Copyright © 2005 by Allyn & Bacon Chapter 7 Updated Jan. 10, 2006 Advertising “Advertising - ‘nonpersonal communication for products, services, or ideas that is paid for by an identified sponsor for the purpose of influencing an audience.’” - Medoff & Kaye, quoting Vanden Bergh & Katz, p. 142 This multimedia product and its contents are protected under copyright law. The following are prohibited by law: Any public performance or display, including transmission of any image over a network; Preparation of any derivative work, including the extraction, in whole or in part, of any images; Any rental, lease, or lending of the program.

Copyright © 2005 by Allyn & Bacon Marketing  All the efforts by any person, group, or organization intended to advance the exchange of a particular good or service Advertising: One element of the marketing mix.

Copyright © 2005 by Allyn & Bacon History-3000 B.C to 1900  3000 B.C.-Babylon Clay tablets exchanged on which names of merchants were inscribed.  100 A.D.-Rome Merchants hung stone signs outside their shops, advertising the goods inside  1525-Germany A publisher printed a communication that advertised a book  1841-Boston Volney Palmer sells newspaper space to those who wish to advertise in newspapers  1875-Philadelphia N. W. Ayer starts first full-service advertising agency: Ayer writes & produces ads & places them in newspapers & magazines

Copyright © 2005 by Allyn & Bacon History-1901 to 1923  1922-Long Island, NY A radio station sells air time to an advertiser  1923-New York City-The Browning King Orchestra, a program featuring music by that band, is wholly sponsored by Browning King clothiers  1923-General Mills produces a jingle for its Wheaties cereal. Sales zoom.

Copyright © 2005 by Allyn & Bacon History-1924 to Present  1940s- New York City CBS founder William Paley airs first programs sponsored by more than one company  Bulova Watch Co. first to buy commercial (“spot”) time on a “magazine”-style program on both radio and tv  1970s- 30-second (:30) spot becomes the most popular ad “buy”  1990s- 15-second (:15) spot becomes common

Copyright © 2005 by Allyn & Bacon History-1924 to Present II  2000s  Return of sponsorship being tested (CBS 60 Minutes)  Product placement/brand placement increasing…began in films, now a staple in TV narratives.  Pay-per-view as an additional revenue stream  Advertising specific digital stations and on the web (accessible through broadband)

Copyright © 2005 by Allyn & Bacon Role of Advertising in U.S. Media  Advertising dollars provide foundation of most mass media.  Advertising finances most radio, television, cable television.  Advertising “model” has dominated since 1920s.  New media are changing mix of financial support  Other financial support models:  Subscription  Pay per view  Membership

Copyright © 2005 by Allyn & Bacon Why Advertise? Benefits for advertiser. An ad can:  inform target audiences of a good or service  foster product & brand loyalty  develop product & brand images Benefits for consumer. An ad can:  provide useful product information  reinforce widely- shared cultural values, such as capitalism & competition social cohesion

Copyright © 2005 by Allyn & Bacon Why Advertise? Disadvantage for advertiser.  advertising is expensive  difficult to measure direct results Disadvantage for consumer.  annoyance factor  disrupts media consumption  annoyance factor  too much influence over content  …annoyance…

Copyright © 2005 by Allyn & Bacon Radio advertising Benefits for advertiser Radio advertising:  localizes a selling effort to: a specific area a specific age, gender, &/or income  can cost less to make than ads for other media (range from $10-20/spot and up)  has high reach; three out of four Americans listen to radio every day  can be very creative - theater of the mind

Copyright © 2005 by Allyn & Bacon Radio advertising Disadvantages for advertiser  products can’t be seen--yet  radio tends to be used as a background medium  ethereal medium - here and gone (no “shelf life”)

Copyright © 2005 by Allyn & Bacon Why Advertise on Broadcast TV? Benefits for advertiser Broadcast TV advertising:  products can be seen  has high reach  can be tailored to more program types than radio advertising

Copyright © 2005 by Allyn & Bacon Why Advertise on Broadcast TV? Disadvantages for advertiser Broadcast TV advertising:  can be “zipped” through & “zapped” off  is streamed through a medium not yet as portable as radio & print  tends to cost more to produce--& display--than radio & print ads.

Copyright © 2005 by Allyn & Bacon Why Advertise on Cable TV? Benefits for advertiser Cable TV advertising:  can reach a greater variety of target audiences than either radio or broadcast TV  can be tailored to more program types than either radio or broadcast TV  is less costly to display at more desirable times of the day than broadcast TV or some radio Market Shares of Top 3 Channels CNN FNC HBO

Copyright © 2005 by Allyn & Bacon Why Advertise on Cable TV? Disadvantages: Same as for Broadcast TV Plus  30% less reach than Broadcast TV  Higher audience “turnover” (subscribers who don’t re-subscribe)

Copyright © 2005 by Allyn & Bacon Internet (web) advertising has yet to be fully defined  A Company Website: Marketing, or public relations--not advertising  Buying space on another company’s website-- advertising Why Advertise on the Internet?

Copyright © 2005 by Allyn & Bacon Why Advertise on the Internet? Benefits for advertiser Internet advertising can:  reach a global audience  reach a greater variety of target audiences than any other medium  be least costly of all other media to produce & display at more desirable dayparts  prompt immediate sales  detailed consumer data Disadvantages for advertiser Internet advertising:  requires an interactive audience member  resists accurate measurement  is disfavored by some parents

Copyright © 2005 by Allyn & Bacon Spam  Unsolicited messages requiring Internet users to actively decline them  are activated when a website visitor inadvertently triggers a permission to receive unsolicited s  can prompt displeasure with advertising in general

Copyright © 2005 by Allyn & Bacon Agency Types  full service  creative boutique- specializes in ad production & campaign development  media buying service- specializes in placing an ad in those media outlets where it will most likely achieve advertiser goals  agencies work closely w/local media

Copyright © 2005 by Allyn & Bacon Local Ad Sales - TV & Radio  Sales Manager  National Accounts Manager Handles national accounts: Coke, Ford… Buys done strictly ‘by the numbers’  Account Executives Local sales agents Account lists & cold calling Selling an “intangible” Per spot pricing Run-of-schedule vs. specialized buys  Traffic - places ads in schedule

Copyright © 2005 by Allyn & Bacon Local Ad Sales - TV & Radio  Station will produce the spot and may provide talent.  Some regional/national production companies specialize in producing ads.  Competitive business  Pay is commission on sales  Many local stations have a 40%+ profit margin!

Copyright © 2005 by Allyn & Bacon Criticism of advertising Ads, say critics  promote materialism, consumption  reinforce stereotypes about historically subordinated social groups  can mislead consumers about product benefits  exploit children  invade & pervade