The Dynamics ofMass Communication

Joseph R. Dominick

Seventh Edition

Part 4Part 4

Specific Media ProfessionsSpecific Media Professions

Chapter 14Chapter 14

AdvertisingAdvertising

Defining AdvertisingDefining Advertising

Simply defined, advertising is any form of non-non-

personalpersonal presentation and promotion of ideas,

goods, and services usually paid forpaid for by an

identified sponsor.identified sponsor.

Advertising FunctionsAdvertising Functions

Advertising fulfills four basic functions in society:

• serves as a marketing function -- helps companies sell products or services

• advertising is educational -- people learn about new or improved products or services

• advertising plays an economic role -- encourages new competition and lower prices

• it performs a social function -- helps increase productivity and raises the standard of living

Advertising can be classified several waysAdvertising can be classified several ways

• target audience specific people to whom product appeals

• consumer advertising goods and services for personal use

• business-to-business products for business use

• geographic focus targets specific geographical regions

• purpose advertising designed to accomplish a distinct goal

• primary demand promotes product category, not specific brand

• selective demand promotes a particular product or service brand

• direct action ad promotes direct, short-term feedback

• indirect action ad promotes long-term brand recognition

A Brief History of AdvertisingA Brief History of Advertising

• Advertising, in a variety of forms, dates to antiquity. The first serious and repeated ads appear shortly after Gutenberg’s invention of moveable type in the form of handbills, posters, and periodicals.

• Most newspaper advertising continued to look more or less like crowded classified ads until the 18th century.

• Ben Franklin improved the look of ads in his newspapers by using more white space and attractive fonts.

A Brief History of Advertising A Brief History of Advertising (Con’t)

With the advent of mass production in the 1800s came the parallel need for mass consumption and mass markets. That rapid consumer evolution became most apparent after the Civil War ended, helped along in large part because . . .

• railroads linked the continent, and linked manufacturers with consumers

• U.S. population doubled 1870-1900 (more consumers)• new media (telephone, typewriter, high-speed printing press,

motion pictures, national magazines, photography, and rural mail delivery) increased communication potential

• people now had more money to spend on new products

A Brief History of Advertising A Brief History of Advertising (Con’t)

• Demand for advertising expertise quickly gave rise to the advertising agency.

• Radio networks make national ads a reality in 1920s.

• The Great Depression and WW II slow advertising industry growth down during the 1930s, 1940s.

• From that time on, advertising content and appeal generally reflects the prevailing mood of the country.

ORGANIZATION OF THEORGANIZATION OF THECONSUMER ADVERTISING INDUSTRYCONSUMER ADVERTISING INDUSTRY

Three components of the advertising industry:

ADVERTISERS• national – emphasis on brand names, product, service• local – emphasis on prices, sales, local storesAnyone in charge of advertising must: • plan the ads, deciding how and where they will appear• budget appropriate funds for advertising• coordinate ads with departments within the company• supervise any outside agency handling the ad account

ORGANIZATION OF THE CONSUMER ORGANIZATION OF THE CONSUMER ADVERTISING INDUSTRY ADVERTISING INDUSTRY (Con’t)

AGENCIES

• full-service agency: handles all phases of the ad campaign

• media buying service: buys, resells, monitors TV/radio slots

• creative boutique: creates imaginative ad campaigns

ORGANIZATION OF THE CONSUMER ORGANIZATION OF THE CONSUMER ADVERTISING INDUSTRY ADVERTISING INDUSTRY (Con’t)

MEDIA

Advertisers evaluate media under four criteria, deciding which ones will give them the best results for their marketing goals:

• 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 what’s the cost to reach a certain number of people (expressed in cost per thousand)?

Evaluating Potential Ad MediaEvaluating Potential Ad Media

Characteristics Papers Magazine Radio TV Net Mail

ReachReach High Low High High Med. High

FrequencyFrequency High Low High High Med. Med.

SelectivitySelectivity Low High High Med. High High

CostCost Med. Med. Low High Med. High

Advertising OnlineAdvertising Online

Online advertising is a new and rapidly evolving ad medium, one that provides a wide range of creative outlets.

• banner ads

• free-link exchange ads

• sponsored chat room and bulletin boards

• e-mail campaigns

• product and service-specific web sites

Four Typical Operational DepartmentsFour Typical Operational Departmentsof an Advertising Agencyof an Advertising Agency

• creative servicescreative services people who create the ads

• account servicesaccount services client-agency liaison staff

• marketing servicesmarketing services suggest appropriate media

• administrationadministration routine business operations

Six Steps of an Advertising CampaignSix Steps of an Advertising Campaign

A campaigncampaign consists of any number of ads, each stressing the same major theme or appeal that appear in a number of media over a specified time. Here are six typical phases:

• choosing the marketing agency• selecting the main appeal or theme• translating the theme into the various media• producing the ads• buying space and time• executing and evaluating the campaign

Advertising ResearchAdvertising Research Ad research goes on during all phases of the campaign to help agencies and clients make informed decisions about the direction and efficiency of their strategies and tactics

• formative research done before campaign starts to help guide creative efforts

• audience defining identifies audience’s demographics• audience profiling identifies attitudes, motivation, lifestyles

• message research• stage 1: pre-test ads for clarity, understanding• stage 2: screen ad prototypes and refine ads

• tracking studies evaluate post-campaign effects

ADVERTISING ECONOMICSADVERTISING ECONOMICSAbout $215 billion was spent on advertising in the United States in

1999. Television and newspapers accounted for almost half the total amount spent

Agency Compensation: Three common methodsAgency Compensation: Three common methods• Commissions media give agencies 15% commission on

time and space they buy from media; though in transition, most common payment

method.• Agency charges fees added from agency’s production costs

• Fees services such as research, focus groups, market analysis--types of services not

traditionally covered by commission

Business-to-Business AdvertisingBusiness-to-Business Advertising

Though the low-profile side of the ad industry, business-to-business ads still rang up $150 billion in sales in 2000.

There are four main categories of B2B advertising: 

. Trade. Trade goods and services to wholesalers, retailers

. Industrial. Industrial items used in production of goods, services

. Professional. Professional services aimed at doctors, nurses, teachers

. Agricultural. Agricultural goods and services aimed at farmers

Consumer vs. Business AdvertisingConsumer vs. Business Advertising

• Target audience in business advertising is much smaller.

• Most advertised business products tend to be technical, complicated, and high priced.

• Business buyers will be professional purchasing agents, basing purchases on reason and research.

• Personal on-site selling plays a much greater role in the business sector.

Business Advertising MediaBusiness Advertising Media

Business advertising’s targets are much narrower than the consumer market, so a mix of highly selective media, usually magazines, works best. Two usual formats:

horizontal magazineshorizontal magazines aimed at particular job function without regard to the industry

vertical magazinesvertical magazines covers all levels and interests within an entire single industry

Business Advertising AppealBusiness Advertising Appeal

Business ad copy tends to be long, fact filled, detailed, technical, accurate, and complete, with little, if any, emotional appeal, yet business buyers pay very close attention to these ads and place a premium on data accuracy and completeness.

Some of the most common business ad formats are testimonials, case histories, new-product news, and demonstrations

End of Chapter 14

AdvertisingAdvertising