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AdvertisingAdvertising

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OutlineOutline

Promotional mixPromotional mix AdvertisingAdvertising

– objectives, budgeting, message / media objectives, budgeting, message / media strategystrategy

Integrated marketing communicationIntegrated marketing communication Global advertisingGlobal advertising

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The Promotional MixThe Promotional Mix

AdvertisingAdvertising Sales promotionSales promotion Direct marketingDirect marketing Public relationsPublic relations Personal sellingPersonal selling

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AdvertisingAdvertising

Non-personal forms of communication, Non-personal forms of communication, conducted through paid media under conducted through paid media under clear sponsorshipclear sponsorship

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AdvertisingAdvertising

Objectives (Mission)Objectives (Mission) Budget (Money)Budget (Money) Program PlanningProgram Planning

– MessageMessage– MediaMedia

MeasurementMeasurement

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Hierarchy of ObjectivesHierarchy of Objectives

OperationalOperational– get message through to consumerget message through to consumer

IntermediateIntermediate– brand awareness, communicate attributesbrand awareness, communicate attributes

Super-ordinateSuper-ordinate– increase loyalty, influence purchase/usageincrease loyalty, influence purchase/usage

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Objectives of Advertising: By Objectives of Advertising: By Stage of DMPStage of DMP

– AwarenessAwareness– Information searchInformation search

» establish image, modify positionestablish image, modify position

– EvaluationEvaluation» change trade-offs made by consumerchange trade-offs made by consumer

– PurchasePurchase» develop intent, promote new usagedevelop intent, promote new usage

– Post-purchasePost-purchase

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Advertising BudgetingAdvertising Budgeting

Heuristic approachesHeuristic approaches– competitive paritycompetitive parity– percentage of salespercentage of sales– increase over previous yearincrease over previous year

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Advertising BudgetingAdvertising Budgeting

Are you over advertising?Are you over advertising?– ““I know 50% of my advertising dollars are I know 50% of my advertising dollars are

wasted, I just don’t know which half.”wasted, I just don’t know which half.” Reasons for over advertisingReasons for over advertising

– agency incentives, asymmetric risk, poor agency incentives, asymmetric risk, poor measurementmeasurement

Reasons for under advertising?Reasons for under advertising?

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Message StrategyMessage Strategy

Communication processCommunication process Advertising appealsAdvertising appeals Advertising executionAdvertising execution

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Communications ProcessCommunications Process

SourceSource– credibility, attractiveness, powercredibility, attractiveness, power

MessageMessage– structure, appealstructure, appeal

ChannelChannel– personal / non-personal, alternative mediapersonal / non-personal, alternative media

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Advertising AppealsAdvertising Appeals

Information / newsInformation / news– new product, sale price, reminder to usenew product, sale price, reminder to use

Logical persuasionLogical persuasion– solution to problem, comparative solution to problem, comparative

advantage, favorable priceadvantage, favorable price Image / Emotional persuasionImage / Emotional persuasion

– transformational (associate experience transformational (associate experience with psychological state)with psychological state)

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Advertising ExecutionAdvertising Execution

Factual messageFactual message DemonstrationDemonstration ComparisonComparison TestimonialTestimonial Slice of lifeSlice of life HumorHumor

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Media PlanningMedia Planning

ReachReach– unduplicated portion of audience exposed unduplicated portion of audience exposed

to an ad at least onceto an ad at least once FrequencyFrequency

– average number of times the audience average number of times the audience reached by the campaign is exposed to the reached by the campaign is exposed to the adad

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Media PlanningMedia Planning

Gross Rating Point (GRP) = Reach x Gross Rating Point (GRP) = Reach x FrequencyFrequency– TRP refers to target audience onlyTRP refers to target audience only

Effective Rating Point (ERP) = R x F x Effective Rating Point (ERP) = R x F x ImpactImpact– Impact depends upon vehicleImpact depends upon vehicle

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Reach and FrequencyReach and Frequency

GRP Reach Frequency

100 30 3.33

200 45 4.44

300 53 5.66

400 57 7.02

500 59 8.47

600 60 10.00

0

10

20

30

40

50

60

0 100 200 300 400 500 600

GRP

Reach

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Advertising EvaluationAdvertising Evaluation

Measure against hierarchy of Measure against hierarchy of objectives:objectives:– exposureexposure– receptionreception– retention (e.g., day-after recall)retention (e.g., day-after recall)– acceptanceacceptance– behaviorbehavior

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Does it pay to advertise?Does it pay to advertise?

Short termShort term– measurable response to advertising is measurable response to advertising is

negligiblenegligible Long termLong term

– drop in recognition, loyalty for drastic cuts drop in recognition, loyalty for drastic cuts in advertisingin advertising

An argument for experimentationAn argument for experimentation

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Integrated Marketing Integrated Marketing Communications (IMC)Communications (IMC)

Old approach: separated by functionOld approach: separated by function– advertisingadvertising

» educate, reinforce imageeducate, reinforce image

– direct marketingdirect marketing» acquire customers, deliver incentivesacquire customers, deliver incentives

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Integrated Marketing Integrated Marketing Communications (IMC)Communications (IMC)

IMC: coordinate promotional mix IMC: coordinate promotional mix elementselements– existing customers: build loyaltyexisting customers: build loyalty

» advertising, direct marketingadvertising, direct marketing

– new customers: encourage switchingnew customers: encourage switching» advertising, direct marketingadvertising, direct marketing

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Global AdvertisingGlobal Advertising

Advantages:Advantages:– economies of scaleeconomies of scale– lower advertising production costslower advertising production costs– consistent international imageconsistent international image– simplified coordination and controlsimplified coordination and control

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Global AdvertisingGlobal Advertising

DisadvantagesDisadvantages– difficulty of implementationdifficulty of implementation– e.g., Parker Pene.g., Parker Pen

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When is Global Advertising When is Global Advertising Appropriate?Appropriate?

Messages with visual appealMessages with visual appeal Brand images with universal appealBrand images with universal appeal New technologies not culturally boundNew technologies not culturally bound