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From communication to advertising:
cases and experiences in the Italian
context
Donata Vianelli
“If communication is to change behavior it must
be grounded in the desire and interests of the receivers.”
Aristotle
Learning objectives
Part 1 (November 13, 2012)
• Define and classify the different types of communication
tools
• Describe and explain the major steps in advertising
decisions
• Describe the techniques available and appropriate for
setting the advertising budget
• Advertising in the Italian context:
Integrated Marketing Communication builds brands
Integrating marketing communications to build brand equity
Source: Kotler et al, 2008
Elements of the communication process
Source: Kotler et al, 2008
Elements of the international communication process
Source: Hollensen, 2010
Current consumer states for two brands
Source: Kotler et al, 2008
An ideal ad campaign
• The right consumer is exposed to the message at the right time and place
• The ad causes consumer to pay attention
• The ad reflects consumer’s level of understanding and behaviors with product
• The ad correctly positions brand in terms of points-of-difference and points-of-parity
• The ad motivates consumers to consider purchase of the brand
• The ad creates strong brand associations
Source: Hollensen, S. (2001) Global Marketing: A Market Responsive Approach, 2nd ed., Financial Times-Prentice Hall, Harlow, p. 520. Reproduced with permission
The major
international adv
decisions
• Why? Objective
• Who? Target group
• How much? Budget
• What? Message
• How? Tools and techinques
• Where? Channels and media
• How effective? Results
Communications objectives
Category need Brand awareness
Brand attitude Purchase intention
Who? Target group
MKTG target
COM target
MKTG target
COM target
MKTG target
COM target
Communication target ≠ marketing target?
The marketing budget
Gross sales value: p x q
- Trade Allowances
= Net product sales
- Direct delivered costs
(production, distribution, etc.)
= Gross Profit
- Marketing appropriations
- Marketing research costs
- Communication costs
= Profit Before Indirects
Top line objectives
(efficacy)
Bottom line objectives
(efficiency)
Budget decisions
Which form of budgeting means that
the firm simply allocates a fixed
proportion of sales to the advertising
budget?
Percentage of sales method
Percentage of sales method
Advantages
• Guarantees equality
among markets
• Easy to justify
• Guarantees only what is
affordable is spent
Disadvantages
• Based on historical
performance
• Ignores necessity of
increased spending
during declining sales
• Does not consider goals
• Fails to address
relationship between
advertising and sales
Which form of budgeting simply
duplicates the amounts spent on
advertising by major rivals?
Competitive parity
Budget decisions
Which form of budgeting simply
duplicates the amounts spent on
advertising by major rivals?
Competitive parity
Budget decisions
Which form of budgeting starts with
determining the advertising objectives
and then ascertaining the tasks needed
to attain the objectives?
Objective and task approach
Budget decisions
Cost of TV advertising in the Italian Market
Show / movie / other Price from Dec. 2 to 15 (30’)
La prova del cuoco 22.000,00 – 27.000,00 €
Lost 50.000,00 €
Report 48.000,00 €
Prime time RAI 1 fiction 110.000,00 €
Show / movie / other Price from Jan. 1 to 19 (30’)
6:55 beginning GR1 (News) 5.600,00 €
15:45 Sunday, end first half soccer matches 4.200,00 €
7:25 beginning GR2 (News) 3.000,00 €
Listed price Sipra
An example of free press
Media decisions
Reach
Frequency
Gross
rating points
(GRPs)
Media mix
Momentum
What is this?
What term refers to the total portion of
the target market exposed to at least
one ad in a given time period?
Reach
What is this?
What term refers to the average
number of times within a given
timeframe that each potential customer
is exposed to the same ad?
Frequency
Communication tools and Media mix
Source: Hollensen, S. (2001) Global Marketing: A Market Responsive Approach, 2nd ed., Financial Times-Prentice Hall, Harlow, p. 519
Marketing Communications are
Now Two-Way
Traditionally:
• One-way communication (Radio, TV,
billboards, etc.)
