Practical Advertising Concepts

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Practical Advertising Concepts

• For Management Studies Students
• By Geoff Linton
• Fall 2006

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Advertising Has One Key Role
Persuasive form of marcom to stimulate a positive
response by a defined target audience (GL) To
influence behaviour so that a receiver of the
message views something positively and then takes
the appropriate action.
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Does Great Adv Just happen?

• Product
• relevant product
• differentiated
• respected brand
• Process
• big idea
• breakthru
• Great Execution
• adv agency

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Apple Computers Exercise

• What business are they in?
• What is their product?
• How successful are they? What do they do well?
• Who is their target market?
• What is this slogan? What does this mean?

See Albert Adv
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(No Transcript)
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One of the Global Mktg Leaders
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Message Dimension (p10)

• Autobiographical
• I
• Narrative
• from a 3rd persons perspective
• exudes well informed, respectable quality
• Drama
• series of events
• requires viewers to connect the sequences
• gets them involved
• Persona
• fictional character or spokesperson

Source the Receiver
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Write the Following when Viewing Videos

• Background
• company info
• Date Period of Advertising
• Product Concept
• name sector
• key features
• Target Audience
• behaviour
• demographic
• Theme
• key messages
• boom factor
• Literary Form
• autobiographical, narrative, drama

Lets watch again
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Review of Marketing

• Why are we in business?
• 4 P's
• Product/Service
• Popularity vs US
• Adv Revenues
• Best Marketers
• Role of Adv
• Purpose of Adv
• Marcom Choices/Mix
• Differences in B2B Adv

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Motives of Business Owners ...

• Self employment
• Employ their family?
• Help the community
• Have Fun
• Annual cash flow of profits
• Satisfy shareholders

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What is Advertising?

• Paid communication
• To a target market
• prospects
• Current customer
• Vehicles
• How much should businesses invest?
• incremental benefit

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Your Role as a Manager

• Maximize Revenue

• Control Costs

How can advertising influence the above?
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Do you think advertising can make consumers or
business buy?
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Puurpose of Advertising

• Build awareness vs competitors
• Shift perceptions
• Generate qualified leads
• Generate incremental revenue profits

Read the Article Back to Basics What Can
Advertising Accomplish www.baycharles.com/artcle03
.htm
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General Marketing Goals

• Image
• Top of Mind Awareness with Primary Target
• Targeted Reach
• Frequency to reinforce their messages
• Research
• Relationship Enhancements
• forums opportunity for feedback
• customer interaction
• increased retention, win-back acquisition
• Sales / Revenue
• fill pipeline with qualified leads
• traffic transactions
• predictable profitable growth (ideally faster
  than industry)
• build their database grow their opt-in e-mail

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Where Advertising Fits
Marketing manager
Place Outlets Channels Coverage Transportation Sto
ck level
Promotion Advertising Personal selling Sales
promotion Public Relations
Price List price Discounts Allowances Credit
items Payment period
Product Features Brand name Packaging Service Warr
anty
Cohesive marketing mix
Decisions product (SKUs) place (channels, site
locations, ) pricing promotion (communication mix)
Product
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But there are issues with marcom...
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Issue Half of marcom is wasted

• problem is that we dont know what half
• part of the problem is many companies dont like
  to measure. Perception of too much effort (for
  now).
• Solution is to... incrementally eliminate
  inefficiency through testing, workflow audits and
  some measurement yardsticks.

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Issues with Advertising

• Great for branding but
• Passive medium
• Lots of Clutter
• other commercials
• too may channels mediums (3000 adv messages per
  day)
• whats your share of voice? Is there a
  correlation to spend?
• Fragmentation
• Expensive
• Not always measurable

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Solution to Measuring Advertising

• Add response CTAs to adv
• Adv Scorecard
• gap tables positioning maps
• Datamine scanner transactional data
• Track Promo Impact through Longitudinal Research
  Studies
• Longwoods (ROEye)
• Project Appolo (Arbitron VNU)
• Cross Media Optimization Strategies Methodologies
  is covered later

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Measuring Advertising thru Omnibus Metrics

• Syndicated research studies
• Audit circulation services
• PMB
• of CSI
• Hire market research companies for general market
  metrics on your product
• Regional Tests

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Consumers Trust Consumers
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Media Bombardment Clutter

• Its a different world for consumers and
  businesses.

Too much choice is fragmenting options. Google
is trying to sell magazine advertisements. TV is
hurting and the internet is gaining.
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So what vehicle should we focus on?
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Which Communications Elements can You Control?

• Controllable Communications
• Personal selling
• Advertising
• Sales Promotion
• Direct Marketing
• Packaging
• Events
• Inbound Telemarketing
• Outbound Telemarketing
• Events
• Public Relations
• Interactive Marketing
• Trade (flyers displays)

• Uncontrollable Communications
• Word of Mouth
• Competitor Activity
• advertising
• public relations
• sales promotion
• direct marketing

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List of Key Vehicles for B2B Mkters
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Lots of Options for DMers

• Cross-section of 19 media
• Serve two roles
• 1. Response
• 2. Image reinforcement (awarness or perception)
• Flat Direct Mail has been the workhorse
• OBTM has been impacted with DNC legislation
• Banner SEM added to survey this year

Source DMA Response Rate Guide 2005
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How much budget will I need to allocate?
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(No Transcript)
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How Big is the Adv Industry?
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US Medias Share of Total Advertising (1999E and
2005E)
Internet is poised to grow the most!
Source Morgan Stanley Dean Witter, May 2000,
Pg.19
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Changing Marketing Mix Its Impact on Agencies...

