Download Ch015.02 - Texas Tech University

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LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 15, YOU SHOULD BE ABLE TO:
LO1
Explain the differences between product
advertising and institutional advertising and the
variations within each type.
LO2
Describe the steps used to develop, execute,
and evaluate an advertising program.
WHERE CAN YOU WATCH TV?
WHERE CAN’T YOU?

Online TV (OTV)
TV has been a key element of the adv landscape
DVR, Video on demand, Consumers,
3D, Competitive Landscape:
1. To viewers:
2. To advertisers: excited about ?
3. To content producers:
4. To gadget manufacturers: DVR,
blue-ray, Xbox, laptop, …
15-3
LO1
TYPES OF ADVERTISEMENTS
PRODUCT ADVERTISEMENTS

Advertising – ?

Product Advertisements – forms includes…
of ?
communication about organization, product,
service, or idea by an indentified sponsor.
• ?
(or Informational)
• Reminder – reinforce previous
knowledge of product
• Competitive (or Persuasive)– ?
• ?
– to assure
current
• Comparative – an increasing common form of
competitive adv. , attract more attention, increase
the perceived quality, backup ? needed
LO1
Campbell’s, 1&1, and Red Bull
What is the type and purpose of each advertisement?
pioneering
Comparative
Reminder
LO1
TYPES OF ADVERTISEMENTS
INSTITUTIONAL ADVERTISEMENTS

Institutional Advertisements – to build ? or an image for an org.
• Advocacy – state its position on issues (e.g., Chevron’s We agree,
American Red Cross)
• Pioneering Institutional – like ‘pioneering ads for products’ (Boeing’s
That’s why we are here, Bayer’s “we cure more headaches than you think,
Bridgestone – “one team. One planet” )
• ?
Institutional – “Got Milk?”
• Reminder Institutional – simply bring the company name again to target
market
15-6
LO1
Chevron and Bridgestone
What is the type and purpose of each advertisement?
Advocacy
Pioneering Institutional
15-7
LO1
Got Milk? and U.S. Army
What is the type and purpose of each advertisement?
Competitive
Reminder Institutional
LO2
DEVELOPING THE
ADVERTISING PROGRAM

1. Identifying the Target
Audience

2. Specifying the Advertising Objectives – awareness, interest, …

3. Setting the Advertising
Budget
15-9
LO2
DEVELOPING THE
ADVERTISING PROGRAM
4. DESIGNING THE ADVERTISEMENT

Message Content – made up of both informational and persuasional
element

Types of Appeals
• ? Appeals – automobile safety ad,
political ad, alcohol, tobacco & drug use
• Sex Appeals – what brands? , it works only
when ?
• Humorous Appeals – what ad?,
AFLAC duck
15-10
LO2
World Wide Fund, Candie’s, and Geico
What is the appeal and purpose of each advertisement?
Fear
Sex
Humorous
LO2
DEVELOPING THE
ADVERTISING PROGRAM
4. DESIGNING THE ADVERTISEMENT

Creating the Actual Message
• Celebrity Spokespeople
• Ideas and Artwork
• Cost – avg $324 to produce 30 sec
15-12
LO2
DEVELOPING THE
ADVERTISING PROGRAM
5. SELECTING THE RIGHT MEDIA

Advertising Media – the means by which the message is communicated
to the ? . The ? is related to (target audience, type of product, nature of
the message, campaign objectives, available budget, the cost of alternative
media)

Media Planning Goals
• Maximize ?
• Minimize ?
15-13
FIGURE 15-1 Television, direct mail, and newspapers
account for more than 65% of all advertising
expenditures (in $millions)
15-14
LO2
DEVELOPING THE
ADVERTISING PROGRAM
SELECTING THE RIGHT MEDIA

Basic Terms
• ? – the # of different people or household exposed to adv.
e.g., newspapers - circulation
• Rating – the ? of household in a market that are tuned to a
particular TV show or Radio Station.
• Frequency – the ?
of times a person in the target audience
is exposed to a message or advertisement.
• Gross Rating Points (GRPs)
• ? (CPM)
Why ‘M’? not ‘T’
= Reach × Frequency
LO2
USING MARKETING DASHBOARDS
What is the Best Way to Reach 1,000 Customers?
Cost per Thousand (CPM) Impressions
CPM ($) =
Advertising Cost ($)
 Impressions Generated (#) 


