Advertising Principles and Practices

Advertising Principles and Practices Introduction to Advertising  Part One: Foundations (Insert new book cover) Provides an introduction to advertising—its role, key players, and history...

Advertising Principles and Practices Introduction to Advertising  Part One: Foundations (Insert new book cover) Provides an introduction to advertising—its role, key players, and history Defines advertising’s role in marketing including key players and new developments Examines advertising’s relationship to society including regulations and ethics in advertising Prentice Hall, © 2009 1-2  Questions We’ll Answer What is advertising and what are its key components? What are advertising’s main roles, and what are the most important types of advertising? Who are the key players in advertising? How has advertising evolved, and how have these developments affected current advertising practice? Prentice Hall, © 2009 1-3  WHAT IS ADVERTISING? Defining Modern Advertising A complex form of communication using objectives and strategies to impact consumer thoughts, feelings, and actions. A form of marketing communication (all the techniques marketers use to reach their customers and deliver their messages). Prentice Hall, © 2009 1-4 Defining Modern Advertising The Evolution of Advertising Identification – Simple images found in ancient Babylonia, Egypt, Greece, and Rome identified a business, manufacturer, or store. Information – Gutenberg’s movable type mechanized printing leading to mass communication. Promotion – The Industrial Revolution led to surplus goods, improved transportation, and the need for new media. Sales – Advertisers became concerned about making ads that worked and defining standards of effective advertising. Prentice Hall, © 2009 1-5 Defining Modern Advertising Five Basic Factors of Advertising 1. Paid communication 2. Sponsor is identified 3. Tries to inform or persuade 4. Reaches a large audience 5. Message conveyed through many different kinds of largely nonpersonal mass media Principle: An effective advertisement is one that can be proven to meet its objectives. Prentice Hall, © 2009 1-6  What is Advertising? Advertising Advertising isis Paid, Paid, Nonpersonal Nonpersonal Communication Communication From From AnAn Identified Identified Sponsor Sponsor Using Using Mass Mass Media Media to to Persuade Persuade or or Influence Influence an an Audience. Audience. Prentice Hall, © 2009  Types of Advertising Interactive Interactive Brand Brand Advertising Advertising Advertising Advertising Public PublicService Service Retail Retailor orLocal Local Advertising Advertising Advertising Advertising Institutional Institutional Advertising Political Political Advertising Advertising Advertising Business-to- Business-to- Business Business Directory Directory Advertising Advertising Advertising Advertising Direct-Response Direct-Response Advertising Advertising Prentice Hall, © 2009 advertisements Prentice Hall, © 2009 1-9 Broad Dimensions That Characterize Great Advertising The Ultimate Test for the Greatness of An Ad is Whether It Achieved Its Goals. Strategy Creativity Creativity Strategy Execution Execution Prentice Hall, © 2009 Four Components of Advertising Prentice Hall, © 2009 1-11  Roles of Advertising Marketing Marketing Role Role Marketing is the process a business uses to satisfy consumer needs and wants through goods and services. Communication Communication Role Role Advertising is a form of mass communication. Economic Economic Role Role Two main views about advertising, either the market power model or the economics of information theory. Informs us about new and improved Societal Societal Role Role products, teaches us how to use these innovations, etc. Prentice Hall, © 2009  Four Components of Advertising 1. Advertising Strategy The strategy is the logic and planning behind the ad that gives it direction. Advertisers develop ads to meet objectives. Advertisers direct ads to identified audiences. Advertisers create a message that speaks to the audience’s concerns. Advertisers run ads in the most effective media. Prentice Hall, © 2009 1-13  Four Components of Advertising 2. Creative Idea The creative concept is the central idea that grabs the consumer’s attention and sticks in memory. Planning strategy requires creative problem solving. Research involves creativity. Buying and placing ads requires creative thinking. Prentice Hall, © 2009 1-14  Four Components of Advertising 3. Creative Execution Effective ads