Download Advertising 1.

Advertising 1.
Advertising can be defined as any paid form of non personal presentation or promotion of ideas,
goods or services by an identified sponsor.
Advertising objectives.
There are two types of advertising objectives, general and specific as given below.
1. General objectives.
a. Increase in demand.
b. Increase profits, sales and revenue.
2. Specific objectives.
a. Preparing ground for salesmen.
b. Information to consumers.
c. Brand building.
d. Expansion of market.
e. Reminding consumers.
f.
Convincing consumers.
g. Barriers to new competitors.
h. Facing current competition etc..
Setting advertising objectives include several approaches. One of the popular approaches is D. A. G.
M. A. R. approach. Russell Colley (1961) developed a model for setting advertising objectives and
measuring
the
results.
This
model
was
entitled ‘Defining Advertising Goals
Measured Advertising Results- DAGMAR. There are two concepts in the approach.
1. Advertising goal involves a communication task.
2. Advertising goal is specific and should involve issues like
a. Measurable.
b. Benchmark.
c. The target.
d. Time period.
for
e. Written goals.
Budget For Advertising:
The advertising budget of an organization is a subset of the larger sales budget and within that, the
marketing budget. Advertising is a part of the sales and marketing effort. Money spent on
advertising can also be seen as an investment in building up the business.
To be successful, advertising should carry messages that appeal to your customers when they want
to buy and reach them through the media they use. It's amazing how many ad campaigns are based
on trying to resolve a business problem -- i.e. clearance sales designed to reduce inventory using
such slogans as "Everything Must Go" or "Must Reduce Overstocks." The U.S. Small Business
Administration advises businesses that the main ingredient for successful advertising is to pitch your
products or services to resolve a customer's problem.
o
Time the advertisement campaign for when the customer wants to buy, not based only upon
when you want to sell.
o
Choose the advertising medium based on the ability to reach prospective customers.
If there is a golden rule for running an advertising campaign, it is that you have to stick to it.
Sustained Advertising = Recognition = Trust = Sales.
Advertising campaign is a long-term investment that takes time to show a return. Your budget must
reflect this reality. Expect to run your advertising campaign for two to four months before your
phone really starts ringing.
When setting the advertising campaign budget, there are two costs to be considered : production
costs, and media costs. Budgeting for both is critical for success.
Advertising Budget is the amount of money which can be or has to be spent on advertising of the
product to promote it, reach the target consumers and make the sales chart go on the upper side
and give reasonable profits to the organization.
Before finalizing the advertising budget of an organization, one has to take a look on the favorable
and unfavorable market conditions which will have an impact on the advertising budget. The market
conditions to watch out are as given below.
1. Frequency of the advertisement.
2. Competition and Clutter.
3. Market Share of the Product.
4. Product Life Cycle Stage.
1. Frequency of the Advertisement.
Frequency of advertisement means the number of times, advertise has been shown with the
description of the product in the allotted time slots. Thus, if any organization needs more
advertising frequency for its product, then the organization will have to increase its
advertising budget.
2. Competition and Clutter.
The companies may have large number of competitors for its product. And also there are
many advertisements shown which is called clutter. If clutter is there, the organization has
to then increase their advertising budget.
3. Market Share.
To get a good market share in comparison to their competitors, the organization should
have a better product in terms of quality, uniqueness, demand and catchy advertisements
with resultant response of the customers. All this is possible if the advertisement budget is
high.
4. Product Life Cycle Stage
If the organization is a newcomer or if the product is on its introduction stage, then the
organization has to keep the budget high to make place in the market with the existing
players and to have frequent advertisements. As the time goes on and product becomes
older, the advertising budget can come down as then the product doesn’t need frequent
advertising.
Methods the budgeting for Advertising:
A famous comment usually attributed to Lord Leverhulme goes:
“I know that half of my advertising budget is wasted, but I’m not sure which half”
It is notoriously difficult to measure the effect of advertising on a business’ sales. Advertising is just
one of the variables that might affect sales in a particular period.
How can a business know whether a specific advertising campaign was effective?
As a percentage of sales, advertising expenditure varies enormously from business to business, from
market to market.
Following approaches are used for setting the advertising budget:
Method (1) Fixed percentage of sales
In markets with a stable, predictable sales pattern, some companies set their advertising spend
consistently at a fixed percentage of sales. This policy has the advantage of avoiding an “advertising
war” which could be bad news for profits.
However, there are some disadvantages with this approach. This approach assumes that sales are
directly related to advertising. Clearly this will not entirely be the case, since other elements of the
promotional mix will also affect sales. If the rule is applied when sales are declining, the result will be
a reduction in advertising just when greater sales promotion is required!
Method (2) Same level as competitors
This approach has widespread use when products are well-established with predictable sales
patterns. It is based on the assumption that there is an “industry average” spend that works well for
all major players in a market.
A major problem with this approach (in addition to the disadvantages set out for the example above)
is that it encourages businesses to ignore the effectiveness of their advertising spend – it makes
them “lazy”. It could also prevent a business with competitive advantages from increasing market
share by spending more than average.
Method (3) Objective and Task
The objective and task approach involves setting marketing objectives based on the “tasks” that the
advertising has to complete.
