Lamb Hair Mc Daniel 2010 2011 CHAPTER 17

Lamb, Hair, Mc. Daniel 2010 -2011 CHAPTER 17 Advertising and Public Relations 1

Learning Outcomes LO 1 Discuss the effects of advertising on market share and consumers LO 2 Identify the major types of advertising LO 3 Discuss the creative decisions in developing an advertising campaign LO 4 Describe media evaluation and selection techniques LO 5 Discuss the role of public relations in the promotional mix 2

The Effects of Advertising Discuss the effects of advertising on market share and consumers LO 1 3

The Effects of Advertising u. U. S. advertising are expected to decline in difficult economic times u. In recent years, 30 companies spent more than $1 billion each u 850, 000 people work in media advertising such as newspapers, magazines, television, radio, and internet media. u. More than 100 companies spend over $300 million annually. LO 1 4

Advertising and Market Share New brands with a small market share spend proportionally more for advertising and sales promotion than those with a large market share. u Beyond a certain level of spending, diminishing returns set in. u New brands require higher spending to reach a minimum level of exposure needed to affect purchase habits. LO 1 5

The Effects of Advertising on Consumers u The average U. S. citizen is exposed to hundreds of ads each day. u Advertising may change a consumer’s negative attitude toward a product, or reinforce a positive attitude. u Advertising can affect consumer ranking of a brand’s attributes. LO 1 6

REVIEW LEARNING OUTCOME Effects of Advertising Return on advertising expense (in sales or market share) Maintaining sales/share Building sales/share Advertising response function Money spent LO 1 P P P Advertising can: ____ change negative attitude to positive ____ reinforce positive attitude ____ affect how consumers rank brand attributes 7

Major Types of Advertising Identify the major types of advertising LO 2 8

Major Types of Advertising LO 2 Institutional Advertising Enhances a company’s image rather than promotes a particular product. Product Advertising Touts the benefits of a specific good or service. 9

Major Types of Advertising Institutional Advertising Corporate identity Advocacy advertising Pioneering Product Advertising Competitive Comparative LO 2 10

Product Advertising Pioneering § Stimulates primary demand for new product or category § Used in the PLC introductory stage Competitive § Influences demand for brand in the growth phase of the PLC § Often uses emotional appeal Comparative § Compares two or more competing brands’ product attributes § Used if growth is sluggish, or if competition is strong LO 2 11

REVIEW LEARNING OUTCOME The Major Types of Advertising LO 2 12

Creative Decisions in Advertising Discuss the creative decisions in developing an advertising campaign LO 3 13

Creative Decisions in Advertising Campaign A series of related advertisements focusing on a common theme, slogan, and set of advertising appeals. LO 3 14

Creative Decisions in Advertising Determine the advertising objectives Make creative decisions Make media decisions Evaluate the campaign LO 3 15

Setting Objectives: The DAGMAR Approach Define target audience Define desired percentage change Define the time frame for change LO 3 16

Creative Decisions Identify product benefits Develop and evaluate advertising appeals Execute the message Evaluate the campaign’s effectiveness LO 3 17

Identify Product Benefits u “Sell the Sizzle, not the Steak” u Sell product’s benefits, not its attributes u A benefit should answer “What’s in it for me? ” u Ask “So? ” to determine if it is a benefit LO 3 18

Identify Product Benefits Attribute “Powerade’s new line has been reformulated to combine the scientific benefits of sports drinks with B vitamins and to speed up energy metabolism. ” “So? ” Benefit LO 3 “So, you’ll satisfy your thirst with a great-tasting drink that will power you throughout the day. ” 19

Advertising Appeals Profit Product saves, makes, or protects money Health Appeals to body-conscious or health seekers Love or romance Used in selling cosmetics and perfumes Fear Social embarrassment, old age, losing health Admiration Reason for use of celebrity spokespeople Convenience Used for fast foods and microwave foods Fun and pleasure Key to advertising vacations, beer, parks Vanity and egotism Used for expensive or conspicuous items Environmental Consciousness Centers around environmental protection LO 3 20

Unique Selling Proposition A desirable, exclusive, and believable advertising appeal selected as theme for a campaign. LO 3 21