are well executed reflecting the highest production values in the industry. Clients demand the best production the budget allows. Prentice Hall, © 2009 1-15  Four Components of Advertising 4. Media Planning/Buying Television, Internet, magazines, and other media are used to reach a broad audience. Deciding how to deliver the message requires creativity. Principle: In advertising how you say something and where you say it is just as important as what you say. Prentice Hall, © 2009 1-16  Roles of Advertising Marketing Marketing Role Role Marketing is the process a business uses to satisfy consumer needs and wants through goods and services. Communication Communication Role Role Advertising is a form of mass communication. Economic Economic Role Role Two main views about advertising, either the market power model or the economics of information theory. Informs us about new and improved Societal Societal Role Role products, teaches us how to use these innovations, etc. Prentice Hall, © 2009  Four Roles of Advertising 1. The Marketing Role Marketing is satisfying customer wants and needs by providing products (goods, services, and ideas). The marketing department is responsible for selling the product using the 4 Ps (product, price, place/distribution, and promotion) and brand development. Principle: A product can be services and ideas as well as goods. Prentice Hall, © 2009 1-18  Four Roles of Advertising 2. The Communication Role Advertising is a message to a consumer about a product, designed to create a response. It is also a form of marketing communication. Advertising uses mass communication to transmit product information to connect buyers and sellers in them marketplace. Principle: One of advertising’s most important strengths is its ability to reach a large audience. Prentice Hall, © 2009 1-19 Table 1.1 The Strengths of Advertising Strengths Examples Can reach a large audience A commercial in the Super Bowl can reach more than 100 million consumers. Introduces products and brands The “1984” commercial for the Apple McIntosh sold out the entire inventory in one day. Builds awareness of products The success of the launch of the iPod was due and brands in part to the great silhouette posters that showed people dancing to the music on their iPods. Creates brand images The success of the new VW Beetle was largely built on its ability to connect with the anti-status image of the original “lowly” Beetle. Provides information The truth® campaign informs teens that “Tobacco kills 1,200 people a day.” Reminds and reinforces Procter & Gamble’s Ivory Soap has been advertised continuously since the late 1800s. Persuades Nike campaigns, with the “Just do it” personal achievement message, have helped increase sales by 300 percent during the 1990s. Prentice Hall, © 2009 1-20  Four Roles of Advertising 3. The Economic Role Because it reaches large groups of people, advertising makes marketing more cost-efficient and lowers prices for consumers. Advertising creates a demand for a brand using hard sell (persuading) and soft sell (image building) techniques. Prentice Hall, © 2009 1-21  The Economic Role By focusing on images and emotional responses, advertising encourages consumers to make decisions based on nonprice benefits. Advertising is a means to objectively provide price-value information, creating a more rational economy. Prentice Hall, © 2009 1-22  Four Roles of Advertising 4. The Societal Role Informs consumers about innovations and issues Helps us compare products and features Mirrors fashion and design trends Teaches consumers about new products and how to use them Helps shape consumer self-image Facilitates self-expression through purchases Presents images about diversity in our world Prentice Hall, © 2009 1-23  Types of Advertising Brand Advertising – Focused on long-term brand identity and image Retail or Local Advertising – Focused on selling merchandise in a geographical area Direct Response Advertising – Tries to stimulate a sale directly Business-to-Business – Sent from one business to another Principle: All types of advertising demand creative, original messages that are strategically sound and well executed. Prentice Hall, © 2009 1-24  Types of Advertising Institutional Advertising – Focused on establishing a corporate identity or winning the public over to the organization’s point of view Nonprofit Advertising – Used by nonprofits like charities, associations, hospitals, orchestras, museums, and churches for customer, members, volunteers, and donors