1. CHAPTER 15 Advertising and Public Relations Designed by Eric Brengle B-books, Ltd. Prepared by Deborah Baker Texas Christian University Marketing Lamb, Hair, McDaniel 9
2. Learning Outcomes Discuss the effects of advertising on market share and consumers Identify the major types of advertising Discuss the creative decisions in developing an advertising campaign LO I LO 2 LO 3
3. Learning Outcomes Describe media evaluation and selection techniques Discuss the role of public relations in the promotional mix LO 5 LO 4
4. The Effects of Advertising Discuss the effects of advertising on market share and consumers LO I
5. The Effects of Advertising
U.S. advertising was almost $300 billion in 2006
In 2005, 32 companies spent over $1 billion each
The advertising industry is smallonly 155,000 employed by the 12,000 advertising agencies
Ad budgets of some firms are almost $4 billion annually
6. The Effects of Advertising LO I Top Ten Leaders by U.S. Advertising Spending
7. 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
Beyond a certain level of spending, diminishing returns set in.
New brands require higher spending to reach a minimum level of exposure needed to affect purchase habits.
8. The Effects of Advertising on Consumers LO I
The average U.S. citizen is exposed to hundreds of ads each day.
Advertising may change a consumers negative attitude toward a product, or reinforce a positive attitude.
Advertising can affect consumer ranking of a brands attributes.
9. REVIEW LEARNING OUTCOME Effects of Advertising LO I
10. Major Types of Advertising Identify the major types of advertising LO 2
11. Major Types of Advertising LO 2 Institutional Advertising Enhances a companys image rather than promotes a particular product. Product Advertising Touts the benefits of a specific good or service.
12. Major Types of Advertising LO 2 Corporate identity Pioneering Competitive Comparative Product Advertising Institutional Advertising Advocacy advertising
13. Product Advertising LO 2 Comparative
Compares two or more competing brands product attributes
Used if growth is sluggish, or if competition is strong
Stimulates primary demand for new product or category
Used in the PLC introductory stage
Influences demand for brand in the growth phase of the PLC
Often uses emotional appeal
14. REVIEW LEARNING OUTCOME The Major Types of Advertising LO 2
15. Creative Decisions in Advertising Discuss the creative decisions in developing an advertising campaign LO 3
16. Creative Decisions in Advertising Advertising Campaign A series of related advertisements focusing on a common theme, slogan, and set of advertising appeals. LO 3
17. Creative Decisions in Advertising LO 3 Determine the advertising objectives Make creative decisions Make media decisions Evaluate the campaign
18. Setting Objectives: The DAGMAR Approach LO 3 Define target audience Define desired percentage change Define the time frame for change
19. Creative Decisions LO 3 Develop and evaluate advertising appeals Execute the message Evaluate the campaigns effectiveness Identify product benefits
Sell the Sizzle, not the Steak
Sell products benefits, not its attributes
A benefit should answer Whats in it for me?
Ask So? to determine if it is a benefit
Identify Product Benefits LO 3
21. Identify Product Benefits LO 3 - So? Attribute Benefit Powerades new line has been reformulated to combine the scientific benefits of sports drinks with B vitamins and to speed up energy metabolism. So, youll satisfy your thirst with a great-tasting drink that will power you throughout the day.
