ADVERTISING

1
ADVERTISING

• and its importance to Marketing

2
About Advertising

• Average person is exposed to more than 2,000
  advertisements a week
• Main Purpose is to present a message that
  encourages the customer to buy the product or
  accept the ideas
• Costs are usually lower than other types of
  promotion
• Businesses must choose appropriate mode of
  advertising, then the content, for their target
  market
• Can presell products before shopping ever starts

3
Drawbacks to Advertising

• Cannot focus on individual needs because same
  message is conveyed to all customers
• Some forms can be too expensive
• Inefficient not everyone exposed is a potential
  customer
• Messages are often short

4
Types of Media for Advertising

• Print
• Newspaper
• Magazine
• Direct-Mail
• Directory
• Outdoor
• Transit
• Broadcast
• Television
• Radio

• Online
• Banner Ads
• Interstitial
• Web Pages
• Other
• Specialty promotional items
• Sports Arena Billboards
• Movie Theater Ads
• Hot Air Balloons and Blimps
• Instant Coupon Machines

5
Print Media

• Oldest form of advertising
• Written
• Newspaper
• Magazine
• Direct-Mail
• Directory
• Outdoor
• Transit

6
Newspaper Ads

• Can be daily or weekly
• Can be local, regional or national
• Classified
• Grouped by specific category
• Pay by word or line
• Display
• Creative illustration of product
• Mix of art, photographs, headlines, copy, and
  logo

• Advantages
• Large readership with a high level of involvement
  by the consumer
• Circulation is known, so businesses can target
  living area or special interests
• Cost is low
• Timely and can change easily
• What are some disadvantages?

7
Magazine Advertising Classifications

• Local, regional, national
• Weeklies, monthlies, quarterlies
• Consumer or business/trade

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Magazine Advertising

• Can target their audiences because they know
  circulation and characteristics of readers
• Have longer life span
• More likely to be remembered
• Print quality is better
• People keep magazines longer
• Variety of presentation formats
• What are the disadvantages?

9
Direct-Mail Advertising

• Can be newsletters, catalogs, coupons, samplers,
  price lists, invitations, reply cards
• Done by mailing list or in with bill
• Highly selective and control timing
• Can use incentives
• Disadvantages
• Low response level
• List becomes dated
• Cost is high due to production, postage, buying
  mailing list

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Directory Advertising

• White and Yellow Pages
• Relatively inexpensive
• Found in 98 percent of American households
• Printed yearly how is this an advantage and a
  disadvantage
• Common for local service business

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Outdoor Advertising

• Highly visible
• 24-hour a day message
• Can be located to reach specific target markets
• Limited viewing time
• Government regulations

12
Transit Advertising

• Printed posters found inside commuter trains
• Exterior posters on outside of taxis and buses
• Posters in the station itself
• Economical
• Defined urban market

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• STOP HERE

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Newspaper Rates

• Quoted by column inch (1 wide x 1deep)
• If a column is 17 per column inch and the
  advertisement is 4 inches wide by 3 inches deep,
  then
• 17 x 4 x 3 204

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Factors that affect rates

• Run of paper where the ad is placed in the
  publication. Does the paper choose or the
  advertiser choose?
• Use of color
• Frequency of advertising
• Open rate varies when the ad runs
• Contract rate
• Cost per thousand readers rate

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Which costs more?

• Guaranteed run Advertiser chooses the last page
  of the publication

• Run of paper the newspaper places ad where it
  has room

17
Which costs more?

• Black White ad

• Color ad

18
Which costs more?

• Advertisers who run ads at least once every month

• Advertisers who run ads just during tax season

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Which costs more?

