Download ADVERTISING

ADVERTISING
and its importance to Marketing
About Advertising
• Average person is exposed to more than 2,000
advertisements a week
• Main Purpose is to present a message that
encourages the customer to buy the product or
accept the ideas
• Costs are usually lower than other types of
promotion
• Businesses must choose appropriate mode of
advertising, then the content, for their target
market
• Can “presell” products before shopping ever starts
Drawbacks to Advertising
• Cannot focus on individual needs because
same message is conveyed to all customers
• Some forms can be too expensive
• Inefficient – not everyone exposed is a
potential customer
• Messages are often short
Types of Media for Advertising
• Print
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Newspaper
Magazine
Direct-Mail
Directory
Outdoor
Transit
• Broadcast
– Television
– Radio
• Online
– Banner Ads
– Interstitial
– Web Pages
• Other
– Specialty – promotional
items
– Sports Arena Billboards
– Movie Theater Ads
– Hot Air Balloons and
Blimps
– Instant Coupon Machines
Print Media
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Oldest form of advertising
Written
Newspaper
Magazine
Direct-Mail
Directory
Outdoor
Transit
Newspaper Ads
• Can be daily or weekly
• Can be local, regional or
national
• Classified
– Grouped by specific
category
– Pay by word or line
• Display
– Creative illustration of
product
– Mix of art, photographs,
headlines, copy, and logo
• Advantages
– Large readership with a
high level of involvement
by the consumer
– Circulation is known, so
businesses can target living
area or special interests
– Cost is low
– Timely and can change
easily
• What are some
disadvantages?
Magazine Advertising
Classifications
• Local, regional, national
• Weeklies, monthlies, quarterlies
• Consumer or business/trade
Magazine Advertising
• Can target their audiences because they know
circulation and characteristics of readers
• Have longer life span
• More likely to be remembered
• Print quality is better
• People keep magazines longer
• Variety of presentation formats
• What are the disadvantages?
Direct-Mail Advertising
• Can be newsletters, catalogs, coupons, samplers,
price lists, invitations, reply cards
• Done by mailing list or in with bill
• Highly selective and control timing
• Can use incentives
• Disadvantages
– Low response level
– List becomes dated
– Cost is high due to production, postage, buying mailing
list
Directory Advertising
• White and Yellow Pages
• Relatively inexpensive
• Found in 98 percent of American
households
• Printed yearly – how is this an advantage
and a disadvantage
• Common for local service business
Outdoor Advertising
• Highly visible
• 24-hour a day message
• Can be located to reach specific target
markets
• Limited viewing time
• Government regulations
Transit Advertising
• Printed posters found
inside commuter trains
• Exterior posters on
outside of taxis and
buses
• Posters in the station
itself
• Economical
• Defined urban market
STOP HERE
Newspaper Rates
• Quoted by column inch (1” wide x 1”deep)
• If a column is $17 per column inch and the
advertisement is 4 inches wide by 3 inches
deep, then
– 17 x 4 x 3 = $204
Factors that affect rates
• Run of paper – where the ad is placed in the
publication. Does the paper choose or the
advertiser choose?
• Use of color
• Frequency of advertising
• Open rate varies when the ad runs
• Contract rate
• Cost per thousand readers rate
Which costs more?
• Guaranteed run –
Advertiser chooses the
last page of the
publication
• Run of paper – the
newspaper places ad
where it has room
Which costs more?
• Black & White ad
• Color ad
Which costs more?
• Advertisers who run
ads at least once every
month
• Advertisers who run
ads just during tax
season
Which costs more?
• Open Rate
– $28 per column inch
on Thursday
– $31 per column inch
on Saturday
– $35 per column inch
on Sunday
• Contract Rate
– Bulk space
• Guarantees that a
minimum number of
inches will be used during
a 12-month period
– Yearly Frequency
• Guarantees that an
advertiser will use a
minimum number of
column inches each week
for 52 weeks
Assuming you are using the cost per thousand (CPM) rate:
Which costs more?
