McGraw-Hill/Irwin

Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

18-1
LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 18, YOU SHOULD BE ABLE TO:

LO1

Explain the differences between
product ad...
LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 18, YOU SHOULD BE ABLE TO:

LO4

Discuss the strengths and weaknesses
of co...
WHERE CAN YOU WATCH TV?
WHERE CAN’T YOU?



Online TV (OTV)

18-4
LO1

TYPES OF ADVERTISEMENTS
PRODUCT ADVERTISEMENTS



Advertising



Product Advertisements
• Pioneering
(or Informatio...
LO1

Campbell’s, 1&1, and Red Bull
What is the type and purpose of each advertisement?

18-6
LO1

Dial Soap
What is the type and purpose of this advertisement?

18-7
LO1



TYPES OF ADVERTISEMENTS
INSTITUTIONAL ADVERTISEMENTS

Institutional Advertisements
• Advocacy
• Pioneering Institu...
LO1

Chevron and Bridgestone
What is the type and purpose of each advertisement?

18-9
LO1

Got Milk? and U.S. Army
What is the type and purpose of each advertisement?

18-10
LO2

DEVELOPING THE
ADVERTISING PROGRAM



Identifying the
Target Audience



Specifying the
Advertising Objectives



...
FIGURE 18-1 The Super Bowl delivers a
huge audience if you can afford the cost of
placing an ad

18-12
LO2

GOING ONLINE
See Your Favorite Super Bowl Ads Again!

18-13
LO2

DEVELOPING THE
ADVERTISING PROGRAM
DESIGNING THE ADVERTISEMENT



Message Content
• Informational
Element
• Persuasi...
LO2

World Wide Fund, Candie’s, and Geico
What is the appeal and purpose of each advertisement?

18-15
LO2

DEVELOPING THE
ADVERTISING PROGRAM
DESIGNING THE ADVERTISEMENT



Creating the Actual Message
• Celebrity Spokespeop...
LO2

DEVELOPING THE
ADVERTISING PROGRAM
SELECTING THE RIGHT MEDIA



Advertising Media



Media Planning Goals
• Maximiz...
FIGURE 18-2 Television, direct mail, and
newspapers account for more than 65% of
all advertising expenditures (in $million...
LO2

DEVELOPING THE
ADVERTISING PROGRAM
SELECTING THE RIGHT MEDIA



Basic Terms
• Reach
• Rating
• Frequency
• Gross Rat...
LO2

USING MARKETING DASHBOARDS
What is the Best Way to Reach 1,000 Customers?
Cost per Thousand (CPM) Impressions
CPM ($)...
FIGURE 18-3 Advertisers must consider the
advantages and disadvantages of the many
media alternatives

18-21
LO3

DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES



Television
• Out-of-Home TV
• Online TV (OTV)

18...
LO3

DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES



Television
• Wasted Coverage
• Cable and Satellit...
LO3

DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES



Radio
• Satellite Radio

• Drive Times

18-24
LO3

DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES



Magazines
• Regional Issues

18-25
LO3

DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES



Newspapers
• Falling Circulation & Ad Revenue
• O...
LO3

DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES



Yellow Pages

18-27
LO3

DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES



Internet
• Rich Media
• Paid Search
• Banner/Disp...
FIGURE 18-4 Google and Yahoo! have the
largest shares of Internet searches and offer
opportunities for online advertising
...
LO3

MAKING RESPONSIBLE DECISIONS
Who is Responsible for Click Fraud?



Pay-to-Read



Click Bots



Webtipping

18-30
LO3

DEVELOPING THE
ADVERTISING PROGRAM
OTHER MEDIA ALTERNATIVES



Outdoor

• Billboards

• Transit
Advertising

18-31
LO3

DEVELOPING THE
ADVERTISING PROGRAM
OTHER MEDIA ALTERNATIVES



Other Media
• Placed-Based Media



Selection Criter...
LO3

DEVELOPING THE
ADVERTISING PROGRAM
SCHEDULING THE ADVERTISING



Factors to Consider
• Buyer Turnover
• Purchase Fre...
LO3

DEVELOPING THE
ADVERTISING PROGRAM
SCHEDULING THE ADVERTISING



Approaches
• Continuous (Steady) Schedule
• Flighti...
LO3

EXECUTING THE
ADVERTISING PROGRAM
PRETESTING THE ADVERTISING



Pretests
• Portfolio Tests
• Jury Tests
• Theater Te...
LO3

EXECUTING THE
ADVERTISING PROGRAM
CARRYING OUT THE ADVERTISING PROGRAM



Full-Service Agency



Limited-Service Ag...
FIGURE 18-5 Alternative structures of
advertising agencies used to carry out the
advertising program