• Open Rate
• 28 per column inch on Thursday
• 31 per column inch on Saturday
• 35 per column inch on Sunday

• Contract Rate
• Bulk space
• Guarantees that a minimum number of inches will
  be used during a 12-month period
• Yearly Frequency
• Guarantees that an advertiser will use a minimum
  number of column inches each week for 52 weeks

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Which costs more?
Assuming you are using the cost per thousand
(CPM) rate

• Advertising with the Chicago Times with a
  circulation of 500,000

• Advertising with the Chicago Tribune with a
  circulation of 300,000

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Magazine Rates

• Based on circulation, quality of readership,
  production technique
• Bleed costs 15 to 20 more
• Color every time color is added, rates
  increase four color most expensive
• Premium position Back cover, Inside first page
• Frequency discounts Rate per issue decreases as
  frequency increases
• Commission rate given by magazine to advertising
  agency
• CPM

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Broadcast Media

• People are more likely to believe broadcast than
  print
• Merely for entertainment doesnt require
  reading
• Average person spends 10 years watching
  television by age 70
• Average person spends 6 years listening to the
  radio by age 70
• Good availability, but more expensive

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Television Advertising

• Has sound, action and color
• Prime time between 7 and 10 pm
• 30 to 60 second spot
• Appealing to large companies with widespread
  distribution
• Directed to a specific audience

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Television Ad Costs

• Highest production cost of any media and high
  dollar cost for time used
• Actual audience size is not assured
• Some people leave the room during commercials
• More expensive for Class AA time (primetime)
• Rates are based on viewership

25
Radio Advertising

• Wide audience 96 of all people over age 12 in
  one week
• Best times?
• Hint Drive Time
• 15, 30 or 60 second slots
• Effective because of announcer, background music,
  jingles, slogans and sound effects
• Can select an audience by choosing stations
• Messages can be changed easily
• Three types network, national spot, and local

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Radio Advertising Disadvantages

• Short life span once broadcast, it is over
• Lack of visual involvement (thats why you need a
  catchy jingle)

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Radio Ad Costs

• Each radio station determines rates by time of
  day
• Run of schedule is cheapest
• Drive time advertising is expensive
• Target audiences, audience size, weekly package
  plans

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Online Advertising

• Advertising messages on the Internet
• Most appear as banner ads
• Button ads are also popular
• Interstitial ads pop ups that must be closed
  first
• Response rates are low
• Selling effectiveness is still uncertain
• Relatively inexpensive

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Other Media

• Specialty
• Items given away with no obligation
• Printed with company name and address
• Likely to be placed with high visibility
• Distribution is limited
• Fairly inexpensive
• Sports Arena Billboards

• Ads in movie theaters or video rentals
• Hot air balloons and blimps
• Skywriting
• Supermarket cart displays
• Instant coupon machines

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Selection of Promotional Media

• Depends on the product, the habits and lifestyles
  of target, types of media available in the area
• Three 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?

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Which Media?

• African-American fashion dolls for children ages
  7-12
• New line of rain jackets
• Vitamins
• Movie
• Watch that costs 1,500
• Computers and computer equipment
• Legal services
• Used Cars

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Promotional Budget Methods

• Percentage of Anticipated Sales
• Budget a percentage of last years sales
• Little financial risk
• All you can Afford
• After all other expenses are paid
• Objective to build sales and reputation in the
  beginning
• Short time only

• Following the Competition
• Planned according to market share
• Weak because it is based on others promotional
  strategies
• Objective and Task
• Determines goals and plans how to reach and
  determines the cost
• Most effective of the four

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Other Activities

• Display print ads around room and have students
  look, close eyes, and tell which they remember
  (p.334)
• Institutional advertising graphic and question (
  p. 336)
• Find an example of a print or broadcast ad you do
  not like state what elements you dont like,
  what you would do to improve the ad, despite the
  dislike of the ad, do you think it is effective?
  (p. 340)
• Select a magazine and a section of a newspaper
  that both contain full page ads and answer the
  following promotional or institutional
  appealing to a want, need or both target
  audience elements that appeal to target
  familiar product other ad campaigns. (p. 341)
• Im a Pepper read p. 348 and develop a slogan
  for next decade (p. 348)
• Select a magazine and determine circulation
  characteristics of readership products
  advertised products advertised matched to target
  (p. 347)
• 20 minutes for tv or radio during different
  intervals list time, what products, and other
  questions (p. 349)

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Outside Book Activities

• www.adslogans.co.uk/hofiner.html (Ad Hall of
  Fame)
• Analyze classified ads (TBE 5/99)
• Computer presentation to make a commercial (TBE
  9/00)
• Sell me your idea (TBE 3/3)
• Create an Ad Campaign (TBE 1/99)