2. chapter 01 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Advertising Yesterday, Today and Tomorrow

3. 1-3 Define advertising and distinguish it from other forms of marketing communications. Explain the importance of advertising in a free market economy. Explore the impact of advertising on society. Explain the role advertising plays in business and marketing. Discuss how advertising evolved with the history of commerce. Chapter 1 Objectives

4. 1-4 What Is Advertising? Definition Advertising is... nonpersonal communication of information,... about products (goods, services and ideas)... by identified sponsors... through various media. usually paid for... usually persuasive in nature... structured and composed...

5. 1-5 What Is Advertising ? Types of Media Mass Billboards Newspapers & Magazines Radio & TV

6. 1-6 What Is Advertising ? Types of Media AddressableMass Billboards Newspapers & Magazines Radio & TV Direct Mail E-Mail

7. 1-7 What Is Advertising ? Types of Media InteractiveMass Billboards Newspapers & Magazines Radio & TV Addressable Direct Mail E-Mail Kiosks Web sites

8. 1-8 What Is Advertising ? Types of Media Nontraditional MassInteractive Billboards Newspapers & Magazines Radio & TV Addressable Direct Mail E-Mail Kiosks Web Sites Shopping Carts Blimps Tattoos

9. 1-9 What Is Advertising ? Types of Media MassInteractive Nontraditional Billboards Newspapers & Magazines Radio & TV Addressable Direct Mail E-Mail Interactive Kiosks Web Sites Nontraditional Shopping Carts Blimps DVDs

10. 1-10 The Marketing Dimension  Defines advertising’s role in business  Marketing the only function with a primary revenue- generating role Business Functions Operations Finance & Admin Marketing

11. 1-11 What Is Marketing ? Marketing is... to create exchanges that... satisfy the perceived needs, wants, and objectives... of individuals and organizations. the process of planning and executing concepts, pricing, distribution and promotion of ideas, goods and services...

12. 1-12 Advertising and the Marketing Process The marketing strategy will help determine... who the targets of advertising should be, in what markets the advertising should appear what goals the advertising should achieve

13. 1-13 Many Buyers & Sellers Economics: Principles of Free-Market Economics Self-Interest Complete Information Absence of Externalities

14. 1-14 Economics: Functions and Effects of Advertising Communicate Product Features and Availability Increase Product Use Build Value, Brand Preference & Loyalty Reduce Overall Sales Cost Induce Customers to Try Products & Suggest Reuse Stimulate Product Distribution Identify & Differentiate Products (Branding)

15. 1-15 Economics: Evolution of Advertising PreindustrialIndustrializingIndustrialPostindustrial pre-18001800-19001900-19801980-present

16. 1-16 Economics: Evolution of Advertising Stage Waggons ad from the preindustrial age

17. 1-17 Economics: Evolution of Advertising PreindustrialIndustrializingIndustrialPostindustrial pre-18001800-19001900-19801980-present

18. 1-18 Economics: Evolution of Advertising Uneeda Biscuit ad from the industrializing age

19. 1-19 Economics: Evolution of Advertising PreindustrialIndustrializingIndustrialPostindustrial pre-18001800-19001900-19801980-present

20. 1-20 Economics: Evolution of Advertising Wrigley’s ad from the industrial age

21. 1-21 Economics: Evolution of Advertising PreindustrialIndustrializingIndustrialPostindustrial pre-18001800-19001900-19801980-present

22. 1-22 Economics: Evolution of Advertising American Legacy Foundation ad from the postindustrial age

23. 1-23 The Global Interactive Age: Looking at the Twenty-first Century DVRs such as TiVo allow viewers to skip ads Advertising is evolving into a two-way medium Permission-based opt in programming allows one-to-one relationship with consumers Computers and internet represent new media for reaching customers Television has become a narrowcasting medium

24. 1-24 Society and Ethics: Effects of Advertising Ethical advertising can... improve standards of living, inform of availability of products, imbue products with personality, help us make personal statements & foster the free press & nonprofits.

25. 1-25 Society and Ethics: Effects of Advertising On the other hand, advertising can: be dangerous if misleading, promote unhealthy products, encourage conformity, glorify conspicuous consumption, or target vulnerable markets.

26. 1-26