INSTRUCTOR MANUAL for Advertising and Integrated Brand Promotion, 7th edition. Thomas O'Guinn Chris by digitaldownload87

INSTRUCTOR MANUAL for Advertising and Integrated Brand Promotion, 7th edition. Thomas O'Guinn Chris Allen Rich

PART 1 Advertising and Integrated Brand Promotion in Business and Society The book is divided into 5 parts. At the beginning of each distinct part of the text, it is worth alerting the students to the focus of the chapters within the part. Part 1 sets the tone for the study of advertising. The chapters in this part emphasize that advertising is much more than the oldstyle mass media messages of the past. But advertising is now much more diverse and dynamic and is part of a process called integrated brand promotion (IBP). IBP is the process of using all sorts of different promotional techniques and tools—from television ads to iPad broadcasts—that send messages about brands to consumers. The rapid ascent of digital media— particularly social networking sites like Facebook, MySpace and Twitter, have radically changed the landscape for advertising and IBP. Advertising and IBP communications are not just marketing messages. They are also part of a social communication process that has evolved over time with changes in culture, technology, and business strategies. The “brand” plays a leading role in communications. Consumers know brands because they hear about them and use them every day—Apple, Nike, Pantene, Starbucks, and literally hundreds of others. Consumers also know (and learn) by using them and by seeing them being used in society. This first part of the book lays out the broad landscape of the advertising and IBP processes that expose us to brands and what they have to offer.

CHAPTER 1 The World of Advertising and Integrated Brand Promotion KEY TERMS mobile marketing advertising client, or sponsor

advertising campaign integrated brand promotion (IBP) advertisement

audience target audience household consumers

Chapter 1/The World of Advertising and Integrated Brand Promotion

members of business organizations members of a trade channel professionals trade journals government officials and employees global advertising international advertising national advertising regional advertising local advertising cooperative advertising, or co-op advertising marketing

marketing mix brand brand extension (variant) brand loyalty brand equity market segmentation differentiation positioning external position internal position repositioning economies of scale inelasticity of demand primary demand stimulation selective demand

stimulation direct response advertising delayed response advertising corporate advertising brand advertising institutional advertising gross domestic product (GDP) value symbolic value social meaning integrated marketing communications (IMC)

Summary PPT 1-2 Know what advertising and integrated brand promotion (IBP) are and what they can do. Since advertising has become so pervasive, it would be reasonable to expect that one might have their own working definition for this critical term. But an informed perspective on advertising goes beyond what is obvious and can be seen on a daily basis. Advertising is distinctive and recognizable as a form of communication by its three essential elements: its paid sponsorship, its use of mass media, and its intent to persuade. An advertisement is a specific message that a company has placed to persuade an audience. An advertising campaign is a series of ads and other promotional efforts with a common theme also placed to persuade an audience over a specified period of time. Integrated brand promotion (IBP) is the use of many promotional tools, including advertising, in a coordinated manner to build and maintain brand awareness, identity, and preference. Discuss a basic model of communication. Advertising cannot be effective unless some form of communication takes place between the company and the audience. But advertising is about mass communication. There are many models that might be used to help explain how advertising works or does not work as a communication platform. The model introduced in this chapter features basic considerations such as the message-production process versus the message-reception process, and this model says that consumers create their own meanings when they interpret advertisements.

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Describe the different ways of classifying audiences for advertising and IBP. Although it is possible to provide a simple and clear definition of what advertising is, it is also true that advertising takes many forms and serves different purposes from one application to another. One way to appreciate the complexity and diversity of advertising is to classify it by audience category or by geographic focus. For example, advertising might be directed at households or government officials. Using another perspective, it can be global or local in its focus. Understand advertising as a business process. Many different types of organizations use advertising to achieve their business purposes. For major multinational corporations, such as Procter & Gamble, and for smaller, more localized businesses, such as the San Diego Zoo, advertising is one part of a critical business process known as marketing. Advertising is one element of the marketing mix; the other key elements are the firm’s products, their prices, and the distribution network. Advertising must work in conjunction with these other marketing mix elements if the organization’s marketing objectives are to be achieved. It is important to recognize that of all the roles played by advertising in the marketing process, none is more important than contributing to building brand awareness and brand equity. Similarly, firms have turned to more diverse methods of communication beyond advertising that we have referred to as integrated brand promotion. That is, firms are using communication tools such as public relations, sponsorship, direct marketing, and sales promotion along with advertising to achieve communication goals. Understand the various types of advertising. There are six fundamental types of advertising described in contrasting pairs: a. Primary versus selective demand stimulation. Primary demand stimulation is the attempt to stimulate demand for an entire product category—milk, toothpaste, automobiles, computers. Selective demand stimulation is the attempt to stimulate demand for a brand within a product category—Dairygold Milk, Crest toothpaste, Nissan Altima automobile, Dell computer. While primary demand has been attempted in various industries (the milk industry being the most prominent example), advertising is not powerful enough to stimulate demand for a product category—only broad influences like demographics, cultural values, or technology can stimulate primary demand. Selective demand is what advertising does and can be very effective at doing. It is the type of advertising that firms spend billions of dollars a year on to build brand awareness and preference.

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b. Direct versus delayed response advertising. Direct response advertising asks consumers to act immediately upon receipt of the advertising message—call this toll-free number, click through to order now, and so on. Delayed response advertising develops awareness, preference, and an image for a brand that takes much longer to affect consumer choice. c. Corporate versus brand advertising. Corporate advertising features an entire corporation rather than any brand marketed by that corporation. GM can run corporate advertising to increase recognition of the firm itself. Or, GM can run brand advertising for Chevrolet or Buick or GM trucks.

Chapter Outline I. The New World of Advertising and Integrated Brand Promotion PPT 1-3 Consumer preferences and new technologies are reshaping the communication environment. The lines between information, entertainment networking, and commercial messages are blurring. The mass media are not dead, but they are being supplemented and supported by all sorts of new ways to reach consumers. Analysts speculate that advertising, IBP, and marketing overall will be more digital, more interactive, and more social. Their reasoning is not hard to understand. Firms have not fully exploited all the opportunities presented by mobile marketing. Mobile marketing is communicating with target markets through mobile devices like smartphones or iPad or Surface tablet devices. A. Old Media/New Digital Media—It’s All about the Brand PPT 1-4 No matter how much technology changes or how many new media options and opportunities are available for delivering messages—it’s still all about the brand! The use of Facebook or Twitter does not change the fundamental challenge and opportunity—communicating effectively about the brand and the brand’s values. II. What Are Advertising and Integrated Brand Promotion? PPT 1-5 Despite the importance of advertising and IBP to firms, it is not a process that the average person understands or values. Many people believe advertising deceives others but rarely themselves. Most think it’s a semi-glamorous profession but one in which people are either morally bankrupt con artists or pathological liars. At worst, advertising is seen as hype, unfair capitalistic

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manipulation, banal commercial noise, mind control, postmodern voodoo, or outright deception. At best, the average person sees advertising as amusing, informative, somewhat annoying, sort of helpful, and occasionally hip. The truth about advertising lies somewhere between the extremes. Sometimes advertising is hard-hitting and powerful; at other times, it’s boring and ineffective. Advertising is anything but unimportant. It plays a pivotal role in world commerce and in the way people experience and live their lives. It is part of the language and culture. It is a complex communication process, a dynamic business process, and now a part of the social interaction process. A. Advertising Defined Advertising is a paid, mass-mediated attempt to persuade. Paid means that a client or sponsor is involved. For this reason, public service announcements (PSAs) are not ads technically. Mass mediated means that the advertising is delivered through a communication medium designed to reach more than one person, typically a large number—or mass—of people. Advertising is widely disseminated through familiar means—television, radio, newspapers, and magazines—and other media such as direct mail, billboards, video games, the Internet, tablets, and smartphones. Attempt to persuade means that ads are designed to get someone to do something. B. Integrated Brand Promotion Defined Integrated Brand Promotion (IBP) is the process of using a wide range of promotional tools that work together to create widespread brand exposure. PPT 1-6 and 1-7 The definition of IBP is also loaded with meaning. IBP is a process. It uses a wide range of tools including: • Advertising in mass media • Sales promotions (coupons, premiums, contests, etc.) • Point-of-Purchase (in-store) advertising • Direct marketing (catalogs, infomercials, email) • Personal selling • Internet advertising (display, banner, pop-up/pop-under) • Social networks/Blogs • Podcasting/smartphone messaging • Event sponsorship • Brand entertainment (product placement on TV shows, in movies) • Outdoor signage/billboards

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• Public relations • Influencer marketing • Corporate advertising C. Advertisements, Advertising Campaigns, and Integrated Brand Promotion PPT 1-8 An advertisement refers to a specific message that an organization has created to persuade an audience. An advertising campaign is a series of coordinated advertisements that communicate a reasonably cohesive and integrated theme about a brand. D. A Focus on Advertising Integrated brand promotion is a key concept associated with advertising. It is of great importance to the contemporary marketing effort. III. Advertising as a Communications Process PPT 1-9 Communication is a fundamental aspect of human existence, and advertising is one of these communications. A. A Model of Mass-Mediated Communication PPT 1-10 A contemporary model of mass-mediated communication is presented in Exhibit 1.9. This model shows mass communication as a process where people, institutions, and messages interact. It has two major components: production (by the sender of the message) and reception (by the receiver of the message). Between production and reception are the mediating (interpretation) processes of accommodation and negotiation. The process of production creates the content of a mass communication. An advertisement, like other forms of mass communication, is the product of institutions (such as corporations, organizations, advertising agencies, and governments) interacting to produce content (what is created for a print ad, television ad, radio ad, podcast, or on a computer screen at a company’s website). It is important to recognize that the content that the advertiser puts into a message is not necessarily the same as the meaning an audience takes from a message. Accommodation and negotiation are the ways in which consumers interpret ads. Each individual receives and

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interprets communication according to unique values and experiences IV. The Audiences for Advertising PPT 1-11 An audience is a group of individuals who receive and interpret messages sent from companies or organizations. A target audience is a particular group of consumers singled out by an organization for an advertising or IBP campaign. A. Audience Categories PPT 1-12 Household consumers are the most conspicuous audience in that most mass media advertising is directed at them. Members of business organizations are the focus of advertising for firms that produce business and industrial goods and services, such as office equipment, production machinery, supplies, and software. Members of a trade channel include retailers, wholesalers, and distributors. These members of the trade channel are a target audience for producers of both household and business goods and services. Professionals form a special target audience and are defined as doctors, lawyers, accountants, teachers, electricians, or any other professional group that has special training or certification. Professionals merit special communications. Trade journals, like Electrical Contractor, are magazines published specifically for members of a trade and carry highly technical articles. Government officials and employees constitute an audience in themselves due to the large dollar volume of buying that federal, state, and local governments do. B. Audience Geography PPT 1-13 and 1-14 Global advertising is advertising that is used worldwide with only minor changes in the visual and message content. It is rare for a brand to have universal cultural appeal, but when it does, global advertising can be used. International advertising occurs when firms prepare and place different in different national markets for the same brand outside their home market. National advertising reaches all geographic areas of a single nation.

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Regional advertising is carried out by producers, wholesalers, distributors, and retailers that concentrate their efforts in a relatively large, but not national, geographic region. Local advertising is directed at an audience in a single trading area, either a city or state. A particular form of local advertising is known as cooperative advertising or co-op advertising in which national companies will share advertising expenses with local dealers. VI. Advertising as a Business Process A. The Role of Advertising in the Marketing Mix PPT 1-15, 1-16, and 1-17 Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives. The marketing mix refers to the four primary areas of responsibility and decision making in marketing. The Role of Advertising in Brand Management PPT 1-18, 1-19, and 1-20 A brand is a name, term, sign, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers. Advertising plays a critical role in brand development and management. In many ways, a brand is a firm’s most precious asset. Advertising affects brand development and management in five important ways: Information and persuasion: Advertising informs and persuades target audiences about the values a brand has to offer. Introduction of a new brand or brand extensions (variants): A brand extension (also referred to as a brand variant) is an adaptation of an existing brand to a new product area. Advertising is essential to inform consumers about the extension. Building and maintaining brand loyalty among consumers: Brand loyalty occurs when a consumer repeatedly purchases the same brand to the exclusion of competitor’s brands. Brand equity is a set of brand assets linked to a brand, its name, and symbol. Creating an image and meaning for the brand: Advertising can communicate how a brand fulfills needs and desires and therefore plays an important role in attracting consumers to brands they find useful and satisfying.

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Building and maintaining brand loyalty within the trade: Advertising and integrated promotions can influence brand preferences in wholesalers and retailers. Marketers can provide training, point-of-purchase advertising displays, and traffic-building events as well as discount pricing and premiums. The Role of Advertising in Market Segmentation, Differentiation, and Positioning PPT 1-21, 1-22, and 1-23 Advertising is critical to segmentation, differentiation, and positioning strategies: Market segmentation is the process of breaking down a large, widely varied (heterogeneous) market into submarkets, or segments, that are more similar in terms of consumer characteristics. Differentiation is the process of creating a perceived difference, in the mind of the consumer, between a brand and its competition. Positioning is the process of designing a brand so that it can occupy a distinct and valued place in the target consumer’s mind relative to other brands. There are three positioning strategic decisions to be made. A firm must decide on the external position for a brand— that is, the niche the brand will pursue relative to all the competitive brands on the market. Additionally, an internal position must be achieved with regard to the other, similar brands the firm itself markets. Finally, repositioning occurs when a firm believes that a brand needs to be revived or updated to address changing market or competitive conditions.

The Role of Advertising in Contributing to Revenue and Profit Generation PPT 1-24 Advertising communicates persuasive information to audiences based on the values created in the marketing mix related to the product, its price, or its distribution. Advertising contributes to the process of creating sales and revenue. When an organization creates large-scale demand for its brand, the quantity of product produced is increased, and economies of scale lead to lower unit production costs. Advertising contributes to demand stimulation by communicating to the market about the features and availability of a brand. By contributing to demand stimulation, advertising then contributes to the process of creating these economies of scale, which ultimately translates into higher profits per unit for the organization.

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When consumers are brand loyal, they are generally less sensitive to price increases for the brand. In economic terms, this is known as inelasticity of demand. Advertising contributes directly to brand loyalty, and thus to inelasticity of demand, by persuading and reminding consumers of the satisfactions and values related to a brand and why they want to choose that brand over competitors’ brands.

B. Types of Advertising PPT 1-25, PPT 1-26, 1-27, and 1-28 Primary versus Selective Demand Stimulation In primary demand simulation, a company would be trying to create a demand for an entire product category. The purpose of selective demand stimulation is to point out a brand’s unique benefits compared to competition. The true power of advertising lies here. Direct versus Delayed Response Advertising Direct response advertising asks consumers to act immediately. • Delayed response advertising relies on imagery and message themes that emphasize the benefits and satisfying characteristics of a brand. Corporate versus Brand Advertising Corporate advertising is not designed to promote a specific brand but is meant to create a favorable attitude toward a company as a whole. Brand advertising communicates the specific features, values, and benefits of a particular brand offered for sale by a particular organization. Another form of corporate advertising is carried out by members of a trade channel, mostly retailers. When corporate advertising takes place in a trade channel, it is referred to as institutional advertising. C. The Economic Effects of Advertising PPT 1-29, 1-30, and 1-31 Advertising’s Effect on Gross Domestic Product Gross domestic product (GDP) is the measure of the total value of goods and services produced within an economic system. Advertising is related to GDP in that it can contribute to levels of overall consumer demand when it helps introduce new products,

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such as DVRs, smartphones, or alternative energy sources. Advertising’s Effect on Competition Advertising is alleged to stimulate competition and therefore motivate firms to strive for better products, better production methods, and other competitive advantages that ultimately benefit the economy as a whole. Large advertising expenditures, though, can act as barriers to entry in a market. Advertising’s Effect on Prices There is no consistent and predictable relationship among advertising, spending, and sales—it all depends on the product category, competition, size of market, and complexity of the message. Advertising’s Effect on Value Value refers to a perception by consumers that a brand provides satisfaction beyond the cost incurred to obtain that brand. Symbolic value refers to what a product or service means to consumers in a nonliteral way. Social meaning refers to what a product or service means in a social context. VI. From Advertising to Integrated Marketing Communications to Integrated Brand Promotion PPT 1-32 Advertising is only one of many promotional tools a marketer can use to communicate about a brand. Beginning in about 1990, the concept of mixing various promotional tools was referred to as integrated marketing communications (IMC). IBP involves the use of various promotional tools, including advertising, in a coordinated manner to build and maintain brand awareness, identity, and preference. IBP emphasizes that coordinated messages must have brand-building effects, not just communications effects.

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assessment objects have been enhanced with additional tags that can be aggregated to provide feedback on how individual students have done on a specific learning outcome such as ethics. The online material can be delivered in one of two formats. For instructors who want to provide students with access to the Ad Age on Campus access as well as the online advertisements and student facing self-assessment quizzes, CourseMate will be provided with each new copy of Advertising and Integrated Brand Communication. Alternatively, students can decide to purchase CourseMate on its own which will also come with the MindTap Reader, which is the ebook version of the print product. For faculty that desire to have a variety of more in-depth assignments to integrate into their course and a desire to have more student data that can be used for analytic purposes, MindTap can be purchased with an enhanced capability. Faculty can customize the student experience and integrate the experience for their students into the campus Learning Management System. For a complete guide into the reporting and analytical capabilities available to faculty, consult the Assurance of Learning section of this manual.

Boxed Feature Questions and Tags QUESTION

DIFFICULTY

BUSPROG

DISC

Primary

BLOOM'S

Chapter 1 Social Media 01

Easy

Communication

Promotion

Knowledge

Chapter 1 Social Media 02

Challenging

Communication

Promotion

Application

Chapter 1 Globalization 01

Easy

Communication

Promotion

Comprehension

Chapter 1 Globalization 02

Challenging

Communication

Promotion

Application

Chapter 1 Ethics 01

Moderate

Communication

Promotion

Application

Chapter 1 Ethics 02

Moderate

Communication

Promotion

Application

CHAPTER 1-Social Media Ads usually last 15, 30, or 60 seconds because that is how media is often sold. A twist on this is a new concept of self-destructing ads that disappear—on purpose after just 3 seconds. http://adage.com/article/digital/brands-experiment-photo-messaging-service-snapchat-facebookpoke/238979/ • 1.

1.SocialMedia.Q1

What is an intended consequence for how consumers post on Snapchat--honestly? Their honestly will spark ___________________ A. Information and persuasion

Chapter 1/The World of Advertising and Integrated Brand Promotion

B. Introduction of a new brand C. Introduction of a brand extension D. Brand loyalty Answer: A

•

1.SocialMedia.Q2

A step above communicating how a brand fulfills needs, it should help link a brand’s image and meaning to: A. the competitor’s image B. the consumer’s social environment and culture C. a retail image D. the core competency of the parent company Answer: B

CHAPTER 1-Globalization In Coca-Cola’s “Be Happy” Campaign, a recurring theme is bringing the world together towards happiness—by sharing a Coke. Here is marketing from Coca-Cola hoping to bring two cultures together via a vending machine. http://adage.com/article/agency-news/coke-s-attempt-unite-indians-pakistanis/241561/ •

1.Globalization.Q1

The creative brief would best fit with what type of advertising approach? A. direct response advertising B. delayed response advertising C. primary demand stimulation D. corporate advertising Answer: B

•

1.Globalization.Q2

Chapter 1/The World of Advertising and Integrated Brand Promotion

What is the difference in corporate versus brand advertising, and which is Coca-Cola doing here? Answer: Corporate advertising is not designed to promote the specific drink Coca-Cola; instead, it is meant to show the Coca-Cola Company and their values, mission, and or product line. Brand advertising communicates the specific features, values, and benefits of a particular brand for sale. This is tricky as the parent company has a similar name, but this is brand advertising for their flagship product-Coca-Cola.

CHAPTER 1-Ethics This article tells how in Brazil, the agency NBS set up an office in a slum in Brazil to teach poor people how to be consumers. http://adage.com/article/rance-crain/brazilian-shop-hopes-good-business-slums/241525/ •

1.Ethics.Q1

In what ways is this an ethical practice for the agency? Why is ethics a big part of advertising? Answer: The agency has a goal of educating a group—poor people in slums-that are often

ignored and left alone as consumers—sometimes as people. Thus, this agency is helping a group often left ignored and alone and uneducated. Advertising must consider ethics because advertising is meant to be an ethical, helpful, informational or entertaining form of persuasions with no intent to deceive.

•

1.Ethics.Q2

The city that the agency is doing the social project with shows a product of service in a societal context. What a product of service means in a societal context is termed: A. Symbolic value B. Social meaning C. Societal value

Chapter 1/The World of Advertising and Integrated Brand Promotion

D. Societal positioning Answer: B

Homework Grid Homework Description 1-a. Drag and Drop iPhone: Recreate Mass-mediated communication model 1-b. Matching Apple: Match Apple’s initiatives with appropriate promotion. 2-a Multiple choice Heinz: Brand spelling and digital search 2-b Multiple choice Heinz as a brand ad 3-a Multiple choice The Dove “real beauty” advertisement is part of a campaign 3-b Multiple choice How women rate themselves on attractiveness Homework is available to faculty to select and integrate into their customized course. THE FOLLOWING SECTIONS OF THE INSTRUCTOR’S MANUAL HAS A SELECTION OF CASES THAT CAN BE INCORPORATED INTO YOUR COURSE AS OUT OF CLASS ASSIGNMENTS , OR AS A METHOD FOR INITIATING CLASSROOM DISCUSSION.

End of Chapter Questions 1.

As consumers exercise ever greater individual control over when and how they receive information, how are advertisers adapting their messages? What is the role, if any, for traditional media outlets in this new environment? Will mobile marketing efforts including directing advertising to smartphones, be accepted by consumers? After decades of focusing on traditional media sources such as television, radio, and newspapers to reach consumers, the rapid growth of the Internet and other evolving technologies have forced advertisers to find new ways to reach consumers. Some examples include the use of blogs and social media, podcasting and smartphone messaging, and event sponsorship. The traditional media outlets still play a role, but it is one that is expected to decrease as those industries struggle against circulation and viewership declines. The issue of whether consumers accept advertising to smartphones remains to be seen.

What does it mean when we say that advertising is intended to persuade? How do different ads persuade in different ways? An attempt at persuasion is one of the defining characteristics of all advertising. Advertising is a form of persuasive communication designed with the goal of getting customers to seek out and/or buy a specific brand. In the absence of a persuasive intent, a communication might be

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news, but it would not be advertising. Given this general goal, ads can be persuasive in many different ways. For example, ads are persuasive when they provide relevant information that convinces the consumer of a brand’s unique benefits. Ads are also persuasive when they generate brand interest that leads the consumer to search for more information about a particular product or service. 3.

Explain the differences among regional advertising, local advertising, and cooperative advertising. What would you look for in an ad to identify it as a cooperative ad? Regional advertising refers to a concentrated ad campaign in a relatively large, but not national, geographic region. Local advertising is more focused and directed at an audience in a single trading area, either a city or state. Cooperative advertising involves sharing of advertising expenses between national companies and local merchants to achieve specific advertising objectives. This form of advertising is easily identified by the joint presence of a manufacturer’s brand and a retailer’s store location in the ad.

How do the goals of direct response versus delayed response advertising differ? Direct response advertising always features an immediate call for action from the consumer. Delayed response advertising is designed to shape brand preferences in such a way that at some future time the consumer’s brand choices will be affected. It relies on imagery and message themes that emphasize the benefits and satisfying characteristics of a brand.

Differentiate between global advertising and international advertising Global advertising uses a similar visual and message content in all markets around the world. A brand must have universal cultural appeal to use global advertising. In international advertising, an advertiser prepares and places different advertising in different national market for the same brand outside the home market.

How does advertising effect brand management and development? If building brand loyalty is one goal, can you identify several examples of businesses that have successfully used advertising campaigns to create strong brand equity? Advertising can effect brand development and management across these five critical areas: providing information to and persuading consumers, introducing new brands or brand extensions, building and maintaining consumer brand loyalty, building and maintaining trade brand loyalty, and create a brand’s image and meaning. Businesses are considered to have established strong brand equity when they are able to create and sustain positive brand association in the minds of consumers over time.

Chapter 1/The World of Advertising and Integrated Brand Promotion

How does the process of market segmentation lead an organization to spend its advertising dollars more efficiently and more effectively? Advertising’s role in the market segmentation process is to develop messages that appeal to the needs and desires of different segments and then to transmit those messages via appropriate media. Market segmentation has important implications for advertising efficiencies and effectiveness. Careful selection of a target market will help in choosing media vehicles that are more likely to reach just the target. This promotes advertising efficiencies. In addition, with a specific target in mind, it is much easier to create messages that will engage the message receiver. This contributes substantially to advertising effectiveness.

What is the concept of integrated brand promotion (IBP)? How are IBP and advertising related? And how is IBP distinct from the advertising industry’s prior emphasis on Integrated Marketing Communications, or IMC? IBP is the process of using a wide range of promotional tools that work together to create widespread brand exposure. Coordination is the key to maintain a clear brand image in the minds of consumers. Advertising is a component of the coordinated promotion effort to develop strong brands. IBP tools include various types of advertising but goes well beyond traditional advertising forms.

