Advertising

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Advertising
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Topics

• Types of media
• Print
• Outdoor
• Broadcast
• Online
• Cost of Advertising
• Media rates

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Advertising

• Any paid from of non-personal promotion by a
  sponsor
• Average person exposed to 2000 ads a week
• Presents company image and product to the public

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Advertising

• Promotional
• Designed to increase sales
• Supports selling efforts
• Creates new markets
• Introduces new products

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Advertising

• Institutional
• Create favorable image
• Extend goodwill
• Provide information
• Allows multiple companies to present collective
  appearance

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Potential

• Cost for reaching customers typically less than
  other forms of promotion
• Repeated exposure imprints consumers
• Can be controlled, unlike publicity
• Advertisements can become cultural statements

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Disaster

• Cannot focus on any individuals
• Can become quite expensive
• Potentially inefficient, not everyone is a
  customer
• Small mistakes are magnified by larger audiences

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Types of Media

• Main categories or instruments used to deliver
  message to the public
• Print
• Broadcast
• Online
• Specialty

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Print

• Oldest and one of the most effective
• Often there is a low absolute cost
• Can very effectively target audience
• Costs re-occur often

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Newspapers

• Daily/weekly
• Local/regional/national
• Community papers, called shoppers, are highly
  concentrated with local advertisements, and
  assorted community news

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Newspapers

• Advantages
• Large readership
• High involvement
• 55 of adults read a newspaper daily
• Accurate targeting
• Low cost
• Timely, ads can be changed often to meet needs

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Newspapers

• Disadvantages
• Wasted circulation
• Papers delivered outside target areas, i.e.
  Inquirer at Penn State, NY Times in Philly
• Short life span
• People do not typically hold onto a newspaper for
  long
• Black white is not very appealing

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Newspaper Rates

• Classified
• Grouped into categories
• For sale, employment, personals, etc.
• Pay by word or line
• Display
• Illustration of product
• Mix of photos, headlines, copy possibly logo
• Cost based on amount of space per column inch

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Newspaper Rates

• Cost per Thousand (CPM)
• Cost to advertisers of exposing 1,000 readers to
  ad
• Open rate
• Contract rate
• Run-of-Paper

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Magazine

• Weekly, monthly, quarterly
• Consumer, trade, special interest

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Magazine

• Advantages
• Well targeted, demographics are known
• Longer life span
• Read more thoroughly
• More likely to be recalled
• Better quality
• Wider variety of formatting

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Magazine

• Disadvantages
• Less mass appeal than newspapers
• Significantly more expensive
• Deadlines for advertisements may be weeks or
  months in advance
• Becomes very difficult to have timely ads or
  promote sales

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Magazine Rates

• CPM is taken into account when negotiating price
• Premium positions
• Back cover, seen when magazine is face down
• Inside cover and first page
• Frequency discounts
• Bleed

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Direct Mail

• Catalogs, newsletters, coupons, samplers, price
  lists, circulars, etc.
• May be included with monthly bill
• Lists acquired from previous purchases with the
  sender or purchased from a different company

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Direct Mail

• Advantages
• Advertisers can be selective
• Only send to people in a certain zip code
• Limited only by postal regulations in terms of
  formatting
• Can entice sales with free samples or coupons
• Can incorporate other types of promotions

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Direct Mail

• Disadvantages
• Low response rate, sometimes as low as 1
• Junk mail image
• Lists become outdated
• Waste money sending to wrong audience
• High absolute cost

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Directory

• White pages
• Free alphabetical listings
• Yellow pages
• Paid listings
• Grouped categorically
• Extra cost of larger advertisement

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Directory

• Advantages
• Inexpensive
• Found in 98 of households
• Kept for at least a year
• Disadvantages
• Held onto so long, price changes risk alienating
  customers

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Outdoor

• Billboards
• Non-standardized
• Placed on business or other locations within the
  community
• Owned by company or rent is paid directly to
  property owner
• Standardized
• Along highways and other roads
• Available to any business, local or national

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Billboards

• Types
• Posters
• Pre-printed, wallpaper-like
• Changed every 3 4 months
• Painted
• Painted onto side of building
• Spectaculars
• Uses motion or lights to attract attention

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Billboards

• Advantages
• Highly visible
• Relatively inexpensive
• Reaches large percentage of target
• Disadvantages
• Becoming very restricted
• Alaska, Hawaii, Vermont, and Maine have outlawed
  billboards
• Size restricted in many other places

