Rajan Saxena - Marketing Management-Mc Graw Hill India (2015) (1)-436-461 (1).pdf

ADVERTISING MANAGEMENT
CHAPTER
16
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
LO1 Describe the role of advertising in brand building
LO2 Interpret institutional framework in advertising
LO3 Formulate advertising decisions
LO4 Demonstrate the tools for measuring advertising effectiveness
LO5 Explain new media of advertising
LO6 Describe ethics in advertising
Advertising that Works
Each year advertising agencies create outstanding campaigns for their client brands. These
campaigns are seen in print, television, social networks like Facebook and You Tube. These
campaigns are recalled, liked and watched the most and have led to brand successes. Some of
these ads in 2013 were:
Cadbury’s “I love you” campaign. We have seen this ad on the television where a wife asks
her husband the last time he had expressed his love for her. He gives her a confused look and
then gets up from the dining table to give her the Dairy Milk Chocolate and mentions he does
so every day without saying in so many words as “I love you”.
Another ad remembered the most is Airtel’s “Har ek friend zaroori hota hai”. The campaign
focused on youth and communicates how every friend was important in his or her way—how-
soever the person was big or small for his specific abilities. This youth friendship campaign
value each relationship in life. It related most to its target market as it reflected its behaviour and
beliefs. Another campaign most widely recalled was the Vodafone ZooZoo campaign which
tickled the ribs of viewers. The lovely ZooZoo ad was created to launch Vodafone 3G services
in India. The ZooZoos turned superman performing unearthly tasks to denote the speed of
Vodafone 3G internet. The campaign’s main aim was to educate audiences about Vodafone on
3G services.
I n P r a c t i c e

Advertising Management 403
ADVERTISING IN BRAND BUILDING
Advertising is a powerful tool in brand building exercise as also in creating
brand imagery. A good creative campaign successfully placed in the target
media can deliver outstanding results. These campaigns are the ones that are
recalled the most as they appeal to the consumers’ feelings and emotions.
Advertising industry has radically changed since 1990s. Explosion in
media and emergence of new media like internet, mobile and interactive television has made the task
of advertising planning and management more challenging and demanding. Visualise this situation
of a family in which each member has his or her own media and programme choice. Its early morn-
ing 6.00 a.m and Mr and Mrs. Ramaswamy aged 65 and 62 years respectively turn on the TV to the
spiritual channel Aastha as they sip their first cup of tea and glance over India’s leading national daily
The Times of India of the day. Their executive son and daughter-in-law, Amit and Radha, aged 35 and
33 respectively, also get started for the day at the same time. While Amit is off to gymnasium for his
workout with his iPod, Radha is busy getting their six year old daughter, who is interested in watch-
ing cartoon channel, ready for school as she herself gets ready. But her grand parents are insistent on
their Aastha programme. A silent war ensues on who can watch the television. Later in the day, Amit
and Radha interact with their friends and colleagues through SMS and mobile phones; they also access
their mails on internet and Amit watches news on the interactive NDTV online, while Radha, in her
free time, shops online.
Both, while returning home cross huge outdoor advertisements mounted on mobile vehicles. This
is today’s media scenario. Given this, the task of any brand manager becomes challenging. What to
communicate and how to do it are just some of these challenges. But the bigger question is cost and
efficacy of ad spends.
Advertising is important for brand building and its successful marketing. It is important for tangible
products like mobile phones, refrigerator, television and computers. It is equally important for services
like hotels, holiday resorts, airlines, and even state tourism. The same is true for ideas and causes.
This chapter focuses on advertising tasks and management and the role it plays in brand building and
marketing.
LO1
Describe the role of
advertising in brand
building
Who can ever forget “No Idea”!, “Get Idea”! Campaign of Idea Cellular. The ad developed
by LOWE showed Abhishek Bachchan in different situations coming out with smart solutions
to different problems. The ‘Get’ idea campaign has surely hit the gold. It won the best brand
campaign at the World Brand Congress in 2013. One such ad has a lady angrily waiting for her
boyfriend in a restaurant who informs her, on the mobile, that he would be late by 40 minutes.
Abhishek Bachchan, as a waiter, asked what she would do for the next 40 minutes. She angrily
responds ‘no idea’. Abhishek Bachchan presents the cell phone with the idea SIM Card and tells
she can communicate with her boyfriend without having to bother about its bill. The commu-
nication line stops with ‘Get the Idea’. This campaign successfully marketed Idea prepaid sim
card’s features—internet, SMS, and social networks.

404 Marketing Management
The goal of advertising is to sell a dream and cre-
ate a hope. For this to happen, all constituents of
the industry like advertising agencies, media and
entertainment must reflect healthy growth trends.
Indian advertising industry has come a long way
even though it contributes only 1% to India’s GDP
as compared to 2.3% in USA. The media and the en-
tertainment industry which plays a significant role
in communication is poised to double in size by
2017. According to a FICCI KPMG report released
at FICCI frames 2012, the industry was expected to
touch `166,100 cr (`1661 billion) by 2017. The size
of the advertising industry in India was estimated
as `36,200 cr with print media accounting for a
large share of 44% followed by television at 33.2%.
By 2017 the Indian advertising industry would be
`63,000 cr with both print and television having
20–30% share each. Digital advertising is estimated
to have a 32% growth and is expected to grow to
`8,720 cr from `2,170 cr in 2013.
The above change is influenced by sustained
growth of the Indian economy in the last two de-
cades which has created a yearning for a better
lifestyle. This yearning has also led to an increase
in consumerism. Advertising industry has played
the role of catalyst in this process. Development in
media and technology has also contributed to the
growth of the industry. Integration of print, video,
television, web technology, internet, SMS and au-
dio is a reality which no media planner can afford
to ignore. Simultaneously the social networks like
Facebook, LinkedIn, and Twitter are also increas-
ingly being used by media houses to reach to their
target customers. All this has enlarged the scope
of advertising and the medium that can be used to
reach the target customers.
Advertising industry is also being asked to de-
liver the desired results. No more now the industry
can take a cover under the old marketing proverb
that 50% of money spent on advertising delivers
results. But no one knows which 50% delivered
result. Advertising productivity is today one of the
prime concern of any client firm. Besides productiv-
ity, creativity continues to be an issue specially so
with small and medium agencies. However, some
of the advertising works have made jaws drop and
set eyeballs gazing like the one mentioned for Cad-
bury Dairy Milk Chocolate, Vodafone’s ZooZoos
and Idea “get the idea sir” or even the Tanishq ad
of Amitabh Bachchan offering a diamond necklace
to his wife Jaya Bhaduri. These ads have stood out
for their innovative approach.
Exhibit 16.1 The Dream Sellers
In the last chapter, we mentioned that the marketer has to choose the customer’s response level to
direct his or her communication. One of these levels is connative or behavioural. Obviously, all market-
ers want consumers to buy their brand. Firms advertise with just this objective in mind. But one has to
remember that the final sale is dependent on many other factors.
Advertising plays a significant role in awareness creation and attitude forma-
tion. It can even generate a trial and purchase, as long as all other elements of
the marketing mix play a contributory role. Thus, it has to be appreciated that
advertising has a limited role in marketing strategy. A marketing plan and strat-
egy takes into account several marketing tools to achieve marketing objectives.
These are product, packaging, customer service, pricing, sales promotion, and
channel relationships.
A marketing plan should be based on specific problems or opportunities, uncovered by situation
analysis done by the brand manager. The marketing mix and allocation of resources across different
elements, should reflect this perception of opportunities and threats. In other words, the marketing
budget should reflect this market reality. Conceptually, the marketing budget should be split in such a
way that the marginal value of an extra budget increment is the same across all elements of the market-
ing mix and hence money is put in that element which will produce maximum incremental sales. This
is more so for advertising. Any increment in the advertising budget should be carefully examined since
A marketing plan should be
based on specific problems/
opportunities uncovered by
situation analysis done by the
brand manager.

