1 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Advertising and 14 Public Relations Canadian Adaptation prepared by Don Hill, Langara College

2 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Learning Objectives 1.Discuss the effects of advertising on market share and consumers 2. Identify the major types of advertising 3. Discuss the creative decisions in developing an advertising campaign

3 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Learning Objectives (continued) 4.Describe media evaluation and selection techniques 5.Discuss the role of public relations in the promotional mix

4 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Learning Objective Discuss the effect of advertising on market share and consumers Online

5 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14Advertising Canadian advertising expenditures is $13 billion per year 25% of this goes to TV 14% to newspapers 13% to direct mail 11% to radio 11% to phone directories 8% to the Internet 5% to magazines 3% to outdoor 10% to other The advertising industry is small—only 54,000 employed in advertising industry 1

6 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Top Ten Marketing Communications Companies in Canada 1

7 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Advertising and Market Share  New brands spend proportionately more for advertising than old ones  Beyond a certain level, diminishing returns set in  A certain level of exposure is needed to affect purchase habits  New brands spend proportionately more for advertising than old ones  Beyond a certain level, diminishing returns set in  A certain level of exposure is needed to affect purchase habits 1

8 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Advertising and the Consumer  Average Canadian is exposed to hundreds of ads each day  Advertising may change a consumer’s attitude toward a product  Advertising can affect consumer ranking of brand attributes  Average Canadian is exposed to hundreds of ads each day  Advertising may change a consumer’s attitude toward a product  Advertising can affect consumer ranking of brand attributes 1

9 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Effects of Advertising on Market Share 1

10 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Learning Objective Identify the major types of advertising 2 2 2

11 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Major Types of Advertising Institutional Advertising Institutional Advertising Product Advertising Product Advertising Designed to enhance a company’s image rather than promote a particular product. Designed to tout the benefits of a specific good or service. 2

12 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Major Types of Advertising Enhance corporation’s identity Pioneering Competitive Comparative Product Advertising Product Advertising Institutional Advertising Institutional Advertising Advocacy advertising 2

13 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Online Product Advertising PioneeringPioneering  Stimulates primary demand for new product or category  Used in the PLC introductory stageCompetitiveCompetitive  Influence demand for brand in the growth phase of the PLC  Often uses emotional appeal ComparativeComparative  Compares two or more competing brands’ product attributes  Used if growth is sluggish, or if competition is strong 22

14 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Learning Objective Discuss the creative decisions in developing an advertising campaign 3 3 3

15 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Advertising Campaign A series of related advertisements focusing on a common theme, slogan, and set of advertising appeals. 3

16 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Steps in Creating an Advertising Campaign Determine the advertising objectives Make creative decisions Make media decisions Evaluate the campaign 3

17 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Creative Decisions 3

18 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Setting Objectives: The DAGMAR Approach Define target audience Define desired percentage change Define the time frame for change 3

19 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Identify Product Benefits “Sell the Sizzle, not the Steak” Sell product’s benefits, not its attributes A benefit should answer “What’s in it for me?” Ask “So?” to determine if it is a benefit 3

20 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Identify Product Benefits 3 Attribute Benefit “Virgin Mobile phones are available in 1,500 stores across Canada, and Virgin phone cards will be sold at 10,000 locations nationwide, including Esso gas stations, Jean Coutu, and Couche- Tard.” “So... ?” “ No contracts or monthly service charges, inexpensive phones, and better prepaid rates than Rogers Wireless, Bell Mobility, and Telus.” “ No contracts or monthly service charges, inexpensive phones, and better prepaid rates than Rogers Wireless, Bell Mobility, and Telus.” Online

21 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Advertising Appeal A reason for a person to buy a product. 3

22 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Common Advertising Appeals Profit Health Love or romance Fear Admiration Convenience Fun and pleasure Vanity and egotism Environmental Consciousness Product saves, makes, or protects money Appeals to body-conscious or health seekers Used in selling cosmetics and perfumes Social embarrassment, old age, losing health Reason for use of celebrity spokespeople Used for fast foods and microwave foods Key to advertising vacations, beer, parks Used for expensive or conspicuous items Centers around environmental protection 3 Click

23 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Unique Selling Proposition A desirable, exclusive, and believable advertising appeal selected as the theme for a campaign. 3

