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Chapter ThreeThe Business of Advertising
Arens|Schaefer|Weigold
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
3-2
Learning Objectives
• List the various groups in the advertising business and explain their relationships
• Discuss the differences between local, national, and transnational advertisers
• Explain how advertisers organize themselves to manage their advertising both here and abroad
3-3
Learning Objectives
• Define the main types of advertising agencies
• Describe the range of tasks people perform in an ad agency and an in-house advertising department
• Relate how agencies get new clients and how they make money
3-5
Local Advertising
• Advertising by businesses within a city or county directed toward customers within the same geographic area
• Types of local advertisers– Dealers or franchisees of national
companies– Stores that sell a variety of branded
merchandise– Specialty businesses and services– Governmental and nonprofit organizations
3-6
Local Advertising
• Advertising manager: Performs all the administrative, planning, budgeting, and coordinating functions
• Types– Product advertising– Sale advertising– Institutional advertising– Classified advertising
3-7
Local Advertising
• Local advertisers and IMC– Integrated marketing
communications (IMC): Building and reinforcing mutually profitable relationships with the stakeholders and general public• Developing and coordinating a strategic
communications program via various media
• Local advertisers and social media– Connecting with a local community
through social media can be very effective
3-9
Transnational Advertisers
• Multinational corporations: Operate and invest throughout many countries and make decisions based on availabilities worldwide– Global marketers: Use a standardized
approach to marketing and advertising in all countries
• Localized approach – Adaptation of products, packages, and
advertising campaigns to suit each market
3-13
Tasks Performed in an Agency
• Account management• Research and account planning• Media planning and buying• Creative concepts• Advertising production• Traffic management• Additional services• Agency administration
3-14
Compensations Received by Agencies
• Media commission: Paid by a medium to recognized advertising agencies for advertising placed with it
• Markup: Source of agency income gained by adding some amount to a supplier’s bill
• Fees– Fee-commission combination, straight-
fee method, and incentive system