Public Service Advertising – Usually produced and run for free on behalf of a good cause Prentice Hall, © 2009 1-25 The Key Players: the Advertiser Wants to send out a message about its business Initiates effort by identifying a problem that advertising can solve Selects the target audience, sets the budget, and approves the ad plan Hires the agency – Agency of record (AOR) does the most business; manages other agencies Prentice Hall, © 2009 1-26  Top Ten U.S. Advertising Categories Category Total ad spend in Total ad spend Percentage 2006 (millions) in 2005 change from (millions) 2005 Telecom $9,431.1 $8,550.5 10.3% Auto, non-domestic 8,726.7 8,832.8 -1.2 Local services and amusements 8,687.0 7,879.2 10.3 Financial services 8,681.8 8,508.8 2.0 Miscellaneous retail* 8,322.9 8,258.0 0.8 Auto, domestic 7,615.2 8,625.1 -11.7 Direct response 6,376.1 6,087.0 4.7 Personal care 5,717,2 5,654.1 1.1 Travel and tourism 5,406.4 5,486.1 -1.5 Pharmaceuticals 5,285.4 4,645.8 13.8 Prentice Hall, © 2009 1-27 Top Ten U.S. Advertisers Company Total ad Total ad spend Percentage spend in 2006 in 2005 change from (millions) (millions) 2005 Procter & Gamble $3,338.7 $3,230.9 3.3% General Motors 2,294.8 3,008.0 -23.7 AT&T 2,203.8 1,684.7 30.8 Verizon Communications 1,944.2 1,761.6 10.4 Time Warner 1,824.6 2,073.5 -12.0 Ford Motor Company 1,699.5 1,567.0 8.5 Walt Disney 1,430.4 1,418.3 0.9 DaimlerChrysler 1,421.4 1,591.5 -10.7 Johnson & Johnson 1,302.8 1,623.4 -19.8 News Corp 1,266.8 1,298.5 -2.4 Prentice Hall, © 2009 1-28  Key Players: Agency Agencies have the strategic and creative expertise, media knowledge, talent, and negotiating abilities to operate more efficiently than the advertiser. Some large advertisers have in-house departments. Prentice Hall, © 2009 1-29  Key Players: Media Media are channels of communication that carry the message to the audience They’re vehicles, but also large media conglomerates like Time Warner and Viacom. Principle: Mass media advertising can be cost effective because the costs are spread over the large number of people the ad reaches. Prentice Hall, © 2009 1-30  Key Players: Suppliers Group of service organizations that assist advertisers, agencies, and the media in creating and placing ads by providing specialized services Artists, writers, photographers, directors, producers, printers, freelancers, and consultants Insert Prentice Hall, © 2009 1-31 Key Players: Target Audiences People to whom an ad is directed—their responses determine if advertising is effective. Targeting is the process of identifying the people in the desired audience. Interactive technology allows ads to be Insert customized to the target audience’s individual needs. Prentice Hall, © 2009 1-32 The Development of Advertising Prentice Hall, © 2009 1-28 The Development of Advertising Prentice Hall, © 2009 1-29 The Development of Advertising Prentice Hall, © 2009 1-30  Current Developments The New Advertising Electronic media are making advertising more intimate, interactive, and personalized. Advertising must evolve to keep up with technology. Creativity involves more than just the ad’s big idea, but finding new ways to engage consumers beyond traditional mass media. Prentice Hall, © 2009 1-36  Current Developments Interactivity Buzz is getting people to talk about the event, idea or brand. People contact companies by phone, the Internet, and through friends. Advertising must change to also become more interactive. Prentice Hall, © 2009 1-37  Current Developments Integrated Marketing Communication (IMC) IMC means unifying all marketing communication messages and tools to send a consistent, persuasive message promoting the brand’s goals. Stakeholders are also important in IMC. Synergy means messages have more impact working jointly than on their own. Prentice Hall, © 2009 1-38  Current Developments Globalization The elimination of trade barriers in the 1990s opened huge international markets. Agencies are forming multinational operations to to address these markets. Should advertisers practice local or global advertising? Video Snippet Harley-Davidson talks about the foundation of a Prentice Hall, © 2009 global marketing strategy. 1-39  Current Developments What makes an ad effective? Gets attention Creates a positive impression for a brand Separates the brand from the competition Influences people to respond in the desired way Principle: An ad that works—that is effective—is one where the target audience responds as the advertiser intended. Prentice Hall, © 2009 1-40