24 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Executing the Message Mood or Image Musical Demon- stration Demon- stration Scientific Real/ Animated Product Symbols Real/ Animated Product Symbols Fantasy Lifestyle Slice-of-Life Humorous CommonExecutionalStylesCommonExecutionalStyles Spokes- person/ Testimonial Spokes- person/ Testimonial 3

25 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14Evaluation Ad effectiveness can be done before or after Before; Pretest – appeal, layout and media After; Post campaign analysis Cassie awards created to improve ad effectiveness Online 3

26 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Learning Objective Describe media evaluation and selection techniques 4 4 4

27 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Major Types of Advertising Media Newspapers Magazines Radio Television Outdoor Media Internet Alternative Media 4 Online

28 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Advertising Spending in 2005

29 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Cooperative Advertising An arrangement in which the manufacturer and the retailer split the costs of advertising the manufacturer’s brand. 4

30 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14NewspapersAdvantages  Geographic selectivity  Short-term advertiser commitments  Immediacy  Year-round readership  High individual market coverage  Co-op and local tie-in availability  Short lead timeDisadvantages  Limited demographic selectivity  Limited colour  Low pass-along rate  May be expensive 4

31 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14Magazines 4  Good reproduction  Demographic selectivity  Regional/local selectivity  Long advertising life  High pass-along rate  Long-term advertiser commitments  Slow audience build-up  Limited demonstration capabilities  Lack of urgency  Long lead timeAdvantagesDisadvantages

32 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14  No visual treatment  Short advertising life  High frequency to generate retention  Background distractions  Commercial clutterAdvantagesDisadvantagesRadio  Low cost  Immediacy of message  Short notice okay  No seasonal audience change  Highly portable  Short-term advertiser commitments  Entertainment carryover 4 Online

33 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14Television 4  Wide, diverse audience  Low cost per thousand  Creative and demonstrative  Immediacy of messages  Entertainment carryover  Demographic selectivity with cable  Short life of message  Consumer skepticism  High campaign cost  Little demographic selectivity with stations  Long-term advertiser commitments  Long lead times for production  Commercial clutterAdvantagesDisadvantages

34 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Outdoor Media 4  Repetition  Moderate cost  Flexibility  Geographic selectivity  Short message  Lack of demographic selectivity  High “noise” levelAdvantagesDisadvantages

35 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14Internet 4  Fast growing  Ability to reach narrow target audience  Short lead time  Moderate cost  Difficult to measure ad effectiveness and ROI  Ad exposure relies on “click through” from banner ads  Not all consumers have access to internet AdvantagesDisadvantages

36 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Examples of Alternative Media Online 4 Ads in Movies and Videos Ads in Movies and Videos Interactive Kiosks Computer Screen Savers Computer Screen Savers Video Shopping Carts Aerial Ads CD-ROMs Advertainments

37 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Media Mix Decisions Cost per Contact Cost per Contact Reach Frequency Audience Selectivity Audience Selectivity The cost of reaching one member of the target market. The number of target consumers exposed to a commercial at least once during a time period. The number of times an individual is exposed to a message during a time period. The ability of an advertising medium to reach a precisely defined market. 4

38 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Media Scheduling Continuous Media Schedule Continuous Media Schedule Flighted Media Schedule Pulsing Media Schedule Pulsing Media Schedule Seasonal Media Schedule Seasonal Media Schedule Advertising is run steadily throughout the period. Advertising is run heavily every other month or every two weeks. Advertising combines continuous scheduling with flighting. Advertising is run only when the product is likely to be used. 4

39 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Learning Objective Discuss the role of public relations in the promotional mix 5 5 5

40 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 The Role of Public Relations Evaluates public attitudes Identifies issues of public concern Executes programs to gain public acceptance 5

41 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Functions of Public Relations Press relations Product publicity Corporate communication Public affairs Lobbying Employee and investor relations Crisis management 5

42 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Public Relations Tools Product placement Consumer education Event sponsorship Issue sponsorship Internet Web sites New product publicity 5

43 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Crisis Management A coordinated effort to handle the effects of unfavourable publicity or of an unfavourable event. 5

44 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 14 Public Relations versus Publicity