The document provides an overview of advertising essentials, defining key terms, objectives, audience segmentation, positioning statements, and budget-setting methods. It emphasizes the importance of understanding audience demographics, psychographics, and competitive media strategies to achieve effective advertising outcomes. Additionally, it outlines various advertising formats and challenges while suggesting resources for further learning in the advertising domain.

1. Marketing Essentials
WEEK 2
Advertising

2. Advertising
“Advertising says to people,
‘Here’s what we’ve got.
Here’s what it will do for you.
Here’s how to get it.’ ”
~ Leo Burnett, Ad Industry Pioneer, 1891-1971

3. Advertising
Expand your Definition of Media
Paid Owned Earned

4. Advertising
Expand your Definition of Media
Paid Owned Earned
Advertising Blog Public Relations
Email Reviews
Packaging Word of Mouth
Social Media

5. Advertising
Paid Media / Advertising Formats
• Print – Magazines / Newspapers
• Broadcast – TV / Radio
• Digital – Web / Mobile
• Out Of Home (OOH) - Billboards / Transit
• Other – Free Standing Insert (FSI) / Direct

6. Advertising
Advertising Terminology
• CPM
• CPA/CPC
• CPP
• CTR
• Impression
• Frequency vs. Reach
• Avails
• Roadblock
• GeoFencing

7. Advertising
Advertising Terminology
• CPM - Cost per Thousand (Impressions)
• CPA - Cost per Action
• CPC - Cost per Click
• CPP - Cost per Point (Gross Ratings Point)
• CTR - Click Thru Rate
• Impression - Ad viewed once by a visitor or
displayed once on a web page

8. Advertising
Advertising Terminology
Frequency vs. Reach
• Frequency - the number of times an ad unit
occurs in a specific amount of time (how often?)
• Reach - the total number of different people or
households exposed, at least once, to an ad
medium during a given period of time
(how many?)

9. Advertising
Advertising Terminology
• Avails - An ad availability spot; a time period
that is available for the insertion of a media
segment such as an available 30 second
advertising spot.

10. Advertising
Advertising Terminology
• Roadblock - buying all of the ad impressions
for a specific web page or section of a site for
specific period of time, providing a form of
exclusivity to the advertiser.
The Roadblock guarantees an advertiser's
branding exposure for that page/section and
also prevents competitors from sharing the
content space.

11. Advertising
Advertising Terminology

12. Advertising
Advertising Terminology
• Geo-Fencing - a virtual boundary around a
physical geographical space
(i.e. - event, retail store, booth)
Commonly used in
mobile advertising to
trigger the delivery or
eligibility to receive
notifications or ads
based on the location
of a device.

13. Advertising
Advertising Objective
Define exactly what you want the advertising to
accomplish…
Do you want the advertising to get people to:
Think?
Feel?
Do something?
A combination of the three?

14. Advertising
Advertising Objective
What’s the most important task
for your advertising?
Is it to encourage an emotional connection with
the brand?
To challenge or offer an incentive to re-appraise
the brand, give the product another try?

15. Advertising
Advertising Objective
What’s the most important task
for your advertising?
Is it to convince an audience that your
product/service delivers better value for the
money?
To get consumers to change their usage
patterns, to try your product instead of what
they always buy?

16. Advertising
Advertising Objective
You will get the best return on your advertising
spend by getting your message in front of your
customers during the decision-making and
buying cycle.

17. Advertising
Identify the Proper Media Channels
• Define your Audience
• Review your Competitors
• Set your Budget

18. Advertising
Define Your Audience

19. Advertising
Define Your Audience
Demographics
• Age
• Gender
• Location
• Education Level
• Marital Status
• Income
• Ethnicity

20. Advertising
Define Your Audience
• What are their media consumption habits?
• What are their expectations and aspirations?
• What are their priorities?
• How much disposable income do they have?
• What are their buying habits?
• Are they likely to have children?
• How many vacations do they take each year?
• How much money do they give to charity?
• How can you help them?

21. Advertising
Define Your Audience
Commonly used market research methods:
• Sales analysis and buying patterns
• Questionnaires
• Web/Social Media statistics
• Focus Groups
• Face-to-face interviews
• Specialist Market Research Companies

22. Advertising
Define Your Audience
Psychographics:
Attitudes / Values / Lifestyles / Opinions
• How will the customer approach the purchase
decision?
• Is it high or low involvement?
• Rational or Emotional?
• Are they looking for security? A thrill?

