1. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 1 Lamb, Hair, McDaniel CHAPTER 17 Advertising and Public Relations © iStockphoto.com/Lachlan Currie

2. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 2 The Effects of Advertising  U.S. advertising expenditures has fallen in recent years  In 2009, 30 companies spent more than $1 billion each  Estimated 1.4 million people work in media advertising such as newspapers, magazines, television, radio, and internet media.  More than 100 companies spend over $300 million annually on advertising. LO 1

3. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 3 Advertising and Market Share New brands with a small market share spend proportionally more for advertising and sales promotion than those with a large market share.  Beyond a certain level of spending, diminishing returns set in.  New brands require higher spending to reach a minimum level of exposure needed to affect purchase habits. LO 1

4. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 4 The Effects of Advertising on Consumers  Advertising may change a consumer’s negative attitude toward a product, or reinforce a positive attitude.  Advertising can affect consumer ranking of a brand’s attributes. LO 1

5. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 5 Major Types of Advertising Institutional Advertising Institutional Advertising Enhances a company’s image rather than promote a particular product. Product Advertising Product Advertising Touts the benefits of a specific good or service. LO 2

6. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 6 Major Types of Advertising Corporate identity Pioneering Competitive Comparative Product Advertising Product Advertising Institutional Advertising Institutional Advertising Advocacy advertising LO 2

7. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 7 Product Advertising PioneeringPioneering  Stimulates primary demand for new product or category  Used in the PLC introductory stageCompetitiveCompetitive  Influences demand for brand in the growth phase of the PLC  Often uses emotional appeal ComparativeComparative  Compares two or more competing brands’ product attributes  Used if growth is sluggish, or if competition is strong LO 2

8. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 8 Creative Decisions in Advertising A series of related advertisements focusing on a common theme, slogan, and set of advertising appeals. Advertising Campaign LO 3

9. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 9 Identify Product Benefits  “Sell the Sizzle, not the Steak”  Sell product’s benefits, not its attributes  A benefit should answer “What’s in it for me?”  Ask “So?” to determine if advertising offers attributes or benefits LO 3

10. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 10 Identify Product Benefits Attribute Benefit “With just 10 calories per serving, Propel hydrates and contains Vitamins C & E, B Vitamins, and antioxidants. Propel is conveniently available in both ready-to-drink and powder form.” “Propel fuels real women who are energized and empowered by physical activity and understand their need to replenish, energize, and protect in all aspects of their lives.” “So?” LO 3

11. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 11 LO 3 Common Advertising Appeals

12. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 12 Unique Selling Proposition A desirable, exclusive, and believable advertising appeal selected as the theme for a campaign. Unique Selling Proposition LO 3

13. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 13 Executing the Message Mood or Image Musical Demon- stration Demon- stration Scientific Real/ Animated Product Real/ Animated Product Fantasy Lifestyle Slice-of-Life Humorous Spokes- person/ Testimonial Spokes- person/ Testimonial LO 3 Symbols

14. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 14 Media Decisions in Advertising Newspapers Magazines Radio Television Internet Outdoor Media Direct Mail Trade Exhibits Cooperative Advertising Brochures Coupons Catalogs Special Events Monitored Media Unmonitored Media LO 4

15. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 15 Newspapers Advantages  Geographic selectivity  Short-term advertiser commitments  News value and immediacy  Year-round readership  High individual market coverage  Co-op and local tie-in availability  Short lead time Disadvantages  Limited demographic selectivity  Limited color  Low pass-along rate  May be expensive LO 4

16. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 16 An arrangement in which the manufacturer and the retailer split the costs of advertising the manufacturer’s brand. Cooperative Advertising LO 4

17. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 17 Magazines Advantages  Good reproduction  Demographic selectivity  Regional/local selectivity  Long advertising life  High pass-along rate Disadvantages  Long-term advertiser commitments  Slow audience build- up  Limited demonstration capabilities  Lack of urgency  Long lead time LO 4

18. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 18 Radio Advantages  Low cost  Immediacy of message  Short notice scheduling  No seasonal audience change  Highly portable  Short-term advertiser commitments  Entertainment carryover Disadvantages  No visual treatment  Short advertising life  High frequency to generate comprehension and retention  Background distractions  Commercial clutter LO 4

19. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 19 Media Decisions: The Radio LO 3 Beyond the Book For small companies that cannot afford television or endorsements, radio advertising can help raise brand exposure and drive sales. Carbonite, which provides data-storage services, discovered that web traffic driven by radio ads was 40 percent more likely to end in a sale. A local market test run on a radio ad can cost as little as $10,000-$30,000 per month. Source: Nitasha Tiku, “On-Air Endorsements,” Inc., June 1, 2010. Available at http://www.inc.com/magazine/20100601/on-air-endorsements.html (accessed November 8, 2010).http://www.inc.com/magazine/20100601/on-air-endorsements.html

20. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 20 Television Advantages  Wide, diverse audience  Low cost per thousand  Creative opportunities for demonstration  Immediacy of messages  Entertainment carryover  Demographic selectivity with cable Disadvantages  Short life of message  Consumer skepticism  High campaign cost  Little demographic selectivity with stations  Long-term advertiser commitments  Long lead times for production  Commercial clutter LO 4

21. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 21 History Will Be Made (In Marketing?) LO 3 Beyond the Book The NHL sparked a massive viral movement when it released its 2010 Stanley Cup television ads—a series of iconic clips from past Stanley Cups played in reverse, asking the question “What if this had never happened?” Fans jumped on board by creating their own versions, which quickly spread across the Internet, drawing more attention to the playoffs in progress. The NHL built of this success, creating more videos using events from games only hours after they’d been played. Source: Mike Barber, “NHL ads are history in the making,” Vancouver Sun, June 5, 2010. http://www.vancouversun.com/sports/hockey/vancouver- canucks/history+making/3117950/story.html?id=3117950

22. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 22 Assignment Watch one hour of prime-time TV and answer the following questions: –How many minutes were devoted to advertising? –How were these ads distributed throughout the hour? –How many commercials were 60 seconds long? 45 seconds? 30 seconds? 15 seconds? Were there any other commercial lengths? –Was the same product advertised more than once during the hour? Were the commercials identical? –In a “pod” of several commercials, do you feel that one position is strongest? Is being first the best? Is being last the best? Why? –How well do the commercials fit with the program? Do the programs and the products have similar target markets? Make sure you note the name of the program and the date/time watched. Be prepared to discuss findings with class. This will be turned in as part of your in-class grade.

23. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 23 Internet Advantages  Fast growing  Ability to reach narrow target audience  Short lead time  Moderate cost Disadvantages  Difficult to measure ad effectiveness and ROI  Ad exposure relies on “click through” from banner ads  Not all consumers have access to Internet LO 4

24. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 24 Outdoor Media Advantages  Repetition  Moderate cost  Flexibility  Geographic selectivity Disadvantages  Short message  Lack of demographic selectivity  High “noise” level LO 4

25. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 25 Alternative Media Ads before Movies Interactive Kiosks Computer Screen Savers Computer Screen Savers Shopping Carts DVDs and CDs Advertainments Cell Phone Ads Subway Tunnel Ads Subway Tunnel Ads Floor Ads Video Game Ads LO 4

26. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 26 Media Selection Considerations Medium Flexibility Target Audience Considerations Reach Cost Per Contact Frequency Noise Level Medium Life Span

27. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 27 Media Scheduling Continuous Media Schedule Flighted Media Schedule Pulsing Media Schedule Seasonal Media Schedule Advertising is run steadily throughout the period. Advertising is run heavily every other month or every two weeks. Advertising combines continuous scheduling with flighting. Advertising is run only when the product is likely to be used. LO 4

28. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 28 Public Relations The element in the promotional mix that: Public Relations Public Relations  evaluates public attitudes  identifies issues of public concern  executes programs to gain public acceptance LO 5

29. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 29 Functions of Public Relations Press relations Product publicity Corporate communication Public affairs Lobbying Employee and investor relations Crisis management LO 5

30. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 30 Public Relations Tools Product placement Consumer education Sponsorship Company Web sites New product publicity LO 5

31. Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 31 Managing Unfavorable Publicity A coordinated effort to handle the effects of unfavorable publicity or an unexpected unfavorable event. Crisis Management Crisis Management LO 5