Today:
• Two-way communication (Blogs, forums,
websites, etc.)
• See the “Break up” VIDEO
Source: Hollensen, S. (2001) Global Marketing: A Market Responsive Approach, 2nd ed., Financial Times-Prentice Hall, Harlow, p. 545. Reproduced with permission
Traditional and Internet communication
in the buying process of customers
Challenges today: see the “Dramatic Shift in Marketing” VIDEO
Push versus pull strategies
Source: Hollensen, S. (2001) Global Marketing: A Market Responsive Approach, 2nd ed., Financial Times-Prentice Hall, Harlow, p. 545. Reproduced with permission
Advertising in Italy (000 €)
Advertising in Italy (1975-2005)
http://gandalf.it/cens2006/c2006-07.htm
Advertising in Italy (1975-2005) - % per media
Printed adv Television Outdoor
http://gandalf.it/cens2006/c2006-07.htm
Advertising in the World (2005) - % per media
Television Printed adv Outdoor
http://gandalf.it/cens2006/c2006-07.htm
Challenges for Global Marketers
• Global promotional campaigns must incorporate new electronic channels as well as traditional channels
• Less distinction between global and local communications mean greater chance for misinterpretation of messages
• Consumers as well as companies can initiate brand communication, giving marketers less control over the message
• Easier measurement through digital marketing means marketers are more accountable for ROI
The Italian market is late… See Leo Burnett Video
Globalized vs. Local Communication
5 most important attributes of a global brand:
– Consistent, easy to pronounce name in all
markets
– Evenly dispersed sales across the world without
one dominant market
– Preserving the true nature and positioning of the
brand in all markets and cultures
– Offering solutions to the same customer needs or
serving the same target markets everywhere
– Consistently presenting the brand through
packaging, pricing, advertising
Standardized Advertising
• Virtually nothing changes in an ad except the language. More loosely defined, an advertisement is considered standardized if it maintains the same theme across the world.
Benefits
– Savings
– Consistency
– Control
– Strong brand recognition
– Ability to leverage products across several markets
There are only a few
brands that have been able
to fully benefit from these
advantages, such as GE,
Heineken and Starbucks.
Products for Standardized
Advertising
• Luxury
• High-Tech
• Fashion
• Automotive
• Less suitable:
– Food
– Personal Care Products
Challenges to Successful
Standardized Ad Implementation
• Different cultural tastes for images and
icons
• The effectiveness of the message may be
compromised
Adapted (Localized) Advertising
• Adapted (or localized) advertising
communications reflect each market’s cultural
and social conditions.
• Goal
– Increase recognition and acceptance of the advertised
brand and product
• Theory
– Presenting a brand in the context of local cultural values
and tastes will allow more people to identify with the
brand, creating higher affinity for that brand and
ultimately, more sales
Factors Influencing Global vs. Local Advertising
• Product Type
• Level of familiarity with a global brand
– More familiarity global
– Less familiarity local
• Government regulation
• Cultural taboos and perceptions
The trade off in choosing a localization strategy in
marketing communications is between higher efficiency of
the campaigns versus increased costs and complexity
Country Specific Advertising Styles
Source: Hollensen, 2010
Global Advertising Regulations
• When planning a global marketing strategy,
marketers have to consider the myriad of standards,
regulations and laws that govern the advertising
industry in the different countries and regional
jurisdictions.
• The landscape for advertising regulations is broken
up not only by national and local authorities, but
sometimes even by advertising medium.
The Global Advertising Agency • Reasons to choose advertising agencies for global
marketing needs:
– Cost-effectiveness
– Market knowledge
– Superior creative work
– Specialized services
• Also to consider:
– Strategic marketing alignment
– Agency reputation and size
– Industry specialization
Adv agency selection factors in Italy
Italian Adv agency
• Supports national subsidiary
• Investment in existing brand best handled nationally
• Closer to marketplace
• Personalized service and greater creativity
• Diversity of ideas
Pan-European Adv agency
• Reflects new European reality
• Economies of scale in new product development and branding
• Uniformity of treatment across Europe
• Resources and skills of major agency
• Easier to manage one agency group
Source: adapted from Lynch, 1994, Table 11-4.
