Chapter 17 Advertising and Public Relations Marketing Lamb, Hair, McDaniel 10 Designed by Eric Brengle B-books, Ltd. Prepared by Amit Shah Frostburg State University

Chapter 17 Advertising and Public Relations Learning Outcomes Discuss the effects of advertising on market share and consumers Identify the major types of advertising Discuss the creative decisions in developing an advertising campaign LOI LO2 LO3

Chapter 17 Advertising and Public Relations Learning Outcomes Describe media evaluation and selection techniques Discuss the role of public relations in the promotional mix LO4 LO5

The Effects of Advertising Chapter 17 Advertising and Public Relations The Effects of Advertising LOI Discuss the effects of advertising on market share and consumers

The Effects of Advertising Chapter 17 Advertising and Public Relations LOI The Effects of Advertising U.S. advertising was forecasted at nearly $480 billion in 2008 In 2005, 32 companies spent over $1 billion each The advertising and marketing services employ 800,000 people Ad budgets of some firms are almost $4 billion annually

The Effects of Advertising Chapter 17 Advertising and Public Relations LOI The Effects of Advertising Top Ten Leaders by U.S. Advertising Spending

Advertising and Market Share Chapter 17 Advertising and Public Relations Advertising and Market Share LOI New brands with a small market share spend proportionally more for advertising and sales promotion than those with a large market share Beyond a certain level of spending, diminishing returns set in. New brands require higher spending to reach a minimum level of exposure needed to affect purchase habits.

The Effects of Advertising on Consumers Chapter 17 Advertising and Public Relations The Effects of Advertising on Consumers The average U.S. citizen is exposed to hundreds of ads each day. Advertising may change a consumer’s negative attitude toward a product, or reinforce a positive attitude. Advertising can affect consumer ranking of a brand’s attributes. LOI

REVIEW LEARNING OUTCOME Effects of Advertising LOI Chapter 17 Advertising and Public Relations

Major Types of Advertising Chapter 17 Advertising and Public Relations Major Types of Advertising LO2 Identify the major types of advertising

Major Types of Advertising Chapter 17 Advertising and Public Relations Major Types of Advertising LO2 Institutional Advertising Enhances a company’s image rather than promotes a particular product. Product Touts the benefits of a specific good or service.

Major Types of Advertising Chapter 17 Advertising and Public Relations Major Types of Advertising LO2 Corporate identity Pioneering Competitive Comparative Product Advertising Institutional Advocacy advertising

Chapter 17 Advertising and Public Relations LO2 Product Advertising Pioneering Stimulates primary demand for new product or category Used in the PLC introductory stage Competitive Influences demand for brand in the growth phase of the PLC Often uses emotional appeal Compares two or more competing brands’ product attributes Used if growth is sluggish, or if competition is strong Comparative http://www.pizzahut.com http://www.papajohns.com Online

REVIEW LEARNING OUTCOME The Major Types of Advertising LO2 Chapter 17 Advertising and Public Relations

Creative Decisions in Advertising Chapter 17 Advertising and Public Relations Creative Decisions in Advertising LO3 Discuss the creative decisions in developing an advertising campaign

Creative Decisions in Advertising Chapter 17 Advertising and Public Relations Creative Decisions in Advertising LO3 Advertising Campaign A series of related advertisements focusing on a common theme, slogan, and set of advertising appeals.

Creative Decisions in Advertising Chapter 17 Advertising and Public Relations LO3 Creative Decisions in Advertising Determine the advertising objectives Make creative decisions Make media decisions Evaluate the campaign

Setting Objectives: The DAGMAR Approach Chapter 17 Advertising and Public Relations Setting Objectives: The DAGMAR Approach Define target audience Define desired percentage change Define the time frame for change LO3

Chapter 17 Advertising and Public Relations LO3 Creative Decisions Develop and evaluate advertising appeals Execute the message Evaluate the campaign’s effectiveness Identify product benefits

Identify Product Benefits Chapter 17 Advertising and Public Relations LO3 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

Identify Product Benefits Chapter 17 Advertising and Public Relations LO3 Identify Product Benefits Attribute Benefit “SoBe Life Water has reformulated five delicious, low-calorie flavors, each infused with essential vitamins and healthy herbal ingredients.” “SoBe Life Water is not only an enhanced water; it is a lifestyle unto itself. It provides consumers the healthiest, most fun and refreshing products, delivering the incredibly positive benefits of hydration.” - So?

Chapter 17 Advertising and Public Relations Advertising Appeals LO3 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

Unique Selling Proposition Chapter 17 Advertising and Public Relations Unique Selling Proposition LO3 Unique Selling Proposition A desirable, exclusive, and believable advertising appeal selected as the theme for a campaign.

Chapter 17 Advertising and Public Relations Executing the Message Mood or Image Musical Demon- stration Scientific Real/ Animated Product Symbols Fantasy Lifestyle Slice-of-Life Humorous Spokes-person/ Testimonial LO3

REVIEW LEARNING OUTCOME Creative Decisions for Ad Campaign Chapter 17 Advertising and Public Relations LO3 REVIEW LEARNING OUTCOME Creative Decisions for Ad Campaign Set advertising objectives Identify benefits Develop appeal Evaluate campaign results Evaluating results helps marketers adjust objectives for future campaigns Execute message

Media Decisions in Advertising Chapter 17 Advertising and Public Relations Media Decisions in Advertising LO4 Describe media evaluation and selection techniques

Media Decisions in Advertising Chapter 17 Advertising and Public Relations Media Decisions in Advertising LO4 Newspapers Magazines Yellow Pages Internet Radio Television Outdoor Media Direct Mail Trade Exhibits Cooperative Advertising Brochures Coupons Catalogs Special Events Monitored Media Unmonitored Media

Major Advertising Media Chapter 17 Advertising and Public Relations LO4 Major Advertising Media Newspapers Magazines Radio Television Outdoor Media Yellow Pages Internet

Chapter 17 Advertising and Public Relations Newspapers LO4 Advantages Disadvantages Geographic selectivity Short-term advertiser commitments News value and immediacy Year-round readership High individual market coverage Co-op and local tie-in availability Short lead time Limited demographic selectivity Limited color Low pass-along rate May be expensive

Cooperative Advertising Chapter 17 Advertising and Public Relations Cooperative Advertising LO4 Cooperative Advertising An arrangement in which the manufacturer and the retailer split the costs of advertising the manufacturer’s brand.