there is no direct relationship between the firm’s sales and advertising expenditure. This is in contrast
to distribution and personal selling or even customer service, where one can establish a direct relation-
ship between any of them and sales.
Hence, the role of advertising is limited to communication—awareness cre-
ation or providing information and favourable attitude development. While its
role is limited, the marketer has to compare the costs of different elements of
his or her communication mix. One such yardstick is the cost per exposure per
thousand people. This is the lowest in advertising. Personal selling is compara-
tively the most expensive route to communicating with the target audience.
Finally, we must also bear in mind that people are generally biased against advertising and many
still believe it to be a waste of organisational resources, particularly in a country like India.
Hence, advertising is important but it is as significant as any other element in the marketing mix.
INSTITUTIONAL FRAMEWORK IN ADVERTISING
Before we turn to advertising decisions, let us consider the institutions in-
volved in the advertising function. Aaker, Batra, and Myer1
opine that the
advertiser’s decisions are influenced by controlling and facilitating institu-
tions, as also by markets and consumer behaviour.
At the centre of an advertising campaign is the advertiser. The advertiser
here refers to the organisation that is interested in communicating its ideas and changing the attitudes
of the target audience. Besides the corporate sector, which includes both public and private sectors, the
government, non-profit organisations like educational institutions, UNICEF, cooperatives, and even
political parties are advertisers. The more recent entrants to this industry are religious institutions,
spritual gurus/leaders, healthcare and even publishing industry and NGOs (non-governmental organisa-
tions). The corporate sector, the most important and the largest spender in advertising, includes manu-
facturing and services firms. The latter consists of banks, the hospitality industry, airlines, and
telecommunications like the MTNL and BSNL, as well as cellphone companies like Airtel, Orange,
BPL, and Escotel, Tata Indicom and Reliance Infocomm. Over the last few years, the government has
emerged as a large spender of money trying to change peoples’ values and attitudes towards issues like
family planning, health care, immunisation, the female child, and even national integration. The gov-
ernment and its agencies have been buying prime time slots on television and solus spaces in the print
media.
The advertiser’s role is to determine the communication objectives. These
have to be in line with the overall organisational goals and strategy. Often, in
determining these objectives, industry conditions play a major role. Specifically,
the intensity of inter firm rivalry and demand and supply conditions within the
industry, play a major role in determining communication goals and strategy.
For example, in the oil industry where demand outstrips supply, the goal of any
oil company is to de-market oil and this involves educating customers on the
need to conserve oil and save energy. But the same is not true in the case of the
hospitality and air travel industries, which have to even out the demand fluctuations. Hence, demand
creating advertising in the lean period and slack hours, becomes important for these firms.
Personal selling is
comparatively the most
expensive route to
communicate with the target
audience.
LO2
Interpret institutional
framework in
advertising
Among the major factors
influencing the communication
decision are the industry
conditions, the intensity of
inter firm rivalry and demand
and supply conditions, and
government policy.

Table 16.1 The Dream Sellers
Top Advertisers in India
1. Hindustan Unilever Ltd.
2. Cadbury
3. Reckitt Benckiser India Ltd. (brands like Dettol, Strepsils, etc.)
4. ITC
5. P&G
6. Colgate Palmolive
7. Ponds India
8. Coca India
9. Samsung India Electronics
10. Marico Ltd.
Table 16.2 Top advertisers on social media
1. Kotak Mahindra (campaign save with subbu)
2. MTV and Tata Nano partnership
3. Reliance 3G (Twit a Tab Context)
4. Bombay High (Twee bid campaign)
5. Home shop 18 (land of luck campaign)
6. Samsung Galaxy Note (incredible art piece campaign)
7. Surf Excel (fulfill a wish)
8. Radio KFC (RJ Hunt)
9. Cadbury (India celebrates)
10. Louis Philippe (mystery of the stone wardrobe campaign)
Source: www.socialsamosa.com./2011-12
Table 16.3 India’s leading advertising agencies
Rank Agency Well-known brand
1 O&M (Ogilvy and Mather) Cadbury, Asian Paints, Vodafone , Fevicol
2. McCann Erickson India Mastercard and Coca Cola
3. Lowe Lintas Idea Cellular, ICICI Prudential, LG, Bajaj Auto
4. JWT Pepsico, Unilever Home & ersonal Care, Ford
5 Leo Burnett McDonald, Heinz, Complan, Bajaj, HDFC Std.Life & Samsung,Times Now
6. Mudra McDonald, Godrej gp, Reliance ADAG,
7. Grey Worldwide ONGC, ITC Foods
8 FCB Ulka Tata Motors, Tata Tele Services, Whirlpool, Hero Honda, ICICI Bank
9. Contract Advertising Shoppers’ Stop, Dabur India
10. Redifussion D Y R Bharti Infotel, Coke
Source: Economic Times

The advertiser’s goals and strategy are influenced by government policy. For example, cigarette and
liquor cannot be advertised in the mass media and hence companies making them find a new media
or indirectly advertise the brand. Besides playing a regulatory role, the government can also play a
facilitating role when it decides to give prime time on its TV channel to companies advocating social
issues like campaigns against AIDS, drugs, or dowry. It may even sponsor news or films, made by the
corporate sector, on television. Hence, government rules and regulations and electronic media (TV,
video, cable TV, and radio) policies play a dominant role in the advertiser’s decision making.
The advertiser is facilitated by advertising agencies and the media in translating its goals into ac-
tion. Market research, in turn, assists institutions like the advertiser, the advertising agencies, and the
media. Within the advertiser’s organisation, it is the product manager or the brand manager (as in soft
drinks and personal products) whose task it is to coordinate between the advertising agencies and the
organisation. In fact, in many multinationals and large Indian firms, a product or brand manager is a
strategist, who is responsible for developing communication goals for the product or brand and evolving
a marketing plan and strategy for it. The advertising campaign, which is a part of this overall market-
ing strategy, is often decided by the product manager. Where the product management structure does
not exist, it is the marketing manager’s job to evolve the advertising strategy and also liase with the
advertising agencies.
While all large advertisers depend on advertising agencies to develop the campaign, smaller
advertisers, have to depend on their own internal resources or take the services of freelance advertising
personnel. Again, in a large advertiser, the marketing personnel are involved in the advertising
campaign’s development, but in smaller firms it is the owner or the entrepreneur who has to decide on
it. Thus, when we refer to an advertiser, it is necessary to understand the decision making process in
these organisations, as also the controlling influence of government and competition, for this will affect
the quality of the advertising campaign.
Let us now turn to the facilitating institutions.
Advertising Agencies
Source or Origin of the Agency An advertising agency can be differentiated on the basis of
its source that is whether it is home grown or a global agency. Mudra is an example of a home grown
agency in India. There are several global agencies that are operating in India like O&M, JWT, McCann,
etc. In the recent past we have also seen a marriage between India born agencies and global agencies.
Some of the well-known names are Trikaya which merged with Grey WorldWide, Redifussion got
married to DYR. R K Swamy got married to BBDO and Ulka to FCB. Understanding the source can
help the firm know the creative resources and network that an agency will be able to bring to fore in
building brands.
Role An advertising agency’s major role is purchase of media time and space. Besides, it is directly
responsible for development of an advertising copy and/or the commercial. It should be noted that in
both these tasks—purchase of media time and space and copy development—the advertising agency is
greatly assisted by market research. Many large advertisers like Hindustan Lever, Procter and Gamble,
ITC have their own internal marketing research departments. With increasing competition and buyer
behaviour and decision processes becoming more complex, many large industrial houses and compa-
nies are creating their own internal marketing research departments. Even large advertising agencies
and media have their own research departments or affiliates.

