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Lamb, Hair, McDaniel

CHAPTER 17

Advertising and Public Relations

2010-2011

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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

Learning OutcomesLearning Outcomes

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Discuss the effects of

advertising on market share and consumers

The Effects of AdvertisingThe Effects of Advertising

LO1

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The Effects of AdvertisingU.S. advertising are expected to decline in

difficult economic timesIn 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

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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

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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

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____ affect how consumers rank brand attributes____ reinforce positive attitude____ change negative attitude to positive

REVIEW LEARNING OUTCOMEEffects of Advertising

Buildingsales/share

Maintainingsales/share

Advertisingresponse function

Advertising can:

Return on advertising expense (in sales or market share)

Money spent

LO1

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Identify the major types of advertising

Major Types of AdvertisingMajor Types of Advertising

LO2

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Major Types of Advertising

InstitutionalAdvertising

InstitutionalAdvertising

Enhances a company’s image rather than promotes a particular product.

Enhances a company’s image rather than promotes a particular product.

ProductAdvertising

ProductAdvertising

Touts the benefits of a specific good or service.

Touts the benefits of a specific good or service.

LO2

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Major Types of Advertising

Corporate identityCorporate identity

PioneeringPioneering

CompetitiveCompetitive

ComparativeComparative

ProductAdvertising

ProductAdvertising

InstitutionalAdvertisingInstitutionalAdvertising

Advocacy advertisingAdvocacy advertising

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Product Advertising

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

LO2

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REVIEW LEARNING OUTCOMEThe Major Types of Advertising

LO2

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Discuss the creative decisions in developing an

advertising campaign

Creative DecisionsCreative Decisionsin Advertisingin Advertising

LO3

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Creative Decisions in Advertising

A series of related

advertisements focusing on a

common theme, slogan, and

set of advertising appeals.

AdvertisingCampaign

AdvertisingCampaign

LO3

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Creative Decisions in Advertising

Determine the advertising objectives

Make creative decisions Make media decisions

Evaluate the campaign

LO3

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Setting Objectives: The DAGMAR Approach

Define target audience Define target audience

Define desired percentage change Define desired percentage change

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

LO3

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Creative Decisions

Develop and evaluate advertising appealsDevelop and evaluate advertising appeals

Execute the messageExecute the message

Evaluate the campaign’s effectivenessEvaluate the campaign’s effectiveness

Identify product benefitsIdentify product benefits

LO3

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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

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Identify Product Benefits

Attribute

Benefit

“Powerade’s new line has been reformulated to combine the scientific

benefits of sports drinks with B vitamins and to speed up energy

metabolism.”

“So, you’ll satisfy your thirst with a great-tasting drink that will power you

throughout the day.”

“So?”

LO3

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Advertising AppealsProfit

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

LO3

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Unique Selling Proposition

A desirable, exclusive, and believable

advertising appeal selected as the

theme for a campaign.

Unique SellingProposition

Unique SellingProposition

LO3

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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

LO3

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REVIEW LEARNING OUTCOME

Creative Decisions for Ad CampaignSet

advertisingobjectives

Identify benefits

Develop appeal

Execute message

Evaluate campaign results

Evaluatingresults helpsmarketersadjust objectivesfor futurecampaignsLO3

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Describe media evaluation

and selection techniques

Media Decisions in AdvertisingMedia Decisions in Advertising

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Media Decisions in Advertising

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

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Major Advertising Media

NewspapersNewspapers

MagazinesMagazines

RadioRadio

TelevisionTelevision

Outdoor MediaOutdoor Media

Yellow PagesYellow Pages

InternetInternet

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Newspapers

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

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An arrangement in which the

manufacturer and the retailer

split the costs of advertising

the manufacturer’s brand.

Cooperative Advertising

CooperativeAdvertising

CooperativeAdvertising

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Magazines

AdvantagesAdvantages

Good reproduction Demographic

selectivity Regional/local

selectivity Long advertising life High pass-along rate

DisadvantagesDisadvantages

Long-term advertiser commitments

Slow audience build-up

Limited demonstration capabilities

Lack of urgency Long lead time

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Noise-Free Reading

SOURCE: Brian Steinberg, “Philips and Time Agree to Keep It Simple,” Wall Street Journal, April 21, 2006, B3.

{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.”

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Radio

AdvantagesAdvantages

Low cost Immediacy of message Short notice scheduling No seasonal audience

change Highly portable Short-term advertiser

commitments Entertainment carryover

DisadvantagesDisadvantages

No visual treatment Short advertising life High frequency to

generate comprehension and retention

Background distractions Commercial clutter

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Television

AdvantagesAdvantages

Wide, diverse audience Low cost per thousand Creative opportunities for

demonstration Immediacy of messages Entertainment carryover Demographic selectivity

with cable

DisadvantagesDisadvantages

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

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Presidential TV Advertising

SOURCE: “Candidates Still Bank On Local TV Ads,” Mediaweek, Oct 22, 2007 p22 .

