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Lamb, Hair, McDaniel

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  1. Lamb, Hair, McDaniel 2010-2011 CHAPTER 17 Advertising and Public Relations

  2. Learning Outcomes LO 1 Discuss the effects of advertising on market share and consumers LO 2 Identify the major types of advertising LO 3 Discuss the creative decisions in developing an advertising campaign LO 4 Describe media evaluation and selection techniques LO 5 Discuss the role of public relations in the promotional mix

  3. The Effects of Advertising Discuss the effects of advertising on market share and consumers LO1

  4. The Effects of Advertising • U.S. advertising are expected to decline in difficult economic times • In recent years, 30 companies spent more than $1 billion each • 850,000 people work in media advertising such as newspapers, magazines, television, radio, and internet media. • More than 100 companies spend over $300 million annually. LO1

  5. Advertising and Market Share New brands with a small market share spend proportionally more for advertising and sales promotion than those with a large market share. • Beyond a certain level of spending, diminishing returns set in. • New brands require higher spending to reach a minimum level of exposure needed to affect purchase habits. LO1

  6. The Effects of Advertising on Consumers • The average U.S. citizen is exposed to hundreds of ads each day. • Advertising may change a consumer’s negative attitude toward a product, or reinforce a positive attitude. • Advertising can affect consumer ranking of a brand’s attributes. LO1

  7. Return on advertising expense (in sales or market share) Advertisingresponse function Money spent REVIEW LEARNING OUTCOME Effects of Advertising Maintainingsales/share Buildingsales/share ____ change negative attitude to positive P Advertising can: P ____ reinforce positive attitude LO1 P ____ affect how consumers rank brand attributes

  8. Major Types of Advertising Identify the major types of advertising LO2

  9. Institutional Advertising Enhances a company’s image rather than promotes a particular product. Product Advertising Touts the benefits of a specific good or service. Major Types of Advertising LO2

  10. Corporate identity Institutional Advertising Advocacy advertising Pioneering Product Advertising Competitive Comparative Major Types of Advertising LO2

  11. Stimulates primary demand for new product or category • Used in the PLC introductory stage Pioneering • Influences demand for brand in the growth phase of the PLC • Often uses emotional appeal Competitive • Compares two or more competing brands’ product attributes • Used if growth is sluggish, or if competition is strong Comparative Product Advertising LO2

  12. REVIEW LEARNING OUTCOME The Major Types of Advertising LO2

  13. Creative Decisionsin Advertising Discuss the creative decisions in developing an advertising campaign LO3

  14. Creative Decisions in Advertising AdvertisingCampaign A series of related advertisements focusing on a common theme, slogan, and set of advertising appeals. LO3

  15. Determine the advertising objectives Make media decisions Make creative decisions Evaluate the campaign Creative Decisions in Advertising LO3

  16. Define target audience Define desired percentage change Define the time frame for change Setting Objectives: The DAGMAR Approach LO3

  17. Identify product benefits Develop and evaluate advertising appeals Execute the message Evaluate the campaign’s effectiveness Creative Decisions LO3

  18. Identify Product Benefits • “Sell the Sizzle, not the Steak” • Sell product’s benefits, not its attributes • A benefit should answer “What’s in it for me?” • Ask “So?” to determine if it is a benefit LO3

  19. Attribute “Powerade’s new line has been reformulated to combine the scientific benefits of sports drinks with B vitamins and to speed up energy metabolism.” Benefit “So, you’ll satisfy your thirst with a great-tasting drink that will power you throughout the day.” Identify Product Benefits “So?” LO3

  20. Profit Product saves, makes, or protects money Health Appeals to body-conscious or health seekers Love or romance Used in selling cosmetics and perfumes Fear Social embarrassment, old age, losing health Admiration Reason for use of celebrity spokespeople Convenience Used for fast foods and microwave foods Key to advertising vacations, beer, parks Fun and pleasure Vanity and egotism Used for expensive or conspicuous items Environmental Consciousness Centers around environmental protection Advertising Appeals LO3