In areas like copy development and media buying, generally, advertising agencies act independently.
In an increasing number of cases, agencies are going beyond their traditional role to get involved in a
client firm’s marketing planning and brand strategy development. The growing feeling among agen-
cies is that since advertising plays an important role in attitude formation, they should take a strategic
perspective of the brand and hence their involvement in brand strategy.
Structure Organisationally, agencies have three groups of people working within them. One is
the creative group whose job is to create advertising campaigns. As the nomenclature suggests, it is the
creative wing of the agency. The single most important factor in agency evaluation is its creativity. It
is no wonder then that copy writers, art personnel, and their like are the ‘blue eyed’ boys and girls of
the advertising industry. The other group consists of account managers. These people are the client’s
product manager, brand manager, or marketing manager’s counterpart in an advertising agency. This
group also performs the ‘selling’ task, as they liase with client firms. It is their responsibility to ensure
that a particular account grows with them and also that the client remains satisfied. Over a period of
time, client servicing and account management have come to acquire a significant position in the agen-
cies’organisation structure. The third group comprises the media executives. As media options increase
and clients relook at the productivity of their money spent in advertising, media planning is going to
become a complex task. Computer based media planning models are increasingly being used to enhance
the yield of every rupee spent in advertising. There is a fourth group emerging now, mainly because of
the changing role of advertising agencies. This is the marketing services group whose task is to exam-
ine and recommend the use of other communication tools to help the client achieve the brand’s goals.
Compensation In terms of compensation, most agencies generally work on a commission and
fee basis. They get a 15% commission from the media in which advertisements are placed. On ‘non-
commissionable’ services like brochure development and printing, agencies usually mark up the sup-
plier’s invoice cost. The agencies also charge fees for creative copy development or, to put in commonly
used term, art work. A growing area of interest in agency compensation is whether agencies could be
made to commit to a marketing goal in terms of market share or sale and then be given an incentive
in the form of a bonus, once that goal has been achieved. This may help create advertising that works.
Strategic Repositioning Another interesting development, following globalisation and a free
market economy, is the increase in mergers, acquisitions, and strategic alliances of leading advertis-
ing agencies across the world. For example, Mudra has a strategic alliance with DDB Needham and
Trikaya with Grey Advertising. Some of the reasons for this ‘mega corporatisation’ of advertising
agencies is that their clients are also on a roller coaster in the game of mergers and acquisitions. Many
of them are already operating in the world market and some of them are even market leaders in their
spheres. To service these clients worldwide, agencies also need a worldwide network. Moreover,
advertising agencies are evolving into full communication agencies, as they realise that advertising is
just one part of the client’s communication mix. Other elements that are important and perhaps equal,
are direct marketing, sales promotion, and public relations. Today, there is a growing movement in this
direction. More and more agencies see their role in the total communication strategy of their client
firms.

The Media
The media is another facilitating institution. Media refers to daily newspapers, magazines, technical
journals (called print media), hoardings, billboards, neon signs (called outdoor media), and cinema,
television, video, cable TV, and radio (called electronic media). Media in India has come a long way
from advertising processions, wall and roof paintings and also shop paintings, as is shown in Exhibit
16.2 on media developments. The media choices have multiplied with the advent of colour television,
commercialisation of Indian TV, cable TV, and the launch of STAR, Zee and other Hindi and regional
language channels. Since rural markets are important to any advertiser, rural communications form an
important part of an advertising agency’s task. And this is where rural promotion vans play a major role.
Today, Indian TV covers almost 82.5% of the Indian population and the radio reaches to almost 95%
of Indians. Among the private channels in India, Zee TV has the maximum reach.
All these developments herald a more complex task, even for the media. Today, large media houses,
like the Times of India Group, help advertisers buy the optimal media mix. Media marketing is going
to be on the increase as the target audience gets fragmented over multiple media choices. Figure 16.1
sums up these advertising institutions and their relationships in advertising management.
Figure 16.1 Institutional Framework for Advertising
ADVERTISING DECISIONS
Advertising Objectives
The starting point in any planning exercise, is one of setting goals or objec-
tives. In evolving an advertising plan, objectives have to be set as they help
in measuring the performance of an advertising campaign. It is important
for the strategist, to know how the strategy fared and the only way to know is how far did it go towards
achieving the objectives. Objectives or goals, are also necessary to justify the financial resources that
are required for an advertisement campaign. The only way to counter skeptics is to state what it would
cost to achieve a specific objective, like a 20% increase in awareness in the target audience.
Objectives are also required for coordination purposes. As we have mentioned earlier, advertising is
one of the communication tools and to achieve the desired marketing objective of sale or market share,
all elements of the communication mix must be coordinated. Each element should have both, a short-
term and a long term goal.
LO3
Formulate advertising
decisions

So, to be meaningful, advertising objectives have to be measurable and communicated. Measurabil-
ity is important or else performance cannot be evaluated.
Let us now consider a few objectives for advertising.
Sales Objectives The prime objective of marketing is to increase the firm or brand’s sales, mar-
ket share, and profits. Hence, marketing activities have to be directed towards this goal. By the same
logic, the advertising goal should also be to increase sales. This goal gives credibility to advertising
expenditure and may even subdue the complaints that 50% of advertising expenditure is a waste of
money, but this goal has a problem. As discussed in Chapter 12, sales is a function of a firm’s marketing
mix, competition activity, and consumer behaviour. Hence, to attribute increase or decrease in sales to
advertising alone is like attributing success or failure in a game of football to just a single player, when it
is really a team game. Besides, the effect of advertising on sales is an extended one, in the sense that an
advertisement may continue to have a demand pull, even after it has been withdrawn. Sales never start
and end, immediately after the campaign has got off the ground or comes to an end. In other words, the
impact of an advertising campaign may not be known for certain, until considerable time has passed.
According to researcher2
Clake, in the case of frequently purchased consumer non-durable products
like soft drinks, tea, coffee, toiletries, and so on, the effect of an advertising exposure can take upto
nine months to get dissipated.
Typically, an advertising campaign may attract new customers to the brand, it might help develop
more positive attitudes in the target market towards the brand, or it may even generate trial purchases.
All these together, will lead to an increase in the brand sales. Isolating these effects and conclusively
showing that the advertising campaign has led to an increase in sales is a difficult proposition.
In the case of financial instruments advertising, direct marketing campaign or even individual clas-
sified advertisements—the kind one often sees in the print media—the results are more tangible.
But for the above situations, it is perhaps incorrect to define advertising goals in terms of sales.
Behavioural Goals More meaningful advertising goals are ones, aimed at changing the target
market’s attitudes and behaviour towards the brand. For this purpose, it is necessary to identify the
target market in the most meaningful manner possible. For example, besides defining the demographic
and psychographic characteristics, it is necessary to define in terms of whether the target customer is a
buyer of premium brands or popular brands. The next stage is knowing the ultimate desired behaviour,
like trial purchase from potential customers, or enhancing loyalty among existing users or enhancing
pleasant experiences with a brand’s usage. In other words, the benefit of creating a ‘lifetime value for a
customer’ for the firm has to be considered by the advertising personnel. This can become an effective
goal for advertising.
Another criterion or step in defining advertising goals in behavioural terms, is an analysis of the
communication and decision process, that will affect desired buyer behaviour. This involves measur-
ing factors that intervene between stimulus (advertising) and the ultimate behavioural response. These
intervening variables are brand awareness, brand comprehension, emotional feelings, and attitude
towards the brand. The latter could be liking or association with a brand or even seeing one’s self in
the brand or the brand as representing the individual buyer’s personality (also called brand personality).
Thus, advertising could be aimed at any of these or a combination of these intervening variables.
Communication Related Goals Another way to define advertising goals, is to do so from a
communication perspective. Since advertising is a communication tool, this appears to be the logical
goal. The earliest such goal was the one emerging from the AIDA model (described in Chapter 14) of
the hierarchy of consumer responses or attitudinal change.

I N F O C U S
DAGMAR Model
In 1961, Russell H. Colley wrote a book called Defining Advertising Goals for Measured Advertising Re-
sults (DAGMAR).3
This was the first attempt to define advertising objectives in measurable terms. “An
advertising goal is a specific communication task, to be accomplished among a defined audience, in a
given period of time”4
. The communication task in DAGMAR is based on a specific communication process
as summarised in Fig. 16.2. This model suggests that an individual buyer goes through different mental
stages before accepting a brand. For example, the individual starts by being aware of the brand. This in
turn leads him or her to know more about the brand–its characteristics, appeals, associated images and
feelings, its competitive position, and the target market. The third step is the attitude which intervenes
between comprehension and the final action of trying the brand or visiting a retail outlet to buy or seek
more information.
Figure 16.2 Hierarchy of Effects Model of the Communication Process
Subsequent to DAGMAR, several other approaches have been developed, to help define advertising
goals. However, the fact is that there is a growing pressure on the advertising industry to quantify its
contribution to the advertiser’s growth. This will put pressure on the advertiser to define advertising
goals in measurable terms. The Advertising Club, Mumbai, used to hold an annual workshop titled
‘Advertising that Works’ where advertising agencies present cases, in which advertising had delivered
positive results to client firms. (See a few cases presented at the end of the last workshop in 1999).

