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Chapter 17
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LO 17-1 Describe advertising and its different
types
LO 17-2 Summarize the eight major steps in
developing an advertising campaign
LO 17-3 Identify who is responsible for developing
advertising campaigns
LO 17-4 Define public relations
LO 17-5 Describe the different tools of public
relations
LO 17-6 Analyze how public relations is used and
evaluated
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O Both large organizations and small
companies use conventional and
online promotional efforts like
advertising to
O Change their corporate image
O Build brand equity
O Launch new products
O Promote current brands
LO 17-1
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otherwise on a password-protected website for classroom use.
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O Advertising
O A paid nonpersonal communication about an
organization and its products transmitted to a
target audience through mass media
O Used to promote goods, services, ideas, images, issues,
people and anything else advertisers want to publicize
or foster
O Advertising permeates our daily lives; can have a
profound impact on how customers view certain
products and can influence purchase behavior
throughout a lifetime
O Many nonbusiness organizations – including
governments, churches, universities and charitable
organizations – use advertising
LO 17-1
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O Institutional advertising
O Promotes organizational images, ideas and
political issues
O Can be used to create or maintain an organizational
image
O May aim to create a more favorable view of the
organization in the eyes of noncustomer groups
O Advocacy advertising
O Advertising that promotes a company’s position
on a public issue
O May be used to promote socially approved behavior
LO 17-1
such as recycling or moderation in consuming alcoholic
beverages
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O Product advertising promotes the
uses, features and benefits of
products
O Two types of product advertising:
O Pioneer advertising – tries to stimulate demand for a
product category rather than a specific brand by
informing potential buyers about the product
O Used most often for products before they hit the market
O Competitive advertising – tries to stimulate demand
for a specific brand by promoting its features, uses and
advantages relative to competing brands
LO 17-1
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otherwise on a password-protected website for classroom use.
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O Three types of competitive
advertising:
O Comparative advertising – compares the
sponsored brand with one or more identified
brands on the basis of one or more product
characteristics
O Reminder advertising – used to remind
consumers about an established brand’s uses,
characteristics and benefits
O Reinforcement advertising – assures users they
chose the right brand and tells them how to get
the most satisfaction from it
LO 17-1
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 Samsung indirectly pokes fun at Apple in some of
its advertisements to indicate the superiority of
the Galaxy phone.
 Stonyfield created an advertisement to promote
 Read the following
examples of advertising.
Determine whether the
type of advertising is
pioneer, competitive, or
institutional advertising:
its efforts to help fund innovative organic farming
projects.
 Clorox released television advertisements to
inform consumers that its brands are still the best
in cleaning.
 To introduce Google Glass, Google had to explain
what the product does and how it is revolutionary.
 The National Highway Traffic Safety
Administration develops jolting ads to reinforce
the danger of texting and driving.
 Apple released the details of its iPad to generate
excitement even before the product hit the
market.
LO 17-1
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O An advertising campaign is the creation and
execution of a series of advertisements to
communicate with a particular target audience
LO 17-2
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otherwise on a password-protected website for classroom use.
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O The target audience is the group of
people at whom advertisements are
aimed
O This may include everyone in the firm’s target
market or only a portion of the target market
O Identifying and analyzing the target audience
are critical processes as the information yielded
helps determine other steps in developing the
campaign
O The more an advertiser knows about the target
audience, the more likely the firm is to develop
an effective advertising campaign
LO 17-2
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O Advertising objectives guide
campaign development and should be
defined carefully
O Objectives should be stated clearly, precisely
and in measureable terms
O Benchmarks provide measurability
O Objectives can be defined on the basis of:
O Sales – increasing dollar sales or unit sales, increasing
LO 17-2
sales by a percentage or increasing market share
O Communication – increase product or brand
awareness, make consumers’ attitudes more
favorable, heighten consumers knowledge of product
features or create awareness
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O Advertising platforms are basic issues
or selling points to be included in an
advertising campaign
O The platform should consist of issues important
to customers
O A single advertisement in an advertising campaign may
contain one or several issues from the platform
O Because the platform is a base on which to
build the advertising message, marketers
should analyze this stage carefully
LO 17-2
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otherwise on a password-protected website for classroom use.
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O The advertising appropriation is the
advertising budget for a specific time
period
O Many factors affect a firm’s decision about how
much to appropriate for advertising
O Geographic size of the market
O Distribution of buyers within the market
O The type of product
O The firm’s sales volume relative to competitors’ sales
volumes
O Business products have small appropriations
LO 17-2
relative to sales, while consumer convenience
items have large appropriations relative to sales
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O Objective-and-task approach
O Budgeting for an advertising campaign by first
determining its objectives and then calculating
the cost of all the tasks needed to attain them
O Percent-of-sales approach
O Budgeting for an advertising campaign by
multiplying the firm’s past and expected sales
by a standard percentage
LO 17-2
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O Competition-matching approach
O Determining an advertising budget by trying to
match competitors’ advertising outlays
O Arbitrary approach
O Budgeting for an advertising campaign as
specified by a high-level executive in the firm
LO 17-2
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otherwise on a password-protected website for classroom use.
