CHAPTER 13Advertising and Public Relations

M A R K E T I N GReal People, Real Choices

Fourth Edition

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It’s an Ad Ad Ad Ad World

• Advertising is nonpersonal communication paid for by an identified sponsor using mass media to persuade, inform, and remind an audience

• 2004: over 265 billion USD spent on advertising

• Biggest spenders: Automobiles, financial services, food and beverages and retail.

• What could be some threats to advertising?

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Types of Advertising

• Product advertising - message focuses on a specific product or service– Category advertising (Got Milk?; The other

white meat, etc.)– Brand advertising

• Institutional advertising - message focuses on activities, personality, or point of view of a company– advocacy advertising (2004: MTV’s

“choose or lose” campaign)– public service advertisements (anti-

smoking; anti-drugs; drunk driving, etc.)

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Purposes of Product Advertising

• To educate people about a new product and what it does

• To emphasize a brand’s features and try to convince the target market to choose it over other options

• To ensure that people won’t forget about a well-established product

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Who Creates Advertising?

• An advertising campaign is a coordinated, comprehensive plan that carries out promotion objectives and results in a series of advertisements placed in media over a period of time

• Agencies– limited-service

• Creative boutiques• Specialize in few options e.g. Internet

advertising– full-service

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Largest Ad Agencies

• J. Walter Thompson• Leo Burnett Worldwide• McCann-Erickson Worldwide• BBDO Worldwide• Grey Worldwide• Ogilvy & Mather• Foote Cone & Belding

• Worldwide billings exceed several billion USD

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The Body of Campaign Creation

• Account management– Campaign strategy and client relations

• Creative services– Visualization and writing of the ads

• Research– Market and Advertising Research

• Media planning– Planning, buying and placing the campaign

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Developing the Campaign

• Identify the Target Market• Establish objectives

– What should the campaign achieve– Budget (in cooperation with client)

• Prepare creative brief• Design Ad Campaign• Choose Media and Schedule• Pretest Campaign• Full rollout

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Design the Ad

• Creative strategy is the process that turns a concept into an advertisement

• Creatives try to develop a “big idea” (e.g. “Think Small”)

• Creatives:

– art directors

– copywriters

– photographers

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Advertising Appeals

• Reasons Why (USP) (e.g. M&Ms melt in your mouth, not in your hand)

• Comparative Advertising (e.g. Coke & Pepsi; DHL, Fedex and UPS; etc.)

• Demonstration (e.g. kitchen appliances, vacuum cleaners, etc.)

• Testimonial (e.g. dentists endorsing toothpastes, etc.)

• Slice-of-Life (e.g. breakfast cereal bars on the go)

• Lifestyle (e.g. Cars, clothes, personal grooming products)

• Fear (e.g. Insurance, drugs)

• Sex (e.g. Victoria’s Secret; Calvin Klein; etc.)

• Humor (e.g. Dodge Hemmi; Sonic etc.)

• Slogans and Jingles (e.g. “Your friendly neighborhood agent”; With Allstate you are in good hands”, etc.)

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Step 4: Pretest What Will Be Said

• Copy testing measures ad effectiveness

– Concept testing

– Test commercials

– Finished testing

• Focus Groups

• Projective Techniques

• Limited area surveys

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Step 5: Choose the Media

• Media planning is a problem-solving process for getting a message to a target audience in the most effective fashion– Where to say it– When to say it

• Highly complicated numbers game• Hundreds of media options from mass media

to video games, DVDs, placements,MP3 players, cell phones, cable channels, etc.

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Television

• Pros– Creative and flexible

(see & hear)– Prestigious– High impact

messages– Network TV is cost

effective for reaching mass audience

– Cable TV is good for reaching targeted group

• Cons– Quickly forgotten– Requires frequent

repetition– Increasingly

fragmented audiences– High costs on an

absolute basis– Shorter ads result in

increased clutter

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Radio

• Pros– Good for selective

targeting– Heard out of

home– Relatively low

cost– Can be modified

quickly– Uses listener

imagination

• Cons– Listeners may not

pay full attention– Small audiences

mean ads must be repeated frequently

– Not appropriate for products requiring demonstration

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Newspapers

• Pros– Wide exposure and

extensive market coverage

– Flexible format permits use of color, different sizes and editions

– Useful for comparison shopping

– Local retailers can tie in with national ads

• Cons– Most don’t spend

much time reading newspapers

– Low readership among teens and young adults

– Short life span– Very cluttered– General decline in

reading habits

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Magazines

• Pros– Narrowly targeted

audiences by specialized magazines

– High credibility and interest level provide good ad environment

– Long life span and pass along rate

– Excellent visual quality

• Cons– With exception of

direct mail, the most expensive form

– Long deadlines– Must use several

magazines to reach target

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Outdoor

• Pros– Very high reach– Low cost– Good for

supplementing other media

• Cons– Hard to

communicate complex messages

– Cannot demonstrate product effectiveness

– Controversial and disliked

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Internet Advertising

• Banners (less that 1% click through rate)