• Advertising with the
Chicago Times with a
circulation of 500,000
• Advertising with the
Chicago Tribune with
a circulation of
300,000
Magazine Rates
• Based on circulation, quality of readership,
production technique
• Bleed – costs 15 to 20% more
• Color – every time color is added, rates increase;
four color most expensive
• Premium position – Back cover, Inside first page
• Frequency discounts –Rate per issue decreases as
frequency increases
• Commission rate –given by magazine to
advertising agency
• CPM
Broadcast Media
• People are more likely to believe broadcast than
print
• Merely for entertainment – doesn’t require reading
• Average person spends 10 years watching
television by age 70
• Average person spends 6 years listening to the
radio by age 70
• Good availability, but more expensive
Television Advertising
• Has sound, action and
color
• Prime time – between 7
and 10 pm
• 30 to 60 second spot
• Appealing to large
companies with
widespread distribution
• Directed to a specific
audience
Television Ad Costs
• Highest production cost of any media and
high dollar cost for time used
• Actual audience size is not assured
• Some people leave the room during
commercials
• More expensive for Class AA time
(primetime)
• Rates are based on viewership
Radio Advertising
• Wide audience – 96% of all people over age 12 in
one week
• Best times?
– Hint: Drive Time
• 15, 30 or 60 second slots
• Effective because of announcer, background
music, jingles, slogans and sound effects
• Can select an audience by choosing stations
• Messages can be changed easily
• Three types – network, national spot, and local
Radio Advertising Disadvantages
• Short life span – once broadcast, it is over
• Lack of visual involvement (that’s why you
need a catchy jingle)
Radio Ad Costs
• Each radio station determines rates by time
of day
• Run of schedule is cheapest
• Drive time advertising is expensive
• Target audiences, audience size, weekly
package plans
Online Advertising
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Advertising messages on the Internet
Most appear as banner ads
Button ads are also popular
Interstitial ads – pop ups that must be closed first
Response rates are low
Selling effectiveness is still uncertain
Relatively inexpensive
Other Media
• Specialty
– Items given away with no
obligation
– Printed with company name
and address
– Likely to be placed with
high visibility
– Distribution is limited
– Fairly inexpensive
• Sports Arena Billboards
• Ads in movie theaters
or video rentals
• Hot air balloons and
blimps
• Skywriting
• Supermarket cart
displays
• Instant coupon
machines
Selection of Promotional Media
• Depends on the product, the habits and lifestyles
of target, types of media available in the area
• Three questions
– Does the medium have the ability to present the product
and the appropriate business image?
– Does the medium have the ability to target the desired
customers?
– Does the medium have the ability to obtain the desired
response rate?
Which Media?
• African-American fashion dolls for children ages
7-12
• New line of rain jackets
• Vitamins
• Movie
• Watch that costs $1,500
• Computers and computer equipment
• Legal services
• Used Cars
Promotional Budget Methods
• Percentage of Anticipated
Sales
– Budget a percentage of last
year’s sales
– Little financial risk
• All you can Afford
– After all other expenses are
paid
– Objective to build sales and
reputation in the beginning
– Short time only
• Following the
Competition
– Planned according to
market share
– Weak because it is based on
other’s promotional
strategies
• Objective and Task
– Determines goals and plans
how to reach and
determines the cost
– Most effective of the four
Other Activities
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Display print ads around room and have students look, close eyes, and tell
which they remember (p.334)
Institutional advertising graphic and question ( p. 336)
Find an example of a print or broadcast ad you do not like – state what
elements you don’t like, what you would do to improve the ad, despite the
dislike of the ad, do you think it is effective? (p. 340)
Select a magazine and a section of a newspaper that both contain full page ads
and answer the following: promotional or institutional; appealing to a want,
need or both; target audience; elements that appeal to target; familiar product –
other ad campaigns. (p. 341)
I’m a Pepper – read p. 348 and develop a slogan for next decade (p. 348)
Select a magazine and determine circulation; characteristics of readership;
products advertised; products advertised matched to target (p. 347)
20 minutes for tv or radio during different intervals – list time, what products,
and other questions (p. 349)
Outside Book Activities
• www.adslogans.co.uk/hofiner.html (Ad Hall
of Fame)
• Analyze classified ads (TBE 5/99)
• Computer presentation to make a
commercial (TBE 9/00)
• Sell me your idea (TBE 3/3)
• Create an Ad Campaign (TBE 1/99)