18-37
LO3

ASSESSING THE
ADVERTISING PROGRAM
POSTTESTING THE ADVERTISING



Posttests



Aided Recall



Unaided Recall

• No...
FIGURE 18-6 Sales promotions can be used
to achieve many objectives

18-39
LO4

SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION



Consumer-Oriented Sales Promotion



Coupons

18-40
SALES PROMOTION

LO4



CONSUMER-ORIENTED SALES PROMOTION

Deals

18-41
LO4



SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION

Premiums
• Self-Liquidating: Free Toy in Happy Meal
• Deal-Pron...
LO4



SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION

Contests

18-43
LO4



SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION

Sweepstakes
• Value-Based Prizes
• Experience-Based Prizes

18-...
LO4



SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION

Samples

18-45
LO4



SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION

Loyalty Programs

18-46
LO4



SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION

Point-of-Purchase Displays

18-47
LO4



SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION

Rebates

18-48
LO4



SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION

Product Placement

18-49
LO4

SALES PROMOTION
TRADE-ORIENTED SALES PROMOTION



Trade-Oriented Sales Promotion



Allowances and Discounts
• Merc...
LO4

SALES PROMOTION
TRADE-ORIENTED SALES PROMOTION



Cooperative Advertising



Training of Distributors’ Salesforces
...
LO5

PUBLIC RELATIONS
PUBLICITY TOOLS



Public Relations



Publicity Tools
• News Release

• Public Service
Announceme...
LO5

INCREASING THE VALUE
OF PROMOTION



Building Long-Term Relationships
with Promotion



Self-Regulation

18-53
VIDEO CASE 18
GOOGLE, INC.: THE RIGHT ADS
AT THE RIGHT TIME

18-54
VIDEO CASE 18
GOOGLE

1. Describe several unique
characteristics about Google
and its business practices.

18-55
VIDEO CASE 18
GOOGLE

2. What is Google’s philosophy
about advertising? How can less
advertising be preferred to more
adve...
VIDEO CASE 18
GOOGLE

3. Describe the types of online
advertising available today.
Which type of advertising does
Google c...
VIDEO CASE 18
GOOGLE

4. How can Google be successful
in the display advertising
business? What other areas of
growth are ...
Advertising

Advertising is any paid form
of nonpersonal communication
about an organization, good,
service, or idea by an...
Product Advertisements

Product advertisements are
advertisements that focus on
selling a good or service and
which take t...
Institutional Advertisements

Institutional advertisements
are advertisements designed to
build goodwill or an image for a...
Reach

Reach is the number of different
people or households exposed to
an advertisement.

18-62
Rating

A rating is the percentage of
households in a market that are
tuned to a particular TV show or
radio station.

18-...
Frequency

Frequency is the average
number of times a person in the
target audience is exposed to a
message or an advertis...
Gross Rating Points (GRPs)

Gross rating points (GRPs) is
a reference number used by
advertisers that is obtained by
multi...
Cost per Thousand (CPM)

Cost per thousand (CPM) is
the cost of reaching 1,000
individuals or households with
the advertis...
Infomercials

Infomercials are program-length
(30-minute) advertisements that
take an educational approach to
communicatio...
Pretests
Pretests are tests conducted before
an advertisement is placed in any
medium to determine whether it
communicates...
Full-Service Agency

A full-service agency is an
advertising agency that provides
the most complete range of
services, inc...
Limited-Service Agencies
Limited-service agencies are
advertising agencies that specialize
in one aspect of the advertisin...
In-House Agencies

In-house agencies consist of the
company’s own advertising staff,
who may provide full services or
a li...
Posttests

