COM 107 Test 2

Monopoly

A single firm dominates production and distribution of an industry. Ex: AT&T had a government-approved monopoly for 100+ years, until the 1980s

Oligopoly

A few firms dominate an industry. Ex: US film and music industries

Limited competition

Lots of producers and sellers, but a limited offering of products

Implications of oligopoly

Ability to take bigger risks; economies of scale; bigger budgets (spectacle); globalization

Economies of scale

Increasing production levels to reduce the overall cost per unit. Ex: studios, repurposed sets

Synergy

A company promotes and profits from a product across all its divisions and platforms so it can advertise everywhere. Ex: Disney's Million Dollar Arm movie

Globalization

The American film industry makes more money from international distribution (~$30 billion) than from US revenue (~$10 billion)

Concentration of ownership

Control of media being held by a small number of companies

Bundling of services

Companies like Comcast and AT&T try to corner all communications by packaging internet, phone, mobile, and satellite together

Merger

Two or more companies combine into a single company

Vertical merger

A company combines with its supplier or customer. Ex: a car company buys a tire company

Sherman Antitrust Act (1890)

First regulation to ban monopolies; makes it a felony to monopolize or conspire to monopolize trade. Used against oil companies

Clayton Antitrust Act (1914)

Strengthened merger control and clarified unfair competition; restricted price discrimination, anticompetitive mergers, and competing directors; gave businesses and consumers the right to sue

Celler-Kefauver Act (1950)

Limited corporate mergers that would hurt competition; specifically concerned with vertical mergers

FTC (Federal Trade Commission)

Created in 1914 to regulate business; oversees the Sherman, Clayton, and Celler-Kefauver Acts

FCC (Federal Communications Commission)

Regulates in the public interest; covers the TV and radio industries

Laissez-faire market

The government stays out of business and lets the market run itself. Ex: the Telecommunications Act, FCC loosening rules, 7-7-7 expanded to 12-12-12

Regulated market

The government sets rules to protect competition and consumers (antitrust laws)

Deregulation

Removing media regulations, based on the ideology that free market = democracy and corporations deserve the same rights as individuals. Began with President Jimmy Carter in the late 1970s

7-7-7 rule

Limit on how many stations one company could own; expanded to 12-12-12 in 1984, with further expansion in 1992 and 1994

1996 Telecommunications Act

Lifted limits on how many TV and radio stations one company can own; let phone companies into TV and radio; let cable raise rates (expanded basic cable up 122% from 1995 to 2008)

Rhetoric

The study of the persuader's power: claims and proofs

Inartistic proofs

Facts, data, photos, testimony that exist outside the persuader

Artistic proofs

Appeals crafted by the persuader for the audience: ethos, pathos, logos

Ethos

Credibility and trust; built on trustworthiness, attractiveness, and expertise

Pathos

Emotion and imagination

Logos

Logic, facts, and consistency

Cognitive dissonance

Unpleasant tension from holding two conflicting attitudes or beliefs. Ex: we love animals but we eat meat. Persuaders create it, then show how to resolve it

Boomerang effect

When a persuasive message backfires and the audience adopts the opposite attitude

Elaboration Likelihood Model (ELM)

Theory that people process persuasive messages by two routes, central or peripheral. Ex: Nixon vs. JFK on TV and radio

Central route

Critical thinking: fully processing the arguments; attitude change is more likely to be permanent and predict behavior

Peripheral route

Shortcut: reacting to cues like attractiveness, likability, visuals, and tone; attitude change is impermanent and does not predict behavior

Demographics

Who the audience is: age, sex, race, status, profession, location, sexuality

Psychographics

What the audience believes: attitudes, wants, preferences, hobbies

VALS

A psychographic segmentation system that sorts US adult consumers into eight groups by primary motivation and resources

Advertising

Paid, nonpersonal communication about products, services, or ideas by identified sponsors through the media

1917 advertising

US entered WWI; advertising turned to supporting the war effort

1941 War Advertising Council

Volunteer advertising professionals who helped the WWII effort (Rosie the Riveter, Loose Lips Sink Ships); still exists today as the Ad Council (drunk driving and social campaigns)

1950s advertising

Birth of TV as the major medium; advertising supported by research; leisure-time ads

Rosser Reeves

Created the unique selling proposition (USP)

Unique selling proposition (USP)

A distinct benefit that sets a product apart from competitors. Ex: Excedrin as the headache medicine

Leo Burnett

Created icons like the Marlboro Man (1955), Jolly Green Giant, and Morris the Cat

1960s advertising

Creative revolution (Ogilvy, Burnett, Bernbach); targeting of women

1970s advertising

NARB formed (1971); Surgeon General warning on cigarettes; ban on radio and TV cigarette ads (1972); shorter TV commercials; Trout & Ries positioning

NARB (National Advertising Review Board)

