Advertising:Advertisingis any paid form of non personal presentation and promotion of a product by an identified sponsor using the mass media that is intended to inform or persuade members of a particular audience. For many, advertising is the most familiar and visible element of the promotion mix. Because it can convey rich and dynamic images, advertising can establish and reinforce a distinctive brand identity. This helps marketers bond with customers and boost sales. Advertising is useful in communicating factual information about the product or reminding consumers to buy theirfavoritebrand. Advertising sometimes suffers from a credibility problem because cynical consumers tune out messages they think are biased or are intended to sell them something they dont need. Advertising can be expensive; therefore, firms need to take great care to ensure their messages are effective. Mass consumption and geographically dispersed markets make advertising particularly appropriate for marketing products using the same promotional messages to large audiences.Types of Advertising:Product AdvertisingProduct advertisingis an advertising message that focuses on a specific product. This is thetypeof advertising the average person usually thinks of when talking about most promotional activities.Institutional AdvertisingInstitutional advertisingis an advertising message that promotes the activities, personality, or point ofviewof an industry, organization, person, geographical location, or government agency. Institutional advertising is often closelyrelatedto the public-relations function of organizations. Some institutional messages state an organizations position on an issue to sway public opinion. This is calledadvocacy advertising.Publicservice advertisements (PSAs)are advertisements the media runs free of charge for not-for-profit organizations that serve society in some way or to support an issue.Retail and Local AdvertisingMajor retailers and small, local businesses advertise to encourage consumers to shop at specific stores or to use local services. Much of the local advertising focuses on store hours, location, and products that are available or on sale. Retail advertisers spend more than any other type of advertiser per year. Organization of the Advertising Function:Organizational arrangements for the advertising function vary among organizations. In small companies, advertising may be handled by someone in the sales department. The advertising function is usually organized in larger organizations as a staff department reporting to the vice president or director of marketing. The director of advertising is an executive position with the responsibility for the functional activity of advertising. This position requires a skilled and experienced advertiser and an individual who communicates effectively within the organization. The success of a firms promotional strategy depends on the advertising directors willingness and ability to communicate both vertically and horizontally in the organization. The major tasks typically organized under advertising include advertising research, design, copywriting, media analysis, and sometimes sales and trade promotion.Anadvertising campaignis a coordinated, comprehensive plan that carries out promotion objectives and results in a series of advertisements placed in media over a specified time period. Although a campaign may be based around a single ad, most have multiple ads with all ads in the campaign having the same look, feel, and message. Creating and executing an advertising campaign often means many companies work together, and it requires a broad range of skilled people to do the job correctly. Some firms may do their own advertising. In many cases, however, organizations retain one or more outside advertising agencies to develop advertising messages on their behalf. Most large companies use outside advertising agencies because they offer several advantages. Some companies who use advertising agencies also manage to reduce the cost of advertising by avoiding many of the fixed expenses associated with maintaining an internal advertising department.Developing an Advertising Campaign:An advertising campaign should be intimately related to the organizations overall promotional goals. The organization and its advertising agency, if it uses one, must have a good idea of whom it wants to reach, what it will take to appeal to this market, and where and when the messages should be placed. Organizations and/or agencies need to take several steps to develop and implement the advertising campaign: identify the target market; set message goals; set the budget; design the ads; pretest; select media; execute the campaign; and posttest.Identifying the Target MarketThe target market of an advertising campaign is identified from research and segmentation decisions. Researchers try to understand the customer so that messages can be created that the customer will comprehend and respond to.Setting Message GoalsMessage goals for a campaign can be increasing brand awareness, boosting sales by a certain percentage, or changing the image of a product. Sometimes the objective is simply to get people to recognize that they need the product. Effective advertising strategies accomplish at least one of three objectives: informing, persuading, or reminding consumers. The secret to success in choosing the best strategy is developing a message that best positions a firms product in the audiences mind. Marketers often combine several advertising strategies to ensure that the advertisement accomplishes set objectives. As markets become more segmented, the need for personalized advertising increases.Setting the BudgetAfter determining message goals, the organization next sets its advertising budget. Advertising is expensive. A firm allocates a percentage of its overall promotion budget to advertising, depending on how much and what type of advertising it can afford. Five methods for setting promotion budgets are listed below: Affordable method Promotion budget is set at the level management thinks the company can afford. Percentage-of-sales method Promotion budget is set as a specified percentage of either past or forecasted sales. Fixed-sum-per-unit method Promotion budget is set as a pre-determined dollar amount for each unit sold or produced. Meeting competition method Promotion budget is set to match competitors promotion outlays on either an absolute or relative basis. Task-objective method Once marketers determine their specific promotion objectives, the amount (and type) of promotional spending needed to achieve them is determined. The task-objective method develops a promotion budget based on a sound evaluation of the firms promotion objectives. As a result, it regulates its allocation of funds to modern marketing practices. Although this is the most rational approach, it is hard to implement because it requires managers to specify their objectives and attach dollar amounts to them.A brands advertising budget often depends on its stage in the product life cycle. New products typically need large advertising budgets to build awareness and to persuade consumers to try the products. Mature brands, however, usually require lower budgets as a ratio to sales.Media SelectionOne of the most important decisions in developing an advertising strategy is the selection of appropriate media to carry the organizations message to its audience. The