Advertisement management

Copyright © 2008 - 2012 managementstudyguide.com. All rights reserved.

Advertisement

Management


ObjectiveDescribe in brief the history of Advertising

Explain what is Advertising Management

Describe the Advertising Management Process

Describe the various media options

Differentiate between Left – Right Brain Ads

Explain the Persuasion Process of Advertising

Explain the various Strategies for Demand Generation

Describe the Types of Advertising

Explain what is Global Advertising

Explain what is Relationship Marketing


Introduction

Look at the various advertising campaigns used by Coca Cola through different decades.

1880

1900

1920

1960

1980

2000

2010


Introduction

2010

2000

1980

1960

1920

1900

1880

Do you notice that the style and approach of the campaign has kept on changing over the years?

So, what is advertising? Why does it change? What is advertising management?

Let us try to understand more about advertising and its management and gain answer to the above questions.


History of Advertising

In the olden days, there were three forms of advertising that were used prior to the time advent of the printing press.

They were:

Advertising has long been used since the olden days. However, it was not the same form of advertising as seen today.

Trademarks

Signs

Town Criers


History of Advertising

TrademarksTrademarks were used by various craftsmen. The craftsmen placed such individual marks or trademarks on goods such as pottery, clothes etc. As the popularity of an artisan spread by word of mouth, the buyers used to identify and buy products by using the distinctive mark.

SignsSigns were placed beside the shop on a wall. Each shop had an inscription on the wall next to entrance. This sign would tell the passerby of the wares or service offered by the shop, whether it sold wine, pottery, bread etc.

Town CriersTown criers were also used for advertising. Men would paid to hold placards and to move through the streets to announce to the citizens of important news and other public events.


What is Advertising

The word ‘Advertising’ is derived from the Latin word, ‘Advertrire’ which means “to turn to”.

Thus, advertising is any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor.


What is Advertising

It is an extremely powerful tool for communicating to the masses and hence to potential customers.

It has proven to be a vital marketing tool to help sell goods, services, images and ideas by using channels of information and persuasion.


What is Advertising ManagementThe process of the complete planning, execution, control and monitoring of advertising campaign is known as advertising management.

Thus, advertising management involves:

Planning

Decision-making Control


Setting

Objectives

Formulating Budgets

Advertising Management Process

Assessin

g

Ad

Effectiveness

Strategy

Implementation

Advertising

Management

Process

Advertising Strategy

Creating

Ad

messages

The following are the steps of the advertising management process:


Steps in Advertising Campaign Management

Steps in Advertising Campaign

Management

Review communication market analysis1Establish advertising portion of IM

C

objectives

2

Review advertising budget3Select media

4Prepa

re cr

eative

brief

5


Framework of Advertising Planning and Decision-Making

Marketing Programme

Integrated Marketing Company PlanAdvertising Plan

Implementation

Situation Analysis


Functions of AdvertisingFunctions of advertising can be divided into two types:

Functions of Advertising

Primary Functions

Secondary Functions

Let’s look at each in detail.


Primary Functions

To increase Sales

To persuade Dealers

To help Dealers

To increase Per capita use

To increase receptiveness of new

product or model

To provide insurance for manufacturer’s

business

To build confidence in

Quality

To eliminate seasonal

fluctuations


Secondary Functions

To encourage salesmen and lend them moral

support

To furnish information

To impress executives

To impress workers

To provide a feeling of security


Informing

Assisti

ng Oth

er

Compan

y Efforts

Reminding Persuading

Role of AdvertisingAdvertising plays several roles and caters to various needs of both the consumer as well as the manufacturer. Some of the roles that advertising fulfils are:

Role of Advertising



Informing

Assisti

ng Oth

er

Compan

y Efforts



Role of Advertising


Informing

• Inform the market about a new product

• Suggest new uses for a product

• Inform the market of a price change

• Explain how the product works

• Describe available services

• Correct false impressions

• Reduce buyers’ fears• Build company image• Increase consumer

awareness• Create positive brand

images• Increase demand for

existing brands


Informing

Assisti

ng Oth

er

Compan

y Efforts



Role of Advertising


Persuading• Help to build brand

preference• Encourage switching to

your brand• Change buyers’

perception of product attributes

• Persuade buyers to purchase now

• Persuade buyers to be open to a sales call

• Persuade customers to try advertised products and services


Informing

Assisti

ng Oth

er

Compan

y Efforts



Role of Advertising


Reminding• Remind buyers about

the future need of the product

• Remind buyers where to buy it

• Keep it alive in the buyers’ mind during off seasons

• Keeps a company’s brand fresh in the consumer’s memory


Informing

Assisti

ng Oth

er

Compan

y Efforts



Role of Advertising


Assisting Other Company Efforts

• Acts as an integral and important aspect of the marketing communications strategy

• Facilitates other company efforts in the marketing communications process


Impact of AdvertisingThere are various impacts that advertising has on different areas. Advertising has an impact on a country’s economy, society, culture, and political system.

Economic Impact

Social Impact

Cultural Impact

Political Impact


Key Advertising Personnel

Client Marketing Manager

Traffic Manager

Creative Director

Account Executive


Key Advertising Personnel

Traffic Manager

Creative Director

Creative Executive

Media Buyers & Planners


Institutions Involved in Field of Advertising

Government

Competition

Control Inst.

Ad Agency

Media

Research Agency

Facilitating Inst.

Advertiser

Market / Consumer Behavior


Advertising ObjectivesThere are several categories of advertising objectives that guide advertising strategy:

Who

What

When

Which

How

Who should

be targeted?

What features and benefits should to be emphasized? What

emotions to be evoked in the consumer for the

product?

What

months or

seasons are

best?

Which geographic

markets need to

be emphasized?

How often should

the brand be

advertised?


Developing Advertising ObjectivesThere are three important considerations to be kept in mind while developing advertising objectives. They are:

Behavioral Decisions: These are the behavioral decisions that the advertising must influence.

Target Segment: The target segment considered while developing the advertising objectives.

Decision Making Process: Decision making process should occur before the communication to influence behavior.


Defining MediaMedia can be defined by considering the following aspects:

FrequencyCost per

Thousand Pulsing

Reach Gross Rating Points (GRP)

Flighting




FrequencyCost per

Thousand Pulsing


Flighting

Reach is the number of different persons or households that are exposed to a particular media schedule at least once during a specified time period.



FrequencyCost per

Thousand Pulsing


Flighting

Frequency is the number of times within the specified time period that an average person or household is exposed to the message.



FrequencyCost per

Thousand Pulsing


Flighting

Gross Rating Points (GRP) is the reach multiplied by the average frequency.



FrequencyCost per

Thousand Pulsing


Flighting

Cost Per Thousand is the calculated cost it takes to reach one thousand people in the target audience from that particular media vehicle.



FrequencyCost per

Thousand Pulsing


Flighting

Flighting refers to advertising for some period, followed by a gap with no advertising, and then followed by a second flight.



FrequencyCost per

Thousand Pulsing


Flighting

Pulsing is a continuous advertising at low weight levels reinforced periodically by waves of heavier activity. Pulsing uses the strength of continuous advertising and flights to create a balanced scheduling strategy.


Media Options - Direct Marketing

Direct Marketing aims to reach a highly targeted group within a specific geography, with optimum cost-efficiently as possible.


Media Options - Direct MarketingDisadvantages

• Consumer Avoidance: Consumer may tend to throw away the mail unopened. It has been found that almost half of all mail gets thrown away.

• Image: The mailers are generally considered to be “junk mail”.

• Timing: It is a time consuming process as it the bulk mail takes 3-10 days to be delivered.

• Cost: The mailing costs continue to rise.

• Reach: It is difficult to get new customers.

Advantages

• Targetability: It can target specific groups by location, product usage, interests etc.

• Cost: It is a cost-efficient option. The controlling costs are generally very low.

• Timing: There are no outside media deadlines.

• Versatility: It is versatile as it can convey a personalized and detailed message.

• Reach: It has a reach towards all households.

• Measurement: Its response rate can be easily measured.

• Environment: It provides a tangible environment and hence, saves consumer time.