22. Advertising Appeals LO 3 Profit Health Love or romance Fear Admiration Convenience Fun and pleasure Vanity and egotism Environmental Consciousness Product saves, makes, or protects money Appeals to body-conscious or health seekers Used in selling cosmetics and perfumes Social embarrassment, old age, losing health Reason for use of celebrity spokespeople Used for fast foods and microwave foods Key to advertising vacations, beer, parks Used for expensive or conspicuous items Centers around environmental protection
23. Unique Selling Proposition LO 3 A desirable, exclusive, and believable advertising appeal selected as the theme for a campaign. Unique Selling Proposition
24. Executing the Message LO 3 Mood or Image Musical Demon- stration Scientific Real/ Animated Product Symbols Fantasy Lifestyle Slice-of-Life Humorous Spokes-person/ Testimonial
25. REVIEW LEARNING OUTCOME Creative Decisions for Ad Campaign LO 3 Set advertising objectives Identify benefits Develop appeal Evaluate campaign results Evaluating results helps marketers adjust objectives for future campaigns Execute message
26. Media Decisions in Advertising Describe media evaluation and selection techniques LO 4
27. Media Decisions in Advertising LO 4 Newspapers Magazines Yellow Pages Internet Radio Television Outdoor Media Direct Mail Trade Exhibits Cooperative Advertising Brochures Coupons Catalogs Special Events Monitored Media Unmonitored Media
28. Major Advertising Media LO 4 Newspapers Magazines Radio Television Outdoor Media Yellow Pages Internet
29. Newspapers LO 4 Advantages
Short-term advertiser commitments
News value and immediacy
High individual market coverage
Co-op and local tie-in availability
Short lead time
Limited demographic selectivity
Low pass-along rate
May be expensive
30. Free Newspapers?
The new Baltimore Examiner is delivering 250,000 newspapersat no charge and unsolicited!
Advertising brings in the revenue for this niche publication targeting households with income of $73,000 or more.
The ads are $2,900 for a full page, compared with $17,000 for its competition, the Baltimore Sun.
The Examiner is betting that low ad rates and the target market will be a valuable proposition to advertisers.
LO 4 SOURCE: Joseph T. Hallinan, Do New Free Dailies Mean Sun is Setting for Paid Newspapers? , Wall Street Journal, April 5, 2006, B1.
31. Cooperative Advertising LO 4 An arrangement in which the manufacturer and the retailer split the costs of advertising the manufacturers brand. Cooperative Advertising
32. Magazines LO 4 Advantages Disadvantages
Long advertising life
High pass-along rate
Long-term advertiser commitments
Slow audience build-up
Limited demonstration capabilities
Lack of urgency
Long lead time
33. Radio LO 4 Advantages Disadvantages
Immediacy of message
Short notice scheduling
No seasonal audience change
Short-term advertiser commitments
No visual treatment
Short advertising life
High frequency to generate comprehension and retention
34. Television LO 4 Advantages Disadvantages
Wide, diverse audience
Low cost per thousand
Creative opportunities for demonstration
Immediacy of messages
Demographic selectivity with cable
Short life of message
High campaign cost
Little demographic selectivity with stations
Long-term advertiser commitments
Long lead times for production
35. TV Advertising: Is Less More?
The number of ads in TV shows is a longstanding complaint of viewers and advertisers.
The media is cluttered and consumers change channels or speed through commercials on a DVR.
Tests are being conducted to feature shorter commercial pods.
LO 4 SOURCE: Suzanne Vranica, TV-Ad Test to Show if Less is More , Wall Street Journal, April 5,2006, B3. Year Commercial Minutes per Hour
36. Outdoor Media LO 4 Advantages Disadvantages
Lack of demographic selectivity
High noise level
37. Internet LO 4 Advantages Disadvantages
Ability to reach narrow target audience
Short lead time
Difficult to measure ad effectiveness and ROI
Ad exposure relies on click through from banner ads
Not all consumers have access to Internet
Online http://www.fox.com http://www.abc.com
38. Alternative Media LO 4 Ads in Movies Interactive Kiosks Computer Screen Savers Shopping Carts DVDs Advertainments Cell Phone Ads Subway Tunnel Ads Floor Ads Video Game Ads
39. Videogame Advertising
Microsoft plans to acquire Massive inc., a start-up that places ads in video games.
Ads are inserted into the game environment.
Video games could become a large new medium for advertising.
LO 4 SOURCE: Robert A. Guth and Nick Wingfield, Microsofts Massive Move into Game Ads , Wall Street Journal, April 26,2006, B1.
40. Directory Assistance Advertising
Companies are offering free telephone directory assistancebut theres an advertisement first.
The audio ads are narrowly targeted, and are 10 to 12 seconds.
The growth of such free services could represent another change in the telecom industry.
Dial 1-800-FREE411 or 1-800-411-METRO
LO 4 SOURCE: Rebecca Buckman, Your Listing, and a Word From Our Sponsor , Wall Street Journal, April 20,2006, B1.