1,000
15-16
Agenda – 22nd Monday
● SPCL
Proj. Due: Next Monday
● Review – Product/Institutional Advertisements, How to
design (Appeals), how to select (Adv Media)
● Adv. Media, focusing “Online Adv.”
● Google Case (ICA#13)
● Sales Promotions
● PR
LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 15, YOU SHOULD BE ABLE TO:
LO3
LO4
LO5
Explain the advantages and
disadvantages of alternative
advertising media.
Discuss the strengths and weaknesses
of consumer-oriented and tradeoriented sales promotions.
Recognize public relations (PR) as an
important form of communication.
15-18
FIGURE 15-2 Advertisers must consider the
advantages and disadvantages of the many
media alternatives
15-19
LO3

DEVELOPING THE
ADVERTISING PROGRAM
Television – reaches 96.7% of household, more than any
other, rich content
• Out-of-Home TV – many bars, hotels, offices, airports, college campus
• Online TV (OTV) – target adv can be achieved
• ?
– how to spend less? “spot,” length (15(25%)/30/60),
Q) cable & satellite channel vs. broadcast network ?
shift to live events – why?
• ?
– having people outside the target market for the product
• Infomercials (30 min) – educational approach (e.g. ?)
15-20
DEVELOPING THE
ADVERTISING PROGRAM
LO3
DIFFERENT MEDIA ALTERNATIVES

Radio –
a ? medium (Farm Radio Network, Family Life Network, Business
or Politics Talk Show,…) , Avg. listening hours (18 to 24) – 12.5 h/w
• Break down
Total = 24,700 Stations
AM =
4,800
FM =
9,800
Satellite (monthly fee, free ad)
/Internet = 10,100
• Peak Listening Time
Drive Times: 7 – 8 AM, remain high
During the day, declines after 4 pm
15-21
LO3
DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES

Magazines – 16,500, online/iPad version, great number of special interest
Publications that appeal to narrowly defined segments, perceived to be more
trustworthy, inspirational, engaging than other media
• ? Issues
15-22
LO3
DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES

Newspapers – important local medium w/ excellent reach potential
• Falling ? & Falling ? Revenue
• Online and Mobile
• Local retailers often use as their sole advertising medium
15-23
LO3
DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES

Yellow Pages – turn to more than 11 billion times/online version 5.6
billion times per year, because yellow pages reach almost all household w/
telephone (falling?); ?medium (?) in the local market;
Disadvantage – The proliferation of other directories
15-24
DEVELOPING THE
ADVERTISING PROGRAM
LO3
DIFFERENT MEDIA ALTERNATIVES

Internet
• Rich Media – Richest?
• Search Ads
• Banner/Display Ads
• Assessment – difficult to measuring impact
Q) Online ad – no guarantee for click, increase ?
of ?, lead to visit the website ?%
15-25
LO3

MAKING RESPONSIBLE DECISIONS
Who is Responsible for Click Fraud?
? Advertising - $20 billion in 2014 (shifting from print & TV):
how it is charged? (how Google & Yahoo charge advertiser);
*Cost-per-click(?): what the publisher (Google or Yahoo) charges Advertisers for
every click. Or Cost-per-view (or visitors)

Click Fraud


?: pay members to click
Click Bots: ? that produce automatic
clicks
15-26
DEVELOPING THE
ADVERTISING PROGRAM
OTHER MEDIA ALTERNATIVES
LO3

Outdoor
• ? – the most common form of outdoor advertising, often
resulting in good reach and frequency, shown to be effective;
the visibility is good supplemental reinforcement for well-known products;
relatively low-cost flexible alternative, can buy in desired geographical
market; it depends on ? and ?
• Transit
Advertising – bus, subway, taxis
15-27
LO3
DEVELOPING THE
ADVERTISING PROGRAM
OTHER MEDIA ALTERNATIVES

Other Media
• Placed-Based Media – airports, doctor’s office, theater,
Time square ?