media selected must be capable of accomplishing the communications objectives of informing, persuading, and reminding potential customers of the product being advertised.Media planningis a problem-solving process for getting a message to a target audience in the most efficient and effective fashion. The decisions to be made include audience selection and where, when, and how frequent the exposure should be. The choice depends on the specific target audience, the objective of the message, and the budget. For the advertising campaign to be effective, the media planner must match up the profile of the target market with specific media vehicles. The first task for a media planner is to find out when and where people in the target market are most likely to be exposed to the communication. This is calledaperture.Impressions, Reach, Frequency, Impact, and CPMWhen analyzing media, the planner is interested in assessingadvertising exposure, the degree to which the target market will see an advertising message in a specific medium. Media planners talk in terms ofimpressions, which measure the number of people who will be exposed to a message placed in one or more media vehicles. To calculate the exposure a message will have if placed in a certain medium, planners considerreachandfrequency.Reachis a measure of the percentage of people in the target market who are exposed to the ad campaign at least once during a given period of time.Frequencyis a measure of how many times the average person in the target market is exposed to the message.Gross rating points (GRPs)are calculated by multiplyingreachtimesfrequency. Media planners can use GRPs to compare the effectiveness of different media vehicles. The advertiser also must decide on the desired mediaimpactthe qualitative value of a message exposure through a given medium and/or medium vehicle. The same message in one magazine, for example, may be more believable than in another. In general, the more reach, frequency, and impact the advertiser seeks, the higher the advertising budget will have to be. Although some media vehicles deliver superior exposure, they may not be cost-efficient. To compare the relative cost-effectiveness of different media and of spots run on different vehicles in the same medium, media planners use a measure calledcost per thousand (CPM). This figure compares the relative cost-effectiveness of different media vehicles that have different exposure rates and reflects the cost to deliver a message to 1,000 people.The media planner has to know the reach, frequency, and impact of each of the major media types and the specific vehicles being considered for each type. The major media types are newspapers, television, radio, magazines, outdoor, and the Internet. Each medium has advantages and disadvantages.Traditional MediaTelevisionBecause of televisions ability to reach so many people at once, it is the medium of choice for regional or national companies. Advertising on a television network can be very expensive. Advertisers may prefer to buy local television time rather than network time because its cheaper or because they have a more localized target market. Television advertising offers good mass-market coverage and low cost per exposure. Television combines sight, sound, and motion, appealing to the senses. It has high absolute costs, fleeting exposure, and less audience selectivity.RadioOne advantage of radio advertising is flexibility. Marketers can change commercials quickly, often on the spot by an announcer and a recording engineer. Radio is attractive to advertisers seeking low cost and the ability to reach specific consumer segments. Radio has good local acceptance as well. On the negative side, radio only offers audio and has fleeting exposure. There tends to be low attention by the audience, and the audience can be fragmented.NewspapersRetailers in particular have relied on newspaper ads since before the turn of the century to inform readers about sales and deliveries of new merchandise. Newspapers are an excellent medium for local advertising and for events that require a quick response. Newspaper advertising is flexible, timely, and believable. It has good local market coverage and broad acceptability. Disadvantages include a short life, poor reproduction quality, and a small pass-along audience.MagazinesMagazines are an important advertising medium because approximately 92 percent of adults look through at least one magazine per month. Magazines have adapted to changing times by narrowing their segments. New technologies such as selective binding allow publishers to personalize their editions so that advertisements for local businesses can be included in issues mailed to specific locations only. Magazine advertising has high geographic and demographic selectivity, credibility and prestige, high-quality reproduction, and long life and good pass-along readership. Unfortunately, magazine advertising presents a long ad purchase lead time, high cost, and no guarantee of position.Outdoor AdvertisingTraditional outdoor advertising takes the form of billboards, painted bulletins or displays, and electric signs and displays. Today, advertisers are finding new places to put their messages outdoors. This form of advertising is flexible, has high repeat exposure, is low cost, has low message competition, and has good positional selectivity. However, outdoor advertising has little audience selectivity and creative limitations.Evaluating Advertising:A famous retailer, John Wanamaker, once said, I am certain that half of the money I spend on advertising is completely wasted. The trouble is I dont know which half. Research findings generally support the wisdom of spending money on advertising. Studies show that increased advertising increases sales, and that increased product usage is linked to advertising exposure. Theres no doubt, however, that much advertising is ineffective. Therefore, organizations should evaluate their advertising efforts in order to increase their advertising success.Post testingPost testingmeans conducting research on consumers responses to advertising messages they have seen or heard. In some cases the ads are popular, but they send the wrong message to consumers. Three ways to measure the impact of an advertisement areunaided recall,aided recall, andattitudinal measures.Unaided recalltests by telephone survey or personal interview whether a person remembers seeing an ad during a specified period of time without giving the person the name of the brand. Anaided recalltest uses the name of the brand and sometimes other clues to prompt answers.Attitudinal measuresprobe more deeply by testing consumer beliefs or feelings about a product before and after being exposed to messages about it.Direct Marketing:Direct marketingis direct non personal communications between carefully targeted consumers or organizations and sellers designed to both obtain an immediate response and cultivate lasting relationships. The response could come in the form of an order, a request for further information, and/or a visit to a store or other place of business for purchase of a product. While many people equate direct marketing with direct mail, this promotional category also includes telephone marketing (telemarketing), direct-response advertising and infomercials on television and radio, direct-response print advertising, and electronic media such as fax, email, and the Internet.