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O A media plan specifies the media
vehicles to be used and the schedule
for running advertisements
O Determines how many people in the target
audience will be exposed to the message and
how the message will effect them
O This is a complex task requiring analysis of the
target audience
O Advertisers spend tremendous amounts on
advertising media
LO 17-2
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O The primary goal of the media plan is
to reach the largest number of people
in the advertising target the budget
will allow
O The secondary goal is to achieve the
appropriate message reach and frequency for
the target audience while staying within budget
O Reach refers to the percentage of consumers in the
target audience actually exposed to a particular
advertisement in a stated period
O Frequency is the number of times these targeted
consumers are exposed to the advertisement
LO 17-2
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O Media planners must decide on which
kinds of media to use
O Radio, TV, newspapers, digital or online
advertising, magazines, direct mail, outdoor
displays or signs on mass transit vehicles
O They take many factors into account:
O Analyze location and demographic characteristics of
consumers in the target audience
O Consider the sizes and types of audiences that specific
media reach
O Content of the message may affect media choice
LO 17-2
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LO 17-2
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otherwise on a password-protected website for classroom use.
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LO 17-2
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otherwise on a password-protected website for classroom use.
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LO 17-2
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otherwise on a password-protected website for classroom use.
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O Cost is a troublesome consideration
because there is no accurate way to
compare the costs of one medium
over another
O Planners try to obtain the best coverage
possible for each dollar spent
O Cost comparison indicator is a means of comparing
LO 17-2
the costs of advertising vehicles in a specific medium in
relation to the number of people reached
O Example: the cost per thousand impressions (CPM) is
the cost comparison indicator for magazines; showing
the cost of exposing 1,000 people to one
advertisement
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otherwise on a password-protected website for classroom use.
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O Digital marketing is creating a
dramatic shift for advertising agencies
O Digital marketing is not reduced to one
medium, but can include platforms such as
O E-books
O iPads
O Geotargeting
O Mobile apps
O Agencies that embrace the new advertising
media are facing challenges in adapting but also
finding increased profitability
LO 17-2
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otherwise on a password-protected website for classroom use.
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O Like media selection decisions, media
scheduling decisions are affected by
numerous factors, such as
O Target audience characteristics
O Product attributes
O Product seasonality
O Customer media behavior
O Size of the advertising budget
LO 17-2
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O There are three general types of
media schedules:
O Continuous
O Advertising runs at a constant level with little variation
throughout the campaign period
O Flighting
O Advertisements run for set periods of time, alternating
with periods in which no ads run
O Pulsing
O Combines continuous and flighting schedule; during
the entire campaign, a portion of advertising runs
continuously
LO 17-2
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O The basic content and form of an
advertising message are a function of
several factors
O Product features, uses and benefits
O The intensity of the advertising
O Characteristics of people in the target audience
O The advertising campaign’s objectives and
platform
O Choice of media
LO 17-2
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O Copy is the verbal portion of
advertisements
O Headlines
O Critical as people often only read headlines
O Subheadlines
O Links the headline to the body copy
O Body copy
O Usually consists of several paragraphs
O Signature
O Identifies the advertisement’s sponsor and may
include a trademark, logo, name and address
LO 17-2
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LO 17-2
O Radio copy should be informal and
conversational to attract listeners’
attention
O In television copy, the audio material
must not overpower the visual
material, and vice versa
O Storyboard is a blueprint that
combines copy and visual material to
show the sequence of major scenes in
a commercial
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O Artwork is an advertisement’s
illustrations and layout
O Illustrations are photos, drawings, graphs,
charts and tables used to spark audience
interest in an advertisement
O Communicates an idea quickly or conveys ideas
difficult to express
O Important because consumers tend to better recall the
visual rather than the verbal portions
O Layout is the physical arrangement of an
advertisement’s illustration and copy
LO 17-2
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O Execution of an advertising campaign
requires extensive planning and
coordination because many tasks
must be completed on time with
several people and firms involved
O Some possible contributors to the campaign are
production companies, research organizations,
media firms, printers and commercial artists
O Implementation requires detailed schedules to
ensure various phases are done on time
LO 17-2
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O A variety of ways exist to test
effectiveness including:
O Measuring achievement of advertising
objectives
O Assessing effectiveness of copy, illustrations or
layouts
O Evaluating the effectiveness of certain media
LO 17-2
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O Advertising can be evaluated before,
during and after the campaign
O Pretest – evaluation of advertisements
performed before a campaign begins
O Consumer jury – a panel of a product’s existing or
potential buyers who pretest ads
O To measure effectiveness during a campaign,
marketers use inquiries or responses
O Posttest – evaluation of advertising
effectiveness after the campaign
O Objectives often determine what kind of posttest is
appropriate
LO 17-2
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O Posttest methods include:
O Recognition test
O Respondents are shown the actual ad and asked if they
recognize it
O Unaided recall test
O Respondents are asked to identify advertisements they
have seen recently but not given recall clues
O Aided recall test
O Asks respondents to identify recent ads and provides
clues to jog their memories
LO 17-2
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 Walmart adopted the selling point of “every day
low prices” as part of its marketing campaigns
 Procter & Gamble set aside $20 million for its
advertising campaign to market a new product
 Janice works at an advertising agency, where her
 Read the following
examples of advertising.
