Ch015.02 - Texas Tech University
McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 15, YOU SHOULD BE ABLE TO:
LO1
Explain the differences between product advertising and institutional advertising and the variations within each type.
LO2
Describe the steps used to develop, execute, and evaluate an advertising program.
WHERE CAN YOU WATCH TV?
WHERE CAN’T YOU?
Online TV (OTV)
TV has been a key element of the adv landscape
DVR, Video on demand, Consumers,
3D, Competitive Landscape:
1. To viewers:
2. To advertisers: excited about ?
3. To content producers:
4. To gadget manufacturers: DVR, blue-ray, Xbox, laptop, …
15-3
LO1
TYPES OF ADVERTISEMENTS
PRODUCT ADVERTISEMENTS
Product Advertisements – forms includes…
• ?
(or Informational)
• Reminder – reinforce previous knowledge of product
• Competitive (or Persuasive)– ?
• ? – to assure current
• Comparative – an increasing common form of competitive adv. , attract more attention, increase the perceived quality, backup ? needed
LO1
Campbell’s, 1&1, and Red Bull
What is the type and purpose of each advertisement?
pioneering Comparative Reminder
LO1
TYPES OF ADVERTISEMENTS
INSTITUTIONAL ADVERTISEMENTS
Institutional Advertisements – to build ? or an image for an org.
• Advocacy – state its position on issues (e.g., Chevron ’s We agree,
American Red Cross)
• Pioneering Institutional – like ‘pioneering ads for products’ ( Boeing ’s
That’s why we are here, Bayer’s “we cure more headaches than you think,
Bridgestone – “one team. One planet” )
• ? Institutional – “Got Milk?”
• Reminder Institutional – simply bring the company name again to target market
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LO1
Chevron and Bridgestone
What is the type and purpose of each advertisement?
Advocacy Pioneering Institutional
15-7
LO1
Got Milk? and U.S. Army
What is the type and purpose of each advertisement?
Competitive Reminder Institutional
LO2
DEVELOPING THE
ADVERTISING PROGRAM
1. Identifying the Target
Audience
2. Specifying the Advertising Objectives – awareness, interest, …
3. Setting the Advertising
Budget
15-9
LO2
DEVELOPING THE
ADVERTISING PROGRAM
4. DESIGNING THE ADVERTISEMENT
Message Content – made up of both informational and persuasional element
Types of Appeals
• ? Appeals – automobile safety ad, political ad, alcohol, tobacco & drug use
• Sex Appeals – what brands? , it works only when ?
• Humorous Appeals – what ad?,
AFLAC duck
15-10
LO2
World Wide Fund, Candie’s, and Geico
What is the appeal and purpose of each advertisement?
Fear Sex Humorous
LO2
DEVELOPING THE
ADVERTISING PROGRAM
4. DESIGNING THE ADVERTISEMENT
Creating the Actual Message
• Celebrity Spokespeople
• Ideas and Artwork
• Cost – avg $324 to produce 30 sec
15-12
LO2
DEVELOPING THE
ADVERTISING PROGRAM
5. SELECTING THE RIGHT MEDIA
Advertising Media – the means by which the message is communicated to the ? . The ? is related to (target audience, type of product, nature of the message, campaign objectives, available budget, the cost of alternative media)
Media Planning Goals
• Maximize ?
• Minimize ?
15-13
FIGURE 15-1 Television, direct mail, and newspapers account for more than 65% of all advertising expenditures (in $millions)
15-14
LO2
DEVELOPING THE
ADVERTISING PROGRAM
SELECTING THE RIGHT MEDIA
Basic Terms
• ? – the # of different people or household exposed to adv. e.g., newspapers - circulation
• Rating – the ? of household in a market that are tuned to a particular TV show or Radio Station.
• Frequency – the ? of times a person in the target audience is exposed to a message or advertisement.
• Gross Rating Points (GRPs)
= Reach
× Frequency
• ? (CPM)
Why ‘M’? not ‘T’
LO2
USING MARKETING DASHBOARDS
What is the Best Way to Reach 1,000 Customers?
