} Advertising is non-personal communication that is paid for by an identified sponsor, and involves either mass communication via newspapers, radio, TV and other media (e.g., billboards, bus stop signage) or direct-to-consumer communication via direct mail.

} There are 3 basic ways by which companies can add value to their offerings:

} by innovating } by improving quality } by altering consumer perception

} Making the product available only at selected in places where young adults like to party.

} They also make use of consumer educators, who drive around in a silver, Red Bull off-road vehicle, passing out free samples who anyone who looks like they need a boost of energy.

} They sponsor extreme sporting events: snowboarding, skateboarding, mountain biking.

} Advertising adds value to brands by influencing consumer perception. Effective advertising causes brands to be viewed as more elegant, more stylish, more prestigious, perhaps superior to competitive offerings, and in general, of higher quality.

} In the USA advertising is also perceived as an investment. That is why in 2010, just before the 2nd wave of the economic crisis, US companies invested approximately $250billion on advertising. The biggest advertising spenders, besides the USA, are Japan, Germany, the United Kingdom, France and Canada.

} The advertising process for a particular brand can be understood as a development and implementation of an advertising strategy, which has 4 major activities:

} setting the objectives } budgeting, positioning, planning message strategy } developing media strategy } assessing advertising effectiveness.

} The logic and planning behind the ad

} Advertisers develop ads to meet objectives

} Advertisers direct ads to identified audiences

} Advertisers create messages that speak to the audiences concerns

} Advertisers run ads in the most effective media

Strategy Creative idea Execution Media

}Strategy }Creative idea

}Execution }Media

The central idea that grabs the consumers attention. Creativity drives the entire field of advertising.

}Strategy }Creative idea

}Execution }Media

Effective ads adhere to the highest production values in the industry. Clients demand the best production the budget allows.

}Strategy }Creative idea }Execution }Media

Communication channels that reach a broad audience. How to deliver the message is just as important coming up with the creative idea of the message.

}Marketing }Communication }Economic }Societal

The process a business uses to satisfy consumer needs by providing goods and services Product category Target market Marketing mix Brand

}Marketing }Communication }Economic }Societal

} Can reach a mass audience

} Introduces products } Explains important

changes } Reminds and

reinforces } Persuades

}Marketing }Communication }Economic }Societal

} Moves from being informational to creating demand

} Advertising is an objective means for providing price-value information, thereby creating a more rational economy

}Marketing }Communication }Economic }Societal

} Informs consumers about innovations and issues

} Mirrors fashion and design trends

} Teaches consumers about new products

} Helps shape consumer self-image

} Perpetuates self-expression

} There are 3 major reasons for setting advertising objectives:

1. The process of setting objectives literally forces top marketing and advertising management to agree on the course advertising is to take for the following planning period, as well as the tasks it is intended to accomplish for a brand.

2. Objective setting guides the budgeting, message creation, and media selection aspects of advertising strategy.

3. Advertising objectives provide standards against which results can be measured.

} If too little money is spent on advertising, sales volume will not be as high as it could be, and profits will be reduced.

} Companies set objectives by using judgment, applying experience with similar situations or using simple rules of heuristics. Among the heuristics we can mention: percentage-of-sale method, and objective-and-task method.

Percentage-of-sale method involves allocating a fixed

percentage of past or anticipated sales revenues to advertising. For example, a company may allocate 5% of the next fiscal periods anticipated sales on advertising. If sales are estimated to $100 million for the upcoming year, the advertising budget will be $5million.

} The objective-and-task method involves the following 3 step procedure:

} Specifying the objectives that a particular advertisement or entire ad campaign is intended to accomplish

} Identifying the specific tasks that must be accomplished in order to reach those objectives

} Accumulating anticipated costs to achieve the specific task.

} The outcome of this process should be enough to achieve critical objectives.

} Builds awareness of products and brands } Creates a brand image } Provides product and brand information } Persuades people } Provides incentives to take action } Provides brand reminders } Reinforces past purchases and brand

experiences

}Advertiser (client)

}Agency }Media }Supplier }Audience

} Uses advertising to send out a message about its products

} Initiates the advertising effort by identifying a marketing problem

} Approves audience, plan and budget

} Hires the advertising agency

}Advertiser (client) }Agency }Media }Supplier }Audience

} Has strategic and creative expertise, media knowledge, workforce talent, and negotiating abilities Advertising

department In-house agency

}Advertiser (client) }Agency }Media }Supplier }Audience

} The channels of communication that carry the message to the audience

} Are also companies or huge conglomerates

} Mass media advertising can be cost effective because the costs are spread over the large number of people the ad reaches.

}Advertiser (client) }Agency }Media }Supplier }Audience

} Assist advertisers, agencies, and the media in creating and placing the ads

} Vendor services are often cheaper than those in-house

}Advertiser (client) }Agency }Media }Supplier }Audience

} The desired audience for the advertising message

} Data-gathering technology improves accuracy of information about customers

} Advertisers must recognize the various target audiences they are talking to and know as much about them as possible

} Brand advertising } Retail or Local advertising } Direct-Response advertising } Business-to-Business advertising } Institutional advertising } Nonprofit advertising } Public Service advertising

} Brand managers work with the advertising agencies to formulate specific meanings for their brands. This positioning also establishes how the brand is to be thought of by members of the target market and how the brand is to be perceived relative to competitive brands in the product category.