Internet, especially mobile internet will shape the
communications in this century. Innovations in inter-
net started soon after its privatisation in 1999. It was
only in 2013 that the internet became integral to mar-
keting. Four companies have played a significant role
in internet marketing. Google today dominates online
advertising; Amazon.com is a leader in online retailing
while Facebook is synonymous to the social network.
Apple set the standard for interface devices which
were often referred as remote controls for many peo-
ples’ digital lives. Even though each had a distinctive
domain to operate, today all of them compete with
each other for dominance in online advertising.
Consider the case of Amazon whose business
model is solely based on marketing and advertising.
Elements like collaborative filtering tool, could tell
that “customers who bought product X also bought
product Y”. In 2011 Amazon launched an advertis-
ing network which was described by AdWeek as
“advertising’s sleeping giants”. Tracking cookies was
another important element of Amazon’s business.
This cookie tagged the product ad in the browser of
a visitor who showed interest in a particular product
but did not buy. Whenever this customer would be
on any of the website in the Amazon network, the
cookie would pop up with the advertisement of
the overlooked product and provide him the op-
portunity to buy. Google on the other hand has
emerged as an undisputed leader in online adver-
tising even though the display advertising has not
been so popular on Google. Rather it has been more
popular on Facebook. Google developed Android
mobile operating system which expanded the world
of apps. Today 75% of apps outside America are
based on Android. They serve as basis for advertis-
ing and connecting with the customer in much more
effective manner than otherwise. Apple on the other
hand is also growing on the strength of its apps
which originally was its unique proposition until it
was challenged by Google’s Android.
Thus, from an advertising perspective it would
be interesting to watch the evolution of the new
medium. It is a fact that social network websites like
Facebook will dominate the global conversations
among consumers and this would be most facili-
tated by smartphone or other hand-held devices.
The DAGMAR model made advertising goals more specific like ‘X’ percent increase in brand awareness
in the target market; 40% of ‘X’ percent to know about the brand, and so on. The important assumptions in
the DAGMAR model are that advertisers will have a benchmark to compare post-advertising effect. The
target market, too, is defined in clear terms. Besides, DAGMAR makes advertising goals time specific and
written.
It is not that DAGMAR has ended all controversy on advertising goals. In fact, DAGMAR has been
challenged. Its critics feel that it is difficult to implement the model (e.g., difficulty in selecting the level in
the hierarchy of the response model). Besides, there are problems of measurement and the noise in the
communication model. Further, DAGMAR seems to inhibit the concept of ‘great idea’, as all firms in the
industry do the same research and many may come up with almost similar campaigns. DAGMAR being
a rational planned approach to advertising, guides creative people and this can inhibit their creativity.
Exhibit 16.2 Future of Advertising
Budget
Once the goals have been set, the advertiser has to decide on the budget. How much should a firm spend
on advertising its brand or services? Most firms have their own norms, but there appears to be some
common guidelines that influence budget decisions. We shall now discuss these guidelines.
Percent of Sales One of the most common methods in an advertising
budgeting exercise is determining the percentage of sales. Past sales or projected
future sales is used as the base. For example, a firm may spend 2% of its sales
Percentage of sales method
is the most popular approach
to budgeting in advertising.

Illustration
Alpha Ltd., a leader in confectionery, wants to intro-
duce diet ice creams for diabetics. According to the
company’s research, there are one million Indians
who suffer from diabetes. This disease has been
on the increase largely because of the changing
Indian lifestyle and according to some experts, it is
growing at the rate of 2% per annum. The health
conscious segment is estimated to be 1% of India’s
population, or about 10 million, mostly located in
the four metros and two mini metros. The firm de-
cides that advertising should generate awareness
on advertising its brands. If this firm’s sales turnover for the year 1999–2000 was `100 crore, then it
would have spent `2 crore on advertising its products and services. Now, if the same firm anticipates
a sales turnover of `500 crore in 2000–1, then its advertising budget will be `10 crore. Percentage of
sales method is the most popular approach to budgeting in advertising.
This method, based on guidelines for budgeting, provides comfort to finance oriented executives,
who believe that advertising should be resorted to only if the firm can afford it. Furthermore, this
method helps prevent advertising wars within the industry.
The limitation of this method, is that it does not believe that advertising can influence sales. In fact,
here sales or estimates of sales seem to influence advertising expenditures. Imagine the impact of this
method on brands that are market leaders and enjoy high customer loyalty, and brands which have just
been introduced. While the former have a liberal, and often excessive, advertising budget, the latter
may not have an adequate budget and consequently may suffer in the long run.
Hence, the percent of sales method needs to be revised to respond to market dynamics, where a brand
may have to be strengthened, maintained, or built.
Affordability Another approach to advertising budgeting is affordability. In this method, the
firm first allocates its financial resources to other unavoidable heads like manufacturing, R&D, trade
discounts, and so on and whatever is left is allocated to advertising. By doing so, the decision maker
ensures that there is no excessive spending on advertising or that resources are not being wasted. Once
again, this method satisfies finance oriented executives and also assumes that sales are independent of
advertising.
Competitive Parity The third approach to the advertising budgeting process is maintaining
competitive parity, or in other words, ‘follow the crowd’. The logic is that collective wisdom is better
than an individual firm’s ideas or a brand manager’s beliefs. This will lead to a near optimal advertising
budget. Further, this method ensures that advertising wars do not occur in the industry.
The limitation of this approach, is that there is no guarantee that everyone will operate at the optimal
level of spending. Even so, a firm may effectively and more productively utilise the money it is spend-
ing on advertising, by a better media plan and more creative copy. Further, differences in size given
firm does not support this principle.
Objectives and Tasks This is a more proactive approach than the ones discussed earlier. In this
method, as the name suggests, an advertising objective is determined in specific terms. Subsequently,
tasks are identified that will help achieve this objective. Finally, the decision maker estimates the costs
of each of these tasks and the total of all these costs becomes the advertising budget. Exhibit 16.3
illustrates this method.
Exhibit 16.3 Objective and Task Approach to Advertising Budgeting

among 70% of the target market and a trial rate of
40% in the first year of its launch.
Tasks required are advertising on TV at prime
time on Star Plus and other channel programmes
commonly watched by the target audience, print
advertising in daily newspapers and magazines with
high national readership statistics, and outdoors like
billboards in metros and mini metros, atmospherics
in ice cream parlours, and so on.
Based on the rates applicable to different time
and space slots of different media and the length
and size of the commercial and advertisement copy
respectively, the firm can now estimate what the
cost will be to achieve the objective. The firm comes
to the conclusion that it will require `1 crore to
achieve the desired advertising objective.
This method is logical as it assumes a causal flow from advertising to sales.
Advertising budgets have to be responsive to market conditions and hence, old thumb rules which
have been cost and finance oriented, cannot help the firm in getting the most out of their advertising
campaigns. More and more firms are now accepting this fact and moving towards the objective and
task method.
Copy Decisions
We now move into the most creative and visible area of advertising decision, or copy decisions. In the
chapter on promotional decisions, we looked at different approaches adopted in message development,
like whether the message was rational or emotional. We also looked at different structures like one sided
or two sided conclusion drawing statements. We shall now examine different creative styles, used in
advertising and also the methods used in copy testing.As we noted earlier, the most important parameter
in an advertising agency evaluation is its creative wing. Different agencies use different creative styles
to communicate the desired message to the target audience. Most of these creative styles are influenced
by the agency chief’s orientation, particularly when he or she happens to have roots in copy writing.
For example, Alyque Padamsee’s orientation has influenced advertising copies and campaigns created
at Lintas, Subroto Sengupta’s orientation influenced the work at Clarion, Subhash Ghosal’s at HTA and
RK Swamy’s at RK Swamy and Associates.
Furthermore, when one examines various advertisements from these advertising agencies and sev-
eral others, one can find certain basic philosophies. These have been the ones of the great masters in
Advertising—David Ogilvy, William Bernbach, Leo Burnett, and Rosser Reeves.
David Ogilvy David Ogilvy, founder of the now famous Ogilvy and Mather (O&M)which is now
a part of WPP, is perhaps one of the most widely read advertising professional. Ogilvy’s emphasis
has been on creating and retaining high brand image. He believes that a high image is to the firm’s
advantage in the long run. If we accept the fact that each advertising exposure helps in creating and
reinforcing a brand image in the consumer’s mind, then Ogilvy argues that a low image brand will face
an uphill task, if the marketer tried to change it to an upscale high image brand. In such situations it is
perhaps advisable that the marketer creates a fresh brand.
Ogilvy also believes in creating distinctive brand personalities to counter competition from ‘me too’
brands. He has used celebrities in his advertising campaigns in the belief that the source adds his or
her personality to the brand and thus gives credibility to it and to the message. Ogilvy has been a firm
believer in research.

