Seminar 228.443: Advertising

1. Seminar 228.443:Advertising Dr. Teri Shaffer

2. Introduction to Advertising • Types of advertising • Advertising industry • Advertising trends

3. What Is Advertising? • Paid, nonpersonal communication • Identified sponsor • Using mass media • To inform, persuade, or remind • An audience

4. Types of Advertising Interactive Advertising Brand Advertising Public Service Advertising Retail or Local Advertising Institutional Advertising Political Advertising Business-to- Business Advertising Directory Advertising Direct-Response Advertising

5. Brand Advertising

6. Brand Advertising

7. Brand Advertising

8. Retail Advertising & Institutional Advertising

9. Retail Advertising & Brand Advertising

10. Retail Advertising

11. Retail Advertising

12. Political Advertising

13. Directory Advertising

14. Direct-Response Advertising

15. B2B

16. Institutional Advertising

17. Institutional Advertising

18. Public Service Advertising (PSA) or Advocacy Advertising

19. Public Service Advertising

20. Interactive Advertising

21. Comparative Advertising

22. Advertising & Demand • Competitive brand advertising • Comparative advertising • Build secondary demand • Pioneering advertising • Build primary demand

23. Pioneering Advertising

24. Pioneering Advertising

25. Advertising Industry • US Government StatisticsUs Bureau of Labor Statistics • 395,200 people employed in US • $300 billion globally

26. Five “Players” of Advertising • Advertiser • Advertising Agency • Media • Vendors • Target Audience

27. 1st Player The Advertiser

28. Advertising Age • http://www.adage.com • Leading National Advertisers • Major brands with ad spending > $94.4 million in 1998

29. Leading National Advertisers (1998) • General Motors Corp. • Proctor & Gamble Co. • Phillip Morris Cos. • DaimlerChrysler • Sears, Roebuck, & Co. • Ford Motor Co. • AT&T Corp. • Walt Disney Co. • PepsiCo • Diageo

30. Domestic Spending by Category (1999) • Automotive • Retail • Movies & media • Financial • Medicines & pharmaceuticals • Telecommunications • Food • Restaurants & fast-food • Airline & ship travel; hotels & resorts • Direct response companies

31. Top Advertisers in Austria (1998) • Proctor & Gamble Co. • Unilever • BML-Konzern • SPAR • Mobilkom Austria AG • Mars Inc. • Henkel • Volkswagen • Max. MobilTelekom Service • Ost. Lotterien

32. Top Global Marketers (1999) • Proctor & Gamble Co. • Unilever • Nestle • Volkswagen • Ford Motor Co. • General Motors Corp. • Toyota Motor Co. • Coca-Cola Co. • Peugeot Citroen • L’Oreal

33. 2nd Player The Advertising Agency

34. Advertising Agency • Account management • Creative department • Media • Research & strategic planning

35. Account Management • Represents agency to client • Client relationship • Knowledge of client’s business • Competitive actions • Consumer trends • Helps set goals & budget • Coordinates day to day work

36. Creative Department • Creates ideas, images, & words make up commercials and ads • Copywriters • Art directors • Oversee print or broadcast production

37. Media Department • Planning • Plan media schedule • Buying • Execute media plan

38. Research • Strategic planning • Consumer research • How does consumer interact with brand? • How does brand fit into consumer lifestyle? • Pretest and posttests

39. Example • 1995 campaign for California Milk Processors Advisory Board • Declining sales from 1980 to 1993 • Result? • Increased sales

40. Paying the Agency • Commission system • Fees

41. Commission • Rebates offered by media advertising agencies (15%)

42. Commission System • Agency creates commercial for advertiser • Agency contacts TV station for air time • TV station bills ad agency Cost of air time $ 10,000 Less 15% (1,500) Due $ 8,500 • Agency bills advertiser $10,000

43. Fee-based Compensation • May vary according to departments or levels of salary • Or flat hourly rate • Charges for out-of-pocket expenses, travel, etc. • Media charges are net of commissions

44. 1982 71% commissions 8% fees 21% combination 1997 35% commissions 58% fees 7% combination Advertising Age (1998)Charges Over Time

45. Full Service Agencies • Four major staff functions • Account management • Creative • Media planning and buying • Research

46. Top Ten Agency Brands (1999) • Grey Advertising (NY) • J.Walter Thompson Co. (NY) • McCann-Erickson Worldwide (NY) • FCB Worldwide (NY) • Leo Burnett USA (Chicago) • Euro RSCG Worldwide (NY) • Young & Rubicam Inc. (NY)BBDO Worldwide (NY) • DDB Worldwide Communications (NY) • Ogilvy & Mather Worldwide (NY)

47. World Top Advertising Organizations (1999) • Omnicom (NY) • Interpublic Group of Cos. (NY) • WPP Group (London) • Havas Advertising (France) • Dentsu (Tokyo) • B Com3 Group (Chicago) • Young & Rubicam Inc. (NY) • Grey Advertising (NY) • True North (Chicago) • Publicis SA (Paris)

48. Agencies on the Internet • TBWA/Chiat/Day • http://www.chiatday.com/ • Fallon McElligott • http://www.fallon.com/ • Bozell Worldwide • http://www.bozell.com/

49. Agencies On The Internet • A comprehensive list of ad agencies can be found at the following address • http://www.digitaldirectory.com/ adagencies.html

50. Limited Service Agencies or Specialized Agencies Functions • Creative, media buying, etc. • Audiences • Minority, youth, etc. • Industries • Healthcare, computers, B2B, etc. • Communication Tool • Direct marketing, interactive, etc.