23. Advertising
Identify the Proper Media Channels
• Define your Audience
• Review your Competitors
• Set your Budget

24. Advertising
Review Your Competitors’ Media Strategy
• What channels do they use?
• How often? (Frequency)
• What message are they delivering?
• What new outlets are emerging?
• How will your company/brand be positioned in
the marketplace?

25. Advertising
Create Your Positioning Statement
• Who is your brand?
• What is your business or industry?
• Who is your target audience?
• What are their needs and/or problems?
• Who are your competitors?
• What is your key/unique benefit or
differentiator over your competitors?
• Why should your target audience believe you
can deliver the benefits?

26. Advertising
Create Your Positioning Statement
• What is your key/unique benefit or
differentiator over your competitors?
Your position defines your competitors.
Your competitors define your position.

27. Advertising
Create Your Positioning Statement - Template
For (target audience), (brand) is the (category)
that delivers (benefit/point of difference) by
(reason to believe).

28. Advertising
Create Your Positioning Statement - Example
For upscale American families, Volvo is the
family automobile that offers maximum safety.

29. Advertising
Define Your Positioning Statement - Example
For healthy, proactive preventers, 25-40, who
want to do as much for the health of their
mouth as possible, Listerine is the germ killing
mouthwash brand that gives you the confidence
of a cleaner, healthier mouth, because Listerine
has been clinically proven to kill the germs that
cause gingivitis.

30. Advertising
Identify the Proper Media Channels
• Define your Audience
• Review your Competitors
• Set your Budget

31. Advertising
Setting your Advertising Budget
• Fixed Percentage of Sales
• Competition Based
• Objective/Task Based
• Maximum Amount Available

32. Advertising
Setting your Advertising Budget
Fixed Percentage of Sales
• LY gross sales (or avg. sales for the past few
years), then allocate a specific percentage
• Common is 2% to 5% of annual revenues.
$300,000 sales = $6,000 - $15,000 ad budget

33. Advertising
Setting your Advertising Budget
Fixed Percentage of Sales
PROS: Easy to understand and safe; keeps your
budget in relation to sales volume -- the very
thing advertising is attempting to drive.
CONS: Based on past performance -- can’t
capitalize on shifts in the business climate or
customer trends; assumes that sales are
directly related to advertising -- other factors
affect your sales.

34. Advertising
Setting your Advertising Budget
Competition Based
• Adopt an “Industry Average” for ad budgets
Auto = less than 1%
Retail = 2.5%
Service = 3.5%
CPG = 8% - 10%
Pharmaceutical = 20%
• Trade Associations / Publications

35. Advertising
Setting your Advertising Budget
Competition Based
PROS: Easy for companies with predictable sales
patterns.
CONS: assumes the industry average applies to
ALL businesses in the marketplace; ignores local
market forces -- missed opportunities to
increase market share.

36. Advertising
Setting your Advertising Budget
Objective/Task Based
• Set specific marketing objectives and decide
on the tasks required to meet those objectives.
(Ex: Increase out-of-state clients by 5%)
• Determine your budget by estimating the costs
of carrying out those tasks; prioritize if you
can’t afford to fund all of your ideas.

37. Advertising
Setting your Advertising Budget
Objective/Task Based
PROS: Accurate -- ties the use of funds directly
to the tasks you want to accomplish; if properly
executed, advertising becomes an investment,
not an expense. By spending whatever is
needed, the company may grow at a faster rate.
CONS: If your advertising campaign fails, it can
be costly -- very difficult to recoup expenses on
a bad promotion.

38. Advertising
Setting your Advertising Budget
Maximum Amount Available
• Set aside just enough money to sustain the
business (and yourself) and spend the rest on
advertising
• Common with start-ups and fast growth
businesses

39. Advertising
Setting your Advertising Budget
Maximum Amount Available
PROS: Rapid growth
CONS: Risky, unless you have deep pockets

40. Advertising
Media Buying
Firms: OMD, Carat, Zenith, Tempus, Initiative
Ad Sales Reps: Print, TV, Radio, Online

41. Advertising
Evaluation
• How will you track sales?
• How will you link sales to advertising?
• Who in your company will do that?
Branding focused campaigns are not easy
to directly link to sales

42. Advertising
Conclusion

43. Advertising
“Doing business without advertising is like
winking at a girl in the dark.
You know what you’re doing,
but nobody else does.”
~ Stuart Henderson Britt

44. Advertising
Resources
www.Adweek.com
www.AdAge.com
www.Clickz.com (online)
www.MarketingProfs.com (online)
www.MediaPost.com
www.ThinkLA.com (Southern California)
www.DOmedia.com (OOH Marketplace)