Posttests are tests conducted
after an advertisement has been
shown to the target audience to
determine whether...
Consumer-Oriented Sales Promotion

Consumer-oriented sales
promotion consists of sales tools
used to support a company’s
a...
Product Placement

Product placement is a
consumer sales promotion tool
that uses a brand-name product
in a movie, televis...
Trade-Oriented Sales Promotions

Trade-oriented sales
promotions are sales tools
used to support a company’s
advertising a...
Cooperative Advertising

Cooperative advertising
consists of advertising programs
by which a manufacturer pays a
percentag...
Publicity Tools

Publicity tools are methods of
obtaining nonpersonal
presentation of an organization,
good, or service wi...
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Chap018

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Chap018

  1. 1. McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. 18-1
  2. 2. LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 18, YOU SHOULD BE ABLE TO: LO1 Explain the differences between product advertising and institutional advertising and the variations within each type. LO2 Describe the steps used to develop, execute, and evaluate an advertising program. LO3 Explain the advantages and disadvantages of alternative advertising media. 18-2
  3. 3. LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 18, YOU SHOULD BE ABLE TO: LO4 Discuss the strengths and weaknesses of consumer-oriented and tradeoriented sales promotions. LO5 Recognize public relations as an important form of communication. 18-3
  4. 4. WHERE CAN YOU WATCH TV? WHERE CAN’T YOU?  Online TV (OTV) 18-4
  5. 5. LO1 TYPES OF ADVERTISEMENTS PRODUCT ADVERTISEMENTS  Advertising  Product Advertisements • Pioneering (or Informational) • Reminder • Competitive (or Persuasive) • Reinforcement • Comparative 18-5
  6. 6. LO1 Campbell’s, 1&1, and Red Bull What is the type and purpose of each advertisement? 18-6
  7. 7. LO1 Dial Soap What is the type and purpose of this advertisement? 18-7
  8. 8. LO1  TYPES OF ADVERTISEMENTS INSTITUTIONAL ADVERTISEMENTS Institutional Advertisements • Advocacy • Pioneering Institutional • Competitive Institutional • Reminder Institutional 18-8
  9. 9. LO1 Chevron and Bridgestone What is the type and purpose of each advertisement? 18-9
  10. 10. LO1 Got Milk? and U.S. Army What is the type and purpose of each advertisement? 18-10
  11. 11. LO2 DEVELOPING THE ADVERTISING PROGRAM  Identifying the Target Audience  Specifying the Advertising Objectives  Setting the Advertising Budget 18-11
  12. 12. FIGURE 18-1 The Super Bowl delivers a huge audience if you can afford the cost of placing an ad 18-12
  13. 13. LO2 GOING ONLINE See Your Favorite Super Bowl Ads Again! 18-13
  14. 14. LO2 DEVELOPING THE ADVERTISING PROGRAM DESIGNING THE ADVERTISEMENT  Message Content • Informational Element • Persuasive Element  Types of Appeals • Fear Appeals • Sex Appeals • Humorous Appeals 18-14
  15. 15. LO2 World Wide Fund, Candie’s, and Geico What is the appeal and purpose of each advertisement? 18-15
  16. 16. LO2 DEVELOPING THE ADVERTISING PROGRAM DESIGNING THE ADVERTISEMENT  Creating the Actual Message • Celebrity Spokespeople • Ideas and Artwork • Cost 18-16
  17. 17. LO2 DEVELOPING THE ADVERTISING PROGRAM SELECTING THE RIGHT MEDIA  Advertising Media  Media Planning Goals • Maximize Exposure • Minimize Costs 18-17
  18. 18. FIGURE 18-2 Television, direct mail, and newspapers account for more than 65% of all advertising expenditures (in $millions) 18-18
  19. 19. LO2 DEVELOPING THE ADVERTISING PROGRAM SELECTING THE RIGHT MEDIA  Basic Terms • Reach • Rating • Frequency • Gross Rating Points (GRPs) = Reach × Frequency • Cost per Thousand (CPM) 18-19