Media Options - Newspaper

Newspaper is a mass media option used to reach adults who are above 35 years of age with a complex, detailed message or to advertise product.



• Cost: It is a bit costlier to advertise in leading newspapers that have a wide reach.

• Reach: The reach is limited only to the consumers who may read that particular newspaper.

Advantages

• Reach: It has a reach of a large mass audience.

• Delivery Form: It has a tangible form of delivery.

• Prestige: It is a traditional medium with wide acceptance. People tend to consider newspapers to be a credible medium. Its readers are usually people with higher income and education levels.

• Versatility: It gives the option to choose the ad size and timing.

• Message: The ad can be placed using illustrations as well as a detailed message.

• Targetability: It can reach various target customers as there are various newspapers that cater to different sections through different zone editions.


Media Options - Radio

Radio as a media option is used to reach a narrow target with frequency to build awareness.



• Reach: It is not a suitable option to reach out to broad demographics.

• Clutter: The message may get cluttered due to the presence of too many advertisers.

• Senses: The ad can only be audio and there is n accompanying visual to capture consumers’ attention.

Advantages

• Frequency: It helps to create a top of the mind awareness in the customer’s mind.

• Demographically Selective: The target can be selected by combine age or sex and the listening preferences to better target.

• Emotional: It helps to create a one-on-one relationship.

• Timing: It provides for a flexible message delivery due to the option of 24-hour air time

• Cost: The rates are negotiable and prove to be an efficient, low cost option.


Media Options - Cable

Cable is used to reach narrow target groups with single exposure in chosen geography.



• Reach: It has a partial reach. It is not suitable for rural areas where cable has not reached.

• Clutter: The message may get cluttered due to the presence of too many advertisers and the availability of high air-time.

• Measurement: It is difficult to measure due to the limited research in this medium.

Advantages

• Growing Medium: It is a growing medium with increasing subscribers.

• Frequency: It helps to create a top of the mind awareness in the customer’s mind.

• Senses: It helps to use both visual and audio in the ads.

• Cost: It is a low-cost local medium.

• Geographically Selective: It can be customized to target particular market areas.

• Demographically Selective: It can be used to target specific consumer groups.


Media Options - Outdoor Billboard

An outdoor billboard is a mass reach medium designed to reach adults who are above 18 years of age with a “reminder” or “directional” message.



• Impact: It is susceptible to minimal viewing by consumers and also low recall by consumers.

• Targetability: It is not efficient for small, narrow target audiences.

Advantages

• Cost: It is a low-cost option.• Reach: It has a large mass

audience appeal.• Environment: It can be

used to advertise using different sizes to demand attention. The billboards are on display 24-hours and 7 days a week.

• Frequency: It is highly visible.

• Versatility: It can be used to target specific geography with a variety of messages.


Other Media Considerations

Yellow Pages• It serves like a search engine

which people look for.• The display costs of ads may

be quite high.• It has a reduced reliance due

to other information search tools such as Internet.

Telemarketing• It has a fixed number of

outbound call objectives that are decided ahead of time.

• It requires the motivation of staff through direct incentives.

• It is crucial to train staff on handling rejections.

Event Marketing• It helps to build relationships.• There are bleak chances of sales

at the time of event. The event itself may generate leads only.


Media Reach ApproachesThere are various approaches that can be used to reach the different segments of the masses such as:

Controlled Coverage: This uses niche media to reach out to only a specific desired segment of the masses. Example: Trade magazines.

Customer Selection: This uses mass media to reach out directly to the masses. Example: Television.


Left – Right Brain AdsThere are two types of ad development approaches used:

Left

Brai

nRight Brain

Left Brain Advertisement

• The “Left brain” advertisements are created to appeal to the logical, rational side of brain.

• The left side of the brain deals with numbers, letters, words, and concepts

Right Brain Advertisement

• The“Right-brain” advertisements are created to appeal to the emotional side of brain.

• The right side of the brain deals with abstract ideas, images, and feelings.


Persuasion Process of AdvertisingThe Persuasion Process of Advertising works through a variety of advertising effects such as follows:

Awareness/

Familiarity

Brand

Benefit/

Information

about

Brands Creating

Image

Associating

Feelings

with BrandLinking

Brands with

Culture

All of the above effects helps create a positive attitude towards the brand and leads to a desirable purchase behaviour.