Selection Criteria
• Media Habits
• Cost
• Product Attributes
15-28
LO3
DEVELOPING THE
ADVERTISING PROGRAM
SCHEDULING THE ADVERTISING

Factors to Consider
• ? Turnover – the rate that the new buyers enter the market; that means
the higher the buyer turnover, the greater amount of adv needed
• ? – more frequently the product is purchased,
the less repetition is required
• ? Rate – the speed at which buyers forget the brand
if advertising is not seen
15-29
LO3
DEVELOPING THE
ADVERTISING PROGRAM
SCHEDULING THE ADVERTISING

Approaches
• Continuous (Steady) Schedule – when seasonal factors are unimportant
• ? (? Schedule – to reflect seasonal demand
• ? (Burst) Schedule – combination of the two, specially product
introduction period
15-30
LO3
EXECUTING THE
ADVERTISING PROGRAM
PRETESTING THE ADVERTISING

Pretests
• Portfolio Tests
• Jury Tests
• Theater Tests
15-31
LO3
EXECUTING THE
ADVERTISING PROGRAM
CARRYING OUT THE ADVERTISING PROGRAM

Full-Service Agency

Limited-Service Agencies

In-House Agencies
15-32
FIGURE 15-A Alternative structures of
advertising agencies used to carry out the
advertising program
15-33
LO3
ASSESSING THE
ADVERTISING PROGRAM
POSTTESTING THE ADVERTISING

Posttests

Aided Recall

Unaided Recall
• Noted

Attitude Tests
• Seen-Associated

Inquiry Tests
• Read Most

Sales Tests
15-34
VIDEO CASE 15
GOOGLE, INC.: THE RIGHT ADS
AT THE RIGHT TIME
15-35
VIDEO CASE 15
GOOGLE
1. Describe several unique characteristics about Google
and its business practices.
Name : “googol”
10 guidelines – Don’t be evil; Key People: ?
Mission Statement : “to organize the world’s information and
make it universally accessible and useful”
Core Technology/Competence : ‘BackRub’  ‘AdWords’
Sales in 2012: $50 bil - $11 bil Profits
Head Quarter : Mountain View, CA
What % of revenues are from the online adv?
15-36
VIDEO CASE 15
GOOGLE
4. (a) How can Google be successful in the display
advertising business?
(b) What other areas of growth are likely to be
pursued by Google in the future?
Currently, Yahoo, MSN are leaders because they put ads on
their websites (Yahoo Finance, MSN Money).
Google – YouTube, DoubleClick (ad agencies bid for ad
placement
Try to win adv over TV industry, Mobile Advertising
because of ?, Driverless Cars, …
15-38
VIDEO CASE 15
GOOGLE
2. (a) What is Google’s philosophy about advertising?
“Advertising” should be ? to consumer just as much as the
organic search results and ? to the consumers’ needs 
leads to continuous improvements in search results
*You answers about case study should be based on the case
material.
“Simplicity or Less Cluttered page” is what then?
15-39
VIDEO CASE 15
GOOGLE
2.
(b) How can less advertising be preferred to more
advertising?
Fewer ads, not more ads; just the right ads at the right time
 Quality Score: to predict ahead, before Google actually
shows an ad, how consumer will react to that ad
15-40
VIDEO CASE 15
GOOGLE
3. Describe (a) the types of online advertising available today
(b) Which type of advertising does Google currently
dominate? Why?
Search: 47%
Display: 35%
Classified: 10%
Referral: 7%
E-Mail: 1%
15-41
GOOGLE vs. Amazon
Google
Search Engine, Adwords
Tech
Innovation in IT
?
Amazon
Core Competency
?
Industry
Online Retailing
Business Model
Competitors
?
Value
Propositions
15-42
FIGURE 15-B Sales promotions can be
used to achieve many objectives
15-43
SALES PROMOTION
LO4
?
: Sales tools, such as coupons, sweepstakes, and samples, used
to support a company’s advertising and personal selling
efforts directed to ultimate consumers

1. Coupons
– sales promotions that usually offer a discount price to the
consumer, which encourages trial. 332 bil coupons/$470 bil to 60 mil household
81% of consumers use, redemption rates (it
changes depending on economy?)
What manufacturers / retailers use most?
Costs to make coupon? E.g. 25 cents coupon?
Worth it?
15-44
LO4

SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION
2. Rebates – the cash rebate based on ?
15-45
LO4

SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION
3. Deals - short-term price reductions to 1. ? or 2. retaliate against
competitors’ action. (E.g. build up the stock)
15-46
LO4

SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION
4. Premiums – consist of merchandise offered (1) ? or at a (2) significant
savings over its retail price
• (2) ?
: the cost charged to the consumer covers the costs
of item
• Free Toy in Happy Meal
• Deal-Prone & Value Seeing Consumers – attached to premiums
15-47
LO4

SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION
5. Contests – consumers apply skill or analytical or creative
thinking to try to win a prize
15-48
LO4

SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION
6. Sweepstakes – requiring submission of
entry, purely games of chance
• ? -Based Prizes – UPC codes, Bottle Cap
codes; products as prize
• ?-Based Prizes
15-49
LO4

SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION
7. Samples – trial size; awareness  trial  sales rose?
15-50
LO4


SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION
8. Loyalty Programs – to encourage and
reward repeat purchases by acknowledge each
purchase made by a consumer and offering a
premium as purchase accumulate
Credit Card Reward Program
15-51
SALES PROMOTION
LO4
CONSUMER-ORIENTED SALES PROMOTION

9. Point-of-Purchase Displays – POP displays take the form of adv
signs, sometimes hold or display actual products
Where located? High traffic area, cash register, the end of an aisle.
Expenditure - $20.3 billion
15-52
LO4

SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION
10. Product Placement – uses a brand-name product in a movie, tv show,
video, or commercial for another product
15-53
LO4

SALES PROMOTION
TRADE-ORIENTED SALES PROMOTION
Trade-Oriented Sales Promotion – sales tools used to support a
company’s advertising and personal selling directed to wholesalers, retailers,
or other intermediaries

Allowances and Discounts
• Merchandise Allowance - % of deduction from list case price
• Case Allowance – discount on each case during the period
• Finance Allowance – paying retailers for financing costs or losses
associated with consumer sales promotions.
 Floor Stock Protection
 Freight Allowance
15-54
LO4

SALES PROMOTION
TRADE-ORIENTED SALES PROMOTION
Cooperative Advertising- a manufacturer pays a % of the retailer’s local
advertising expense for advertising the manufacture's products.
e.g., often 50% of the cost of adv

Training of Distributors’ Salesforces – a manufacturer’s success
often rests on the ability of the reseller’s sales force to represent its
products. Thus, in the best interest of the manufacturer to help train the
reseller’s sales force.
15-55
LO5

PUBLIC RELATIONS
Publicity Tools – Methods of obtaining ‘? ’ presentation of an organization,
product, or service without direct cost.
• 1. ? – many companies frequently use the _______ ,
consisting of an announcement regarding changes in the company
or the product line.
• 2. News ? – representatives of media all invited to an
informational meeting; often used when new products are introduced
or significant changes in corporate structure and leadership are being
made.
• 3. Public Service Announcement (PSA) – ? organization
rely heavily on public service announcement (PSA), which are free
space or time donated by the media.
15-56
Advertising
Advertising is any paid form
of nonpersonal communication
about an organization, good,
service, or idea by an identified
sponsor.
15-57
Product Advertisements
Product advertisements are
advertisements that focus on
selling a good or service and
which take three forms:
(1) pioneering (or informational),
(2) competitive (or persuasive),
and (3) reminder.
15-58
Institutional Advertisements
Institutional advertisements
are advertisements designed to
build goodwill or an image for an
organization rather than promote
a specific good or service.
15-59
Infomercials
Infomercials are program-length
(30-minute) advertisements that
take an educational approach to
communication with potential
customers.
15-60
Pretests
Pretests are tests conducted before
an advertisement is placed in any
medium to determine whether it
communicates the intended message
or to select among alternative
versions of the advertisement.
15-61
Posttests
Posttests are tests conducted
after an advertisement has been
shown to the target audience to
determine whether it
accomplished its intended
purpose.
15-62
Consumer-Oriented Sales Promotion
Consumer-oriented sales
promotion consists of sales tools
used to support a company’s
advertising and personal selling
directed to ultimate consumers.
Also called consumer promotions.
15-63
Product Placement
Product placement is a
consumer sales promotion tool
that uses a brand-name product
in a movie, television show, video
game, or a commercial for another
product.
15-64
Trade-Oriented Sales Promotions
Trade-oriented sales
promotions are sales tools
used to support a company’s
advertising and personal selling
directed to wholesalers,
distributors, or retailers. Also
called trade promotions.
15-65
Cooperative Advertising
Cooperative advertising
consists of advertising programs
by which a manufacturer pays a
percentage of the retailer’s local
advertising expense for
advertising the manufacturer’s
products.
15-66
Publicity Tools
Publicity tools are methods of
obtaining nonpersonal
presentation of an organization,
good, or service without direct
cost, such as news releases,
news conferences, and public
service announcements.
15-67