This document discusses key aspects of advertising, sales promotion, and public relations as outlined in Chapter 16. It defines advertising and describes the different types of product and institutional advertisements. It also explains important advertising metrics like reach, rating, frequency, and cost per thousand. Additionally, it outlines the steps in developing an advertising program, evaluating media alternatives, and assessing the program's effectiveness through pretesting and posttesting.

1. ©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
Advertising, Sales
Promotion, and Public
Relations
CHAPTER
16
Roger A. Kerin
Steven W. H artley
MARKETING
THE CORE
Eighth Edition

2. ©McGraw-Hill Education.
LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 16, YOU SHOULD BE ABLE TO:
(1 of 2)
1. Explain the differences between product
advertising and institutional advertising and
the variations within each.
2. Describe the steps used to develop,
execute, and evaluate an advertising
program.
3. Explain the advantages and disadvantages
of alternative advertising media.
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3. ©McGraw-Hill Education.
LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 16, YOU SHOULD BE ABLE TO:
(2 of 2)
4. Discuss the strengths and weaknesses of
consumer-oriented and trade-oriented sales
promotions.
5. Recognize public relations as an important
form of communication.
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4. ©McGraw-Hill Education.
FANTASY IS BECOMING REALITY FOR
ADVERTISERS!
More than 20M people have tried VR and AR
technologies!
• Used for more than video games.
• VR and AR offer unique, immersive
experiences to consumers.
• New medium for advertisers.
• Get consumers’ undivided attention.
Virtual Reality
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5. ©McGraw-Hill Education.
TYPES OF ADVERTISEMENTS
PRODUCT ADVERTISEMENTS
Advertising
Product advertisements
Three forms:
1. Pioneering (or informational)
2. Competitive (or persuasive)
3. Reminder
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6. ©McGraw-Hill Education.
WHICH TYPE OF ADVERTISEMENTS ARE
SHOWN?
Mercedes-Benz print ad promoting a
new, self-driving car.
Progressive website comparing
insurance quotes.
Duracell print ad during the holidays
urging consumers to not forget the
batteries.
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7. ©McGraw-Hill Education.
TYPES OF ADVERTISEMENTS
INSTITUTIONAL ADVERTISEMENTS
Institutional advertisements
Four forms:
1. Advocacy
2. Pioneering institutional
3. Competitive institutional
4. Reminder institutional
Chevron Ad
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8. ©McGraw-Hill Education.
DEVELOPING THE ADVERTISING PROGRAM
Steps in developing an ad program:
1. Identifying the target audience
2. Specifying the advertising objectives
3. Setting the advertising budget
Amazon
Super Bowl Ad
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9. ©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
DESIGNING THE ADVERTISEMENT (1 of 2)
Message content
• Informational element
• Persuasive element
Common types of appeals
1. Fear appeals – avoid negative experiences
2. Sex appeals – increase attractiveness
3. Humorous appeals – fun and exciting
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10. ©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
DESIGNING THE ADVERTISEMENT (2 of 2)
Creating the actual message:
• Copywriters create the text.
• Translating text to advertisement is
complex.
• High-quality, 30-second ad = $345,000 to
produce.
Anomaly
Agency
Beats by
Dre Ad
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11. ©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
SELECTING THE RIGHT MEDIA (1 of 2)
1. Advertising media choices:
• Print
• Radio
• TV
2. Media selection:
• Target audience, product,
messages, costs
3. Media planning goals
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12. ©McGraw-Hill Education.
FIGURE 16-1 Television, direct mail, and the
Internet account for more than 75% of all advertising
expenditures ($ in millions).
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13. ©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
SELECTING THE RIGHT MEDIA (2 of 2)
Basic terms of media buyers:
• Reach
• Rating
• Frequency
• Gross rating points (grps) = Reach ×
frequency
• Cost per thousand (CPM)
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14. ©McGraw-Hill Education.
APPLYING MARKETING METRICS
What Is the Best Way to Reach 1,000 Customers?
Cost per thousand (CPM) impressions
CPM = (Cost of Ad ÷ Audience size) × 1,000
Media
Alternative
Cost of Ad Audience Size Cost per
Thousand
Impressions
Time
(magazine)
$254,200 2,000,000 $127
USA Today
(newspaper)
$242,600 852,955 $284
Super Bowl
(television)
$5,000,000 103,000,000 $49