• Buttons (small banners anywhere in the web page)

• Search engine and directory listings

• Pop-up ads (open a separate window)

• Email– permission

marketing (opt out options given by marketer)

– Spamming (junkmail on the internet)

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Media Scheduling

• Specifies the exact media to use for the campaign, when and how often the message should appear

• Outlines the planner’s best estimate of which media and vehicles will be most effective in attaining campaign objectives

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Factors Affecting Media Scheduling

• Target market profile

• People reached by different vehicles

• Advertising patterns of competitors

• Capability of medium to convey desired information

• Compatibility of product with editorial content

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Media Scheduling Terms 1

• Impressions – the number of people who will be exposed to a message placed in one or more media vehicles

• Reach – the percentage of the target market exposed to the media vehicle at least once.

• Frequency – the average number of times a person in the target group will be exposed to the vehicle in a period

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Media Scheduling Terms 2

• Gross Rating Points (GRPs) – reach * frequency

• Cost per Thousand (CPM) – compares the relative cost effectiveness of different media vehicles that have different exposure rates; it reflects the cost to deliver a message to 1000 people

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Media Scheduling: How Often?

• Continuous – steady stream throughout year (products which we buy on a regular basis)

• Pulsing – varies amount of advertising based on when product is in demand (e.g., suntan lotion)

• Flighting – advertising appears in short, intense bursts alternative with periods of little to no activity

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Evaluating Advertising

• Posttesting means conducting research on consumers’ responses to advertising messages they have seen or heard

– unaided recall (recall in the absence of a cue)

– aided recall (recall with a cue provided)

– attitudinal measures (like / dislike)

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Public Relations

• Attempts to influence the attitudes and perceptions of consumers, stockholders, and other stakeholders toward companies, brands, politicians, celebrities, not-for-profit organizations (e.g. Mel Gibson’s film – “The Passion…”

• Do something good, then talk about it• Why PR – “third party” reporting is seen to be

unbiased and therefore credible• Create a crisis management plan

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Some well known PR crises

• Tylenol and product tampering

• Wendy’s and finger in chili

• Pepsi & Coke – pesticides in cola (India)

• Union Carbide in India – hundreds of deaths due to gas leak

• Vioxx & heart attack and stroke victims

• Can you think of more?

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Objectives of Public Relations

• Introducing new products• Influencing government legislation

(lobbying)• Enhancing the image of a city, region,

or country (Mauritius, Singapore – “So easy to enjoy, so hard to forget”)

• Calling attention to a firm’s involvement with the community (e.g. sponsoring sporting events, rock concerts, special events, etc.)

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Planning a PR Campaign

• Develop objectives (e.g. International Apple Institute – “An apple a day…”)

• Execute the campaign

• Evaluate the campaign

– Problems with gauging effectiveness

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PR Campaign Strategy

• Statement of objectives

• Situation analysis

• Specification of target audiences, messages to be communicated, specific program elements to be used

• Timetable and budget

• Discussion of how the program will be evaluated

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PR Activities

• Press Releases (new products, new findings, etc.)

• Internal PR (newsletters, close-circuit TV, employee awards, etc.)

• Lobbying (influencing govt. officials to vote a certain way on legislation, initiate new legislation, etc.)

• Speech writing (write speeches for senior executives – annual meetings, industry meetings, etc.)

• Corporate identity (logos, symbols, stationery design, etc. for companies, identity manuals)

• Media relations (create and maintain access with reporters to be used when needed)

• Sponsorships (sporting events, rock concerts, etc.)• Special events (e.g. visits of dignitaries to plant, planning a

christmas party, etc,)• Advice and counsel (e.g. to top management on

communication issues)

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Measuring Effectiveness

• In-house assessment

• Awareness and Preference Studies

• Counting of press clippings

• Impression counts

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Direct Marketing

• Any direct communication to a consumer or business recipient that is designed to generate a response in the form of an order, a request for further information, and/or a visit to a store or other place of business for purchase of a product

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Forms of Direct Marketing

• Mail order (3% of overall retail US sales)– Catalogs (e.g. Eddie Bauer, Lands End, Dell,

Gateway, JC Penney, Neiman Marcus, etc.)– Direct mail (offers a specific product through mail

at one point in time – can be personalized) • Telemarketing (cheap and easy; 1 in 6 Americans

cannot resist a telemarketing pitch; more effective in B2B selling; national Do-not-call registry)

• Direct response television– Infomercials– Home shopping networks (QVC and HSN)– Top selling categories: diet and health products,

kitchen appliances, exercise equipment and music CDs)

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M-Commerce

• Promotional activities transmitted over mobile phones and other mobile devices such as personal digital assistants (PDAs)

– Prevalent in Europe and Asia

– Problems of “spim”

• What does the future hold?

– Have you seen Minority Report?