National Advertising: Typically prime-time network TV, major regional/national media (newspapers, magazines). Goal: To inform or remind consumers of the company or brand and to reinforce its brand image. (Coke)
Retail/Local Advertising: Typically done by retailers or local merchants. Emphasis on price, service, merchandise assortment. Goal: To generate store traffic and sales with more direct action advertising. (Filene’s)
Primary Demand Advertising: To stimulate demand for the general product class or industry. (Milk)
Selective Demand Advertising: To stimulate demand for a specific company’s brands. (Ford)
Business-to-Business Advertising: Targeted at individuals who buy or influence the purchase of industrial goods or services for their companies. (IBM)
Professional Advertising: Targeted to professionals to encourage them to use a company’s product in their business operations or to recommend their products to the end-user. (Pfizer pharmaceuticals)
Trade Advertising: Targeted to marketing channel members such as wholesalers, distributors and retailers. To encourage re-stocking, promoting and reselling to end customers. (P&G to Grocers)
Copy of the advertisement in Benjamin Franklin's Pennsylvania Gazette which ran July 2, 1761 and July, 9 1761. “ A LIST of CHILDREN now at the State-House, in Philadelphia, who in the Course of the War, were taken Captives from several Parts of this Province by the Indians, and have been lately released by his Excellency General AMHERST, and sent to this Government, in order to their being delivered up to their Parents, or other Relations, who are hereby desired forthwith to come and receive them." The History of the Ad Agency
Advertising can take many forms (TV commercials, radio spots, print ads, and outdoor billboards to name a few), but collectively they are referred to as “the creative.”
Development of the creative is typically done in teams of two. A Copywriter (words) and an Art Director (visuals) work together to create rough versions of the ads including: TV storyboards, print layouts, and radio scripts. Creative teams can work successfully together for years -- often hired, fired and promoted together.
The Creative Director , who approves all the work before it is shared with the client, has a tremendous influence on all the work an agency develops, ensuring that the work is unique and appealing while strategically on target.
Once an idea for a radio or TV ad is ready to be brought to life, a Producer joins the team. The producer coordinates with the outside resources necessary to produce finished ads. He estimates the cost to produce the ads, writes contracts, and coordinates the production from start to finish.
The Traffic Manager performs a similar function for print ads, estimating costs and coordinating these jobs from start to finish. In addition, the Traffic Manager is also responsible for getting all ad materials where they need to go.
Typically, the largest portion of a marketer’s budget goes towards buying media. This places a huge responsibility on the media planning and buying department.
Media Planners determine what combination of TV, Radio, Magazines, etc., would reach as many target consumers as possible at the lowest cost. The result of their research and analysis is the Media Plan, a calendar of scheduled advertising
The measurements they use include:
Reach: what percentage of the target audience will be exposed to the ad
Frequency: how many times the average consumer in the target audience will be exposed to the ad
Effective Reach: also referred to as ‘3+ reach,’ quantifies the percentage of the target audience that will be exposed to the ad more than three times
Media Buyers take the media plan recommended by the planners and negotiate its purchase as inexpensively as possible.
Advertising agencies began actively doing research in the 1920s. This research was focused on answering specific business questions about products and consumer preference.
Research was typically not an integral part of the creative development process until the introduction of Account Planning.
Account Planning began in England during the 1960s. It focuses on consumer attitudes and branding for the goal of creating a unique identity for the client’s brand which is distinct from the competition and compelling to the target consumer.
Research centers around focus groups where small groups of consumers tell agencies a lot more about what consumers think and feel than a nationwide survey.
Account Planners use this information to weave facts together into compelling stories. These stories can form the basis of a brand positioning, a unique product benefit or perhaps even a commercial storyline.
Many agencies have created unique planning processes. For example, J Walter Thompson relies on TTB (Thompson Total Branding), McCann has the Brand Footprint, and Bates offers the Brand Wheel.
Chronology of how most advertising is generally created:
The process is collaborative with multiple agency departments involved at key points along the way. This may seem a bit chaotic at times, but the process encourages input from diverse points of view, stimulates healthy debate and allows strong ideas to emerge regardless of the source.
Minority Agencies: Specialize in reaching specific ethnic groups, such as African Americans or Hispanics
Boutiques: Smaller advertising organizations that focus almost exclusively on the creative product.
Media Agencies: Planning and buying of all types of media.
Industry Specialty Agencies: Concentrate on particular industries with unique set of advertising-related issues.
Agency Holding Companies:
Last year, nearly 40% of all global advertising was managed by just three companies.
The industry has seen many big mergers and acquisitions resulting in vast entities known as Holding Companies.
The world’s largest holding companies (WPP Omnicom, Interpublic) may be unfamiliar to many outside the industry. That’s because the agencies they own typically continue to operate under their original names – BBDO, McCann, Ogilvy & Mather.
Historically, agencies were paid a commission based on a percentage of the cost of media they bought for clients.
It is based on the spending level of clients, not on the amount of work an agency performs.
Increasingly, agencies are being compensated under a fee arrangement either billing for services by the hour or the agency and client can develop a project list and agree on a flat amount for each project.
In 2000, more than 75% of clients compensated their agency under a fee arrangement, up from just 15% in 1985.
Another popular trend in compensation is the performance incentive, where the agency’s pay is contingent on the success of its work (success being defined jointly by the agency and the client). The appeal of this arrangement for clients is obvious, and in 2000 about 10% of agency relationships included a performance component.
Return on investment (ROI) for direct response advertising is measured in terms of cost per lead. In other words, how much did the company spend on advertising and marketing costs for each lead that resulted from the effort?
The cost per lead figures are derived from an analysis of three numbers:
Frequency of ad
Cost per ad
Number of leads generated
Such analysis can be completed daily if necessary. Adjustments can be made to the media mix, run times and frequency of buys to adjust the campaign and bring cost per lead numbers in line with expectations.
When managed properly, a direct response advertising campaign can effectively generate leads and sales while at the same time enabling marketers to get the most from their marketing spending.
Combining Direct Marketing with other Promotional tools
Direct marketing with Advertising - ads or infomercials
Direct marketing with Publicity/PR - call to action
Direct marketing with Personal Selling - telemarketing and direct selling (Amway, Mary Kay)
Direct marketing with Sales Promotion - sweapstakes, contests, etc.
Direct marketing with Database marketing - most valuable customer lists, direct mail
The concept of one-to-one marketing is not new to American business. In fact, one-to-one relationships were prevalent during the early colonial period. It was commonplace to have direct contact with the person with whom one was doing business. As a result, specific bonds of trust were established between farmers, traders, merchants, shopkeepers and artisans and their customers.
This changed over the course of the late 18th and 19th centuries. Several new technologies permanently altered the old economic landscape: railroads, steam ships, cable cars, the telegraph, and the telephone. Urban centers grew at phenomenal rates, a long-distance economy grew, and in some ways, the familiar, one-to-one nature of commerce diminished.
These new modes of transportation, communication, and the quick access to information had a dramatic impact on the American social and commercial landscape. Not only did different groups relate to one another for the first time, but also the ways in which people related and communicated changed.