Advertising

Chapter 19

Advertising and It’s Purpose

Advertising is nonpersonal promotion which promotes ideas, goods or services by using a variety of media.

The average city dweller is exposed to more than 3,000 advertising messages everyday

Advertisers control the message, where it will be seen or heard, and how often it will be repeated

Advertising and It’s Purpose

Marketers can use advertising to introduce a new business or change a company image

Advertising can also promote a new product or an existing one, encourage the use of a particular service, or encourage business-to-business transactions

Two main types of advertising: Promotional Advertising Institutional Advertising

Promotional Advertising Definition Advertising designed is to increase sales Targets are consumers or B2B customers Encourages potential customers to ask for

info, call for appointment, participate on the internet, or enter a retail store.

Leads / Prospecting

Institutional Advertising Definition Designed to create a favorable image for a

company and foster goodwill in the marketplace

Connecting the businesses name to a worthy cause helps a company make a favorable impression

Does not directly increase sales

Mass Advertising Versus Targeted Advertising

Mass ads enables companies to reach large numbers of people

Targeted ads target messages to select audiences

Advertising demonstrates features and benefits

Types of Media

Medias - the agencies, means, or instruments used to convey advertising messages to the public.

4 General categories The advertising

message and the target audience determine the type of media that is used

Newspaper Television Opt-in e-mail

Giveaways Promoted Tweets

1. Print Media

a. Newspaper advertising

b. Magazine advertising

c. Direct-mail advertising

d. Directory advertising

e. Outdoor advertising

f. Transit advertising

a. Newspaper Advertising

Daily and Weekly Newspapers – local papers

Shoppers and Alternative Newspapers – delivered to homes

National Newspapers – USA Today, Wall Street Journal

b. Magazine Advertising

Distributed locally, regionally or nationally

Published weekly, monthly and quarterly

Consumer or B2B B2B are also known as

trade magazines

c. Direct Mail

Highly focused form of advertising Printed direct mail Electronic direct mail Newsletters, catalogs, coupons, samples,

circulars and invitations to sales Carefully selecting the target

d. Directory Advertising

A directory that accepts advertising

Relatively inexpensive and target all demographic groups

Kept of a year White Pages Yellow Pages

e. Outdoor Advertising

Non-standardize outdoor signs used at the place of business

Standardized outdoor signs are purchased from advertising companies

Highly visible and relatively inexpensive

Available 24 / 7

f. Transit Advertising

Found on public transportation – trains, taxis buses, public benches, bus stop shelters, kiosks, newsstands, trashcans, subways, railroad, bus and airline terminals

Reaches wide and captive audiences

2. Broadcast Media

Encompass radio and television

Over a lifetime of 66 years – a person will watch nearly ten years of TV and 6 years listening to the radio

Network and cable

a. Television Advertising

The ultimate advertising medium for many businesses

Combine creative elements – sight , sound, action and color

30 to 60 spots Infomercials promote products Highest production costs Small companies cannot afford

b. Radio Advertising

Radio stations reach 96% of people age 12 and over

Radio is a mobile medium Messages can be updated daily or hourly Carefully target market based on type of

radio station Presented in 10, 20, 30 or 60 second spots Background music, jingles, slogans add

drama

3. Internet Advertising

Is a form of advertising that uses either email or the World Wide Web (www)

Small part of overall advertising but growing

Opt-in e-mail ads, banner ads, pop-up ads, search engine ads, and rich-media video ads

4. Specialty Media

Sometimes called giveaways or advertising specialties

Relatively inexpensive with advertiser’s name or logo

Located in high visibility area

5. Other Advertising Media Ad supported TV screens at airports, gas

stations, health clubs and subways Digital billboards at sports arenas On-screen movie theater ads Messages on diaper-changing stations,

trash cans, bathroom stalls elevators, hot air balloons.

Ceilings and floor graphics Electronic shelf ads Supermarket-cart displays

6. New Media Interactive and Internet-driven Uses electronic media devices such as

Wed-enabled small screen iPods, cell phones, laptops, and video games to reach increasing mobile populations

Advertisers go to those places to find their target market customers – blogs, vlogs, video and audio newscasts, RSS news feeds and social networking

MEDIA PLANNING AND SELECTION

The process of selecting the appropriate advertising media and deciding the time or space in which the ads should appear to accomplish the marketing objectives

3 basic questions 1) Can the medium present the product and the

appropriate business image;2) Can the desired customers be targeted with

the medium; 3) Will the medium get the desired response

rate?

Media Rates

Section 17.2

A. MEDIA MEASUREMENT Audience – number of homes or people

exposed to an ad Impression – a single exposure to an

advertising message Frequency – the number of times an

audience sees or hears an advertisement Cost per thousand (CPM) The media cost of

exposing 1,000 readers or viewers to an advertising impression – comparison tool

B. MEDIA RATES

Use a set format defined in terms of time or space

Based on geographic location Standard Rate and Data Service – look up

rates Audit Bureau of Circulations (ABC) – verify

circulation rates

1. NEWSPAPER RATES

Two types of advertising – classified ad or display ad

Classified ads pay by the word or line Display ads – larger than classified ads and

cost is based upon the amount of space used and the ad’s position in the newspaper

Quote rates by the column inch

FACTORS THAT AFFECT NEWSPAPER RATES

Day of week ad runs Where the ad appears

in the paper Run-of-paper rates

allows the newspaper to place the ad where ever they feel it would fit

Guaranteed or preferred locations

Color use in ad Frequency of the ad Open rates versus

contract rates

COMPARING RATES

Use CPM to compare ad rates Cost of the ad x 1,000/Ciculation = CPM $500 x 1,000/500,000 = $1 per 1,000 readers $600 x 1,000/300,000 = $2 per 1,000 readers Does ad reach target market?

2. MAGAZINE RATES

Based on circulation, the type of readership and production techniques

Bleed – half or full page ads are printed to the very edge of the page, leaving no white border – charge 15% – 20% more

You use the CPM to compare costs

Cheapest ad is black & white. Color is more expensive

Premium position refers to ad placement

Rate discounts – based on frequency or commission (% of sales given by the magazine to the ad agency for placing the ad for advertiser

3. ONLINE RATES Based upon the type of

format the customer desires.

Banner ads

Rich-media enhanced banner ads

Button ads

Interstitial ads CPM rate based on number

of viewers Rates vary based on the

volume of monthly page views

4. RADIO RATES Types of Radio Advertising

1. Network radio advertising

2. National spot radio ad

3. Local radio advertising

Spot radio refers to geographical area where an ad runs

Spot commercial are ad messages of one minute or less on network or spot radio

Drive time and run-of schedule (ROS) allows a radio station to decide when to run the ad.

5. TELEVISION RATES

Rates vary with the time of day. Prime time (7:00 p.m.-10:00 p.m.) most expensive

Advertisers try to play their messages during the time slots that enable them to reach the most customers

D. PROMOTIONAL BUDGET FOUR METHODS

Promotional Budget considers not only the cost for developing and placing or airing advertising but also the cost of staffing the department or campaign.

4 Common promotional budgeting methods are:

1. Percentage of sales method – budget based on a percentage of past or anticipated sales

2. All you can afford method – first pay all expenses then apply remainder of funds to promotional activities

3. Following the competition method – advertiser matches its competitor’s promotional expenditures

4. Objective and task method – company determines goals, identify steps to meet goals and determines cost for promotional activities to meet goals