• Shift to Direct Marketing in B2C B2B
• D.M growing faster than advertising now
  accounts for 190B (US expenditures)
• response driven plus D.M is a stealth tool more
  difficult for competitors to track
• direct mail has been the workhorse for 100 years
  (2 RR it works but marketing cycles are slow)
  plus its measurable!
• telemarketing is faster but costs can spiral
  upwards
• But Along Came New Internet Branding Tools
• websites (which need traffic)
• banners (money invested needs to go somewhere)
• E-mail is the Most Powerful IMC Tool
  (Blitzkreig )
• fast (test, rollout measure in 72hrs)
• higher response rates (5-20) and less
  expensive incredible ROI

Industry trend towards CRM databases, Measured
Marketing, faster marketing cycles , plus tools
that can both brand drive response build
relationships (can be an agency SCA)
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What Cdn Sectors Spend the Most?
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Popularity of Vehicles

• Does not include weekly or flyers

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Mass Advertising Spend is Flat
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What Should the Company Mix Be?
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Budget Method Calculation

• of sales
• Relative to competitor
• Historical
• Forecasted Impact

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Are Companies Spending Enough Online?
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But the Internet is Great to Reach Higher HHI...
Source for media consumption SRI/Knowledge
Networks, Fall 2005 Source for ad spending CMR,
full year 2005. Insurance includes (PC, Life
Health)
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Spending by category
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But Internet Ad Spending is Still Small
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SME (June B_at_B magazine)
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Search is Now Huge Business
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A comparison of push and pullpromotional
strategies
A. Push strategy
B. Pull strategy
Manufacturer
Manufacturer
Flow ofpromotionmainlypersonalsellingdirecte
d tointermediaries
Flow ofdemandstimulation
Flow ofdemandstimulation
Flow ofpromotionmainly advertisingdirected
toconsumers
Wholesaler
Wholesaler
Retailer
Retailer
Consumer
Consumer
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Budget Allocations by Activity
Trade Promotion
Consumer Promotion
Advertising
50 77 25 12
24 11
U.S.
Canada
Source Nielsen Promotional Services
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Defining the Promo industry

• Premium incentives
• Promotional Products
• P-O-P displays
• Sponsorships
• Coupons
• Licensing
• Specialty printing

• Fulfillment
• Agency Net Revenues
• Games, contests, sweeps
• Interactive/Internet
• Research
• Sampling
• In-store services

Plus Event Marketing
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Double by definition

• Estimated 2002 spending without event marketing
• 101.7 billion
• Estimated spending including event marketing
• 233.7 billion

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Advertising 211.7 b 24Consumer
promotion 233.7 b 26.5Trade
promotion 436.6 49.5All Marketing
882.0 b 100
2002 Total U.S. spending on

• Source PROMO and Intellitrends

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Different song from the choir

• What percentage of your 2002 marketing budget
  was allocated to these activities?

Source 2003 Promotion Trends Report (numbers not
equal to 100)
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How did the spending break out?
Top three strategies/tactics by spent

• 2002 2001
• Direct mail 36.0 36.4
• Event marketing 29.7 24.1
• P-O-P displays 23.4 24.1
• Games, contests, sweeps 20.6 15.9
• Ad specialties 19.4 11.8
• Coupons 17.1 13.6
• Premium incentives 17.1 16.8
• Sponsorship 17.1 12.3
• Co-marketing/acct. specific 15.4 28.2

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Another Benchamrk Gives Another Perspective
Source 1999 Outfront Survey of Major B2B
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Annual Direct Marketing Expenditures in the US
in Both Consumer B2B
91 Billion
97 Billion
Source DMA Economic Survey
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IMC Vehicles

• Select appropriate vehicles
• Break thru clutter
• Go stealth where possible
• Track measure

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Blocking Chart

• Sequence
• Integrate
• Execute
• Measure

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B2B Marketers are Shifting Budgets in 2004
Source B_at_B magazine Marketer Survey 2004
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Appendix
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The Creative Messages Relation to Ad Formats

• Exhibit 12-3
• See Page 382

Creative Pyramid
1. 2. 3. 4. 5.
Visual Headline Body copy Slogan Logo/a
ddress

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Parts of an Advertisement

• Headline
• Subheads
• Illustration
• Body Copy
• Logo
• Signature
• Slogan
• Border
• White space

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Types of Adv

• Target Audience
• B2C
• B2B
• trade
• professional
• Purpose
• Product Adv
• Action Adv (or DR Adv)
• Awareness Adv
• Corporate Adv

• Geographic
• local
• regional
• national
• global
• Other
• co-op
• IMC

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Topline Overview of the Analysis Required.
Whats the Problem to be Solved or Opportunity
to be Leveraged?
What do we know have?..
What the Macro External Market View/Insights?

• Analyze the TAP
• location of key customers (, growth)
• vertical industry clusters
• customer purchase cycle
• purchase involvement
• buying requirements (JIT, service)

• Analyze the PCP
• physical product (size, shape weight)
• type of good (specialty, convenience,
• manufacturing locations
• sensitivities or quality issues

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Lab Assignment 1

• Read the Article Back to Basics What Can
  Advertising Accomplish
• www.baycharles.com/artcle03,htm

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Lab Assignment 1

• Find a B2C company who you think is an
  advertising leader
• Describe their target market
• what do they look like?
• How many are there?
• Find an article on Ebsco relating to their
  advertising
• How much do they spend on advertising?

Lets discuss
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Graphic Programs

• Corel Draw Paint
• Photoshop
• Paint Shop Pro
• Quark
• Pagemaker
• Issutrator

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Paris Travel Adv