Experiential Exercises 1.

Box-office sensations like Avatar, Harry Potter and the Deathly Hallows, and Spider-Man 3 don’t happen by accident. To achieve big screen success, movie advertisers develop integrated brand promotion (IBP) campaigns that communicate unified messages to target audiences using diverse media. Select a film now showing in theaters and identify the various ways the movie is being promoted. What types of advertising and promotion are employed in the campaign? Do the different advertisements have a consistent look, feel, and message? Do the different media vehicles target different demographic groups? Suggest one additional media option that marketers might use to reach the film’s target audience. Answers will differ based on students’ movie selections, but the film industry creates memorable IBP campaigns that convey a unified image, meaning, and identity for a new release. For the recent sci-fi epic Avatar, Twentieth Century Fox used the following advertising and promotion: TV ads, the AVTR.com website, movie-themed Coca-Cola Zero cans, a four-minute trailer shown during a Dallas Cowboys football game, exclusive prescreenings offered to print media, product placement in the Fox Network series Bones, action figures by Mattel Toys, a reusable Avatar scrapbook for kids, and a Ubisoft video game for

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Xbox 360 and other game consoles. 2.

After perfecting the pizza delivery model in the 1980s, Domino’s lost touch with its customers to the point that the brand was ridiculed as little more than cardboard and ketchup. To fix the brand, executives commissioned a reinvention of the Domino’s pizza and launched a “Pizza Turnaround” campaign to renew customer loyalties. Using the Internet for research, write a brief report on the Domino’s “Pizza Turnaround.” Describe the campaign’s role in managing the Domino’s brand. What was the message strategy of the campaign? Do you think the ads were effective at restoring the brand’s image? How might company leaders use the tools of advertising and promotion to keep consumers buying the new and improved Domino’s pizza? The Domino’s “Pizza Turnaround” campaign was unique in its admission that the product was bland and in need of replacement. Ads borrowed words from the pizza’s harshest critics to make the point. The campaign also used consumer recommendations to direct the overhaul of the core product and its ingredients. The campaign was largely successful, at least in the short term: Domino’s doubled its revenues in 2010 following the release of the new pizza pie. Answers will vary on how Domino’s could use advertising and promotion to foster brand loyalty for its new pizza; however advertising has the ability to associate brands with hot trends, and promotion can offer incentives that stimulate repeat purchases.

Cellular telephones and wireless computing products are nearly ubiquitous now in American life. In some ways, any one phone or service provider is seen not so much as a brand but as an unmarked commodity. But there are important exceptions. Consider the intense media attention and consumer interest that surrounded the release of Apple’s iPhone and AT&T’s exclusive contract to provide cellular service to the new phone. Providing examples from current campaigns, describe how advertising has affected value related to cellular services or products. Contrast that with the iPhone release. How did advertising and integrated brand promotion influence symbolic value and social meaning related to the new product? Advertising influences the symbolic value that consumers attach to a given brand or product, conveying distinct messages about social-class connections or status. In the case of cellular telephone purchases, one provider might promote the value notion that a consumer is getting a good deal by providing a basic phone at little or no cost in exchange for a year- or two-year service contract. Then what explains the instant popularity of the $500 iPhone? Students should recognize here the lesson that every object takes on meaning from society and popular culture. When consumers perceive greater social value in a brand, they are more likely to pay a premium for that brand or product.

Working in small groups, imagine that you have been hired to create an advertising strategy for the release of a new line of basketball shoes produced by the athletic apparel maker Under

Chapter 1/The World of Advertising and Integrated Brand Promotion

Armour. The Maryland-based business has seen rapid growth in recent years, but it is not considered to be the same kind of globally-recognized brand as Nike or Adidas. Beyond the central advertising campaign for the new shoe line, what tools would your team recommend employing to achieve integrated brand promotion? Explain how you would coordinate those efforts to ensure maximum effectiveness. Students should demonstrate a full understanding of the various tools available for integrated brand promotion, from event sponsorship to direct marketing to billboards and blogs. The team reports also should reflect an understanding of the role advertising plays within IBP and the importance of ensuring that whatever techniques are employed, they work smoothly together to create a consistent and compelling message.

Chapter 2: The Structure of the Advertising and Promotion Industry: Advertisers, Agencies, Media, and Support Organizations

CHAPTER 2 The Structure of the Advertising and Promotion Industry: Advertisers, Agencies, Media, and Support Organizations KEY TERMS social media blog crowdsourcing advertiser client trade reseller advertising agency full-service agency creative boutique digital/interactive agency in-house agency media specialists promotion agency

direct response agency direct marketing agency database agency fulfillment center infomercial consumer sales promotion trade-market sales promotion event-planning agency designer logo public relations firm account services

account planner creative services production services media planning and buying services commission system markup charge fee system pay-for-results external facilitator consultant production facilitator

Summary PPT 2-2 and 2-3 Discuss important trends transforming the advertising and promotion industry. Recent years have proven to be a period of dramatic change for the advertising and promotion industry. The trend affecting advertisers, agencies, and the media the most is that consumers are now in greater control of the information they receive about brands. Collectively, individuals are gravitating toward sharing and creating information through websites, blogs, social media, wikis, and video sites like YouTube. The simplest example is when consumers log onto the Internet and visit sites they choose to visit for either information or shopping. Social media have emerged as the most significant form of consumer control over information creation and communication most recently. Facebook has approximately 1 billion users worldwide, sharing content with each other every week. Twitter has more than 50 million users who post billions of tweets a year. As consumers search for more control over their information flow, advertisers, agencies, and media

Chapter 2/The Structure of the Advertising and Promotion Industry: Advertisers, Agencies, Media, and Support Organizations

organizations are struggling to adapt to consumer desires. Next, the proliferation of media from cable television to satellite radio to the Internet has created new advertising options. Giant media conglomerates are expected to control a majority of these television, radio, and Internet properties. Media proliferation has, in turn, led to increasing media clutter and fragmentation, reducing the effectiveness of advertisements. As a result, advertisers are using more IBP tools like sales promotions, event sponsorships, and public relations to supplement and enhance the primary advertising effort. Crowdsourcing is the next big trend affecting the industry. The idea behind crowdsourcing is to get consumers more involved with and committed to a brand in a way that passive, intrusive advertising simply cannot. Consumers help “build the brand” with recommendations for features, advertising, or events. They can also communicate about the brand to audiences in ways that seem natural and credible—something corporate launched advertising struggles with. Finally, mobile marketing/mobile media may turn out to be the biggest trend that affects the industry. Technology has resulted in significant opportunities for advertisers to reach consumers with messages directed to consumers’ mobile devices— primarily smartphones, tables like the Apple iPad, e-readers like the Amazon Kindle; however, personal navigation devices (PNDs) can also accommodate messages in the wireless world. Describe the advertising and promotion industry’s size, structure, and participants. Many different types of organizations make up the industry. To truly appreciate what advertising is all about, one must understand who does what and in what order in the creation and delivery of an advertising or IBP campaign. The process begins with an organization that has a message it wishes to communicate to a target audience. This is the advertiser. Next, advertising and promotion agencies are typically hired to launch and manage a campaign, but other external facilitators are often brought in to perform specialized functions, such as assisting in the production of promotional materials or managing databases for efficient direct marketing campaigns. New to the industry in recent years are digital/interactive agencies which specialize in mobile marketing and social media campaigns. External facilitators also include consultants with whom advertisers and their agencies may confer regarding advertising and IBP strategy decisions. All advertising and promotional campaigns must use some type of media to reach target markets. Advertisers and their agencies must therefore also work with companies that have media time or space. Discuss the role played by advertising and promotion agencies, the services provided by these agencies, and how the agencies are compensated. Advertising and promotion agencies come in many varieties and offer diverse services to

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Chapter 2: The Structure of the Advertising and Promotion Industry: Advertisers, Agencies, Media, and Support Organizations

clients with respect to planning, preparing, and executing advertising and integrated brand promotion (IBP) campaigns. These services include market research and marketing planning, the actual creation and production of ad materials, the buying of media time or space for placement of the ads, and traffic management to keep production on schedule. Some advertising agencies appeal to clients by offering a full array of services under one roof; others such as creative boutiques, develop a particular expertise and win clients with their specialized skills. Promotion agencies specialize in one or more of the other forms of promotion beyond advertising. New media agencies are proliferating to serve the Internet and other new media needs of advertisers. Compensation schemes in the industry vary. The four most prevalent ways to compensate an agency for services rendered are commissions, markups, fee systems, and the new pay-for-results programs. Identify key external facilitators who assist in planning and executing advertising and integrated brand promotion campaigns. Marketing and advertising research firms assist advertisers and their agencies in understanding the market environment. Consultants of all sorts from marketing strategy through event planning and retail display are another form of an external facilitator. Perhaps the most widely used facilitators are in the area of production of promotional materials. In advertising, a wide range of outside facilitators is used in the production of both broadcast and print advertising. In promotions, designers and planners are called on to assist in the creation and execution of the promotional mix tools. Software firms fill a new role in the structure of the industry. These firms provide expertise in tracking and analyzing consumer usage of new media technology. Discuss the role played by media organizations in executing effective advertising and integrated brand promotion programs campaigns. Media organizations are the essential link in delivering advertising and IBP communications to target audiences. There are traditional media organizations such as television, radio, newspaper, and magazines. Interactive media options include not just the Internet and wireless access to consumers through smartphones and iPads, but also through broadband video streaming. Media conglomerates such as AT&T, Time Warner, and News Corp. control several different aspects of the communications system, from cable broadcast to Internet communications and emerging high-speed broadband communications technologies.

Chapter Outline This chapter contains some key information about the new era for advertising (and its role in integrated brand promotion, or IBP). While the industry has been characterized by rapid change . part.

Chapter 2/The Structure of the Advertising and Promotion Industry: Advertisers, Agencies, Media, and Support Organizations

for the last two decades—primarily driven by technological change as introduced in Chapter 1—the current era of change is highly significant. More than ever before, advertising agencies are being challenged by both advertisers and consumer. Advertisers are demanding more effective communications and measurable results. Consumers now have more alternatives for acquiring information—PDAs, smartphones, the Internet (particularly blogs and social media networks), and TiVo devices—and more control over those alternatives. Throughout this chapter and carrying over into Chapter 3, the issue of control will be highlighted. Advertisers’ response and the even greater importance of the brand are considered. I. The Advertising Industry in Constant Transition There have always been power struggles in the advertising and promotion industry. Now, however, it is about how the advertising industry can successfully adapt to the new technologies that consumers are willing and, in many cases, eager to use as they seek more control over their information environment. The solution seems to be that advertisers will continue in the “digital divide.” That is, dividing their total advertising spending more into digital media—Web advertising, social media, and mobile marketing—and continue to move away from traditional mass media like television, newspapers, magazines, and radio. II. Trends Affecting the Advertising and Promotion Industry The following are trends affecting the advertising and promotion industry. PPT 2-4 and 2-5 A. Consumer Control: From Social Media to Blogs to DVRs Consumers are now in greater control of the information they receive about product categories and the brands within those categories. Social media, blogs, and DVRs devices are three prime examples. Advertisers and their agencies are trying to adapt to the concept that consumers are gaining greater control by making more creative ads which will more likely be watched by the consumers. B. Media Proliferation, Consolidation, and “Multiplatform” Media Organizations At another level of the industry, media proliferation and consolidation are taking place simultaneously. Media companies of all types tend to pursue more and more “properties” if they are allowed to legally, thus creating what are now referred to as “multiplatform” media organizations. The ultimate multiplatform may be Walt Disney Co., which owns the ABC broadcasting network and the ESPN cable network group, plus multiple other cable stations.

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Chapter 2: The Structure of the Advertising and Promotion Industry: Advertisers, Agencies, Media, and Support Organizations

C. Media Clutter and Fragmentation Means More IBP There are more ways for the advertiser to reach the consumer than ever before. However, given the backlash against advertising that clutter can cause, advertisers and their agencies are rethinking the way they try to communicate with consumers. There is a greater focus on integrating more tools within the overall promotional effort in an attempt to reach more consumers in more different ways. J&J moved hundreds of millions of dollars away from traditional media to digital media including the Internet and blogs. D. Crowdsourcing Crowdsourcing involves the online distribution of certain tasks to groups (crowds) of experts, enthusiasts, or even consumers. The idea behind crowdsourcing is to get consumers more involved with and committed to a brand in a way that passive, intrusive advertising simply cannot. Consumers help “build the brand” with recommendations for features or even advertising campaign images. They also can communicate about the brand to audiences in ways that seem natural and credible. Refer to Ford and Starbucks as prime examples. E. Mobile Marketing/Mobile Media Technology has resulted in significant opportunity for advertisers to reach consumers with messages directed to consumers’ mobile devices—primarily smartphones and tablets. The challenge will be to make the messages relevant and acceptable to consumers. III. The Scope and Structure of the Advertising Industry PPT 2-6 Spending is approaching $400 billion annually in the United States with worldwide advertising exceeding $600 billion. Another perspective on the scope of advertising and promotion is the amount spent on advertising by individual firms—the $3.05 billion spent by General Motors on advertising was only about 2.6 percent of GM’s sales. Exhibit 2.5 shows the 20 largest investors in the United States in 2011. A. Structure of the Advertising and Promotion Industry PPT 2-7 The structure of the advertising and promotion industry clarifies who does what, in what order, during the process. Exhibit 2.6 shows the structure of the advertising and promotion industry by showing who the different participants are in the process. It demonstrates that advertisers can employ the services of agencies that may (or may not) contract for specialized services with various external facilitators which results in advertising and

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promotion being directed with the help of various media organizations to one or more target audiences. It is important to note here that advertisers do not always need to employ the services of agencies. Nor do advertisers or agencies always seek the services of external facilitators. Some advertisers deal directly with media organizations and Internet portals for placement of their advertisements or implementation of their promotions. B. Advertisers PPT 2-8 here, 2-9, and 2-10 First in the structure of advertising are the advertisers themselves. Advertisers are business, not-for-profit, and government organizations that use advertising and other promotional techniques to communicate with target markets and to stimulate awareness and demand for their brands. Advertisers are also referred to as clients by their advertising and promotion agency partners. The following categories describe the different types of advertisers and the role advertising plays for them. Manufacturers and Service Firms Large national manufacturers of consumer products and services are the most prominent users of advertising and promotion, spending billions of dollars annually. Procter & Gamble, General Foods, Verizon, and Anheuser-Busch InBev all have national or global markets for their products and services. Students should note here that regional and local producers of household goods and services also rely heavily on advertising. These firms often use ads placed in newspapers and regional editions of magazines. Trade Resellers The term trade reseller is simply a general description for all organizations in the marketing channel of distribution that buy products to resell to customers. As text Exhibit 2.6 shows, resellers can be retailers, wholesalers, or distributors. Retailers that sell in national or global markets are the most visible reseller advertisers and promotion users. Walmart, The Gap, and McDonald’s are examples of national and global retail companies that use various forms of IBP to communicate with customers. Wholesalers and distributors have little need for mass media and use trade publications, directory advertising trade directories, direct mail, personal selling, and their Internet websites as their main advertising media.

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Chapter 2: The Structure of the Advertising and Promotion Industry: Advertisers, Agencies, Media, and Support Organizations

Federal, State, and Local Government Although it may seem odd to students to list the government as an advertiser, government bodies invest millions of dollars in advertising annually. The U.S. government is one of the largest spenders on advertising in the U.S., with expenditures exceeding $1 billion in annually. The most visible government campaigns are U.S. government advertising for the armed forces recruiting and social issues. Social and Not-for-Profit Organizations Advertising by social and not-for-profit organizations at the national, state, and local level is common—Red Cross, the Nature Conservancy, and United Way are examples. This advertising is used to raise awareness of the organizations, seek donations, and attempt to shape behavior. Organizations such as these use both the mass media and direct mail to promote their causes and services. C. The Role of the Advertiser in IBP PPT 2-11 and 2-12 There is an important role played by the advertiser before the services of an agency are enlisted. Advertisers of all sizes and types, have to be prepared for their interaction with an agency in order for the agency to do its job effectively. That is, it is the advertiser’s role to: • Describe the value that the firm’s brand provides to users. • Describe the brand’s position in the market relative to competitive brands. • Describe the firm’s objectives for the brand in the near term and long term (e.g., brand extensions, international market launches). • Identify the target market(s) that are most likely to respond favorable to the brand. • Identify and manage the supply chain/distribution system that will most effectively reach the target markets. • Be committed to using advertising and other promotional tools as part of the organization’s overall marketing strategy to grow the brand. D. Advertising and Promotion Agencies PPT 2-13, 2-14, 2-15, and 16 Advertisers have a full complement of agencies that specialize in various aspects of advertising and promotion. Advertising Agencies

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Advertising agencies provide expertise to help advertisers prepare advertising programs. An advertising agency is an organization of professionals who provide creative and business services to clients related to planning, preparing, and placing advertisements. Exhibit 2.10 shows shows the world’s 10 largest advertising organizations and their worldwide gross income. The top U.S.-based agencies had combined worldwide income of $33.2 billion in 2011. The types of agency professionals who help advertisers in the planning, preparation, and placement of advertising and other promotional activities include the following: Account planners Creative directors Marketing specialists Sales promotion and event planners Account executives Copywriters Media buyers Direct marketing specialists Art directors Radio and television producers Graphic designers Web developers Lead account planners Researchers Chief executive officers (CEOs) Interactive media planners Chief financial officers (CFOs) Artists Chief technology officers (CTOs) Social media experts Chief marketing officers (CMO) Public relations specialists Full-Service Agencies PPT 2-17 and 2-18 A full-service agency includes an array of advertising professionals to meet all the promotional needs of clients. Often, such an agency will also offer a global reach to the client. Creative Boutiques A creative boutique emphasizes creative concept development, copywriting, and artistic services to its clients. An advertiser can employ this alternative for the strict purpose of infusing greater creativity into the message theme or individual advertisement. Creative boutiques are idea factories; however, as firms search for IBP programs and make a commitment to IBP campaigns, the creative boutique may be an extra expense and step that advertisers simply don’t feel they can afford. Digital/Interactive Agencies

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Chapter 2: The Structure of the Advertising and Promotion Industry: Advertisers, Agencies, Media, and Support Organizations

These agencies help advertisers prepare communications for new media such as the Internet, mobile marketing, and interactive television. Digital/interactive agencies focus on ways to use Web-based solutions for direct marketing and target market communications. In-House Agencies An in-house agency is often referred to as the advertising department in a firm and takes responsibility for the planning and preparation of advertising materials. This option has the advantage of greater coordination and control in all phases of the advertising process. Another advantage is that the firm can keep all commissions that an external agency would have earned. Media specialists Media specialists are organizations that specialize in buying media time and space and offer media strategy consulting to advertising agencies and advertisers. The task of strategic coordination of media and promotional efforts has become more complex because of the proliferation of media options and extensive use of promotional tools beyond advertising. Promotion Agencies focus on promotion efforts that full-service advertising agencies do not specialize in. Promotion agencies handle everything from sampling to event promotions. Descriptions of different types of promotional agencies and their services follow. Direct Marketing and Database Agencies (also called direct response agencies) These agencies provide a variety of direct marketing services. Direct marketing agencies and database agencies maintain and manage large databases of mailing lists as one of their services. They design direct marketing campaigns that can use either mail or telemarketing or direct response campaigns using all forms of media. They help advertisers construct and merge databases of target customers. In many cases, these agencies maintain fulfillment centers, which ensure that customers receive the product ordered through direct mail. In addition, many direct marketing agencies can prepare infomercials for clients. Sales Promotion Agencies

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Chapter 2/The Structure of the Advertising and Promotion Industry: Advertisers, Agencies, Media, and Support Organizations

These specialists design and then operate contests, sweepstakes, special displays, or coupon campaigns for advertisers. These agencies specialize in consumer sales promotions or trade sales promotions. Event-Planning Agencies Event-planning agencies and organizers are experts in finding locations, securing dates, and putting together a team of people to manage an event. The event-planning agency will also often take on the task of advertising the event. Design Firms Designers help a firm create the visual impression of a firm's advertising materials and also create logos and other visual representations for the brand. They also design most of the material used in supportive communications such as banners, package design, coupons, in-store displays, and brochures. Public Relations Firms Public relations firms manage an organization’s relationships with the media, the local community, competitors, industry associations, and government organizations. E. Agency Services PPT 2-19, 2-20 and 2-21 Although not every full-service agency offers every service, the services that can be found in full-service agencies are discussed in the following sections. Exhibit 2.12 details the common structure of a full-service advertising agency that also provides a number of IBP services. Account Services Account services entail identifying the benefits a brand offers, its target audience, and the best competitive positioning, and then developing a complete advertising plan. In some cases, an agency can also provide basic marketing and consumer behavior research. Another primary task in account services is to keep the various agency teams—creative, production, and media—on schedule and within budget. Marketing Research Services

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Chapter 2: The Structure of the Advertising and Promotion Industry: Advertisers, Agencies, Media, and Support Organizations

The research services usually entail agency locating studies that have bearing on a client’s advertising and explaining these studies to the client. Account planner positions have been added in many agencies to coordinate the research effort. Creative and Production Services The creative services group prepare the client’s message that will be delivered through advertising, sales promotion, direct marketing, social networks, and mobile marketing. Production services include producers (and sometimes directors) who take creative ideas and turn them advertisements, direct mail pieces, and other IBP materials. Media-Planning and Buying Services Advertising agencies themselves provide media planning and buying services similar to those of the specialized agencies. The central challenge is to determine how a client’s message can most effectively and efficiently reach the target audience. Administrative Services Agencies have personnel departments, accounting and billing departments, and sales staffs that go out and sell the agency to clients. Most important to clients is the traffic department, which has the responsibility of monitoring projects to be sure that deadlines are met. Traffic managers make sure the creative group and media services are coordinated so that deadlines for getting ads into media are met. F. Agency Compensation PPT 2-22 The way agencies get paid is somewhat different from the way other professional organizations are compensated. The four most prevalent agency compensation methods are commissions, markup charges, fee systems, and pay-for-results plans. Commission The commission system is the traditional method of agency compensation and is based on the amount of money the advertiser spends on media. Under this method, 15 percent of the total amount billed by a media organization is retained by the advertising agency as compensation for all costs in creating advertising for the advertiser. The only variation is that the rate typically changes to 16 percent for outdoor media. Exhibit 2.15 provides students with a simple example of how the commission system works. In the last five years, many agencies have challenged this traditional structure and negotiated different

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percentages for commission. Markup Charges Markup charges add a percentage to a variety of services the agency purchases from outside suppliers. In many cases, an agency will turn to outside contractors for art, illustration, photography, printing, research, and production. The agency then, in agreement with the client, adds a markup charge to these services. A typical markup on outside services has been 17.65 percent to 20 percent. Fee System A fee system is much like that used by consultants or attorneys, whereby the advertiser and the agency agree on an hourly rate for different services provided. Pay for Results Many advertisers and agencies alike have been working on compensation programs called pay-for-results or incentive-based compensation that base the agency’s fee on the achievement of agreed-on results. In this type of program, the agency’s fee is based on the achievement of agreed upon results. G. External Facilitators PPT 2-23, 2-24, 2-25, and 2-16 External facilitators are organizations or individuals that provide specialized services to advertisers and agencies. Marketing and Advertising Research Firms Research firms such as Burke and Simmons can perform original research for advertisers using focus groups, surveys, or experiments to assist in understanding the potential market or consumer perceptions of a product or services. Other research firms, such as SRI International, routinely collect data (from grocery store scanners, for example) and have these data available for a fee. There are also firms that specialize in message testing to determine if consumers find advertising messages appealing and understandable Consultants A variety of consultants specialize in areas related to the promotional process. Advertisers

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Chapter 2: The Structure of the Advertising and Promotion Industry: Advertisers, Agencies, Media, and Support Organizations

seek out marketing consultants for assistance in the planning stage regarding market segment behaviors and macro-economic and cultural trends. Creative and communications consultants provide insight on issues related to message strategy and message themes. Media experts help an advertiser determine the proper media mix and efficient media placement. Three new types of consultants have emerged in recent years. One is a database consultant, who works with both advertisers and agencies in developing and managing databases for direct mail campaigns. Production Facilitators External production facilitators offer essential services both during and after the production process. Production is an area where advertisers and their agencies rely most on external facilitators. For broadcast production, directors, production managers, songwriters, camera operators, audio and lighting technicians, and performers are all essential. Production houses can provide the physical facilities, including sets, stages, equipment, and crews, needed for broadcast production. Similarly, in preparing print advertising, graphic artists, photographers, models, directors, and producers may be hired from outside the advertising agency or firm to provide the specialized skills and facilities needed in preparing advertisements. Software firms An interesting and complex new category of facilitator in advertising and promotion is that of software firms These firms offer the kind of expertise that is so esoteric that even the most advanced full-service or digital agency would have to seek their assistance. H. Media Organizations PPT 2-27 and 2-28 Media represent the next level in the industry structure shown in text Exhibit 2.17. The media available for placing advertising, such as broadcast and print media are well known to students simply because they’re exposed to them daily. Exhibit 2.17, however, organizes this information into five specific categories. Broadcast—major television networks like NBC, ABC, as well as national magazines such as Maxim or People, provide advertisers with time and space for their messages at considerable cost. Also included are satellite TV and radio. Print—advertisers can choose between magazines, direct mail, newspapers, specialty such as handbills and programs, and banners.