For each example,
determine the step in the
advertising process:
job is to take the concepts and draft the copy for
advertisements
 Petco has determined a schedule for its
advertisements on major networks; it will also
place ads on the Internet
 Yum Brands developed a new advertising
campaign for Taco Bell in hopes the campaign will
increase sales by 20%
 Fred conducts pre-tests and post-tests to see how
well an advertisement impacted a group of
consumers
 Dyson vacuum cleaner advertisements focus
more on affluent home owners.
LO 17-2
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O An advertising campaign may be
handled by:
O An individual or a few people within a firm
O Small firms depend heavily on local media
O A firm’s own advertising department
O May obtain services of independent research
organizations or may hire freelance specialists for
some projects
O An advertising agency
O May be advantageous because an agency provides
highly skilled, objective specialists with broad
experience at low to moderate costs to the firm
LO 17-3
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O Public relations are communication
efforts used to create and maintain
favorable relations between an
organization and its stakeholders
O Can be directed at either internal or external
stakeholders
O Public relations can be used to promote people,
places, ideas, activities and even countries
O Often used by nonprofit organizations
O Public relations focus on enhancing the image
of the total organization
LO 17-4
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O Companies use a variety of tools to
convey messages and create images
O Public relations tools include
O Written materials such as brochures,
O
O
O
O
LO 17-5
newsletters and annual reports
Corporate identity materials such as business
cards and signs
Speeches
Event sponsorships
Special events
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otherwise on a password-protected website for classroom use.
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O Publicity - a news story type of
communication about an organization
and/or its products transmitted
through a mass medium at no charge
O Publicity-based public relations tools include
O News release – a short piece of copy publicizing an
LO 17-5
event or product
O Feature article – a manuscript of up to 3,000 words
prepared for a specific publication
O Captioned photograph – a photo with a brief
description of its contents
O Press conference – a meeting used to announce major
news events
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LO 17-5
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otherwise on a password-protected website for classroom use.
 An oil and gas company just experienced a major
 Read the following
examples. Describe
whether the example is a
news release, feature
article, captioned
photograph, or press
conference:
oil spill. It is important that the CEO personally
address the media to give a statement and
provide reassurances.
 The Atlanta Zoo wants to market a benefits
concert, so it writes up a short blurb and sends it
to the local radio station.
 Lululemon paid to have a large picture of its
newest yoga outfit placed on the front page of the
newspaper, accompanied by a brief description to
explain what it is.
 An article on Square’s credit card reader and how
it can change the banking industry appeared in
Bloomberg Businessweek.
 PR Newswire works with Kraft to develop and
distribute a 300-word story about how it has
performed in the last quarter.
LO 17-5
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O Environmental monitoring identifies
changes in public opinion affecting an
organization
O A public relations audit is used to
assess an organization’s public image
or to evaluate the effect of a specific
public relations program
LO 17-6
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O A communications audit may include
a content analysis of messages, a
readability study or a readership
survey
O Social audit is used when an
organization wants to measure the
extent to which stakeholders view it
as being socially responsible
LO 17-6
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O Companies may have to deal with
unexpected and unfavorable publicity
resulting from
O An unsafe product
O An accident resulting from product use
O Controversial actions of employees
O Or some other negative event or situation
LO 17-6
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O Negative events that generate public
relations can wipe out a company’s
favorable image and destroy positive
customer attitudes
O How an organization deals with
unfavorable actions and outcomes
can have a significant impact on firm
valuation
LO 17-6
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O First and foremost, the organization
should try to prevent negative
incidents and events through
O Safety programs, inspections, training and
effective quality control procedures
O Consistent brand messages and
images throughout all communication
at times of crisis helps strengthen the
brand
LO 17-6
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O Plans and policies should be in place
before a crisis occurs
O In most cases, organizations should
expedite news coverage of negative
events rather than try to discourage
or block them
LO 17-6
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 While a company can get in trouble for
releasing ads that deceive the customer,
sometimes an advertising claim might be
technically true but still misleading.
 There are many cases where marketers take
advantage of cultural perceptions. Organic
food, for instance, is marketed for its lack of
additives and non-organic pesticides.
However, there is no proof that organic or
natural food is more nutritious.
 Natural potato chips still contain lots of fats
and sugars. Vague definitions, such as the
word “natural,” can also be misleading.
 It is important that advertisers take their
responsibility to consumers into account
before releasing a possibly confusing
advertisement.
LO 17-6
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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.