Advertising:
A paid, mediated presentation of information about services, products or ideas with the specific goal of influencing the consumers of the information
> Advertising is a form of promotion
- promotion: making the public aware of a company, candidate, product, service or issue
- promotion includes advertising, public relations, packaging, personal selling and gifts
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Importance of advertising
> Consumer economics interaction of the supply and demand in the advertising market connection between advertising market and consumer market
> Advertising and prosperity
> Advertising and democracy
> Persuasion vs. coercion
Origins of advertising
> Stepchild of technology
> Mercantile press and advertising
- mercantile newspapers served businesses announced arrival of goods from England real estate sales services offered
Origins of advertising
> Development of mass advertising
- 1840s: Penny Press caused explosion in circulation merchants could reach thousands of readers each day – it was the first mass advertising papers began to sell advertising space by the column inch
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Origins of advertising
> Development of Mass Advertising
- patent medicines (let the buyer beware) prompted government to create truth-in advertising laws
1906: Pure Food and Drug Act
1914: Federal Trade Commission established
1931: Food and Drug Administration established regulate advertising and interstate trade crack down on false advertising
Origins of advertising
> Development of mass advertising
- rise of advertising agents go-between for newspapers/magazines and advertisers could place the same ad in many publications created the first newspaper directory evolved into today’s advertising agencies
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Origins of advertising
> Broadcasting arrives
- radio was first instantaneous national medium could reach millions of people at the same time
Origins of advertising
> Broadcasting arrives
- rise of advertising agencies
+ more choices for advertisers
+ agencies became full-service organizations research audiences advise client where to place the ad buy ad space in newspapers, radio, TV etc.
write the ad copy create the ad illustrations, video etc.
Origins of advertising
> Broadcasting arrives
- TV let viewers see product & hear national message persuasive message is much more effective
TV has the greatest growth in ad revenue
- 1980s: rise of cable TV advertiser can reach segmented audiences target products or campaigns to different audiences http://adage.com/images/random/datacenter/2009/spendtrends09.pdf
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Advertising agencies
> Pioneer agencies
Wayland Ayer’s N. W. Ayer & Son
> Agency compensation
Commissions
Performance
Equity
Advertising agencies
> Producing the ad campaign
+ The ad agency team the creative side designs ads for various media copywriters designers artists photographers video production companies
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Advertising agencies
> Producing the ad campaign
- the ad agency team
+ the business side media buyers place the ads in various media
+ researchers plan and assess the effectiveness of the ad
Advertising agencies
> Producing the ad campaign
- the ad agency team
+ the business side merchandise experts oversee other forms of promotion besides advertising
+ account executive oversee the campaign
Placing advertisements
> Media plans
- CPM (cost per thousand)
- Audit Bureau of Circulations
- Survey organizations (e.g., Nielson & Arbitron)
- Standard Rate and Data Service
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Placing advertisements
> Traditional choices
- Newspapers
- Magazines
Shelf life
Pass-along circulation
- Radio
- Television
Ad clutter
- Online
Placing advertisements
> Other methods of advertising
 billboards
 clothing logos
 direct mail



TV informercials yellow pages product placement in TV and movies
New advertising platforms
> Search engines
- Google ads
Sponsored Link
Click-through fee
> Gaming
- Advergame
> Pre-movie advertising
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Brand strategies
> Brand names
> Brand images
David Ogilvy
> The future of brand names
Store brands
Branding
Brand strategies
> Does advertising make goods more expensive?
