CHAPTER 16 Advertising and Public Relations Chapter Objectives 1 Identify the three major advertising objectives and the two basic categories of advertising. List the major advertising strategies. Describe the process of creating an advertisement. 4 Identify the major types of advertising appeals and discuss their uses. List and compare the major advertising media. Outline the organization of the advertising function and the role of an advertising agency. 7 Explain the roles of cross-promotion, public relations, publicity, and ethics in an organization’s promotional strategy. Explain how marketers assess promotional effectiveness. 5 2 8 3 6

ADVERTISING TYPES OF ADVERTISING • Advertising Paid, non- personal communication through various media about a business firm, not-for- profit organization, product, or idea by a sponsor identified in a message that is intended to inform or persuade members of a particular audience. TYPES OF ADVERTISING • Product advertising Nonpersonal selling of a particular good or service. • Institutional advertising Promotion of a concept, an idea, a philosophy, or the goodwill of an industry, company, organization, person, geographic location, or government agency.

OBJECTIVES OF ADVERTISING • Informative advertising Promotion that seeks to develop initial demand for a good, service, organization, person, place, idea, or cause. • Persuasive advertising Promotion that attempts to increase demand for an existing good, service, organization, person, place, idea, or cause. • Reminder advertising Advertising that reinforces previous promotional activity by keeping the name of a good, service, organization, person, place, idea, or cause before the public. • Advertisers coordinate advertising objectives with the product’s stage in the product life cycle.

ADVERTISING STRATEGIES • Advertising is a means of bringing buyers and sellers together. • Marketers often combine several strategies to meet their objectives. COMPARATIVE ADVERTISING • Comparative advertising Advertising strategy that emphasizes messages with direct or indirect promotional comparisons between competing brands. • Market leaders seldom acknowledge competing brands. CELEBRITY TESTIMONIALS • Use of celebrity spokespeople for products. • Can build brand equity but can hurt brand if celebrity is hit by scandal.

INTERACTIVE ADVERTISING RETAIL ADVERTISING • Includes all advertising by retail stores that sell goods or services directly to the consuming public. • Cooperative advertising Strategy in which a retailer shares advertising costs with a manufacturer or wholesaler. INTERACTIVE ADVERTISING • Involves two-way promotional messages transmitted through communication channels that induce message recipients to participate actively in the promotional effort. • Changes balance between marketers and consumers.

ADVERTISING MESSAGES ADVERTISING APPEALS • Advertising campaign Series of different but related ads that use a single theme and appear in different media within a specified time period. ADVERTISING APPEALS • Appeals can provide information or appeal to emotion. • Fear appeals—imply or state that incorrect buying decisions could lead to bad consequences. • Humor seeks to create positive mood related to good or service. • Ads based on sex can be attention-getting, but they boost recall only if the appeal is appropriate to the type of product.

DEVELOPING AND PREPARING ADS • Goals: • Gain attention. • Inform and/or persuade. • Lead to purchase or other desired action. • After idea conception, ad must be refined from rough sketch to finished layout. CREATING INTERACTIVE ADS • Lively, engaging content. • Use of advertising in games, or advergames. • Banners are the most common form of online advertisement. • Use of pop-ups is declining; adware seen as disreputable.

MEDIA SELECTION Broadcast Television Cable Television Radio Newspaper Direct Mail Magazines- Consumer/Business Outdoor Internet

MEDIA SCHEDULING • After selecting media, marketers determine the most effective timing and sequence for a series of advertisements. • Influenced by seasonal sales patterns, repurchase cycles, and competitors’ activities. • Measure effectiveness in three ways: • Reach—the number of people exposed to an advertisement. • Frequency—the number of times an individual is exposed to an advertisement. Minimum of three exposures is recommended. • Gross rating point—the product of the reach times the frequency.

ORGANIZATION OF THE ADVERTISING FUNCTION • Organizational arrangements vary from company to company. • Usually organized as a staff department reporting to a vice president of marketing. • Major tasks include include advertising research, design, copywriting, media analysis, and in some cases, sales and trade promotion. ADVERTISING AGENCIES • Advertising agency Firm whose marketing specialists help advertisers plan and prepare advertisements. • May offer creativity and objectivity that is difficult to maintain in an internal department.

PUBLIC RELATIONS • Firm’s communications and relationships with its various publics, including customers, employees, stockholders, suppliers, and government agencies. • Serves broad objectives by enhancing prestige and image of all parts of the organization. • PR department is link between the firm and the media. • Nonmarketing public relations—a company’s messages about general management issues. •  Marketing public relations (MPR)—narrowly focused public relations activities that directly support marketing goals. • Publicity Nonpersonal stimulation of demand for a good, service, place, idea, person, or organization by unpaid placement of significant news regarding the product in a print or broadcast medium.

CROSS-PROMOTION • Cross-promotion Promotional technique in which marketing partners share the cost of a promotional campaign that meets their mutual needs. • Provide greater benefits in return for both partners. • Example: Cingular Wireless promoting artists such as Coldplay, Gwen Stefani, and Alicia Keys. • Cingular sells more ringtones because it features these artists. • Artists gain greater exposure.

MEASURING PROMOTIONAL EFFECTIVENESS • Promotional prices vary widely. • Because of expense, advertising professionals must demonstrate how promotional programs contribute to increased sales and profits. MEASURING ADVERTISING EFFECTIVENESS • Media research—assesses how well particular medium delivers message, where and when to place the message, and the size of the audience. • Message research—tests consumer reactions to an advertisement’s creative message. • Pretesting—assessing an advertisement’s likely effectiveness before it is completed. • Posttesting—assessing advertisement’s effectiveness after it has appeared.

MEASURING PUBLIC-RELATIONS EFFECTIVENESS • Count media placements, conducting public opinion polls. • Conduct focus groups, interview opinion leaders, before-and-after polls. EVALUATING INTERACTIVE MEDIA • Hits—user requests for a file. • Impressions—number of times a viewer sees an ad. • Click-throughs—user clicks ad for more information. • View-through—measure response over time.

ETHICS IN NONPERSONAL SELLING ADVERTISING ETHICS • Advertising to children, advertising alcohol, and the use of cookies on Web sites are all areas of ethical controversy. • Puffery—exaggerated claims of a product’s superiority or the use of subjective or vague statements that may not be literally true. • Uniform Commercial Code distinguishes puffery from specific, quantifiable statements. ETHICS IN PUBLIC RELATIONS • Issues include performing services for companies that produce unsafe products. • Public Relations Society of America’s Code of Professional Standards prohibits promoting products or causes widely known to be harmful.