Push Technique

The Push Technique is used to push the product into the market. There are various methods used for pushing a product such as use of:• Displays, racks, stand at point of

sale • Trade deals, special displays• Dealer premiums, prizes, gifts• Advertising materials, mats,

inserts• Push money • Collaterals, catalogs, manuals• Trade shows, conventions,

meetings


Pull Technique

The Pull Technique is used to pull consumers towards product by directly offering something to the consumers. There are various methods used for pulling consumers such as use of:• Free Sampling• Free trials • Discount Coupons• Premiums or gifts • Contests, sweepstakes • Price-off deals • Refunds/rebates • Frequency/loyalty programs • Point-of-purchase advertising


Push Versus Pull Techniques The major difference between the push and pull techniques is the manner in which the information of the product flows. • In the push technique, the information flows downwards from the producer to

the consumer. • Whereas in the pull technique, as the consumers are directly pulled the

information moves upwards from consumer to the producer as shown in the figure.


Strategies for Demand Generation

In the increased consumption strategy the market dynamics are such that the sales increases due to growth in demand product form expansion. The strategy involves product expansion incorporating new use applications.

In the defensive strategy the market dynamics are such that the sales increases due to growth in demand because of old customers staying loyal to the brand and buying the product. The strategy involves recalling important brand features, reinforcing user experience and through consumer promotions.

In the offensive strategy the market dynamics are such that the sales increases due to growth in demand because of new customers buying the product. The strategy involves increasing primary demand as well as secondary demand.

Offensive Strategy

There are various strategies used in advertising for generating demand such as follows:


Hierarchy of Effects Model - DAGMAR

Let's take a look at the various hierarchical effects that are achieved through DAGMAR.

DAGMAR is a hierarchy of effects model that is used to achieve an effect in consumers from ‘unawareness’ to ‘action’.

Hence, DAGMAR Approach is used as a communication task to be accomplished amongst a defined audience in a specified period of time.


Hierarchy of Effects Model - DAGMAR

CognitiveAware

Comprehension & image

Attitude

Action

Unaware

Affective

Behavioral


Purpose of DAGMARThe following are the various purpose of DAGMAR:

Help to perform the

complete Selling

function

•

Announce a special reason

for ‘buying now’

•

Helps to create awareness of

the brand

•

Help to tie in with some

special buying event

•

To create brand image and

remind people to buy

•

To help correct false

impressions or misinformation

• • • • •


Limitations of DAGMARThere are a few limitations of DAGMAR which are as follows:

LimitationsLimitations

This model does not help to measure sales.

It only gives a broad outline which does not specify details.

Measurement is a problem in this model.

There are other factors that may affect goals.

The model may not hold good in all situations.


Types of Advertising


••

••

Standard Advertising

Primary & Selective Demand Advertising

Co-Operative Advertising

Social Advertising




The aim of the standard type of advertising is to persuade consumers to purchase certain products and services.

The motive is to create a need and desire for a product in the consumer and then sell the product to him.




Primary demand advertising is designed to stimulate demand among consumers for a category of product. Examples: silk & products made from silk.

Selective demand advertising is designed to stimulate demand for individual brands. Example: silk cloth of a particular company.




Co-operative advertising promotes products of two or more firms. The firms whose products are advertised share the cost of advertising.

Example: A manufacturer and a few retailers may advertise for a product and share the cost of advertising.


Social Advertising

Social Advertising

Social advertising is a type of public relations advertising and as such is usually for a non-product and non-profit purposes. The main focus is on some matter of social importance.


Manner of DistributionThere are various manners in which the advertising may be scheduled and presented the consumers such as:• Continuous schedule: In a continuous

schedule, the advertisement is scheduled to appear continuously in front of the consumer.

• Flighting schedule: A Flighting schedule calls for advertising for some period, followed by a gap with no advertising, and then followed by a second flight.

