Chapter 16 Global Advertising McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. Outline Advertising in Selected Countries The Top Global Advertisers and Ad Agencies Global Advertising Pros and Cons The Communication Process and Culture Global Campaign Planning Takeaways. Advertising Intensity in Selected Nations Country North America Canada United States Latin America Argentina Brazil Chile Asia China Hong Kong India Japan Singapore South Korea Australia New Zealand Europe France Germany Italy Spain Sweden Switzerland United Kingdom Russia Advertising Expenditures Total ($billion) $ per capita 4.8 120.2 157 445 2.7 5.2 0.6 76 32 43 3.4 2.8 1.2 33.3 0.7 3.3 4.6 0.7 0.3 419 1.2 262 222 70 246 185 9.3 18.9 6.8 4.7 1.9 2.5 15 0.04 157 230 118 120 211 356 252 0.02 Media Usage in % of Ad Expenditures Country North America Canada United States Latin America Argentina Brazil Chile Asia China Hong Kong India Japan Singapore South Korea Australia New Zealand Europe France Germany Italy Spain Sweden Switzerland United Kingdom Russia TV Print Radio Cinema Outdoor 37.7 37.4 46.5 47.2 12.9 13.5 0.1 2.8 1.9 49.7 58.6 43.1 32.8 314.8 39.3 7.7 4.1 10.9 2.2 0.3 7.6 5.5 6.4 48.4 51.8 55.9 52.5 38.4 26.8 33.7 36.6 47.1 41 16.7 41.7 51.7 70.2 52.8 49.5 4.5 4.4 2.3 5.7 3.9 2.4 7.4 12.9 0.3 0.7 2.6 24.4 1.4 4.6 0.6 4.3 35.1 23.3 52.1 42.4 21 13.8 32.1 74 45.6 69.2 37.2 43.8 70.3 71.2 57.8 18.3 6.8 3.2 5.4 9.3 3.9 3.1 4.3 1.8 0.8 1 0.7 1 0.5 1 0.4 0.9 0.9 11.9 3.9 4.7 3.5 4.4 4.9 4.9 6 Top Global Advertisers Figures are in millions of US dollars rank 1999 1998 1 2 2 1 3 3 4 4 5 7 6 8 7 5 8 6 9 9 10 10 11 12 12 11 13 14 14 13 15 15 spending outside the US country advertiser headquarters 1999 % change count UNILEVER Rotterdam/London 3110 8.1 66 P&G Cincinatti 2988 -4.7 68 NESTLE Vevey, Switzerland 1580 0.6 67 COCA COLA Atlanta 1178 5.3 69 FORD Dearborn, Michigan 1150 6.9 51 GM Detroit 1148 8.6 43 L'OREAL Paris 1120 0.2 47 VOLKSWAGEN Wolfsburg, Germany 1009 -8.2 33 TOYOTA Toyota City Japan 1007 -3.9 44 PSA PEUGEOT CITROEN Paris 906 -0.3 37 SONY Tokyo 886 8.3 53 MARS Mclean VA 841 -3.4 37 RENAULT Paris 809 5.7 31 PHILIP MORRIS New York 767 -1.5 49 HENKEL Dusseldorf 728 -0.9 35 US media ad spending 1999 1998 588 769 1704 1743 329 280 355 316 1272 1212 2960 2206 450 407 372 255 718 657 590 298 575 277 1358 19 1265 8 Top Global Advertisers (cont’d) Figures are in millions of US dollars rank 1999 1998 1 2 2 1 3 3 4 4 5 7 6 8 7 5 8 6 9 9 10 10 11 12 12 11 13 14 14 13 15 15 worldwide media spending breakdownof regional 1999 media spending reported advertiser 1999 1998 africa asia latin america europe middle east canada UNILEVER 3698 3646 31 839 419 1785 18 19 P&G 4693 4880 11 527 550 1805 41 55 NESTLE 1909 1851 8 342 197 1023 5 5 COCA COLA 1533 1435 20 283 334 519 8 14 FORD 2122 2288 3 126 142 825 13 41 GM 4108 3263 0 110 214 723 18 83 L'OREAL 1570 1525 4 36 51 1003 2 23 VOLKSWAGEN 1381 1353 6 23 163 796 4 17 TOYOTA 1725 1706 9 607 24 320 15 32 PSA PEUGEOT CITROEN 906 909 0 16 47 840 3 0 SONY 1477 1394 0 387 71 398 3 27 MARS 1139 1148 0 69 31 732 0 8 RENAULT 809 765 0 1 41 766 1 0 PHILIP MORRIS 2125 2044 0 92 75 567 10 22 HENKEL 747 742 0 14 0 714 0 0 Top Global Advertising Agencies Figures are in millions of US dollars Worldwide Gross Rank Agency Headquarters Income (2000) 1 Dentsu Tokyo 2432 2 McCann-Erickson Worldwide New York 1824.9 3 BBDO Worldwide New York 1534 4 J Walter Thompson Co New York 1489.1 5 Euro RSCG Worldwide New York 1430.1 6 Grey Worldwide New York 1369.8 7 DDB Worldwide New York 1176.9 8 Ogilvy & Mather Worldwide New York 