Learning objectives
Part 2 (November 20, 2012)
• The effectiveness of advertising
• Culture and advertising
• Culture and advertising in the Italian context
Advertising effectiveness
= Solicited B.A.
= Spontaneous Brand Awareness
= Top of Mind
Spontaneous + Solicited = total B.A.
Which is the 1° brand of the category you think of?
Which other brands do
you remember?
Have you ever heard of brand Y?
8
7
7
6
5
4
4
3
3
2
2
2
2
2
2
SoV %
2008*
Finance/Insurance 2008*
255.855.000 € (-7%)
19.7
18.3
17.4
14.6
12.2
9.9
9.0
8.7
7.6
6.2
6.0
5.5
5.3
4.9
4.7
7.5
21.6
16.9
17.6
2.2
12.5
8.3
2.0
7.5
5.0
9.8
4.5
4.0
13.6
6.1
ALLIANZ
UNICREDIT
INTESA-SANPAOLO
ING DIRECT
MEDIOBANCA
BNP PARIBAS
MPS
DIRECT LINE
FINDOMESTIC BANCA
BANCA MEDIOLANUM
BARCLAYS
MASTERCARD EUROPE
ALLEANZA ASSICURAZIONI
POSTE ITALIANE
ELECTA -22%
+21%
+17%
-44%
+21%
-18%
+277%
+6%
-34%
-21%
+448%
-17%
+3%
-15%
+164%
Gen-Ago 08
Gen-Ago 07
D%
* Jan - Aug 08
(€.000)
Source: AcNielsen (Net Investments)
AN EXAMPLE IN THE INSURANCE ITALIAN MARKET
TOP SPENDER
38
18
13
13
9
9
x
SoV %
2008*
Direct Insurance 2008*
23.467.000 € (+14%)
8'738
4'275
3'127
3'004
2'200
2'058
66
8'256
4'548
2'845
1'163
2'104
1'728
DIRECT LINE
GENIALLOYD
DIALOGO
GENERTEL
LINEAR
ZURITEL
CONTE.IT +++%
+5%
+158%
+10%
-6%
+6%
Gen-Ago 08
Gen-Ago 07
D% (€.000)
+19%
Source: AcNielsen (Net Investments)
* Jan - Aug 08
AN EXAMPLE IN THE INSURANCE ITALIAN MARKET
TOP SPENDER
38%
18%
13%
13%
9%
9%
0%
SoV %
Gen-Ago 08
0%
14%
13%
7%
11%
0%
3%
0%
7%
58%
31%
7%
0%
0%
2%
0%
3%
1%
8%
0%
0%
0%
0%
25%
21%
0%
40%
50%
65%
54%
0%
26%
0%
0%
2%
1%
0%
0%
0%
14%
42%
10%
13%
4%
4%
82%
4%
17%
18%
5%
1%
6%
3%
0%
0%
0%
0%
0%
24%
24%
28%
24%
25%
DIRECT INSURANCE
DIRECT LINE
GENIALLOYD
DIALOGO
GENERTEL
LINEAR
ZURITEL
CONTE.IT
TV SAT TV RADIO NEWSPAPERS FREE/PAY PRESS
MAGAZINES OUTDOOR CARDS CINEMA INTERNET
Source: AcNielsen (Net Investments)
* Jan - Aug 08
AN EXAMPLE IN THE INSURANCE ITALIAN MARKET
MEDIA MIX
KEY LEARNINGS
- Direct Insurance is an INTENSIVE adv market
- Adspend follows car sales peaks
- Growing investments and SOV
- TV VS Newspapers+Radio
- Concentration: top 2 = 56%
- Online gaining high share
KEY LEARNINGS – COMPETITORS
Two main clusters by offline media mix:
1. TV-based strategies
2. Press+Radio-based
strategies
Plus one company using balanced Multimedia Strategy:
The importance of words
http://www.youtube.com/watch?v=Hzgzim5m7oU
KSF and characteristics of adv
in international markets
Innovation and time to market
Brand recall and brand linkage
Consistency (coherence with the overall strategy)
Impact (“not a massage for the consumer but a kick for the stomach”)
Costs: the general rule is to create international films
(standardization) with a local media planning (adaptation)
Risks of standardization… the problem of culture.
