Ch 16: Advertising, Public Relations, and Sales promotions

The Effects of Advertising

Advertising was defined in Chapter 15 as impersonal, mass communication about a product or organization that is paid for by a marketer. It is a popular form of promotion, especially for consumer packaged goods and services. Increasingly, as more and more marketers consolidate their operations, advertising is seen as an international endeavor. Promotion makes up a large part of most brands’ budgets. Typically, promotional spending is divided into measured and unmeasured media. Measured media ad spending includes network and cable TV, newspapers, magazines, radio, outdoor, and Internet (though paid search and social media are not included).

• sales and market share improvements slow down and eventually decrease no matter how much is spent on advertising and sales promotion. This phenomenon is called the advertising response function . Understanding the advertising response function helps marketers use promotion budgets wisely.

Major Types of Advertising

A firm’s promotional objectives determine the type of advertising it uses. If the goal of the promotion plan is to improve the image of the company or the industry, institutional advertising may be used. In contrast, if the advertiser wants to enhance the sales of a specific good or service, product advertising should be used.

Institutional Advertising

Historically, advertising in the United States has been product and service oriented. Today, however, companies market multiple products and need a different type of advertising. Institutional, or corporate, advertising is designed to establish, change, or promote the corporation’s identity as a whole. Institutional advertising is also important for hiring and recruitment. It usually does not ask the audience to do anything but maintain a favorable attitude toward the advertiser and its goods or services.

• A form of institutional advertising called advocacy advertising is typically used to safeguard against negative consumer attitudes and to enhance the company’s credibility among consumers who already favor its position. Corporations often use advocacy advertising to express their views on controversial issues.

Product Advertising

Unlike institutional advertising, product advertising promotes the benefits of a specific good or service. The product’s stage in its life cycle often determines which type of product advertising is used: pioneering advertising, competitive advertising, or comparative advertising.

• Pioneering advertising is intended to stimulate primary demand for a new product or product category. Heavily used during the introductory stage of the product life cycle, pioneering advertising offers consumers in-depth information about the benefits of the product class. Pioneering advertising also seeks to create interest, and can be quite innovative in its own right. For example, Amazon recently released the Echo smart speaker to broad critical and public acclaim.

• Firms use competitive or brand advertising when a product enters the growth phase of the product life cycle and as other companies begin to enter the marketplace with similar products. Instead of building demand for the product category, the goal of competitive advertising is to influence demand for a specific brand. In the growth phase, promotion often focuses less on being informative and appeals more to emotions. Generally, this phase is where an emphasis on branding begins. Advertisements focus on showing subtle differences between competitive brands, building recall of a brand name, and creating a favorable attitude toward the brand

• Comparative advertising directly or indirectly compares two or more competing brands on one or more specific attributes. Some advertisers even use comparative advertising with their own brands. Products experiencing slow growth or those entering the marketplace against strong competitors are more likely to employ comparative claims in their advertising.

Creative Decisions in Advertising

Advertising strategies are typically organized around an advertising campaign. An advertising campaign is a series of related advertisements focusing on a common theme, slogan, and set of advertising appeals. It is a specific advertising effort for a particular product that extends for a defined period of time.

• Before creative work can begin on an advertising campaign, it is important to determine what goals or objectives the advertising should achieve. An advertising objective identifies the specific communication task a campaign should accomplish for a specified target audience during a specified period. The objectives of a specific advertising campaign often depend on the overall corporate objectives and the product being advertised.

• Once objectives are defined, creative work can begin on the advertising campaign. Advertising campaigns often follow the AIDA model, which was discussed in Chapter 15. Depending on where consumers are in the AIDA process, the creative development of an advertising campaign might focus on creating attention, arousing interest, stimulating desire, and ultimately leading to the action of buying the product.

Developing and Evaluating Advertising Appeals

An advertising appeal identifies a reason for a person to buy a product. The challenging task of developing advertising appeals is typically the responsibility of the creative team (e.g., art directors and copywriters) in the advertising agency. Advertising appeals are based on findings from data analytics and typically play off consumers’ emotions or address some need or want consumers have.