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

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Internet

AdvantagesAdvantages

Fast growing Ability to reach

narrow target audience

Short lead time Moderate cost

DisadvantagesDisadvantages

Difficult to measure ad effectiveness and ROI

28% WW audience; 77% No. America

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Outdoor Advertising

SOURCE: “Us’s Landscape Turns Luminous As Highway Billboards Go Digital,” Marketing Week, October 25, 2007, p22.

• 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)

LO4

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Outdoor Media

AdvantagesAdvantages

Repetition Moderate cost Flexibility Geographic selectivity

DisadvantagesDisadvantages

Short message Lack of demographic

selectivity High “noise” level

LO4

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Privacy Protection

SOURCE: http://networkadvertising.org/managing/principles.asp

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:

1. The ad networks may place a cookie on your computer;

2. 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.

3. They have provided an "opt-out" mechanism for the targeted ad programs they provide.

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GGooooggllee’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

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Alternative Media

Ads in MoviesAds in Movies

Interactive KiosksInteractive Kiosks

Computer Screen Savers

Computer Screen Savers

Shopping CartsShopping Carts

DVDsDVDs

AdvertainmentsAdvertainments

Cell Phone AdsCell Phone Ads

Subway Tunnel AdsSubway

Tunnel Ads

Floor AdsFloor Ads

Video Game AdsVideo Game Ads

LO4

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Qualitative Factors in Media Selection

Attention to the commercial and the program

Program liking

Lack of distractions

Other audience behaviors

LO4

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Media Scheduling

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.

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REVIEW LEARNING OUTCOME

Media Evaluation and Selection

Scheduling:

continuous

flighted

pulsing

seasonal

Winter Spring Summer Fall

Type: NewspaperMagazineRadioTelevision

OutdoorInternetAlternative

Considerations:

LO4

Mix How much of each?

Cost per contact How much per person?

Reach How many people?

Frequency How often?

Audience selectivity How targeted is the audience?

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Discuss the role of public

relations in the promotional mix

Public RelationsPublic Relations

LO5

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Public Relations

The element in the promotional

mix that:

Public Relations

Public Relations

evaluates public attitudes

identifies issues of public concern

executes programs to gain public acceptance

LO5

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Functions of Public Relations

Press relations Press relations

Product publicityProduct publicity

Corporate communicationCorporate communication

Public affairsPublic affairs

LobbyingLobbying

Employee and investor relationsEmployee and investor relations

Crisis managementCrisis management

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Public Relations Tools

Product placementProduct placement

Consumer educationConsumer education

Event sponsorshipEvent sponsorship

Issue sponsorshipIssue sponsorship

Internet Web sitesInternet Web sites

New product publicityNew product publicity

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Consumer Education Sites

consumer.gov/idtheft – identity theft privacyrights.org – consumer privacy rights and responsibilities annualcreditreport.com – one free credit report/consumer each year consumeraction.gov – broad range of consumer education topics consumerworld.org – latest consumer news consumerreports.org/main/home.jsp – unbiased product information consumer.gov – directs consumers to fed gov’t sites pueblo.gsa.gov – brochures and pamphlets ftc.gov/ftc/consumer.htm – unfair and deceptive business practices fcc.gov – radio, television, satellite, and telephone motorist.org – lists car repair shops meeting set standards recall.gov – safety and product recall information cpsc.gov – safety, toys, nursery equipment, home appliances, furniture, computers, fireworks nhtsa.gov – defects in automobiles, crash test ratings, safety recalls, air bags and child safety seats fda.gov – food safety or food products, prescription or over the counter drugs, or medical devices

consumer.gov/idtheft Identity theft

privacyrights.org Consumer privacy rights and responsibilities

annualcreditreport.com One free credit report/consumer each year

consumeraction.gov Broad range of consumer education topics

consumerworld.org Latest consumer news

consumerreports.org/main/home.jsp Unbiased product information

consumer.gov Directs consumers to fed gov’t sites

pueblo.gsa.gov Brochures and pamphlets

ftc.gov/ftc/consumer.htm Unfair and deceptive business practices

fcc.gov Radio, television, satellite, and telephone

motorist.org Lists car repair shops meeting set standards

recall.gov Safety and product recall information

cpsc.gov Safety, toys, nursery equipment, home appliances, furniture, computers, fireworks

nhtsa.gov Defects in automobiles, crash test ratings, safety recalls, air bags and child safety seats

fda.gov Food safety or food products, prescription or over the counter drugs, or medical devices

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Managing Unfavorable Publicity

A coordinated effort to handle the

effects of unfavorable publicity or of

an unfavorable event.

CrisisManagement

CrisisManagement

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REVIEW LEARNING OUTCOMEThe Role of Public Relations

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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

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