Chapter 1 Background of Today’s Advertising

1-2 ADVERTISING What is advertising? Where do we find Advertising? Can we ever get away from advertising? Is advertising to controlling in our lives?

1-3 A DEFINITION OF ADVERTISING It is a paid for by the sponsor rather than run at the discretion of the medium It is nonpersonal. It identifies the sponsor of the message.

1-4 A DEFINITION OF ADVERTISING It is persuasive. It is carried by mass media.

1-5 A DEFINITION OF ADVERTISING Advertising: a planned communication activity in which messages in mass media are used to persuade audiences to adopt goods, services, or ideas. Advertising is distinguished from other promotional activities in that it is paid for by an identified sponsor, nonpersonal, carried by mass media, and designed to be persuasive.

1-6 Advertising is: A communication tool Two requirements: Centralized exchange Economy where supply surpasses demand

1-7 Factors Creating a Foundation Beginning of the fulfillment of a democratic ideal Industrial Revolution  Mass production  Need for skilled workers Introduction of the railroad National branding

1-8 In the Beginning Advertising has a 5000-year recorded history The last 100 years in US history have been most influential Contributors from the beginning:  Babylonians  Greeks  Roman merchants

1-9 Four Broad Periods of Study Pre-marketing Era Mass Communication Era Research Era Interactive Era

1-10 Move to Creativity Increased output created a competitive environment Emphasis on creative advertising Advertising seen as a “science” Idea of planned obsolescence

1-11 Print Media Siquis Newspapers – historically been the primary advertising medium Important people  Johann Gutenberg  Benjamin Harris  Benjamin Day

1-12 Print Media (continued) Magazines – slow but steady growth  Saturday Evening Post Saturday Evening Post  Ladies’ Home Journal Ladies’ Home Journal  Time Time

1-13 By 1920, high color advertising was commonplace.

1-14 The Advertising Agency Forerunners  Volney Palmer  George Rowell  J. Walter Thompson  N.W. Ayer and Sons American Association of Advertising Agencies American Association of Advertising Agencies

1-15 Legislation  Pure Food and Drug Act (1906) Pure Food and Drug Act (1906)  Federal Trade Commission Act (1914) Federal Trade Commission Act (1914)  Federal Food, Drug and Cosmetic Act (1938) Federal Food, Drug and Cosmetic Act (1938)  Wheeler Lea Act (1938) Wheeler Lea Act (1938)

1-16 Advertising and WWI Marked the first time advertising was used as a social instrument  Agencies tried to Arouse patriotism Sell government bonds Encourage conservatism Promote war-related activities

1-17 Patriotism was a common advertising theme during WWI.

’s Mini-depression to crash Products appearing on the market  Passenger cars  Electric refrigerators  Washing machines  Electric shavers  Radios

1-19 Cadillac

1-20 Coca-Cola

1-21 Introduction of Radio Invented by Guglielmo Marconi Used mainly by maritime operators in the beginning KDKA – first commercial station

1-22 Modern Era of Radio Presidential Elections Sporting events Local entertainment NBC CBS

1-23 The Great Depression of the 1930’s Rapid growth was slowed by Depression Causes of the Depression  Excess industrial capacity  Heavy consumer debt  Declining price levels Consumer spending was discouraged WWII turned this trend around What is happening today? 2015 (fuel)

1-24 Advertising During WWII Similar to WWI Most advertising was created to encourage Americans to cooperate in the war effort War Advertising Council

1-25 Exhibit 1.8 Advertising messages were sponsored by the government.

1-26 Exhibit 1.9 War Council reminds Americans not to disclose war secrets.

1-27 Growth Period from TrendPercentage of growth Population of U.S.38% Disposable income327% New housing starts47% Energy consumption121% College enrollments136% Car registrations151% Telephones in use221% Retail sales250% Frozen food production655% Airline passenger963% Homes with dishwashers1043% Homes with air conditioning3662%

1-28 Advertising in the Fragmented 80’s Major developments  New technology  Audience fragmentation  Consolidation  Credit

1-29 Service Economy and the 21 st Century Service providers are the trend Wal-Mart U.S. Bureau of Labor Statistics , service employment will outpace manufacturing by a 5-1 margin  What is the problem with this? Trust factor challenged in first decade of 21 st century Permission Marketing

1-30 Summary History of advertising can only be studied within the context of the social and economic development of a country. Fundamental changes  Development of e-commerce  Reaching consumers on a more personal basis  Audiences are taking greater control of communication channels.  Field is fast and ever-changing.