- Some say yes, cost of making the ad is passed on to the consumer
- Others say no, ads actually lowers the price of goods economies of scale mass production reduces manufacturing costs
Brand strategies
> Another factor in price is brand loyalty and the product’s recognition
- some advertising emphasizes product quality differentiating the product shows how it is different and better than the competition
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Brand strategies
> Social costs
- racking up credit card bills to buy things advertisers tell use we for social acceptance brand of watch or shoes or clothes
- fashion ads that encourage anorexia or early-teen sexuality
Manipulation by advertising
> influence children’s behavior
- young children lack rational thinking abilities can’t differentiate between program and ad
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Manipulation by advertising
> slotting manufacturers paying for store promotions and shelf space
Manipulation by advertising
> Advertising’s influence on journalism
- favorable treatment of major advertisers
- self-censorship to avoid offending advertiser
- “lighter” news to draw larger TV audiences
- response to consumer boycotts
Influence of advertising on consumer behavior
> consumer behavior:
- the study of how advertising affects people
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Influence of advertising on consumer behavior
> Two perspectives of consumer behavior:
cognitive rational mental process use information in ads to make rational choices more often found in print ads
emotive appeals to the emotions more often found in TV ads
Identifying consumers as types
> Tools advertisers and ad agencies use to identify potential customers:
- demographics
+ characteristics of the person or household age income family size marital status etc.
Identifying consumers as types
> Tools advertisers and ad agencies use to identify potential customers:
- psychographics
+ lifestyles and activities hobbies movie attendance music preferences sports etc.
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Identifying consumers as types
> Tools advertisers and ad agencies use to identify potential customers:
- geographics
+ where the potential buyer lives
Advertising techniques
> Lowest common denominator
- unique selling proposition
Rosser Reeves - unique selling proposition
- positioning
Advertising techniques
> Redundancy techniques
- barrages flight or waves
- bunching
- trailing
- multimedia trailing
> Testimonials
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Advertising techniques
> Quality advertising
> Salience and novelty
United Colors of
Benetton
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> Identity advertising
> Source credibility
> Classical conditioning stimulus and response
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No. 3: Timex watches http://www.youtube.com/watch?v=clI3Oc1vnaM
No. 2: Coca Cola http://www.youtube.com/watch?v=xffOCZYX6F8
No. 1: Apple computer http://www.youtube.com/watch?v=R706isyDrqI
Advertising affects consumers in four ways
1.
make people aware of the product or service
> have to know it exists before you can buy it
2.
provide price information
> look for sales in stores
> know what kind of car you can afford
> know where you can afford to buy or rent a home
Advertising affects consumers in four ways
3.
provide information about quality
> endorsements from creditable sources
4.
get people to identify the product with a certain person or activity
> identity advertising
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Advertising affects consumers in four ways
 same ad won’t affect all consumers
> need to create campaign with several ads
- attract different demographics
- attract different psychographics
Two types of agencies
1.
full service
> offer the client all the ad-team services
2.
boutique agency
> specialize in creative services
Types of advertisements
> Geographic coverage
- National
+ same ad throughout the country
Nike
Dominoes
General Motors
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Types of advertisements
> Geographic coverage
- Local
+ local businesses sporting goods store selling Nikes local Dominoes’ promotion
GM ad targeting S. Calif. market
Types of advertisements
> Geographic coverage
- Regional
+ zoning ads for small area of the media’s market community news insert in LA Times regional distribution of national magazine cable company’s local ad slot on CNN or
A&E
- Geographic coverage affects the price of the ad
+ bigger audience = higher ad rates
Types of advertisements
> Non-commercial ads
- Business ads influence attitude toward a business create positive attitude
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Types of advertisements
> Non-commercial ads
- Public service ads promote behavior and attitudes that benefit society many are created by the Advertising Council
Types of advertisements
> Non-commercial ads
- Political ads
+ persuade people to vote for a candidate or support an issue
+ types of political ads biography ads position ads attack ads daisy: http://www.youtube.com/watch?v=Er5h_TXun6o
New advertising techniques
> Word-of-mouth advertising
- Buzz advertising
- Viral advertising http://www.youtube.com/watch?v=owGykVbfgUE
> Under-the-radar advertising
- Stealth ads
- Product placement
- Infomercials
‘Zines
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Problems and issues
> Advertising clutter
> Creative excesses
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