A definition of culture
“Values, attitudes, beliefs, artefacts and other meaningful
symbols represented in the pattern of life adopted by
people that help them interpret, evaluate and
communicate as members of a society”
Culture is what remains when
that which has been learned
is entirely forgotten
Expressions of culture
• Selective perception
• Stereotyping
• Thinking patterns and intellectual styles
• Language
• Signs, symbols and body language
• Imagery and Music
Stereotypes
Heaven is where:
– The cooks are French
– The mechanics are German
– The policemen are British
– The lovers are Italian
… And it is all organised by the Swiss
Hell is where:
– The cooks are British
– The mechanics are French
– The policemen are German
– The lovers are Swiss
… And it is all organised by the Italians
Main dimensions of culture
• High context (i.e. Asian cultures) and
low context cultures (i.e. USA) (Hall)
• Hofstede dimensions of culture:
– Power distance
– Individualism / collectivism
– Masculinity / femininity
– Uncertainty avoidance
– Long term orientation
Culture and advertising
• Communication styles vary by culture. Some
examples:
– American tv is action oriented… Finnish video dramas are
much more static.
– Fun is not a Russian concept
– The happy ending is rare in Japanes novels and plays
• Communication styles across country can be analyzed
considering:
– high context and low context communication
– interpersonal communication:
• direct versus indirect
• verbal versus non verbal
High-Context and Low-Context Communication
• In high context cultures, people implicitly and
imperceptibly collect information from their networks.
French, Italians, Spanish, people of the Middle East,
Japan… they prefer indirect communication with less copy
and more symbols.
• In low context cultures people do not collect information
from their networks, and for this reason they require
detailed information from other sources.
Germans, Americans… tend to use more copy,
argumentation, facts and data.
Direct versus indirect modes of
communication
• In direct modes of communication, intentions and people
implicitly and imperceptibly collect information meanings are
displayed clearly and expressed explicitly.
• Direct modes are typical of individualistic, low-context
cultures, where individual value orientations, linear logic and
direct verbal interactions are emphasized
• In indirect modes of communication, indirect speech and
contextual non verbal acts (role oriented) are preferred.
• Indirect modes are typical of collectivistic, high-context
cultures, where the emphasis is mainly on group values,
circular logic and indirect verbal interaction
Verbal versus non verbal modes of communication
• Verbal (using words) or non verbal (using symbols)
• In the direct verbal style, wants, needs and desires are
expressed explicitly. Typical words are “absolutely” and
“definitely” to express buying intentions.
• The indirect verbal style refers to verbal messages that
conceal the speaker’s true intentions. “Probably” or
“somewhat” are example of the indirect style.
Value paradoxes in advertising appeals:
some examples
• The success paradox:
– Mazda, USA, “The best selling car in the world”
– Carlsberg, Denmark, “Probably the best beer in the
world”
– Aeg, Italy, “Perfekt in form und funktion”
– Philips, the Netherlands: “Let’s make things better”
• The tension paradox:
– Ready for the unexpected
– Take a break
Italian Style
• The importance of local culture / proud to be Italian
– Illy campaign -
http://www.youtube.com/watch?v=4lycrG6Y8EQ
- Cocacola happiness table:
http://www.youtube.com/watch?v=Sh2v1XfQ-SE
- Mulino Bianco – emotions -
http://www.youtube.com/watch?v=1D6WZaS9dpE
- Italian Passions -
http://www.youtube.com/watch?feature=endscreen&v=dBO
h_u2xkvg&NR=1
- De Longhi cases