These tasks could be financial in nature (e.g. achieve a certain increase in sales, profits) or related to
the marketing activity that is generated by the campaigns. For example:
•Numbers
of
enquiries
received
quoting
the
source
code
on
the
advertisement
• Increase in customer recognition / awareness of the product or brand (which can be measured)
• Number of viewers, listeners or readers reached by the campaign
Method (4) Residual
The residual approach, which is perhaps the worst of all, is to base the advertising budget on what
the business can afford – after all other expenditure. There is no attempt to associate marketing
objectives with levels of advertising. In a good year large amounts of money could be wasted; in a
bad year, the low advertising budget could guarantee a further low year for sales.
Importance of Advertising Budget:
One of the most important considerations you should have when advertising your product or service
is your budget. Your advertising budget can literally make or break your business, so it is extremely
important to get the most out of your advertising dollars. Here are some tips.
Advertising your business usually costs money, however, you don’t have to break the bank. There
are plenty of ways to reach your market that is beneficial to your budget and will help expand your
bottom line.
It is important to note a big budget used carelessly could be just as bad as having too small a
budget. In order to effectively research different types of advertisings, you will need to experiment
and research which types of advertising are best for your business. Make sure you have enough
money to try out a few advertising venues.
Many entrepreneurs try to shock and awe their market, by spending as much as they can in a short
period of time, this tactic rarely works. Your business needs to be in the public eye generally for a
long period of time for it to pick up steam. Building your advertising campaign is similar to building
your business, tweaking and analyzing it over many months or years to make sure you are going in
the right direction. If you are planning on advertising your small business, keep in mind the
importance of an advertising budget.
Advertising copy.
Advertising copy can be said as text of a print, radio, or television advertising message that aims at
catching and holding the interest of the prospective buyer, and at persuading him or her to make
a purchase all within a few short seconds. A copy in essence describes the advertisement in words
irrespective of the medium of advertising. A copy employes the use of words to promote a product,
business, idea or person.
Components of advertising copy.
1. Headline. headlines may be a label, may be informative, provocative, selective, direct
command or question.
2. Sub headline. smaller to headline but effective several times.
3. Slogans.
4. Illustrations.
5. Text or body of the copy.
6. Closing of the copy.
7. Logo or identification mark.
Advertising copy designing.
Advertising copy designing means arrangement of various components to make effective
advertisement. The right place of headline, sub headline, slogans, text, illustrations, closure and logo
are important here. In the audio visual commercials, advertisement design is also known as story
board or timeline which is a series of pictures with audio to run on the screen in a coordinated
manner to make the full video feel.
Selecting theme is very important for any advertisement copy. Themes can be humour, tragedy, pity,
pride, beauty, sex, ethnocentrism etc..
Copy testing.
The set of nine principles, called PACT (Positioning Advertising Copy Testing), defines copy testing as
research which is undertaken when a decision is to be made about whether advertising should run in
the marketplace. Whether this stage utilizes a single test or a combination of tests, its purpose is to
aid in the judgment of specific advertising executions.
Positioning Advertising Copy Testing (PACT) principles.
1. Provide measurements that are relevant to the objectives of the advertising.
2. Require agreement about how the results will be used in advance of each
specific test.
3. Provide multiple measurements (because single measurements are not adequate to assess
ad performance).
4. Be based on a model of human response to communications—the reception of a stimulus,
the comprehension of the stimulus, and the response to the stimulus.
5. Allow for consideration of whether the advertising stimulus should be exposed more than
once.
6. Require that the more finished a piece of copy is, the more soundly it can be evaluated and
require, as a minimum, that alternative executions be tested in the same degree of finish.
7. Provide controls to avoid the biasing effects of the exposure context.
8. Take into account basic considerations of sample definition.
9. Demonstrate reliability and validity.
The Testing Process
Testing may occur at various points throughout the development of an ad or a campaign: (1) concept
generation research, (2) rough, prefinished art, copy, and/or commercial testing, (3) finished art or
commercial pretesting, and (4) market testing of ads or commercials (post testing).
1. Concept generation research.
The concept generation research is conducted very early in the campaign development process in
order to explore the targeted consumer’s response to a potential ad or campaign or have the
consumer evaluate advertising alternatives.
2. Rough Art, Copy, and Commercial Testing.
Advertisers are increasingly spending more monies testing a rendering of the final advertisement at
early stages because creating an advertisement is a costly process. Tests of rough art, copy and
commercials include comprehension and reaction tests and consumer juries. Again, the Internet
allows field settings to be employed.
1. Comprehension and reaction tests:-
How consumers comprehend and react to the advertisements are measured here.
2. Consumer juries.
This method uses consumer’s representative known as consumer jury of the target market
to evaluate the probable success of an advertisment.
3. Pretesting of Finished Ads.
Pretesting finished ads is one of the more commonly employed studies among marketing
researchers and their agencies. At this stage, a finished advertisement or commercial is used; since it
has not been presented to the market, changes can still be made.
4. Posttests of Print Ads
A variety of print posttests are available, including inquiry tests, recognition tests, and recall tests. In
inquiry tests, tests are designed to measure advertising effectiveness on the basis of inquiries
generated on the basis of recognition by the consumers and in recall test, the measurement is based
on the recall by the consumers.