Chapter 17 Advertising and Public Relations Magazines LO4 Advantages Disadvantages Long-term advertiser commitments Slow audience build-up Limited demonstration capabilities Lack of urgency Long lead time Good reproduction Demographic selectivity Regional/local selectivity Long advertising life High pass-along rate

Chapter 17 Advertising and Public Relations Radio LO4 Advantages Disadvantages No visual treatment Short advertising life High frequency to generate comprehension and retention Background distractions Commercial clutter Low cost Immediacy of message Short notice scheduling No seasonal audience change Highly portable Short-term advertiser commitments Entertainment carryover

Chapter 17 Advertising and Public Relations Television LO4 Advantages Disadvantages Wide, diverse audience Low cost per thousand Creative opportunities for demonstration 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 clutter

TV Advertising: Is Less More? Chapter 17 Advertising and Public Relations TV Advertising: Is Less More? LO4 The number of ads in TV shows is a longstanding complaint of viewers and advertisers. The media is cluttered and consumers change channels or speed through commercials on a DVR. Tests are being conducted to feature shorter commercial pods.

Chapter 17 Advertising and Public Relations Outdoor Media LO4 Advantages Disadvantages Short message Lack of demographic selectivity High “noise” level Repetition Moderate cost Flexibility Geographic selectivity

Chapter 17 Advertising and Public Relations Internet LO4 Advantages Disadvantages Difficult to measure ad effectiveness and ROI Ad exposure relies on “click through” from banner ads Not all consumers have access to Internet Fast growing Ability to reach narrow target audience Short lead time Moderate cost Online http://www.fox.com http://www.abc.com

Videogame Advertising Chapter 17 Advertising and Public Relations Videogame Advertising LO4 In 2006, Microsoft acquired Massive inc., a start-up that places ads in video games. Ads are inserted into the game environment. Video games could become a large new medium for advertising. SOURCE: Robert A. Guth and Nick Wingfield, “Microsoft’s ‘Massive’ Move into Game Ads,” Wall Street Journal, April 26,2006, B1.

Chapter 17 Advertising and Public Relations Cell Phones LO4 Newest advertising media Useful for reaching youth market 3 billion cell phone users in the world In 2006 cell phone ad sales reached over $400 million in U.S. – nearly $900 million worldwide

Chapter 17 Advertising and Public Relations LO4 Media Selection Media Mix – Combination of media to be used for a promotional campaign Cost per contact – The cost of reaching one member of the target market Reach – number of target consumers exposed to a commercial at least once during a specific period, usually four weeks Frequency – number of times an individual is exposed to a given message during a specific period

Qualitative Factors in Media Selection Chapter 17 Advertising and Public Relations LO4 Qualitative Factors in Media Selection Attention to the commercial and the program Involvement Program liking Lack of distractions Other audience behaviors

Chapter 17 Advertising and Public Relations Media Scheduling LO4 Continuous Media Schedule Advertising is run steadily throughout the period. Flighted Media Schedule Advertising is run heavily every other month or every two weeks. Pulsing Media Schedule Advertising combines continuous scheduling with flighting. Seasonal Media Schedule Advertising is run only when the product is likely to be used.

REVIEW LEARNING OUTCOME Media Evaluation and Selection Chapter 17 Advertising and Public Relations LO4 REVIEW LEARNING OUTCOME Media Evaluation and Selection Type: Newspaper Magazine Radio Television Outdoor Internet Alternative Considerations: Mix How much of each? Cost per contact How much per person? Reach How many people? Frequency How often? Audience selectivity How targeted is audience? Scheduling: continuous flighted pulsing seasonal Winter Spring Summer Fall

Chapter 17 Advertising and Public Relations LO5 Discuss the role of public relations in the promotional mix

Chapter 17 Advertising and Public Relations LO5 Public Relations The element in the promotional mix that: evaluates public attitudes identifies issues of public concern executes programs to gain public acceptance

Functions of Public Relations Chapter 17 Advertising and Public Relations LO5 Functions of Public Relations Press relations Product publicity Corporate communication Public affairs Lobbying Employee and investor relations Crisis management

Public Relations Tools Chapter 17 Advertising and Public Relations Public Relations Tools LO5 Product placement Consumer education Event sponsorship Issue sponsorship Internet Web sites New product publicity Online http://www.vw.com http://www.chevrolet.com

Example of Consumer Education Chapter 17 Advertising and Public Relations Example of Consumer Education LO5 Corporations are teaching public school students about personal finance. People under age 25 are a fast-growing group for credit card debt increases and bankruptcy. Is it appropriate to use educational materials with a corporate identity? How should financial literacy be taught? SOURCE: Diya Gullapalli, “Your Kid’s Teacher: The Bank,” Wall Street Journal, April 8-9, 2006, B1.

Managing Unfavorable Publicity Chapter 17 Advertising and Public Relations Managing Unfavorable Publicity LO5 Crisis Management A coordinated effort to handle the effects of unfavorable publicity or of an unfavorable event.

REVIEW LEARNING OUTCOME The Role of Public Relations LO5 Chapter 17 Advertising and Public Relations