Objectives 1 To 2 To Objectives To create

Objectives 1. To 2. To

Objectives • • • To create an advertising campaign. To understand how advertising is used in business. To identify the various types of advertising media. To understand the components of a professional advertisement. To learn the pricing methods associated with advertising costs. 2

Advertising – the paid, non-personal promotion of a cause, idea, product or service by an identified sponsor attempting to inform, persuade or remind a particular target audience 3

Advertising • Is used to attract customers’ attention • Is implemented through multiple channels or “media” • Is used to inform, persuade or remind customers about a product or company 4

Advertising • Surrounds us everyday – the average consumer is exposed to more than 2, 000 advertising messages a week – more than $500 billion is spent annually on advertising worldwide – there are more than 13, 000 advertising agencies in the U. S. employing more than 177, 000 people – in 2008, more was spent on political advertising in the U. S. than ever before — about $2. 6 billion 5

Types of Advertising click here Advertising Media click here Advertising Plans click here

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Advertising by Purpose Informational Advertising • is used to introduce new products • is used to give consumers information about a product Persuasive Advertising • is used after a product has been introduced • is used to build demand sales for a product Image Advertising • is used to influence the way a customer perceives a product • is used to promote a positive image of a brand Main Menu 8

Institutional & Promotional Advertising Institutional Advertising • is used to create a favorable image for an entire company • concentrates on an industry, versus a single product Promotional Advertising • is used to increase overall sales • is directed at customers or business-to-business relationships • is used to motivate customers to act Main Menu 9

Reminder & Trial Advertising Reminder Advertising • reminds customers about a product • reminds customers that they need a product Trial Advertising • encourages consumers to make the initial purchase of a new product • is often associated with test markets Main Menu 10

Brand Switching & Switchback Advertising Brand Switching advertising • is designed to convince customers to switch brands Switchback Advertising • is designed to bring former customers back to a product Main Menu 11

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Advertising Media • Include: – print – broadcast – the Internet – interactive/specialty media Main Menu 13

Newspapers • Have a wide demographic reach • Increase awareness of business products and services in a specific region • Have quick turnover rate which allows advertisers to meet new market conditions • Often require the same ad be inserted over a significant time period in order to reach a target audience Main Menu 14

Newspapers • Are the most inexpensive way to reach a mass audience • Are great for advertising short-term sales and price offers • Are not always effective for image-based advertisements • Must immediately catch readers’ attention Main Menu 15

Choosing a Newspaper • Should include the following considerations: – distribution § Is it distributed daily or weekly? – size § Is it standard or tabloid size? – audience § What type of people read it? Main Menu 16

Newspapers • Offer the following types of ads: – display ads § typical print ads; contain text and/or graphics – classified ads § shorter ads (usually in small print) appearing with other similar ads – public notices § legal notices concerning government contracts, foreclosures, community information, etc. – preprinted inserts § flier printed separately then placed in newspaper Main Menu 17

Newspaper Ads • Are limited in special effects such as font, size and color • Can lead to advertising clutter • Should use original copy and headings • Are calculated in dpi’s (dots per inch) Main Menu 18

Magazines • Focus on a specific target audience • Have a delay between purchase and publication • Do not work well for businesses seeking to target fast-changing market trends • Are an important advertising medium for most businesses Main Menu 19

Magazines • Offer the following types of ads: – display ads § typical print ads; contain text and/or graphics – advertorials § informational ads formatted to look like articles – classified ads § shorter ads (usually in small print) appearing with other similar ads Main Menu 20

Magazine Ads • Allow more elaborate graphics and colors • Include copy, design and artwork directed to a specific target market • Present important product information to consumers, such as: – how the product works – how it benefits the consumer – where it can be purchased Main Menu 21

Direct Mail • Generates a strong number of purchasing responses • Is dependent on well developed mailing lists – including people most likely to buy products or services – gathered from a variety of marketing research companies • Can cost as much as television advertising, depending on the type of list Main Menu 22

Direct Mail • Includes the following: – catalog mailers – coupons – fliers – letters – invitations Main Menu 23

Direct Mail Materials • Are used to sell products or services • Are an inexpensive way to reach a small market • Should be designed around the following: – using a catchy headline – identifying benefits about your product or service – distinguishing your product from your competitors • Can be hand delivered or hung for quick viewing Main Menu 24

Telephone Directory Ads • Are used to compliment or extend the effects of advertising in other media • Serve as a permanent or long-term medium • Are used to target specific geographic areas or communities • Are relatively inexpensive Fun Fact: Telephone directories can be found in more than 98 percent of American homes. Main Menu 25