  20. 20. LO2 USING MARKETING DASHBOARDS What is the Best Way to Reach 1,000 Customers? Cost per Thousand (CPM) Impressions CPM ($) = Advertising Cost ($)  Impressions Generated (#)    1,000   18-20
  21. 21. FIGURE 18-3 Advertisers must consider the advantages and disadvantages of the many media alternatives 18-21
  22. 22. LO3 DEVELOPING THE ADVERTISING PROGRAM DIFFERENT MEDIA ALTERNATIVES  Television • Out-of-Home TV • Online TV (OTV) 18-22
  23. 23. LO3 DEVELOPING THE ADVERTISING PROGRAM DIFFERENT MEDIA ALTERNATIVES  Television • Wasted Coverage • Cable and Satellite TV • Infomercials 18-23
  24. 24. LO3 DEVELOPING THE ADVERTISING PROGRAM DIFFERENT MEDIA ALTERNATIVES  Radio • Satellite Radio • Drive Times 18-24
  25. 25. LO3 DEVELOPING THE ADVERTISING PROGRAM DIFFERENT MEDIA ALTERNATIVES  Magazines • Regional Issues 18-25
  26. 26. LO3 DEVELOPING THE ADVERTISING PROGRAM DIFFERENT MEDIA ALTERNATIVES  Newspapers • Falling Circulation & Ad Revenue • Online and Mobile • New Types of News Organizations 18-26
  27. 27. LO3 DEVELOPING THE ADVERTISING PROGRAM DIFFERENT MEDIA ALTERNATIVES  Yellow Pages 18-27
  28. 28. LO3 DEVELOPING THE ADVERTISING PROGRAM DIFFERENT MEDIA ALTERNATIVES  Internet • Rich Media • Paid Search • Banner/Display Ads • Assessment 18-28
  29. 29. FIGURE 18-4 Google and Yahoo! have the largest shares of Internet searches and offer opportunities for online advertising 18-29
  30. 30. LO3 MAKING RESPONSIBLE DECISIONS Who is Responsible for Click Fraud?  Pay-to-Read  Click Bots  Webtipping 18-30
  31. 31. LO3 DEVELOPING THE ADVERTISING PROGRAM OTHER MEDIA ALTERNATIVES  Outdoor • Billboards • Transit Advertising 18-31
  32. 32. LO3 DEVELOPING THE ADVERTISING PROGRAM OTHER MEDIA ALTERNATIVES  Other Media • Placed-Based Media  Selection Criteria • Media Habits • Cost • Product Attributes 18-32
  33. 33. LO3 DEVELOPING THE ADVERTISING PROGRAM SCHEDULING THE ADVERTISING  Factors to Consider • Buyer Turnover • Purchase Frequency • Forgetting Rate 18-33
  34. 34. LO3 DEVELOPING THE ADVERTISING PROGRAM SCHEDULING THE ADVERTISING  Approaches • Continuous (Steady) Schedule • Flighting (Intermittent) Schedule • Pulse (Burst) Schedule 18-34
  35. 35. LO3 EXECUTING THE ADVERTISING PROGRAM PRETESTING THE ADVERTISING  Pretests • Portfolio Tests • Jury Tests • Theater Tests 18-35
  36. 36. LO3 EXECUTING THE ADVERTISING PROGRAM CARRYING OUT THE ADVERTISING PROGRAM  Full-Service Agency  Limited-Service Agencies  In-House Agencies 18-36
  37. 37. FIGURE 18-5 Alternative structures of advertising agencies used to carry out the advertising program 18-37
  38. 38. LO3 ASSESSING THE ADVERTISING PROGRAM POSTTESTING THE ADVERTISING  Posttests  Aided Recall  Unaided Recall • Noted  Attitude Tests • Seen-Associated  Inquiry Tests • Read Most  Sales Tests 18-38
  39. 39. FIGURE 18-6 Sales promotions can be used to achieve many objectives 18-39
  40. 40. LO4 SALES PROMOTION CONSUMER-ORIENTED SALES PROMOTION  Consumer-Oriented Sales Promotion  Coupons 18-40
  41. 41. SALES PROMOTION LO4  CONSUMER-ORIENTED SALES PROMOTION Deals 18-41
  42. 42. LO4  SALES PROMOTION CONSUMER-ORIENTED SALES PROMOTION Premiums • Self-Liquidating: Free Toy in Happy Meal • Deal-Prone & Value Seeing Consumers 18-42
  43. 43. LO4  SALES PROMOTION CONSUMER-ORIENTED SALES PROMOTION Contests 18-43
  44. 44. LO4  SALES PROMOTION CONSUMER-ORIENTED SALES PROMOTION Sweepstakes • Value-Based Prizes • Experience-Based Prizes 18-44
  45. 45. LO4  SALES PROMOTION CONSUMER-ORIENTED SALES PROMOTION Samples 18-45
  46. 46. LO4  SALES PROMOTION CONSUMER-ORIENTED SALES PROMOTION Loyalty Programs 18-46
  47. 47. LO4  SALES PROMOTION CONSUMER-ORIENTED SALES PROMOTION Point-of-Purchase Displays 18-47
  48. 48. LO4  SALES PROMOTION CONSUMER-ORIENTED SALES PROMOTION Rebates 18-48