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Interactive Media—it includes choices ranging from online computer services, homeshopping broadcasts, CD-ROMs to smartphones and e-readers. Support Media—it includes transit companies (bus and taxi boards), billboard organizations, specialized directory companies, and sports and performance arenas for sponsorships, display materials, and premium items. It includes all those places that advertisers want to put their messages other than mainstream traditional or interactive media. Media Conglomerates—note the inclusion in this list of “media conglomerates.” This category is included because organizations like Viacom and Comcast own and operate companies in broadcast, print, and interactive media. I. Target Audiences PPT 2-29 The structure of the advertising and promotion industry and the flow of communication would obviously be incomplete without an audience. The audiences for promotional communications, with the exception of household consumers, are also the advertisers who use advertising and IBP communications. Business and government audiences are key to the success of a large number of firms that sell only to business and government buyers.

ONLINE CONTENT The online dynamic content provides both content and insights into the ethical, global, and social media aspects of Advertising and Integrated Brand Communication. The integrated assessment components will provide students with assurances that they have mastered the assigned readings and provide feedback to faculty that the students have completed the assigned readings and data on student mastery of the content. In addition to the feedback on the correct answers, all of the assessment objects have been enhanced with additional tags that can be aggregated to provide feedback on how individual students have done on a specific learning outcome such as ethics. The online material can be delivered in one of two formats. For instructors who want to provide students with access to the Ad Age on Campus access as well as the online advertisements and student facing self-assessment quizzes, CourseMate will be provided with each new copy of Advertising and Integrated Brand Communication. Alternatively, students can decide to purchase CourseMate on its own which will also come with the MindTap Reader, which is the e-book version of the print product. For faculty that desire to have a variety of more in-depth assignments to integrate into their course and a desire to have more student data that can be used for analytic purposes, MindTap can be purchased with an enhanced capability. Faculty can customize the student experience and integrate the . part.

Chapter 2: The Structure of the Advertising and Promotion Industry: Advertisers, Agencies, Media, and Support Organizations

experience for their students into the campus Learning Management System. For a complete guide into the reporting and analytical capabilities available to faculty, consult the Assurance of Learning section of this manual.

Boxed Feature Questions and Tags QUESTION

DIFFICULTY

BUSPROG

DISC

Primary

BLOOM'S

Chapter 02 Social Media 01

Easy

Technology

Promotion

Application

Chapter 02 Social Media 02

Moderate

Technology

Promotion

Application

Chapter 02 Globalization 01

Moderate

Diversity

Promotion

Application

Chapter 02 Globalization 02

Moderate

Diversity

Promotion

Synthesis

Chapter 02 Ethics 01

Moderate

Ethics

Promotion

Application

Chapter 02 Ethics 02

Challenging

Ethics

Promotion

Application

CHAPTER 2-Social Media Facebook and Amazon (at time of article) do not use the industry self-regulatory Ad Choices program—unlike most other media firms. This is another issue on the hot topic of online consumer privacy. http://adage.com/article/digital/amazon-s-facebook-s-ad-privacy-practices-irk-adagencies/238946/

•

2.SocialMedia.Q1

1. If Facebook or Amazon hire an agency that focuses on helping advertisers prepare communications for new media, this type of agency is called a(n): A. Full-service agency B. Interactive agency C. Online agency D. Virtual agency Answer: B

•

2.SocialMedia.Q2

2. One reason online advertising and online consumer behavior is crucial to advertisers is to help them define: A. . part.

Segment Audiences

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Target Audiences

Market Structure

Online IBP Synergy Answer: B

CHAPTER 2-Globalization http://adage.com/article/global-news/myanmar-ripe-marketing-s-frontier/242106/ After two decades of isolating sanctions, the Southeast Asian of Myanmar (formerly called Burma) is largely untouched by brands—but not for long. Despite the opportunity, there are barriers to entry such as the rural landscape, poverty, and political change. •

2.Globalization.Q1

1. The trend affecting the advertising and promotion industry implied by this article is: A. Media proliferation, consolidation, and multiplatform media organizations B. Media clutter and fragmentation C. Consumer control D. Agency consolidation and globalization Answer: D

•

2.Globalization.Q2

2. Considering market opportunity in Myanmar, what may advertisers first understand? A.

The market participants

The ad agencies in Southeast Asia

Consumer behavior and cultural research in the area

The market structure Answer: C

CHAPTER 2-Ethics . part.

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http://adage.com/article/media/prime-minister-u-k-media-ethics-probe/235263/ U.K. Prime Minister David Cameron testified about media ethics. He made an inquiry during a phone-hacking scandal that was linked to his company. •

2.Ethics.Q1

1. When it comes to taking accountability for ethics, whose final responsibility is it? A. Marketing and advertising research firms B. Consultants C. The advertiser/their agency of record D. External facilitators Answer: C

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2.Ethics.Q2

2. Consider in what ways media/advertising and ethics relate. Give an example of something you consider as unethical (but not illegal) that relates to media or advertising. Answer: Advertising and ethics relate because advertising is a lens to society and it can

have the power to influence, set ideas and standards, and persuade. For example, some say that the agency commission system can lead to agencies upselling media buys for a bigger commission, even if the client may not need such an expensive media buy.

Homework Grid Homework Description 1-a. Multiple Choice Katie Couric: Media Organizations 1-b. Matching Types of advertising agencies 2-a. Multiple choice Hormel: Account Services 3-a. Multiple choice Agency executive description Homework is available to faculty to select and integrate into their customized course. THE FOLLOWING SECTIONS OF THE INSTRUCTOR’S MANUAL HAS A SELECTION OF CASES THAT CAN BE INCORPORATED INTO YOUR COURSE AS OUT OF CLASS ASSIGNMENTS , OR AS A METHOD FOR INITIATING CLASSROOM DISCUSSION.

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END OF CHAPTER QUESTIONS 1.

Briefly describe the major trends affecting the advertising and promotion industry. Which of these do you think is the most important and impactful? Why? The major trends are: • Consumer control • Media proliferation, consolidation, and multiplatform media organizations • Media clutter and fragmentation • Crowdsourcing • Mobile marketing and mobile media Students could argue for any one of these trends as being the most important. While consumer control is the most problematic for marketers, .media clutter is a huge problem too. Crowdsourcing is a big opportunity, but comes with problems of its own. Finally, mobile marketing allows new ways of reaching consumers and will be particularly potent at the point of purchase if consumers do not rebel.

Do you think the increasing independence and control consumers gain through new technologies like TiVo, iPads, and smartphones will make advertising and product branding more or less important? Explain. One might assume that as consumers gain more control over the messages they receive from advertisers, advertising’s role as a means of information and persuasion becomes less relevant. The irony is that the control consumers are starting to exert will make product branding even more important as consumers choose how and where they want to be exposed to persuasive messages. It will be a challenge for advertising agencies to insert themselves and their clients’ brands into this new consumer-controlled environment, but they will find innovative ways to make the connection.

In the structure of the advertising and promotion industry, what role do promotion agencies play? Promotion agencies assist in the development of IBP materials and campaigns other than advertising. Often, full-service advertising agencies concentrate on advertising and offer only a few IBP services. As such, promotion agencies are called in to fill the gap.

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The U.S. government spends millions of dollars each year trying to recruit young men and women into the armed services. What forms of advertising and IBP communications would be best suited to this recruiting effort?

Chapter 2: The Structure of the Advertising and Promotion Industry: Advertisers, Agencies, Media, and Support Organizations

The U.S. government is clearly engaged in a persuasive effort. Mass-mediated advertising combined with direct marketing, event sponsorship, and Web-based promotions would likely have a positive impact on the target audience. 5.

Huge advertisers like Procter & Gamble and General Motors spend billions of dollars on advertising every year. Put these billions of dollars into perspective. Is it really that much money? What information from Chapter 1 is relevant to the perspective on how much advertisers spend? First, even though billions of dollars represents huge spending on an absolute basis, the percentage of sales may be only 2.6 percent. Second, Chapter 1 highlights that advertising fulfills many important roles from persuasion, to brand image development, to market segmentation, differentiation, and positioning. Finally, Chapter 1 also highlights that advertising can contribute to economies of scale and inelasticity of demand which can have a positive effect on profits.

What is the advertiser’s role in IBP? The advertiser must be able to do the following prior to enlisting the services of an agency: (1) fully understand and describe the value that the firm’s brand provides to users; (2) fully understand and describe the brand’s position in the market relative to competitive brands; (3) describe the firm’s objectives for the brand in the near term and long term (e.g., brand extensions, international market launches, etc.); (4) identify the target markets that are most likely to respond to the brand; (5) identify and manage the supply chain/distribution system that will most effectively reach the target markets; (6) be committed to using advertising and other promotional tools as part of the organization’s overall marketing strategy to grow the brand. Advertisers that can do these will be prepared for a productive partnership with an agency.

As advertisers become more enamored of the idea of IBP, why would it make sense for an advertising agency to develop a reputation as a full-service provider? The traditional advertising agency’s expertise involves development of ad campaigns that are then placed in mass-media outlets like television, radio, newspapers, and magazines. The rising popularity of Integrated Brand Promotion (IBP) has seen marketers turn to other promotional vehicles like event sponsorship, sales promotions, direct marketing, and advertising on the Internet in an effort to break through the clutter to reach the targeted customer. Importantly, with the various tools that are being used, speaking to the customer with a “common voice” has become both more complicated and essential. Here

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we have the logic for the full-service agency. Speaking with a common voice should be easier if all the relevant expertise can be found “under one roof.” 8.

Explain the viewpoint that a commission-based compensation system may actually give an ad agency an incentive to do the wrong things for its clients. In a commission-based compensation system, the agency is paid a percentage of the media space or time that it places for a client. This system can have two unwanted effects. First, if compensation is dictated by ad placements in traditional mass media, this may discourage the agency from recommending nontraditional (e.g., event sponsorship or product placements) outlets. Second, working under the commission system, the agency would be taking money out of its own pocket if it ever recommended that the client cut its advertising expenditures. In fact, there will be times when cutting one’s advertising budget is the right thing to do. Agencies working on commission have a hard time seeing any virtue in a budget-cutting recommendation.

What makes the production of promotional materials the area where advertisers and their agencies are most likely to call on external facilitators for expertise and assistance? Advertising agencies are paid to develop creative concepts. Often, bringing these concepts to life in finished advertisements or IBP materials demands highly specialized skills. Lighting technicians, camera operators, songwriters, models, and sound mixers are some of the specialists needed in the production of advertising. With IBP materials, coupon production and distribution, event planning and management, or product placement require specialized expertise. No ad agency or client could afford to maintain all this specialized expertise on staff; so external facilitators will be hired to assist with ad production.

10. Give an example of how the skills of a public relations firm might be employed to reinforce the message that a sponsor is trying to communicate through other forms of promotion. New product introduction is likely to be accompanied by some level of advertising support; new product introductions are also an excellent time to engage a public relations firm. A new product should have some features or attributes that are newsworthy. Here is where the tools of public relations—press releases, feature stories, lobbying, spokespersons and company newsletters—may play a critical role in supporting the advertising campaign. If the news media deem the new product launch newsworthy, there can be a tremendous synergy between the messages carried in advertising and the six o’clock news for breaking through to the target audience.

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Chapter 2: The Structure of the Advertising and Promotion Industry: Advertisers, Agencies, Media, and Support Organizations

Experimental Exercises 1.

In response to the Haitian earthquake that brought devastation to over one million people near Port-au-Prince, large corporations stepped up to provide medicines, shelter, food, and other forms of disaster relief. The primary coordinator of the effort was the Business Civic Leadership Center, a not-for-profit agency that partnered with Office Depot to create a National Disaster Help Desk. The sponsorship helped generate nearly $150 million in aid from Teva Pharmaceuticals, GE, and other well-known businesses. Choose a not-for-profit agency that champions a social cause, and research the ways in which it uses advertising and promotion to accomplish humanitarian goals. How do ads by the nonprofit organization differ from those of profit-oriented businesses? How are they similar? Answers will vary based on students’ selections, but not-for-profit organizations use advertising to generate donations, raise awareness of causes, and shape public behavior. Many non-profits use ads to boost individual donations transacted at cause-related websites. In the case of the Business Civic Leadership Center, partnerships with large corporate donors enabled the non-profit agency to achieve its social responsibility goals while allowing leading corporations to associate their brands with international charity efforts.

After two decades of advertising in Super Bowl matchups, PepsiCo opted out of the Big Game in 2010 and redirected funds into a social networking campaign called “Refresh Everything.” The campaign, which harnessed the power of Facebook and blogs to offer financial grants for customer-led community projects, generated hundreds of thousands of Facebook friends and awarded millions to proposal winners. Devise an advertising campaign that uses interactive social media to attract audiences to a popular brand. Create a relevant crowdsourcing activity for the campaign. What award will your campaign offer to consumer participants? What types of agencies and support organizations will be involved in coordinating the campaign? In what ways might social media help your message break through media clutter? Answers will vary based on students’ ideas. However, social campaigns often assign tasks to groups of consumers, enthusiasts, or experts—a technique known as crowdsourcing. The idea is to get consumers interacting with brands in highly engaging situations. These campaigns often ask consumers to build the brand by making recommendations, and by getting friends to join in. Big rewards attract consumers and retain them for months. Social media campaigns may require input from interactive agencies and creative boutiques. Research has shown that the word-of-mouth buzz generated in social contexts

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results in long lasting impressions. Some advertisers view social media as a cure to media clutter, primarily because of its potential for building virtual communities. 3.

This chapter highlights some of the challenges facing advertisers and agencies as consumers have gained greater control of information sources – blocking telemarketing calls, for instance, and carefully guarding the privacy of cell phone numbers and other contact information. Working in the same groups, brainstorm ways that advertisers still could reach out to consumers and invite them to learn more about your brand or product. As your team develops ideas, also explain how you would address these questions: a. What ethical issues might arise in your approach to consumers? How would you navigate privacy concerns? b. Are there any legal risks or potential challenges? c. Are there any legal risks or potential challenges to your approach? This team exercise will not only provide students with a chance to brainstorm ideas for a realistic campaign, but in so doing, they will become keenly aware of the difficult landscape advertisers face in trying to navigate increased consumer sensitivity to privacy issues. Team answers should address the possibility of future do-not-mail legislation, anti-spam regulations, and efforts to keep marketers from contacting consumers through cell phone text messages.

Identify the four primary compensation methods discussed in this chapter and discuss which system would best be able to hold both clients and agencies to ethical and responsible business practices? What risks exist in each method? Apart from the threat of regulatory inquiries or criminal investigations, discuss why it is important for agency billing systems to be fully transparent and accountable? Students should demonstrate an understanding of the four primary methods of agency compensation—commissions, markup charges, fee systems, pay-for-results—as well as a sensitivity to the ethical issues surrounding billing, compensation and client relationships.

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Chapter 3: The History of Advertising and Brand Promotion

CHAPTER 3 The History of Advertising and Brand Promotion KEY TERMS Industrial Revolution principle of limited liability branding dailies consumer culture Pure Food and Drug Act chain of needs Great Depression

subliminal advertising Action for Children’s Television Federal Trade Commission (FTC) National Advertising Review Board interactive media

consumer-generated content (CGC) e-business branded entertainment

Summary PPT 3-2, and 3-3 Tell the story of advertising’s birth. Although some might contend that the practice of advertising began thousands of years ago, it is more meaningful to connect advertising as we know it today with the emergence of modernity and capitalism. In such systems, business organizations must compete for survival in a free market setting. In this setting, it is natural that a firm would embrace a tool that assists it in persuading potential customers to choose its products over those offered by others. Of course, advertising is such a tool. The explosion in production capacity that marked the Industrial Revolution gave demand-stimulation tools added importance. Mass moves of consumers to cities and modern times helped create, along with advertising, consumer culture. Discuss several significant eras in the evolution of advertising in the United States, and relate important changes in advertising practice to more fundamental changes in society and culture. How did successful advertising leverage the social and cultural forces of their day? Before the Industrial Revolution, advertising’s presence in the United States was barely noticeable. With an explosion in economic growth around the turn of the century, modern advertising was born: The “P. T. Barnum era” and the 1920s established advertising as a major force in the U.S. economic system, but was harsh, unregulated, and often unethical. It was carnivalesque. Advertising’s heyday may have been the 1920s. In this period advertising was stylish, and many of the techniques used today were invented. With the Great Depression

Chapter 3/The History of Advertising and Brand Promotion

and World War II, cynicism toward and distrust of advertising began to grow. This concern led to refinements in practice and more careful regulation of advertising in the 1960s and 1970s. The 1960s saw advertisers truly refine their skills in terms of resolving seemingly contradictory things: advertising could now sell a revolution against un-hip consumption. Consumption was once again in vogue during the designer era of the 1980s. The new communication technologies that emerged in the 1990s gave rise to greater consumer connectivity and access to relevant consumer information. From then until the current period, we have seen advertisers adjust to new media, the greatest economic upheaval since the Great Depression, and the merging of advertising with other entertainment and communication technologies. In all of this change, the constant is that advertisers rely on familiar strategies to react to a changing culture and society. Tell the story of greater consumer access to information. Integrated, interactive, and wireless have become the advertising buzzwords of the early 21st century. These words represent notable developments that are reshaping consumer behavior, marketing, and advertising practice.

Chapter Outline I. The Rise of Advertising PPT 3-4 and 3-5 Advertising is sometimes said to have had its origins in ancient times. Well, that is not really the case, at least not in any meaningful sense. Advertising is a product of modern times and modern media. Advertising came into being as a result of at least four major factors: • The rise of capitalism • The Industrial Revolution • The emergence of modern branding • The rise of modern mass media A. The Rise of Capitalism For advertising to become prominent in a society, the society must rely on aspects of capitalism: organizations compete for resources, called capital, in a free market. Part of the competition for resources involves stimulating demand for organization’s goods or services, and advertising, as a strategic process, can be used to do so. B. The Industrial Revolution

Chapter 3/The History of Advertising and Brand Promotion

The Industrial Revolution was an economic force that yielded the need for advertising. The revolution began about 1750 in England. It spread to the United States and progressed slowly until the early 1800s, when the War of 1812 boosted domestic production. The Industrial Revolution took American society away from household self-sufficiency to marketplace dependency as a way of life. Industrialization was a basic force behind the rapid increase in massproduced goods that required stimulation of demand; something that advertising can be very good at. In addition, the railroad could facilitate large demand by expanding geographic markets. In the 1840s, the principle of limited liability, which restricts an investor’s risk in a business venture to only his or her shares in a corporation rather than all personal assets, gained acceptance and resulted in the accumulation of large amounts of capital to finance the Industrial Revolution. C. The Emergence of Modern Branding Modern capitalism required branding. Manufacturers had to develop brand names so that consumers could focus their attention on a clearly identified item particularly once the railroad starting delivering products long distances from manufacturers’ sites. Manufacturers began branding their products in the late 1800s, Ivory (1882), and Coca-Cola (1886), Budweiser (1891), Maxwell House (1892) were among the first branded consumer products to show up on shopkeepers’ shelves. Branding required advertising. It’s no accident of history that modern branding and modern advertising agencies appeared at exactly the same time in the late 19 th century. D. The Rise of Modern Mass Media With the invention of the telegraph in 1844, a communication revolution was set in motion. Most important to advertising was the rise of mass-circulation magazines. The ads in these magazines began reaching a more diverse audience and national brands were projected into the national consciousness. Also, it is critical to realize that for the most part, mass media in the United States are supported by advertising. Without the rise of mass media, there would be no national brands, and no advertising. II. The Eras of Advertising PPT 3-6 and 3-7 Several periods can be identified that gives various perspectives on the process of advertising. A. The Preindustrialization Era (Pre-1800) Advertising did not flourish before industrialization. It grew in popularity during the 18th century in both Britain and the American colonies although it still existed in a variety of simpler forms—

Chapter 3/The History of Advertising and Brand Promotion

the messages were informational and appeared on the last pages of the tabloid. The Pennsylvania Gazette was the first newspaper to separate ads with blank lines and was the first to use illustrations in advertisements. Advertising was about to change dramatically, however. B. The Era of Industrialization (1800 to 1875) Advertisers in this era tried to cultivate markets for growing production as the population dramatically increased. A middle class, spawned by the economic windfall of regular wages from factory jobs, began to emerge. Newspaper circulation was fostered by the railroads. Advertising was not universally hailed as an honorable practice. Without formal regulation, advertising was considered an embarrassment by many segments of society. This image wasn’t helped by the advertising for patent medicines, the first products heavily advertised on a national scale that promised a cure for nearly everything. C. The “P. T. Barnum Era” (1875 to 1918) PPT 3-8 During the years from about 1875 to 1918, advertising ushered in what is known as consumer culture, or a way of life centered on consumption. This was a time of advertising legends: Albert Lasker, head of Lord and Thomas in Chicago, possibly the most influential agency of its day; Francis W. Ayer, founder of N. W. Ayer; John E. Powers, the most important copywriter of the period; Earnest Elmo Calkins, champion of advertising design; Claude Hopkins, influential in promoting ads as “dramatic salesmanship”; and John E. Kennedy, creator of “reason why” advertising. Until 1906, advertising went completely unregulated. In that year, Congress passed the Pure Food and Drug Act, which required manufacturers to list the active ingredients of their products on the labels. The ads of this period were bold, carnivalesque, garish, and often full of dense copy that hurled fairly incredible claims at prototype modern consumers—thus the “P. T. Barnum” description. D. The 1920s (1918 to 1929) PPT 3-9 and 3-10 An important advertising logic is that good times always come with side effects, and then a product to remedy the side effect. Consumers learned of halitosis from Listerine advertising and about body odor from Lifebuoy advertising. An endless consumption chain was created: Needs lead to products; new needs are created by the unintended side effects of modern times and new products; even newer products solve even newer needs, and on and on. This chain of needs is essential to a capitalist economy, which must continue to expand in order to survive. This makes a necessity of advertising.

