1. Chapter 15
Advertising

2. Defining Advertising
• Advertising is any form of nonpersonal
presentation and promotion of ideas,
goods, and services usually paid for by an
identified sponsor

3. Functions of Advertising
• Serves a marketing function by helping
companies that provide products or services sell
their products
• Educational: people learn about products and
services
• Economics: encourages competition, and
product improvements, leads to lower prices
• Reaches a mass audience, thereby reducing
the cost of personal selling and distribution
• Social function: it displays material and cultural
opportunities available in a free-enterprise
society

4. Types of Advertising
• Who is the target audience?
• Consumer advertising: targeted to
people who buy the goods and services
for personal use
• Business-to-business advertising:
aimed at people who buy products for
business use
• Example 1, Example 2

5. Business to business
• Trade: advertising good/services to
wholesalers and retailers, who then resell
the products
• Industrial: advertising items used in the
further production of good/services.
• Professional: advertising aimed at doctors,
lawyers, nurses -- those who might
influence the buying process in their
industry
• Agricultural: advertising aimed at farmers,
i.e. equipment, feed, fertilizer, etc.

6. Types of Advertising
• Geographic focus: National,
international, regional/local?
• Example 1 , Example 2, Example 3
• Local: Example 1, Example 2
• Purpose: primary demand & selective
demand ads

7. Types of Advertising
• Primary demand: promotion of a particular
product category, rather than a brand. Example:
Got Milk campaign
• Selective Demand: used by companies to sell
their particular brand of something. Example:
Apple v. PC
• Direct Action: usually contains a toll-free
number or website “call to action” to get
consumers to act quickly. Example: ShamWOW
• Indirect Action: Works over time to build a
company’s image and create awareness.
Example: Apple Think Different campaign

8. History
• First advertisement was in 1840 – a
handbill that announced a prayer book for
sale (England)
• Advertising made its way to the colonies
from English settlers
• Ben Franklin was an early pioneer

9. History
• The impact of increasing industrialization from
the end of the Civil War to the beginning of the
20th century was apparent
• Railroads linked all parts of the country, enabling
Eastern manufacturers to ship their goods to the
West
• US population doubled
• Invention of new media (telegraph, telephone,
radio) improved communication
• Economic production increased, people had
more disposable income

10. History
• The advertising agency
was born: organization
that provides advertising
services to clients
• 1920s: radio becomes an
advertising medium
• WWII, ad budgets were
cut
• 1957: many stories
surfaced that advertising
was a form on mind
control; concept of
subliminal advertising
• By the 1960s, ad
agencies were big
business

11. History
• 1970s: bad economy prompted a return to more
direct selling techniques and efficient media
buying
• 1980’s and 1990’s: Cable TV opens many ad
options; rise of the infomercial; global marketing
and the trend towards specialized advertising to
select audiences
• 2000’s: Internet advertising, viral marketing;
TiVo and DVRs change the landscape of TV
advertising

12. Advertising Industry
• Three main components of the advertising
industry:
1.advertisers
2.advertising agencies
3.the media

13. Advertisers
• National advertisers: sell their
products/services to customers all
across the country (Coca-Cola,
McDonalds)
• Retail advertisers (local advertisers): sell
their products/services to customers in
one city or trading area

14. Agencies
• Full service agency: handles all parts of the advertising
process for clients; do all planning, creating, producing
and placing of ads.
• Media Buying Service: buys radio and TV time, and
resells it to advertisers and advertising agencies. Sells
spots to an advertiser, orders the spots on various
stations, monitors the station to see if the spots ran
• Creative boutique: organization that specializes in the
actual creation of ads.

15. Media
Evaluated along four dimensions
1.Reach: how many people get the message?
2.Frequency: how often is the message
received?
3.Selectivity: Does the medium actually reach
potential customers
4.Efficiency: How much does it cost to reach a
certain number of people (also called “cost
per thousand people”

16. The Campaign
A typical campaign consists of:
• Choosing the marketing strategy
• selecting the main appeal or theme
• translating the theme to various media
• producing the ads
• buying space and time
• executing and evaluating the campaign

17. Marketing
• Positioning: fitting the product/service
to one or more segments of the broad
market in such a way as to set it apart
from the competition without making any
change in the product

18. Research
• Helps agencies and their clients make informed
decisions about their strategy and tactics
• Formative research: done before the campaign, to
guide creative effort
• Message research: pre-tests the message developed
for the campaign
• Tracking studies: examine how the ads perform during
and after the actual campaign

19. Advertising in the digital age
• Online ads began in 1994 – HotWired
(companion site to Wired magazine)
advertised about a dozen sponsors on their
website
• Consumers are more often making choices to
avoid advertising (OnDemand programming,
TiVo, DVR, streaming TV shows with fewer
advertisements than on a network,
purchasing commercial free TV shows on
iTunes or DVD, using ad blocker software
online)

20. Viral advertising
• A technique, by which companies try to create
messages that are so compelling, interesting,
funny or suggestive that consumers willingly share
them with others
• Boston, ATHF
• Boston, more
• The Blair Witch Project
• Paranormal Activity
• Evian Roller Babies

21. Social Impact: Viral Videos
• A viral video is a video that becomes popular
through the process of Internet sharing,
typically through video sharing
websites, social media and email
• When the video being passed around is a
type of advertisement, this subverts the
typical consumer behavior of avoidance of
exposure to advertising
• Can be a very powerful (and inexpensive)
way to generate exposure and/or brand
impressions

22. Viral Videos
• Not always sanctioned by a company to
use for advertisement
• Companies will often create “viral videos”
to create buzz about their products or
services – whether or not it looks like an
official advertisement isn’t always clear
• PETA, Miller Lite, Honda, Levi’s,
JCPenney’s

23. YouTube/Viral Video Examples
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Lonelygirl15 (2006)
Charlie Bit My Finger Leave Britney Alone (2007)
Don’t Tase Me Bro (2007)
RickRoll (2008)
Susan Boyle (2009)
OK Go (2009)
JK Wedding Entrance Dance - YouTube (2009)
The Top 10 Viral Videos of 2010
- Video - TIME.com

24. YouTube/Viral Video Examples
• The Top 10 Viral Videos of 2011 | TIME.com
• 'Gangnam Style' to
'Kony 2012:' This
year's top viral videos CNN.com
• 2013: The Harlem
Shake [BEST ONES!]