15. ©McGraw-Hill Education.
FIGURE 16-2 Advertisers must consider the advantages and
disadvantages of the many media alternatives.
MEDIUM ADVANTAGES DISADVANTAGES
Television Reaches extremely large audience; uses picture,
print, sound, and motion for effect; can target
specific audiences
High cost to prepare and run ads; short exposure
time and perishable message; difficult to convey
complex information
Radio Can target specific local audiences; ads can be
placed quickly, can use sound, humor, and intimacy
effectively
No visual element; short exposure time and
perishable message; difficult to convey complex
information
Magazines Can target specific audiences; high-quality color;
long life of ad; ads can be clipped and saved; can
convey complex information
Long time needed to place ad; relatively high cost;
competes for attention with other magazine
features
Newspapers Excellent coverage of local markets; ads can be
placed and changed quickly; ads can be saved;
quick consumer response; low cost
Ads compete for attention with other newspaper
features; short life span; poor color
Yellow Pages Excellent coverage of geographic segments; long
use period; available 24 hours/365 days
Proliferation in competitive directories in many
markets; difficult to keep up to date
Internet Video and audio capabilities; animation can capture
attention; ads can be interactive and link to
advertiser
Animation and interactivity require large files and
more time to load; effectiveness is still uncertain
Outdoor Low cost; local market focus; high visibility;
opportunity for repeat exposures
Message must be short and simple; low selectivity
of audience; criticized as a traffic hazard
Direct mail High selectivity of audience; can contain complex
information and personalized messages; high-
quality graphics
High cost per contact; poor image (junk mail)

16. ©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES (1 of 8)
Television:
• Reaches 96% of households
• Out-of-home TV in hotels, bars,
offices, etc.
• Infomercials
• 30-minute advertisements

17. ©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES (2 of 8)
Radio:
• 15,500 radio stations
• Satellite radio
• Peak times are drive times
• Use limited if products must be seen
Walmart
Radio Ad

18. ©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES (3 of 8)
Magazines:
• 7,293 consumer magazines
• 237 new magazines/year
• Specific topics for segments and
geographies

19. ©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES (4 of 8)
Newspapers:
• Local medium and current events
• Call for action
• Online and mobile editions

20. ©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES (5 of 8)
Yellow pages:
• 40% of U.S. consumers use print Yellow
Pages once/year.
• 25% use online Yellow Pages each month.
• Reach almost all households.

21. ©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES (8 of 8)
Internet and online advertising:
• Audio and video
• Rich media
• Banner/display ads
• Mobile marketing

22. ©McGraw-Hill Education.
MAKING RESPONSIBLE DECISIONS
Who Is Responsible for Preventing Click Fraud?
Internet ad spending $78+ billion
• Paid-to-read.
• “Clickbots.”
• Estimated 20% of clicks may be result of
fraud costing advertisers $6.5 billion!
• Solutions?
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23. ©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES (7 of 8)
Outdoor:
• Billboards and digital billboards
• Targeted geographical market
• Transit advertising
• Conditional content changes as needed
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©Bhubeth Bhajanavorakul/Shutterstock

24. ©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES (8 of 8)
Other media
• Place-based media
• Out-of-home advertising (OOH)
• Locations that attract target
audience
• In-store campaigns
• Airports
• Hotels
• Health clubs
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©Roman Tiraspolsky/Shutterstock

25. ©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
SCHEDULING THE ADVERTISING (1 of 2)
Factors to consider:
• Buyer turnover – how often new buyers
enter the market
• Purchase frequency – how frequently
product is purchased
• Forgetting rate – speed that buyers forget
the brand
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26. ©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
SCHEDULING THE ADVERTISING (2 of 2)
Scheduling approaches:
1. Continuous (steady) schedule
• Steady, seasons not important
2. Flighting (intermittent) schedule
• Intermittent, reflect seasonal demand
3. Pulse (burst) schedule
• Burst, flighting and continuous, new product
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EXECUTING THE
ADVERTISING PROGRAM
PRETESTING THE ADVERTISING
Pretests
• Portfolio test: to test copy alternatives.
• Jury tests: show copy to panel of
consumers to rate.
• Theater tests: consumers view new
shows or movies (may include recording
devices during viewing).
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28. ©McGraw-Hill Education.
EXECUTING THE
ADVERTISING PROGRAM
CARRYING OUT THE ADVERTISING PROGRAM
Full-service agency
• Complete range of services
Limited-service agencies
• Contract for creative work
In-house agencies
• Company’s own staff
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ASSESSING THE
ADVERTISING PROGRAM
Posttests:
• Aided recall
1. Noted
2. Associated
3. Read any
• Unaided recall
• Attitude tests
• Inquiry tests
• Sales tests
Then, make any needed changes!
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Courtesy of GfK North America

30. ©McGraw-Hill Education.
SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION (1 of 6)
Consumer-oriented sales promotion
• Coupons: Offer discounted prices
• Deals
• Short-term price reductions
• Increase trials
• React to competition
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SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION (2 of 6)
Premiums
• Offers items free or at significant savings
• Self-liquidating: free toy
• Encourages frequent buying
Contests: Encourage consumers to apply skills
or creative thinking to win a prize.
Oreo Creation
Contest