Chapter 3/The History of Advertising and Brand Promotion

The 1920s were generally prosperous times. Americans enjoyed a previously unequaled standard of living. It was an age of hedonism, and the pleasure principle was appreciated, openly and often. Ads of the era exhorted consumers to have a good time and instructed them how to do it. Consumption was not only respectable, but also expected. The average citizen had become a “consumer.” Ads from the 1920s emphasized themes of modernity, the division between public workspace, the male domain of the office, and the private, “feminine” space of the home. Science and technology were the new religions of the day, and ads stressed the latest scientific offerings. E. The Depression (1929 to 1941) PPT 3-11 The Great Depression was brutal, broke lives and families. The Great Depression forever changed the way people thought about a great many things: their government, business, money, spending, saving, credit, and, not coincidentally, advertising. Just as sure as advertising was glamorous in the 1920s, it was suspect in the 1930s. It was part of big business, and big business, big greed, and big lust had gotten America into the great economic depression. Advertisers responded to this attitude by adopting a tough, no-frills advertising style. The stylish and aesthetic ads of the 1920s gave way to harsher and more cluttered ads. The themes in advertisements traded on the anxieties of the day: Losing one’s job meant being a bad provider, spouse, or parent, unable to give the family what it needed. Radio emerged as a significant advertising medium. During the 1930s, the number of radio stations rose to 814, and the number of radio sets in use more than quadrupled to 51 million. Advertising, like the rest of the country, suffered during this period. Agencies cut salaries and forced staff to work four-day weeks without being paid for the mandatory day off. F. World War II and the 50s (1942 to 1960) PPT 3-12, 3-13 and 3-14 Many ads during this era made direct reference to the war effort (direct students to the Coke ad in text Exhibit 3.19). In fact, the advertising industry set up an Advertising War Council to show its support for the war effort. Following World War II, the economy continued to improve, and the consumption spree was on again. There was great concern about the rise of communism. The issue of “mind control” became an American paranoia, and many people suspected that advertising was a tool of mind control. Stories began circulating in the 1950s that advertising agencies were doing motivation research and using a psychological sell, which served to fuel an underlying suspicion of advertising. During this period, Americans began to fear they were being seduced by subliminal advertising. The key figure in the subliminal advertising scare—James Vicary—turned out to be a crook and

Chapter 3/The History of Advertising and Brand Promotion

disappeared before his controversial movie theater research could ever be verified. A point to emphasize with students here is that no study has ever been able to replicate his results. Further, while subliminal communication is detectable, there is no evidence that persuasive commercial information can be communicated subliminally. The ‘50s were also about sex, youth culture, rock ‘n’ roll, and the emergence of television to portray those images. Nothing like television had ever existed before within U.S. households— advertisers took advantage of this opportunity. This era saw huge growth in the U.S. economy and household incomes. Technological change was relentless—television, telephone, the automatic washer and dryer led advertisers to portray the “modern life.” 1950’s advertising projected a confused, sometimes harsh sometimes sappy presence—this was not the golden age of advertising. Two of the most significant advertising personalities of the period were Rosser Reeves of the Ted Bates agency, who is best remembered for his ultra-hardsell style, and consultant Ernest Dichter, best remembered for his motivational research, which focused on the subconscious and symbolic elements of consumer desire. G. Peace, Love, and the Creative Revolution (1960 to 1972) PPT 3-15 and 3-16 Advertising during the 1960s was slow to respond to the massive social revolution going on all around it. The nation was struggling with civil rights, the Vietnam War, and the sexual revolution, but advertising was often still portraying women and minorities in subservient roles. Advertising did experience a creative revolution in which the “creatives” (art directors and copywriters) had a bigger say in management. The emphasis in advertising turned from ancillary services to the creative product and from science and research to art, inspiration, and intuition. The look of advertising during this period was clean, minimalist, and sparse, with simple copy and the use of humor. Advertising as an industry became aware of its role in consumer culture—it was an icon of a culture fascinated with consumption. H. The 1970s (1973 to 1980) PPT 3-17 This was the age of polyester, disco, blow, and driving 55. Advertising retreated to the tried-andtrue but hackneyed styles of earlier decades with a return to the hard sell. Advertisers actually started to present women in new roles and to include people of color in ads for a wide variety of products. The process of advertising encountered new challenges. First, there was growing concern over what effect advertising had on children. A group of women in Boston formed Action for Children’s Television (ACT), which lobbied the government to limit the amount and content of advertising directed at children. Second, the Federal Trade Commission (FTC) and

Chapter 3/The History of Advertising and Brand Promotion

the National Advertising Review Board demanded higher standards of honesty and disclosure. Several firms were subject to legislative mandates and fines because their advertising was judged misleading, for example, Warner-Lambert (for advertising that Listerine mouthwash could cure and prevent colds) and Campbell’s Soup (for putting marbles in the bottom of a soup bowl to bolster its look). The most positive aspect of this period was the contribution of technology to the process of advertising. The growth in communications technology was unprecedented. Consumers began to surround themselves with communication devices. The development of the VCR, cable television, and the laser disc player all occurred during the 1970s. Cable programming grew in quality, with viewing options like ESPN, CNN, TBS, and Nickelodeon. I. The Designer Era (1980 to 1992) PPT 3-18 The average American had twice as much real income as his or her parents had at the end of WWII. The country made a right, and conservative politics were the order of the day. Ads from this era were class- and values-conscious and openly promoted consumption, but in an understated and conservative way. Several new, high technology trends were emerging in the industry, which led to more creative, bold, and provocative advertising. Television advertising of this period was influenced by the rapid-cut editing style of MTV: rapid cuts with a very selfconscious character. J. The E-Revolution Begins (1993 to 2000) PPT 3-18 One can argue with the exact date, but somewhere near the mid-1990s is the point where it becomes clear that Internet adverting and other e-brand promotions were not only here to stay, but were going to change the entire advertising landscape. Big advertisers, like P&G and Sprint are warning ad agencies that they must confront a “new media” future that won’t be driven by traditional advertising. Nineties ads were generally more visually oriented and much more self-aware. It was believed interactive media would allow direct measurement of ad exposure and impact and thus makes agencies more accountable for ad performance—the measurement never came about but the accountability did. Another significant change in this era is that the center of the advertising universe moved west from New York to Minnesota, Oregon, Washington and California. K. Consumer Access, Connections, Branded Entertainment, and the Great Recession (2000 to present) PPT 3-19, 3-20, and 3-21

Chapter 3/The History of Advertising and Brand Promotion

Lots of Internet companies that burned cash like kindling never turned a profit and died. Part of the problem was the lack of a good Web advertising revenue model. Phase II of the e-adevolution (Web 2.0) has been much more successful than Phase I in the late 1990s. Consumer control emerges in this era. The issues of consumers “co-creating” ads is raised here and defined as consumer-generated content (CGC). Cultural contradictions, social disruptions, and identity issues emerge which can be leveraged by advertising images and themes. Ebusiness is another form of e-advertising and promotion in which companies selling to business customers (rather than to household consumers) rely on the Internet to send messages and close sales Firms start to invest heavily in new means of connecting with consumers through interactive websites and social media. III. Branded Entertainment PPT 3-22 and 3-23 Branded entertainment is the blending of advertising and integrated brand promotion with entertainment—primarily film, music, and television programming. A subset of branded entertainment is product placement, the significant and prominent placement of brands within films or television programs. Examples are Tom Cruise wearing Ray Bans in the film Top Gun or the cast of Friends drinking Pepsi. IV. The Value of History PPT 3-24 As intriguing as new technologies are, the fundamental purpose of advertising has not changed. Advertising is still a paid attempt to persuade. Advertising still contributes to revenue generation and profits and still nurtures brand success. Big firms still spend billions of dollars on traditional media. Technology has changed the way people shop and the way they seek out and control information flow.

Chapter 3/The History of Advertising and Brand Promotion

Boxed Feature Questions and Tags QUESTION

DIFFICULTY

BUSPROG Primary

DISC Primary

BLOOM'S

Chapter 03 Social Media 01

Moderate

Technology

Promotion

Application

Chapter 03 Social Media 02

Moderate

Technology

Promotion

Application

Chapter 03 Globalization 01

Challenging

Diversity

Promotion

Application

Chapter 03 Globalization 02

Challenging

Diversity

Promotion

Evaluation

Chapter 03 Ethics 01

Moderate

Ethics

Promotion

Synthesis

Chapter 03 Ethics 02

Challenging

Ethics

Promotion

Synthesis

CHAPTER 3-Social Media http://adage.com/article/media/digital-cracks-50-ad-revenue-wired-magazine/238986/ Wired magazine is a magazine that for the first time collected more than half of all of their ad revenue from digital advertising. This represents a major digital shift for a magazine. •

3.SocialMedia.Q1

1. The evolution of advertising, as evidenced by the shift in Wired magazine’s advertising, has brought us to which stage? A. Advertiser empowerment and branded entertainment B. Media conglomerates and consumer generated content C. The E-Revolution D. Consumer empowerment and branded entertainment

Chapter 3/The History of Advertising and Brand Promotion

Answer: D

•

3.SocialMedia.Q2

2. Relevant to the magazine, they work with __________________, or those who specialize in buying time and space and offer strategy consulting to agencies and advertisers. A.

In-house agencies

Media specialists

Creative boutiques

Lead account planners

Answer: B

CHAPTER 3-Globalization http://adage.com/article/global-news/meet-line-japan-s-biggest-social-networkheard/242079/

The Japanese app “Line” provides free IM and calling via smartphones, tablets and desktops. Line, is at press time the world’s fastest-growing social network—getting 50 million followers in under 400 days. Line was launched after the Tohoku earthquake; the name refers to lines that formed outside of public phones after the devastating earthquake.

•

3.Globalization.Q1

1. In what ways is this social network “Line” reflective of a more fundamental change in society and culture? Answer: A main change in society and culture is a prosocial movement via branded

communication. Because the app is free and provides consumers with a free way to IM and call loved ones (especially after an emergency), the trend towards using social media for good is seen here.

Chapter 3/The History of Advertising and Brand Promotion

•

3.Globalization.Q2

2. Line is most popular in Japan. Do you think this social media app could be successful in your country? If so why/why not? Would you personally use the app? Answer: Yes, this is a great idea for an app because it helps people—for free—to communicate especially in times of emergency. I think this app would be successful in the U.S. because consumers want a trusted way to communicate with their loved ones. During emergencies, sometimes cell service is unavailable, so having an app to IM or call from could solve that problem.

CHAPTER 3-Ethics One of the big lessons in business ethics is to take accountability from the top and not to place blame on those below you (because top managers hired them or chose to partner with them). Here is a story that shows how tacky blaming subordinates can be. http://adage.com/article/media/ethics-inquiry-james-murdoch-blamessubordinates/234334/ •

3.Ethics.Q1

1. Ethics is close to the law. According to the text, __________________ restricts an investor’s risk in a business venture to only his or her shares in a corporation rather than all personal assets. A. The principle of limited liability B. Risk assessment C. Subordinate risk shuffling D. Ethics-based business Answer: A

•

3. Ethics.Q2

Chapter 3/The History of Advertising and Brand Promotion

2. If you were James Murdoch (the businessman featured in the article), what would you have done differently and why? Answer: If I were James Murdoch, I would have first acknowledged my role and my company’s role in any scandal. Then I would take accountability for my subordinates, because ultimately it was my or my company’s choice and decision to work with those people or agents. I would also apologize and do something pro-social with the company, such as a donation, as a sincere gesture.

Homework Grid Homework Description 1-a. Multiple Choice Checkboxes Kool-Aid: Mid-20th Century Advertising 1-b. Multiple Choice Subliminal messages 2-a. Multiple choice Flintstones: Gender roles 2-b. Multiple choice Flintstone: Gender roles 2-c. True/False Advertising: Smoking 3-a. Multiple choice Budweiser Ad 3-b. Matching Budweiser Initiatives Homework is available to faculty to select and integrate into their customized course. THE FOLLOWING SECTIONS OF THE INSTRUCTOR’S MANUAL HAS A SELECTION OF CASES THAT CAN BE INCORPORATED INTO YOUR COURSE AS OUT OF CLASS ASSIGNMENTS , OR AS A METHOD FOR INITIATING CLASSROOM DISCUSSION.

End of Chapter Questions 1.

Why does advertising that resolves cultural contradictions work? Advertising that resolves cultural contradictions works because brands that emphasize contradiction in imagery and messaging become relevant and meaningful to people who live those contradictions. Brands can also offer themselves as solutions to contradiction and conflict.

Explain why there is a strong relationship between increasing urbanization and per capita spending. Population growth typically involves dramatic growth in a country’s cities. As population densities rise in urban areas, the effectiveness of advertising will rise because many different

Chapter 3/The History of Advertising and Brand Promotion

media can easily reach audiences in well-defined population centers. Conversely, when a country’s population is not massed in cities but scattered across rural areas instead, it will be next to impossible to find media that can efficiently reach the audience. 4.

Describe the various factors that produced an explosion of advertising activity in the P. T. Barnum era. The dramatic increase in advertising during the P. T. Barnum era was a result of several factors. Rapid population growth and the simultaneous growth of urban areas set the stage for advertising to be more effective. At the same time, the rapid industrialization of the United States was making more products available for sale and providing more workers with discretionary income. These conditions fostered many advertising “success stories,” which naturally convinced more manufacturers to employ this powerful demand stimulation tool.

The 1950s were marked by great suspicion about advertisers and their potential persuasive powers. Do you see any lingering effects of this era of paranoia in attitudes about advertising today? Consumers remain apprehensive about the motives of advertisers, and concerns about manipulative tactics like subliminal advertising never seem to fade. This is obviously not a question with right or wrong answers, and it is a good question for exploring the class’s concerns about whether advertisers have the power to manipulate consumers. Discussing a question like this one can also give an instructor the opportunity to share personal views of the topic. An issue that may arise in the context and is addressed specifically in Chapter 4 is the threat to consumer privacy from spam and transgressions at social media networking sites.

The “creative revolution” that handed more authority to agency art directors and copywriters in the 1960s led to key shifts in the appearance and message of mainstream advertising. Describe these changes and how they continue to influence advertising today. As the creative forces within major advertising agencies gained greater authority during the 1960s, the advertising process shifted from science and research to art, inspiration, and intuition. Initially, this shift was marked by the appearance of clean, minimalist ad pages with simple copy and subtle humor. By the end of the decade, advertising had become increasingly selfaware and willing to poke fun at its very existence. Such self-referential themes continue to be a hallmark of advertising today, along with the predominant emphasis on youth culture in advertising that first took hold during the 1960s. Or, as adman Merle Steir, quoted in the chapter, wrote back in 1967: “Youth has won. Youth must always win.”

Chapter 3/The History of Advertising and Brand Promotion

There were many important developments in the 1970s that set the stage for advertising in the designer era. Which of these developments are likely to have the most enduring effects on advertising practice in the future? Many important developments that can be traced to the 1970s will have continuing implications for advertising practice. These include the beginning of the second wave of the feminist movement, the formation of the advocacy group known as ACT (Action for Children’s Television), and the legacy of the Federal Trade Commission’s aggressive policymaking in that period. From a technological standpoint, the birth of the VCR and the proliferation of cable television were major developments with long-term implications for advertisers. Finally, the decade of the 1970s marked the beginning of “merger mania.”

Why is branded entertainment important to the future of advertising and brand promotion? Branded entertainment allows advertising and the brands advertised to become more naturally a part of consumer lifestyles and daily existence. The process also features the brand as a “star” in a highly involving consumer context. In addition, the branded entertainment process is not subject to nearly as many regulations and traditional media placement of ads.

Review the technological developments that have had the greatest impact on the advertising business. What new technologies are emerging that promise more profound changes for advertisers in the next decade? Many technological developments have had a major impact on advertising practice, but to date none has been more profound than the evolution of television in the United States and around the world. As the early years of the 21st century progress, however, we are witnessing another technological marvel that may one day rival television in how it altered advertising practice. This marvel is the Internet and its user-friendly companion, the World Wide Web. Some analysts have compared the birth of television in the 1950s with the emergence of the World Wide Web today. The Internet is spawning a host of new options from e-business to paid search and Wi-Fi, while participating in broader trends like branded entertainment. In a backlash against the ubiquitousness of advertising, many consumers are turning to TiVo, a digital video recording system that enables users to block out all commercials. In addition, the technology associated with smartphones may be the dawn of another new era in behavioral tracking and mobile marketing.

10. What creative trends in ads have emerged in the period from 2001 to the present? As for the creative trends in ads, ads of the '00s have become even more self-aware and selfreferential. They are ads that are very aware of being ads. Everyone is in on it. However,

Chapter 3/The History of Advertising and Brand Promotion

straightforward traditional ads are still a big part of the mix and probably always will be. Arty and comedic attempts to communicate a brand's value can be successful, yet being too cute can lead to roundabout, indirect messages that confuse the consumer and overshadow the product.

Experiential Exercises 1.

What will be the next era in advertising? Some experts predict that smartphones will soon be more important to advertisers than the Internet was during the e-revolution. Identify today’s most popular smartphone apps and suggest how advertisers might use them to advertise products and services to target audiences. Apps are revolutionary because they enable advertisers to reach consumers wherever they roam. A well-designed app can put information about products and services at the fingertips of millions of smartphone users. Apps can even stimulate on-the-go purchases from mobile customers. To be effective, an app should offer real value or solve a problem for customers. For example, restaurants might design apps that alert customers about wait times; retailers might use apps to send sales alerts on select merchandise; and spas could offer apps for scheduling visits. One iPhone marketing app, iWaffles, helps breakfast lovers find the nearest waffle house, listing 5,000 locations nationwide.

Branded entertainment has widespread acceptance in television and film, and now theme parks are getting in on the action. The Harry Potter book series may have reached its end, but Universal Orlando Resort is keeping the magic alive with the Wizarding World of Harry Potter, an enchanting amusement park exhibit where visitors become completely immersed in J.K. Rowling’s fantasy world—complete with majestic replica of Hogwarts. Write a report on the 20-acre park and explain how Universal Studios, J.K. Rowling, and Warner Bros. use this branded entertainment to keep the Potter marketing franchise going. Branded entertainment is any mix of advertising and entertainment that transforms a brand into a feature attraction. The Wizarding World of Harry Potter, an Orlando theme park that opened in 2010, offers visitors unprecedented immersion into the fantasy world of Harry Potter. The 20-acre park features rides, attractions, restaurants, and shops—all focused on the sale of Potter merchandise. Executives at Universal worked closely with author J.K Rowling to recreate Hogwarts Castle, Dumbledore’s dusty office, and even the warlock sport known as Quidditch. The park’s opening stirred up feverish buzz among Harry Potter fans worldwide. Rowling will receive millions of dollars in annual licensing payments, and Universal Studios and Warner Bros. will have a year-round theme park driving the sale of book and film merchandise.

Chapter 3/The History of Advertising and Brand Promotion

The practice of advertising has steadily evolved over the past century, adapting to the culture’s social and economic changes. Following the directions below, analyze distinctions between some of the key eras in advertising inside the United States using the online database www.adflip.com, which features advertisements from the 1940s to the present. a. Browse Adflip’s extensive database, select two ads from different decades of advertising history. Briefly describe the ads and explain how they fit the general characteristics of other advertising during that era as defined in the chapter. b. Select an ad from the Adflip site that does not seem to reflect its era’s general characteristics. How does it differ from ads typical of this period? Do you think the difference is intentional? Explain. Utilizing the extensive online collections at adflip.com, students should demonstrate an understanding of the distinct approaches, themes, and appearance used by advertisers over the past seven decades, as discussed in the chapter. Student answers will vary depending on the individual decades and advertisements they are analyzing, but students should recognize how unique social, economic, and political factors during the time period they are examining helped shape the advertising message. The online database also can be useful for instructors seeking additional examples for class discussions about trends in advertising over the past century.

As early as the 1920s, advertisers recognized that women had authority over as much as 80 percent of household purchases. From that point forward, women have been primary targets for the ad world–even in product categories that might traditionally be viewed as male oriented. To evaluate how that remains true today, locate a prominent advertisement for a product or service in each of these three categories: home improvement, automotive, and financial. For each ad, identify how the brand is appealing to women and why. Do you believe the campaign is likely to be successful in attracting female consumers? Why or why not? With women consumers controlling the vast majority of consumer spending, nearly every retailer, manufacturer, and service provider have adapted advertising campaigns to woo this vital market segment. As the chapter illustrates, it is a lesson advertisers first took to heart early in the 20th Century, playing on women’s concerns about everything from personal hygiene to home efficiency to the state of their marriages. Today, students should find advertising that taps into current social and economic trends, such as time demands as women juggle work and family obligations, increased personal financial freedom, and greater authority over major household expenditures, such as cars, vacations, and retirement planning.

Chapter 4/Social, Ethical, and Regulatory Aspects of Advertising

CHAPTER 4 Social, Ethical, and Regulatory Aspects of Advertising and Promotion Key Terms ethics deception puffery primary demand unfair advertising vertical cooperative advertising comparison advertisements monopoly power advertising substantiation

program consent order cease-and-desist order affirmative disclosure corrective advertising celebrity endorsements, testimonials, and bloggers self-regulation National Advertising Review Board (NARB)

consumerism behavioral targeting spam phishing premiums appropriation defamation slander libel

Summary PPT 4-2 and 4-3 Identify the benefits and problems of advertising and promotion in a capitalistic society and debate a variety of issues concerning their effects on society’s well-being. Advertisers have always been followed by proponents and critics. Proponents of advertising argue that it offers benefits for individual consumers and society at large. At the societal level, proponents claim that advertising helps promote a higher standard of living by allowing marketers to reap the rewards of product improvements and innovation. Advertising also “pays for” mass media in many countries and provides consumers with a constant flow of information, not only about products and services but also about political and social issues. Over the years, critics have leveled many charges at advertising and advertising practitioners. Advertising expenditures in the multibillions are condemned as wasteful, offensive, and a source of frustration for many in society who see the lavish lifestyle portrayed in advertising, knowing they will never be able to afford such a lifestyle. Critics also contend that advertisements rarely furnish useful information but instead perpetuate superficial stereotypes of many cultural subgroups. For many years, some critics have been concerned that advertisers are controlling us against our will with subliminal advertising messages.

Chapter 4/Social, Ethical, and Regulatory Aspects of Advertising

Explain how ethical considerations affect the development of advertising and IBP campaigns. Ethical considerations are a concern when creating advertising, especially when advertising will be targeted to children or will involve controversial products such as firearms, gambling, alcohol, or cigarettes. Although ethical standards are a matter for personal reflection, it certainly is the case that unethical people can create unethical advertising. However, there are also many safeguards against such behavior, including the corporate and personal integrity of advertisers. Discuss the role of government agencies and consumers in the regulation of advertising and promotion. Governments typically are involved in the regulation of advertising. It is important to recognize that advertising regulations can vary dramatically from one country to the next. In the United States, the Federal Trade Commission (FTC) has been especially active in trying to deter deception and unfairness in advertising. The FTC was established in 1914, and since then, a variety of legislations have been passed to clarify its powers. The FTC has also developed regulatory remedies that have expanded its involvement in advertising regulation such as the advertising substantiation program. Point out to students that while the FTC is highlighted in this summary, the chapter features a large number of government organizations that can regulate advertising practices. Explain the meaning and importance of self-regulation for firms that develop and use advertising and promotion. Some of the most important controls on advertising are voluntary; that is, they are a matter of self-regulation by advertising and marketing professionals. For example, the American Association of Advertising Agencies has issued guidelines for promoting fairness and accuracy when using comparative advertisements. Many other organizations, such as the Better Business Bureau, the National Association of Broadcasters, and the Direct Marketing Association, participate in the process to help ensure fairness and assess consumer complaints about advertising and promotion. Discuss the regulation of the full range of techniques used in the IBP process. The regulation of other tools in the IBP process focuses on direct marketing, e-commerce, sales promotions, and public relations. In direct marketing and e-commerce, the primary concern has to do with consumer privacy. New legislation, like the Do Not Call Registry and the CAN SPAM Act, is restricting the ways in which companies can contact consumers with a

Chapter 4/Social, Ethical, and Regulatory Aspects of Advertising

sales offer. The legislation is a reaction to new technologies that have enabled firms to match consumers’ online behavior with off-line personal information. Another aspect of e-commerce has to do with contests and sweepstakes, and the potential for such games to be gambling opportunities in reality. In sales promotions, premium offers, trade allowances, and off-line contests and sweepstakes are subject to regulation. Firms are required to state the fair value of “free” premiums, trade allowances must follow the guidelines of fair competition, and contests and sweepstakes must follow strict rules specified by the FTC. The regulation of public relations efforts has to do with privacy, copyright infringement, and defamation. Firms must be aware of the strict legal parameters of these factors.

Chapter Outline Introductory Scenario: Who Do You Trust? Students should relate to this scenario immediately since it is likely that virtually every one of them has a Facebook account. One can relate to them that 80 percent of Facebook users log on everyday—so they are likely daily users as well. What is surprising, though, is that many students are not familiar with Twitter, even though Twitter claims to have 98 million users and over 1 billion tweets a day. The meaningful issues in this scenario for discussion: • Facebook is popular with consumers because they can “share” personal information with friends and stay connected. • But Facebook launched “Beacon,” which would have automatically shared users’ Web behavior and Web purchases with their entire friends’ network. • Twitter is a simple “IM” system, except that it is tied to many celebrity and corporate entities. There is a lot of “voyeurism” on Twitter as consumers follow celebrities. • How do students feel when they learn that their beloved celebrities are being paid $5,000, $10,000, or even more for every tweet posted? This scenario should get students thinking in the right direction. It is likely they came in thinking that big, bad corporations like BP were unethical. They can see that some of the social network sites they may have very positive affinity for, should also be subject to some social and ethical scrutiny. Important teaching note: A lot of the issues raised in this chapter will generate an emotional reaction, but it is imperative to move students away from the emotional, intuitive reactions to more analytical, fact-based assessments. Many of the criticisms of advertising are legitimate and require careful consideration. A large number of the criticisms of advertising are naïve and simply emotional and do not stand up under analytical, objective scrutiny. Challenge your students to be analytical and objective.