Telephone Directory Ads • Require proper and strategic placement • Should compliment the directory and be easy to read • Should give the consumer information needed to make a purchase • Provide key information, such as: – available products and services – discounts or coupons – delivery policies Main Menu 26

Radio Ads • Reach target audiences through placement on appropriate stations • Are inexpensive to place and produce • Can be placed on more than one station in a given market • Can change quickly and frequently to meet the needs of a changing market Main Menu 27

Radio Ads • • Reach a large number of commuters Are presented in 30, 60 or 90 second slots Cannot appeal to the physical senses Are priced according to specific time slots – morning drive (most expensive) – daytime – afternoon drive (expensive) – evening Main Menu 28

Television Ads • Are free of limitations of other media • Combine audio, visual and textual effects • Provide the ability to reach a wide audience • Are primarily oriented toward customers • Are the most expensive form of advertising Main Menu 29

Types of Television Ads • Include: – network television ads – local television ads – cable and satellite television ads Main Menu 30

Network Television Ads • Run on national broadcast networks such as CBS, NBC and FOX • Reach the largest audience of any type • Are expensive • Require consideration of the following: – size of reachable audience – demand of specific time slot Main Menu 31

Local Television Ads • Run on local affiliates of network stations – these are stations which broadcast some national programming, but also produce programming (like news) specific to their area • Can be purchased in 30 -second spots • Run from early morning until the evening news • Require consideration of the same factors as national networks Main Menu 32

Cable & Satellite Television Ads • Run on cable networks such as ESPN, Comedy Central and Animal Planet • Offer selectivity, lower costs and flexibility • Allow for definition of a target audience based on demographics and/or psychographics • Require consideration of the following: – – cable popularity in the area “viewership” of the channel the wide range of available viewing options image of the station Main Menu 33

The Internet • Reaches millions of potential consumers • Allows a combination of sound, graphics and text in one location • Eliminates the advantage of size and economic power – large companies no longer dominate advertising media Main Menu 34

Internet Advertising Methods • Include: – search engines – homepages – advertising banners – pop-up ads Main Menu 35

Search Engines • Generate the largest percentage of new traffic to web pages • Offer businesses the opportunity to list their website at the top or side of search results • Are expensive, but provide advertisers with options • Include: • Yahoo® • Google® • Ask. com® Main Menu 36

Homepages • Allow small businesses to compete with large companies for a modest price • Provide potential customers with basic company information • Allow consumers to order products directly • Should allow for easy navigation both visually and physically • Are most effective when other advertising types direct people to them Main Menu 37

Advertising Banners • Are graphic advertisements on web pages • Build brand awareness or generate traffic for the advertiser’s website • Can be part of a link exchange – an arrangement in which two businesses with complimentary products and services advertise for each other on their respective sites in order to reach a large segment of a given market Main Menu 38

Pop-Up Ads • Are online advertisements which appear over a browser window • Require a viewer to physically click on the ad to close the window • Have a response rate of less than one percent • Are most successful for entertainment-based industries • Can be blocked by a variety of software Main Menu 39

Outdoor Advertising • • Includes billboards and outdoor signage Is highly visible and inexpensive Provides messages 24 hours a day Is used to support advertisements placed in other media • Is used as a directional marker to point customers toward your business Main Menu 40

Outdoor Advertising • Needs short, attention-getting messages • Is difficult to target to a specific group • Requires efficient use of graphics and headings • Should be visible from a long distance Main Menu 41

Transit Advertising • Is found on many forms of public transportation – for example, taxis, trains, buses • Reaches a wide and sometimes captive audience • Is typically used in urban areas Main Menu 42

Specialty Advertising • Includes: – sports arena banners – motion picture and DVD ads – scoreboards – blimp and airplane ads – endorsements and sponsorships – cross-promotional ads – product placement – in-store or display-oriented ads – trade shows and conventions Main Menu 43

Cross Promotional Ads • Feature a logo or brand symbol of a company or product on a product produced by a separate company • Sometimes also feature a coupon or special offer encouraging the purchase of both products • Also include products with an organization’s logo – for example, American Heart Association® or Susan G. Komen for the Cure® Main Menu 44

