Advertising
MediaLink 3.0
Richard E. Caplan
The University of Akron
Advertising
• “Any paid form of non-personal presentation and
promotion of ideas, goods, or services by an
identified sponsor”
– American Marketing Association
• Consumers pay for media by watching and
listening to advertisements
– You pay directly for books, movies and recordings
– Television, radio, newspapers, magazines and many
web sites are supported by television
• Advertising is not a medium
– Advertising carries the messages from people who
pay for media
Ancient Advertising
• Phoenicians painted messages on stones
– 1200 BC
• Criers carried signboards to announce the arrival
of ships
– Sixth century B.C.
• Britain required products to carry trademarks to
protect buyers
– First trademark was issued for Bass Ale
• Handbills were the first printed advertisements
– William Caxton in England, 1478
Early Newspaper Ads in America
• First newspaper ads in America were
classified ads
– Boston News-Letter -1704
• Mass circulation penny press
– New York Sun -1833
– Benjamin Day
• Philadelphia Public Ledge
– Reported “advertising is our revenue”
– Advertising financially support media
Let the Buyer Beware
• Penny press would accept any advertising content
– Patent medicines that were mostly alcohol
• Anti-Corpulene pills and Dr. T. Felix Couraud’s Oriental Cream to
remove tan and blemishes
• Unscrupulous advertisers prompted consumer
complaints
• Newspapers established an open advertising policy
– “Our advertising columns are open to the public”
– Except what is prohibited by law or immoral
• No one took responsibility for advertising
– Everyone deplored advertising
Advertising in Magazines
• Magazines resisted advertising
• Advertising as a way for magazines to succeed
– The Ladies’ Home Journal -1887
– Cyrus H. K. Curtis
• Success due to advertising
– Hired Edward Bok as edtor
• Campaign against patent medicine
– Edward Bok led The Ladies’ Home Journal with Collier’s and the
AMA to oppose adverting of patent medicine
• Congress created Federal Trade Commission (FTC)
– Monitor deceptive advertising
– Today the Federal Trade Commission continues to monitor advertising
Advertising in Radio
• First radio advertisement
– WEAF New York -1922
• Ad for real-estate development
• Lucky Strike Dance Orchestra premiered on NBC
– Sales increased 47%
• Continuous reference to the sponsors’ products
– Sir Walter Raleigh Cigarettes
• Sir Walter Raleigh Review
–
–
–
–
In the Raleigh Theater
With the Raleigh Orchestra
Accompanying the Raleigh Rovers
Performing “The Adventures of Sir Walter Raleigh”
• Squeezed in 70 reference to the product
• Radio advertising earned more than magazines in 1938
Advertising on Television
• Television began as an advertising medium
– Commercial radio networks established television
networks
• Direct sponsorship
– Sponsors and advertising agencies took over the
responsibility of producing shows
• Led to the quiz sandal
• Shows often bore the name of the advertiser
– Gratitude factor
• Viewers who liked the program would buy the product
Advertising on the Internet
• Advertisers flocked to the Internet in the late 90’s
– Primarily used banner advertisement on major web sites
– Pop up ads were also tried
• A window that contained the advertisement would open behind the
users browser or on top of it
– More of an annoyance to the web user
• Advertising on the Internet didn’t necessarily bring
increased sales
– Click through rate is less than 1 percent
• Rate at which web browsers click on ads to get more information
• In 2000 online ads reached $8 billion
– Declined in 2001
• Online ads are attempting to use multimedia to interest
web surfers
How Advertising Works
• A change in the meaning of the word advertise
– From “to take note” to “to persuade”
• Advertising is the rhetoric of democracy
– Daniel J. Boorstin
• Common characteristics of advertising
– Repetition
• Repeating message for effect
– Advertising style
• Hyperbole, fantastic claims
– Ubiquity
• To catch consumers attention
Advertising Appeals
• Grabbing your attention
– Get you to read, listen to, or watch an ad
• Appeal to consumers
– Advertising goal is to “tug at our psychological shirt
sleeves”
– According to Jib Fowles in Mass Advertising as Social
Forecast
• Fifteen appeals commonly are used according to
Fowles
– Sex, affiliation, nurture, guidance, aggression,
achievement, dominance, prominence, attention,
autonomy, escape, safety, aesthetic sensations,
satisfy curiosity, physiological
Audience
• Demography
– Consumer characteristics
• Age, gender, income, marital status, occupation, education
• Target audience
– Design messages to reach specific elements of the
audience
– Match the product with the audience
• Advertise low calorie food in Weight Watchers
Magazine not Gourmet
– Advertising agencies try to match a client’s product to
an audience
Criticism of Advertising
• According to Louis C. Kaufman in Essentials of
Advertising
– Three main Criticisms
• Advertising adds to the cost of products
– Consumers pays the cost of advertising
– Advertising helps make goods available and lowers prices
• Advertising causes people to buy products they do not
need
– Dangerous goods like cigarettes
– Advertising may stimulate the purchase of a new product but
consumers will not continue to buy an unsatisfactory product
• Advertising reduces competition and thereby fosters
monopolies
– High cost of advertising limits entry into the market place
– Less expense then other forms of sales
Does Advertising Work?