  21. Unique Selling Proposition Unique SellingProposition A desirable, exclusive, and believable advertising appeal selected as the theme for a campaign. LO3

  22. Scientific Slice-of-Life Musical Lifestyle Demon- stration Spokes-person/ Testimonial Mood or Image Fantasy Real/ Animated Product Symbols Humorous Executing the Message LO3

  23. Identify benefits Develop appeal Execute message Evaluatingresults helpsmarketersadjust objectivesfor futurecampaigns Evaluate campaign results REVIEW LEARNING OUTCOME Creative Decisions for Ad Campaign Setadvertising objectives LO3

  24. Media Decisions in Advertising Describe media evaluation and selection techniques LO4

  25. Newspapers Direct Mail Magazines Trade Exhibits Yellow Pages Cooperative Advertising Internet Brochures Radio Coupons Television Catalogs Outdoor Media Special Events Media Decisions in Advertising Monitored Media Unmonitored Media LO4

  26. Newspapers Magazines Radio Television Outdoor Media Yellow Pages Internet Major Advertising Media LO4

  27. Newspapers Advantages Disadvantages • Geographic selectivity • Short-term advertiser commitments • News value and immediacy • Year-round readership • High individual market coverage • Co-op and local tie-in availability • Short lead time • Limited demographic selectivity • Limited color • Low pass-along rate • May be expensive LO4

  28. An arrangement in which the manufacturer and the retailer split the costs of advertising the manufacturer’s brand. Cooperative Advertising CooperativeAdvertising LO4

  29. Magazines Advantages Disadvantages • Long-term advertiser commitments • Slow audience build-up • Limited demonstration capabilities • Lack of urgency • Long lead time • Good reproduction • Demographic selectivity • Regional/local selectivity • Long advertising life • High pass-along rate LO4

  30. Noise-Free Reading {Contents Brought to you by...} The table of contents (TOC) in a magazine commonly appears after a dozen—sometimes two dozen—or more pages of advertisements. To cut through the noise, Philips Electronics paid $5 million to Time, Inc. to place the TOC on the first page of four magazines—Time, Fortune, People, and Business 2.0. In those issues, the TOC appeared on the very first page, opposite an ad on the inside front cover, reading: “Philips Electronics is bringing the table of contents to the front of selected Time, Inc. magazines to make things easier for readers.” SOURCE: Brian Steinberg, “Philips and Time Agree to Keep It Simple,” Wall Street Journal, April 21, 2006, B3. LO4

  31. Radio Advantages Disadvantages • No visual treatment • Short advertising life • High frequency to generate comprehension and retention • Background distractions • Commercial clutter • Low cost • Immediacy of message • Short notice scheduling • No seasonal audience change • Highly portable • Short-term advertiser commitments • Entertainment carryover LO4

  32. Television Advantages Disadvantages • Wide, diverse audience • Low cost per thousand • Creative opportunities for demonstration • Immediacy of messages • Entertainment carryover • Demographic selectivity with cable • Short life of message • Consumer skepticism • High campaign cost • Little demographic selectivity with stations • Long-term advertiser commitments • Long lead times for production • Commercial clutter LO4

  33. Presidential TV Advertising When it comes to advertising, presidential hopefuls continue to favor local TV: • Nearly 95 percent of presidential campaign ads between January 1 to October 10, 2007 were aired on local TV stations • Mitt Romney led other Republican presidential candidates with 10,893 TV ads in that time period • Bill Richardson led Democrats with 5,975 TV ads, followed by Barack Obama with 4,293 ads SOURCE: “Candidates Still Bank On Local TV Ads,” Mediaweek, Oct 22, 2007 p22 . LO4

  34. Internet Advantages Disadvantages • Fast growing • Ability to reach narrow target audience • Short lead time • Moderate cost • Difficult to measure ad effectiveness and ROI • 28% WW audience; 77% No. America LO4

