1. 1 Lamb, Hair, McDaniel CHAPTER 17 Advertising and Public Relations 2010-2011

2. 2 LO 1 Discuss the effects of advertising on market share and consumers LO 2 Identify the major types of advertising LO 3 Discuss the creative decisions in developing an advertising campaign LO 4 Describe media evaluation and selection techniques LO 5 Discuss the role of public relations in the promotional mix Learning Outcomes

3. 3 Discuss the effects of advertising on market share and consumers The Effects of Advertising LO 1

4. 4 The Effects of Advertising  U.S. advertising are expected to decline in difficult economic times  In recent years, 30 companies spent more than $1 billion each  850,000 people work in media advertising such as newspapers, magazines, television, radio, and internet media.  More than 100 companies spend over $300 million annually. LO 1

5. 5 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

6. 6 The Effects of Advertising on Consumers  The average U.S. citizen is exposed to hundreds of ads each day.  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

7. 7 ____ affect how consumers rank brand attributes ____ reinforce positive attitude ____ change negative attitude to positive REVIEW LEARNING OUTCOME Effects of Advertising Building sales/share Maintaining sales/share Advertising response function Advertising can: Return on advertising expense (in sales or market share) Money spent    LO 1

8. 8 Identify the major types of advertising Major Types of Advertising LO 2

9. 9 Major Types of Advertising Institutional Advertising Institutional Advertising Enhances a company’s image rather than promotes a particular product. Product Advertising Product Advertising Touts the benefits of a specific good or service. LO 2

10. 10 Major Types of Advertising Corporate identity Pioneering Competitive Comparative Product Advertising Product Advertising Institutional Advertising Institutional Advertising Advocacy advertising LO 2

11. 11 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

12. 12 REVIEW LEARNING OUTCOME The Major Types of Advertising LO 2

13. 13 Discuss the creative decisions in developing an advertising campaign Creative Decisions in Advertising LO 3

14. 14 Creative Decisions in Advertising A series of related advertisements focusing on a common theme, slogan, and set of advertising appeals. Advertising Campaign LO 3

15. 15 Creative Decisions in Advertising Determine the advertising objectives Make creative decisions Make media decisions Evaluate the campaign LO 3

16. 16 Setting Objectives: The DAGMAR Approach Define target audience Define desired percentage change Define the time frame for change LO 3

17. 17 Creative Decisions Develop and evaluate advertising appeals Execute the message Evaluate the campaign’s effectiveness Identify product benefits LO 3

18. 18 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 it is a benefit LO 3

19. 19 Identify Product Benefits Attribute Benefit “Powerade’s new line has been reformulated to combine the scientific benefits of sports drinks with B vitamins and to speed up energy metabolism.” “So, you’ll satisfy your thirst with a great-tasting drink that will power you throughout the day.” “So?” LO 3

20. 20 Advertising Appeals Profit Health Love or romance Fear Admiration Convenience Fun and pleasure Vanity and egotism Environmental Consciousness Product saves, makes, or protects money Appeals to body-conscious or health seekers Used in selling cosmetics and perfumes Social embarrassment, old age, losing health Reason for use of celebrity spokespeople Used for fast foods and microwave foods Key to advertising vacations, beer, parks Used for expensive or conspicuous items Centers around environmental protection LO 3

21. 21 Unique Selling Proposition A desirable, exclusive, and believable advertising appeal selected as the theme for a campaign. Unique Selling Proposition LO 3

22. 22 Executing the Message Mood or Image Musical Demon- stration Demon- stration Scientific Real/ Animated Product Symbols Real/ Animated Product Symbols Fantasy Lifestyle Slice-of-Life Humorous Spokes- person/ Testimonial Spokes- person/ Testimonial LO 3

23. 23 REVIEW LEARNING OUTCOME Creative Decisions for Ad Campaign Set advertising objectives Identify benefitsDevelop appeal Execute message Evaluate campaign results Evaluating results helps marketers adjust objectives for future campaigns LO 3

24. 24 Describe media evaluation and selection techniques Media Decisions in Advertising LO 4

25. 25 Media Decisions in Advertising Newspapers Magazines Yellow Pages Internet Radio Television Outdoor Media Direct Mail Trade Exhibits Cooperative Advertising Brochures Coupons Catalogs Special Events Monitored Media Unmonitored Media LO 4

26. 26 Major Advertising Media Newspapers Magazines Radio Television Outdoor Media Yellow Pages Internet LO 4

27. 27 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

28. 28 An arrangement in which the manufacturer and the retailer split the costs of advertising the manufacturer’s brand. Cooperative Advertising LO 4

29. 29 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

30. 30 Noise-Free Reading SOURCE: Brian Steinberg, “Philips and Time Agree to Keep It Simple,” Wall Street Journal, April 21, 2006, B3. {Contents Brought to you by...} The table of contents (TOC) in a magazine commonly appears after a dozen—sometimes two dozen—or more pages of advertisements. To cut through the noise, Philips Electronics paid $5 million to Time, Inc. to place the TOC on the first page of four magazines—Time, Fortune, People, and Business 2.0. In those issues, the TOC appeared on the very first page, opposite an ad on the inside front cover, reading: “Philips Electronics is bringing the table of contents to the front of selected Time, Inc. magazines to make things easier for readers.” LO 4