Chapter 4/Social, Ethical, and Regulatory Aspects of Advertising

I. The Social Aspects of Advertising PPT 4-4 and 4-5 The social aspects of advertising are organized issue by issue. We have chosen to raise an issue and then take a pros-and-cons approach to offer students a balanced treatment. If a person finds advertising intrusive and manipulative, the social aspects usually provide fuel for the fires of skepticism. One thing is sure: The social impact of advertising invites vigorous debate about what is positive and negative in the advertising process. A. Advertising Educates Consumers Does advertising provide valuable information to consumers, or does it seek only to confuse or entice them? Here’s what the experts on both sides have to say. Pro: Advertising Informs Supporters of advertising argue that advertising educates consumers, equipping them with the information they need to make informed purchase decisions. By regularly assessing information and advertising claims, consumers become more educated about the features, benefits, functions, and values of products. Educated consumers enhance their lifestyles and economic power through astute marketplace decision making. A related argument is that advertising reduces search time for desired products and services, saving consumers both time and money. Another aspect of informing the public has to do with the role advertising can play in communicating about important social issues. Example: Miller Brewing devotes millions of dollars a year to promoting responsible drinking with both print and television advertisements. Con: Advertising Is Superficial and Intrusive Critics argue that advertising does not provide good product information and that it is so pervasive and intrusive to daily life that it is impossible to escape. The information it does provide is shallow and meaningless. All information in an ad is biased, limited, and inherently deceptive. Critics claim that ads should contain functional feature information and performance results—things that can be measured and tested brand by brand. Advertisers argue in response that in many instances, consumers are interested in more than a physical, tangible material good with performance features and purely functional value and, instead, rely on emotional or hedonic criteria in decision making. Exhibits 4.3

Chapter 4/Social, Ethical, and Regulatory Aspects of Advertising

and 4.4 really highlight this issue—both are good ads and do communicate information— one functional, one emotional. With respect to the intrusive aspect of advertising, the argument is that advertising has become so widespread (in some critics’ view, ubiquitous) that consumers are starting to revolt. In a Planetfeedback.com survey where respondents expressed their annoyance with pop-up ads, the study found that more than 95 percent of consumers considered themselves “angry” or “furious” over email spam and website pop-up ads. Clutter and intrusiveness reduce the effectiveness of advertising. According to one expert, “The ability of the average consumer to even remember advertising 24 hours later is at the lowest level in the history of our business.” B. Advertising Improves the Standard of Living Whether advertising raises or lowers the general standard of living is hotly debated. Opinions vary widely on this issue and go right to the heart of whether advertising is a good use or a waste of energy and resources. Pro: The Economic Effects ofAdvertising Lower the Cost of Products Four aspects of the nature of advertising, supporters argue, help lower the cost of products: • Due to the economies of scale produced by advertising, consumers may pay less. • Greater variety of choice in products and services stems from the increased probability of success firms realize from being able to introduce new products with the assistance of advertising. • The pressures of competition and the desire to have products that are easy to advertise stimulate firms to produce improved products and brands and introduce lower-priced brands. • The speed and reach of advertising aids in the diffusion of innovations. This means that new discoveries can be communicated to a large percentage of the marketplace very quickly. All four of these factors can contribute positively to the standard of living and quality of life in a society. Advertising may be instrumental in bringing about these effects because it serves an important role in demand stimulation and keeping customers informed. Con: Advertising Wastes Resources and Raises the Standard of Living Only for Some Advertising represents an inefficient, wasteful process that “shuffles existing total

Chapter 4/Social, Ethical, and Regulatory Aspects of Advertising

demand,” rather than expanding total demand. Advertising thus brings about economic stagnation and a lower standard of living. Similarly, brand differences are trivial and the proliferation of brands does not offer a greater variety of choice but rather a meaningless waste of resources. In addition, some argue that advertising is a tool of capitalism that widens the gap between the rich and the poor. C. Advertising Affects Happiness and General Well-Being PPT 4-6 Critics and supporters of advertising differ significantly in their views about how advertising affects consumers’ happiness and general well-being. Con: Advertising Creates Needs A common cry among critics is that advertising creates needs and makes people buy things they don’t really need or even want. The argument is that consumers are relatively easy to seduce into wanting the next shiny bauble offered by marketers. Pro: Advertising Addresses a Wide Variety of Basic Human Needs PPT 4-7 and 4-8 Advertising is not powerful enough to create human needs—refer to Maslow’s hierarchy discussion in the text. Rather, once human needs emerge, advertising (in the context of modern, mass consumption) can offer alternatives to addressing human need states. In the pursuit of esteem, many consumers buy products they perceive to have status and prestige: expensive jewelry, clothing, automobiles, and homes. Con: Advertising Promotes Materialism It is also claimed that individuals’ wants and aspirations may be distorted by advertising. Material goods are placed ahead of spiritual and intellectual pursuits. Advertising, which portrays products as symbols of status, success, and happiness, contributes to the materialism and superficiality in a society. It creates wants and aspirations that are artificial and self-centered. This results in an overemphasis on the production of private goods to the detriment of public goods (such as highways, parks, schools, and infrastructure). Pro: Advertising Only Reflects Society’s Priorities Defenders of advertising argue that it did not create the American emphasis on materialism: Major holidays like Christmas (gifts), Thanksgiving (food), and Easter (candy

Chapter 4/Social, Ethical, and Regulatory Aspects of Advertising

and clothing) have become festivals of consumption. Authors point out that goods and possessions have been used in cultures for centuries to mark special events, play significant roles in rituals, and serve as vessels of special meaning long before there was modern advertising. D. Advertising: Demeaning and Deceitful, or Liberating and Artful? PPT 4-9 Advertisers are always on the lookout for creative and novel ways to grab and hold the attention of their audience. In addition, an advertiser has a very specific profile of the target customer in mind when an ad is being created. Con: Advertising Perpetuates Stereotypes The process of targeting audiences yields a negative effect by perpetuating stereotypes. The portrayal of women, the elderly, and ethnic minorities in stereotypical roles is of particular concern. Women are still predominantly cast as homemakers or objects of desire. The elderly are often shown as helpless or ill, even though many active seniors enjoy a rich lifestyle. Pro: Advertisers Are Showing Much More Sensitivity Advertisers are realizing that a diverse world requires diversity in message images, perhaps signaling the end of stereotyping in advertising. However, many remain dissatisfied with the pace of change. Con: Advertising Is Often Offensive A pervasive and long-standing criticism of advertising is that it is often offensive and the appeals are in poor taste. Taste is just that, a personal and inherently subjective evaluation. What is offensive to one person is merely satiric to another. Many times, advertisers get caught in a firestorm of controversy because certain, and sometimes relatively small, segmentsThe text lays out several examples of honest, worthy organizations that have inadvertently offended consumers with their ads. Perhaps, consumers—overloaded with commercial stimuli—are losing their tolerance. Pro: Advertising Is a Source of Fulfillment and Liberation There are those who argue that the consumption that advertising glorifies is actually quite good for members of society. Modern conveniences are appreciated that liberate people

Chapter 4/Social, Ethical, and Regulatory Aspects of Advertising

from the more foul facets of the natural, such as body odor, close contact with dirty diapers, and washing clothes by hand. Before the modern consumer age, the consumption of many goods was restricted by social class. Modern advertising has helped bring the democratization of goods. There is a liberating quality to advertising that should be appreciated. Con: Advertisers Deceive via Subliminal Stimulation Since there is so much confusion surrounding the issue of subliminal advertising, perhaps this is the most appropriate point to provide some clarification: There is no such thing. Research by psychologists and marketers alike verifies that the human brain is capable of processing information below the conscious threshold of awareness. Although there is some evidence for some types of subconscious ad processing, it is short-lived and found only in laboratories. Till date there is no practical application of subliminal advertising. You can also highlight the more detailed discussion of subliminal advertising in the Ethics Box on page 131. Pro: Advertising Is Democratic Art. There are those who argue that one of the best aspects of advertising is its artistic nature. The pop art movement of the late 1950s and 1960s, particularly in London and New York, was characterized by a fascination with commercial culture. The text describes how Andy Warhol demonstrated that art was for the people and that the most accessible art was advertising. E. Advertising Has a Powerful Effect on the Mass Media PPT 4-10 Pro: Advertising Fosters a Diverse and Affordable Mass Media Advertising fans argue that advertising is the best thing that ever happened to an informed democracy. Magazines, newspapers, television, and radio stations are supported by advertising expenditures. In 2009, advertising expenditures on mass media in the United States exceeded nearly $102 billion. If you include online advertising’s support of websites, the number approaches $200 billion. Others argue that advertising provides invaluable exposure to issues. When noncommercial users of advertising rely on the advertising process, members of society receive information on important social and political issues.

Chapter 4/Social, Ethical, and Regulatory Aspects of Advertising

Another charge leveled at advertisers is that they purchase airtime only on programs that draw large audiences. Critics argue that these mass market programs lower the quality of television because cultural and educational programs, which draw smaller and more selective markets, are dropped in favor of mass market programs. Con: Advertising Affects Programming Critics argue that advertisers who place ads in media have an unhealthy effect on shaping the content of information contained in the media. Some specific examples in the chapter point out the payment to journalists for favorable editorial comments about brands. A related issue is the extent to which brands are being placed and featured in programs (branded entertainment) from American Idol to re-runs of Friends. Finally, programs that deal with important issues such as poverty and AIDS have a hard time attracting advertisers. II. The Ethical Aspects of Advertising PPT 4-11 Ethics are moral standards and principles against which behavior is judged. Honesty, integrity, fairness, and sensitivity are all included in a broad definition of ethical behavior. Much of what is judged as ethical or unethical comes down to personal judgment. A. Truth in Advertising PPT 4-12 Deception is making false or misleading statements in an advertisement. The difficulty regarding this issue is in determining just what is deceptive. A manufacturer who claims a laundry product can remove grass stains is subject to legal sanctions if the product cannot perform the task. Another manufacturer who claims to have “The Best Laundry Detergent in the World,” however, is within its rights to employ superlatives. The use of absolute superlatives like “Number One” or “Best” is called puffery and is considered completely legal. Likewise, it is impossible to legislate against emotional appeals such as those made about the beauty- or prestige-enhancing qualities of a product because these claims are unquantifiable. Since these appeals are legal, the ethics of such appeals fall into a gray area. Beauty and prestige, it is argued, are in the eye of the beholder, and such appeals are neither illegal nor unethical.

Chapter 4/Social, Ethical, and Regulatory Aspects of Advertising

B. Advertising to Children PPT 4-13 and 4-14 Children are viewed as vulnerable consumers and the desire to restrict advertising aimed at children is based on a wide range of concerns, not the least of which is that at one time it was estimated that children between 2 and 11 years old see around 25,600 ads in a year. The desire to restrict advertising to children is based on three concerns. Many critics argue that programs featuring commercial products, especially products aimed at children, are simply long advertisements. It is believed that advertising promotes superficiality and values founded in material goods and consumption. Children are considered inexperienced consumers and easy prey for the sophisticated persuasions of advertisers. Advertising influences children’s demands for everything from toys to snack foods. These demands create an environment of child-parent conflict. Add to that, the historical view held by child psychologists who contend that advertising advocates violence; is responsible for child obesity, creates a breakdown in early learning skills, and results in a destruction of parental authority. One of the earliest restrictions was due to the efforts of the special-interest group Action for Children’s Television that helped get the Children’s Television Act passed in 1990. This regulation restricts advertising on children’s programming to 10.5 minutes per hour on weekends and 12 minutes per hour on weekdays. There is the fairly well-supported argument that children grow up in a system where consumption is a part of everyday life. These arguments demonstrate that children at a fairly young age understand the rules of commerce, gain a healthy skeptic for advertising, and clearly recognize its intent. C. Advertising Controversial Products PPT 4-15, 4-16, and 4-17 There are ethical questions about the wisdom of allowing the advertising of controversial goods and services, such as alcoholic beverages, tobacco, gambling and lotteries, and firearms. Critics charge that tobacco and alcoholic beverage firms are targeting adolescents with advertising and making dangerous and addictive products appealing. The controversy over alcohol has moved to the forefront as recent looser restrictions by networks have caused a huge spike in spending and ad placement on television by alcoholic beverage marketers. Recent studies completely contradict research conducted since the 1950s carried out by

Chapter 4/Social, Ethical, and Regulatory Aspects of Advertising

marketing, communications, psychology, and economics researchers—including assessments of all the available research by the Federal Trade Commission. Although children at a very early age can, indeed, recognize tobacco advertising characters like “Joe Camel,” they also recognize as easily the Energizer Bunny (batteries), the Jolly Green Giant (canned vegetables), and Snoopy (life insurance)—all characters associated with adult products. Kids are also aware that cigarettes cause disease and know that they are intended as an adult product. Research shows that children are more influenced by parents and playmates than by the mass media. See the extensive literature citations in this chapter for those students who are bound to their intuition on this topic. Primary demand is demand for an entire product category. (Be sure to have a clear and complete discussion of the issue of primary demand here.) All of the controversial product categories are mature products and advertising does not affect aggregate demand in mature product categories—revisit Chapter 1. Advertising is used to gain and maintain market share for brands. Gambling and state-run lotteries are another controversial product with respect to advertising. What is the state’s obligation to protect vulnerable citizens by restricting the placement or content of gambling or lottery advertising? Is the state above the criticisms it levels at advertisers? Final key point: Advertising is not powerful enough to create primary demand in mature product categories like alcohol or tobacco. III. The Regulatory Aspects of Advertising The term regulation immediately brings to mind government scrutiny and control of the advertising process. Three primary groups—consumers, industry organizations, and government bodies—regulate advertising in the truest sense. They shape and restrict the advertising process. A. Areas of Advertising Regulation There are three basic areas of advertising regulation: deception and unfairness in advertising, competitive issues, and advertising to children. Each area is a focal point for regulatory action. Deception and Unfairness PPT 4-18 and 4-19

Chapter 4/Social, Ethical, and Regulatory Aspects of Advertising

Agreement is widespread that deception in advertising is unacceptable—period. The problem, of course, is that it is as difficult to determine what is deceptive from a regulatory standpoint as it is from an ethical standpoint. The Federal Trade Commission (FTC) has a policy statement on deception. It specifies the following three elements as essential in declaring an ad deceptive: • There must be a representation, omission, or practice that is likely to mislead the consumer. • This representation, omission, or practice must be judged from the perspective of a consumer acting reasonably in the circumstance. • The representation, omission, or practice must be a “material” one. The basic question is whether the act or the practice is likely to affect the consumer’s conduct or decision with regard to the product or service. If so, the practice is material, and consumer harm is likely because consumers are likely to have chosen differently if not for the deception. It is also a definition that can lead to diverse interpretations when it is actually applied to advertisements in real life. One critical point about the FTC’s approach to deception is that both implied claims and missing information can be bases for deeming an ad deceptive. This advice is very legal, but practical guidelines can be found on the FTC’s website. The definition of unfairness had been relatively vague. In 1994, Congress ended a long-running dispute in the courts and in the advertising industry by approving legislation that defines unfair advertising as “acts or practices that cause or are likely to cause substantial injury to consumers, which is not reasonably avoidable by consumers themselves and not outweighed by the countervailing benefits to consumers or competition.” Competitive Issues PPT 4-20 and 4-21 There are several advertising practices relating to maintaining fair competition that can result in regulation: cooperative advertising, comparison advertising, and the use of monopoly power. Vertical cooperative advertising is an advertising technique in which a manufacturer and dealer (either a wholesaler or retailer) share the expense of advertising. There is nothing illegal, per se, about the practice. The competitive threat inherent in the process is that certain dealers can be given bogus cooperative advertising allowances. These allowances require no effort or expenditure on the part of the dealer and thus represent hidden price concessions, giving these dealers a competitive cost advantage. As such, they are a form of unfair competition and are deemed illegal. If an advertising allowance is granted to a

Chapter 4/Social, Ethical, and Regulatory Aspects of Advertising

dealer, that dealer must demonstrate that the funds are applied specifically to advertising. Comparison advertisements are those in which an advertiser makes a comparison between the firm’s brand and competitors’ brands. Again, comparison ads are completely legal. However, if the advertisement is carried out in such a way that the comparison is not a fair one, there is an unjust competitive effect. The FTC may require a firm using comparison to substantiate claims made in an advertisement and prove that the claims do not tend to deceive. A slightly different remedy is the use of a disclaimer to help consumers understand comparative product claims. Some firms are so powerful in their use of advertising that monopoly power by virtue of their spending power can become a problem. This issue normally arises in the context of mergers and acquisitions where two powerful competitors and advertisers merge to create a monopoly-like power. Advertising to Children PPT 4-22 This was raised earlier as a social issue, but here critics argue that continuously bombarding children with persuasive stimuli can alter their motivation and behavior. Although government organizations, such as the FTC, have been active in trying to regulate advertising directed at children, industry and consumer groups have been more successful in securing restrictions. The major television networks have set their own guidelines for advertising aimed at children. The guidelines restrict the use of celebrities, prohibit exhortative language (such as “Go ask dad”), and restrict the use of animation to one-third of the total time of a commercial. B. Regulatory Agents PPT 4-23 and 4-24 Government Regulation In the United States, several different government agencies have been given the power and responsibility to regulate the advertising process. A review of Exhibit 4.15 in the text identifies the seven agencies that have legal mandates concerning advertising and their areas of regulatory responsibility. The newest, the Consumer Finance Protection Bureau (CFPB), was established as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, in part, as a result of the financial crisis in 2009 caused by lack of

Chapter 4/Social, Ethical, and Regulatory Aspects of Advertising

banking regulations. Its authority includes the regulation of home loan and credit card practices as well as a regulatory system for financial services advertising. The FTC is the most powerful of the regulatory bodies and warrants special attention. The FTC has been granted legal power through legislative mandates and also has developed programs for regulating advertising. The FTC’s Legislative Mandates The Federal Trade Commission was created by the Federal Trade Commission Act in 1914. The original purpose of the agency was to prohibit unfair methods of competition. In 1916, the FTC concluded that false advertising was one way in which a firm could take unfair advantage of another, and advertising became a primary concern of the agency. In 1938, the effects of deceptive advertising on consumers became an issue for the FTC. The Wheeler-Lea Amendment (1938) was concerned only with the effect of advertising on competition. The amendment broadened the FTC’s powers to include regulation of advertising that was misleading to the public (regardless of the effect on competition). Several other acts provide the FTC with legal powers over advertising. The RobinsonPatman Act (1936) prohibits firms from providing phantom cooperative-advertising allowances as a way to court important dealers. Consumer protection legislation, which seeks to increase the ability of consumers to make more informed product comparisons, includes the Fair Packaging and Labeling Act (1966), the Truth in Lending Act (1969), and the Fair Credit Reporting Act (1970). The FTC Improvement Act (1975) expanded the authority of the commission by giving it the power to issue trade regulation rules. Recent legislation relates to the FTC’s role in monitoring and regulating advertising. The Nutrition Labeling and Education Act 1990 (NLEA) requires uniformity in the nutritional labeling of food products and sets strict rules for claims about the nutritional attributes of food products. The Children’s Television Act (1990) limits the minutes of advertising during television programs for children. The FTC’s Regulatory Programs and Remedies PPT 4-25 and 4-26 The advertising substantiation program of the FTC was initiated in 1971 with the intention of ensuring that advertisers make supporting evidence for their claims available to consumers. The program was strengthened in 1972 when the commission

Chapter 4/Social, Ethical, and Regulatory Aspects of Advertising

forwarded the notion of “reasonable basis” for the substantiation of advertising. This extension suggests not only that advertisers should substantiate their claims, but also that the substantiation should provide a reasonable basis for believing the claims are true. Simply put, before a company runs an ad, it must have documented evidence that supports the claim it wants to make in that ad. The consent order and the cease-and-desist order are the most basic remedies used by the FTC in dealing with deceptive or unfair advertising. In a consent order, an advertiser accused of running deceptive or unfair advertising agrees to stop running the advertisements in question, without admitting guilt. A cease-and-desist order requires that the advertising in question be stopped within 30 days so that a hearing can be held to determine whether the advertising is deceptive or unfair. Affirmative disclosure is another remedy available to the FTC. An advertisement that fails to disclose important material facts about a product can be deemed deceptive, and the FTC may require affirmative disclosure in future advertising, whereby the important material absent from prior ads must be included in subsequent advertisements. The absence of important material information may cause consumers to make false assumptions about products in comparison to the competition. The most extensive remedy for advertising determined to be misleading is corrective advertising. In cases where evidence suggests that consumers have developed false beliefs about a brand based on misleading or deceptive advertising, the firm may be required to run corrective ads to dispel those false beliefs. The FTC has specific rules for advertisements that use celebrity endorsements, testimonials, and bloggers. In the case of experts (those whose experience or training allows a superior judgment of products), the endorser’s actual qualifications must justify his or her status as an expert. In the case of celebrities (such as Jamie Lee Curtis as the spokesperson for Activia), guidelines indicate that the celebrity must be an actual user of the product, or the ad is considered deceptive. Finally, the FTC has recently issued guidelines, which specify that bloggers who feature brands in their blogs and who receive cash or in-kind payments (e.g., free products) must disclose this material relationship with the firm. State Regulation PPT 4-27 State governments do not have extensive policing powers over the promotional

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activities of firms because most firms engage in interstate commerce making the jurisdiction federal. Since the 1980s, the National Association of Attorneys General, whose members include the attorneys general from all 50 states, has been active as a group in monitoring advertising and sharing its findings. Overall, however, states will rely on the vigilance of the federal agencies discussed earlier to monitor promotional practices and then act against firms with questionable activities. Industry Self-Regulation PPT 4-28, 4-29, and 4-30 The promotion industry has come far in terms of self-control and restraint. Some of this improvement is due to tougher government regulation, and some to industry selfregulation. Self-regulation is the promotion industry’s attempt to police itself. Supporters say it is a shining example of how unnecessary government intervention is, whereas critics point to it as a joke, an elaborate shell game. According to the critics, meaningful selfregulation occurs only when the threat of government action is imminent. Several industry and trade associations and public service organizations have voluntarily established guidelines for advertising within their industries. The reasoning is that selfregulation is good for the advertising community as a whole and promotes the credibility, and therefore the effectiveness, of advertising itself. Exhibit 4.16 in the text lists the various business organizations that have taken on the task of regulating and monitoring advertising. The purpose of self-regulation by these organizations is to evaluate the content and quality of promotional activities specific to their industries. The effectiveness of such organizations depends on the cooperation of members and the policing mechanisms used. Industry self-regulation is not just the result of efforts by industry organizations. Firms themselves often voluntarily regulate their behavior. The Walt Disney Company, in an attempt to respond to consumers’ concerns about child obesity, decided to carefully monitor all products advertised on the firm’s child-focused television channels to insure that all ads complied with strict new nutritional standards. The National Advertising Review Board The NARB is the operations arm of the Advertising Self-Regulatory Council (ASRC) which establishes the policies and procedures for advertising industry self-regulation, including the National Advertising Division (NAD), Children’s Advertising Review Unit (CARU), National Advertising Review Board (NARB), Electronic Retailing SelfRegulation Program (ERSP), and Online Interest-Based Advertising Accountability

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Program (Accountability Program). Complaints received from consumers, competitors, or local branches of the Better Business Bureau (BBB) are forwarded to the NAD. After a full review of the complaint, the issue may be forwarded to the NARB and evaluated by a panel. The general procedure for dealing with complaints is detailed in Exhibit 4.17 in the text. State and Local Better Business Bureaus There are more than 140 separate local bureaus. Membership dues paid by area businesses support each local organization. The three divisions of a local BBB— merchandise, financial, and solicitations—investigate advertising and selling practices of firms in their areas. A local BBB has the power to forward a complaint to the NAD for evaluation. Beyond its regulatory activities, the BBB tries to avert problems associated with advertising by counselling new businesses and providing information to advertisers and agencies regarding legislation, potential problem areas, and industry standards. Advertising Agencies and Associations An individual agency is legally responsible for the advertising it produces and is subject to sanctions for deceptive or misleading claims. The American Association of Advertising Agencies (4As) has no legal or binding power over its agency members, but it can apply pressure when its board feels industry standards are not being upheld. The 4As also publishes guidelines on advertising messages for its members. One of the most widely recognized industry standards is the 4As’ Creative Code. The code outlines the responsibilities and social impact advertising can have and promotes high ethical standards of honesty and decency. Individual Media Organizations Individual media organizations evaluate the advertising they receive for broadcast and publication. The National Association of Broadcasters (NAB) has a policing arm known as the Code Authority, which implements and interprets separate radio and television codes. Newspapers have historically been rigorous in their screening of advertising. Many newspapers have internal departments to screen and censor ads believed to be in violation of the newspaper’s advertising standards. Although the industry does not have a formal code, many individual publications have very high standards. The Direct Marketing Association (DMA) is active in promoting ethical behavior and standards among its members. It has published guidelines for ethical business practices.

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In 1971, the association established the Mail Preference Service, which allows consumers to have their names removed from most direct mail lists. Those whose livelihoods depend on advertising are just as interested as consumers and legislators in maintaining high standards. If advertising is perceived by consumers as an unethical and untrustworthy business activity, the economic vitality of many organizations will be compromised. Self-regulation can help prevent such a circumstance and is in the best interest of all the organizations discussed here. Internet Self-Regulation PPT 4-31 Because there are few federal guidelines established for advertising and promotion on the Internet (with the exception of anti-spam legislation and COPPA: Children’s On-line Privacy Protection Act), the industry itself has been the main governing body. The most significant organization is the Digital Advertising Alliance (DAA) which was launched around the Self-Regulatory Principles for Online Behavioral Advertising which was formulated in 2009. The DAA is a leading industry association applying consumer-friendly standards to online behavioral advertising across the Internet. The DAA operates as a true industry selfregulatory body in that it cannot mandate punishment for what it perceives as a violation of codes of good practice. The only power of the DAA was to issue a “decision” that KIA did not comply with the industry’s guidelines. Internationally, the United Kingdom has the Internet Watch Foundation and Canada has Canadian Association of Internet Providers offering self-regulation guidelines. Consumers as Regulatory Agents PPT 4-32 Consumers themselves are motivated to act as regulatory agents based on a variety of interests, including product safety, reasonable choice, the right to information, and privacy. Advertising tends to be a focus of consumer regulatory activities because of its conspicuousness. Consumerism and consumer organizations have provided the primary vehicles for consumer regulatory efforts. Consumerism, The actions of individual consumers to exert power over the marketplace activities of organizations, is by no means a recent phenomenon. The earliest consumerism efforts can be traced to seventeenth-century England. In the United States, there have been recurring consumer movements throughout the twentieth century.

