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  1. 1. CHAPTER 13 Advertising and Public Relations M A R K E T I N G Real People, Real Choices Fourth Edition
  2. 2. It’s an Ad Ad Ad Ad World <ul><li>Advertising is nonpersonal communication paid for by an identified sponsor using mass media to persuade, inform, and remind an audience </li></ul><ul><li>2004: over 265 billion USD spent on advertising </li></ul><ul><li>Biggest spenders: Automobiles, financial services, food and beverages and retail. </li></ul><ul><li>What could be some threats to advertising? </li></ul>
  3. 3. Types of Advertising <ul><li>Product advertising - message focuses on a specific product or service </li></ul><ul><ul><li>Category advertising (Got Milk?; The other white meat, etc.) </li></ul></ul><ul><ul><li>Brand advertising </li></ul></ul><ul><li>Institutional advertising - message focuses on activities, personality, or point of view of a company </li></ul><ul><ul><li>advocacy advertising (2004: MTV’s “choose or lose” campaign) </li></ul></ul><ul><ul><li>public service advertisements (anti-smoking; anti-drugs; drunk driving, etc.) </li></ul></ul>
  4. 4. Purposes of Product Advertising <ul><li>To educate people about a new product and what it does </li></ul><ul><li>To emphasize a brand’s features and try to convince the target market to choose it over other options </li></ul><ul><li>To ensure that people won’t forget about a well-established product </li></ul>
  5. 5. Who Creates Advertising? <ul><li>An advertising campaign is a coordinated, comprehensive plan that carries out promotion objectives and results in a series of advertisements placed in media over a period of time </li></ul><ul><li>Agencies </li></ul><ul><ul><li>limited-service </li></ul></ul><ul><ul><ul><li>Creative boutiques </li></ul></ul></ul><ul><ul><ul><li>Specialize in few options e.g. Internet advertising </li></ul></ul></ul><ul><ul><li>full-service </li></ul></ul>
  6. 6. Largest Ad Agencies <ul><li>J. Walter Thompson </li></ul><ul><li>Leo Burnett Worldwide </li></ul><ul><li>McCann-Erickson Worldwide </li></ul><ul><li>BBDO Worldwide </li></ul><ul><li>Grey Worldwide </li></ul><ul><li>Ogilvy & Mather </li></ul><ul><li>Foote Cone & Belding </li></ul><ul><li>Worldwide billings exceed several billion USD </li></ul>
  7. 7. The Body of Campaign Creation <ul><li>Account management </li></ul><ul><ul><li>Campaign strategy and client relations </li></ul></ul><ul><li>Creative services </li></ul><ul><ul><li>Visualization and writing of the ads </li></ul></ul><ul><li>Research </li></ul><ul><ul><li>Market and Advertising Research </li></ul></ul><ul><li>Media planning </li></ul><ul><ul><li>Planning, buying and placing the campaign </li></ul></ul>
  8. 8. Developing the Campaign <ul><li>Identify the Target Market </li></ul><ul><li>Establish objectives </li></ul><ul><ul><li>What should the campaign achieve </li></ul></ul><ul><ul><li>Budget (in cooperation with client) </li></ul></ul><ul><li>Prepare creative brief </li></ul><ul><li>Design Ad Campaign </li></ul><ul><li>Choose Media and Schedule </li></ul><ul><li>Pretest Campaign </li></ul><ul><li>Full rollout </li></ul>
  9. 9. Design the Ad <ul><li>Creative strategy is the process that turns a concept into an advertisement </li></ul><ul><li>Creatives try to develop a “big idea” (e.g. “Think Small”) </li></ul><ul><li>Creatives: </li></ul><ul><ul><li>art directors </li></ul></ul><ul><ul><li>copywriters </li></ul></ul><ul><ul><li>photographers </li></ul></ul>
