Global Advertising Chapter 16 © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Outline Advertising in Selected Countries The Top Global Advertisers and Ad Agencies Global Advertising Pros and Cons The Communication Process and Culture Global Campaign Planning Takeaways.

Advertising Intensity in Selected Nations

Media Usage in % of Ad Expenditures

Figures are in millions of US dollars Top Global Advertisers

Figures are in millions of US dollars Top Global Advertisers (cont’d)

Figures are in millions of US dollars Top Global Advertising Agencies

To coordinate with the global advertiser in terms of final message creation & media selection To effectively construct a media schedule for the various local markets within its global network To communicate the global advertisements effectively into various smaller local markets To account for across-country variability in financial arrangements & payments The Global Ad Agency Job

GLOBAL ADVERTISING – media advertising that is more or less uniform across many countries, often, but not necessarily in media vehicles with global reach Global Advertising Defined

ADVANTAGES DISADVANTAGES CONSISTENCY OF BRAND COMMUNICATIONS MEDIA SPILLOVER COST SAVINGS IMPROVED PRODUCTION LEVERAGING A GREAT IDEA IMAGES AND SYMBOLS MIGHT NOT BE LOCALLY ACCEPTABLE APPROPRIATE MEDIA MIGHT NOT BE AVAILABLE PRODUCT USAGE IS NOT THE SAME LOCAL CREATIVITY IS STIFLED Pros and Cons of Global Advertising

SUPPLY SIDE 1) GLOBAL AD AGENCIES 2) GLOBAL MEDIA DEMAND SIDE 3) GLOBAL CUSTOMERS 4) PREFERENCE CONVERGENCE 5) GLOBAL COMPETITORS Drivers of Global Advertising

1.STRATEGY – Global ads involve products &services that are positioned similarly across markets, wherein the product’s appeal is consistent 2.ORGANIZATION – global ads are typically directed from headquarters with the help of advertising agencies with a global network 3.MEDIA – with global reach are used, creating spillover that crosses borders to reach customers in different countries & follows traveling customers around the globe 4.MESSAGE & CREATIVE – copy & visualization may be uniform across markets, uniformity decreases based on how different each local market is from another Four Components of Global Advertising

IDENTICAL ADS – ads are identical, usually with localization only in terms of language voice-over changes & simple copy translations (e.g. the Marlboro cowboy ads) PROTOTYPE ADVERTISING – the same ads, but the voice-over may be changed to avoid language & cultural problems, & the ad may be re-shot with local celebrities (e.g. Drakkar Noir) PATTERN STANDARDIZATION – similar but less structured global approach, wherein the positioning theme is unified & some alternative creative concepts are planned, but execution differs between markets (e.g. Xerox) Global Ad Categories

Brand Name same Theme same Visual same Positioning same Actors same Words same Language (local) Media same Materials same Slogan same Brand Name same Theme same Visual same Positioning same Actors not same Words not same Language (local) Media not same Materials not all same Slogan same PROTOTYPE ADVERTISINGPATTERN STANDARDIZATION Global Ads: Same everywhere?

WEB ADS are those boxed inserts on the screen that appear as you surf the web. They are interactive in the sense that you can click on them to get more information about the product/service. Types of Web ads: Banner ads – most common, measured in pixels Tickers – banner ads that move across the screen Interstitial ads – ads that flash while a request is being handled, filling up idle loading time. Pop-up ads – ads that appear once a site has been loaded prior to webpage access Transactional ads – let you order/request something without leaving the current webpage Roadblocks – full screen ads that users must pass through to get to other screens Rich media ads – the web version of a TV commercial, with audio and motion Web Ads Are Naturally Global

Producer/ marketer/ advertiser Sets objectives and advertising budget Mass Media Carries the message Advertising agency Develops message (encoding) and selects media Opinion leaders, individuals Receive the message and interpret (decoding) Individuals Think, feel and act (hierarchy of effects) Coordination and control Generate feedback on effects Sender’s cultural settingReceiver’s cultural setting The International Mass Communication Process

VISUAL PROCESSING Low literacy Younger Segments Low Involvement products High context societies VERBAL PROCESSING High Literacy Older segments High involvement products Low context societies TV commercials Magazines Newspapers Radio Ads Cultures and Visual vs Verbal Processing

ADVERTISING EXPOSURE AWARENESS KNOWLEDGE LIKING/ATTITUDE PREFERENCE TRIAL REPEAT PURCHASE/LOYALTY The Hierarchy of Effects

AWARENESS KNOWLEDGE ATTITUDE CHANGE & IMAGE BUILDING INFLUENCE BEHAVIOR TV, Radio Words (spoken/written), Print, TV/Radio TV, Magazines, Cinema, Outdoor Ads Media must be timely, newspapers, TV Matching Ad Objectives and Media

Global Advertising is Most Powerful When… the image communicated can be identical across countries the symbols used carry the same meaning across countries the product features desired are the same the usage conditions are similar across markets

Goodyear’s Latin-Am. Campaign Planning

CAUCHOS CUBIERTAS GOMAS LLANTAS NEUMATICOS Venezuela Argentina Puerto Rico Mexico, Peru, Guatemala, Colombia Chile What to sayWhere to say it Global Tire Ads: Language pitfalls How do you say “tire” in Latin America’s Spanish?

1.By focusing on regions, it may be possible to reap the scale benefits & cost efficiencies of global advertising without sacrificing too much on the side of local adaptation. 2. The early involvement of country subsidiaries & agency professionals not only facilitates later acceptance of unified themes but also helps broaden the sources of powerful campaign concepts. 3.The process by which pattern standardization is arrived at needs to allow open & free exchange. 4.Even when the company has operated for years in a market, research is still necessary, especially when conditions are changing. Goodyear: Lessons for Global Advertisers

As the affluence of countries grows, new products/services appear, & customers need more information. Advertising becomes more important and advertising expenditures as a percentage of GDP increase. Takeaway

As markets integrate, global communications expand, & customers become more similar, pan-regional advertising campaigns will become increasingly cost-efficient & more effective than multi-domestic advertising. Takeaway

Instead of complete uniformity, global advertising tends to follow a pattern standardization approach with unified slogan, visualization, & image but with local execution in terms of language, spokespersons, & copy. This helps avoid the pitfalls of standardized & translated messages. Takeaway

The global advertising agency is often at an advantage over local rivals when it comes to global /regional advertising. But independent local advertising agencies have combined with others to form multinational networks & can sometimes offer stronger local talent. Takeaway

Developing a global campaign takes time, effort, & planning. The process should involve headquarters and ad agency managers & local representatives whose knowledge will help formulate the global communication strategy. Takeaway