  49. 49. LO4  SALES PROMOTION CONSUMER-ORIENTED SALES PROMOTION Product Placement 18-49
  50. 50. LO4 SALES PROMOTION TRADE-ORIENTED SALES PROMOTION  Trade-Oriented Sales Promotion  Allowances and Discounts • Merchandise Allowance • Case Allowance  Free Goods • Finance Allowance  Floor Stock Protection  Freight Allowance 18-50
  51. 51. LO4 SALES PROMOTION TRADE-ORIENTED SALES PROMOTION  Cooperative Advertising  Training of Distributors’ Salesforces 18-51
  52. 52. LO5 PUBLIC RELATIONS PUBLICITY TOOLS  Public Relations  Publicity Tools • News Release • Public Service Announcement (PSA) • News Conference 18-52
  53. 53. LO5 INCREASING THE VALUE OF PROMOTION  Building Long-Term Relationships with Promotion  Self-Regulation 18-53
  54. 54. VIDEO CASE 18 GOOGLE, INC.: THE RIGHT ADS AT THE RIGHT TIME 18-54
  55. 55. VIDEO CASE 18 GOOGLE 1. Describe several unique characteristics about Google and its business practices. 18-55
  56. 56. VIDEO CASE 18 GOOGLE 2. What is Google’s philosophy about advertising? How can less advertising be preferred to more advertising? 18-56
  57. 57. VIDEO CASE 18 GOOGLE 3. Describe the types of online advertising available today. Which type of advertising does Google currently dominate? Why? 18-57
  58. 58. VIDEO CASE 18 GOOGLE 4. How can Google be successful in the display advertising business? What other areas of growth are likely to be pursued by Google in the future? 18-58
  59. 59. Advertising Advertising is any paid form of nonpersonal communication about an organization, good, service, or idea by an identified sponsor. 18-59
  60. 60. Product Advertisements Product advertisements are advertisements that focus on selling a good or service and which take three forms: (1) pioneering (or informational), (2) competitive (or persuasive), and (3) reminder. 18-60
  61. 61. Institutional Advertisements Institutional advertisements are advertisements designed to build goodwill or an image for an organization rather than promote a specific good or service. 18-61
  62. 62. Reach Reach is the number of different people or households exposed to an advertisement. 18-62
  63. 63. Rating A rating is the percentage of households in a market that are tuned to a particular TV show or radio station. 18-63
  64. 64. Frequency Frequency is the average number of times a person in the target audience is exposed to a message or an advertisement. 18-64
  65. 65. 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. 18-65
  66. 66. 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). 18-66
  67. 67. Infomercials Infomercials are program-length (30-minute) advertisements that take an educational approach to communication with potential customers. 18-67
  68. 68. 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. 18-68
  69. 69. 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. 18-69
  70. 70. 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. 18-70
  71. 71. 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. 18-71
  72. 72. Posttests Posttests are tests conducted after an advertisement has been shown to the target audience to determine whether it accomplished its intended purpose. 18-72
  73. 73. 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. 18-73
  74. 74. 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. 18-74
  75. 75. 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. 18-75
  76. 76. 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. 18-76
  77. 77. Publicity Tools Publicity tools are methods of obtaining nonpersonal presentation of an organization, good, or service without direct cost, such as news releases, news conferences, and public service announcements. 18-77

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