  10. 10. Advertising Appeals <ul><li>Reasons Why (USP) (e.g. M&Ms melt in your mouth, not in your hand) </li></ul><ul><li>Comparative Advertising (e.g. Coke & Pepsi; DHL, Fedex and UPS; etc.) </li></ul><ul><li>Demonstration (e.g. kitchen appliances, vacuum cleaners, etc.) </li></ul><ul><li>Testimonial (e.g. dentists endorsing toothpastes, etc.) </li></ul><ul><li>Slice-of-Life (e.g. breakfast cereal bars on the go) </li></ul><ul><li>Lifestyle (e.g. Cars, clothes, personal grooming products) </li></ul><ul><li>Fear (e.g. Insurance, drugs) </li></ul><ul><li>Sex (e.g. Victoria’s Secret; Calvin Klein; etc.) </li></ul><ul><li>Humor (e.g. Dodge Hemmi; Sonic etc.) </li></ul><ul><li>Slogans and Jingles (e.g. “Your friendly neighborhood agent”; With Allstate you are in good hands”, etc.) </li></ul>
  11. 11. Step 4: Pretest What Will Be Said <ul><li>Copy testing measures ad effectiveness </li></ul><ul><ul><li>Concept testing </li></ul></ul><ul><ul><li>Test commercials </li></ul></ul><ul><ul><li>Finished testing </li></ul></ul><ul><li>Focus Groups </li></ul><ul><li>Projective Techniques </li></ul><ul><li>Limited area surveys </li></ul>
  12. 12. Step 5: Choose the Media <ul><li>Media planning is a problem-solving process for getting a message to a target audience in the most effective fashion </li></ul><ul><ul><li>Where to say it </li></ul></ul><ul><ul><li>When to say it </li></ul></ul><ul><li>Highly complicated numbers game </li></ul><ul><li>Hundreds of media options from mass media to video games, DVDs, placements,MP3 players, cell phones, cable channels, etc. </li></ul>
  13. 13. Television <ul><li>Pros </li></ul><ul><ul><li>Creative and flexible (see & hear) </li></ul></ul><ul><ul><li>Prestigious </li></ul></ul><ul><ul><li>High impact messages </li></ul></ul><ul><ul><li>Network TV is cost effective for reaching mass audience </li></ul></ul><ul><ul><li>Cable TV is good for reaching targeted group </li></ul></ul><ul><li>Cons </li></ul><ul><ul><li>Quickly forgotten </li></ul></ul><ul><ul><li>Requires frequent repetition </li></ul></ul><ul><ul><li>Increasingly fragmented audiences </li></ul></ul><ul><ul><li>High costs on an absolute basis </li></ul></ul><ul><ul><li>Shorter ads result in increased clutter </li></ul></ul>
  14. 14. Radio <ul><li>Pros </li></ul><ul><ul><li>Good for selective targeting </li></ul></ul><ul><ul><li>Heard out of home </li></ul></ul><ul><ul><li>Relatively low cost </li></ul></ul><ul><ul><li>Can be modified quickly </li></ul></ul><ul><ul><li>Uses listener imagination </li></ul></ul><ul><li>Cons </li></ul><ul><ul><li>Listeners may not pay full attention </li></ul></ul><ul><ul><li>Small audiences mean ads must be repeated frequently </li></ul></ul><ul><ul><li>Not appropriate for products requiring demonstration </li></ul></ul>
  15. 15. Newspapers <ul><li>Pros </li></ul><ul><ul><li>Wide exposure and extensive market coverage </li></ul></ul><ul><ul><li>Flexible format permits use of color, different sizes and editions </li></ul></ul><ul><ul><li>Useful for comparison shopping </li></ul></ul><ul><ul><li>Local retailers can tie in with national ads </li></ul></ul><ul><li>Cons </li></ul><ul><ul><li>Most don’t spend much time reading newspapers </li></ul></ul><ul><ul><li>Low readership among teens and young adults </li></ul></ul><ul><ul><li>Short life span </li></ul></ul><ul><ul><li>Very cluttered </li></ul></ul><ul><ul><li>General decline in reading habits </li></ul></ul>
  16. 16. Magazines <ul><li>Pros </li></ul><ul><ul><li>Narrowly targeted audiences by specialized magazines </li></ul></ul><ul><ul><li>High credibility and interest level provide good ad environment </li></ul></ul><ul><ul><li>Long life span and pass along rate </li></ul></ul><ul><ul><li>Excellent visual quality </li></ul></ul><ul><li>Cons </li></ul><ul><ul><li>With exception of direct mail, the most expensive form </li></ul></ul><ul><ul><li>Long deadlines </li></ul></ul><ul><ul><li>Must use several magazines to reach target </li></ul></ul>