• Pulsating schedule: A Pulsating schedule is continuous advertising at low weight levels. Such advertising is reinforced periodically by waves of heavier activity. Pulsating uses a mix of both continuous and flighting schedules and uses the advantages of both to create a balanced scheduling strategy.


Budgeting Methods

Objective-and-Task Method

Competitive Parity Method (Match Competitors Method)

Affordability Method

Percent-of-Sales Budgeting

There are various methods used for deciding the budget of the advertising. They are:





Competitive Parity Method(Match Competitors Method)


Percent-of-Sales BudgetingPercent-of-Sales Budgeting

In this method, a brand’s advertising budget is set by a company by simply deciding the budget as a fixed percentage of past or anticipated sales volume of the brand.







The objective-and-task method is considered to be the most sensible and defendable advertising budgeting method.In this method, it is decided as to what specific role the company expects advertising to play for a brand and the company then sets the budget accordingly.



Competitive Parity Method (Match Competitors Method)





In this method the budget for a brand is decided by setting advertising budget by basically following what competitors are doing.








In this method, the budget is decided as only the funds that remain after budgeting for everything else are spent on advertising.This method is generally followed only by the most unsophisticated and impoverished firms.However, in real life it has been found that usually affordability and competitive considerations are always taken into account and influence the budgeting decisions of all companies.



Global AdvertisingAdvertising has seen a gigantic growth over the decades. Advertising has gone through five major stages of development: domestic, export, international, multi-national, and global. In present day, global advertising is also gaining ground and is claiming as much importance for a brand as its domestic advertising.

The approach to global advertising is slightly different from that to domestic advertising. The following are the three primary and fundamentally different approaches to the development of global advertising executions:• Transit ads are used as they can reach a target audience in

well defined geographic areas• The use of web-based directories because they offer

convenience and speed• The use of event sponsorship to target well-defined

audiencesHence, we can see that global marketing forces companies to communicate and think globally.


Key Characteristics of Global AdvertisingThe following are some of the key characteristics of global advertising:

High coordination across markets and Less local autonomy

Knowledge is centralized to some extent

Global product teams and ad agency

Systematic development of inter-market segments

Cultural relativity


Phases of Global MarketingThe following are the different phases of global marketing:

Market extension International advertising is secondary to domestic advertising.Example: P&G, Polaroid, Whirlpool

Multi-domestic International advertising is equivalent to domestic advertising. Example: Ford prior to 1996

Global There is no difference between international advertising and domestic advertising. Example: IBM, Coke, McDonalds


Challenges in Global AdvertisingThere are various challenges that are faced in global advertising such as:

Foreign-exchange

Shifting borders

Technological pirating

Cultural differences

Unstable governments and Corruption


Relationship MarketingLook at the expression given below.

Total Revenue

Value of Referrals

& Advertising Costs

Customer

Value

Hence, we see that for every new customer that a company gets, it has to spend some amount in referrals as well as advertising. It has been found that on an average it costs 5 times more to get a new customer than retain one.

So, a marketing strategy that is employed by almost all companies is that of relationship marketing or the strategy of growing relationships with one’s existing customers.


Key Elements of Relationship MarketingThe following are the key elements of “Relationship Marketing”:

Relate

Group

Differentiate

Identify



Relate

Group

Differentiate

Identify

It is important to identify your customers. For this purpose, various methods are used such as providing an incentive to customers to identify themselves and provide information. It is important that the company should define for itself as to how it will use the collected information before launching the program. The company can then use the information strategically to increase quality of the relationship such as to increase loyalty, sales or referrals.



Relate

Group

Differentiate

Identify

Differentiating the customers is as important as identifying them. By differentiating the customers, a company can differentiate the value that a particular customer holds for a brand. It is crucial that a company differentiates between its most profitable customers who provide the highest lifetime value and those with the best growth opportunity who offer the most unrealized future value. It is also vital that the customers should be differentiated on the basis of their needs, desired service level and the preferred contact method.



Relate

Group

Differentiate

Identify

It is also vital to make groups and define buckets of similar customers to make tailored action possible. It is important to profile each segment and define key elements to help enhance the relationship such as for more loyalty, more share of wallet, more referrals, more positive word of mouth.



