MKT CH 15

Most advertising money is spent in

North America, Asia, and Europe

Producers of consumer products generally spend

a larger percentage on advertising than firms that produce business products

Advertising Agencies

Specialists in planning and handling mass-selling details for advertisers

• independent of advertiser and have an outside viewpoint

• bring experience and can do the job more economically

Every ad and advertising campaign should have

clearly defined objectives that grow out of the firm’s overall marketing strategy and the promotion jobs assigned to advertising.

Good advertising objectives are

• specific

• measurable

• include a timeframe

Adoption Process Stages

1. Awareness

2. Interest

3. Evaluation & Trial

4. Decision

5. Confirmation

Adoption Process Stages: Awareness

• Teaser campaigns

• Pioneering ads

• Jingles & slogans

• Viral advertising

• Announcements

Adoption Process Stages: Interest

• Informative or descriptive ads

• Image & celebrity ads

• Email ads

• Demonstration of benefits

Adoption Process Stages: Evaluation & Trial

• Competitive ads

• Persuasive copy

• Comparative ads

• Testimonials

• Search ads

Adoption Process Stages: Decision

• Direct-action retail ads

• Point of purchase ads

• Price deal offers

Adoption Process Stages: Confirmation

• Reminder ads

• Informative “why” ads

Firms should work closely with other _______________ to coordinate advertising efforts to get the best results.

channel members

Advertising Allowances

Price reductions to firms in the channel to encourage them to advertise or otherwise promote the firm’s products locally

Cooperative Advertising

Producers sharing in the cost of adds with wholesalers or retailers

2 Basic Types of Advertising

1. Product (includes pioneering, competitive, and reminder)

2. Institutional

Product Advertising

Advertising that tries to sell a specific product

Institutional Advertising

Advertising that tries to promote an organization’s image, reputation, or ideas rather than a specific product (may inform, persuade, or remind)

Product Advertising: Pioneering

Advertising that tries to develop primary demand for a product category rather than demand for a specific brand

Pioneering Advertising is usually done in the

early stages of the product life cycle

• turns potential customers into adopters

Product Advertising: Competitive

Advertising that tries to develop a selective demand for a specific brand rather than a product category

Competitive Advertising is forced onto a firm when

the product life cycle moves along - to hold its own against competitors.

Competitive Advertising: Direct

Competitive advertising that aims for immediate buying action

Competitive Advertising: Indirect

Competitive advertising that points out product advantages - to affect future buying decisions

Comparative Advertising

Advertising that makes specific brand comparisons using actual product names

Product Advertising: Reminder

Advertising to keep the product’s name before the public

Reminder advertising may be useful when the product has achieved

brand preference or insistence, perhaps in the market maturity or sales decline stages

Institutional advertising usually focuses on the

name and prestige of an organization or industry

Institutional advertising’s basic objective is to

develop goodwill or improve an organization’s relations with various groups (customers, shareholders, employees, etc)

Advertising Media

The various means/ mediums by which a message is communicated to its target market

Effectiveness depends on how well the medium fits with

the rest of a marketing strategy

1. promotion objectives

2. target markets you want to reach

3. funds available for advertising

4. nature of the media

Nature of Media

• whom they reach

• with what frequency

• with what impact

• at what cost

Digital: Mobile → Advantages

• Ads link to more detailed website

• Some “pay for results”

• Easier to track results

• Can be highly targeted

• Precise-location based

Digital: Mobile → Disadvantages

• Hard to compare costs with other media

• More focused on later stages of purchase process

Digital: Desktop/ Laptop → Advantages

• Ads link to more detailed website

• Some “pay for results”

• Easier to track results

• Can be highly targeted

Digital: Desktop/ Laptop → Disdvantages

• Hard to compare costs with other media

• More focused on later stages of purchase process

TV→ Advantages

• Demonstrations

• Image building

• Good Attention

• Wide reach

• Cable can be targeted

TV→ Disadvantages

• “Clutter”

• Ads compete for attention

• Expensive

• Limited time (30 seconds or less)

• Often skipped by viewers

Radio → Advantages

• Wide reach

• Segmented audience

• Inexpensive

• Use of sound & voices can help create certain image of business

Radio → Disdvantages

• Weak attention

• Many different rates

• Short exposure

• Declining audience

• Listeners can’t review the ad

• Ads interrupt entertainment

Magazines → Advantages

• High reader involvement

• Very targeted

• Good detail

• Some “pass along”

• Image quality high

Magazines → Disdvantages

• Inflexible

• Long lead times

• Cost can be high

• Limited flexibility on location of ad within magazine

Out-of-Home (billboards,cinemas, bus stops, etc.) → Advantages

• Captive audience

• Can be geographic and local

Out-of-Home (billboards,cinemas, bus stops, etc.) → Disdvantages

• Outdoor: “glance” medium

• Cinema: primarily a younger audience

Advertisers pay for the

whole audience a chosen meda delivers, including those who aren’t potential customers

To ensure good media selection, the advertisers first must

clearly specify its target market. Then the advertiser can choose media to reach those target customers.