Chapter 4/Social, Ethical, and Regulatory Aspects of Advertising

These movements have focused on the same issue: Consumers want a greater voice in the whole process of product development, distribution, and information dissemination. Consumers commonly try to create pressure on firms by withholding patronage through boycotts. Some boycotts have been effective. Firms as powerful as Procter & Gamble, Kimberly-Clark, and General Mills all have historically responded to threats of boycotts by pulling advertising consumers found offensive. Consumer Organizations •

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The Consumer Federation of America (CFA) was founded in 1968 and now includes over 300 national, state, and local consumer groups and labor unions as affiliate members. The goals of the CFA are to encourage the creation of consumer organizations, provide services to consumer groups, and act as a clearinghouse for information exchange. Consumers Union is a nonprofit consumer organization best known for its publication of Consumer Reports. Established in 1936, Consumers Union describes itself as “an expert, independent, non-profit organization whose mission is to work for a fair, just, and safe marketplace for all consumers and to empower consumers to protect themselves.”

This organization supports itself through the sale of publications and accepts no funding, including advertising revenues, from any commercial organization and now claims to have the most subscribers to its website of any organization of its type (www.consumersunion.org). These two groups are well known, but there are literally hundreds of such groups organized by geographic location or product category. Consumers have proven that with an organized effort, corporations can and will change their practices. In one of the most publicized events in recent times, consumers applied pressure to Coca-Cola and, in part, were responsible for forcing the firm to remarket the original formula of Coca-Cola. IV. The Regulation of Other Promotional Tools PPT 4-33 and 4-34 As other promotional tools gain prominence, the regulation of these promotions becomes more relevant. This is a regulatory environment that is emerging. A. Regulatory Issues in Direct Marketing and the Internet The most pressing regulatory issue facing direct marketing and e-commerce is database

Chapter 4/Social, Ethical, and Regulatory Aspects of Advertising

development and the privacy debate that accompanies the practice. Privacy Online privacy issues focus on a wide range with behavioral targeting issues made possible by technology. Behavioral targeting is the process of database development facilitated by online tracking markers that advertisers place on a Web surfer’s devices in order to track that person’s online behavior. Big online content providers, like Facebook, Google, and Apple, don’t charge users a fee for access to a variety of data and information services. As such, they have to generate revenue somehow from these services, so they sell your online behavior patterns to advertisers. Another iteration of this privacy invasion is the now widespread capability to track consumers’ physical whereabouts by virtue of GPS devices embedded in smartphones. There is some hope for improved privacy. Twitter has recently agreed to adopt a “do-nottrack” policy option, which is a privacy initiative being heavily promoted by the FTC, privacy advocates, and even Mozilla (the developer of the Firefox Web browser). In addition, Google said it is considering implementing the do-not-track option on its Chrome browser. Spam Spam refers to the unsolicited commercial messages sent over the Internet and is a serious problem. “Phishing” is fraudulently attempting to acquire private consumer information, such as usernames, passwords, social security numbers, and credit card details, by pretending to be a trustworthy entity—a bank, the IRS, or other organization that will get the email user’s attention. To put the problem into perspective, it is estimated that about 7.7 trillion spam messages are sent every year. Internet providers have tried to form coalitions to fight spam. Technological solutions (anti-spam software) are getting more sophisticated. The U.S. Senate passed the CAN SPAM Act in November of 2003. Be sure students recognize that not all spam is blocked by this Act—only fraudulent, deceptive, or pornographic messages. There have been several prosecutions under the CAN SPAM Act and violators are actually spending time in jail. Contests, Sweepstakes, Coupons Even though privacy and spam are huge direct marketing and e-commerce issues, they are not the only ones. The next biggest legal issue has to do with sweepstakes, contests, and © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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coupons. Direct mail sweepstakes are required to state that a purchase is not necessary to win. These activities give marketers the opportunity to construct databases of customers. If customers request that their names be removed, this must be done promptly. In addition, penalties can be imposed on marketers who do not promptly remove consumers’ names from mailing lists at the consumer’s request. Coupon fraud regulation is needed to protect marketers rather than consumers. Coupons distributed through direct mail, newspapers, magazines, or the Internet requires legal protection for the marketer more than anything else. Fraud abounds in the area of couponing, aggravated by the fact that approximately 90 percent of the U.S. population still uses coupons and redeems billions of dollars’ worth of coupons a year. Safeguards like stating strict limitations on redemption, geographic limitations, or encrypted bar codes that can be scanned to detect fraud are all ways to reduce problems with contests, sweepstakes, and coupons. Telemarketing Another legal issue in direct marketing that has hit the headlines in recent years has to do with telemarketing practices. The first restriction on telemarketing was the Telephone Consumer Fraud and Abuse Prevention Act of 1994. Telemarketers are required to state their names, the purpose of the call and the company they work for. Telemarketers are only allowed to make calls between 8 A.M. and 9 P.M., and they cannot call the same customer more than once every three months. In addition, they cannot use automatic dialing machines with a recorded message, and they must keep a list of consumers who do not want to be called. Most recently, the “do-not-call-registry” was created by the Federal Trade Commission on October 1, 2003. Be sure students understand that 60 million phone numbers have been registered, not 60 million consumers. B. Regulatory Issues in Sales Promotion. PPT 4-35 and 4-36 Regulatory issues in sales promotion focus on three areas: premium offers, trade allowances, and contests and sweepstakes. Premium Offers Premiums are items offered for free or at a greatly reduced price with the purchase of another item. Marketers must state the fair retail value of the item offered as a premium.

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Trade Allowances In the area of trade allowances, marketers need to be familiar with the guidelines set forth in the original Robinson-Patman Act of 1936. Even though this is an old piece of legislation, it still applies to contemporary trade promotion practices. Customers need to be offered similar prices on similar merchandise. This means marketers cannot use special allowances to highly attractive customers. Contests and Sweepstakes The issues discussed in the e-marketing section apply as FTC has specified four violations of regulations that marketers must avoid in carrying out sweepstakes and contests: • Misrepresentation of value • Failure to provide complete disclosure about the conditions necessary to win; • Failure to disclose the conditions necessary to obtain a prize; • Failure to ensure that a contest or sweepstakes is not classified as a lottery. Product/Brand Placement (Insertion) The area of sales promotion receiving attention most recently in the regulatory arena is brand/product placement in television programs and films. As discussed earlier, consumer groups feel that unless television networks and film producers reveal that brands are placed into a program or film for a fee, consumers could be deceived into believing that the product use is natural and real. Privacy PPT 4-37 The privacy problems facing a public relations firm center on the issue of appropriation. Public relations firms cannot use pictures or images owned by someone else–appropriation. The same is true of public relations materials prepared for release to the press or as part of a company’s public relations kit. Copyright Infringement Copyright infringement can occur when a public relations effort uses written, recorded, or photographic material from others’ works. Defamation

Chapter 4/Social, Ethical, and Regulatory Aspects of Advertising

When a communication occurs that damages the reputation of an individual because the information is not true, it is referred to as defamation of character. Slander is oral defamation over a TV or radio broadcast. Libel is defamation that occurs in print such as in magazines, newspapers, on the Internet, or direct mail.

ONLINE CONTENT The online dynamic content provides both content and insights into the ethical, global, and social media aspects of Advertising and Integrated Brand Communication. The integrated assessment components will provide students with assurances that they have mastered the assigned readings and provide feedback to faculty that the students have completed the assigned readings and data on student mastery of the content. In addition to the feedback on the correct answers, all of the assessment objects have been enhanced with additional tags that can be aggregated to provide feedback on how individual students have done on a specific learning outcome such as ethics. The online material can be delivered in one of two formats. For instructors who want to provide students with access to the Ad Age on Campus access as well as the online advertisements and student facing self-assessment quizzes, CourseMate will be provided with each new copy of Advertising and Integrated Brand Communication. Alternatively, students can decide to purchase CourseMate on its own which will also come with the MindTap Reader, which is the ebook version of the print product. For faculty that desire to have a variety of more in-depth assignments to integrate into their course and a desire to have more student data that can be used for analytic purposes, MindTap can be purchased with an enhanced capability. Faculty can customize the student experience and integrate the experience for their students into the campus Learning Management System. For a complete guide into the reporting and analytical capabilities available to faculty, consult the Assurance of Learning section of this manual.

Boxed Feature Questions and Tags QUESTION

DIFFICULTY

BUSPROG

DISC

Primary

BLOOM'S

Chapter 04 Social Media 01

Challenging

Technology

Promotion

Synthesis

Chapter 04 Social Media 02

Moderate

Technology

Promotion

Application

Chapter 04 Globalization 01

Moderate

Diversity

Promotion

Application

Chapter 04 Globalization 02

Challenging

Diversity

Promotion

Synthesis

Chapter 04 Ethics 01

Moderate

Ethics

Promotion

Application

Chapter 04 Ethics 02

Challenging

Ethics

Promotion

Synthesis

CHAPTER 4-Social Media

Chapter 4/Social, Ethical, and Regulatory Aspects of Advertising

http://adage.com/article/digital/stan-lee-s-original-channel-surges-youtube-ratings/238982/ World of Heroes is a YouTube channel as a place they describe as "for all things related to the hero lifestyle and enthusiast culture." Most videos are funny parodies of superheroes. The founder is Stan Lee-a 90 year-old--who is still full of creativity.

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4.SocialMedia.Q1

1. As YouTube is a top social media site, what, if any, ethics concerns can you think of that are seen on video sharing sites such as YouTube? Answer: Sometimes consumers, bloggers, or anyone who posts to YouTube are paid to

comment on a product or service—yet this is not disclosed. Another ethics concern is that YouTube pays consumers for posting very popular videos, and some of the most popular videos are posted or made by children or teenagers. •

4.SocialMedia.Q2

2. While it seems safer to make funny parodies of superheroes rather than living people such as celebrities or politicians, defamation that occurs in print such as online is termed: A.

Defamation

Slander

Libel

Appropriation Answer: C

CHAPTER 4-Globalization http://adage.com/article/global-news/d-ad-awards-dumb-ways-die-meetsuperhumans/242055/ The U.K. and the U.S. are the most awarded countries at London’s top creative awards show, D&AD. The winners are “Dumb Ways to Die” (for Metro Trains) and “Meet the Superhumans” (for Paralympics TV coverage). Dumb ways to die is especially cute.

Chapter 4/Social, Ethical, and Regulatory Aspects of Advertising

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4.Globalization.Q1

1. This creative work shows the role of the consumer or the person. The actions of individual consumers or groups of consumers designed to exert power in the marketplace is called: A. Puffery B. Vertical cooperative advertising C. Affirmative disclosure D. Consumerism Answer: D •

4.Globalization.Q2

After watching the creative work in the article, do you think that the spot “Dumb Ways to Die” is creative enough to win London’s top creative award? If so, what specifically did you find creative? If not, what would you do to make it more creative? Answer: I think the spot is very creative and worthy of the creative award. Specifically, I thought the music and the original song, combined with the cartoon characters doing ridiculous things I would never think of as dangerous, were very catchy. Usually, I don’t finish watching ads, but this is one I played over again. The copy was very creative as well.

CHAPTER 4-Ethics http://adage.com/article/global-news/china-announce-advertising-code-ethics/226907/ China adopts an advertising code of ethics, which is a big step towards the increased role of IBP in that country—who is currently the 4th largest country in advertising. •

4. Ethics.Q1 1.

What type of regulatory agent is in place with this code of ethics? A. Government regulation B. Industry self-regulation C. Internet self-regulation

Chapter 4/Social, Ethical, and Regulatory Aspects of Advertising

D. Consumers as regulatory agents Answer: B •

4. Ethics.Q2

2. You are charged with writing an advertising code of ethics for China; what is one thing you would make sure to include and why? Answer: One thing I would include in the code of ethics for China is the portrayal of cigarettes in Chinese advertising. Knowing the higher percentage of smokers there and the health effects, it is important to de-glamourize smoking in ads. The reason why is to benefit their overall health.

Homework Grid Homework Description 1-a. Multiple Choice Slim-Fast: Self-Regulation 1-b. Multiple Choice Slim-Fast: Disclosure 2-a. Multiple Choice Defamation 3-a. Multiple Choice Regulation Homework is available to faculty to select and integrate into their customized course. THE FOLLOWING SECTIONS OF THE INSTRUCTOR’S MANUAL HAS A SELECTION OF CASES THAT CAN BE INCORPORATED INTO YOUR COURSE AS OUT OF CLASS ASSIGNMENTS , OR AS A METHOD FOR INITIATING CLASSROOM DISCUSSION.

End of Chapter Questions 1.

Advertising has been a focal point of criticism for many decades. In your opinion, what are some of the key factors that make advertising controversial? Some of the criticisms of advertising are that it is a waste of resources and promotes materialism as life’s sole purpose. Many people contend that it offers little in the way of useful information and, at the same time, reinforces demeaning stereotypes of women, minority groups, and the elderly. There are also those who are simply irritated by the numbers of advertising stimuli that interrupt us in daily life. Acceptance of advertising also can be a matter of taste, and because tastes differ, there will always be disagreements about the kinds of ads that reflect poor taste. One important point about stereotypes is that the

Chapter 4/Social, Ethical, and Regulatory Aspects of Advertising

process of market segmentation does play a role in creating stereotypes because, in segmenting, marketers often come up with a prototypical description of their target consumer. They then try to engage the target audience with advertising that features individuals who fit the prototype. This process can backfire for the marketer when the types featured in ads come off as shallow and one-dimensional. 2.

As blogs and celebrity testimonials have proliferated across the media landscape, so have efforts by businesses and manufacturers to gain positive mentions, reviews, and commentary on these seemingly grassroots sites. What ethical issues are raised if a blogger is paid to comment on a product? Does it matter if the blogger discloses any financial agreements? Advertising audiences are increasingly skeptical of the information they receive, whether it comes from traditional sources such as newspapers and magazines, or newer forms of commentary and news, such as blogs. A key question is whether the information has been influenced in any way, whether by the individual bias of the writer (an automobile reviewer, say, who simply prefers German cars to American automobiles) or by the influence of a third party (he or she has been compensated by BMW to write favorably about their new vehicles). In some instances, disclosing a relationship with a source or subject can be useful. It might come in the form of an editor’s note, for instance, acknowledging that the reviewer’s personal car is German-made. But when the writer acknowledges accepting payment for favorable commentary, marketers may risk audience alienation. The FTC considers this an important enough issue that it now has specified guidelines regarding the disclosure of affiliation for “incentivized” bloggers.

You have probably been exposed to hundreds of thousands of advertisements in your lifetime. In what ways does exposure to advertising make you a better or worse consumer? This question should lead to a spirited discussion about the information available from advertising. Showing this passage on an overhead projector could motivate such a discussion: Advertising is clearly an immensely powerful instrument for the elimination of ignorance. To help the class appreciate the information available through advertising, it is important to encourage reflection about the differences in information that can be gleaned from various media. It is also important to point out that by simply helping consumers know what options are available in a product category, even when more information would be called for before purchase, advertising has provided value. In addition, it would be appropriate to discuss advertising’s role in reducing the amount of time consumers must spend in searching for information about products. For example, one could pose a question such as: “Would your efficiency and effectiveness as a shopper be reduced or enhanced if all forms of advertising were eliminated?” Or, on the other side of the argument, “Are

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people ‘worse’ consumers because they become emotionally taken with ads or become more materialistic because of ads?” 4.

Use Maslow’s hierarchy of needs to address critics’ concerns that too much of advertising is directed at creating demand for products that are irrelevant to people’s true needs. What an individual truly needs (versus wants) is a tough thing to pin down. If Maslow and his hierarchy are correct, it is fair to say that people can have many different types of needs. Moreover, what is needed can vary from one individual to the next, depending on where they fall in Maslow’s hierarchy. In an affluent society like the United States, basic physiological and safety needs are often not pressing. Belonging or self-esteem needs may be much more salient in an affluent society. When critics condemn advertising as being irrelevant to people’s “true needs,” they often overlook that belonging and self-esteem can be as prominent to some consumers as are the more basic needs for others.

One type of advertising that attracts the attention of regulators, critics, and consumer advocates is advertising directed at children. Why is it the focal point of so much attention? Do you think kids are particularly vulnerable—or do they know what advertising is all about? Advertising critics and regulators focus much of their attention on protecting groups in the population that may be vulnerable to the effects of advertising. Vulnerability could be based in misunderstanding an advertising message or simply not understanding that all advertising is conducted in an effort to persuade. Children are vulnerable in this regard and may be subject to extreme levels of advertising exposure (the-television-as-babysitter syndrome). Governments around the world commonly seek to shelter children from the persuasive effects of advertising. But, careful examination of the literature shows that children as young as five to six years old understand that advertising has the intention to sell them something, and further, they develop skepticism toward advertising at this young age as well.

What are the pros and cons of database marketing, and what can consumers do to protect themselves and their privacy from unwanted or intrusive advertising and promotion campaigns? According to marketers, database marketing creates value for consumers. The more that direct marketers know about their customers, the better they can serve them by delivering offers known to be relevant based on consumer history. According to many consumer advocates, however, any good that might come from the “data mining” process is far outweighed by the annoyance created by the avalanche of offers plaguing consumers.

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These advocates argue for “permission marketing,” in which marketers can direct advertising and promotions only to people who give them express permission to do so by indicating clearly that they “opt-in” to receiving offers through the mail or email. 7.

What is comparison advertising, and why does this form of advertising need a special set of guidelines to prevent unfair competition? Comparison advertising involves some claim of superiority versus a competitor’s brand. The competitive brand need not be mentioned explicitly. Comparative ads can be powerful in their effects when strong claims are advanced. Guidelines are important for this type of ad to ensure the accuracy of the claims that competitors advance about one another.

Explain why a marketer might be tempted to misuse cooperative-advertising allowances to favor some kinds of retailers over others. What piece of legislation empowered the FTC to stop these bogus allowances? Marketers might be motivated to provide bogus allowances to some retailers as an incentive to get these retailers’ business. In the early days of chain department stores, this was a common practice. Today, a marketer might want to attract Walmart or Costco and be tempted to misuse coop ad allowances. The Robinson-Patman Act of 1936 prohibits this practice.

Various methods of industry self-regulation are discussed in this chapter. Do you think self- regulation can be effective, or is government regulation the only really effective way to control advertising and promotional efforts? Effective controls over advertising often reflect both government intervention and industry self-regulation. One important example is the 1998 multi-billion-dollar settlement between cigarette manufacturers and the states. The agreement was a powerful combination of government action and industry self-correction. In addition to paying billions of dollars to settle lawsuits brought by the state attorneys general to recoup money spent on smokingrelated illnesses, the tobacco companies also agreed to end advertising at sporting events and stop marketing to young people. (Students can see examples of what health advocates consider some of the tobacco industry’s most egregious campaigns from the 1940s and 1950s at this Truth in Advertising site: http://www.chickenhead.com/truth.)

10. Spam and phishing are considered the scourge of not just the Internet, but IPB as well. In this chapter, you have read about attempts to limit spam and phishing. What would you suggest as ways spam can limited – or eliminated?

Chapter 4/Social, Ethical, and Regulatory Aspects of Advertising

As in other forms of advertising regulation, efforts to control spam ultimately may combine industry self-regulation and government enforcement. As technology allows consumers to “opt in” to receive email targeting their personal interests or consumption patterns, advertisers can more efficiently reach consumers most receptive to their product and tailor their message to that audience. Consumers, meanwhile, may be more receptive to receiving some electronic marketing messages if they are confident that the government is monitoring and willing to take action against errant marketers sending masses of unwanted emails. Students should consider the success of the federal government’s Do Not Call registry as they assess ways to effectively control spam messages.

Experiential Exercises 1.

Although public service announcements (PSAs) exist to educate society and are not a form of paid advertising, a recent texting-while-driving warning from England’s South Wales Police Department was so graphic that many television networks banned it. In the spot, three British teenage girls text-and-drive their way into a head-on collision. The gruesome real-life highway carnage staged by professional filmmaker Peter Watkins-Hughes left international viewers shocked and in tears. For an in-class discussion, watch this PSA or another controversial ad and discuss the conflict between advertising’s ability to educate and its potential to be offensive. When do edgy ads cross the line, and who decides? The traffic safety PSA from the South Wales Police Department can be found online by searching for “texting while driving PSA.” With motorists at risk from texting while driving, highway safety agencies seek to deliver the urgent message that texting kills. Research conducted on this driver-safety ad showed that the spot was highly persuasive: A full 86 percent of viewers said the PSA was extremely effective, and 80 percent said they would be less likely to text and drive after watching the video. It is no surprise that health and safety organizations use emotional and rational appeals—usually a mix of staggering statistics and scare tactics—to persuade audiences. However, many viewers complained the visual presentation was too disturbing for television, and the ad was banned in many countries. The creatives felt that shock-logic was necessary and justified given the urgency of the message, the challenges of media clutter, and the problem of teenage indifference.

General Motors continues to struggle, even after receiving an unpopular multi-billion bailout from taxpayers. During an attempt to win back consumers in 2010, the American automaker hit a truth-in-advertising snag. In one television ad, CEO Ed Whitacre boasted that GM repaid a $5.8 billion taxpayer loan after emerging from bankruptcy, citing the payback as proof of GM’s financial recovery. Media quickly denounced the ads as deceptive for omitting that GM did not repay the other $52 billion still owed to taxpayers. The ads also concealed that the “payback” didn’t come from GM profits—it was a

Chapter 4/Social, Ethical, and Regulatory Aspects of Advertising

reshuffling of taxpayer bailout cash from the U.S. Troubled Assets Relief Program (TARP). For an in-class discussion, debate whether GM’s ad was deception or mere puffery. Who is responsible for investigating deceptive advertising? Would an investigation of GM by government regulatory agencies involve a conflict of interest? What should GM do to correct the issue if the ads are deceptive? The ads were deceptive by way of omission. The money shuffle was concealed to make it appear GM was doing good business again, when in fact the government-owned automaker did not repay money from its own earnings. The press panned the ads for deception. The Federal Trade Commission (FTC) is the regulatory agency that oversees truth in advertising claims. Under FTC guidelines, omission of key information can be ruled as deception. The most common remedy for misleading ads is corrective advertising, in which firms denounce the earlier deceptive claims and inform consumers of the truth. With regard to a fair regulatory process, it is unlikely that this General Motors case could be fairly adjudicated—both the FTC and GM are government-run organizations, and there is a conflict of interest in having the government investigate itself. 3.

List two product categories (other than cigarettes) that you think require some kind of advertising regulation and explain why. Do you think they require government regulation, industry self-regulation, or consumer regulation? Explain. Based on your answer, list regulatory agents that might get involved in controlling advertising for these products. Finally, go to the Internet and do a search for one or more agency or watchdog sites that would be relevant to the regulatory process. How does the site encourage consumers to get involved, and what resources does the site offer to empower their participation in the process? This can be a very interesting exercise and discussion. Products aimed at teens would be good choices as teens are always cited as being vulnerable to the images and appeals of advertising. Other product categories that would be good are beer and diet products. This is a good exercise to have students regulatory pair agencies with product categories and to think about the role of consumer watchdog agencies such as MADD.

Working in small teams, imagine that you have been hired by a large pizza chain to develop an IBP campaign for a new product, the KidZa Meal, which will consist of a 4inch round pizza, a small drink, and a doll that looks like a traditional Italian pizza chef. The chain is hoping sales of KidZa Meals will drive more families to its dine-in restaurants and increase take-out orders. But the chain is concerned about perceptions that it is targeting children in its advertising and contributing to concerns about childhood obesity rates. What type of advertising campaign would you suggest for this client? As you evaluate the components of the marketing mix, what recommendations would you make

Chapter 4/Social, Ethical, and Regulatory Aspects of Advertising

regarding the product? In proposing a campaign for the pizza chain, the student teams should consider what ethical issues are at stake in promoting a fast food product aimed primarily at children. Answers should reflect an awareness of pressures on the restaurant industry to curb marketing toward children and discuss ways that the product might be adjusted to counter such concerns. The chef doll, for instance, might be swapped out for a jump rope, or the pizza might come with the option of vegetable toppings.

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

PART 2 Analyzing the Environment for Advertising and Integrated Brand Promotion Lecture Alert: It is important to make a very big deal out of this transition to Part 2. Students need to be aware that they have just concluded their examination of The Process of Advertising and Integrated Brand Promotion (Part 1) and now are transitioning to The Planning phase. Part 1 laid the groundwork for understanding what advertising and IBP are—a survey of the topics. Now, the focus and emphasis turns managerial with planning issues being the first important step toward developing advertising and IBP materials.

