11 Advertising

Selling a Message

The Development of the Advertising Industry

• Advertising—any paid form of non-personal communication about an organization, product, service, or idea by an identified sponsor makes inexpensive media possible provides a diverse amount of product information

The Birth of Consumer Culture

Boston News-Letter selling ads as early as 1704

individual shops and businesses placed ads; no brand promotion

Industrialization and the Growth of Advertising

mass production of low-cost, standardized products

prevalence of messages (ads) grew alongside the availability of products

people could now buy items that fit their style

The Growth of Brand Names

economy of abundance—there are as many goods available as people want to buy

brand name—word or phrase attached to pre-packaged good that allows for promotion:

helped consumer distinguish products from one another

Quaker Oats pioneered use of branding

Pears Soap (Thomas J. Barratt)

Famous slogan: “Have you had your Pears’ today?”

Advertising-Supported Media Advertising helped penny papers flourish. Initially limited in magazines:

• The Ladies’ Home Journal

Advertisers sponsored entire early radio programs. Television specialized in “selling audiences to

advertisers.”

Consumer Advertising

local advertising:

direct action message—designed to get consumers to purchase a product or engage in a behavior

national advertising:

indirect action message—designed to build the image of and demand for a product

advocacy advertising:

promote a particular point of view rather than a product

trade advertising:

promote products directly to other businesses rather than to the consumer market

The Advertising Business

• client—the person or company that has a product or idea to promote:

• advertising used to: build awareness of a new product build a positive image of the product convince users to switch brands promote a benefit of the product

• Research and planning: starts with identifying client’s objectives identifying the characteristics of the target audience ads tested internally and externally

• Creative activity: big idea—will grab people’s attention and make them

take notice, remember, and take action “All good advertising consists of both idea and

execution. All bad advertising consists of just execution.”

• the agency—researches the market, creates the advertising, and places it in the media George Rowell (1860s):

• first to buy space in papers, then sell it to clients• first to publish circulation numbers

Francis W. Ayer opened N.W. Ayer and Son (1868):• wrote copy, developed artwork, planned campaigns • pioneered use of open contract—enabled the agency to

provide advertising space in any publication

David Ogilvy: Ads should be created to sell a product or promote a message.

Advertising does not exist to be innovative, exciting, creative, or entertaining.

Most powerful ad headline words are “free” and “new.”

• Media planning: figuring out which media to use buying the media at the best rates evaluating how effective the purchase was trying to reach largest percentage of target audience

with lowest CPM—cost per thousand views

• Agency size and income U.S. agencies generated $11.2 billion in revenue for

2004 Advertisers spent $263.77 billion in 2004 in United

States:• $38 billion in Japan, $18.4 billion in the U.K., and $18.3

billion in Germany

Trends in agencies include:• large agencies buying multiple, smaller ones• specialization

• The media newspapers:

• original advertising medium • allow advertisers to present detailed

information• space can be purchased last minute

magazines:• higher print quality • longer lead time for preparation

outdoor:billboards, blimps, barns, posters, etc.

radio: • drive time—morning and afternoon commute• short lead time and relatively low costs

television:• offers sound, motion, and visuals • best time slots sold a year in advance

the Internet: • companies that do a lot of their business on the

Net • pop-ups, banners, buttons

The Audience

• targeting—making a particular product appeal to a narrowly defined group

• audience members are often defined by the “graphics”: demographics geographics psychographics

Advertising in Contemporary Culture

• Four common misconceptions about advertising: Advertising makes you buy things you don’t want. Advertising makes things cost more. Advertising helps sell bad products. Advertising is a waste of money.

clutter—the huge number of commercials and other messages that compete for consumer attention between programs:

viewers more likely to remember first ad in a group

average Britain exposed to 311 ads per week (2005)

average American exposed to 789 ads per week (2005)

fight clutter with celebrities and non-traditional ads (Goodyear blimp)

• http://www.artistmike.com/Temp/SubliminalAd.html

Subliminal advertising—messages that are allegedly embedded so deeply in an ad that they cannot be consciously perceived

no supporting research, only speculation

• http://www.youtube.com/watch?v=OYecfV3ubP8

When advertisements are more important than the program:

1984 Super Bowl—Apple Macintosh commercial

directed by Ridley Scott

showed Orwellian “Big Brother” situation

• Advertising to children In 2006, industry spent $15 billion on ads to kids. Federal Trade Commission study published in 1978:

o children from the ages of 2–11 see 20,000 ads per year

Food advertising to children has been scrutinized:o health effectso obesity epidemic

TARGETED CHILDRENhttp://www.youtube.com/watch?v=WMDPql6rweo

The Future of Advertising

• Technology allows viewers to skip commercials: In 2006, 10 percent of Americans had DVRs.

• Survey of 133 national advertisers found that 78 percent thought television advertising was less effective.

• CBS is selling Web ads as a package with broadcast ads.

• mobisodes—mobile phone delivered video episodes.

• Product Placement product integration—when product or service being

promoted is not only seen, but is spoken of as a central part of the story

challenge is making them seem natural rather than intrusive

unpopular with television and movie writers

• The Long Tail of Advertising Internet advertising still relatively small (2.5–5

percent) search engine uses difficult to measure consumer exposure to online ads