1109.4 9 Publicis Worldwide Paris 1040.9 10 Leo Burnett Worldwide Chicago 1029.3 % Change from 1999 <23.6>/td 9.8 6.7 9.7 5.7 14.8 9.3 16.6 7.9 10.4 Worldwide Capitalized Billings 2000 16507 17468.5 13611.5 10229 10646.1 9136.6 9781 10647.2 7904.5 7757.8 The Global Ad Agency Job • To coordinate with the global advertiser in terms of final message creation & media selection • To effectively construct a media schedule for the various local markets within its global network • To communicate the global advertisements effectively into various smaller local markets • To account for across-country variability in financial arrangements & payments Global Advertising Defined GLOBAL ADVERTISING – media advertising that is more or less uniform across many countries, often, but not necessarily in media vehicles with global reach Pros and Cons of Global Advertising ADVANTAGES • • • • • CONSISTENCY OF BRAND COMMUNICATIONS MEDIA SPILLOVER COST SAVINGS IMPROVED PRODUCTION LEVERAGING A GREAT IDEA DISADVANTAGES • • • • IMAGES AND SYMBOLS MIGHT NOT BE LOCALLY ACCEPTABLE APPROPRIATE MEDIA MIGHT NOT BE AVAILABLE PRODUCT USAGE IS NOT THE SAME LOCAL CREATIVITY IS STIFLED Drivers of Global Advertising SUPPLY SIDE 1) GLOBAL AD AGENCIES 2) GLOBAL MEDIA DEMAND SIDE 3) GLOBAL CUSTOMERS 4) PREFERENCE CONVERGENCE 5) GLOBAL COMPETITORS Four Components of Global Advertising 1. STRATEGY – Global ads involve products &services that are positioned similarly across markets, wherein the product’s appeal is consistent 2. ORGANIZATION – global ads are typically directed from headquarters with the help of advertising agencies with a global network 3. MEDIA – with global reach are used, creating spillover that crosses borders to reach customers in different countries & follows traveling customers around the globe 4. MESSAGE & CREATIVE – copy & visualization may be uniform across markets, uniformity decreases based on how different each local market is from another Global Ad Categories • IDENTICAL ADS – ads are identical, usually with localization only in terms of language voice-over changes & simple copy translations (e.g. the Marlboro cowboy ads) • PROTOTYPE ADVERTISING – the same ads, but the voice-over may be changed to avoid language & cultural problems, & the ad may be re-shot with local celebrities (e.g. Drakkar Noir) • PATTERN STANDARDIZATION – similar but less structured global approach, wherein the positioning theme is unified & some alternative creative concepts are planned, but execution differs between markets (e.g. Xerox) Global Ads: Same everywhere? PROTOTYPE ADVERTISING PATTERN STANDARDIZATION • Brand Name same • Brand Name same • Theme same • Theme same • Visual same • Visual same • Positioning same • Positioning same • Actors same • Actors not same • Words same • Words not same • Language (local) • Language (local) • Media same • Media not same • Materials same • Materials not all same • Slogan same • Slogan same Web Ads Are Naturally Global WEB ADS are those boxed inserts on the screen that appear as you surf the web. They are interactive in the sense that you can click on them to get more information about the product/service. Types of Web ads: • Banner ads – most common, measured in pixels • Tickers – banner ads that move across the screen • Interstitial ads – ads that flash while a request is being handled, filling up idle loading time. • Pop-up ads – ads that appear once a site has been loaded prior to webpage access • Transactional ads – let you order/request something without leaving the current webpage • Roadblocks – full screen ads that