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Slide 1 Joseph R. Dominick University of Georgia--Athens © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 2 Part IV Specific Media Professions © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 3 Chapter 14 Chapter Outline Advertising Defining Advertising A Brief History of Advertising Organization of the Consumer Advertising Industry Advertising Online Producing Advertising Economics Business-to-Business Advertising Advertising © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 4 Defining Advertising Advertising is any form of non-personal presentation and promotion of ideas, goods, and services usually paid for by an identified sponsor. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 5 Defining Advertising Four basic functions of advertising Marketing – helps companies sell products Educational – teaches people about products Economics – allows competition that lowers prices Social – encourages a climate of free enterprise © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 6 Defining Advertising Elements of Advertising Business-to-business Consumer Purpose Target advertising audience advertising advertising Selective Primary Indirect Geographic Direct demand demand action action advertising focus advertising ad ad promotes promotes specific promotes targets promotes specific sells accomplishes product people specific products long-term abuying particular category, to geographical whom for abehavior brand distinct personal business product notrecognition specific for goal regions use brand appeals quick brand results © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 7 Defining Advertising Marketing consists of the development, pricing, distribution, and promotion of ideas, goods, and services. Advertising is part of the general promotion process, along with personal selling, sales promotions, and public relations. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 8 A Brief History of Advertising Ancient Babylonian clay tablets – shoe making services English handbill (1480) – prayer book Ben Franklin’s classified ads – white space and large headlines Industrial Revolution – mass production, mass markets, mass consumption © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 9 A Brief History of Advertising Critical mass achieved (1865 – 1900) Railroads throughout the continent US population doubled New communication media Telephone Typewriter High-speed printing press Motion pictures National magazines Photography Rural mail delivery More economic production and disposable income © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 10 A Brief History of Advertising Birth of the advertising agency Volney Palmer in Philadelphia (1842) – space brokerage N. W. Ayer and Son (late 19th C) – full ad campaigns 1920s – Radio makes national ads a reality 1929 crash and WW II slow industry Cold and Korean Wars distrust of advertising The Hidden Persuaders © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 11 A Brief History of Advertising Vast changes in 1960s – 1980s Media environment Transportation Internationalization of marketplace Cultural diversity 1990s+ Internet ads fall short Internet bubble Advent of PVRs © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 12 Organization of the Consumer Advertising Industry Media Ad Industry © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 13 Organization of the Consumer Advertising Industry Advertisers National – brand names, product, service Local – prices, sales, local stores Basic advertising activities Plan ads Determine how and where the ads will appear Budget appropriate funds for advertising Coordinate ads inside the company Supervise outside ad agency Follow-up on effectiveness © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 14 Organization of the Consumer Advertising Industry Agencies Trend is towards global mega-agencies Full-service agency Handles all campaign phases Studies market Studies product Presents findings Launches execution phase Follows-up Provides other marketing services (trade shows, etc) Media buying service Buys, resells, monitors television and radio slots Creative boutique Creates imaginative ads and ad campaigns © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 15 Organization of the Consumer Advertising Industry [Insert Table 14-1 here] Figure 14-1 Top Five Advertising Agencies, 2002 © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 16 Organization of the Consumer Advertising Industry Media Finding the right people involves mass media skill Four dimensions are important Reach How many people can get the message? Frequency How often will the message be received? Selectivity Will the medium reach the right people? Efficiency How much does it cost to reach a certain number of people? Also important: creative/technical nature of the medium © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 17 Organization of the Consumer Advertising Industry [Insert Table 14-2 here] Figure 14-2 Advertising Expenditures in Various Media, 1999 (Dollar figures are in billions) © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 18 Advertising Online 1994 – HotWired’s website with ads Roller-coaster success since, but 2004 revival: Lower ad prices Better ad technology People online more Selection of effective ad techniques (e.g., pop-ups) Changing methods of paying for ads 2002 – online ads were 3% of U.S. ad dollars © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 19 Advertising Online Type of Online Ads Banner ads Pop-ups Pop-unders Splash pages Skyscrapers Sponsored chat rooms Floating ads Mousetrapping Product-specific web sites © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 20 Producing Advertising Four major departments Creative services produce the ads Account services client-agency relationship Marketing services media expertise; promotions Administration day-to-day administration © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 21 Producing Advertising An advertising campaign consists of a large number of advertisements, all stressing the same major theme or appeal, that appear in a number of media over a specified time. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 22 Producing Advertising Six phases to an ad campaign 1) 2) 3) 4) 5) 6) Radio media production Print 6 TVmedia ads production Choose the strategy Television media production -Script music, FX -- 5Rough thumbnail Radiowith adsdialog,sketches Select the theme -- Storyboard and feedback -Recording -- Rough layouts (actual size) 4 Print ads -- Filming Translate the theme into media -- Comprehensive -- Postproduction layout -- Special effects Produce the ads -- Master tape -- Use of outside specialists Buy space and time Execute and evaluate Curvy mountain roads © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 23 Producing Advertising Advertising Research Formative research (before campaign starts) Guides creative efforts Audience defining (demographics) Audience profiling Identifies attitudes, motivation, lifestyles Message research Stage 1: pre-test ads Stage 2: screen ad prototypes and refine ads Tracking studies (post-campaign effects) © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 24 Economics $218B spent on advertising in U.S. (2002) Agency compensation Commissions 15% commission on time and space from media Pay-for-performance gradually taking over Agency charges Fees © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 25 Economics [Insert Figure 14-1 here] Figure 14-1 Advertising Expenditures in Various Media, 2002 © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 26 Business-to-Business Advertising Selling products to other businesses Four main categories of B2B advertising: 1) Trade: Advertising goods and services to wholesalers and retailers 2) Industrial: Advertising items used in production of goods and services 3) Professional: Advertising services aimed at doctors, nurses, teachers, and other professionals 4) Agricultural: Advertising goods and services aimed at farmers © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 27 Business-to-Business Advertising Consumer vs. B2B advertising B2B: much smaller target audience Business products and corresponding ads tend to be technical, complicated, and high priced Business buyers are professional purchasing agents Purchases based on reason and research Decisions often made in-committee Personal selling more important in B2B Ad efforts tend to support the seller, not do the selling © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 28 Business-to-Business Advertising Media Small audience + personal selling personalized media Trade magazines, trade papers, brochures Direct mail Trade catalogs Specialized cable channels and programs Horizontal publications aim at particular job function Vertical publications cover entire single industry © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 29 Business-to-Business Advertising Appeals Business ad copy Long, fact-filled, detailed, technical, accurate, complete Little, if any, emotional appeal Common business ad formats Testimonials Case histories New-product news Demonstrations Recent developments in warming up B2B ads © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 30 Advertising Employment down 16% (20002003) Entry-level Creative Junior copywriter Creative trainee Junior art director Production assistant Business Courses in advertising and business; marketing Assistant media buyer Research assistant Junior account executive Account service trainee © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 31 Advertising Upward Mobility Excellent advancement opportunities Creative Senior copywriter Creative director Senior art director Business Media director Research director Account executive Management supervisor © 2005 The McGraw-Hill Companies, Inc. All rights reserved.