31. 31 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

32. 32 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

33. 33 Presidential TV Advertising SOURCE: “Candidates Still Bank On Local TV Ads,” Mediaweek, Oct 22, 2007 p22. When it comes to advertising, presidential hopefuls continue to favor local TV: –Nearly 95 percent of presidential campaign ads between January 1 to October 10, 2007 were aired on local TV stations –Mitt Romney led other Republican presidential candidates with 10,893 TV ads in that time period –Bill Richardson led Democrats with 5,975 TV ads, followed by Barack Obama with 4,293 ads LO 4

34. 34 Internet Advantages  Fast growing  Ability to reach narrow target audience  Short lead time  Moderate cost Disadvantages  Difficult to measure ad effectiveness and ROI  28% WW audience; 77% No. America LO 4

35. 35 Outdoor Advertising SOURCE: “Us’s Landscape Turns Luminous As Highway Billboards Go Digital,” Marketing Week, October 25, 2007, p22. In 1970, billboards accounted for 80 percent of outdoor advertising In 2006, billboards accounted for 64 percent of outdoor advertising, public transport for 12 percent (e.g.. buses, trucks, cars), street furniture for 7 percent (e.g. park benches, bus kiosks), and 17 percent alternative (outdoor) media  Some car owners are paid $200-$800/month for driving a car “wrapped” in the logo and branding of an advertiser  So far, only 700 of the 450,000 U.S. billboards are digital (only 40 states allow their use) LO 4

36. 36 Outdoor Media Advantages  Repetition  Moderate cost  Flexibility  Geographic selectivity Disadvantages  Short message  Lack of demographic selectivity  High “noise” level LO 4

37. 37 Privacy Protection SOURCE: http://networkadvertising.org/managing/principles.asp Third-party ad networks provide most of today’s Web ads. These ad networks use cookies to track your Web preferences and usage patterns, then tailor advertising content to your interests. Network Advertising Initiative (NAI) member companies are self-regulating. Each has agreed to post a notice on all Web sites served by their networks. This notice informs consumers that: 1.The ad networks may place a cookie on your computer; 2.The cookie may be used to tailor ad content both on the site you are visiting as well as other sites within that network that you may visit in the future. 3.They have provided an "opt-out" mechanism for the targeted ad programs they provide. LO 4

38. 38 Google Google ’s AdWords (Ads Work!) Google's total revenue in 2008 was $21.8 billion and of this, $21.1 billion was derived from advertising. At the end of its third quarter in 2009, the company’s total revenue was $16.9 billion, $16.4 billion from advertising. To appreciate just how much Google has grown, consider this—in 2003 the company's total revenue was $1.46 billion with advertising revenue representing $1.42 billion. Source: http://investor.google.com/fin_data.html last visited November 12, 2009http://investor.google.com/fin_data.html last visited November 12 LO 4

39. 39 Alternative Media Ads in Movies Interactive Kiosks Computer Screen Savers Computer Screen Savers Shopping Carts DVDs Advertainments Cell Phone Ads Subway Tunnel Ads Subway Tunnel Ads Floor Ads Video Game Ads LO 4

40. 40 Qualitative Factors in Media Selection  Attention to the commercial and the program  Program liking  Lack of distractions  Other audience behaviors LO 4

41. 41 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

42. 42 REVIEW LEARNING OUTCOME Media Evaluation and Selection Scheduling: continuous flighted pulsing seasonal WinterSpringSummer Fall Type:Newspaper Magazine Radio Television Outdoor Internet Alternative Considerations: LO 4 MixHow much of each? Cost per contactHow much per person? ReachHow many people? FrequencyHow often? Audience selectivityHow targeted is the audience?

43. 43 Discuss the role of public relations in the promotional mix Public Relations LO 5

44. 44 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

45. 45 Functions of Public Relations Press relations Product publicity Corporate communication Public affairs Lobbying Employee and investor relations Crisis management LO 5

46. 46 Public Relations Tools Product placement Consumer education Event sponsorship Issue sponsorship Internet Web sites New product publicity LO 5

47. 47 Consumer Education Sites consumer.gov/idtheftIdentity theft privacyrights.orgConsumer privacy rights and responsibilities annualcreditreport.comOne free credit report/consumer each year consumeraction.govBroad range of consumer education topics consumerworld.orgLatest consumer news consumerreports.org/main/home.jspUnbiased product information consumer.govDirects consumers to fed gov’t sites pueblo.gsa.govBrochures and pamphlets ftc.gov/ftc/consumer.htmUnfair and deceptive business practices fcc.govRadio, television, satellite, and telephone motorist.orgLists car repair shops meeting set standards recall.govSafety and product recall information cpsc.govSafety, toys, nursery equipment, home appliances, furniture, computers, fireworks nhtsa.govDefects in automobiles, crash test ratings, safety recalls, air bags and child safety seats fda.govFood safety or food products, prescription or over the counter drugs, or medical devices

48. 48 Managing Unfavorable Publicity A coordinated effort to handle the effects of unfavorable publicity or of an unfavorable event. Crisis Management Crisis Management LO 5

49. 49 REVIEW LEARNING OUTCOME The Role of Public Relations LO 5

50. 50 Advertising for TV Shows Aggregating print ads for televisions shows as well as breaking them down, James Hibberd offers an informative look at advertising trends in 2009. http://www.thrfeed.com/nbcs-trauma-.html LO 5