Cost per Thousand (CPM) Impressions
CPM ($) =
Advertising Cost ($)
Impressions Generated (#)
1,000
15-16
Agenda – 22 nd Monday
●
SPCL Proj. Due: Next Monday
●
Review – Product/Institutional Advertisements, How to design (Appeals), how to select (Adv Media)
●
●
●
●
Adv. Media, focusing “Online Adv.”
Google Case (ICA#13)
Sales Promotions
PR
LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 15, YOU SHOULD BE ABLE TO:
LO3
LO4
Explain the advantages and
disadvantages of alternative advertising media.
Discuss the strengths and weaknesses of consumer-oriented and tradeoriented sales promotions.
LO5
Recognize public relations (PR) as an important form of communication.
15-18
FIGURE 15-2 Advertisers must consider the advantages and disadvantages of the many media alternatives
15-19
LO3
DEVELOPING THE
ADVERTISING PROGRAM
Television
– reaches 96.7% of household, more than any other, rich content
• Out-of-Home TV – many bars, hotels, offices, airports, college campus
• Online TV (OTV) – target adv can be achieved
• ? – how to spend less? “spot,” length (15(25%)/30/60),
Q) cable & satellite channel vs. broadcast network ?
shift to live events – why?
• ? – having people outside the target market for the product
• Infomercials (30 min) – educational approach (e.g. ?)
15-20
LO3
DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES
Radio
– a ? medium (Farm Radio Network, Family Life Network, Business or Politics Talk Show,…) , Avg. listening hours (18 to 24) – 12.5 h/w
• Break down
Total = 24,700 Stations
AM = 4,800
FM = 9,800
Satellite (monthly fee, free ad)
/Internet = 10,100
• Peak Listening Time
Drive Times: 7 – 8 AM, remain high
During the day, declines after 4 pm
15-21
LO3
DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES
Magazines
– 16,500, online/iPad version, great number of special interest
Publications that appeal to narrowly defined segments, perceived to be more trustworthy, inspirational, engaging than other media
• ? Issues
15-22
LO3
DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES
Newspapers – important local medium w/ excellent reach potential
• Falling ? & Falling ? Revenue
• Online and Mobile
• Local retailers often use as their sole advertising medium
15-23
LO3
DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES
Yellow Pages
– turn to more than 11 billion times/online version 5.6 billion times per year, because yellow pages reach almost all household w/ telephone (falling?) ; ?medium (?) in the local market;
Disadvantage – The proliferation of other directories
15-24
LO3
DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES
Internet
• Rich Media – Richest?
• Search Ads
• Banner/Display Ads
• Assessment – difficult to measuring impact
Q) Online ad – no guarantee for click, increase ?
of ?, lead to visit the website ?%
15-25
LO3
MAKING RESPONSIBLE DECISIONS
Who is Responsible for Click Fraud?
? Advertising - $20 billion in 2014 (shifting from print & TV): how it is charged? (how Google & Yahoo charge advertiser);
* Cost-per-click(?): what the publisher (Google or Yahoo) charges Advertisers for every click. Or Cost-per-view (or visitors)
Click Fraud
?: pay members to click
Click Bots: ? that produce automatic clicks
15-26
LO3
DEVELOPING THE
ADVERTISING PROGRAM
OTHER MEDIA ALTERNATIVES
Outdoor
• ?
– the most common form of outdoor advertising, often resulting in good reach and frequency, shown to be effective; the visibility is good supplemental reinforcement for well-known products; relatively low-cost flexible alternative, can buy in desired geographical market; it depends on ? and ?
• Transit
Advertising – bus, subway, taxis
15-27
LO3
DEVELOPING THE
ADVERTISING PROGRAM
OTHER MEDIA ALTERNATIVES
Other Media
• Placed-Based Media – airports, doctor’s office, theater,
Time square ?