I N F O C U S
In his famous book titled Confessions of an Advertising Man5
first published in 1964, Ogilvy urges his
agency to follow eleven principles.
These are:
Content of the message rather than its execution is important.
Search for a great idea or else the campaign may fail.
Talk straight to the customer. Do not treat him or her as a moron.
Do not create boring or dull copies.
Avoid clowning.
Create contemporary advertising.
If you have created a great campaign and it ‘pulls’ target audience to the brand, keep it so long as
it does so.
Be honest in advertising. Avoid fluff and telling lies in the copy.
Brand and its image is most important–create a brand personality, distinctive from others.
Do not be an imitator.
Creativity is always individual specific–committees do not create campaigns.
Much of Ogilvy’s copies reflect this philosophy.
William Bernbach William Bernbach held a diametrically opposing view to that of Ogilvy, in
the sense that he emphasised execution of the message. In his words, ‘execution can become content,
it can be just as important as what you say . . . a sick guy can utter some words and nothing happens;
a healthy vital guy says them and they rock the world.’6
Bernbach, the founder of the well known advertising agency Doyle Dane Bernbach (now known
as DDB Needham, part of the Omnicom group), respected his audience and avoided puffery in his
advertising copies. He also avoided cliches and heavy repetition. He has always been straight, clean,
honest, and direct in his approach. He believed in the need to create a distinctive advertising copy, that
makes the brand stand out amid competition from ‘me too’ brands. Bernbach has used humour to gain
target audiences attention. And finally he de-emphasises research, believing that it leads to generating
too many ‘me too’ advertisements.
Rosser Reeves What makes Promise toothpaste different from all others? It is the clove content.
How many of us can think of Promise without the clove? Though it is not as if the other brands do not
use it, the fact is that Balsara’s Promise was the first to make the claim and hence it became its Unique
Selling Proposition (USP) which helped it to position itself against the giant Colgate in the toothpaste
market. This concept of USP came from Rosser Reeves of the Ted Bates agency (now a part of the
Saatchi group). Reeves believed that an advertisement needs to sell and not just merely be a work of
art or aesthetics.
Unique selling proposition makes the brand stand out in the crowd. Even though others have the
same features, if you are the first to claim it, it becomes your USP. In the development of USP, three
factors contribute to it:
(b) it should be unique in the sense that no one else has yet claimed it
(c) it must sell

As may be inferred, development of a USP requires research and experimentation. Reeves believed
that once an advertising copy has been created using a USP, then it should not be changed.
However, in today’s contemporary world marked by standardisation of technology and brands
transcending into commodity situations, it is doubtful if any brand can claim a USP. Even if it does,
perhaps it may be short lived. Today, technological developments, homogenisation of customer needs
across different markets, and developments in communication pose a challenge to the concept of USP
as a brand building strategy.
Leo Burnett Leo Burnett, like Bernbach, has been diametrically opposed to David Ogilvy. While
Ogilvy has advocated the use of celebrities in creating high image brands, Leo Burnett advocates the
use of the common man in advertising. He believed that an average customer was more likely to believe
the ‘man in the street’ rather than the high profile celebrity. The key words that describe his copies are
‘warm’ and ‘believable’.
Thus, we see that from Ogilvy to Burnett, one thing which is common to all of them, is that they
have tried not to be copy cats. They have tried to build brands and be distinct from the crowd. These
styles should be seen in continuum from ‘what you say’ to ‘how you say’. Today, many agencies use a
combination of these styles to create strong brand personalities. It is difficult to say that only one style
dominates the agency’s art work.
Copy Testing
Prior to operationalising the campaign, it is necessary to test the advertising copy with the target audi-
ence. The purpose of testing the copy, is to know how the potential buyer or target audience will react.
Testing a copy, before and after the campaign, helps in ensuring advertising effectiveness. However,
many in advertising agencies object to this testing, largely on the ground that most tests tell only, what
is working rather than giving information on why one advertising copy is effective and not the other.
It has also been criticised on the ground that creativity cannot be tested.
Notwithstanding these criticisms or objectives to testing, many advertising
agencies and advertisers continue to test advertisement copies. Testing which is
done before the launch of the campaign is called pre-testing and the one done
after the campaign is called post-testing.
The parameters on which an advertising copy has to be evaluated or tested, are
desirability, exclusiveness, and believability7
. Or in other words, any advertising
copy should be likeable and interesting to the target audience. It should stand
out in the clutter of noise created by competition and finally the target audience should believe in the
claims made by the copy, in other words, the copy should be credible.
To test the copy on the first two dimensions of desirability and exclusiveness, recognition and recall
tests are conducted. For the third dimension, namely believability, the copy is tested on persuasiveness
and purchase behaviour of the target customer.
Recognition This is the first prerequisite to a successful advertising campaign. However, it should
be kept in mind, that a high recognition score is not necessarily an indicator of successful advertising,
because recognition requires least effort on the part of the target audience. Recall tests require a higher
degree of information retrieval and to a large extent can reveal whether the advertising copy is able to
filter through the perceptual veil.
Desirabiltiy, exclusiveness,
and believability are the
three parametres on which
an advertising copy has to be
evaluated.

Recognition Tests This suggests involve the buyer being able to recognise an advertisement as
belonging to a brand or a firm and/or as one that he or she has seen earlier. This
test is commonly used for television and radio commercials. In print advertising,
three measures are generated for each advertisement copy. These are called
‘noted’, ‘seen associated’, and ‘read most’.
Noted, refers to the number of respondents or percentage of readers of the
issue, who remember having seen the advertisement. Seen associated is the
percentage of readers, who remember seeing any part of the advertisement that
clearly shows the brand, service, the firm’s name, and so on. Read most is the
percentage of respondents who read half or more of the copy.
Recall This refers to the proportion of the target audience that can recall an advertisement and its
contents. There are two types of recalls—unaided and aided. In the former, the respondent is asked
to recall as much, as he or she is able to, of the copy content of a specific brand. The respondent may
recall the model, the situation, headlines, some features of the product, just the music, or any other
dimension of the copy. At times, this recall is either not possible or is negligible. On such occasions,
the researcher aids the respondent by asking a question such as, ‘Did you see a TV commercial showing
Aamir Khan?’ And if the respondent replies positively, then the researcher may ask the next question
‘Which product is he shown giving to his friend?’, and so on. Alternatively, in TV and radio commer-
cials, the background music or jingle may be played and customers asked to identify the brand and tell
more about the advertisement.
Recall tests measure comprehension and also to a large extent, attractiveness of the copy. Psycholo-
gists tell us that human beings remember only those stimuli, which are rewarding and attractive. How-
ever, these tests have been criticised, because they do not measure the effectiveness of an emotional
commercial.
Persuasion tests refer to the proportion of target audience who show a distinctive attitudinal shift
towards the brand after seeing its advertisement.
A commonly used method here is theatre testing, aimed at studying forced exposure brand perform-
ance change8
. In the theatre testing method, a group of respondents are invited to preview television
programming. They respond to demographic and brand or product usage questions that appear on the
TV screen. Then they view a half hour variety programme. In the middle of the programme, com-
mercials are placed. These commercials also include the test copy. After the audience reactions to the
programme, an unaided brand recall question is asked. This forms the basis of clutter or awareness score
(the percentage of people who recalled the brand advertised). The test commercials are then exposed a
second time, surrounded by programme material. Attitude shift is now measured by asking respondents
to select brands in a product class if they were to go shopping. In advertising for durables and services
the pre- and post- preference is measured by determining:
(a) the favourite brand
(b) the next preferred alternative
(c) brands that would not be considered
(d) brands towards which the customer is indifferent
Besides the above, respondents are probed about the following:
(e) comprehension of a message or slogan
(f) communication of secondary copy ideas
Recognition tests suggests
the buyer being able to
recognise an advertisement
as belonging to a brand, while
recall refers to the proportion
of the target audience that
can recall an advertisement
and its contents.