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Transit

• Uses public transportation to carry a message
• Advantages
• Wide captive audience
• Inexpensive within defined market
• Disadvantages
• Not always available
• Defacement
• Restricted to certain routes

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Online Advertising

• Tremendously popular
• Will surpass Radio and Magazine by 2010
• 20 Billion in total spending
• Banner ads
• Interstitial ads
• Pop-ups pop-unders
• Disadvantages
• Low usage rates
• Privacy issues

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Online Rates

• Heavily based on CPM
• Click through
• On Load
• Often websites will barter with other sites
• Exchange banner ads in hopes of increases both
  sites traffic

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Specialty Media

• Giveaways that are used frequently
• Pens, pencils, notepads
• Constant exposure to company name and logo
• Disadvantages
• Limited distribution
• Often these items are taken by people with little
  to no interest in company

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Broadcast

• Based on an lifespan of 70 years, a person spends
  10 years watching TV and 6 years listening to the
  radio
• 1200 commercial TV stations
• 10,000 AM and FM stations
• 99 of Americans own at least one TV
• 2/3 of Americans own 3

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Radio

• 96 of people listen to the radio
• 15, 30, 60 seconds spots
• Drive times best for advertising
• Advantages
• Very mobile, can be taken just about anywhere
• Very flexible, changes can be made within a few
  days or minutes

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Radio

• Disadvantages
• Short life span, only played once unless more
  airtime is paid for
• Large markets have competing stations
• Must choose of advertise on all of them
• Because listeners are often multi-tasking,
  message may be missed

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Radio Rates

• Local radio advertising
• Local businesses to their markets
• Geographically limited
• National spot advertising
• National firms decide on a station-by-station
  basis and select certain markets
• Network radio advertising
• Broadcasts to all affiliates

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Radio Rates

• Rates determined on time of day
• Peak during drive times
• Thats a main reason why there are so many
  commercials during rush hour
• Discounts are given for run-of-schedule (ROS)
• Station makes decision when to play advertisement

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Television

• Mostly 30 60 second spots
• Exception being infomercials
• Advantages
• Pulls together sight sound for a more effective
  message
• Potential customers can see products features
• Can be directed toward specific audiences

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Television

• Disadvantages
• High production cost
• High cost to reserve spot
• Audience size is not assured, many people leave
  the room or change the channel

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Television Rates

• Based on popularity of show
• Quarterly Nielson ratings are crucial in
  determining price
• Time slots determine price
• 8 pm 11 pm is referred to as class AA
• Rates change from class A to class D
• Fewer viewers equate to lower costs

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Other Media

• Stadiums
• Movies
• Blimps
• Skywriting
• Plane banners
• Instant coupons
• Video walls

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Selection of Promotional Media

• Depends on product, target audience, and media
  available
• Questions
• Does media have the ability to present the
  product/corporate image?
• Does media have the ability to target desired
  customers?
• Does media have the ability to obtain the desired
  response?

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Cooperative Advertising

• Cost-sharing where both the supplier and local
  store pay for advertisement
• Sears Craftsman
• Macys Calvin Klein
• Local store must agree to guidelines when
  featuring product

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Cooperative Advertising

• In some instances, stores earn advertising
  credits when purchasing a suppliers product
• Typically a percentage of the sale
• These can be redeemed to offset approved ads

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Cooperative Advertising

• Advantages
• Decreased cost for both sides
• Wider appeal and recognition
• Disadvantages
• Loss of control or placement
• Decisions of supplier may become too costly for
  store

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Advertising Formats

• Slice-of-life
• Shows people using the product in an everyday
  situation
• Pillsbury, Cheerios
• Fantasy
• Displays some fantastical situation or dream
• Perfume, Captain Morgans

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Advertising Formats

• Musical
• Revolves around a jingle or song about product
• Pepsi, Oscar Mayer
• Humor
• Large percentage of advertisements use humor
• Sierra Mist, Reebok

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Advertising Formats

• Expertise
• Manufacturer or producer explaining the product.
• Oreck, many car advertisements
• Testimonial
• Celebrities, athletes, or other people giving
  endorsements
• Chunky Soup, make-up

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Advertising Formats

• Lifestyle
• Shows product in relation to a lifestyle
• Mountain Dew, most trucks
• Mood or Image
• Evokes specific feelings
• DeBeers, Hallmark

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Advertising Formats

• Character
• Uses fictitious character, typically animated
• Expedia Traveling Gnome, Geico
• Evidence
• Uses rational reasoning and studies to show why a
  product is better
• Miller Lite, most medicines