CHAPTER 5 Advertising, Integrated Brand Promotion, and Consumer Behavior Key Terms consumer behavior consumer package goods(CPG) mindshare brands need state internal search evoked set consideration set top of mind external search evaluative criteria conversion brand ambassadors

customer satisfaction cognitive dissonance involvement consumer-brand relationship extended problem solving limited problem solving habit variety seeking brand loyalty predecisional distortion accessibility accessibility bonus

attitude advertising clutter meaning culture rituals stratification increasing income inequality taste life-stage identity community brand communities

Summary PPT 5-2, 5-3, and 5-4

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

Describe the four basic stages of consumer decision making. Advertisers need a keen understanding of their consumers as a basis for developing effective advertising. This understanding begins with a view of consumers as systematic decision makers who follow a fairly predictable process in making their choices among products and brands. The process begins when consumers perceive a need, and it proceeds with a search for information that will help in making an informed choice. The search-and-evaluation stage is followed by purchase. Postpurchase use and evaluation then become critical as the stage in which customer satisfaction is ultimately determined. Explain how consumers adapt their decision-making processes as a function of involvement and experience. Some purchases are more important to people than others, and this fact adds complexity to any analysis of consumer behavior. To accommodate this complexity, advertisers often think about the level of involvement that attends any given purchase. Involvement and prior experience with a product or service category can lead to four diverse modes of consumer decision making. These modes are extended problem solving, limited problem solving, habit or variety seeking, and brand loyalty. Discuss the role of memory and emotion in how advertising may influence consumer behavior. Advertisements are developed to influence the way people think about products and brands. More specifically, advertising is designed to affect consumers’ beliefs and brand attitudes. Advertisers use multiattribute attitude models to help them ascertain the beliefs and attitudes of target consumers. However, consumers have perceptual defenses that allow them to ignore or distort most of the commercial messages to which they are exposed. When consumers are not motivated to thoughtfully process an advertiser’s message, it may be in that advertiser’s best interest to feature one or more peripheral cues as part of the message. Discuss the role of culture on consumer behavior and in creating good advertising. Advertisers who overlook the influence of culture are bound to struggle in their attempt to communicate with the target audience. For example, rituals are patterns of behavior shared by individuals from a common culture. Violating cultural values and rituals is a sure way to squander advertising dollars. Advertising and integrated brand promotion help turn products into brands. They do this by wrapping brands with cultural meaning. Brands with high cultural capital are worth more. Brands are cocreated by consumers and advertisers.

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

Discuss the role of social class, taste, and cultural capital in consumer behavior and advertising. Consumer behavior is an activity that each of us undertakes before a broad audience of other consumers. Advertising helps the transfer of meaning. Gender, ethnicity, and race are important influences on consumption. Who consumers are—their identity—is changeable; consumers can change aspects of who they are rapidly and frequently through what they buy and use. Celebrities are particularly important in this regard. Discuss the role of family, identity, gender, and community on consumer behavior and advertising. All four of these sociological factors influence how consumers see themselves and others. It affects what they buy. Describe and then discuss cultural branding. Give an example. Cultural branding is a type of branding that leverages sociocultural forces to create and maintain great brands. The basic idea is to find some rift or stress in society and culture and then use this to offer a solution in the form of a branded good. An example would be the introduction of the Marlboro Man in 1955. Discuss how effective advertising uses sociocultural meaning in order to sell things. Advertising transfers a desired meaning to the brand by placing them within a carefully constructed social world represented in an ad, or “slice of life.” Advertisers paint a picture of the ideal social world, with all the meanings they want to impart to their brand. Then the brand is carefully placed in that picture, and the two (the constructed social world and the brand) rub off on each other, becoming a part of each other. Meaning is thus transferred from the carefully constructed social world within the ad to the brand.

Chapter Outline Introduction The chapter provides a contemporary and insightful treatment of advertising and consumer behavior. It is divided into parts, each representing a valuable way of looking at consumer behavior, branding, and advertising. The first treats consumer behavior as a psychological and decision-making exercise. It deals with information processing, decision processes, and how advertisers try to game or manipulate them for their best results. The second section is more

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

sociological and cultural in its approach. It examines what happens outside of individual consumer’s heads, out there in the real world, where social forces and culture matter. This section includes a discussion of ads as “social text” and how they transmit sociocultural meaning and in doing so help create meaningful brands. Particular attention must be paid to the discussion of “cultural branding,” a particularly effective way to understand how consumers relate to brand messages. The chapter also discusses different perspectives on income inequality, rebellion, and authenticity and how these factors can affect consumer behavior, and how advertisers use them to their advantage. PPT 5-5 Consumer behavior is defined as all things related to how humans operate as consumers. It is far better for advertisers to understand consumer behavior than not, although some companies do very well with only a very thin understanding of how their customers choose their brands. This is especially true in the case of so-called low involvement goods, such as consumer packaged goods (CPG)—think trash bags, papers towels, laundry detergent, canned soup. When CPG or other low involvement brands are transformed from simple memory-based ones (mindshare brands) into more culturally and socially meaningful ones through advertising, or when considering high involvement categories such as automobiles or clothing, then the advertising and the related consumer behavior is a lot more interesting and fun. In any case, all advertisers could significantly improve their odds and profits by better understanding their consumers, even the old, big, too-big-to-fail, and lucky ones. This chapter summarizes the concepts and frameworks we believe are most helpful in trying to understand consumer behavior as it most closely relates to advertising and integrated brand promotion. We explain consumer behavior from two different perspectives: one psychological and the other sociocultural. The first portrays consumers as systematic (but not always rational) information seekers (or at least recipients), processors, and decision makers. The second perspective views consumers as social beings who operate in their societies and cultures and thus behave largely as a function of social circumstance and cultural forces. A teaching emphasis here is to point out to students that no single perspective can adequately explain consumer behavior. Consumer behavior is complex and multifaceted—psychological, social, and cultural all at the same time. I. Perspective One: The Consumer as Decision Maker PPT 5-6 One way to view consumer behavior is as a fairly predictable sequential process culminating with the individual’s gaining a set of benefits from a product or service that satisfies that person’s perceived needs. In this basic view, individuals can be thought of as purposeful decision

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

makers who weigh and balance alternatives, or resort, typically in times of complexity and too much information, to simple decision rules of thumb (heuristics) to make decisions. A. The Consumer Decision-Making Process Need Recognition The consumption process begins when people perceive a need. A need state arises when one’s desired state of affairs differs from one’s actual state of affairs. One way advertising works is to point to and thereby activate needs that will motivate consumers to buy a product or service. Information Search and Alternative Evaluation PPT 5-7 and 5-8 Need recognition simply sets in motion a process that may involve extensive information search and careful evaluation of alternatives prior to purchase. During this search and evaluation, there are numerous opportunities for the advertiser to influence the final purchase decision. Information for the purchase decision is acquired through an internal or external search. The consumer’s first option for information is to draw on personal experience, prior knowledge, and prior exposure to advertising and this is known as internal search. The internal search results in the recall of a set of brands (an evoked set). This is closely related to the consideration set—a set of brands the consumer will consider for purchase. It is possible that internal search will not turn up enough information to yield a decision. The customer then proceeds with an external search which involves visiting retail stores or looking online to examine the alternatives, seeking input from friends and relatives about their experiences with the products in question, or perusing professional product evaluations furnished in various publications like Consumer Reports. When consumers are in an active information-gathering mode, they also may be receptive to detailed, informative advertisements delivered through any of the print media, or they may deploy a shopping agent or a search engine to scour the Internet for the best deal or for opinions of other users. As the search-and-evaluation process proceeds, consumers form evaluations based on the characteristics or attributes of the brands in their consideration set have in common. These product attributes or performance characteristics are referred to as evaluative criteria. Evaluative criteria differ from one product category to the next and can include many

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

factors, such as price, texture, warranty terms, color, scent, or carb content. Purchase PPT 5-9 It would be a big mistake to view purchase as the culmination of the decision-making process. What happens after the sale is very important to advertisers. Advertisers want trial; they then want conversion (repeat purchase). They want brand loyalty. Some want to create brand ambassadors, users who will become apostles for the brand, spreading its gospel. Postpurchase Use and Evaluation PPT 5-10 The goal for marketers and advertisers must not be simply to generate a sale; it must be to create satisfied and perhaps even loyal customers. PPT 5-11 Advertising can play an important role in inducing customer satisfaction by creating appropriate expectations for a brand’s performance, or by helping the consumer who has already bought the advertised brand to feel good about doing so. Cognitive dissonance is the anxiety or regret that lingers after a difficult decision. When dissonance is expected, it makes good sense for the advertiser to reassure buyers with detailed information about its brands. B Four Modes of Consumer Decision Making PPT 5-11 and 5-12 Consumers aren’t always deliberate and systematic as a decision-making sequence like the one above would suggest. The search time that people put into their purchases can vary dramatically for different types of products. The text elaborates on four decision-making modes that help advertisers appreciate the richness and complexity of consumer behavior. These four modes are determined by a consumer’s involvement and prior experiences with the product or service in question. Sources of Involvement Involvement is the degree of perceived relevance and personal importance accompanying the choice of a certain product or service within a particular context: How much it matters

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

to the consumer. Many factors contribute to the level of involvement in a consumption decision. Interests and avocations, like cooking, photography, pet ownership, or exercise and fitness, can enhance involvement levels. When risk is associated with a purchase— perhaps as a result of the high price of the item, or because the consumer will have to live with the decision for a long time—elevated involvement is likely. Consumers can also derive important symbolic meaning from products and brands. Higher involvement may be a function of a consumer–brand relationship. Relationship means that the consumer has come to have some sort of emotional attachment to the brand, or even the category. Involvement levels vary among product categories for an individual and also among the individuals for any given product category. PPT 5-13 and 5-14 Extended Problem Solving When consumers are inexperienced in a particular consumption setting, yet find the setting highly involving, they are likely to engage in extended problem solving. Consumers go through a deliberate decision-making process that begins with explicit need recognition, proceeds with careful internal and external search, continues through alternative evaluation and purchase, and ends with a lengthy post-purchase evaluation. Limited Problem Solving Experience and involvement are both low in limited problem solving. This is a common mode of decision making. In this, a consumer will be less systematic in his or her decision making. The consumer has a new problem to solve, but it is not a problem that is interesting or engaging, so the information search is limited to simply trying the first brand encountered. Habit or Variety Seeking Habit refers to buying a single brand repeatedly as a solution to a simple consumption problem. This occurs where a decision is not involving and a consumer repurchases from the category over and over again. Variety seeking refers to the tendency of consumers to switch their selection among various brands in a given category in a seemingly random pattern. This is not to say that a consumer will buy just any brand; he or she probably has two to five brands that provide similar levels of satisfaction to a particular consumption problem. However, from one purchase occasion to the next, the individual will switch brands from within this set, for the sake of variety. Brand Loyalty

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

This mode is typified by high involvement and rich prior experience. Consumers demonstrate brand loyalty when they repeatedly purchase a single brand to fulfill a specific need and have some degree of emotional connection to the brand. It is important to distinguish brand loyalty from simple habit. Brand loyalty is based on emotional connection toward the brand and a conscious commitment to find this brand each time the consumer purchases from this category. Conversely, habits are merely consumption simplifiers that are not based on the power of an emotional relationship with the brand. C. Advertising, Consumer Behavior, and Memory PPT 5-15 and 5-16 Semantic/Word Memory Semantic memory is the kind of memory through which names, words, and concepts are stored and retrieved from our minds. It is the type of memory that drives a great deal of low involvement or mindshare brands. It is a relatively well-understood form of human memory and is very easily used by advertisers. The more easily you can retrieve something from semantic memory, the more accessible it is. Greater accessibility is a good thing for advertised brand names. The more easily (or more quickly) one retrieves something from memory, the more frequent or popular one believes it to be. This is called the accessibility bonus. Episodic Memory Episodic memory is just like it sounds: memories of episodes. It is your memory of events, what you did last night, your friend’s party, and so on. It could also be a consumption experience like driving a certain car or eating a brand of ice cream. It could also be an ad, most likely a television ad. Episodic memory is not as well understood as semantic memory. Emotion Emotion is incredibly important in consumer behavior. Researchers have shown that if a brand is associated with a positive emotion or feeling, the subsequent information about the brand is actually distorted in favor of the emotion-linked brand and against others. It then affects subsequent consumer decisions in favor of the emotion-linked brand. This power clearly favors the use of emotional branding techniques, brand relationship building, including advertising. Information Overload and Simplification

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

Consumers appear to have a strong desire to have as much information as possible; they have always been told that good consumer decisions are based on having the most information. But it turns out to those who study consumer decision making that there is such a thing as information overload. Consumers simply get too much information and confront too many choices to be able to comprehensively and effectively apply all the information to the choice task. What they do then is to use a decision heuristic, or way of simplifying the task. Common ones include buying the most popular brand, the least expensive, the most expensive, the one you have heard the most about, or the one you bought last. Clutter and Attention Advertising clutter derives from the context in which ads are processed. Even if a person wanted to, it would be impossible to process and integrate every advertising message that he or she is exposed to each day. The clutter problem is further magnified by competitive brands making very similar performance claims. Advertisers employ a variety of tactics to break through the clutter. Popular music, celebrity spokespersons, sexy models, rapid scene changes, and anything that is novel are devices for combating selective attention. The battle for consumers’ attention poses another dilemma for advertisers. Without attention, there is no chance that an advertiser’s message will have its desired impact; however, the provocative, attention-attracting devices used to engage consumers often become the focal point of consumers’ ad processing. II. Perspective Two: The Consumer as Social Being PPT 5-17 Consumers are more than information processors, and ads are more than socially isolated attempts at attitude manipulation. In this approach, meaning is the focus, and consumer behavior is meaningfully social. The social meaning-based approach centers on knowing how to connect with human beings around their lives and consumption practices with advertising and other brand promotion. A. Consuming in the Real World PPT 5-18 Culture Culture is what a people do, or “the total life ways of a people, the social legacy the individual acquires from his or her group.” It is the way we eat, groom ourselves, celebrate, and mark our space and position. Cultures may be large and national, or they may be regional or local, or not geographic at all: urban hipster culture, teen tech-nerd, etc.

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

Culture surrounds the creation, transmission, reception, and interpretation of ads and brands, just as it touches every aspect of consumption.

Rituals are “often-repeated formalized behaviors involving symbols.” Cultures participate in rituals; consu Rituals don’t have to be the biggest events of the year. Stratification PPT 5-19 Stratification provides a broad context and refers to systematic inequalities in things such as wealth, income, education, power, and status. Social class and stratification was supposed to be reflected in a consumer’s taste and thus their consumption. The traditional view was that advertisers cared about social class and stratification because consumers used their choices to reflect their class. But this assumption has been challenged lately. Some believe that traditional social class–consumption taste hierarchies have collapsed, or at least become much less stable. Another factor is that the current period is a time of great and increasing income inequality. Taste PPT 5-20 Taste refers to a generalized set or orientation to consumer aesthetic preferences. Social class impacts consumption through tastes and media habits. Marketers of social class include what one wears, where one lives, and how one talks. Cultural capital is the value that cultures place on certain consumption practices and objects—ordering wine with dinner, flying first class, having an original piece of artwork hanging on your walls is cultural capital for some consumers. Family PPT 5-21 Although some kinds of purchases are handled by one family member, many decisions are actually diffuse nondecisions, arrived at through what consumer researcher C. W. Park aptly calls a “muddling-through” process. These “decisions” just get made, and no one is really sure who made them, or even when. Advertisers capitalize on the flexibility of this social system by suggesting in their ads who should take charge of a given consumption task, and then arming that person with the appearance of expertise so that whoever wants the job can take it and defend his or her purchases. Advertisers focus on the major gross differences in families as this impacts consumption.

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

Family roles change when both parents are employed or when children leave home to go to college. In addition, today the concept of family is very open: there are many single parent households, second marriages, and gay and lesbian households. Advertisers are often interested in things like the age of the youngest child, the size of the family, and the family income. For example, the age of the youngest child living at home tells an advertiser where the family is in terms of needs and obligations (that is, toys, investment instruments for college savings, clothing, and vacations). This is called a lifestage variable and is used frequently in advertising and promotion planning. Race and Ethnicity The question of how race figures into consumer behavior is difficult. We experience discomfort from the desire to say, “Race doesn’t matter, we’re all the same,” and on the other hand, not wanting (or not being able) to deny the significance of race in reaching ethnic subcultures with advertising that has ethnic significance and relevance. Still, race is something that does inform one’s social identity to varying degrees. One is not blind to one’s own ethnicity. African-Americans, Latinos, and other ethnic groups have culturally related consumption preferences that can be communicated about in advertising. Politics PPT 5-22, 5-23, and 5-24 This broad influence plays itself out in factors such as increased globalization of brands and greater world-wide acceptance of consumer culture. In addition, global movements, like country labor practices and politics, can create preferences for “green brands.” Gender There is, however, no definitive list of gender differences in consumption, because the expression of gender, just like anything else social, depends on the situation and the social circumstances. In the 1920s, advertisers openly referred to women as less logical, more emotional, and the cultural stewards of beauty—all untouchable in advertising in today’s context. Marketers must be aware of gender and be careful not to use gender to patronize, insult, or ignore. One market where this holds true is the gay and lesbian market. These consumers have large disposable incomes and have been ignored by marketers until recently. Understanding the nuances of different cultures is a business imperative.

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

Community Community is a powerful and traditional sociological concept. The idea of community extends well beyond the idea of a geographic place. Advertisers are becoming increasingly aware of its power. It is important in at least two major ways. • Products have social meanings, and community is the quintessential social domain, so consumption is inseparable from the notion of where we live. Communities may be the fundamental reference group. • Brand communities are groups of consumers who feel a commonality and a shared purpose grounded or attached to a consumer good or service. B. Cultural Branding and Advertising Cultural branding is a type of branding that leverages sociocultural forces to create and maintain great brands. It is often dependent on advertising. The basic idea is to find some rift or stress in the seams of society and culture and then use this to offer a solution in the form of a branded good. Rebellion and Advertising Scholars have noted that consumers sometimes use their consumption choices to stake out a position in a “revolution” of sorts. It must be remembered that anytime there is a significant social movement, a time of rapid change, opportunities galore are opened up to the advertiser. When the earth moves under our feet, we feel off balance and in need of reassurance, and advertised products often promise that reassurance. Authenticity Among the attributes advertising can give to a brand, authenticity (in the eyes of others) is one of the very most powerful. If an advertiser can convince consumers that their brand is the “real,” the authentic choice of those in the know, the original, then it is often seen as the best. This is a simple but very powerful brand statement. Sometimes companies just claim to be real so long that it eventually becomes true sometimes. C. How Ads Transmit Meaning PPT 5-25 Advertising can be thought of as “text” which is read and interpreted by consumers. Ads can turn already meaningful things into things with very special meaning—brands can become “cool” or develop high cultural capital through advertising. Ads turn products into brands.

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

Meaning to consumers is transmitted from ads only because there is an intelligible social context for the ad. Ads have become part of consumers’ everyday language and conversation. Ads in many ways are the sociocultural text of our time. Ads also become part of consumers’ everyday language by picking up phrases, slogans, ideas and agendas from ads. PPT 5-26 This PPT summarizes the whole process of CB influences.

ONLINE CONTENT The online dynamic content provides both content and insights into the ethical, global, and social media aspects of Advertising and Integrated Brand Communication. The integrated assessment components will provide students with assurances that they have mastered the assigned readings and provide feedback to faculty that the students have completed the assigned readings and data on student mastery of the content. In addition to the feedback on the correct answers, all of the assessment objects have been enhanced with additional tags that can be aggregated to provide feedback on how individual students have done on a specific learning outcome such as ethics. The online material can be delivered in one of two formats. For instructors who want to provide students with access to the Ad Age on Campus access as well as the online advertisements and student facing self-assessment quizzes, CourseMate will be provided with each new copy of Advertising and Integrated Brand Communication. Alternatively, students can decide to purchase CourseMate on its own which will also come with the MindTap Reader, which is the ebook version of the print product. For faculty that desire to have a variety of more in-depth assignments to integrate into their course and a desire to have more student data that can be used for analytic purposes, MindTap can be purchased with an enhanced capability. Faculty can customize the student experience and integrate the experience for their students into the campus Learning Management System. For a complete guide into the reporting and analytical capabilities available to faculty, consult the Assurance of Learning section of this manual.

Boxed Feature Questions and Tags QUESTION

DIFFICULTY

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Chapter 05 Social Media 01

Challenging

Technology

Promotion

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Chapter 05 Social Media 02

Challenging

Technology

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Chapter 05 Globalization 01

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Chapter 05 Ethics 01

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Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

http://adage.com/article/digital/linkedin-ramps-content-pursuit-ad-dollars/242935/ •

5.SocialMedia.Q1

1. Drag each stage of LinkedIn, according to the article, to its proper sequence in the diagram.

Content Marketing Platform

Sponsored story ads

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3 Content Marketing Platform

5.SocialMedia.Q2

Richard Branson, founder of Virgin Group, is an influencer columnist on LinkedIn. LinkedIn refers to such content as “premium content.” Do you think that this approach by influencers in corporate worlds is an effective idea to entice you to spend time on the social media site? Why/why not? Support your response with content from the chapter. Answer: Yes, according to the chapter, influencers are opinion leaders, and due to word of mouth and social media, they have pull due to credibility. Because this is a more career-oriented social network, the influencers should be credible business leaders. Yet, if the content itself is not helpful or seems not altruistic, then this approach could fail.

CHAPTER 5-Globalization http://adage.com/abstract?article_id=242029

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

For Cadillac’s global creative advertising, General Motors considered pitches for three months. GM chose Interpublic’s three agencies: Hill Holliday, Campbell-Ewald and Lowe. •

5.Globalization.Q1

Global creative advertising by a company such as General Motors can be done by a different agency that does the account management. Answer: False •

5.Globalization.Q2

Luxury brand marketing such as Cadillac importantly taps into consumers’ A. Ego-fulfillment, status, and power B. Online consumer behavior C. Brand history D. Demographics Answer: A

CHAPTER 5-Ethics http://adage.com/article/media/nbc-universal-interns-file-lawsuit/242978/

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5. Ethics.Q1

A behavior in industry that is receiving media attention due to ethics, such as with NBC is: A. Digital media tracking B. TiVo or DVR measurement C. Unpaid or underpaid internships D. Purchasing of DirectTV contracts

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

Answer: C •

5. Ethics.Q2

Have you had an unpaid internship before, or one where you worked overtime (8 hours a day plus)? If not, put yourself in the role of Saturday Night Live’s media intern. Discuss the ethics of this practice in your opinion. Answer: A correct response addresses all parts of the question with a supported opinion. For instance-No, I have not been an unpaid intern. But I did often work overtime when I worked as an intern in an ad agency. I did not complain because I got valuable experience and I got much more than some money. I think that as long as the intern is getting treated well overall and learning a lot to spark their career, it is not necessarily unethical because it is part of paying dues to get into a competitive industry in a tough economy.

Homework Grid Homework Description 1-a. Multiple Choice McDonald’s: Print Ad 1-b. Multiple Choice Buyer Behavior 1-c. Multiple Choice Buyer Behavior 2-a. Essay Brand Ambassador Types 2-b. Multiple choice Needs Recognition 3-a. Multiple choice Lululemon: Problem Solving Homework is available to faculty to select and integrate into their customized course. THE FOLLOWING SECTIONS OF THE INSTRUCTOR’S MANUAL HAS A SELECTION OF CASES THAT CAN BE INCORPORATED INTO YOUR COURSE AS OUT OF CLASS ASSIGNMENTS , OR AS A METHOD FOR INITIATING CLASSROOM DISCUSSION.

End of Chapter Questions 1.

When consumers have a well-defined consideration set and a list of evaluative criteria for assessing the brands in that set, they in effect possess a matrix of information about that category. Drawing on your experiences as a consumer, set up and fill in such a matrix for the category fast-food restaurants. This question asks the student to conduct an internal search for information about fast-food restaurants and fill in the information matrix defined by their consideration set and evaluative criteria. Several brands of fast-food restaurants (e.g., McDonald’s, Wendy’s, Burger King, and Taco Bell) would mark the columns of the information matrix and

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

evaluative criteria (e.g., prices, cleanliness, taste, menu variety, speed of service) would define the rows. The point of a question like this one is to encourage students to think about the wide variety of information that consumers possess as a basis for their brand attitudes and purchase preferences. 2.

Is cognitive dissonance a good thing or a bad thing from an advertiser’s point of view? Explain how and why advertisers should try to take advantage of the cognitive dissonance their consumers may be experiencing. Cognitive dissonance is the anxiety or regret that lingers after a difficult decision. Advertisers might view cognitive dissonance as a good thing. As the consumer is experiencing dissonance, that individual is likely to be more receptive to information from the advertiser. Dissonance reduction is a relevant goal when customer satisfaction is given high priority by the marketer. Providing detailed information and advice about proper use of the product can be very important after purchase as a way of reducing dissonance and simultaneously enhancing the customer’s satisfaction with his or her purchase.

Most people quickly relate to the notion that some purchasing decisions are more involving than others are. What kinds of products or services do you consider highly involving? What makes these products more involving from your point of view? Involvement with a product or service can be a function of several factors. Personal interests like pet ownership or exercise and fitness will influence involvement as will the risk associated with a purchase. Risk perceptions are usually determined by the time and money that must be invested to acquire a product. When consumers derive important symbolic meaning from products or brands, their involvement levels will also be affected. Finally, consumption choices linked to deep emotional concerns or rewards will also be more involving.

Explain the difference between brand-loyalty and habitual purchasing. When a brand-loyal customer arrives at a store and finds his or her favorite brand is out of stock, what would you expect to happen next? Habitual purchasing involves buying a single brand repeatedly as a solution to a mundane consumption problem. The motive is just to keep things simple. With brand loyalty, we also see repeat purchasing of a single brand, but in this case the sequence of purchases is based on highly favorable brand attitudes and a conscious commitment to the brand. For the brand-loyal customer a stock-out means that he or she will not buy from the category on the purchase occasion when the stock-out was experienced. For the habitual purchaser, a stock-out simply provides an incentive to try another brand.

