chap018

LO2Describe the steps used to develop, execute, and evaluate an advertising program.

Explain the advantages and disadvantages of alternative advertising media.

LEARNING OBJECTIVES (LO)

AFTER READING CHAPTER 18, YOU SHOULD BE ABLE TO:

Explain the differences between product advertising and institutional advertising and the variations within each type.

LO4Discuss the strengths and weaknesses of consumer-oriented and trade-oriented sales promotions.

Recognize public relations as an important form of communication.LO5

LEARNING OBJECTIVES (LO)

AFTER READING CHAPTER 18, YOU SHOULD BE ABLE TO:

WHERE CAN YOU WATCH TV?WHERE CAN’T YOU?

Online TV (OTV)

TYPES OF ADVERTISEMENTSPRODUCT ADVERTISEMENTS

Advertising

• Pioneering(or Informational)

• Competitive(or Persuasive)

• Reminder

Product Advertisements

• Comparative

• Reinforcement

Campbell’s, 1&1, and Red BullWhat is the type and purpose of each advertisement?

Dial SoapWhat is the type and purpose of this advertisement?

TYPES OF ADVERTISEMENTSINSTITUTIONAL ADVERTISEMENTS

Institutional Advertisements

• Advocacy

• Pioneering Institutional

• Competitive Institutional

• Reminder Institutional

Chevron and BridgestoneWhat is the type and purpose of each advertisement?

Got Milk? and U.S. ArmyWhat is the type and purpose of each advertisement?

DEVELOPING THEADVERTISING PROGRAM

Identifying the Target Audience

Specifying the Advertising Objectives

Setting the Advertising Budget

FIGURE 18-1FIGURE 18-1 The Super Bowl delivers a huge audience if you can afford the cost of placing an ad

GOING ONLINESee Your Favorite Super Bowl Ads Again!

DESIGNING THE ADVERTISEMENT

Message Content

• InformationalElement

• PersuasiveElement

Types of Appeals

• Fear Appeals

• Sex Appeals

• Humorous Appeals

World Wide Fund, Candie’s, and GeicoWhat is the appeal and purpose of each advertisement?

DESIGNING THE ADVERTISEMENT

Creating the Actual Message

• Celebrity Spokespeople

• Ideas and Artwork

• Cost

SELECTING THE RIGHT MEDIA

Advertising Media

• Maximize Exposure

• Minimize Costs

Media Planning Goals

FIGURE 18-2FIGURE 18-2 Television, direct mail, and newspapers account for more than 65% of all advertising expenditures (in $millions)

SELECTING THE RIGHT MEDIA

Basic Terms

• Reach

• Rating

• Frequency

• Gross Rating Points (GRPs)

• Cost per Thousand (CPM)

= Reach × Frequency

USING MARKETING DASHBOARDSWhat is the Best Way to Reach 1,000 Customers?

Cost per Thousand (CPM) Impressions

CPM ($) = Advertising Cost ($)

Impressions Generated (#)1,000

FIGURE 18-3FIGURE 18-3 Advertisers must consider the advantages and disadvantages of the many media alternatives

DIFFERENT MEDIA ALTERNATIVES

Television

• Out-of-Home TV

• Online TV (OTV)

Television

• Wasted Coverage

• Cable and Satellite TV

• Infomercials

• Satellite Radio • Drive Times

• Regional Issues

Magazines

Newspapers

• Falling Circulation & Ad Revenue

• New Types of News Organizations

• Online and Mobile

Yellow Pages

• Paid Search

• Rich Media

Internet

• Banner/Display Ads

• Assessment

FIGURE 18-4FIGURE 18-4 Google and Yahoo! have the largest shares of Internet searches and offer opportunities for online advertising

MAKING RESPONSIBLE DECISIONSWho is Responsible for Click Fraud?

Pay-to-Read

Click Bots

Webtipping

OTHER MEDIA ALTERNATIVES

Outdoor

• TransitAdvertising

• Billboards

OTHER MEDIA ALTERNATIVES

Other Media

• Placed-Based Media

Selection Criteria

• Media Habits • Cost

• Product Attributes

DEVELOPING THEADVERTISING PROGRAMSCHEDULING THE ADVERTISING

Factors to Consider

• Buyer Turnover

• Forgetting Rate

• Purchase Frequency

DEVELOPING THEADVERTISING PROGRAMSCHEDULING THE ADVERTISING

Approaches

• Continuous (Steady) Schedule

• Pulse (Burst) Schedule

• Flighting (Intermittent) Schedule

EXECUTING THEADVERTISING PROGRAMPRETESTING THE ADVERTISING

Pretests

• Portfolio Tests

• Theater Tests

• Jury Tests

EXECUTING THEADVERTISING PROGRAM

CARRYING OUT THE ADVERTISING PROGRAM

Full-Service Agency

Limited-Service Agencies

In-House Agencies

FIGURE 18-5FIGURE 18-5 Alternative structures of advertising agencies used to carry out the advertising program

