1. Fuqua School of Business
Brand Advertising
Brand Management System
On Building A Brand
Price
Product
Place
Promotion
Managing Across Brands
Professor Carl Mela
Marketing 460
Product Management
Fuqua School of Business

2. Agenda
Advertising Planning
Advertising Efficacy
Trends in Advertising

3. Advertising Planning Introduction Situation Analysis Objectives
Budgeting
Strategy
Execution
Evaluation
Marketing
Communications
Brand
Management
Market
Intelligence

4. Advertising Planning
Execution
Agency
Copy
Media

5. Execution - Agency Selecting an Agency Account reviews
How well will they execute the strategy in your advertising plan?
Agencies pitch an execution strategy
Deutsch for VW 95 days, 50 of 175 employees, and $360K just for final pitch
and lost!

6. Execution - Agency
WSJ 2006

7. Execution - Agency Agency Organization
Account services (sales and strategy)
Marketing services (research, events, pr, direct marketing)
Creative (creates message)
Production (produces advertising)
Media (where, when, and how much)
Administrative (accounting and billing)

8. Execution - Agency Agency Compensation
Commission (typically 15% of media, less for big clients)
Fees (hourly rates)
Leads to conflicts with respect to billing supplies and support across clients
Pay for Results (sales, awareness, etc.)
P&G may switch from sales-based to Gilette’s incentive based approach

9. Execution - Agency

10. Execution - Copy Agency Client Account Exec Copywriter Senior Writer
Account Exec & Legal
Product or Brand Manager
Senior Managers

11. Execution – Copy (Firm)

12. Execution – Copy (Agency)

13. Execution - Copy

14. Lodish et al. (1995)
Little relation between recall/ persuasion measure and brand sales
Ad elasticity is 0.13
2001 Interbrand study – only 1/6 of campaigns meet sales and budget objectives

15. Why Ad Elasticities Are Low

16. So, How to Break Through
New media trends

17. Trends in Communication Strategy
Medium
2006 Spend ($MM)
% Change
Direct Mail
$58,507
6.5%
Broadcast TV
$46,889
5.9%
Newspapers
$46,589
-1.7%
Cable TV
$25,439
7.5%
Internet
$16,157
36.0%
Radio
$19,941
-0.6%
Yellow Pages
$16,289
2.0%
Magazines
$13,332
3.0%
Outdoor
$6,696
7.4%
Business Papers
$4,233
1.5%
Miscellaneous
$36,763
Grand Total
$291,036
4.7%
Source: Advertising Age by Robert J. Coen, McCann-Erickson Inc; Newspaper Association of America; Radio Advertising Bureau; Simba Information; Outdoor Advertising Association of America; Interactive Advertising Bureau (IAB); Lehman Brothers

18. Internet Ad Spend

19. Trends in Communication Strategy
Mediametrix

20. Internet Ad Spend

21. Paid Search

22. Trends in Communication Strategy

23. Trends in Communication Strategy
Viral and Word of Mouth Marketing (Ford Sportka)
Web logs (blogs)
Advertainment
Branded content
Product placements
Other Media
Cell phones
In-store TV (P&G diaper ads in restrooms)
Video games

24. Trends in Communication Strategy

25. Trends In Communication Strategy

26. Trends in Communication Strategy
Product Placements
$4.25 billion in ‘04, an increase of 22.8 from ’03 (NYT)

27. Trends in Communication Strategy
$ 10 MM of Electronic Arts $4 BB 2004 Revenue (NY Times).
Will grow now that Nielsen can track
Issues of fit (this deodorant placement seems sensible)

28. Trends in Communication Strategy

29. Trends in Communication Strategy
Interactive, Customized and Adressable Media
Internet ($10 CPM)
$12 BB in 2005 market and growing (4% of US spend)
MSN Ad -- $1MM for 24 hours ($25 K 4 Years Back)
TV -- $2.4 MM for 0:30 Superbowl, $574,504 for Desperate Housewives
1 Page People Ad -- $228,275
Upfront v. bid model for pricing ads Up 27% in 2005 compared to 11% for TV (Jupiter/TNS)
DVRs/Video on Demand
Direct distribution of TV
Internet, DVR (6.5 MM), iPod, Google video and CBS
Cell Phones ($35 CPM)
$75,000 to $300,000 for campaign vs. $25,000 to $50,000 in 2005
Battle between carriers and content providers over fees slows rollout

30. Trends in Communication Strategy

31. Trends in Communication Strategy
Relationship Marketing
Not only do new technologies deliver content, but they receive information on choices
Exploit addressability and interactivity of DVR and Internet to customize and target
Media models merging – Internet and DVR

32. Trends in Communication Strategy
IMC - Integrated Marketing Communications
consistency across promotional mix and media
Publicis has “Chief Holistic Officer
Accountability
justify your communications expenditures
Media Convergence
The old media model is shattered and this implies immense opportunity and risk

33. Media Convergence

34. Don’t Give up on TV!

35. Don’t Give up on TV!

36. In-store TV

37. Summary
“Evaluate marketing communications options strategically to determine how they can contribute to brand equity.” - Keller
Engage in advertising planning
Planning process
Agency, copy, media
Consistent message across promo mix (integrated marketing communications)