CHAPTER 13 Advertising and Public Relations M A R K E T I N G Real People, Real Choices Fourth Edition CHAPTER 13 Advertising and Public Relations

It’s an Ad Ad Ad Ad World Advertising is nonpersonal communication paid for by an identified sponsor using mass media to persuade, inform, and remind an audience 2004: over 265 billion USD spent on advertising Biggest spenders: Automobiles, financial services, food and beverages and retail. What could be some threats to advertising?

Types of Advertising Product advertising - message focuses on a specific product or service Category advertising (Got Milk?; The other white meat, etc.) Brand advertising Institutional advertising - message focuses on activities, personality, or point of view of a company advocacy advertising (2004: MTV’s “choose or lose” campaign) public service advertisements (anti-smoking; anti-drugs; drunk driving, etc.)

Purposes of Product Advertising To educate people about a new product and what it does To emphasize a brand’s features and try to convince the target market to choose it over other options To ensure that people won’t forget about a well-established product

Who Creates Advertising? An advertising campaign is a coordinated, comprehensive plan that carries out promotion objectives and results in a series of advertisements placed in media over a period of time Agencies limited-service Creative boutiques Specialize in few options e.g. Internet advertising full-service

Largest Ad Agencies J. Walter Thompson Leo Burnett Worldwide McCann-Erickson Worldwide BBDO Worldwide Grey Worldwide Ogilvy & Mather Foote Cone & Belding Worldwide billings exceed several billion USD

The Body of Campaign Creation Account management Campaign strategy and client relations Creative services Visualization and writing of the ads Research Market and Advertising Research Media planning Planning, buying and placing the campaign

Developing the Campaign Identify the Target Market Establish objectives What should the campaign achieve Budget (in cooperation with client) Prepare creative brief Design Ad Campaign Choose Media and Schedule Pretest Campaign Full rollout

Design the Ad Creative strategy is the process that turns a concept into an advertisement Creatives try to develop a “big idea” (e.g. “Think Small”) Creatives: art directors copywriters photographers

Advertising Appeals Reasons Why (USP) (e.g. M&Ms melt in your mouth, not in your hand) Comparative Advertising (e.g. Coke & Pepsi; DHL, Fedex and UPS; etc.) Demonstration (e.g. kitchen appliances, vacuum cleaners, etc.) Testimonial (e.g. dentists endorsing toothpastes, etc.) Slice-of-Life (e.g. breakfast cereal bars on the go) Lifestyle (e.g. Cars, clothes, personal grooming products) Fear (e.g. Insurance, drugs) Sex (e.g. Victoria’s Secret; Calvin Klein; etc.) Humor (e.g. Dodge Hemmi; Sonic etc.) Slogans and Jingles (e.g. “Your friendly neighborhood agent”; With Allstate you are in good hands”, etc.)

Step 4: Pretest What Will Be Said Copy testing measures ad effectiveness Concept testing Test commercials Finished testing Focus Groups Projective Techniques Limited area surveys

Step 5: Choose the Media Media planning is a problem-solving process for getting a message to a target audience in the most effective fashion Where to say it When to say it Highly complicated numbers game Hundreds of media options from mass media to video games, DVDs, placements,MP3 players, cell phones, cable channels, etc.

Television Pros Creative and flexible (see & hear) Prestigious High impact messages Network TV is cost effective for reaching mass audience Cable TV is good for reaching targeted group Cons Quickly forgotten Requires frequent repetition Increasingly fragmented audiences High costs on an absolute basis Shorter ads result in increased clutter

Radio Pros Good for selective targeting Heard out of home Relatively low cost Can be modified quickly Uses listener imagination Cons Listeners may not pay full attention Small audiences mean ads must be repeated frequently Not appropriate for products requiring demonstration

Newspapers Pros Wide exposure and extensive market coverage Flexible format permits use of color, different sizes and editions Useful for comparison shopping Local retailers can tie in with national ads Cons Most don’t spend much time reading newspapers Low readership among teens and young adults Short life span Very cluttered General decline in reading habits

Magazines Pros Narrowly targeted audiences by specialized magazines High credibility and interest level provide good ad environment Long life span and pass along rate Excellent visual quality Cons With exception of direct mail, the most expensive form Long deadlines Must use several magazines to reach target

Outdoor Pros Very high reach Low cost Good for supplementing other media Cons Hard to communicate complex messages Cannot demonstrate product effectiveness Controversial and disliked