Selection Criteria
• Media Habits
• Product Attributes
• Cost
15-28
LO3
DEVELOPING THE
ADVERTISING PROGRAM
SCHEDULING THE ADVERTISING
Factors to Consider
• ? Turnover – the rate that the new buyers enter the market; that means the higher the buyer turnover, the greater amount of adv needed
• ? – more frequently the product is purchased, the less repetition is required
• ? Rate – the speed at which buyers forget the brand if advertising is not seen
15-29
LO3
DEVELOPING THE
ADVERTISING PROGRAM
SCHEDULING THE ADVERTISING
Approaches
• Continuous (Steady) Schedule – when seasonal factors are unimportant
• ? (? Schedule – to reflect seasonal demand
• ? (Burst) Schedule – combination of the two, specially product introduction period
15-30
LO3
EXECUTING THE
ADVERTISING PROGRAM
PRETESTING THE ADVERTISING
• Portfolio Tests
• Jury Tests
• Theater Tests
15-31
LO3
EXECUTING THE
ADVERTISING PROGRAM
CARRYING OUT THE ADVERTISING PROGRAM
Full-Service Agency
Limited-Service Agencies
In-House Agencies
15-32
FIGURE 15-A Alternative structures of advertising agencies used to carry out the advertising program
15-33
LO3
ASSESSING THE
ADVERTISING PROGRAM
POSTTESTING THE ADVERTISING
Aided Recall
• Noted
• Seen-Associated
• Read Most
Unaided Recall
Attitude Tests
Inquiry Tests
Sales Tests
15-34
VIDEO CASE 15
GOOGLE, INC.: THE RIGHT ADS
AT THE RIGHT TIME
15-35
VIDEO CASE 15
1.
Describe several unique characteristics about Google and its business practices.
Name : “googol”
10 guidelines – Don’t be evil; Key People: ?
Mission Statement : “to organize the world’s information and make it universally accessible and useful”
Core Technology/Competence : ‘BackRub’ ‘AdWords’
Sales in 2012: $50 bil - $11 bil Profits
Head Quarter : Mountain View, CA
What % of revenues are from the online adv?
15-36
VIDEO CASE 15
4.
(a) How can Google be successful in the display advertising business?
(b) What other areas of growth are likely to be pursued by Google in the future?
Currently, Yahoo, MSN are leaders because they put ads on their websites (Yahoo Finance, MSN Money).
Google – YouTube, DoubleClick (ad agencies bid for ad placement
Try to win adv over TV industry, Mobile Advertising because of ?, Driverless Cars, …
15-38
VIDEO CASE 15
2.
(a) What is Google’s philosophy about advertising?
“Advertising” should be ? to consumer just as much as the organic search results and ? to the consumers’ needs leads to continuous improvements in search results
*You answers about case study should be based on the case material.
“Simplicity or Less Cluttered page” is what then?
15-39
VIDEO CASE 15
2.
(b) How can less advertising be preferred to more advertising?
Fewer ads, not more ads; just the right ads at the right time
Quality Score: to predict ahead, before Google actually shows an ad, how consumer will react to that ad
15-40
VIDEO CASE 15
3.
Describe (a) the types of online advertising available today
(b) Which type of advertising does Google currently dominate? Why?
Search: 47%
Display: 35%
Classified: 10%
Referral: 7%
E-Mail: 1%
15-41
GOOGLE vs. Amazon
G o o g l e
Search Engine, Adwords Core Competency
Tech
Innovation in IT
Industry
Business Model
?
Competitors
Value
Propositions
Amazon
?
Online Retailing
?
15-42
FIGURE 15-B Sales promotions can be used to achieve many objectives
15-43
LO4
SALES PROMOTION
?
1. Coupons
– sales promotions that usually offer a discount price to the consumer, which encourages trial. 332 bil coupons/$470 bil to 60 mil household
81% of consumers use, redemption rates (it changes depending on economy?)
What manufacturers / retailers use most?
Costs to make coupon? E.g. 25 cents coupon?
Worth it?