Executing the Message Scientific Slice-of-Life Musical Lifestyle Spokesperson/ Testimonial Demonstration Mood or Image LO 3 Real/ Animated Product Symbols Fantasy Humorous 22

REVIEW LEARNING OUTCOME Creative Decisions for Ad Campaign Set advertising objectives Identify benefits Develop appeal LO 3 Evaluating results helps marketers adjust objectives for future campaigns Execute message Evaluate campaign results 23

Media Decisions in Advertising Describe media evaluation and selection techniques LO 4 24

Media Decisions in Advertising LO 4 Monitored Media Unmonitored Media Newspapers Direct Mail Magazines Trade Exhibits Yellow Pages Cooperative Advertising Internet Brochures Radio Coupons Television Catalogs Outdoor Media Special Events 25

Major Advertising Media Newspapers Magazines Radio Television Outdoor Media Yellow Pages Internet LO 4 26

Newspapers Advantages § § § § Geographic selectivity Short-term advertiser commitments News value and immediacy Year-round readership High individual market coverage Co-op and local tie-in availability Short lead time LO 4 Disadvantages § § Limited demographic selectivity Limited color Low pass-along rate May be expensive 27

Cooperative Advertising An arrangement in which the manufacturer and the retailer split the costs of advertising the manufacturer’s brand. LO 4 28

Magazines Advantages § § § Good reproduction Demographic selectivity Regional/local selectivity Long advertising life High pass-along rate Disadvantages § § § LO 4 Long-term advertiser commitments Slow audience buildup Limited demonstration capabilities Lack of urgency Long lead time 29

Noise-Free Reading {Contents Brought to you by. . . } The table of contents (TOC) in a magazine commonly appears after a dozen—sometimes two dozen—or more pages of advertisements. To cut through the noise, Philips Electronics paid $5 million to Time, Inc. to place the TOC on the first page of four magazines—Time, Fortune, People, and Business 2. 0. In those issues, the TOC appeared on the very first page, opposite an ad on the inside front cover, reading: “Philips Electronics is bringing the table of contents to the front of selected Time, Inc. magazines to make things easier for readers. ” LO 4 SOURCE: Brian Steinberg, “Philips and Time Agree to Keep It Simple, ” Wall Street Journal, April 21, 2006, B 3. 30

Radio Advantages § § § § Low cost Immediacy of message Short notice scheduling No seasonal audience change Highly portable Short-term advertiser commitments Entertainment carryover LO 4 Disadvantages § § § No visual treatment Short advertising life High frequency to generate comprehension and retention Background distractions Commercial clutter 31

Television Advantages § § § Wide, diverse audience Low cost per thousand Creative opportunities for demonstration Immediacy of messages Entertainment carryover Demographic selectivity with cable Disadvantages § § § § LO 4 Short life of message Consumer skepticism High campaign cost Little demographic selectivity with stations Long-term advertiser commitments Long lead times for production Commercial clutter 32

Presidential TV Advertising When it comes to advertising, presidential hopefuls continue to favor local TV: – Nearly 95 percent of presidential campaign ads between January 1 to October 10, 2007 were aired on local TV stations – Mitt Romney led other Republican presidential candidates with 10, 893 TV ads in that time period – Bill Richardson led Democrats with 5, 975 TV ads, followed by Barack Obama with 4, 293 ads LO 4 SOURCE: “Candidates Still Bank On Local TV Ads, ” Mediaweek, Oct 22, 2007 p 22. 33

Internet Advantages § § Fast growing Ability to reach narrow target audience Short lead time Moderate cost LO 4 Disadvantages § § Difficult to measure ad effectiveness and ROI 28% WW audience; 77% No. America 34

Outdoor Advertising • In 1970, billboards accounted for 80 percent of outdoor advertising • In 2006, billboards accounted for 64 percent of outdoor advertising, public transport for 12 percent (e. g. . buses, trucks, cars), street furniture for 7 percent (e. g. park benches, bus kiosks), and 17 percent alternative (outdoor) media § Some car owners are paid $200 -$800/month for driving a car “wrapped” in the logo and branding of an advertiser § So far, only 700 of the 450, 000 U. S. billboards are digital (only 40 states allow their use) SOURCE: “Us’s Landscape Turns Luminous As Highway Billboards Go Digital, ” Marketing Week, October 25, 2007, p 22. LO 4 35