• Advertising is simply information
– Simply telling the consumer about new
products
– Consumers are always looking for a
better way to meet their needs
• Overwhelming power to deceive
consumers
– Making people buy what they don’t
want
• Evaluating is more difficult
– A middle ground exists between the two
arguments
Working in Advertising
• 6,000 advertising agencies in the United
States
– Most bill under $1 million a year
• Advertising agencies are paid through a
commission on advertising time and space
sold
– Commonly 15%
• Agencies also produce television, radio
and print ads for their clients
– Will bill clients for additional production
services
Jobs in Advertising Agencies
• Market research
– Establish target audience based
on product
• Media selection
– Suggest media for client
• Creative activities
– Create copy and design
• Account management
– Liaison between agency and client
• Administration
– Business management
• Public relations
– Extra service
Advertising Agencies Organization
• Account executive
• Creative department
– Creative director
• Copy platform
– Art director
– Client reviews
• Media department
– Media buyer
– Media representative
• CPM - cost per thousand
• Market (audience)
research
– Media research
Business of Advertising
• Media and advertising are interdependent
• Advertising business is dependent on the national
economy
– If the economy is healthy advertising industry will grow
– During recession advertisers cut their budgets
• Advertising business declines
• During recession advertisers may change media strategy
– Choose radio over television
• Radio costs much less
Television Commercials
• Television adverting is expensive
– Average 30 second ad on network television could cost $100,000
– 30 second ad on the Super Bowl would cost $2 million
• Networks and stations sells 10, 15 and 30 second ads
• National advertising on network programs is handled by national
advertising agencies
– The country’s biggest advertisers use agencies
• Proctor and Gamble, Ford, GM, and McDonald’s for example
• National agencies buy advertising based on CPM
– Cost-per-thousand
• Cost of reaching 1000 people
• Television adds are expensive to produce
– As much as a $1 million per minute
• Using other media may be more cost effective
Print and Radio Advertising
• Local television, radio and print are less expensive than
television
– Allows targeting of a specific audience
• Based on demographics
– Age, education, gender, income
• Target audiences
– Women who travel read Cosmopolitan but don’t watch daytime
television
– Newsweek delivers to more people for less money than Time
• Audience information for broadcasting
– Radio
• Arbitron
– Television
• A. C. Nielsen
Local Advertising
• Small local business
– Many advertise in local newspapers, handbills
• Susan’s Coffee and Tea
– Coupon published in neighborhood weekly
• Large local business
– Many use local newspaper, television and radio
• Bud Kennedy’s Ford Dealership
– 30 second announcement during sports each night
» Co-op with Ford Motor
– Half page display ad on Saturdays
• Most local advertising expenditures go to newspapers
• Local advertising agencies
– Design campaign, produce and place ads
Local Media Includes Services For Clients
• Newspapers
– Prepare ads using clip art
• Radio stations
– Produce ads
• Write copy
• Talent services and limited production
– Barter
• Trade airtime for advertiser’s product
– Give a product as a contest prize
• Television stations
– Produce ads
• Write copy
• Limited production
– May only shoot slides and graphics
National Sales Representatives
• Manufacturers desire to sell product nationally
• Hire a local advertising agency
– Recommends a market strategy
• Agency contacts a national sales representatives
– Rep firm
• Negotiates the purchase of air time and advertising space in
local market to firms outside the market
• Takes a 15% commission on sales
• Work of rep firm
– Prepares a media package to reach target audience
– Based on CPM
• Cost per thousand
Advertising Alcohol
• Television networks
– Voluntary self-regulation
• Do not carry liquor ads
• Does not show people drinking beer
• Distilled Sprits Council
– Voluntary code of good practices
• Ban on television advertising
• Bureau of Alcohol, Tobacco and Firearms and
Federal Trade Commission
– Do not have authority to regulate liquor commercials
Challenging the Ban
• Seagram’s Advertised Royal Crown
whiskey on local Texas television station
• Television networks aired late night ads
sponsored by liquor companies for two
months in 2002
– Ads promoted the responsible use of alcohol
Regulating Advertising
• Federal Trade Commission
– Established 1914
– Stop businesses that restrict competition,
injure or deceive consumers
• If FTC determines an ad to be deceptive it stops the
ad
– Can require corrective ad
• Food and Drug Administration
– Oversees claims that appear on food labels
• The claim of fresh orange juice means it cannot
have been frozen
Other Regulatory Bodies
• Federal Communication Commission
– Enforces rules that govern broadcast media
• Rules against misleading demonstrations of
products
• Environmental Protection Agency
• Consumer Product Safety Agency
• National Advertising Review Board
– Self-regulation
International Advertising
• Globe products
– Advertising to a world
– wide audience
• Coca-Cola
• McDonald’s
• Global media
– CNN Worldwide
– Internet
• Advertising agency billing outside the U.S. is
increasing
• Changing demographics
– Addition of Spanish dialog to television commercials