1. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Chapter 15 Global Advertising

3. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The Global Advertising Job Global Advertising Advertising that is fairly uniform across many countries Multidomestic advertising is international advertising deliberately adapted to particularly markets and audiences in message and/or creative execution Problems facing the decision maker in global advertising Allocation of advertising budget amount to several market countries Developing the message to use in the selected market countries Deciding what media to select to advertise in the selected countries

4. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The International World of Advertising Advertising Volume Advertising intensity varies a great deal between countries Not a very common form of communication in some countries Generally, the higher the GDP, The more is spent on advertising in per capita terms The more developed the country, the more money is allocated to advertising Advertising is an unusually important medium in the U.S This is a result of the cultural diversity that makes social norms and interpersonal communication relatively less reliable

5. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The International World of Advertising Media Spending Important media in various countries Outdoor advertising is much more important in India than in the West Cinema can be of great value in countries like Argentina and Singapore Print media in European countries are strong Europeans avoid the use of radio for advertising Television advertising is strong in China, India, Japan, and Latin America Global media are emerging in television, magazines, newspapers, and on the Internet

6. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The International World of Advertising Web ads Banner ads “Tickers Pop-up ads Transactional ads “Roadblocks” “Rich media”

7. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The International World of Advertising Strategic Implications Advertising expenditures create barriers to entry into an industry Several countries in which media is scarcely available have made advertising a competitive weapon of limited usefulness The communication objectives realistically achieved through various media differ among countries The so-called hierarchy of effects traces the effects of advertising through brand awareness to knowledge, attitude, liking, trial, and adoption

8. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The International World of Advertising Strategic Implications Television Television is a true mass medium for creating awareness, but provides a status association for the brand in other markets Radio Radio is a true mass medium in many countries, but very focused on specific segments in other markets Newspapers Newspapers are the only available medium in some countries and have to fulfill the standard role of a direct action influence Outdoor Where literacy levels are low broadcast and outdoor advertising will outweigh print media in importance

9. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. What Does Global Advertising Involve? Components of Global Advertising Strategy Global advertising often involves products and services that are positioned similarly across markets Organization Global advertising is typically directed from headquarters with the help of advertising agencies with a global network Media Global advertising draws on media with global reach such as satellite TV and international editions of periodicals to create spillovers Message and Creative The copy and visualization go to the center of the global campaign

10. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. What Does Global Advertising Involve? Identical Ads The ads can be identical usually with localization only in terms of language voice- over changes and simple copy translations Prototype Advertising Global prototypes involve voice-over and visuals are changed to avoid language and cultural problems Pattern Standardization Utilized when the positioning theme is unified but the actual execution of ads differ between markets Globalization Examples Coca-Cola develops prototypes of advertising messages and layouts in the U.S. and sends them to representatives abroad

11. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Pros and Cons of Global Advertising Cost Advantages The creative ideas of globally uniform campaigns, once developed, can be used globally Globalized campaigns can also be the basis for savings in media buying Global Markets Global advertising, in general, will be most useful when the market itself is global Global Products and Brands It is often indicated that global products and brands need global advertising

12. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Pros and Cons of Global Advertising A summary of conditions for global advertising The image communicated can be identical across countries The symbols used carry the same meaning across countries The product features desired are the same The usage conditions are similar across markets

13. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The Global Advertiser’s Decisions Strategic Objectives Most managers approach global advertising with the intention of using the global reach of media and the similarity of message to enhance the awareness and unique positioning of the brand or product The boost to the brand image and global brand equity is usually the most immediate benefit However, the effect of global advertising can also be more direct and be close to buyer action

14. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The Global Advertiser’s Decisions Budgeting for Global Advertising Percentage-of-sales Setting a certain percentage of last year’s sales as next year’s budget Although percentage-of-sales is popular among firms from most countries, it is not a very useful method for setting global advertising budgets Competitive parity approaches Where advertising budgets are set on the basis of what competitors spend Objective-task method Typically involved with budgeting for global advertising and favored domestically by more sophisticated marketers

15. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The Global Advertising Agency Agency Globalization Most large agencies in the U.S. and Europe have global reach However, the ability to execute the global campaign can vary because of uneven local capability The Agency’s Job The global advertiser will generally develop the message and media schedule working intimately with an advertising agency that has local representation in the various markets According to researchers, the emphasis on pan-regional campaigns is mainly due to the emergence of regional groupings and trading blocs

16. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The Global Advertising Agency Message Creation Message creation and language translation Are the aspects most consistently and thoroughly discussed in the literature on global advertising Message translation Is complicated because of the cultural diversity among the various countries of the world Media Selection If message creation needs the collaboration of the agency and the advertiser, media selection is an area where the agency and its local representatives rule

17. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The Global Advertising Agency Media Selection The type of media selected depends on the objectives of the campaign For awareness Television serves well in many countries where it is generally available For attitude change and image building Television and magazine advertising are generally more useful To affect behavior directly, the media chosen have to be timely reaching the audience near the time of purchase Once the media types have been decided upon The particular vehicles to be used within each type are usually selected on the basis of some efficiency criterion

18. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Close-Up: Goodyear in Latin America Goodyear in Latin America The planning process of the Goodyear standardized approach to advertising involved six stages Preliminary Orientation (September) The beginning stage was an educational one, allowing both headquarters and local subsidiary staff to understand each other’s perspectives Regional Meeting to Define Communications Strategy (October) The purpose was to develop an “umbrella” campaign theme that would fit all countries but with subsidiary autonomy to prepare local advertising Advertising Creative Meeting (November) The task force met to consider six alternative concepts developed by the creative teams

19. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Close-Up: Goodyear in Latin America Goodyear in Latin America Goodyear six stages (cont’d) Qualitative Research Stage (November-December) The research on the proposed concept storyboards focused on two issues The customers’ degree of concern about safety and security of the tires and the customers’ reaction of various creative themes Research Review Meeting (January) The aim was to reach a consensus on one unique selling proposition Final Creative Review (March) Each team’s concept was presented without indicating the team identity or the country in which the campaign originated

20. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Close-Up: Goodyear in Latin America Lessons Pattern standardization in pan-regional advertising First By focusing on regions it may be possible to reap the scale benefits and cost efficiencies of global advertising Second The early involvement of country subsidiaries and agency professionals helps broaden the sources of powerful campaign concepts Third The process by which pattern standardization is arrived at needs to allow open and free exchange Fourth Even when the company has operative for years in a market research is still necessary, especially when conditions are changing