ASSESSING THEADVERTISING PROGRAMPOSTTESTING THE ADVERTISING

Posttests

Aided Recall Unaided Recall

• Noted

• Read Most

• Seen-Associated

Attitude Tests

Inquiry Tests

Sales Tests

FIGURE 18-6FIGURE 18-6 Sales promotions can be used to achieve many objectives

SALES PROMOTIONCONSUMER-ORIENTED SALES PROMOTION

Consumer-Oriented Sales Promotion

Coupons

Premiums

• Self-Liquidating: Free Toy in Happy Meal

• Deal-Prone & Value Seeing Consumers

Contests

• Value-Based Prizes

• Experience-Based Prizes

Sweepstakes

Samples

Loyalty Programs

Point-of-Purchase Displays

Rebates

Product Placement

SALES PROMOTIONTRADE-ORIENTED SALES PROMOTION

Trade-Oriented Sales Promotion

Allowances and Discounts

• Merchandise Allowance

• Finance Allowance

• Case Allowance

Free Goods

Floor Stock Protection Freight Allowance

SALES PROMOTIONTRADE-ORIENTED SALES PROMOTION

Cooperative Advertising

Training of Distributors’ Salesforces

PUBLIC RELATIONSPUBLICITY TOOLS

Publicity Tools

Public Relations

• News Release

• News Conference

• Public ServiceAnnouncement (PSA)

INCREASING THE VALUEOF PROMOTION

Self-Regulation

Building Long-Term Relationships with Promotion

GOOGLE, INC.: THE RIGHT ADSAT THE RIGHT TIME

VIDEO CASE 18

VIDEO CASE 18GOOGLE

1. Describe several unique characteristics about Googleand its business practices.

VIDEO CASE 18GOOGLE

2. What is Google’s philosophy about advertising? How can less advertising be preferred to more advertising?

VIDEO CASE 18GOOGLE

3. Describe the types of online advertising available today. Which type of advertising does Google currently dominate? Why?

VIDEO CASE 18GOOGLE

4. How can Google be successfulin the display advertising business? What other areas of growth are likely to be pursuedby Google in the future?

Advertising

Advertising is any paid formof nonpersonal communicationabout an organization, good, service, or idea by an identified sponsor.

Product Advertisements

Product advertisements are advertisements that focus on selling a good or service and which take three forms:(1) pioneering (or informational), (2) competitive (or persuasive), and (3) reminder.

Institutional Advertisements

Institutional advertisementsare advertisements designed to build goodwill or an image for an organization rather than promotea specific good or service.

Reach is the number of different people or households exposed to an advertisement.

Rating

A rating is the percentage of households in a market that are tuned to a particular TV show or radio station.

Frequency

Frequency is the averagenumber of times a person in the target audience is exposed to a message or an advertisement.

Gross Rating Points (GRPs)

Gross rating points (GRPs) isa reference number used by advertisers that is obtained by multiplying reach (expressed asa percentage of the total market) by frequency.

Cost per Thousand (CPM)

Cost per thousand (CPM) isthe cost of reaching 1,000 individuals or households withthe advertising message in a given medium (M is the Roman numeral for 1,000).

Infomercials

Infomercials are program-length (30-minute) advertisements that take an educational approach to communication with potential customers.

Pretests

Pretests are tests conducted before an advertisement is placed in any medium to determine whether it communicates the intended message or to select among alternative versions of the advertisement.

Full-Service Agency

A full-service agency is an advertising agency that provides the most complete range of services, including market research, media selection, copy development, artwork, and production.

Limited-Service Agencies

Limited-service agencies are advertising agencies that specializein one aspect of the advertising process, such as providing creative services to develop the advertising copy, buying previously unpurchased media space, or providing Internet services.

In-House Agencies

In-house agencies consist of the company’s own advertising staff, who may provide full services ora limited range of services.

Posttests

Posttests are tests conducted after an advertisement has been shown to the target audience to determine whether it accomplished its intended purpose.

Consumer-Oriented Sales Promotion

Consumer-oriented sales promotion consists of sales tools used to support a company’s advertising and personal selling directed to ultimate consumers. Also called consumer promotions.

Product Placement

Product placement is a consumer sales promotion tool that uses a brand-name productin a movie, television show, video game, or a commercial for another product.

Trade-oriented sales promotions are sales toolsused to support a company’s advertising and personal selling directed to wholesalers, distributors, or retailers. Also called trade promotions.

Trade-Oriented Sales Promotions

Cooperative Advertising

Cooperative advertisingconsists of advertising programs by which a manufacturer pays a percentage of the retailer’s local advertising expense for advertising the manufacturer’s products.

Publicity Tools

Publicity tools are methods of obtaining nonpersonal presentation of an organization, good, or service without direct cost, such as news releases, news conferences, and public service announcements.

chap018

advertising cost

institutional advertising

product advertising

advertising objectivessetting

advertising programidentifying

advertising budget

advertising expenditures

advertising program18

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