Common Advertising Appeals

The advertising appeal selected for the campaign becomes what advertisers call its unique selling proposition . The unique selling proposition often becomes all or part of the campaign’s slogan. The Snickers candy bar is known for its ability to stop hunger. To emphasize this attribute, the company recently changed the logo on its packaging to words associated with hunger, such as “snippy” and “grouchy.” This move helped the brand stand out in a crowded snack market.

Executing the Message

Message execution is the way an advertisement portrays its information. In general, the AIDA plan (see Chapter 15) is a good blueprint for executing an advertising message. Any ad should immediately draw the attention of the reader, viewer, or listener. The advertiser must then use the message to hold interest, create desire for the good or service, and ultimately motivate a purchase.

Media Decisions In Advertising

A major decision for advertisers is the choice of medium —the channel used to convey a message to a target market. Media planning , therefore, is the series of decisions advertisers make regarding the selection and use of media, enabling the marketer to optimally and cost-effectively communicate the message to the target audience.

Media Types

Advertising media are channels that advertisers use in mass communication. The six major advertising media are newspapers, magazines, radio, television, the Internet, and outdoor media.

Newspapers

Newspapers are one of the oldest forms of media. The advantages of newspaper advertising include geographic flexibility and timeliness. Although there has been a decline in circulation as well as in the number of newspapers, nationally, there are still several major newspapers including the Wall Street Journal, USA Today, the New York Times, the Los Angeles Times, and the Washington Post. Most newspapers, however, are local.

Magazines

Magazines are another traditional medium that continues to be successful. Some of the top magazines according to circulation include AARP, Game Informer Magazine, Better Homes and Gardens, Reader’s Digest, and Good Housekeeping. But the cost per contact in magazine advertising is usually high as compared with the cost of advertising in other media.

Radio

Radio has several strengths as an advertising medium: selectivity and audience segmentation, a large out-of-home audience, low unit and production costs, timeliness, and geographic flexibility. Local advertisers are the most frequent users of radio advertising, contributing over 75 percent of all radio ad revenue. As with newspapers, radio also lends itself well to cooperative advertising.

Television

Television broadcasting media include network television, independent stations, cable television, and direct broadcast satellite television. Network television reaches a wide and diverse market, and cable television and direct broadcast satellite systems, such as DIRECTV and DISH Network, broadcast a multitude of channels devoted to highly segmented markets. Because of its targeted channels, cable television is often characterized as “narrowcasting” by media buyers

The Internet

Note that global online advertising spending reached $214.4 billion in 2018, eclipsing television’s $200.8 billion.

Online advertising includes search engine marketing (e.g., pay-per-click ads like Google AdWords), display advertising (e.g., banner ads, video ads), social media advertising (e.g., Facebook ads), email marketing, and mobile marketing (including mobile advertising and SMS). Some online channels, like Google, offer the ability toaudience buy(whereby advertisers can purchase ad space targeted to a highly specific group), but others, such as Turner, Digital, and FunnyorDie, believe the complex cookie-based strategy poses too many risks.

Out-of-Home Media (OOH)

Out-of-home advertising (OOH) or outdoor advertising is a flexible, low-cost medium that may take a variety of forms. Examples include billboards, skywriting, giant inflatables, mini billboards in malls and on bus stop shelters, signs in sports arenas, and lighted moving signs in bus terminals and airports, as well as ads painted on cars, trucks, buses, water towers, manhole covers, drinking glass coasters, and even people, called “living advertising.” The plywood scaffolding surrounding downtown construction sites often holds ads, which in places like Manhattan’s Times Square, can reach over a million viewers a day.

Media Selection Considerations

An important element in any advertising campaign is the media mix , the combination of media to be used. Media mix decisions are typically based on several factors: cost per contact, cost per click, reach, frequency, target audience considerations, flexibility of the medium, noise level, and the life span of the medium.

• Cost per contact , also referred to as cost per thousand (CPM) , is the cost of reaching one member of the target market. Naturally, as the size of the audience increases, so does the total cost. Cost per contact enables an advertiser to compare the relative costs of specific media vehicles

• Cost per click is the cost associated with a consumer clicking on a display or banner ad. Although there are several variations, this option enables the marketer to pay only for “engaged” consumers—those who opted to click on an ad.

