Marketing 4 - Chapter 17

Advertising

Paid nonpersonal communication about an organization and its products transmitted to a target audience through mass media

Pros and Cons of different media vehicles

Newspapers:

Pros: Reach a large audience; purchased to be read; geographic flexibility; short lead time; frequent publication; favorable for cooperative advertising; merchandising services

Cons: Not selective for socioeconomic groups or target market; short life;
limited reproduction capabilities; large
advertising volume limits exposure to
any one advertisement

Magazines:

Pros: Demographic selectivity; good reproduction; long life; prestige; geographic selectivity when regional issues are available; read in leisurely manner

Cons: High costs; 30- to 90-day average lead time; high level of competition; limited reach; communicates less frequently

Direct mail:

Pros: Little wasted circulation; highly selective; circulation controlled by advertiser; few distractions; personal; stimulates actions; use of novelty; relatively easy to measure performance; hidden from competitors

Cons: Very expensive; lacks editorial content to attract readers; often thrown away unread as junk mail; criticized as an invasion of privacy; consumers must choose to
read the ad

Radio:

Pros: Reaches 93 percent of U.S. adults; highly mobile and flexible; very low relative costs; ad can be changed quickly; high level of geographic and
demographic selectivity; encourages use of imagination
Cons: Lacks visual imagery; short life of message; listeners’ attention limited
because of other activities; market fragmentation; difficult buying procedures; limited media and audience research

Television:

Pros: Reaches large audiences; high frequency available; dual impact of audio and video; highly visible; high prestige; geographic and demographic selectivity; difficult to ignore; on-demand capabilities

Cons: Very expensive; highly perishable message; size of audience not guaranteed; amount of prime time limited; lack of selectivity in target market

Digital, social, mobile, media:

Pro: Immediate response; potential to reach a precisely targeted audience; ability to track customers and build databases; highly interactive medium; real-time analytics

Cons: Costs of precise targeting are high; inappropriate ad placement; effects difficult to measure; concerns about security and privacy

Outdoor:

Pros: Allows for frequent repetition; low cost; message can be placed close to point of sale; geographic selectivity; operable 24 hours a day; high creativity and
effectiveness
Cons: Message must be short and simple; no demographic selectivity; seldom attracts readers’ full attention; criticized as a traffic hazard and blight on countryside; much wasted coverage; limited capabilities

Reach vs. frequency

Reach: the percentage of consumers in a target market exposed to an advertisement in a specified period.

Frequency: the number of times targeted consumers are exposed to an advertisement in a specified period

Minimum Frequency

At least 3, it’s the minimum number of times a consumer needs to be exposed to a message to retain it.

Different types of advertising

Institutional (Advocacy)

Product (Pioneer, competitive)

Reminder

Native

Institutional advertising

Advertising that promotes organizational images, ideas, and political issues
May aim to create a more favorable view of the
organization in the eyes of noncustomer groups, such
as shareholders, consumer advocacy groups, potential
shareholders, or the general public

Advocacy advertising – Advertising that promotes a
company’s position on a public issue

Product advertising

Advertising that promotes the uses, features, and
benefits of products

Two types of product advertising:
–Pioneer advertising: tries to stimulate demand for a
product category rather than a specific brand by
informing potential buyers about the new product
–Competitive advertising: aims to stimulate demand for
a specific brand by promoting its features, uses, and
advantages relative to competing brands

Reminder advertising

Advertising used to remind consumers about an established brand’s uses, characteristics, and benefits

Native advertising

Digital advertising that matches the appearance and purpose of the content in which it is embedded

Steps in the advertising campaign

1. Identify and analyze target audience

2. Define advertising objectives

3. Create advertising platform

4. Determine advertising appropriation

5. Develop media plan

6. Create advertising message

7. Execute campaign

8. Evaluate advertising effectiveness

Media scheduling options

Continuous: Advertising runs at a constant level with little variation throughout the campaign period

Flighting: Advertisements run for a set period of time, alternating with periods in which no ads run

Pulsing: During specific time periods, additional advertising is used to intensify the level of communication with the target audience.

Methods for determining advertising budget

Objective-and-task: Determining advertising objectives and then calculating the cost of all the tasks needed to attain them

Percent-of -sales: Multiplying the firm’s past and expected sales by a standard percentage based on what the firm has traditionally spent on advertising and the industry average for advertising spending

Competition-matching: setting the advertising budget to match the competitors’ spending on advertising

Arbitrary: Setting the advertising budget at a level specified by a high-level executive in the firm

CPM and how to calculate it

Cost per thousand (CPM)

The indicator is stated as the cost of exposing one thousand people (CPM) to an advertisement in a medium

CPM = (Cost of ad space/circulation) x100

Evaluation tests

Recognition test – A posttest in which respondents are shown the actual ad and asked if they recognize it
Unaided recall test – A posttest in which respondents are asked to identify advertisements they have seen recently but are not given any recall clues
Aided recall test – A posttest that asks respondents to identify recent ads and provides clues to jog their memories

Parts of an advertisement

Product Features, Uses, and Benefits

Characteristics of the Target Audience

Advertising Campaign Objectives and Platform

Choice of Media

Public relations

Communications efforts used to create and maintain favorable relations between an organization and its stakeholders
Focuses on enhancing the image of the total organization

Tools for public relations

Written materials
Brochures, Newsletters, Company magazines, News releases, Annual reports, Corporate identity materials, Speeches, Sponsored events

Public relations vs. publicity

Publicity: a news story type of communication transmitted through a mass medium at no charge

Publicity focuses on immediate media attention/public visibility, and public relations focuses on long-term relationships and reputations

Pros and cons of publicity

Pros:

Credibility, News value, Low cost, Significant word-of-mouth communication, A perception of being endorsed by the media

Cons:

Must be accepted by the news media; must be timely, interesting, accurate, and in the public interest; inability to control content or the time of release to the public