Product Placement • Involves placing a brand-name product in a movie or TV show • Includes strategic placement of a product so it can be seen by viewers • Is a popular advertising method for food and transportation companies • Attempts to avoid the clutter of more traditional advertising methods Fun Fact: Hershey’s® paid $1 million to feature Reese’s® Pieces® in the movie “E. T. ” and sales of the candy rose by 80 percent. Main Menu 45

In-Store/Display-Oriented Advertising • Is advertising at the location of sale • Includes: – electronic shelf ads – cart displays – above-aisle displays – floor mats – in-store sound systems – instant coupon machines Main Menu 46

Trade Shows & Conventions • Are exhibitions used to showcase a particular industry’s line of products • Include specialized booths or displays • Are used to introduce new products or network with new businesses • Are usually geared toward business-to-business relationships Main Menu 47

Business-to-Business Advertising • Is typically directed at companies or business representatives • Uses slightly different strategies than consumer advertising • Usually includes one or more of the following: – in-house publications – trade publications – cold calling Main Menu 48

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Advertising Campaigns • Consist of these components: – campaign objectives – identification of primary and secondary target markets – a list of selected advertising media – a schedule of advertising – a detailed budget Main Menu 50

Campaign Objectives • Identify the specific ambitions or intended outcomes of the plan • Should be specific and measurable • Should include a deadline or time frame • Should relate to the company’s overall mission and purpose • Examples include: – increase sales by 10 percent as compared to last year – distribute customer reward cards by Monday the 15 th – implement a new line of men’s wear by October Main Menu 51

Target Markets • Are specific groups of buyers who share common needs or characteristics • Are particular segments of customers to which an advertiser markets • Are determined through consumer analysis • Examples include: – Latina New Yorkers ages 18 -35 – athletic men with an annual income greater than $75, 000 – school-age children who like soccer Main Menu 52

Target Markets • Can be divided or “segmented” by the following: – demographics – psychographics – geographic location – behavior Main Menu 53

Demographic Segmentation • Specifies a target market on the basis of statistical information, such as: – age – gender – income – occupation – education – marital status – religion – race or nationality Main Menu 54

Demographic Segmentation • Focuses on specific data or usage rates based on consumer background • Uses secondary data to identify targeted populations – is obtained from research which has already been conducted – is the easiest and least expensive type of data to retrieve Main Menu 55

Geographic Segmentation • Divides a market into geographic units, such as: – nations – regions – states – counties – cities or neighborhoods Main Menu 56

Geographic Segmentation • May influence consumer trends or buying habits • Is often associated with “cultural” influences • Is used to identify areas which would best benefit from given products Main Menu 57

Psychographic Segmentation • Divides markets into groups based on the following: – personal values – lifestyle – personality characteristics – hobbies and interests • Involves the “why” component of consumer buying patterns Main Menu 58

Behavioral Segmentation • Divides markets into groups based on the following: – consumer knowledge – attitude – usage patterns – response to a product Main Menu 59

Primary & Secondary Markets Primary Markets • consist of your most important targeted or segmented group • should be the focus of most advertising budgets Secondary Markets • include a second group of potential customers • usually include a small variation to the primary audience, such as: – a change in gender – a change in race – a different geographic location Main Menu 60

Developing an Advertising Plan • Includes the following key actions: – determine your financial power § What can you afford? – determine the urgency of the message or campaign – evaluate the pay off and benefits – analyze the impact of each advertising medium Main Menu 61

Selecting an Advertising Approach • Includes the following important considerations: – reach – frequency – media impact – media timing – cost Main Menu 62

Reach • Is the percentage of customers within a specific target market who are exposed to an advertising message • Refers to how many people heard or saw a message • Refers to the extent to which an idea is spread Main Menu 63

Frequency • Is the average number of times a consumer is exposed to a message • Is needed to establish frequency goals • Is directly related to the repetition of an advertisement Main Menu 64

Media Impact • Refers to how effective an advertisement will be in various outlets • Is discovered through analysis of the best advertising mediums for a given message • Determines the top advertising methods which should be used to maximize consumer interest Main Menu 65

Media Timing • Refers to when an advertisement should be run • Consists of a continuous, flighting or pulsing pattern Main Menu 66

Continuous Ads • Run on a scheduled basis for a given time period • Provide greater exposure over a longer period of time • Are designed to keep current customers using a product • Can be predicted in terms of time slots and run times • Are designed to build consumer loyalty Main Menu 67

Flighting Ads • Run heavily for a short period of time, stop completely, then return heavily • Are used for seasonal merchandise, for new products, or in response to competitors’ efforts • Are supported by the discounts often given on large blocks of advertising purchased at once • Can be quite effective because the heavy schedule increases frequency levels Main Menu 68

