1-1 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Chapter 1 Where marketing communication began: the development of advertising in Australia and New Zealand

1-2 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Learning objectives 1.To define advertising—looking at its importance and its function. 2.To trace the history of advertising in Australia and New Zealand. 3.To explore the changing advertising environment. 4.To introduce marketing communication concepts—such as consumer empowerment and engagement, the push–pull marketplace and interactive advertising, digital and social media— that will be fundamental to the rest of the book.

1-3 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Future of advertising News channels Definition History Empowered Consumers Changes in ad agencies Importance Structure & function Social media Interactive advertising Digital media Advertising Engagement

1-4 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell What is advertising? Traditional definition Advertising is any paid form of non-personal communication about an organisation, product, service or idea by an identified sponsor. Traditional definition Advertising is any paid form of non-personal communication about an organisation, product, service or idea by an identified sponsor. Traditional definition Advertising is any paid form of non-personal communication about an organisation, product, service or idea by an identified sponsor. Traditional definition Advertising is any paid form of non-personal communication about an organisation, product, service or idea by an identified sponsor. Paid: The space or time for an advertising message must be purchased. Non-personal: Involves mass media (e.g. TV, radio, newspapers, magazines) in one- way communications. Traditional definition Advertising is any paid form of non-personal communication about an organisation, product, service or idea by an identified sponsor. Traditional definition Advertising is any paid form of non-personal communication about an organisation, product, service or idea by an identified sponsor.

1-5 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell The best job in the world The best job in the world campaign, but how much advertising did it use?

1-6 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell A new definition of advertising New, improved definition Advertising is a paid, mediated form of communication from an identifiable source, designed to persuade the receiver to take some action, now or in the future. New, improved definition Advertising is a paid, mediated form of communication from an identifiable source, designed to persuade the receiver to take some action, now or in the future. Traditional definition Advertising is any paid form of non-personal communication about an organisation, product, service or idea by an identified sponsor. Traditional definition Advertising is any paid form of non-personal communication about an organisation, product, service or idea by an identified sponsor.

1-7 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Importance of advertising

1-8 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Importance of advertising

1-9 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Advertising has many functions The nature and purpose of advertising differs from one industry to another and across situations. Engage & involve Brand awareness Brand equity Brand image Communicate & interact

1-10 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Brand awareness Building brand awareness is especially important for new products.

1-11 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Brand image Even established brands need to build and maintain brand image.

1-12 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell History of advertising

1-13 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Function and structure Advertising agency Advertising agency Client options In-house advertising

1-14 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Types of agencies Full service Creative boutiques Media buying services Other

1-15 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Creating advertising Planning advertising Producing advertising Research Selecting media Full-service agencies Full range of marketing, communication and promotion services General communications  Sales promotion  Direct marketing  Interactive  Package design  Public relations  Publicity General communications  Sales promotion  Direct marketing  Interactive  Package design  Public relations  Publicity

1-16 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Artists Ad agencies have skilled specialists Copywriters Researchers Photographers Media analysts Other skills

1-17 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Great Australian ads

1-18 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-18 Future of advertising News channels Definition History Empowered consumers Changes in ad agencies Importance Structure & function Social media Interactive advertising Digital media Engagement Advertising

1-19 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Advertising timeline (Australia) 1800 First ad (poster) 1803 First newspaper ad 1901 First advertising service agency (Sydney) 1946 National industry association (AANA) 1821 First magazine Media commissions introduced 1912 First industry association (Melbourne) 1923 Commercial radio 1956 Commercial TV

1-20 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Advertising timeline (NZ) 1901 Newspaper Publishers Association 1906 First advertising agency 1923 Broadcasting regulations st television broadcast 1821 First magazine Advertisers Association of NZ accredited agencies in operation 1989 Te Mangai Paho (Maori Broadcasting) established

1-21 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell History of advertising Early newspaper advertisements were confined to printed text only. Illustrations were rare until the 1860s. Source: Walter Powell Advertisement for Paragon Kitchens, 1862 State Library of Victoria, Pictures Collection

1-22 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Advertising today—Australia Advertising agencies: Media expenditure: $12.6 billion

1-23 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Advertising today—Australia (cont.) Radio licences 374 commercial 358 community Television (FTA) 54 commercial 83 community Subscription TV 2588 Metro and regional daily newspapers: 50+ Consumer magazines 140 (audited) Cinema screens: 1994 Radio licences 374 commercial 358 community Television (FTA) 54 commercial 83 community Subscription TV 2588 Metro and regional daily newspapers: 50+ Consumer magazines 140 (audited) Cinema screens: 1994 Population: 21 million

1-24 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Advertising today—NZ Advertising agencies: 200+ Media expenditure: $2045 million

1-25 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Advertising today—NZ (cont.) 6000 magazines 455 cinema screens 300 radio stations 87 TV channels 150 newspapers Population: 4.18 million

1-26 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Breakdown of advertising expenditure (Australia)

1-27 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Media expenditure in New Zealand: 2007 Media Platform2008 ($million) 2009 ($million) Newspapers Television Radio Magazines Outdoor7468 Cinema96 Addressed mail5658 Unaddressed mail6465 Interactive Source: New Zealand Advertising Standards Board

1-28 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-28 Future of Advertising News Channels Definition History Empowered Consumers Changes in Ad Agencies Importance Structure & Function Social Media Interactive Advertising Digital Media Engagement Advertising

1-29 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell The changing advertising landscape  Consumer empowerment  Push-pull marketplace  Digital media and interactive advertising  Social media  New rules of engagement

1-30 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Consumer empowerment and the push-pull marketplace Insert figure 1.7 Push pull marketplace

1-31 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Digital media and interactive advertising

1-32 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Interactive advertising

1-33 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Social media Social media defined: Social media has been defined as ‘a group of internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of user- generated content. David Schumann, Andy Artis & Rachel Rivera, ‘The future of interactive advertising through an IMC lens’, Journal of Interactive Advertising, vol. 1, no. 2,. 2001

1-34 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Social media Key opportunity: How to engage consumers by inviting them to create content around a product? Consumers are consumers of content Consumers are consumers of content Consumers are producers of content Consumers are producers of content Brands are owned by companies Brands are owned by companies Brands are a shared creation Brands are a shared creation Marketers define brand meanings and values Marketers define brand meanings and values Consumers define brand meanings and values Consumers define brand meanings and values Traditional viewContemporary view

1-35 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Social media

1-36 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell New rules of engagement

1-37 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 1-37 Future of Advertising News Channels Definition History Empowered Consumers Changes in Ad Agencies Importance Structure & Function Social Media Interactive Advertising Digital Media Engagement Advertising

1-38 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell The future of advertising  Harsh economic environment leading to advertising budget cuts  Mass media advertising is dying  Rise of new communications technologies  Fragmentation of media and markets  Search for big ‘consumer insight’  From great executions to strong strategy

1-39 Copyright  2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell Summary and conclusions  Advertising in Australia and New Zealand has a long heritage with its roots dating back to the 1800s.  Advertising has evolved from a push by marketers to reach audiences to a more complex and interactive approach.  Consumer empowerment has led to an emphasis on shared dialog rather than pushed messages.  Definitions of advertising have changed to accommodate new technologies and interactivity.  The advertising industry has also adapted to current changes.  Advertising continues to be the best way to reach large audiences.