Today, advertisers direct more attention to reaching

smaller, more defined target markets

TV tailors ads to individual households using

big data from consumers’ credit and loyalty cards, online activities

Addressable TV is a technology that allows cable television to

deliver specific ads to each household instead of advertising to everyone watching a particular show

Magazines sort readers by

special interests

Pay-per-Click

An advertiser pays media costs only when a customer clicks on the ad that leads to the advertiser’s website

Most media charge customers based on the

number of people who see an ad

Most websites use a

pay-per-click advertising model

Retargeting (aka behavioral retargeting)

Displaying ads to a web user based on sites he or she has previously visited

Programmatic Delivery refers to the

use of software and artificial intelligence to automate placing online advertising on websites or in social media to target users

• Increases the efficiency and effectiveness of media planning

• low cost makes it easier to target customers more precisely

Digital Ad: Banner Ads → Advantages

• Relatively low cost

• Banner ads work best for building a brand and image

• Good tracking tools can measure effectiveness

• Targeted ads can bring in customers

Digital Ad: Banner Ads → Disadvantages

• Some types (ex:pop-up) can be intrusive

• Browser ad blockers may limit reach

• So relevant that people tend to ignore them

Digital Ad: Directories & Classifieds (ex: Craigslist) → Advantages

• Low cost

• Highly targeted

• Best for customers ready to buy

Digital Ad: Directories & Classifieds (ex: Craigslist) → Disadvantages

• Doesn’t work for brand building

• Doesn’t fit for large companies

Digital Ad: Search Advertising (ex:Google ads) → Advantages

• Easy to set budget and control costs

• Targets users in information-gathering stage of the buying process

• Easy to measure return on investment

• Highly targeted

• High credibility

Digital Ad: Search Advertising (ex:Google ads) → Disadvantages

• Bidding process for keywords can become costly

• Information overload for customers

• Limited space for copy thrust

• Limited/no image capability

Digital Ad: Social Media Advertising → Advantages

• High knowledge of individuals

• Potentially wide reach

• Can stimulate viral

• Can be narrowly targeted

• Relatively low cost

• Endorsement from friends (likes) can be powerful

• Easy to set a budget

Digital Ad: Social Media Advertising → Disadvantages

• Users of social media actively avoid advertising

• Advertiser generally has fewer data than from other sources

Digital Ad: Mobile Advertising → Advantages

• A large and growing audience

• Works best for high-involvement/utilitarian products

• Potential for location-based targeting

• Works well for immediate purchase

Digital Ad: Mobile Advertising → Disadvantages

• Technical limitations (small screen, bandwidth, data transfer)

• No user friendly

• Not very interactive

• Measurement tools still emerging

Banner/ Display Ads

A type of online advertising that places an ad on a web page, often across the top or to the side of the page’s primary content

• Click-through rate is low

Click-Through Rate

The number of people who click on the ad divided by the number of people this ad is presented to

Banner Ads often have the goal of

generating awareness and building a brand

Influencers

Trusted or well-known figures who can sway attitudes or purchase decisions among a particular target market - to promote a brand

Click Fraud

Occurs when a person or software program automatically clicks on an add without having any interest in the ad’s subject. The intent is to defraud the advertiser and make money for an unscrupulous website

Copy Thrust

What the words and illustrations of an ad should communicate

A guide to message planning: AIDA

• getting Attention

• holding Interest

• arousing Desire

• obtaining Action

AIDA: getting Attention

Anything different or eye-catching: shocking statements, special effects, etc.

AIDA: holding Interest

The tone and language of the ad must fit with the experiences and attitudes of the target customers and their reference groups

AIDA: arousing Desire

An ad should usually focus on a unique selling proposition, the main point of differentiation from competitors. It should aim at an important unsatisfied need.

AIDA: obtaining Action

Direct-response ads can sometimes promote action by encouraging interested consumers to do something even if they aren’t ready to make a purchase

Native Advertising

Advertising designed not to look like ads; it mimics the look and feel of the platform on which the ad appears

Corrective Advertising

Ads to correct deceptive advertising

If the Federal Trade Commission (FTC) decides that a particular practice is unfair or deceptive, it has the power to require

affirmative disclosures or cocrective advertising.

Sales Promotion

refers to Promotion activities (other than advertising, publicity, and personal selling) - that stimulate interest, trail, or purchase by final customers or others in the channel.

Sales Promotion Objectives

usually focus on prompting some short-term action.

Sales Promotion Activities: Aimed @ Final Consumers or Users

• Contests

• Coupons

• Aisle Displays

• Samples

• Trade Shows

• Point-of-purchase materials

• Frequent buyer programs

• Sponsored events

• Partnering with causes

• Limited availability products

Sales Promotion Activities: Aimed @ Wholesalers or Retailers

• Price deals

• Promotion allowances

• Sales contests

• Calendars

• Gifts

• Trade shows

• Meetings

• Catalogs

• Merchandising Aids

• Videos

Sales Promotion Activities: Aimed @ Company’s Own Sales Force

• Contests

• Bonuses

• Meetings

• Portfolios

• Displays

• Sales aid

• Training Materials

Trade Promotion

Sales promotion aimed at intermediaries