  35. Outdoor Advertising • In 1970, billboards accounted for 80 percent of outdoor advertising • In 2006, billboards accounted for 64 percent of outdoor advertising, public transport for 12 percent (e.g.. buses, trucks, cars), street furniture for 7 percent (e.g. park benches, bus kiosks), and 17 percent alternative (outdoor) media • Some car owners are paid $200-$800/month for driving a car “wrapped” in the logo and branding of an advertiser • So far, only 700 of the 450,000 U.S. billboards are digital (only 40 states allow their use) SOURCE: “Us’s Landscape Turns Luminous As Highway Billboards Go Digital,” Marketing Week, October 25, 2007, p22. LO4

  36. Outdoor Media Advantages Disadvantages • Repetition • Moderate cost • Flexibility • Geographic selectivity • Short message • Lack of demographic selectivity • High “noise” level LO4

  37. Privacy Protection Third-party ad networks provide most of today’s Web ads. These ad networks use cookies to track your Web preferences and usage patterns, then tailor advertising content to your interests. Network Advertising Initiative (NAI) member companies are self-regulating. Each has agreed to post a notice on all Web sites served by their networks. This notice informs consumers that: • The ad networks may place a cookie on your computer; • The cookie may be used to tailor ad content both on the site you are visiting as well as other sites within that network that you may visit in the future. • They have provided an "opt-out" mechanism for the targeted ad programs they provide. LO4 SOURCE: http://networkadvertising.org/managing/principles.asp

  38. Google’s AdWords (Ads Work!) Google's total revenue in 2008 was $21.8 billion and of this, $21.1 billion was derived from advertising. At the end of its third quarter in 2009, the company’s total revenue was $16.9 billion, $16.4 billion from advertising. To appreciate just how much Google has grown, consider this—in 2003 the company's total revenue was $1.46 billion with advertising revenue representing $1.42 billion. Source: http://investor.google.com/fin_data.html last visited November 12, 2009 LO4

  39. Shopping Carts Floor Ads Computer Screen Savers Subway Tunnel Ads DVDs Video Game Ads Interactive Kiosks Cell Phone Ads Ads in Movies Advertainments Alternative Media LO4

  40. Qualitative Factors in Media Selection • Attention to the commercial and the program • Program liking • Lack of distractions • Other audience behaviors LO4

  41. Media Scheduling Continuous Media Schedule Advertising is run steadily throughout the period. Flighted Media Schedule Advertising is run heavily every other month or every two weeks. Pulsing Media Schedule Advertising combines continuous scheduling with flighting. Seasonal Media Schedule Advertising is run only when the product is likely to be used. LO4

  42. Type: Newspaper Magazine Radio Television Outdoor Internet Alternative Scheduling: continuous flighted pulsing seasonal Winter Spring Summer Fall REVIEW LEARNING OUTCOME Media Evaluation and Selection Considerations: LO4

  43. Public Relations Discuss the role of public relations in the promotional mix LO5

  44. Public Relations Public Relations The element in the promotional mix that: • evaluates public attitudes • identifies issues of public concern • executes programs to gain public acceptance LO5

  45. Press relations Product publicity Corporate communication Public affairs Lobbying Employee and investor relations Crisis management Functions of Public Relations LO5

  46. New product publicity Product placement Consumer education Event sponsorship Issue sponsorship Internet Web sites Public Relations Tools LO5

  47. Consumer Education Sites

  48. A coordinated effort to handle the effects of unfavorable publicity or of an unfavorable event. Managing Unfavorable Publicity Crisis Management LO5

  49. REVIEW LEARNING OUTCOME The Role of Public Relations LO5

  50. Advertising for TV Shows Aggregating print ads for televisions shows as well as breaking them down, James Hibberd offers an informative look at advertising trends in 2009. • http://www.thrfeed.com/nbcs-trauma-.html LO5