  17. 17. Outdoor <ul><li>Pros </li></ul><ul><ul><li>Very high reach </li></ul></ul><ul><ul><li>Low cost </li></ul></ul><ul><ul><li>Good for supplementing other media </li></ul></ul><ul><li>Cons </li></ul><ul><ul><li>Hard to communicate complex messages </li></ul></ul><ul><ul><li>Cannot demonstrate product effectiveness </li></ul></ul><ul><ul><li>Controversial and disliked </li></ul></ul>
  18. 18. Internet Advertising <ul><li>Banners (less that 1% click through rate) </li></ul><ul><li>Buttons (small banners anywhere in the web page) </li></ul><ul><li>Search engine and directory listings </li></ul><ul><li>Pop-up ads (open a separate window) </li></ul><ul><li>Email </li></ul><ul><ul><li>permission marketing (opt out options given by marketer) </li></ul></ul><ul><ul><li>Spamming (junkmail on the internet) </li></ul></ul>
  19. 19. Media Scheduling <ul><li>Specifies the exact media to use for the campaign, when and how often the message should appear </li></ul><ul><li>Outlines the planner’s best estimate of which media and vehicles will be most effective in attaining campaign objectives </li></ul>
  20. 20. Factors Affecting Media Scheduling <ul><li>Target market profile </li></ul><ul><li>People reached by different vehicles </li></ul><ul><li>Advertising patterns of competitors </li></ul><ul><li>Capability of medium to convey desired information </li></ul><ul><li>Compatibility of product with editorial content </li></ul>
  21. 21. Media Scheduling Terms 1 <ul><li>Impressions – the number of people who will be exposed to a message placed in one or more media vehicles </li></ul><ul><li>Reach – the percentage of the target market exposed to the media vehicle at least once. </li></ul><ul><li>Frequency – the average number of times a person in the target group will be exposed to the vehicle in a period </li></ul>
  22. 22. Media Scheduling Terms 2 <ul><li>Gross Rating Points (GRPs) – reach * frequency </li></ul><ul><li>Cost per Thousand (CPM) – compares the relative cost effectiveness of different media vehicles that have different exposure rates; it reflects the cost to deliver a message to 1000 people </li></ul>
  23. 23. Media Scheduling: How Often? <ul><li>Continuous – steady stream throughout year (products which we buy on a regular basis) </li></ul><ul><li>Pulsing – varies amount of advertising based on when product is in demand (e.g., suntan lotion) </li></ul><ul><li>Flighting – advertising appears in short, intense bursts alternative with periods of little to no activity </li></ul>
  24. 24. Evaluating Advertising <ul><li>Posttesting means conducting research on consumers’ responses to advertising messages they have seen or heard </li></ul><ul><ul><li>unaided recall (recall in the absence of a cue) </li></ul></ul><ul><ul><li>aided recall (recall with a cue provided) </li></ul></ul><ul><ul><li>attitudinal measures (like / dislike) </li></ul></ul>
  25. 25. Public Relations <ul><li>Attempts to influence the attitudes and perceptions of consumers, stockholders, and other stakeholders toward companies, brands, politicians, celebrities, not-for-profit organizations (e.g. Mel Gibson’s film – “The Passion…” </li></ul><ul><li>Do something good, then talk about it </li></ul><ul><li>Why PR – “third party” reporting is seen to be unbiased and therefore credible </li></ul><ul><li>Create a crisis management plan </li></ul>
  26. 26. Some well known PR crises <ul><li>Tylenol and product tampering </li></ul><ul><li>Wendy’s and finger in chili </li></ul><ul><li>Pepsi & Coke – pesticides in cola (India) </li></ul><ul><li>Union Carbide in India – hundreds of deaths due to gas leak </li></ul><ul><li>Vioxx & heart attack and stroke victims </li></ul><ul><li>Can you think of more? </li></ul>