32. ©McGraw-Hill Education.
SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION (3 of 6)
Sweepstakes
• Value-based prizes
• Experience-based prizes
Samples
• Free product or trial size
• Encourages consumers to try new things
and save money

33. ©McGraw-Hill Education.
SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION (4 of 6)
Loyalty programs
• Encourages and rewards repeat
purchases
• Offers a premium as purchases
accumulate
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SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION (5 of 6)
Point-of-purchase displays
• Signs hold or display
products
• Located in high-traffic areas
Rebates: Cash rebates with proof
of purchase
©McGraw-Hill Education

35. ©McGraw-Hill Education.
SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION (6 of 6)
Product placement
• Use of brand-name product
in movie or TV
• Annual value of product
placements exceeds $6
billion
• Consumer complaints are
leading to new regulations
about disclosure
©Walt Disney Studios Motion Pictures/Photofest

36. ©McGraw-Hill Education.
SALES PROMOTION
TRADE-ORIENTED SALES PROMOTION (1 of 2)
Trade-oriented sales promotion
• Allowances and discounts
• Merchandise allowance
• Case allowance
• Free goods
• Finance allowance
• Floor stock protection
• Freight allowance
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SALES PROMOTION
TRADE-ORIENTED SALES PROMOTION (2 of 2)
Cooperative advertising: Manufacturer
pays percentage of retailer’s advertising
expense
Training of distributors’ sales forces
• Success rests on resellers’ sales force
• Produce manuals, brochures
• National sales meetings
• Recognition programs
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PUBLIC RELATIONS
Publicity tools:
• News release
• News conference
• Public service
announcement (PSA)
Publicity often provides stronger
impact than does advertising!
American
Red Cross PSA
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©Theo Wargo/NBC/Stringer/Getty Images

39. ©McGraw-Hill Education.
Advertising
Advertising is any paid form of nonpersonal
communication about an organization,
product, service, or idea by an identified
sponsor.
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Product Advertisements
Product advertisements are
advertisements that focus on selling a
product or service and which take three
forms: (1) pioneering (or informational), (2)
competitive (or persuasive), and (3)
reminder.
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Institutional Advertisements
Institutional advertisements are
advertisements designed to build goodwill or
an image for an organization rather than
promote a specific product or service.
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Reach
Reach is the number of different people or
households exposed to an advertisement.
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Rating
A rating is the percentage of households in
a market that are tuned to a particular TV
show or radio station.
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Frequency
Frequency is the average number of times
a person in the target audience is exposed
to a message or an advertisement.
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Gross Rating Points (GRPs)
Gross rating points (GRPs) is a reference
number used by advertisers that is obtained
by multiplying reach (expressed as a
percentage of the total market) by
frequency.
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Cost per Thousand (CPM)
Cost per thousand (CPM) is the cost of
reaching 1,000 individuals or households
with the advertising message in a given
medium (M is the Roman numeral for
1,000).
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Infomercials
Infomercials are program-length (30-
minute) advertisements that take an
educational approach to communication with
potential customers.
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Pretests
Pretests are tests conducted before an
advertisement is placed in any medium to
determine whether it communicates the
intended message or to select among
alternative versions of the advertisement.
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Full-Service Agency
A full-service agency is an advertising
agency that provides the most complete
range of services, including market
research, media selection, copy
development, artwork, and production.
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Limited-Service Agencies
Limited-service agencies are advertising
agencies that specialize in one aspect of the
advertising process, such as providing
creative services to develop the advertising
copy, buying previously unpurchased media
space, or providing Internet services.
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In-House Agencies
In-house agencies consist of the
company’s own advertising staff, who may
provide full services or a limited range of
services.
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Posttests
Posttests are tests conducted after an
advertisement has been shown to the target
audience to determine whether it
accomplished its intended purpose.
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Consumer-Oriented Sales Promotion
Consumer-oriented sales promotion
consists of sales tools used to support a
company’s advertising and personal selling
directed to ultimate consumers. Also called
consumer promotions.
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Product Placement
Product placement is a consumer sales
promotion tool that uses a brand-name
product in a movie, television show, video
game, or a commercial for another product.
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Trade-Oriented Sales Promotions
Trade-oriented sales promotions are
sales tools used to support a company’s
advertising and personal selling directed to
wholesalers, distributors, or retailers. Also
called trade promotions.
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Cooperative Advertising
Cooperative advertising consists of
advertising programs by which a
manufacturer pays a percentage of the
retailer’s local advertising expense for
advertising the manufacturer’s products.
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Publicity Tools
Publicity tools are methods of obtaining
nonpersonal presentations of an
organization, product, or service without
direct cost, such as news releases, news
conferences, and public service
announcements.
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Mobile Marketing
Mobile marketing is the broad set of
interactive messaging options that enable
organizations to communicate and engage
with consumers through any mobile device.
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