Post on 25-Dec-2015
AdvertisingIs any paid form of non-personal promotion of ideas, goods, and services by an identified sponsor.
Its purpose is to present a message that encourages the customer to buy the product, use the services, or to accept the idea.• Advertising is typically designed to reach large
numbers.
• Different from Publicity, because Advertising is controlled by the business.
Promotional - Advertising designed to increase sales or to increase the use of services.
Institutional - Advertising designed to create a favorable impression and goodwill for a business
Advertising Types
Advertising cannot focus on individual needs because the same message is conveyed to all customers.
It can be very expensive, especially TV.
It can be very inefficient because everyone is not a potential customer.
Advertisements are very short, and less informative than a sales interaction.
Disadvantages
Selection of MediaThe Three Major Questions Does the medium have the ability to present the product and the appropriate business image? Does the medium have the ability to target the desired customers? Does the medium have the ability to obtain the desired response rate?
Selection ScenarioApple is introducing the new iPad, and they are trying to determine the best media to use. Using the Selection of Media Questions, to help Apple decide what to do.
Picture Retrieved from: http://reviews.cnet.com/i/bto/20100127/hardware-01-20100127_610x355.jpg. 2/15/11
Print Media Assignment
1.) What type of Advertisement is it?
2.) What type of Magazine is it?
3.) Why did the company select the magazine to advertise in?
4.) What is the target audience?
5.) What is the drawback to use this type of media for the advertisement?
Media Rate Resources
Standard Rate and Data Service Publishes Rate Cards for most major media according to general categories, such as print or broadcast media.
Audit Bureau of Circulation Print Media uses this to verify circulation figures
Two CategoriesClassified Ad – grouped or classified into specific categories (Help Wanted, Real Estate, Auto Sales, etc.). Pay based by the word or by lines of type.
Display Ad – Creative illustrations of the product, art, photographs, headlines, copy, and using a logo. Generally larger and the cost is based upon size.
Newspaper Rates
Column InchOne column wide by 1” deep.
Column Inch Rate Formula$ per inch x
# of columns x # of inches =
Total Cost of the Advertisement
Newspaper Rates
Run-of-Paper Are usually Display Ads. This allows the newspaper to choose where they will run an ad in the paper. They can charged more for a specific location in the paper. Open Rate This rate is based upon when an advertisement will appear in the paper, usually more on the weekends and Sunday. Contract Rate Purchase a specific amount of space for a given time period. Can be written in terms of location, appearance, # of times, sizes, and many more.
Newspaper Rates
Cost Per Thousand (CPM) RateThe cost of advertising in a Newspaper to reach a 1,000 readers.
This rate assists a business in determining the costs to advertise in different Newspapers.
Cost Per Thousand (CPM) Rate Formula
Cost of the Ad x 1000/ The Circulation =
CPM rate
Newspaper Rates
Magazine Rates are based upon 3 things:
Circulation
Quality of Readership
Production Technique
Magazine Rates
BleedHalf or Full Page ads are printed to the edge of the Page.Black and White RatesLowest Rates, offered for black and white ads.Color RatesMore expensive, offered for color ads. Each time a color is added, rates increase.Premium PositionWhere ads are placed. Typically front inside cover, back cover.Frequency Discounts Same ad several times a year, less money the more often.
Magazine Rates
Rates depends on the type of format that the advertisement uses.
Formats include: Banner Ads, Video Ads, Button Ads, Links, and many more.
Rates also based upon page views.
Tough to set rates, because effectiveness of ads is hard to judge.
Online Rates
Network Radio Advertising – is a broadcast from a studio to all affiliated radio stations.
National Spot Radio Advertising – is used to advertise on a local station by station basis.
Local Radio Advertising – is done by a local business for its target market. How do Radio Stations determine rates?Rates are determined by the time of day. Drive Times are the most expensive and desired.
Radio Rates
Advertising Rates for TV are based on
Time of Day - Prime time – 8 to 11
Special Events - (Super Bowl)
Stations - Viewers
Businesses use Nielson Ratings to help determine when they should advertise.
http://tvbythenumbers.zap2it.com/2011/02/15/tv-ratings-monday-mad-love-starts-slowly-for-cbs-chuck-harrys-law-hold-at-lows-the-cape-falls/82690
Television Rates
Cost sharing arrangement
Both a supplier and a local advertiser pay for advertising
Participation depends on guidelines set by each party including the type of media, the ad, its placement.
Example: Taco Bell and Fritos, New Burrito with Chili Fritos, Rotel and Velveeta
http://www.youtube.com/watch?v=o8fX3Msn1uw
Cooperative Advertising
Advantages
Shared expenses,
Access to more funding
In-store displays
TV ads
DisadvantagesControl over content and the message placements
Guidelines.
Cooperative Advertising
4 Methods to Create a Promotional Budget
1.) Percentage of anticipated salesBudget based on past or future sales
2.) All you can afford
Last of your budget after everything is paid for
3.) Following the competition
Competitors are matched or planned in proportion to the market
4.) Objective and Task Method
Consider certain situation and determine where the company wants to go, and budget accordingly.
Promotional Budget