1 Chapter 17: Advertising and Public Relations Prepared by Amit Shah, Frostburg State University Designed by Eric Brengle, B-books, Ltd. Copyright 2010

1

Chapter 17: Advertising and Public Relations

Prepared by Amit Shah, Frostburg State University

Designed by Eric Brengle, B-books, Ltd.

Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Learning Outcomes

2

Discuss the effects of advertising on market share and consumers

Identify the major types of advertising

Discuss the creative decisions in developing an advertising campaign

LO1

LO2

LO3


Learning Outcomes

3

Describe media evaluation and selection techniques

Discuss the role of public relations in the promotional mix

LO5

LO4


The Effects of Advertising

4

Discuss the effect of advertising on market share

and consumers.

LO1



• In recent years, 30 companies spent over $1 billion each

• The advertising and marketing services employ approximately 750,000 people.

• Ad budgets of some firms are almost $4 billion annually.

5Copyright 2010 by Cengage Learning Inc. All Rights Reserved


6

Top Ten Leaders by U.S.Advertising Spending

Top Ten Leaders by U.S.Advertising Spending


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

1. Beyond a certain level of spending, diminishing returns set in.

2. New brands require higher spending to reach a minimum level of exposure needed to affect purchase habits.


The Effects of Advertising on Consumers

8

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.


Review Learning OutcomeEffects of Advertising

9

LO1


Major Types of Advertising

10

Identify the major types of advertising.

LO2



11

Institutional Advertising- Enhancesa company’s image rather than promotes a particular product.

Product Advertising- Touts thebenefits of a specific good or

service.



12

Corporate identityCorporate identity

PioneeringPioneering

CompetitiveCompetitive

ComparativeComparative

ProductAdvertising

ProductAdvertising

InstitutionalAdvertisingInstitutionalAdvertising

Advocacy advertisingAdvocacy advertising


Product Advertising

13

PioneeringPioneeringPioneeringPioneering Stimulates primary demand for

new product or category Used in the PLC introductory stage

CompetitiveCompetitiveCompetitiveCompetitive Influences demand for brand in the

growth phase of the PLC Often uses emotional appeal

ComparativeComparativeComparativeComparative Compares two or more competing

brands’ product attributes Used if growth is sluggish, or if

competition is strong

Online

http://www.pizzahut.comhttp://www.papajohns.com


http://www.pizzahut.com/

http://www.pizzahut.com/

http://www.papajohns.com/

http://www.papajohns.com/

Review Learning OutcomeThe Major Types of Advertising

14

LO2


Creative Decisions in Advertising

15

Discuss the creative

decisions in developing an

advertising campaign.

LO3



16

Advertising Campaign - A series

of related advertisements

focusing on a common theme,

slogan, and set of

advertising appeals.



17

Determine the advertising objectives

Make creative decisions Make media decisions

Evaluate the campaign


Setting Objectives: The DAGMAR Approach

18

Define target audienceDefine target audience

Define desired percentage changeDefine desired percentage change

Define the time frame for change Define the time frame for change


Creative Decisions

19

Develop and evaluateadvertising appeals

Develop and evaluateadvertising appeals

Execute the message

Execute the message

Evaluate thecampaign’s effectiveness

Evaluate thecampaign’s effectiveness

Identify product benefits

Identify product benefits


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


Identify Product Benefits

21

Attribute

Benefit

“SoBe Life Water has reformulated five delicious, low-calorie flavors,

each infused with essential vitamins and healthy herbal ingredients.”

“SoBe Life Water is not only an enhanced water; it is a lifestyle unto

itself. It provides consumers the healthiest, most fun and refreshing products, delivering the incredibly

positive benefits of hydration.”

- So?


Advertising Appeals

22

Profit

Health

Love or romance

Fear

Admiration

Convenience

Fun and pleasure

Vanity and egotism

Environmental Consciousness

Product saves, makes, or protects money

Appeals to body-conscious or health seekers

Used in selling cosmetics and perfumes

Social embarrassment, old age, losing health

Reason for use of celebrity spokespeople

Used for fast foods and microwave foods

Key to advertising vacations, beer, parks

Used for expensive or conspicuous items

Centers around environmental protection


Unique Selling Proposition

23

A desirable, exclusive, and

believable advertising appeal

selected as the theme

for a campaign.


Executing the Message

Mood or Image

Mood or Image

MusicalMusical

Demon-stration

Demon-stration

ScientificScientific

Real/AnimatedProductSymbols

Real/AnimatedProductSymbols

FantasyFantasy

LifestyleLifestyleSlice-of-LifeSlice-of-Life

HumorousHumorous

Spokes-person/

Testimonial

Spokes-person/

Testimonial

Copyright 2010 by Cengage Learning Inc. All Rights Reserved 24

Review Learning OutcomeCreative Decisions for Ad Campaign

25

LO3

Setadvertisingobjectives

Identify benefits

Develop appeal

Evaluate campaign results

Evaluatingresults helpsmarketersadjust objectivesfor futurecampaigns

Execute message


Media Decisions in Advertising

26

Describe media evaluation and

selection techniques.