(g) evaluation of demonstrations, spokespersons, or message
(h) perception of brand uniqueness
(i) irritating or confusing elements
(j) viewer involvement
A modified version of this theatre test is conducted for testing radio commercials.
Purchase Behaviour
The final test of a copy or commercial is whether it really moves the customer to buy the brand in a real
world market situation. Two well known tests here, are ones involving coupons to stimulate purchasing
and those involving split cable testing.
Furthermore, other methods for testing print copies are:
(a) Direct rating method which asks consumers to rate alternative advertisements on attractiveness,
believability, and exclusivity.
(b) Portfolio tests asking consumers to view and/or listen to a portfolio of advertisements and then
ask them to recall all the advertisements and their content. This could be unaided or aided recall.
(c) Laboratory tests using equipment to measure the consumer’s psychological reactions to an
advertisement.
Besides the above, lately, marketers and advertising agencies have been doing longitudinal studies to
monitor the impact of an advertising campaign over a period of time. These studies are called tracking
studies.9
Media Selection
A highly creative advertising copy may not be able to deliver results, if there is an improper selection
of media or a poor media plan and strategy. In evolving a media plan, decisions have to be taken with
respect to the following media factors.
Media Class This refers to the type of medium, which is most appropriate to the product and copy.
This includes newspapers, magazines, television, radio, billboards, and direct
mail.
Media Vehicles They provide the immediate environment for the adver-
tisement. For example, within newspapers, The Times of India is a media vehicle,
in television Zee TV’s Antakshari is the vehicle.
Media Option This refers to the size (full or half page), length (30 or 60
seconds), colour or location (like front page, bottom right, or prime time 9.00
p.m.) of the advertisement in the media vehicle.
Scheduling and Timing This refers to how media options are scheduled over a period of time.
The strategic options here are—
(i) Flighting: That is, periods of total inactivity
(ii) Continuous: That is, even distribution of advertising during a time period
(iii) Pulsing: That is, a continuous base augmented by intermittent bursts of heavy advertising
Flighting is useful in products whose demand is seasonal. After the season, the demand for these
products ceases to exist. A typical example is that of desert coolers in states, such as Uttar Pradesh,
Madhya Pradesh, Rajasthan, Haryana, Punjab, Bihar, and Delhi. The demand for such coolers emerge
Flighting is useful in products
whose demand is seasonal,
continuous for products
whose demand is not limited
to specific seasons; while
pulsing will work with
products that are seasonal,
but would not touch the zero
sales level in the lean period.

during the summer months of April to July and declines soon after the monsoon sets in. Hence, it pays
to advertise desert coolers or its components like exhaust fans and pumps during the summer months
only and then discontinue until the subsequent year. So for products whose demand is seasonal, the
flighting strategy works well.
Continuous advertising is a good strategy for products like textiles, toiletries, and so on, whose de-
mand is not limited to specific seasons. Here the objective of the firm is to retain its brand(s) uppermost
in the customers’mind and hence continuous visibility, through reminder advertisements and other such
tactics.
Pulsing works with products like soft drinks and ice creams, whose demand is high during summer
months and after that the demand does decline, but not to the zero sales level. The demand swings
between two extremes, which is between lean demand and peak demand. The objective of advertising
is to ensure brand preference, even when the demand is minimum, and during peak time to ensure
higher sales volume and market share.
Quantitative Factors in Media Selection In the evolution of a media
plan, both quantitative (like circulation or viewership statistics, costs, etc) and
qualitative (like profile of the target audience and the mood created by media
vehicles) factors have to be considered. While data on circulation or viewership
is available from sources like Audit Bureau of Circulation (ABC), National
Readership Survey (NRS), Indian Newspaper Society (INS), and even the dif-
ferent publishing houses, cost of inserting an advertisement is available from the
publisher, Doordarshan, AIR or the respective television channel offices. The
qualitative factors for each media is to be collected through market research. One of the quantitative
criterion, used in selecting the media is cost per thousand, or cost per thousand people reached by a
particular vehicle. This is calculated by dividing the reach of the vehicles by the cost of an advertis-
ment carried in it. Suppose the reach (readership) of newspaper A is 1,20,00,000 persons and the cost
of a full page advertisement in it is `10,000 then cost per thousand of advertising in this paper is `0.83
only. But in another newspaper whose readership may be only 70,00,000 persons, the cost of the same
advertisement may be `1.42. Considering cost per thousand (which is `0.83), we find that advertis-
ing in newspaper A is a better alternative. That is why, one finds a larger number of advertisements in
newspapers and magazines, that have high circulation and programmes which enjoy high viewership
and listenership. At one time, when Doordarshan was telecasting Ramayana, Mahabharata, and Hum
Log, almost the entire nation used to watch these programmes. These programmes enjoyed the highest
viewership, and hence the clustering of advertisements immediately before the programme.
While cost per thousand is an important consideration, one has to also examine the quality of reader-
ship and viewership and whether the audience goes through the entire newspaper or magazine or waits
and watches the entire programme. In other words, though cost per thousand in a newspaper like The
Times of India may be the lowest, if research shows that most readers just glance through the headlines
or through the newspaper, then actually the cost is much higher as the effective readership may be lower.
The same holds good for TV or video advertising.
Another factor that prevents heavy emphasis on the cost per thousand factor, is the quality of the
audience and whether it matches the firm’s definition of the target audience. Some programmes on tel-
evision like ‘The News Tonight’on Doordarshan had a different viewership profile from the Saturday or
Sunday movie on Star Plus. Researches on viewership have shown that the former had a more upscale
or elite audience, while a feature film had mass appeal.
One of the quantitative
criterion used in selecting
the media is cost per
thousand, or cost per
thousand people reached
by a particular advertising
vehicle.

Qualitative Factors in Media Selection Media vehicles create a mood in the target audience.
This could be romantic or serious or sporty or comical. Marketing Research has suggested that often
the mood created after reading an article or viewing a program on a television channel gets transferred
to the product being advertised in that media vehicle. For example a sports channel like ESPN gets
the viewer in a sporting mood. He cheers or jeers or feel depressed on a player’s performance. As he
cheers the player, brands endorsed by the player and visible in the stadium tend to get placed in viewer’s
mind. Leading consumer and other brands have taken an advantage of some of the well-known sports
events like IPL to build their brand equity. Likewise, the FTV or the MTV create an entirely different
mood.
Hence, in selecting the media, one has to determine the desired number of exposures to the target
audience in the appropriate vehicle. The number of exposures is based on the advertiser’s objective. It
could be a trial which is based on increased awareness. Assume the rate of trial increases at a diminish-
ing rate with the level of audience awareness as shown in Fig. 16.3.
Figure 16.3 Relationship between Product Trial and Awareness
If the advertiser seeks a trial rate of T*, he needs to have a brand awareness at level A*. How many
exposures, or E*, will help achieve this level of awareness, is now the key issue which is resolved by
an understanding of the three key terms and the interrelationship among them. These are:
Reach It is the number of persons or households exposed to a media schedule at least once, during
a specific time period.
Frequency This implies the number of times within a specific time frame, that an average person or
household is exposed to the message.
Impact This is the qualitative value of an exposure through a given medium. (e.g. an advertisement
for clothing for a modern and elegant woman in Savvy, Society, or Femina will have a higher impact
than in Woman’s Era).
The relationship among these variables is summarised below:

Total Number of Exposures (E)
This is the reach times frequency, or E = R ¥ F. This gives us the key term used
in media planning, namely Gross Rating Point (GRP) for TV or radio and OTS
(opportunity to see) in print media. This is the basic unit used for buying time
on television or radio, before or after a programme, and space in the print media.
Thus, if 80% of the target audience for a computer software firm sees and listens to news in English on
Doordarshan at least 5 times a week, then the GRP for English news is 80 ¥ 5 = 400. In the context of
television advertising, particularly on the national network, one of the terms used is HUT, or households
or homes using television. This will always be lower than the number of homes owning television and
hence HUT is always expressed as a percent of the latter, while GRP for any programme will differ
regionally or across different market segments.
For example, suppose on Saturdays, 300 million TV sets are on to watch the film between 5.30 p.m.
and 8.30 p.m. and we assume that there are 600 million TV sets in the country, then the HUT for the
Saturday film is 50% for that day and time period. Suppose, on a Saturday, an Amitabh Bachchan film
had 270 million households watching it, then the share for Amitabh Bachchan’s film is 90% (270 mil-
lion divided by 300 million) and its rating is 45 (i.e., 270 million divided by 600 million). Mathemati-
cally, a programme’s rating equals its share multiplied by the HUT.
Weighted Number of Exposures
This refers to the reach times average frequency times average impact, or
WE = R ¥ F ¥ I.
Generally, a media plan is a trade-off between reach and frequency. One of
the factors that has to be kept in mind is the ‘forgetting’that occurs in any human
learning situation. Since most advertising aims at educating and bringing a desired response, repetition
(and hence frequency) is important. The decision about the level of repetition is based on the extent of
forgetfulness associated with a brand, product category, or message.
Thus, advertising management consists of decision sets aimed at creating appropriate consumer at-
titudes, which will help create brand image and personality. As media choices multiply and inter firm
competition increases, strategic decision-making in advertising will become more complex and demand
skills of a much higher magnitude, than the ones used today. The advertiser and advertising agencies
will have to use technology to help them to achieve their goals.
TOOLS FOR MEASURING ADVERTISING EFFECTIVENESS
Effectiveness of advertising is an issue that has been debated over the years.
Despite this, the extent of fundamental research in this area continues to be
abysmally low. Most effectiveness studies deal with specific ads and cam-
paigns. Considerable money is spent on pre-testing an ad copy. But in order
to get the maximum yield, campaign effectiveness should be tested on the
following parameters:
(a) Brand awareness
(b) Knowledge about the brand
(c) Preference for the brand
(d) Sales effect
Total number of exposures
(E) = Reach (R) ¥ Frequency
(F)
Weighted number of
exposures = R ¥ F ¥ I
(Impact)
LO4
Demonstrate the
tools for measuring
advertising
effectiveness

Sales Effect Research The sales effect of advertising is generally harder
to measure than the communication effect. This is because sales are impacted by
several other factors like price, payment terms, brand availability, store ambi-
ence, sales person and customer’s past experience, etc. The sales impact is, how-
ever, easily measurable in interactive form of campaigns and Internet advertising.
In all other media and campaigns, researchers try to measure the sales impact by analysing either
historical or experimental data. The historical approach involves correlating past sales to past advertis-
ing expenditures using advanced statistical techniques.
Experimental design involves tracking consumer purchases linked to specific advertising. For this
purpose, consumer panels are created and their purchases tracked to their advertising recalls and televi-
sion viewing of a commercial. In store tests are also conducted to assess the effectiveness of promo-
tions, displays, store ambience, packaging, and other consumer deals in operation.
Thus, advertising today is far more demanding and challenging than it was earlier. The most criti-
cal task of advertising, is to keep the brand relevant to the changing market demographics. Liril has
remained relevant over a period of time, even when communications have changed. However, it kept
the core value of ‘freshness’ constant in all its communication campaigns.
NEW MEDIA OF ADVERTISING
Online Advertising
As was mentioned earlier, online advertising has come of age in India. No
more is a Web address limited to a few well known companies. Today, this
segment of the advertising industry is growing at nearly 30%. The factors
contributing to the growth of this segment are a mix of cutting edge technology and creativity. To make
Internet advertising deliver, firms need to leverage the strategy of multi channel delivery and message
to maximise share of voice at a given point of time.
To appreciate online advertising, one needs to understand its dynamics. The most important form of
online advertising is the banner ad, which is a graphic image that is often animated and is ‘clickable’.
This ‘click’ takes the viewer to another Web location. The banners appear at the top or side panels or at
the bottom of the Web page. However, they can be placed anywhere including the centre of the page.
Various pricing models are adopted by the websites. As was mentioned earlier, the rates vary between
`100 and `600 on a CPM (cost per metric) basis. CPM also reflects cost per thousand impressions.
Focused sites like naukri.com or shaadi.com, or other popular sites like indiatimes.com may charge rela-
tively higher rates than others. Barter arrangements are very common in online advertising. For example,
two websites may agree to run banner ads for each other. This can lead to traffic building at both the sites.
Banner ads include direct marketing capabilities. Each banner carries with it a unique identifier. This
allows a website to track the effectiveness of the ad in generating traffic and direct promotions.
Thus, to conclude, the task of advertising is to grab consumer attention at all times and everywhere.
The challenge lies in effectively using all possible channels, media vehicles, including Internet, and
short messaging services on cell phones.
Mobile Advertising
With the growth and high penetration of mobile phones in India, mobile marketing and advertising is
fast catching up. Mobile advertising is the advertising on mobile phones. Multiple types of advertis-
LO5
Explain new media of
advertising
Experimental design
involves tracking consumer
purchases linked to specific
advertising.

● Ensure the truthfulness and honesty of represen-
tations and claims made by advertisements and
safeguard against misleading advertising. Specifi-
cally, please ensure the following:
❍ Advertisements shall not, without permis-
sion from the person, firm or institution un-
der reference, contain any reference to such
person, firm or institution which confers an
unjustified advantage on the product adver-
tised or tends to bring the person, firm or
institution into ridicule or disrepute. If and
when required to do so by the ASCI, the
advertiser and the advertising agency shall
produce explicit permission from the per-
son, firm or institution to which reference is
made in the advertisement.
❍ Advertisements must be truthful. All descrip-
tions, claims and comparisons which relate
to matters of objectively ascertainable fact
should be capable of substantiation. Adver-
tisers and advertising agencies are required
to produce such substantiation as and when
called upon to do so by the ASCI.
❍ Where advertising claims are expressly stat-
ed to be based on or supported by inde-
pendent research or assessment, the source
and date of this should be indicated in the
advertisement.
❍ Advertisements shall neither distort facts nor
mislead the consumer by means of implica-
tions or omissions. Advertisements shall not
contain statements or visual presentation
which directly or by implication or by omis-
sion or by ambiguity or by exaggeration
are likely to mislead the consumer about
the product advertised or the advertiser or
about any other product or advertiser.
❍ Advertisements shall not be so framed as
to abuse the trust of consumers or exploit
their lack of experience or knowledge. No
advertisement shall be permitted to contain
any claim so exaggerated as to lead to grave
ing are possible on mobiles. One of the most common is the SMS advertising which is estimated to be
over 90% of mobile marketing revenue worldwide. Other forms include MMS advertising, advertising
within mobile games and videos, etc. The effectiveness of a mobile media ad campaign can be measured
either through the cost per impression or cost per click. However, in view of the demand for productivity
and more objective measurement, conversion rates like click to call rates are being used to assess the
effectiveness of mobile advertising. Mobile media can be operative on a mobile webpage or within a
mobile application. Since a mobile phone is an interactive mass media similar to the internet, advertis-
ers are hoping to make use of viral marketing methods in which the recipient of an advertisement of a
mobile can forward it to his friends.
ETHICS IN ADVERTISING
Ethical Standards in Advertising
Advertising Standards Council of India has laid down a Code of Conduct
for advertisers, agencies and the media. This code calls for self-regulation.
The primary objective of this code is to ensure that no advertisement is false
and make claims which the advertiser never intended to fulfil. At the same time the code also requires
the campaign to be transparent and such which should not abuse the trust of the consumer or exploit
the lack of experience or knowledge. Nor should it be offensive to any cast, community, gender, race,
colour or nationality. The detailed code of conduct of the Advertising Standards Council of India is
shown in Exhibit 16.4.
Exhibit 16.4 Advertising Standards Council of India: Code of Conduct
LO6
Describe ethics in
advertising

