Download Nature and Scope of Advertising

Copyright © 2007 McGraw-Hill Ryerson Limited
Objectives
To understand:
• The nature, purpose, and scope of
advertising and what it means to the
individual firm.
• The characteristics of the major types of
advertising.
• How advertising campaigns are developed
and advertising media are selected.
Copyright © 2007 McGraw-Hill Ryerson Limited
Nature and Scope of Advertising
• Consists of all activities involved in
presenting to an audience a non-personal,
sponsor-identified, paid-for message about a
product or organization.
Copyright © 2007 McGraw-Hill Ryerson Limited
Nature and Scope of Advertising
• Advertising is distinguished from other
forms of marketing communications:
• It has a verbal and/or visual message.
• The sponsor of the message is identified.
• Delivery is through recognizable (usually mass)
media.
• There is payment by the advertiser to the media for
carrying the message.
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Types of Advertising
Classified according to:
1. Target audience.
2. What is being advertised.
3. The objectives sought.
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1. Advertising to Target Audiences
• Consumer advertising:
• Generally appears in mass media
• Directed to end consumers
• May be product or institutional in nature
• Business-to-business advertising:
• Often called trade advertising
• Directed to a business market
Copyright © 2007 McGraw-Hill Ryerson Limited
2. What is Being Advertised?
• Product advertising:
• Designed to promote the sale of a specific product
or service
• May be direct action  quick-response
• May be indirect action  over a longer time
• Institutional or corporate advertising:
• Promotes the firm or tries to create a positive
image
• May be customer-service
• May be public-service
Copyright © 2007 McGraw-Hill Ryerson Limited
3. What are the Objectives?
• Primary demand advertising:
• Intended to stimulate use of a category of products
• Pioneering advertising  Primary demand done in the
introductory stage of PLC
• Selective demand advertising:
• Intended to encourage purchase of a particular brand or the
products and services of a specific firm
• Comparative advertising  Direct or indirect comparisons
to a rival brand
• Cooperative advertising:
• Involves the sharing of the cost of advertising by two or
more sponsors  A manufacturer and retailers (vertical) or
a group of retailers (horizontal)
Copyright © 2007 McGraw-Hill Ryerson Limited
The Cost of Advertising
• Traditional mass media are losing ground to
“new” media like direct mail directories,
weekly newspapers, and the Internet.
• Most companies spend less than 3% of their
sales on advertising.
• The largest budgets for advertising are in
the consumer products field.
• Many firms spend far more on personal
selling than they do on advertising.
Copyright © 2007 McGraw-Hill Ryerson Limited
Developing an Advertising Campaign
• A campaign consists of all the tasks
involved in transforming a theme into a
coordinated advertising program to
accomplish a specific goal.
• All elements of an advertising campaign
must be consistent with the advertiser’s
corporate and promotional strategies.
Copyright © 2007 McGraw-Hill Ryerson Limited
Developing an Advertising Campaign
• Before designing a campaign, an advertiser
must:
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Know the target audience.
Establish overall promotional goals.
Set the total promotional budget.
Determine the overall promotional theme.
Copyright © 2007 McGraw-Hill Ryerson Limited
Steps in an Advertising Campaign
1.
2.
3.
4.
5.
Define the objectives of the campaign
Establish a budget for the advertising
Create the advertising message
Select the media to be used
Evaluate the effectiveness of the
advertising
Copyright © 2007 McGraw-Hill Ryerson Limited
Advertising Objectives
• Specific objectives are dictated by the
firm’s overall marketing strategy.
• Typical objectives include:
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Supporting personal selling.
Improving dealer relations.
Introducing a new product or service.
Expanding the use of a product.
Counteracting substitution.
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Establish the Budget
• A difficult process
• Consider the objective and task method
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Creating the Message
• The message must first get the attention of
the target audience.
• It must then influence the audience in the
desired way.
• The message has two elements:
• Appeal – the reason for accepting the message
• Execution – transforming the appeal into words
and visuals
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Selecting the Media
• Advertisers have to decide what type of
media, which category, and which specific
vehicles.
• Certain factors influence the media choice:
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The objectives of the ad
The audience to be reached
The requirements of the message
The time and location of the buying decision
The cost of placing the advertising in the media
Copyright © 2007 McGraw-Hill Ryerson Limited
Characteristics of the Major Media
• Newspapers are flexible and timely, have a
local orientation and wide coverage, low
cost.
• Television is versatile, but audience is now
fragmented, reaches mass audiences.
• Magazines deliver quality advertising to
specific segments, message stays around.
Copyright © 2007 McGraw-Hill Ryerson Limited
Characteristics of the Major Media
• Direct mail is personal and selective.
• Radio stations target specific segments, low
cost, local orientation, short message life.
• Out-of-home has a low cost per exposure
and reaches a large percentage of the
population.
• Specialty advertising has a long life.
Copyright © 2007 McGraw-Hill Ryerson Limited
The Emerging Media
• Internet advertising is being used in
combination with traditional advertising to
manage fragmentation.
• Infomercials are not widely used, but have
found a role for certain products.
• Place-based media is growing due to
difficulty in reaching certain target
segments, such as young professionals and
dual-career families.
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Evaluating Advertising
• It is difficult to determine the effectiveness of
advertising.
• Ads may have several objectives, work over extended time
periods, and results are usually not observable.
• Direct measurement of effectiveness is possible
where ads stimulate immediate sales.
• Indirect measures are more often used to get at
recognition of the ad, aided and unaided recall of
the advertiser and of the message.
• Much advertising is pre-tested before it appears.
Copyright © 2007 McGraw-Hill Ryerson Limited