Formed in 1971; an industry self-regulation board that corrects false or harmful ads

Positioning (Trout & Ries)

Positioning a product in relation to its competition

1980s advertising

MTV; more visual styling and storytelling; relaxed government controls; sex appeals

1990s advertising

Infomercials; the internet; viral and guerilla ads; controversy as a creative strategy; products define lifestyle and individuality

2000-present advertising

Dialogue; consumer driven; micro-targeting; mobile consumers and mobile media

Advertising conclusions

Ads correspond with existing cultural frames; messages changed from what a product does to what a product says

Regulation of advertising

FTC (advertisers must back up claims); ban on cigarette ads in 1972; NARB self-regulation

Marketing mix

The set of tools a company uses to sell a product (the 4 Ps)

4 Ps

Product (what), Price (cost), Place (how it's distributed), Promotion (advertising)

Advertising and the marketing mix

Advertising is only one P (promotion), can't be tied directly to sales or profit, so objectives are communication goals, not sales goals

Maslow's hierarchy of needs

Self-actualization > Esteem > Love and Belonging > Safety > Physiological

Physiological need

Basic needs: food, water, sleep, shelter

Safety need

Security: insurance, health

Love and belonging need

Relationships and social acceptance. Ex: hygiene and alcohol ads

Esteem need

Being seen as a leader or respected. Ex: powerful women ads

Self-actualization

Living your best life; motivation, fitness

Hierarchy of advertising effects

Moves consumers through Learn, Feel, Do. Expanded version: Awareness > Knowledge > Understanding > Liking > Preference > Action

Taylor's 6-segment message strategy wheel

Framework for choosing an ad message strategy: Ego, Social, Sensory, Routine, Acute, Informational

Ego (ritual)

Luxury and self-image. Ex: a Lambo. Order: Feel, Learn, Do

Social (ritual)

Alcohol, restaurants, tickets, makeup. Order: Feel, Learn, Do

Sensory (ritual)

Little lifestyle treats, like name brand over store brand. Order: Do, Feel, Learn

Routine (transmission)

Hygiene and food; barely thinking. Order: Do, Learn, Feel

Acute (transmission)

Purchases that need no info: medicine, car tires, emergencies. Order: Do, Learn, Feel

Informational (transmission)

Heavily researched purchases like cars or TVs. Order: Learn, Feel, Do

Humor appeal

Culturally bound (age, education, gender) and risky, but memorable, boosts positive associations and word of mouth

Fear appeal

Develop the severity of the threat, prove its likelihood, and show the efficacy of the solution; give an easy action to resolve the fear

Sex appeal

Common in fashion, beauty, and fragrance products

Media planning

The strategic process of deciding where, when, and how often an ad should run to reach the target audience

Media buying

Negotiating and purchasing the ad space or time the media plan calls for

Product placement

Products shown in scripted entertainment; advertisers pay for the placement

Product integration

A product built into the storyline, actively acknowledged by characters

Native advertising

Paid content that matches the look of editorial content, often written with a publication's editorial staff, with subtle labeling

Public relations (PR)

The management function that establishes and maintains mutually beneficial relationships between an organization and the publics on whom its success or failure depends

POEM model

Paid, Owned, Earned media: the types of media a brand uses to reach consumers

Paid media

The brand controls the messaging. Ex: ads

Owned media

Channels the brand controls. Ex: website, internal communications, events

Earned media

Coverage others give the brand. Ex: shares, reviews, news coverage

Press agent

A person who promotes to get media attention, often using exaggeration or hype; the goal is attention

Publicity

Media coverage of an organization without it paying for placement. Ex: news covering a new bakery

Press release

A short written announcement sent to the media to share news

Video news release (VNR)

A pre-produced video segment made by an organization and designed to look like a real news story so TV stations can air it as is or edit it

Pseudo-event

An event staged mainly to get media coverage, not because it would happen naturally. Ex: a ribbon-cutting

Different Publics

The groups of people an organization's success or failure depends on

Internal public

Inside the organization: employees, stockholders

External public

Outside the organization: clients and consumers, media organizations, government agencies, community leaders, general public

Primary public

Active, loyal supporters; direct clients and vendors

Latent public

An unformed group until a triggering event, then suddenly interested

Hostile public

Antagonistic toward the speaker or message; unreceptive, even argumentative

Motivated public

Positive attitudes toward the speaker or topic; needs to be inspired and encouraged

Influencer (Lou, 2021)

A content creator who consistently creates and shares digital content within a specific knowledge domain

Nano influencer

1-10K followers

Micro influencer

10-100K followers

Macro influencer

100K-1M followers

Mega influencer

1M+ followers

True influence

Follower stickiness: how many followers follow an influencer through purchases, ideals, or something in between, not just follower count

Mommy bloggers

Parents who blog about family life; an early example of influencers