The World of Advertising and Integrated Brand Promotion

We need perspective on advertising and IBP! Technology and consumer control are reshaping the communications environment The lines between entertainment and advertising/IBP are blurring—”Madison & Vine” Firms use advertising/IBP to build brands

We need perspective on advertising and IBP! Firms of all sizes need and use advertising Advertising is just one of many tools in IBP Advertising/IBP do not guarantee success—8 of 10 new products fail People have all sorts of positive and negative (mis)perceptions about advertising and promotion

We need perspective on advertising and IBP! Four criteria must be met for a communication to be classified as advertising: The communication must be paid for The advertiser must be identified The communication must be delivered through mass media The communication must be attempting to persuade

We need perspective on advertising and IBP! Integrated Brand Promotion (IBP) is the process of using a wide range of promotional tools working together to create widespread brand exposure.

We need perspective on advertising and IBP! IBP is a process IBP uses a wide ranges of tools including: Advertising Point of Purchase (in-store) materials Direct Marketing (catalogs, infomercials, email) Personal Selling Internet advertising Blogs Podcasting Event sponsorship Brand entertainment (product placement on TV shows, in movies) Outdoor signage/billboards Public relations Influencer (peer-to-peer) communications Corporate advertising

Distinctions within Advertising Advertising Campaign An integrated series of ads and promotions that communicate a central theme or idea Advertisements Specific messages designed to persuade an audience

Model of the Communications Process Encoding Fields of Experience Response Feedback Loop Decoding Channel MESSAGE Source / Sender Receiver / Audience

Advertising as a Communications Process: Mass Mediated

Advertising as a Communications Process Production: The advertiser and social context determine ad content. Reception: The context of ad reception and the audience’s understanding of an ad result in a meaningful interpretation of the ad. Accommodation and negotiation: The ways in which consumers interpret ads

Audiences for Advertising: Audience Categories Household Consumers Business Organizations The Trade Channel Professionals Government

Audiences for Advertising: Audience Geography Global advertising International advertising National advertising Regional advertising Local advertising

Ad in Context Example This ad ran in Italy. Do you think this is a “global” or “international” ad? What’s the difference?

Advertising as a Business Process The role of advertising in the marketing mix Advertising in brand management Advertising in market segmentation, differentiation, and positioning Advertising in revenue and profit generation

Advertising as a Business Process Definition of Marketing: The process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives. American Marketing Association, 1995

The Role of Advertising in the Marketing Mix Perceived Value Distribution Product Promotion Price

The Role of Advertising in Brand Management Information and persuasion Introduction of new brands and extensions Building and maintaining brand loyalty/brand equity Creating an image/meaning Building brand loyalty in the trade channel

Advertising’s Role in Segmentation, Differentiation and Positioning (heterogeneous > homogeneous) Differentiation (perceived as different or unique) Positioning Distinct from other brands Occupies a “value” level External niche vs. internal

Advertising’s Role in Revenue and Profit Generation Brand loyalty leads to inelasticity of demand: less price sensitivity to demand Economies of scale: higher volume results in lower unit cost

Types of Advertising Primary demand stimulation Selective demand stimulation Direct response advertising Delayed response advertising Corporate advertising

Ad in Context Example Is this ad an example of primary or selective demand stimulation? What’s the difference?

The Economic Effects of Advertising Gross Domestic Product Business Cycles Competition Prices Value

From IMC to IBP Special Events Television Advertising C o u p n s Coordinated promotional activities reinforce one another