LO4


Media Decisions in Advertising

27

NewspapersNewspapers

MagazinesMagazines

Yellow PagesYellow Pages

InternetInternet

RadioRadio

TelevisionTelevision

Outdoor MediaOutdoor Media

Direct MailDirect Mail

Trade ExhibitsTrade Exhibits

Cooperative AdvertisingCooperative Advertising

BrochuresBrochures

CouponsCoupons

CatalogsCatalogs

Special EventsSpecial Events

Monitored MediaMonitored Media Unmonitored MediaUnmonitored Media


Major Advertising Media

28

NewspapersNewspapers

MagazinesMagazines

RadioRadio

TelevisionTelevision

Outdoor MediaOutdoor Media

Yellow PagesYellow Pages

InternetInternet


Newspapers

29

AdvantagesAdvantages

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

DisadvantagesDisadvantages

Limited demographic selectivity

Limited color Low pass-along rate May be expensive


Cooperative Advertising

30

An arrangement in which themanufacturer and the retailersplit the costs of advertising

the manufacturer’s brand.


Magazines

31

AdvantagesAdvantages DisadvantagesDisadvantages

Good reproduction

Demographic selectivity

Regional/local selectivity

Long advertising life

High pass-along rate

Long-term advertiser commitments

Slow audience build-up

Limited demonstration capabilities

Lack of urgency

Long lead time


Radio

32


Low cost

Immediacy of message

Short notice scheduling

No seasonal audience change

Highly portable

Short-term advertiser commitments

Entertainment carryover

No visual treatment

Short advertising life

High frequency to generate comprehension and retention

Background distractions

Commercial clutter


Television

33


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


TV Advertising: Is Less More?• The number of ads in TV shows is

a longstanding complaint of viewers and advertisers.

• Tests are being conducted to feature shorter commercial pods.

• A significant trend to affect television advertising is the rise in popularity of digital video recorders (DVRs) such as TiVo.


Outdoor Media

35


Repetition

Moderate cost

Flexibility

Geographic selectivity

Short message

Lack of demographic selectivity

High “noise” level


Internet

36


Fast growing

Ability to reach narrow target audience

Short lead time

Moderate cost

Difficult to measure ad effectiveness and ROI

Ad exposure relies on “click through” from banner ads

Not all consumers have access to Internet

Online

http://www.fox.comhttp://www.abc.com


http://www.fox.com/

http://www.fox.com/

http://www.abc.com/

http://www.abc.com/

Videogame Advertising

• In 2006, Microsoft acquired Massive inc., a start-up that places ads in video games.

• Ads are inserted into the game environment.

• Video games could become a large new medium for advertising.

37

SOURCE: Robert A. Guth and Nick Wingfield, “Microsoft’s ‘Massive’ Move into Game Ads,”

Wall Street Journal, April 26,2006, B1.


Cell Phones• Newest advertising media.

• Useful for reaching youth market.

• Over 4 billion cell phone users in the world.

• In 2008 cell phone ad sales reached over $1.6 billion in U.S. – nearly $4.4 billion worldwide.


Media Selection• Media Mix – Combination of media to be used

for a promotional campaign

• Cost per contact – The cost of reaching one member of the target market

• Reach – number of target consumers exposed to a commercial at least once during a specific period, usually four weeks

• Frequency – number of times an individual is exposed to a given message during a specific period


Qualitative Factors in Media Selection

• Attention to the commercial and the program

• Involvement

• Program liking

• Lack of distractions

• Other audience behaviors


Media Scheduling

41

ContinuousMedia Schedule

Flighted Media Schedule

PulsingMedia Schedule

SeasonalMedia Schedule

Advertising is run steadily throughout the period.

Advertising is run heavily every other month or every two weeks.

Advertising combines continuous scheduling with flighting.

Advertising is run only when the product is likely to be used.


Review Learning OutcomeMedia Evaluation and Selection

42

LO4

Type: NewspaperMagazineRadioTelevisionOutdoorInternetAlternative

Considerations:

Mix How much of each?Cost per contact How much per person?Reach How many people?Frequency How often?Audience selectivity How targeted is audience?

Scheduling: continuous

flighted

pulsing

seasonal

Winter Spring Summer FallCopyright 2010 by Cengage Learning Inc. All Rights Reserved

Public Relations

43

Discuss the role of public

relations in the promotional mix.

LO5


Public Relations

44

The elements in the promotional mix that:

-evaluate public attitudes,-identify issues of public concern,

-execute programs to gain public acceptance.


Functions of Public Relations

45

Press relations Press relations

Product publicityProduct publicity

Corporate communicationCorporate communication

Public affairsPublic affairs

LobbyingLobbying

Employee and investor relationsEmployee and investor relations

Crisis managementCrisis management


Public Relations Tools

46

Product placementProduct placement

Consumer educationConsumer education

SponsorshipSponsorship

Web sitesWeb sites

New product publicityNew product publicity

Online

http://www.vw.comhttp://www.chevrolet.com


http://www.vw.com/

http://www.vw.com/

http://www.chevrolet.com/

http://www.chevrolet.com/

Example of Consumer Education

• Corporations are teaching public school students about personal finance.

• People under age 25 are a fast-growing group for credit card debt increases and bankruptcy.

• Is it appropriate to use educational materials with a corporate identity?

• How should financial literacy be taught?

47

SOURCE: Diya Gullapalli, “Your Kid’s Teacher: The Bank,”

Wall Street Journal, April 8-9, 2006, B1.


Managing Unfavorable Publicity

48

Crisis Management -A coordinated effort to handle

the effects of unfavorablepublicity or of an

unfavorable event.


Review Learning OutcomeThe Role of Public Relations

49

LO5


Documents

1 Chapter 17: Advertising and Public Relations Prepared by Amit Shah, Frostburg State University Designed by Eric Brengle, B-books, Ltd. Copyright 2010