users must pass through to get to other screens • Rich media ads – the web version of a TV commercial, with audio and motion The International Mass Communication Process Producer/ marketer/ advertiser Sets objectives and advertising budget Coordination and control Sender’s cultural setting Advertising agency Mass Media Develops message (encoding) and selects media Carries the message Generate feedback on effects Receiver’s cultural setting Opinion leaders, individuals Receive the message and interpret (decoding) Individuals Think, feel and act (hierarchy of effects) Cultures and Visual vs Verbal Processing VISUAL PROCESSING TV commercials Radio Ads Low literacy Younger Segments Low Involvement products High context societies VERBAL PROCESSING Magazines Newspapers High Literacy Older segments High involvement products Low context societies The Hierarchy of Effects ADVERTISING EXPOSURE AWARENESS KNOWLEDGE LIKING/ATTITUDE PREFERENCE TRIAL REPEAT PURCHASE/LOYALTY Matching Ad Objectives and Media AWARENESS TV, Radio KNOWLEDGE Words (spoken/written), Print, TV/Radio ATTITUDE CHANGE & IMAGE BUILDING INFLUENCE BEHAVIOR TV, Magazines, Cinema, Outdoor Ads Media must be timely, newspapers, TV Global Advertising is Most Powerful When… • the image communicated can be identical across countries • the symbols used carry the same meaning across countries • the product features desired are the same • the usage conditions are similar across markets Goodyear’s Latin-Am. Campaign Planning Global Tire Ads: Language pitfalls How do you say “tire” in Latin America’s Spanish? What to say Where to say it CAUCHOS Venezuela CUBIERTAS Argentina GOMAS Puerto Rico LLANTAS Mexico, Peru, Guatemala, Colombia NEUMATICOS Chile Goodyear: Lessons for Global Advertisers 1. By focusing on regions, it may be possible to reap the scale benefits & cost efficiencies of global advertising without sacrificing too much on the side of local adaptation. 2. The early involvement of country subsidiaries & agency professionals not only facilitates later acceptance of unified themes but also helps broaden the sources of powerful campaign concepts. 3. The process by which pattern standardization is arrived at needs to allow open & free exchange. 4. Even when the company has operated for years in a market, research is still necessary, especially when conditions are changing. Takeaway As the affluence of countries grows, new products/services appear, & customers need more information. Advertising becomes more important and advertising expenditures as a percentage of GDP increase. Takeaway As markets integrate, global communications expand, & customers become more similar, pan-regional advertising campaigns will become increasingly cost-efficient & more effective than multi-domestic advertising. Takeaway Instead of complete uniformity, global advertising tends to follow a pattern standardization approach with unified slogan, visualization, & image but with local execution in terms of language, spokespersons, & copy. This helps avoid the pitfalls of standardized & translated messages. Takeaway The global advertising agency is often at an advantage over local rivals when it comes to global /regional advertising. But independent local advertising agencies have combined with others to form multinational networks & can sometimes offer stronger local talent. Takeaway Developing a global campaign takes time, effort, & planning. The process should involve headquarters and ad agency managers & local representatives whose knowledge will help formulate the global communication strategy.