Chapter 6Slide 1 Goals  List the many forms of advertising  discuss advantages and disadvantages of each type of advertising  Define publicity and describe ways to use publicity as a promotional tool

To succeed as a business and entrepreneur, your customers need to know about your business

Pick a photo that has shape and not real busy or you won’t be able to see what you have.

Chapter 6Slide 5  promotional mix – strategy created by adopting a blend of some, if not all, of the types of promotion available  Promotion includes: ◦ advertising ◦ publicity ◦ personal selling ◦ sales promotion

Chapter 6Slide 6  Advertising a paid form of communication sent out by a business about a product or service ◦very important for small and/or new businesses ◦Purpose: Communicates with potential customers  Details your products and services and why customers should buy from you

Slide 7  Advertising should clearly communicate your message and image ◦If low price is your message, highlight this in ads ◦Large companies hire advertising agencies – costly ◦Small business usually handle their own

What are some types of Advertising you can think of?  Student contributions:

 Online  Television  Radio  Newspaper  Direct Mail  Magazine  Outdoor  Transit  Social Networking What are some types of Advertising you can think of?:

 Online advertising still new – uses different guidelines than print ◦Graphics, photos, layouts, text and design must be professional for a positive impact  Cost effective way to promote products to customers  Can interact with customers via chat rooms, blogs, and e-newsletters

 Banner ad – graphic image in a box across the top or down side of web page  Floating Ad – ad that moves across the screen or floats above the page content  Wallpaper Ad – ad that changes the background of the page being viewed  Trick Banner – banner ad that looks like a dialog box with buttons appearing as an error message or alert  Pop-Up Ad – new window that opens in front of the current window with an ad  Pop-Under Ad – new window that loads behind the current window and appears when user closes the active window

1. Cost per Mil (CPM)  the advertiser is charged based on the exposure of the message to a specific audience  priced per thousand viewers reached with the message 2. Cost Per click (CPC)  the advertiser is charged based on the number of user clicks on the advertisement  viewers respond to the ad by clicking on the hyperlink within the ad 3. Cost per Action (CPA)  the advertiser is charged when a user takes an action to complete a form  advertisers prefer this type of charge for banner ads

◦Viewers perceive it as SPAM mail  utilize software to block promotions ◦On-line advertising is used when customers extend beyond the local (home town) market

Chapter 6Slide 14  Can communicate through sight and sound  Can be creative, entertaining, and informative  Most Effective way to reach a large number of people quickly  Two types: ◦Commercials - last less than a minute ◦Infomercials - last ½ hour or more and provide in-depth coverage about a specific product  Most costly form or advertising

 Fees include: ◦length of time of the commercial ◦the costs of producing the commercial  National advertising most expensive  Local TV offers affordable rates for small businesses  Example: ◦$250 for a 1 minute commercial that cost you $2000 to produce. You plan to air it 30 times. How much does the commercial cost?  $200* 30 = $ $2000 = $9,500

 it is very expensive  the audience is to broad to be effective for most small businesses ◦Best for large national and global corporations

 reaching more than 90 million viewers  spectacular and innovative in most cases  Highly anticipated even before the game  Typically costs millions of dollars for 30 seconds ◦2013 record high for cost? ◦$4 million for a 30 second ad ◦Best of 2012Best of 2012

Chapter 6Slide 18  less expensive than television advertising  listener demographics are more specific than television ◦easier to reach target audience ◦Ex: rock stations target teenagers/young adults  Fees: ◦pay for air time ◦pay for production costs

Chapter 6Slide 19 ◦the message is purely audio  a visual of the product is not shown ◦listeners may forget what they hear ◦listeners may tune out during commercials ◦May need to hire someone to create an ad

 Historically, newspapers were the single largest form of advertising in the U.S ◦Changing as a result of the internet  Advantages of newspaper advertising include: ◦relatively inexpensive ◦targets a limited geographic area ◦reaches a large number of people

 Many people in the audience may not be interested in your business  Competition from many other business ads

Chapter 6Slide 22  Consumers use telephone directories repeatedly  Ads appear close to the listing of the business in yellow pages

 People looking in directory are seeking a specific business  In print is hard to persuade to use your business versus competitor’s

Chapter 6Slide 24  promotional materials sent to target customers through the mail ◦Fliers, catalogs, letters, and other correspondence  Estimated at $ $2.00 cost per item  Direct mail coupled with incentive offerings are more effective than a flier alone!

Chapter 6Slide 25  Direct-mail is often considered to be “junk mail.” ◦It often gets discarded without being read ◦Need attention grabbing design to get them to read it

Chapter 6Slide 26  Excellent way to aim products and services at specific markets (fitness products in fitness magazines etc…)  Local magazines that target a limited geographic area are often the best choice for small businesses

Chapter 6Slide 27 ◦National distribution can make some magazines an inappropriate way to advertise a local business

Chapter 6Slide 28  signs on public transportation  can provide more information than a billboard  effective if your target market includes consumers who use mass transit

 billboards and signs ◦can be effective as the name of your business is located where many people can see it  Disadvantages: ◦limited information can be included ◦may not project the image you wish to convey

 Use social networking sites for business promotion ◦Twitter – used for business promotions ◦LinkedIn – job openings, find consultants and contractors ◦YouTube – promotional video demonstrations or testimonials from current customers ◦Facebook – web pages to promote your business ◦Blogging – to highlight new products and share company info and customers can respond Chapter 1Slide 30

Social Networking Video

Chapter 6Slide 32  Use a variety of methods for your ad campaign  Obtain cost estimates for all advertising that is under consideration  Calculate a projected budget

Chapter 6Slide 33  Publicity - a nonpaid form of communication that calls attention to your business through media coverage ◦can be positive or negative ◦Publicity is free  Staging events that generate publicity usually not free  Press release: a written statement meant to inform the media of an event or product

 public relations - the act of establishing a positive relationship with customers and the general public ◦Done through community involvement in:  sponsoring a sports team  donating to local charities  supporting work-based programs at local educational institutions  supporting Big Brothers or Big Sisters  organizing community programs

Chapter 6Slide 35  Self-promotion is a way to keep the name of your business visible and in the forefront of people’s minds.  Self-promotion methods include: ◦the distribution of goods with your company’s identifying information on it  t-shirts or hats with name on it  office supplies – pens, notepads, coffee mugs etc.