  27. 27. Objectives of Public Relations <ul><li>Introducing new products </li></ul><ul><li>Influencing government legislation (lobbying) </li></ul><ul><li>Enhancing the image of a city, region, or country (Mauritius, Singapore – “So easy to enjoy, so hard to forget”) </li></ul><ul><li>Calling attention to a firm’s involvement with the community (e.g. sponsoring sporting events, rock concerts, special events, etc.) </li></ul>
  28. 28. Planning a PR Campaign <ul><li>Develop objectives (e.g. International Apple Institute – “An apple a day…”) </li></ul><ul><li>Execute the campaign </li></ul><ul><li>Evaluate the campaign </li></ul><ul><ul><li>Problems with gauging effectiveness </li></ul></ul>
  29. 29. PR Campaign Strategy <ul><li>Statement of objectives </li></ul><ul><li>Situation analysis </li></ul><ul><li>Specification of target audiences, messages to be communicated, specific program elements to be used </li></ul><ul><li>Timetable and budget </li></ul><ul><li>Discussion of how the program will be evaluated </li></ul>
  30. 30. PR Activities <ul><li>Press Releases (new products, new findings, etc.) </li></ul><ul><li>Internal PR (newsletters, close-circuit TV, employee awards, etc.) </li></ul><ul><li>Lobbying (influencing govt. officials to vote a certain way on legislation, initiate new legislation, etc.) </li></ul><ul><li>Speech writing (write speeches for senior executives – annual meetings, industry meetings, etc.) </li></ul><ul><li>Corporate identity (logos, symbols, stationery design, etc. for companies, identity manuals) </li></ul><ul><li>Media relations (create and maintain access with reporters to be used when needed) </li></ul><ul><li>Sponsorships (sporting events, rock concerts, etc.) </li></ul><ul><li>Special events (e.g. visits of dignitaries to plant, planning a christmas party, etc,) </li></ul><ul><li>Advice and counsel (e.g. to top management on communication issues) </li></ul>
  31. 31. Measuring Effectiveness <ul><li>In-house assessment </li></ul><ul><li>Awareness and Preference Studies </li></ul><ul><li>Counting of press clippings </li></ul><ul><li>Impression counts </li></ul>
  32. 32. Direct Marketing <ul><li>Any direct communication to a consumer or business recipient that is designed to generate a response in the form of an order, a request for further information, and/or a visit to a store or other place of business for purchase of a product </li></ul>
  33. 33. Forms of Direct Marketing <ul><li>Mail order (3% of overall retail US sales) </li></ul><ul><ul><li>Catalogs (e.g. Eddie Bauer, Lands End, Dell, Gateway, JC Penney, Neiman Marcus, etc.) </li></ul></ul><ul><ul><li>Direct mail (offers a specific product through mail at one point in time – can be personalized) </li></ul></ul><ul><li>Telemarketing (cheap and easy; 1 in 6 Americans cannot resist a telemarketing pitch; more effective in B2B selling; national Do-not-call registry) </li></ul><ul><li>Direct response television </li></ul><ul><ul><li>Infomercials </li></ul></ul><ul><ul><li>Home shopping networks (QVC and HSN) </li></ul></ul><ul><ul><li>Top selling categories: diet and health products, kitchen appliances, exercise equipment and music CDs) </li></ul></ul>
  34. 34. M-Commerce <ul><li>Promotional activities transmitted over mobile phones and other mobile devices such as personal digital assistants (PDAs) </li></ul><ul><ul><li>Prevalent in Europe and Asia </li></ul></ul><ul><ul><li>Problems of “spim” </li></ul></ul><ul><li>What does the future hold? </li></ul><ul><ul><li>Have you seen Minority Report? </li></ul></ul>