or widespread disappointment in the minds
of consumers.
❍ Obvious untruths or exaggerations intended
to amuse or to catch the eye of the con-
sumer are permissible provided that they
are clearly to be seen as humorous or hy-
perbolic and not likely to be understood as
making literal or misleading claims for the
advertised product.
❍ In mass manufacturing and distribution of
goods and services it is possible that there
may be an occasional, unintentional lapse
in the fulfilment of an advertised promise
or claim. Such occasional, unintentional
lapses may not invalidate the advertisement
in terms of the Code.
● Ensure that advertisements are not offensive to
generally accepted standards of public decency.
● Ensure to safeguard against the indiscriminate
use of advertising for the promotion of products
which are regarded as hazardous to society or
to individuals to a degree or of a type which is
unacceptable to society at large.
❍ No advertisement shall be permitted which:
■ Tends to incite people to crime or to
promote disorder and violence or in-
tolerance.
■ Derides any race, caste, colour, creed
or nationality.
■ Presents criminality as desirable or di-
rectly or indirectly encourages people,
particularly minors, to emulate it or con-
veys the modus operandi of any crime.
■ Adversely affects friendly relations with
a foreign State.
❍ Advertisements addressed to minors shall
not contain anything, whether in illustration
or otherwise, which might result in their
physical, mental or moral harm or which
exploits their vulnerability.
❍ Advertisements shall not, without justifiable
reason, show or refer to dangerous practices
or manifest a disregard for safety or encour-
age negligence.
❍ Advertisements should contain nothing
which is in breach of the law nor omit any-
thing which the law requires.
❍ Advertisements shall not propagate prod-
ucts, the use of which is banned under the
law.
❍ Advertisements for products whose
advertising is prohibited or restricted by
law or by this code must not circumvent
such restrictions by purporting to be
advertisements for other products the
advertising of which is not prohibited or
restricted by law or by this code. In judging
whether or not any particular advertisement
is an indirect advertisement for product
whose advertising is restricted or prohibited,
due attention shall be paid to the following:
■ Visual content of the advertisement
must depict only the product being ad-
vertised and not the prohibited or re-
stricted product in any form or manner.
■ The advertisement must not make any
direct or indirect reference to the pro-
hibited or restricted products.
■ He advertisement must not create any
nuances or phrases promoting prohib-
ited products.
■ The advertisement must not use partic-
ular colours and layout or presentations
associated with prohibited or restricted
products.
■ The advertisement must not use situ-
ations typical for promotion of pro-
hibited or restricted products when
advertising the other products.
● Ensure that advertisements observe fairness in
competition so that the target consumer needs to
be informed on choices in the marketplace and
the canons of generally accepted competitive
behaviour in business are both served.
❍ Advertisements containing comparisons
with other manufacturers or suppliers or
with other products including those where
a competitor is named are permissible in the
interests of vigorous competition and public
enlightenment provided.
■ It is clear what aspects of the adver-
tiser’s product are being compared
with what aspects of the competitor’s
product.

■ The subject matter of comparison is not
chosen in such a way as to confer an
artificial advantage upon the advertiser
or so as to suggest that a better bargain
is offered than is truly the case.
■ The comparisons are factual, accurate
and capable of substantiation.
■ There is no likelihood of the consumer
being misled as a result of the compari-
son, whether about the product adver-
tised or that with which it is compared.
■ The advertisement does not unfairly
denigrate attack or discredit other prod-
ucts, advertisers or advertisements di-
rectly or by implication.
❍ Advertisements shall not make unjustifi-
able use of the name or initials of any other
firm, company or institution, nor take unfair
advantage of the goodwill attached to the
trade mark or symbol of another firm or
its product or the goodwill acquired by its
advertising campaign*.
❍ Advertisements shall not be similar to any
other advertiser’s earlier run advertisements
in general layout, copy, slogans, presenta-
tions, music or sound effects, so as to sug-
gest plagiarism*.
* Complaints of plagiarism of advertisements re-
leased earlier abroad will lie outside the scope
of this Code except in the undermentioned cir-
cumstances:
❍ The complaint is lodged within 12 months
of the first general circulation of the adver-
tisements/campaign complained against.
❍ The complainant provides substantiation
regarding the claim of prior invention/us-
age abroad.
SUMMARY
Advertising is a powerful tool in brand building exercise as also in creating brand imagery. A good
creative campaign successfully placed in the target media can deliver outstanding results. These
campaigns are the ones that are recalled the most as they appeal to the consumers’ feelings and
emotions. Over the years advertising industry has radically changed primarily because of the expo-
nential growth in consumer industry leading to multiple brands. Growth in print, digital and mobile
media has further contributed to the changes in advertising industry. In India the size of advertising
industry was estimated as `36,200 cr with print media accounting for 44% followed by television
at 33%. By 2017 advertising industry would be `63,000 cr. And digital advertising would have had
a 32% growth and would be `8700 cr. Advertising industry comprises of advertiser, advertising
agency and media which also includes digital and mobile. Advertising decisions relate to objec-
tives, budget ad copy and media choice. It is imperative to evaluate the effectiveness of advertising.
Several approaches are used for the purposes of assessing the effectiveness of an ad. These relate to
consumer awareness, recognition, and comprehension and consumer preference for the brand. It is
also about measuring sales effect of an advertisement. Online advertising and mobile advertising is
today gaining prominence primarily because of the growth of social networks and mobile internet.
Advertisers and advertising agency both must adhere to the code of conduct as laid down by the
Advertising Standards Council of India. It is a code which is based on the principle of self-regulation
and demand that advertisement must be truthful. All descriptions, claims and comparisons must be
capable of being substantiated.

POWER POINTS
1. Advertising is a powerful tool in brand building exercise as also in creating brand imagery.
(LO1)
2. Over the years advertising industry in India has grown by leaps and bounds and expected to
be 63,000 cr by 2017. (LO1)
(LO1)
4. The institutional framework of advertising management includes the advertiser, advertis-
ing agencies, and the media. An advertising agency’s major role is purchase of media time
and space. Besides, it is directly responsible for development of advertising copy and/or the
commercial. Another interesting development is the ‘mega corporatisation’ of advertising
agencies through mergers and acquisitions. (LO2)
5. Media refers to daily newspapers, magazines, technical journals (called the print media),
hoardings, billboards, neon signs, etc. (called outdoor media) cinema and television, video,
cable TV and radio (called the digital and mobile media). (LO2)
6. Marketing research agencies facilitate advertising decisions in all these three institutions. The
of competition within the industry. (LO2)
7. Advertising objectives range from generating sales to creating awareness and brand prefer-
ences.Advertising objectives have to be measurable and communicable in order to to evaluate
performance. Communication is also the major goal of advertising. (LO3)
(LO3)
9. The manager must know what to spend. It is here that he or she may choose between methods
like percent to sales, affordability, competitive parity, and objectives and tasks. Increasingly,
(LO3)
10. Advertising copy decisions are the creative man’s forte. Increasingly, it has been observed
that the agency chief’s philosophy has guided creative strategy development. (LO3)
11. The advertising copy needs to be pre tested on parameters like desirability, exclusiveness,
and believability. The common methodologies used here are recognition, recall, persuasion,
and purchase behaviour tests. (LO3)
12. Media decisions involve the choice of media class, media vehicle, media option and schedul-
ing, and timing of an advertisement. (LO3)
13. Factors considered in choosing the media are its reach, frequency, impact, nature of the prod-
uct, and sometimes even media costs. (LO3)
14. Advertising effectiveness is measured on parameters like brand awareness, knowledge about
the brand and preference of the brand, and sales effect of the brand. (LO4)
15. Advertising through search engines like Google, Yahoo, social networks, aggregators’ portals
and mobile phones have today gained prominence. Mobile advertising is through SMS, MMS,
Mobile games and videos and mobile internet. This is the medium of future. (LO5)
16. Advertisements have got to be true and must not abuse the trust of the consumer or exploit
the lack of experience or knowledge nor should it be offensive for any section of the society.
(LO6)

QUESTIONS FOR DISCUSSION
each of these with appropriate examples. (LO1)
2. What are the goals of advertising? In which situation can sales and behavioural change in the
target audience be considered an advertising goal? (LO2)
3. A leading European departmental store is all set to enter the Indian market. You have been
retained as an advertising consultant. Evolve an advertising strategy for this store. You may
spell out your assumptions and clearly mention objectives, copy platform, and media choices.
(LO3)
4. It is said that advertising is a waste of scarce resources in a developing country like India. Do
you agree? Substantiate your arguments with appropriate examples. (LO4)
age young professionals. You have been hired to develop a communication strategy which will
communication plan for the launch. (LO4, 5 and 6)

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