Relate

Group

Differentiate

Identify

A key element of relationship marketing is to relate to the customer. It is important that a brand should cater to individual needs. A company can build relationships by using its knowledge of the customer to alter the way it treats the customer.



Relate

Group

Differentiate

Identify


Positioning Process

Positioning Concept

The desired preception or association

management wants target customers to

have for a firm and/or its products

Market Target

Positioning Strategy

The combination of marketing actions

used to portray the positioning concept to

targeted buyers

Positioning EffectivenessThe extent to which management's positioning objectives are achieved in the market target

Positioning of the Brand

The positioning of the brand by the

buyers in the market target


Culture in Advertisement

• •

Culture plays an important part in advertising.

It is vital that the advertisements are in-sync with the culture of the place or else they may fail to have the impact that they sought to have on the consumers.

Let's take a look at how culture can affect an ad campaigns.

•


Examples of Culture in Advertisement

Thus, we see that understanding the culture of a place is very important to design a successful ad campaign that will be effective and appeal to the masses.

Pepsi’s “Come alive with the Pepsi generation’ was translated into “Pepsi brings your ancestor’s back from the grave” in China

The Coca-Cola name in China was read as “Ke-kou-ke-la” meaning “Bite the was tadpole” later changed to “Ko-kou-ko-le” meaning happiness in the mouth.

In Italy, Schweppes Tonic water was translated into Schweppes Toilet water”


SegmentationSegmentation is a crucial part of the advertising process. Segmentation is the decision about which consumers the advertising should target.

The following steps should be performed to decide upon the market segmentation:

Identify markets with

unfulfilled needs

Determine market

segmentation

Select market to be

targeted

Position the brand through

marketing strategies


Steps of Segmentation ProcessThe following are the steps of the segmentation process:

Group consumers according to their needs.

Group marketing actions, usually the products offered, available to

the organization.

Develop a market/product grid to relate the market segments to the firms’ products and actions.

Select the product segments toward which the firm directs its

marketing actions.

Take marketing actions to reach target segments.


Bases for Segmentation

Geographic Segmentation

State - region - country - climate

Demographic Segmentation

Age, sex, income, education, occupation, social class

Psychographic Segmentation

Activities, Interests & Opinions, Values & Lifestyles, Personality traits

Behavioristic Segmentation

Usage, loyalties. use occasions

Benefit Segmentation

Types of specific needs or wants to be satisfied.


Invention of ROI

The advent of ROI instilled a new confidence in companies to get a chance to measure the outcome of the advertising money that they had spent.

ROI helped companies to actually attach a figure to the impact that their advertising was having on the customers.

The invention of “Return On Investment” or “ROI” brought about a new wave in the field of advertising.


Case Study

H&G Inc. has been a sturdy player in the field of Switchgears in Europe for the last five decades. It is currently ranked number one in its field in several countries of Europe. Much of its success is attributed to its powerful advertising campaigns. It has been involved in international marketing also but to a very small extent.However, now H&G Inc. plans to reinvent its image and present itself to the US and Asian markets. H&G Inc. faces tough competition from the existing companies in those countries who enjoy a large market share in the field of switchgears of the US and Asian markets.

1. What is the strategy that you think H&G Inc. should employ to reinvent its image?

2. How can H&G Inc. design a powerful advertising campaign that caters solely to the US and Asian markets?


SummaryIn this module you learnt that:

The process of the complete planning, execution, control and monitoring of advertising campaign is known as advertising management.

Advertising has an impact on a country’s economy, society, culture, and political system.

The following are the three primary and fundamentally different approaches to the development of global advertising executions:• Transit ads are used as they can reach a target audience in well defined geographic

areas• The use of web-based directories because they offer convenience and speed• The use of event sponsorship to target well-defined audiences

Segmentation is a crucial part of the advertising process. Segmentation is the decision about which consumers the advertising should target.

The following are the steps of the advertising management process:• Advertising Strategy - Setting Objectives, Formulating Budgets, Creating Ad

messages & Selecting Ad Media and Vehicles• Strategy Implementation• Assessing Ad Effectiveness

Advertisement management

Business

Transcript of Advertisement management