Outdoor Media Advantages § § Repetition Moderate cost Flexibility Geographic selectivity LO 4 Disadvantages § § § Short message Lack of demographic selectivity High “noise” level 36

Privacy Protection Third-party ad networks provide most of today’s Web ads. These ad networks use cookies to track your Web preferences and usage patterns, then tailor advertising content to your interests. Network Advertising Initiative (NAI) member companies are self-regulating. Each has agreed to post a notice on all Web sites served by their networks. This notice informs consumers that: 1. The ad networks may place a cookie on your computer; 2. The cookie may be used to tailor ad content both on the site you are visiting as well as other sites within that network that you may visit in the future. 3. They have provided an "opt-out" mechanism for the targeted ad programs they provide. LO 4 SOURCE: http: //networkadvertising. org/managing/principles. asp 37

Google’s Ad. Words (Ads Work!) Google's total revenue in 2008 was $21. 8 billion and of this, $21. 1 billion was derived from advertising. At the end of its third quarter in 2009, the company’s total revenue was $16. 9 billion, $16. 4 billion from advertising. To appreciate just how much Google has grown, consider this—in 2003 the company's total revenue was $1. 46 billion with advertising revenue representing $1. 42 billion. Source: http: //investor. google. com/fin_data. html last visited November 12, 2009 LO 4 38

Alternative Media Shopping Carts Floor Ads Computer Screen Savers Subway Tunnel Ads DVDs Video Game Ads Interactive Kiosks Cell Phone Ads in Movies Advertainments LO 4 39

Qualitative Factors in Media Selection u Attention to the commercial and the program u Program liking u Lack of distractions u Other audience behaviors LO 4 40

Media Scheduling Continuous Media Schedule Advertising is run steadily throughout the period. Flighted Media Schedule Advertising is run heavily every other month or every two weeks. Pulsing Media Schedule Advertising combines continuous scheduling with flighting. Seasonal Media Schedule Advertising is run only when the product is likely to be used. LO 4 41

REVIEW LEARNING OUTCOME Media Evaluation and Selection Type: Newspaper Magazine Radio Television Outdoor Internet Alternative Scheduling: continuous flighted Considerations: Mix How much of each? Cost per contact How much person? Reach How many people? Frequency How often? Audience selectivity How targeted is the audience? LO 4 pulsing seasonal Winter Spring Summer Fall 42

Public Relations Discuss the role of public relations in the promotional mix LO 5 43

Public Relations The element in the promotional mix that: § evaluates public attitudes § identifies issues of public concern § executes programs to gain public acceptance LO 5 44

Functions of Public Relations Press relations Product publicity Corporate communication Public affairs Lobbying Employee and investor relations Crisis management LO 5 45

Public Relations Tools New product publicity Product placement Consumer education Event sponsorship Issue sponsorship Internet Web sites LO 5 46

Consumer Education Sites consumer. gov/idtheft Identity theft privacyrights. org Consumer privacy rights and responsibilities annualcreditreport. com One free credit report/consumer each year consumeraction. gov Broad range of consumer education topics consumerworld. org Latest consumer news consumerreports. org/main/home. jsp Unbiased product information consumer. gov Directs consumers to fed gov’t sites pueblo. gsa. gov Brochures and pamphlets ftc. gov/ftc/consumer. htm Unfair and deceptive business practices fcc. gov Radio, television, satellite, and telephone motorist. org Lists car repair shops meeting set standards recall. gov Safety and product recall information cpsc. gov Safety, toys, nursery equipment, home appliances, furniture, computers, fireworks nhtsa. gov Defects in automobiles, crash test ratings, safety recalls, air bags and child safety seats fda. gov Food safety or food products, prescription or over the counter drugs, or medical devices 47

Managing Unfavorable Publicity Crisis Management A coordinated effort to handle the effects of unfavorable publicity or of an unfavorable event. LO 5 48

REVIEW LEARNING OUTCOME The Role of Public Relations LO 5 49

Advertising for TV Shows Aggregating print ads for televisions shows as well as breaking them down, James Hibberd offers an informative look at advertising trends in 2009. • http: //www. thrfeed. com/nbcs-trauma-. html LO 5 50