Internet Advertising Banners (less that 1% click through rate) Buttons (small banners anywhere in the web page) Search engine and directory listings Pop-up ads (open a separate window) Email permission marketing (opt out options given by marketer) Spamming (junkmail on the internet)

Media Scheduling Specifies the exact media to use for the campaign, when and how often the message should appear Outlines the planner’s best estimate of which media and vehicles will be most effective in attaining campaign objectives

Factors Affecting Media Scheduling Target market profile People reached by different vehicles Advertising patterns of competitors Capability of medium to convey desired information Compatibility of product with editorial content

Media Scheduling Terms 1 Impressions – the number of people who will be exposed to a message placed in one or more media vehicles Reach – the percentage of the target market exposed to the media vehicle at least once. Frequency – the average number of times a person in the target group will be exposed to the vehicle in a period

Media Scheduling Terms 2 Gross Rating Points (GRPs) – reach * frequency Cost per Thousand (CPM) – compares the relative cost effectiveness of different media vehicles that have different exposure rates; it reflects the cost to deliver a message to 1000 people

Media Scheduling: How Often? Continuous – steady stream throughout year (products which we buy on a regular basis) Pulsing – varies amount of advertising based on when product is in demand (e.g., suntan lotion) Flighting – advertising appears in short, intense bursts alternative with periods of little to no activity

Evaluating Advertising Posttesting means conducting research on consumers’ responses to advertising messages they have seen or heard unaided recall (recall in the absence of a cue) aided recall (recall with a cue provided) attitudinal measures (like / dislike)

Public Relations Attempts to influence the attitudes and perceptions of consumers, stockholders, and other stakeholders toward companies, brands, politicians, celebrities, not-for-profit organizations (e.g. Mel Gibson’s film – “The Passion…” Do something good, then talk about it Why PR – “third party” reporting is seen to be unbiased and therefore credible Create a crisis management plan

Some well known PR crises Tylenol and product tampering Wendy’s and finger in chili Pepsi & Coke – pesticides in cola (India) Union Carbide in India – hundreds of deaths due to gas leak Vioxx & heart attack and stroke victims Can you think of more?

Objectives of Public Relations Introducing new products Influencing government legislation (lobbying) Enhancing the image of a city, region, or country (Mauritius, Singapore – “So easy to enjoy, so hard to forget”) Calling attention to a firm’s involvement with the community (e.g. sponsoring sporting events, rock concerts, special events, etc.)

Planning a PR Campaign Develop objectives (e.g. International Apple Institute – “An apple a day…”) Execute the campaign Evaluate the campaign Problems with gauging effectiveness

PR Campaign Strategy Statement of objectives Situation analysis Specification of target audiences, messages to be communicated, specific program elements to be used Timetable and budget Discussion of how the program will be evaluated

PR Activities Press Releases (new products, new findings, etc.) Internal PR (newsletters, close-circuit TV, employee awards, etc.) Lobbying (influencing govt. officials to vote a certain way on legislation, initiate new legislation, etc.) Speech writing (write speeches for senior executives – annual meetings, industry meetings, etc.) Corporate identity (logos, symbols, stationery design, etc. for companies, identity manuals) Media relations (create and maintain access with reporters to be used when needed) Sponsorships (sporting events, rock concerts, etc.) Special events (e.g. visits of dignitaries to plant, planning a christmas party, etc,) Advice and counsel (e.g. to top management on communication issues)

Measuring Effectiveness In-house assessment Awareness and Preference Studies Counting of press clippings Impression counts

Direct Marketing Any direct communication to a consumer or business recipient that is designed to generate a response in the form of an order, a request for further information, and/or a visit to a store or other place of business for purchase of a product

Forms of Direct Marketing Mail order (3% of overall retail US sales) Catalogs (e.g. Eddie Bauer, Lands End, Dell, Gateway, JC Penney, Neiman Marcus, etc.) Direct mail (offers a specific product through mail at one point in time – can be personalized) Telemarketing (cheap and easy; 1 in 6 Americans cannot resist a telemarketing pitch; more effective in B2B selling; national Do-not-call registry) Direct response television Infomercials Home shopping networks (QVC and HSN) Top selling categories: diet and health products, kitchen appliances, exercise equipment and music CDs)

M-Commerce Promotional activities transmitted over mobile phones and other mobile devices such as personal digital assistants (PDAs) Prevalent in Europe and Asia Problems of “spim” What does the future hold? Have you seen Minority Report?