Pulsing Ads • Combine continuous and flighting patterns • Are scheduled heavily in an irregular manner with stretches of light scheduling between • Are usually less expensive but still gain recognition • Are unpredictable in terms of exact timing or “time slot” • Are usually used for products, such as clothes, which sell all year but are sensitive to seasonal changes Main Menu 69

Advertising Costs • Should comprise at least 20 percent of a company’s budget • Are calculated based on CPM, or cost-per-thousand – refers to the media cost of making 1, 000 impressions – is used to determine the value or effectiveness of a medium (Cost of ad) X (1, 000) = CPM Total Circulation Main Menu 70

Newspaper Rates • Fluctuate based on frequency and repeat purchases • Are based on the size and location of the ad – front page ads and insert ads are more expensive • Are influenced by the presence of color • Are influenced by daily rates – weekend rates are more expensive Main Menu 71

Magazine Rates • Are based on the following: – circulation § number of papers distributed – readership § circulation times the number of people who read each paper – production techniques § color and design costs – placement or location of the ad Main Menu 72

Online Advertising Rates • Are determined based on the type of medium – banner ads, pop-ups, etc. • Vary based on the number of website “hits” or viewing rates • Can be calculated based on CPM or CPC – cost-per-click (CPC) charges an advertiser for each time someone physically clicks on the ad rather than just sees the ad Main Menu 73

Radio Rates • Are based on the following: – time of day § peak drive times are the most expensive – station formatting – commercial length (30 or 60 second spot) – production costs, sound effects and narration Main Menu 74

Television Rates • Vary based on the time of day – prime time (7 p. m. to 10 p. m. ) is the most expensive • Are influenced by the number of viewers or “ratings” • Fluctuate between national and local stations • Are influenced by production cost Main Menu 75

Advertising Budgets • Are influenced by the short-term and long -term goals of the campaign • Are usually calculated based on a percentage of past sales • Should reflect the company’s goals and financial strength • Should reflect accurate costs and expenditures Main Menu 76

Assessment 77

Assessment 1. Name two forms of advertising. 2. When selecting a newspaper to advertise in you should consider: A. Distribution B. Size C. Audience D. All of the above 78

Assessment 3. Direct mail pieces should have a catchy ____. 4. Where would you find a transit poster? 5. What are the two most expensive radio time slots? 79

Assessment 6. On local television advertisers can purchase __-second spot announcements. 7. Name two types of target marketing segmentation. 80

Assessment 8. List at least two types of internet marketing methods. 9. What does CPM stand for? 10. (T/F) The number of times a consumer is exposed to a message is called “reach”. 81

• • • Farese, L; Kimbrell, G; and Woloszky (2006) Marketing Essentials. Woodlands, CA: Mc. Graw Hill Companies, Inc. Gutnick, L. ; Huang, T. ; Lin, J. ; and Schmidt, T. (2007) New Trends in Product Placement. University of California, Berkeley. Seelye, Katherine Q. “About $2. 6 Billion Spent on Political Ads in 2008. ” The New York Times. December 2, 2008. Dictionary of Business Terms, 3 rd edition, by Jack P. Friedman, published by Barron's Educational Series, Inc. Britannica Concise Encyclopedia. © 2006 Encyclopedia Britannica, Inc. All rights reserved. Encyclopedia of Business, by The Gale Group, Inc. academic. brooklyn. cuny. edu/economic/. . . /ADVDMKTopic 8. doc “Internet Advertising/Online Advertising Revenue 2000 -2008. ” Grabstats. com. 2008. http: //www. aaaa. org/agency/pubs/newessentials/agencybusiness/pages/ag encystatistics. aspx http: //www. entrepreneur. com/advertising/adcolumnistroyhwilliams/article 706 44. html http: //www. entrepreneur. com/advertising/adcolumnistroyhwilliams/article 721 26. html http: //www. outsourcestrategies. com/blog/2007/02/benefits-of-internetmarketing. html 82

Collaborator Graphics Designer Kyle Mc. Gregor, Ph. D. Tarleton State University Production Coordinators Maggie Bigham Amy Baker Technical Writer Jessica Odom Production Manager Dusty Moore Executive Producers Heather Jones Amy Hogan Brand Manager Gordon Davis, Ph. D. Megan O’Quinn Jeff Lansdell 83 ©MMVII CEV Multimedia. Ltd.