The Advertising Industry Evolution of Advertising Lesson 2.1

History of Advertising – Lesson 2.1 Before Advertising Early Households Self-sufficient (grew crops, made clothing, etc.) Early Towns As population grew, people gather into towns for protection and commerce. Real estate was scarce in town and people could not be self sufficient. Began to specialize and rely on one another (interdependent) Early Commerce Began to barter but it soon became outdated. Began to sell their products for gold.

History of Advertising Advertising – In The Beginning Industrial Revolution around 1850 mass production became possible. Advertising became necessary to encourage the purchase of these new large quantities. Inventions that also produced a boom in advertising in the 1800’s: Telegraph – 1844 (communication) Railroad- 1864(distant markets) Increased newspaper circulation – 1850’s (mass media)

History of Advertising Advertising Matures 1900’s, ads took more modern look. Became more visual- were considered works of art. Radio in 1930’s TV in the 1950’s

Advertising Today & Tomorrow Advertising is everywhere Large percentage of company income is spent on ads Example: Proctor & Gamble spend $3 billion/year Tide and Crest Traditional ad media was directed at passive audience, now various media has reached its limitations. Example: radio (sounds that can be produced) and print ads (what can be place on paper.

Advertising Today & Tomorrow Advertising – Tomorrow Internet continues to become an important part of ad strategy. Allows for interactive media (communication goes both ways) The potential for future technology is unlimited.

Vintage vs. Modern Vintage Modern

Vintage vs. Modern Vintage Modern

Vintage vs. Modern Vintage Modern

Vintage vs. Modern Vintage Modern

Vintage vs. Modern Vintage Modern

Vintage vs. Modern Vintage Modern

The Advertising Industry Lesson 2.2

Advertising Industry What is an industry? A distinct group of productive or profit-making businesses. Examples: Car industry – makes cars Steel industry – makes steel Fast Food industry – makes fast food

The Advertising Process Business Advertising Agency In-House Advertising External Facilitator Media You

Different Kinds of Advertisers Manufacturers Retailers Advertise the most Consumer goods and services Stores such as grocery, clothing, etc.

Advertising Agency Advertising Agency – a company made up of professionals who specialize in providing creative and business services involved in planning, preparing, and placing advertisements. Advantages to using an ad agency: Businesses are not familiar with the field of advertising. Agencies can maintain a larger, more diversified pool of specialists than an advertiser would employ. It is more cost-effective to pay a consultant to do a specific task when it’s needed than to maintain a staff of specialist the advertiser would only need occasionally.

Advertising Agency External Facilitators Perform specialized services for advertisers and ad agencies like: Providing sets Equipment Work crews for commercials Photography sessions Research for future planning

Changes in the Advertising Industry New Retail Channels Market Saturation Catalogs TV shopping networks Online shopping You watch 21 minutes of commercials of every hour during the day. In movie theater you watch trailers for other movies and ads for products. Advertising is becoming its own worst enemy.

Changes in the Advertising Industry Frequently businesses want to use an integrated approach to marketing communication. Marketing Mix – all marketing activities. Marketing Mix Advertising Sales promotions Event sponsorships Public relations

Changes in the Advertising Industry Media Consolidation Business Consolidation Many media companies have merged in recent years. This affects an advertiser’s ability to negotiate costs for advertising. Example: a single company can control 50 radio stations Many companies in many industries are merging and consolidating. The affects on advertising: Fewer businesses are potential clients Consolidated companies want to advertise in larger geographic areas.

Question Suppose you are the director of marketing for a major fast food chain. What changes in the advertising industry concern you the most? What ways might your company overcome these challenges?