Objectives
1.To
2.To
Objectives
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•
•
•
•
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
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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
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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
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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 and 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
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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
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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
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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
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Advertising Media
• Include:
–print
–broadcast
–the Internet
–interactive/specialty
media
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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
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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
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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?
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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
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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)
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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
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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
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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
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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
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Direct Mail
• Includes the following:
– catalog mailers
– coupons
– fliers
– letters
– invitations
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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
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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.
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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
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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
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Radio Ads
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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
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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
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Types of Television Ads
• Include:
– network television ads
– local television ads
– cable and satellite television ads
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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
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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
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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
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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
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Internet Advertising Methods
• Include:
– search engines
– homepages
– advertising banners
– pop-up ads
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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®
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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
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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
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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
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Outdoor Advertising
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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
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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
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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
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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
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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®
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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.
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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
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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
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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
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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
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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 15th
– implement a new line of men’s wear by October
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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
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Target Markets
• Can be divided or “segmented” by the
following:
– demographics
– psychographics
– geographic location
– behavior
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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
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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
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Geographic Segmentation
• Divides a market into geographic units,
such as:
– nations
– regions
– states
– counties
– cities or neighborhoods
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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
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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
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Behavioral Segmentation
• Divides markets into groups based on the
following:
– consumer knowledge
– attitude
– usage patterns
– response to a product
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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
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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
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Selecting an Advertising
Approach
• Includes the following important
considerations:
– reach
– frequency
– media impact
– media timing
– cost
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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
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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
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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
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Media Timing
• Refers to when an advertisement should
be run
• Consists of a continuous, flighting or
pulsing pattern
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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Assessment
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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
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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?
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Assessment
6. On local television advertisers can
purchase __-second spot announcements.
7. Name two types of target marketing
segmentation.
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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”.
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Farese, L; Kimbrell, G; and Woloszky (2006) Marketing Essentials.
Woodlands, CA: McGraw 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, 3rd 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/.../ADVDMKTopic8.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/article706
44.html
http://www.entrepreneur.com/advertising/adcolumnistroyhwilliams/article721
26.html
http://www.outsourcestrategies.com/blog/2007/02/benefits-of-internetmarketing.html
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Collaborator
Kyle McGregor, Ph.D.
Graphics Designer
Tarleton State University
Technical Writer
Production Coordinators
Jessica Odom
Production Manager
Maggie Bigham
Amy Baker
Dusty Moore
Executive Producers
Heather Jones
Amy Hogan
Brand Manager
Gordon Davis, Ph.D.
Megan O’Quinn
Jeff Lansdell
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CEV Multimedia. Ltd.