15-44
LO4
SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION
2. Rebates – the cash rebate based on ?
15-45
LO4
SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION
3. Deals short-term price reductions to 1. ? or 2. retaliate against competitors’ action. (E.g. build up the stock)
15-46
LO4
SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION
4. Premiums – consist of merchandise offered (1) ? or at a (2) significant
savings over its retail price
• (2) ? : the cost charged to the consumer covers the costs of item
• Free Toy in Happy Meal
• Deal-Prone & Value Seeing Consumers – attached to premiums
15-47
LO4
SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION
5. Contests – consumers apply skill or analytical or creative thinking to try to win a prize
15-48
LO4
SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION
6. Sweepstakes – requiring submission of entry, purely games of chance
• ? -Based Prizes – UPC codes, Bottle Cap codes; products as prize
• ?-Based Prizes
15-49
LO4
SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION
7. Samples – trial size; awareness trial sales rose?
15-50
LO4
SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION
8. Loyalty Programs – to encourage and reward repeat purchases by acknowledge each purchase made by a consumer and offering a premium as purchase accumulate
Credit Card Reward Program
15-51
LO4
SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION
9. Point-of-Purchase Displays – POP displays take the form of adv signs, sometimes hold or display actual products
Where located? High traffic area, cash register, the end of an aisle.
Expenditure - $20.3 billion
15-52
LO4
SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION
15-53
LO4
SALES PROMOTION
TRADE-ORIENTED SALES PROMOTION
Allowances and Discounts
• Merchandise Allowance - % of deduction from list case price
• Case Allowance – discount on each case during the period
• Finance Allowance – paying retailers for financing costs or losses associated with consumer sales promotions.
Floor Stock Protection Freight Allowance
15-54
LO4
SALES PROMOTION
TRADE-ORIENTED SALES PROMOTION
Training of Distributors’ Salesforces – a manufacturer’s success often rests on the ability of the reseller’s sales force to represent its products. Thus, in the best interest of the manufacturer to help train the reseller’s sales force.
15-55
LO5 PUBLIC RELATIONS
• 1. ? – many companies frequently use the _______ , consisting of an announcement regarding changes in the company or the product line.
• 2. News ? – representatives of media all invited to an
informational meeting; often used when new products are introduced or significant changes in corporate structure and leadership are being made.
• 3. Public Service Announcement (PSA) – ? organization rely heavily on public service announcement (PSA), which are free space or time donated by the media.
15-56
Advertising
Advertising is any paid form of nonpersonal communication about an organization, good, service, or idea by an identified sponsor.
15-57
Product Advertisements
Product advertisements are advertisements that focus on selling a good or service and which take three forms:
(1) pioneering (or informational),
(2) competitive (or persuasive), and (3) reminder.
15-58
Institutional Advertisements
Institutional advertisements are advertisements designed to build goodwill or an image for an organization rather than promote a specific good or service.
15-59
Infomercials
Infomercials are program-length
(30-minute) advertisements that take an educational approach to communication with potential customers.
15-60
Pretests
Pretests are tests conducted before an advertisement is placed in any medium to determine whether it communicates the intended message or to select among alternative versions of the advertisement.
15-61
Posttests
Posttests are tests conducted after an advertisement has been shown to the target audience to determine whether it accomplished its intended purpose.
15-62
Consumer-Oriented Sales Promotion
Consumer-oriented sales promotion consists of sales tools used to support a company’s advertising and personal selling directed to ultimate consumers.
Also called consumer promotions .
15-63
Product Placement
Product placement is a consumer sales promotion tool that uses a brand-name product in a movie, television show, video game, or a commercial for another product.
15-64
Trade-Oriented Sales Promotions
Trade-oriented sales promotions are sales tools used to support a company’s advertising and personal selling directed to wholesalers, distributors, or retailers. Also called trade promotions .
15-65
Cooperative Advertising
Cooperative advertising consists of advertising programs by which a manufacturer pays a percentage of the retailer’s local advertising expense for advertising the manufacturer’s products.
15-66
Publicity Tools
Publicity tools are methods of obtaining nonpersonal presentation of an organization, good, or service without direct cost, such as news releases, news conferences, and public service announcements.
15-67