• Reach is the number of target customers who are exposed to a commercial at least once during a specific period, usually four weeks. Media plans for product introductions and attempts at increasing brand awareness usually emphasize reach

• Frequency is the number of times an individual is exposed to a given message during a specific period. Advertisers use average frequency to measure the intensity of a specific medium’s coverage. Research suggests that the optimal number of exposure varies by medium, product category, and type of ad.

• A medium’s ability to reach a precisely defined market is its audience selectivity . Some media vehicles, like general newspapers and network television, appeal to a wide cross section of the population. Others—such as The Knot, Popular Mechanics, Architectural Digest, In Style, MTV, ESPN, and Christian radio stations— appeal to very specific groups.

• The flexibility of a medium can be extremely important to an advertiser. For example, because of layouts and design, the lead time for magazine advertising is considerably longer than for other media types, so it is a less flexible medium. By contrast, radio and Internet advertising provide maximum flexibility. If necessary, an advertiser can change a radio ad on the day it is aired.

  • Noise level is the amount of distraction experienced by the target audience in a medium. Noise can be created by competing ads, as when a street is lined with billboards or when a television program is cluttered with competing ads.

  • Media have either a short or a long life span, which means that messages can either quickly fade or persist as tangible copy to be carefully studied. A radio commercial may last less than a minute, but advertisers can overcome this short life span by repeating radio ads often. In contrast, a magazine has a relatively long life span, which is further increased by a high pass-along rate.

• Media Scheduling

  After choosing the media for the advertising campaign, advertisers must schedule the ads. A media schedule designates the medium or media to be used (such as magazines, television, or digital), the specific vehicles (such as People magazine, the show This is Us on television, or Rush Limbaugh’s national radio program), and the insertion dates of the advertising.

• A continuous media schedule is designed so that the ad runs steadily throughout the advertising period. Examples include Ivory soap and Charmin toilet tissue, which may have an ad in the newspaper every Sunday and a television commercial on NBC every night during the week at 7:30 p.m. over a three-month time period.

• With a flighted media schedule , the advertiser may schedule the ads heavily every other month or every two weeks to achieve a greater impact with an increased frequency and reach at those times. Similarly, movie studios might schedule television advertising on Wednesday and Thursday nights, when moviegoers are deciding which films to see that weekend.

• A pulsing media schedule combines continuous scheduling with flighted scheduling; it is continuous advertising that is more frequent during the best sale periods. A retail department store may advertise on a year-round basis but place more advertising during certain sale periods, such as Thanksgiving, Christmas, and back to school.

• Certain times of the year call for a seasonal media schedule . Products like Nyquil cold medicine and Coppertone sunscreen, which are used more during certain times of the year, tend to follow a seasonal strategy.

Public Relations

Public relations is the element in the promotional mix that evaluates public attitudes, identifies issues that may elicit public concern, and executes programs to gain public understanding and acceptance.

• Publicity is the effort to capture media attention—for example, through articles or editorials in publications or through human-interest stories on radio or television programs. Companies usually initiate publicity through press releases that further their public relations plans. A company about to introduce a new product or open a new store may send press releases to the media in the hope that the story will be published or broadcast

• New-Product Publicity

  Publicity is instrumental in introducing new products and services. Publicity can help advertisers explain what’s different about their new product by prompting free news stories or positive word of mouth about it. During the introductory period, an especially innovative new product often needs more exposure than provided by conventional, paid advertising

• Marketers are increasingly using product placement to reinforce brand awareness and create favorable attitudes. Product placement is a strategy that involves getting one’s product, service, or name to appear in a movie, television show, radio program, magazine, newspaper, video game, video or audio clip, book, commercial for another product, on the Internet, or at special events.

• Consumer Education

  Some major firms believe that educated consumers are more loyal customers. Financial planning firms often sponsor free educational seminars on money management, retirement planning, and investing in the hope that the seminar participants will choose the sponsoring organizati

• With sponsorship , a company spends money to support an issue, cause, or event that is consistent with corporate objectives, such as improving brand awareness or enhancing corporate image. The biggest category of sponsorships is sporting events; this category accounts for almost 70 percent of spending in sponsorships and has grown steadily in recent years

• Company Websites

  Companies are increasingly using the Internet in their public relations strategies. Company websites are used to introduce new products; provide information to the media, including social media news releases; promote existing products; obtain consumer feedback; communicate legislative and regulatory information; showcase upcoming events; provide links to related sites