} Absolut Vodka has built a reputation for being cosmopolitan, Nike, considered the brand for serious athletes, while Belgian chocolates are quality sweets.

1. If it creates an impression for a product or brand.

2. If it influences people to respond in some way.

3. If it separates the product or brand from the competition in the mind of the consumer.

} Advertisers use a vast array of techniques to present their brands in the most favorable light and persuade customers to contemplate purchasing their brands. Frequently employed techniques include:

} Informational ads (such as automobile ads in the classified pages of a newspaper)

Humorous executions (e.g. most Budweiser ads; Holiday Inns advertising campaign with the thirty-something slacker who lives at home with his parents and grandmother).

Sex appeal (Emporio Armani fragrance ads) and Celebrity endorsements (e.g. McDonalds advertisement featuring Kobe Bryant)

1. It extends from sound marketing strategy. Advertising can be effective only if it is compatible with other elements of the Integrated Marketing Communication.

2. It takes the consumers view. Consumers buy product benefits, not attributes. Therefore, advertising must be stated in away that relates to the consumer needs, wants, and values and not strictly in terms of product characteristics

3. It is persuasive. Persuasion usually occurs when there is a benefit for the consumer, and not just for the marketer.

4. It finds a unique way to break through competitive clutter. Advertisers continuously compete with each other in order to catch consumers attention. This is not easy if we take into consideration the massive number of print advertisements, broadcast commercials, and other sources of information available daily to consumers.

Indeed, the situation in television advertising has been characterized as audiovisual wallpaper, which implies sarcastically that consumers pay just about as much attention to commercials as they do to the detail in their own wallpaper after it has been on the walls for a certain period of time.

} It never promises more than it can deliver. This point speaks for itself, both in terms of ethics and in terms of smart business sense. Consumers learn quickly when they have been deceived and resent it.

} It prevents the creative idea from overwhelming the strategy. The purpose of advertising is to persuade and influence; the purpose is not to be cute for cutes sake or humorous for humors sake. The ineffective use of humour results in people remembering the humor but forgetting the selling message.

} Effective advertising is usually creative. It differentiates itself from the mass of advertisements, and it is easier to give examples of creative advertisements than to define them.

1. The Intel Inside application of ingredient branding whereby this chip manufacturer convinced many computer purchasers that Intel chips substantially enhanced computer quality.

2. Absolut vodkas continuing magazine campaign that focuses on this brands hip image by portraying the brands unique bottle shape in trendy situations.

3. The milk moustache campaign that associates drinking milk with a wide variety of interesting and respectable celebrities.

} Advertising message should be delivered to the right customers at the right time, and with sufficient frequency. As a result, advertising messages stand a chance of being effective only if the media strategy is effective.

} Creative advertisement is more effective when placed in media whose characteristics enhance the value of the advertising message and reach the customer.

} Besides determining which media to use (television, radio, magazines, etc), the media planner must also pick the vehicles within each medium (e.g., specific magazines or TV programs), and decide how to allocate the budget among the various alternatives.

} Additional decisions involve determining when to advertise, choosing specific geographical locations, and deciding how to distribute the budget over time and across geographic locations.

A successful media strategy requires that the target audience be clearly pinpointed. Target audiences are usually selected based on:

} geographic factors (ads are aimed at people residing in urban areas),

} demographic consideration (ads directed to women between the age of 18 and 49)

} product-usage concerns (ads are focused on heavy product users),

} lifestyle/psychographic characteristics (ads are directed to people with active, outdoor lifestyle)

} A second aspect of media strategy is establishing specific objectives. There are 4 major objectives, fundamental to media planning: reach, frequency, continuity, cost. Media planners seek answers to the following types of questions:

} What portion of the target audience do we want to see (read, hear) the advertising message? reach

} How often should the target audience be exposed to the advertisement? frequency

} When are the best times to reach the target audience? continuity

} What is the least expensive way to accomplish the other objective? - cost

} Advertisers have 4 major mass media from which to choose: television, radio, magazines and newspapers. Each medium possesses various strengths and weaknesses.

} Besides these four means of media we should also mention the Internet, which is used for:

} Placing banner advertisement } Posting e-mail messages } For conveying company and brand information via the

creation of home pages.

} The Internet is a potentially invaluable advertising medium for advertisers. Compared to other media, the Internet is an interactive medium in that consumers seek out information and devote their time to a particular home page, banner ad, or e-mail advertisement if it offers informational, educational or recreational value. The Internet may be considered the Yellow Pages Let your mouse do the walking.

}Expanded view }Integrated Marketing Communication

}Globalization

} Electronic media are changing the media landscape

} New media are more personal and interactive

}Expanded view }Integrated Marketing Communication

}Globalization

} The practice of unifying all marketing communication tools so they send a consistent, persuasive message

}Expanded view }Integrated Marketing Communication

}Globalization

} Increasing globalization of marketing programs

} Advertisers are moving into global markets and agencies are forming huge multinational operations