audience– Cable TV is good for

reaching targeted group

Cons– Quickly forgotten– Requires frequent

repetition– Increasingly fragmented

audiences– High costs on an absolute

basis– Shorter ads result in

increased clutter

Radio

Pros– Good for selective

targeting– Heard out of home– Relatively low cost– Can be modified

fast– Uses listener

imagination

Cons– Listeners may not

pay full attention– Small audiences

mean ads must be repeated frequently

– Not appropriate for products requiring demonstration

Newspapers

Pros– Wide exposure and

coverage– Flexible format– Useful for

comparison shopping

– Local retailers can tie in with national

Cons– Most don’t spend

much time reading newspapers

– Low readership among teens and young adults

– Short life span– Very cluttered

Magazines

Pros– Target audiences– High credibility and

interest level – Long life span and

pass along rate– Excellent visual

quality

Cons– With exception of

direct mail, the most expensive form

– Long deadlines– Must use several

magazines to reach target

Outdoor

Pros– Very high reach– Low cost– Good for

supplementing other media

Cons– Hard to communicate

complex messages– Cannot demonstrate

product effectiveness– Controversial and

disliked

Direct Response

Pros– Ads can target

extremely narrow audiences

– Messages can be timed

– Easy to measure effectiveness

Cons– High cost per

exposure– Target lists must

be constantly updated

– Ads lack credibility among many consumers

Innovative Media

Place-based media - transmit messages in public places

Guerilla marketing - use unconventional locations and intensive word-of-mouth campaigns to push products

Internet Advertising

BannersButtonsSponsorshipsSearch engine

and directory listings

Pop-up adsEmail– permission

marketing– spamming

Web site design

Media Scheduling

Specifies the exact media to use for the campaign, when and how often the message should appear

Outlines the planner’s best estimate of which media and vehicles will be most effective in attaining campaign objectives

Factors Affecting Media Scheduling

Target market profilePeople reached by different vehiclesAdvertising patterns of competitorsCapability of medium to convey desired

informationCompatibility of product with editorial

content

Media Scheduling Terms_1

Impressions - the number of people who will be exposed to a message placed in one or more media vehicles

Reach - the percentage of the target market exposed to the media vehicle

Frequency - the average number of times a person in the target group will be exposed to the vehicle

Media Scheduling Terms_2

Gross Rating Points (GRPs) - reach * frequency

Cost per Thousand (CPM) - compares the relative cost effectiveness of different media vehicles that have different exposure rates; it reflects the cost to deliver a message to 1,000 people

Media Scheduling: How Often?

Continuous - steady stream throughout year

Pulsing - varies amount of advertising based on when product is in demand (e.g., suntan lotion)

Flighting - advertising appears in short, intense bursts alternative with period of little to no activity

Evaluating Advertising

Post testing means conducting research on consumers’ responses to advertising messages they have seen or heard– unaided recall– aided recall– attitudinal measures

Direct Marketing

Any direct communication to a consumer or business recipient that is designed to generate a response in the form of an order, a request for further information, and/or a visit to a store or other place of business for purchase of a product

Forms of Direct Marketing

Mail order– Catalogs– Direct mail

TelemarketingDirect response television– Infomercials– Home shopping networks

M-Commerce

Promotional activities transmitted over mobile phones and other mobile devices such as personal digital assistants (PDAs)– Prevalent in Europe and Asia