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

Describe three attitude-change strategies that could be suggested by the results of a study of consumer behavior using multi-attribute attitude models. Provide examples of different advertising campaigns that have employed each of these strategies. The MAAMs framework discussed in detail in this chapter suggests three basic strategies for changing consumers’ attitudes. First, the advertiser could seek to change consumers’ perceptions of how well the brand performs with respect to important evaluative criteria. Second, effort could be directed at enhancing consumers’ perceptions about the importance for an evaluative criterion that previously had been considered unimportant for judging the brand. The third way to affect attitudes is to introduce a new attribute to the product category and establish the importance of this new evaluative criterion. This question can stimulate rich discussion if students are given an assignment before class to collect examples of advertising campaigns that feature each of the three change strategies.

Watch an hour of prime-time television and for each commercial you see, make a note of the tactic the advertiser employed to capture and hold the audience’s attention. How can the use of attention-attracting tactics backfire on an advertiser? Asking students to watch an hour of television will be one of the easiest class assignments that you ever make. However, you must emphasize that the advertisements are to be the point of their viewing. To help them focus on the task, have each student keep track of the number of ads and record the time length of each ad. Each ad also is to be scrutinized for tactics used by the advertiser to grab or hold attention. If all the students are asked to write a one-page summary of what they learned from this experience to bring to class, they will be primed for a lively discussion of the challenges faced by advertisers in attracting and holding consumers’ attention.

What does it mean to say that culture is “invisible”? Explain how this invisible force serves to restrict and control the activities of advertisers. Culture is invisible in that, for persons within a culture, it is hard to recognize how they are being influenced and constrained by the values they share with others in that culture. This invisible effect of culture becomes apparent when crosscultural comparisons are made. Culture is a critical issue for advertisers who are preparing advertising campaigns that will be conducted on a global scale. It is risky to presume that a campaign prepared in one culture will automatically transfer to others. Within a particular culture, changes in cultural values create important social trends that represent great sources of opportunity for the advertiser perceptive enough to spot the trend before it becomes obvious to all.

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

Give three examples of highly visible cultural rituals practiced annually in the United States. For each ritual you identify, assess the importance of buying and consuming for the effective practice of the ritual. How a culture chooses to celebrate its holidays reveals much about values. The annual cultural rituals mentioned in this question could be defined as major holidays—Easter, Fourth of July, Thanksgiving, Christmas, and so on. For each holiday discussed, the point is to consider the importance of buying and/or consuming for effective celebration of the holiday. One might come away from this discussion with a view of national holidays as “consumption festivals.” What does this say about American culture?

Are you a believer in the intergenerational effect? Make a list of the brands in your cupboards, refrigerator, and medicine cabinet. Which of these brands would you also expect to find in your parents’ cupboards, refrigerator, and medicine cabinet? This question provides another possible take-home project. The intergenerational effect is a reference to brand preferences handed down from one generation to the next. Students can provide raw material for considering the robustness of this effect by doing a pantry inventory. An important question to consider in discussing these effects is—does the effect appear to be confined to some product categories? Why might some product categories be more prone to an intergenerational effect than others?

10. “In today’s modern, highly educated society, there is simply no reason to separate men and women into different target segments. Gender just should not be an issue in the development of marketing and advertising strategies.” Comment. Although our society has witnessed major changes in sex-role norms and gender equity, many marketers and advertisers still feature gender in their segmentation strategies (e.g., Gillette takes distinctive approaches in marketing its razors to men versus women). Men and women obviously have different needs when it comes to some products and services. However, an interesting direction might be to ask the class for suggestions about products in which marketers are missing the boat in their gender-oriented strategies. Are some brands missing an opportunity by focusing too strongly on males or females when both sexes represent possible markets? Could some brands benefit by abandoning their genderspecific strategies to pursue a more unisex approach?

Solutions to Experiential Exercises 1.

How well do online advertisers understand your consumer behavior? Today’s interactive ads are so personalized that Web users routinely encounter the products and messages most likely

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

to appeal to their unique customer profile and preferences. As an out-of-class assignment, identify 20 ads that you see while browsing the Web on your computer or smartphone. For each, list whether or not the ad seemed relevant to your buying habits. Were the brands the ones you use or are likely to try? Did the messages address your social and cultural life context? Finally, judge whether online ads generally treated you as a “decision maker” or a “social being,” and explain your answer. This exercise makes students chronicle 20 ads as they go about their daily interactions with Internet media. Each student’s answers will differ since online advertising is personalized, addressing the consumer behavior of individual users. The questions require students to evaluate their own consumer behavior and determine if advertisers are effective at developing and targeting consumer profiles. 2.

Divide the class into teams and have each group create a campaign concept that directly addresses sociological factors of consumer behavior. Each group should create a campaign based on concepts of stratification, taste, and cultural capital. Once brands and campaigns are developed, each team should present its idea to the class and allow students to guess the income level, education, and occupational prestige of the campaign’s target audience. (Team members should keep this information confidential until after the class makes its evaluation.) Finally, take a vote on which campaign is most effective at appealing to the sociological motivations and tastes of its intended audience. Although campaigns will vary, individual teams should demonstrate the ability to develop products and advertising messages that address the class distinctions and tastes of the target audience. Students will have lively discussions about whether or not their classmates’ brands and campaigns accurately reflect the social class, taste, and cultural capital of the intended audiences.

A key issue in post-purchase evaluation is cognitive dissonance – the anxiety or “buyer’s remorse” that can linger after high involvement purchasing decisions. Research has shown that some consumers are more likely to read ads for a product they already have purchased than ads for competing brands. With this in mind, imagine that you have been hired by the luxury watchmaker Breitling to design an ad campaign specifically intended to ease potential cognitive dissonance. What steps could the company make to reach out to consumers after the purchase? What advertising messages and imagery could be most effective in reinforcing the consumer’s decision to purchase the watch? The work of marketers and advertisers does not stop once a sale is made. That is particularly true for high involvement, high-cost products and services, where consumers are likely to be more susceptible to the problem of cognitive dissonance. An unsatisfactory

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

post-purchase evaluation can lead consumers to return the item in the short term, or fail to make repeat purchases when it is time to replace that automobile, expensive watch, or high-tech mobile phone. Students should demonstrate an understanding of this important concept as they develop ideas for the luxury watch manufacturer. Ideas might include email or traditional mail outreach, using contact information gathered for warranty purchases. In advertising messages, the watchmaker might emphasize the notion of the watch’s status, longevity, or resilience–or very possibly all three. 4.

Working in small teams, brainstorm ideas for an advertising campaign that has as its primary target audience the community of consumers who are intensely loyal to Vans, the surf and skateboard brand best known for its quirky, slip-on canvas shoes. What steps would you take to tap into this brand community? As you develop ideas, explain how those approaches would connect to the rituals and values of that community. Also consider what socio-cultural meaning the campaign would convey about the brand and its users. This exercise allows students to explore key elements in understanding the second perspective offered in the chapter, that of understanding the consumer as a social being. One powerful way that consumers interact with advertising and brands is by virtue of the distinct cultural, geographic, or other communities to which they belong. For advertisers, the notion of community is important, because it grounds consumption and serves as an organizing point for many of the other social concepts discussed in the chapter, including rituals, traditions, and values. Brand communities can be particularly valuable. In this exercise, students should demonstrate an understanding of how Vans could reach out to its most loyal consumers, whether by sponsoring surfing competitions, online extreme sports discussion groups, or even distinct custom designs for its trademark shoe, all with the intention of reinforcing communal appeal.

Chapter 6: Market Segmentation, Positioning, and the Value Proposition

CHAPTER 6 Market Segmentation, Positioning, and the Value Proposition Key Terms segment target position positioning STP marketing heavy users, committed users, lead users brand freaks

switchers, or variety seekers emergent consumers point-of-entry marketing demographic segmentation geodemographic segmentation psychographics lifestyle segmentation benefit segmentation

consumer markets business markets competitive field niche marketing positioning strategy value proposition brand promise brand platform

Summary PPT 6-2 here Explain the process known as STP marketing. The term STP marketing refers to the process of segmenting, targeting, and positioning. Marketers pursue this set of activities in formulating marketing strategies for their brands. STP marketing also provides a strong foundation for the development of advertising campaigns. While no single approach can guarantee success in marketing and advertising, STP marketing should always be considered when consumers in a category have heterogeneous wants and needs. Describe different bases that marketers use to identify segments. In market segmentation, the goal is to break down a heterogeneous market into more manageable subgroups or segments. Many different bases can be used for this purpose. Markets can be segmented on the basis of usage patterns and commitment levels, demographics, geography, psychographics, lifestyles, benefits sought, SIC codes, or stages in the purchase process. Different bases are typically applied for segmenting consumer versus business-to-business markets. Discuss the criteria to target a segment.

Chapter 6/Market Segmentation, Positioning, and the Value Proposition

In pursuing STP marketing, an organization must get beyond the stage of segment identification and settle on one or more segments as a target for its marketing and advertising efforts. Several criteria are useful in establishing the organization’s target segment. First, the organization must decide whether it has the proper skills to serve the segment in question. The size of the segment and its growth potential must also be taken into consideration. Another key criterion involves the intensity of the competition the firm is likely to face in the segment. Often, small segments known as market niches can be quite attractive because they will not be hotly contested by numerous competitors. Identify the essential elements of an effective positioning strategy. The P in STP marketing refers to the positioning strategy that must be developed as a guide for all marketing and advertising activities that will be undertaken in pursuit of the target segment. Effective positioning strategies should be linked to the substantive benefits offered by the brand. They are also consistent internally and over time, and they feature simple and distinctive themes. Benefit positioning, user positioning, and competitive positioning are options that should be considered when formulating a positioning strategy. Review the necessary ingredients for creating a brand’s value proposition. Many complex considerations underlie marketing and advertising strategies, so some device is called for to summarize the essence of one’s strategy. We advance the idea of the value proposition as a useful device for this purpose. A value proposition is a statement of the various benefits (functional, emotional, and self-expressive) offered by a brand which create value for the customer. These benefits as a set justify the price of the product or service. Clarity in expression of the value proposition is critical for development of advertising that sells.

Chapter Outline I. STP Marketing and Advertising PPT 6-3 here Very few marketers advertise to everyone. It is way too expensive and wasteful. So, advertisers usually have to segment their market—that is, cut it into pieces and focus on the piece or pieces (segments) that make the most sense. They then have to target (focus advertising and IBC for delivery upon) that segment or segments with advertising and integrated brand promotion. Then they have to position their brand for that segment(s). Positioning means to attempt to give a brand a certain meaning relative to its competitors. Doing the three together is called the STP

Chapter 6/Market Segmentation, Positioning, and the Value Proposition

marketing approach. Markets are segmented; segments of markets (groups of potential customers) are targeted, and brands are positioned. II. Segmenting Markets PPT 6-4 here The first step in STP marketing involves market segmentation—breaking down large, broader markets into more manageable submarkets or customer segments. Advertisers need to identify a segment with common characteristics that will lead the members of that segment to respond distinctively to a marketing program. This section reviews several ways that consumer markets are commonly segmented. A. Usage and Commitment Level PPT 6-5 and PPT 6-6 here It is important to recognize that for most products and services, some users will purchase much more, and more frequently, than others. These consumers are called heavy users, committed users, or lead users. It is common to find that heavy users in a category account for the majority of a product’s sales and become the preferred or primary target segment. A heavy-user focus, however, takes attention and resources away from those who need encouragement to purchase the market’s brand. Perhaps most important, heavy users may be differ significantly from average or infrequent users in terms of their motivations to consume, their approach to the brand , or their image of the brand. They may be brand-freaks, consumers who are so committed to the brand that their consumer behavior toward it borders on the pathological. B. Switchers and Variety Seekers PPT 6-7 here These consumers often buy what is on sale or choose brands that offer discount coupons or other price incentives. Whether they are pursued through price incentives, high-profile advertising campaigns, or both, switchers turn out to be a costly target segment. Much can be spent in getting their business merely to have it disappear just as quickly as it was won. C. Emergent Consumers PPT 6-7 here Emergent consumers offer the organization an important business opportunity. In most product categories there is a gradual but constant influx of first-time buyers. The reasons for this influx vary by product category and include purchase triggers such as puberty, college

Chapter 6/Market Segmentation, Positioning, and the Value Proposition

graduation, marriage, a new baby, divorce, a new job, a big raise, or retirement. Immigration can also be a source of numerous new customers in many product categories. Emergent consumers are motivated by many different factors, but they share one notable characteristic: Their brand preferences are still under development. Developing advertising campaigns to win with first-time users is often referred to as point-of-entry marketing. D. Demographics PPT 6-8 here Demographic segmentation is used in selecting target segments and includes basic descriptors like age, gender, race, marital status, income, education, and occupation. Demographic information has special value in market segmentation because if an advertiser knows the demographic characteristics of the target segment, choosing media to efficiently reach that segment is much easier. Demographic information has two specific applications: • Demographics are commonly used to describe or profile segments that have been identified with some other variable. If an organization had first segmented its market in terms of product usage rates, the next step would be to describe or profile its heavy users in terms of demographic characteristics like age or income. • Demographic categories are frequently used as the starting point in market segmentation. E. Geographic Location PPT 6-9 here Geographic segmentation may be conducted within a country by region (for example, Pacific Northwest versus New England), by state or province, by city, or even by neighborhood. Climate and topographical features yield dramatic differences in consumption by region for products like snow tires and surfboards, but geography can also correlate with other differences that are not so obvious. Eating and food preparation habits, entertainment preferences, recreational activities, and other aspects of lifestyle have been shown to vary along geographic lines. Marketers have merged information on where people live with the U.S. Census Bureau’s demographic data to produce a form of market segmentation known as geodemographic segmentation that identifies neighborhoods (by zip codes) around the country that share common demographic characteristics. One such system, known as PRIZM (potential rating index by zip marketing), identifies 62 market segments that encompass all the zip codes in the United States. F. Psychographics and Lifestyle

Chapter 6/Market Segmentation, Positioning, and the Value Proposition

PPT 6-10 here Psychographics is a term that refers to a form of research that emphasizes the understanding of consumers’ activities, interests, and opinions (AIOs). Psychographics were created as a tool to supplement the use of demographic data. Because focus on consumers’ activities, interests, and opinions often produces insights into differences in the lifestyles of various segments, this approach usually results in lifestyle segmentation. Knowing details about the lifestyle of a target segment can be valuable for creating advertising messages that ring true to the consumer. G. Benefits Sought PPT 6-11 here In benefit segmentation, target segments are delineated by the various benefit packages that different consumers want from competing products and brands. H. Segmenting Business-to-Business Markets PPT 6-11 here The discussion of segmentation has focused on ways to segment consumer markets—the markets for products and services purchased by individuals or households to satisfy their specific needs. Consumer marketing is often compared and contrasted with business-tobusiness marketing. Business markets are the institutional buyers who purchase items to be used in other products and services or to be resold to other businesses or households. Business markets can be segmented using several of the options already discussed. PPT 6-12 here III. Prioritizing Segments PPT 6-13, PPT 6-14, and PPT 6-15 here Segmenting markets typically yields a mix of segments that vary in their attractiveness to the advertiser. In pursuing STP marketing, the advertiser must get beyond this potentially confusing mixture of segments to a selected subset that will become the primary target for its marketing and advertising programs. Perhaps the most fundamental criterion in segment selection revolves around what the members of the segment want versus the organization’s ability to provide it. Every organization has distinctive strengths and weaknesses that must be acknowledged when choosing its target segment. Another major consideration in segment selection entails the size and growth potential of the segment. Segment size is a function of the number of people, households, or institutions in

Chapter 6/Market Segmentation, Positioning, and the Value Proposition

the segment, plus their willingness to spend in the product category. A second consideration is the forecasted return on investment (ROI) for the segment. A third selection criterion is the competitive field—companies that compete for the segment’s business. Advertisers must first look at the competitive field and then decide whether it has a particular expertise, or perhaps just a bigger budget, that would allow it to serve the segment more effectively. The smaller-is-better segmentation principle has become so popular in choosing segments that it is now referred to as niche marketing. A market niche is a relatively small group of consumers who have a unique set of needs and who typically are willing to pay a premium price to the firm that specializes in meeting those needs. IV. Targeting PPT 6-16 here A. Positioning/Repositioning Positioning or repositioning is where the advertiser and IBP pros work on crafting the meaning of the desired brand. B. The Bahr–InterBrand Positioning Opportunity Method PPT 6-17 here The best positioning model comes from Anne Bahr at InterBrand. InterBrand is the world’s largest and most successful brand consultancy. It has four factors represented by overlapping circles. The point at which these four meet is considered the best opportunity, the brand’s best position. They are: • Relevance: Where is the strong consumer connection? What is the revealed need(s) of consumers? • Differentiation: Can the brand stand out as significantly different from others? • Credibility: Will consumers believe it? • Stretch: Will the brand’s meaning have continued relevance in changing times? Will it foster brand extensions? To derive a brand’s best positioning, you should find the place where the answer to all four questions is “yes.” Then you know that your positioning is good and sustainable. C. Essentials for Effective Positioning Strategies PPT 6-18 here

Chapter 6/Market Segmentation, Positioning, and the Value Proposition

Effective positioning strategies are based on meaningful commitments of organizational resources to produce substantive value for the target. Deliver on the Promise For a positioning strategy to be effective and remain effective over time, the organization must be committed to creating substantive value for the customer. There’s Magic in Consistency A positioning strategy also must be consistent internally and consistent over time. Regarding internal consistency, everything must work in combination to reinforce a distinct perception in the consumer’s eyes about what a brand stands for. A strategy also needs consistency over time. Consumers have perceptual defenses that allow them to screen or ignore most of the ad messages they are exposed to. Breaking through the clutter and establishing what a brand stands for is a tremendous challenge, but it is a challenge made easier by consistent positioning. Simplicity and distinctiveness are essential to the advertising task. No matter how much substance has been built into a product, it will fail in the marketplace if the consumer doesn’t perceive what the product can do. The basic premise of a positioning strategy must be simple and distinctive if it is to be communicated effectively to the target segment. V. Working with a Value Proposition and a Brand Platform PPT 6-19 here Brand positioning is often summarized as a value proposition, a brand promise, or a brand platform. One of the ways to capture and keep a record of what our brand is supposed to stand for in the eyes of the target segment is by articulating the brand’s value proposition. A value proposition is a natural extension of concepts that are already familiar; it simply consolidates the emphasis on customer benefits that has been featured in this chapter. It is a simple sentence or two that clearly says just what value the brand will be to the customer. The brand promise is another name for this idea. It is instead expressed in terms of what it is that the brand promises the customer. Another way of summarizing or “putting it all together” is known as the brand platform—a core idea that frames an ambition or aspiration for the brand that will be relevant to target audiences over time. PPT 6-20 here

Chapter 6/Market Segmentation, Positioning, and the Value Proposition

A. Now, Making It Happen The strategic planning triangle proposed by advertising researchers Esther Thorson and Jeri Moore will be helpful to pull together the concepts presented in this chapter. As reflected in Exhibit 6.15, the apexes of the planning triangle entail the segment(s) selected as targets for the campaign, the brand’s value proposition, and the array of persuasion tools that will be deployed to achieve campaign goals. Thorson and Moore place identification and specification of the target segment as the paramount apex in their model. The second important apex in the planning triangle entails specification of the brand’s value proposition. The final apex of the planning triangle considers the various persuasion tools that may be deployed as part of the campaign.

ONLINE CONTENT The online dynamic content provides both content and insights into the ethical, global, and social media aspects of Advertising and Integrated Brand Communication. The integrated assessment components will provide students with assurances that they have mastered the assigned readings and provide feedback to faculty that the students have completed the assigned readings and data on student mastery of the content. In addition to the feedback on the correct answers, all of the assessment objects have been enhanced with additional tags that can be aggregated to provide feedback on how individual students have done on a specific learning outcome such as ethics. The online material can be delivered in one of two formats. For instructors who want to provide students with access to the Ad Age on Campus access as well as the online advertisements and student facing self-assessment quizzes, CourseMate will be provided with each new copy of Advertising and Integrated Brand Communication. Alternatively, students can decide to purchase CourseMate on its own which will also come with the MindTap Reader, which is the ebook version of the print product. For faculty that desire to have a variety of more in-depth assignments to integrate into their course and a desire to have more student data that can be used for analytic purposes, MindTap can be purchased with an enhanced capability. Faculty can customize the student experience and integrate the experience for their students into the campus Learning Management System. For a complete guide into the reporting and analytical capabilities available to faculty, consult the Assurance of Learning section of this manual.

Boxed Feature Questions and Tags QUESTION

DIFFICULTY

BUSPROG

DISC

Primary

BLOOM'S

Chapter 06 Social Media 01

Easy

Technology

Promotion

Application

Chapter 06 Social Media 02

Challenging

Technology

Promotion

Synthesis

Chapter 6/Market Segmentation, Positioning, and the Value Proposition

Chapter 06 Globalization 01

Moderate

Diversity

Promotion

Application

Chapter 06 Globalization 02

Challenging

Diversity

Promotion

Synthesis

Chapter 06 Ethics 01

Moderate

Ethics

Promotion

Application

Chapter 06 Ethics 02

Challenging

Ethics

Promotion

Synthesis

CHAPTER 6-Social Media http://adage.com/article/media/york-times-brings-rich-media-ads-ipad-app/242924/ •

6.SocialMedia.Q1

Segmentation, Targeting, and Positioning are still relevant strategies now that digital media such as iPad advertising is prevalent. Answer: T

•

6.SocialMedia.Q2

Describe what the article means by “banner blindness” – something that is crucial to the principles of this chapter. Answer: Banner blindness is a term that refers to online consumers, and how they tend to ignore banner ads or such ads that run across or sit at the top of the screen. They are used to that space as ad space, and are as such “blind” to the ads.

Chapter 6/Market Segmentation, Positioning, and the Value Proposition

CHAPTER 6-Globalization http://adage.com/article/privacy-and-regulation/student-project-kill-digital-adtargeting/242955/

• 6.Globalization.Q1 Online consumers are segmented, and the student interviewed here is worried if this is used for: A. online target marketing B. price discrimination C. service variance D. service discrimination

•

6.Globalization.Q2

Based on your knowledge of STP strategy, do you as a consumer prefer accurate target marketing based ads (or non-accurate ones)? Why? Then, how or why would you use this student’s idea/program? Answer: This response has two parts. One, a yes or no on preference. This should be explained (e.g., yes I prefer target advertising because it is informative while mismatched ads are a waste of time to see and are annoying). Two, how or why they would use the program described in the article (e.g., I would not use the program because I prefer my ads to be targeted based on me). CHAPTER 6-Ethics http://adage.com/article/media/paula-deen-brand-recover/242914/

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6. Ethics.Q1 Paula Deen is a human brand that needs to work on some positioning post communication crisis. Drag each aspect of the process to its proper place in the diagram.

1 Communication Crisis

2 Brand Repositioning

3 Brand Positioning

Chapter 6/Market Segmentation, Positioning, and the Value Proposition

Answer: 1 Brand Positioning

•

2 Communication Crisis

3 Brand Repositioning

6. Ethics.Q2

Would you have pulled relationships or contracts in sponsorship or marketing communications with Paula Deen post the media attention to her situation? Why/not? Answer: The correct response will address yes or no they would not have pulled relationships (e.g., yes) and why (e.g., her image could transfer to associated people or companies as being racist).

Homework Grid Homework Description 1-a. Drag and Drop Mazda: Strategy 1-b. True/False Mazda: Campaigns 1-c. Multiple choice Mazda: Targeting 2-a. True/False STP Marketing 2-b. Multiple choice Segments 3-a. Multiple choice JC Penney: Emergent consumers 3-b. True/False Psychographic segmentation 3-c. Multiple Select Segment selection criteria Homework is available to faculty to select and integrate into their customized course. THE FOLLOWING SECTIONS OF THE INSTRUCTOR’S MANUAL HAS A SELECTION OF CASES THAT CAN BE INCORPORATED INTO YOUR COURSE AS OUT OF CLASS ASSIGNMENTS , OR AS A METHOD FOR INITIATING CLASSROOM DISCUSSION.

End of Chapter Questions 1.

Explain the appeal of emergent consumers as a target segment. Identify a current ad campaign targeting an emergent-consumer segment. Emergent-consumer segments are appealing because of their long-term potential. Emergent consumers are first-time buyers with no brand loyalty. Marketers who target such segments

Chapter 6/Market Segmentation, Positioning, and the Value Proposition

may be able to cultivate lifetime relationships that can lead to substantial revenue streams. Check your college newspaper for the credit-card companies working your campus to solicit new cardholders: this is emergent-consumer targeting. 2.

It is often said that psychographics were invented to overcome the weaknesses of demographic information for describing target segments. What unique information can psychographics provide that would be of special value to advertisers? Psychographic variables gauge consumers’ activities, interests, and opinions. When used to describe segments, they are likely to stimulate insights about the motives of consumers in the target segment. Psychographic descriptors can also be quite useful to the art and creative directors and copywriters responsible for developing specific advertisements. Psychographic information helps those who prepare advertisements to better understand the consumer they are trying to reach and engage.

What criteria did Mobil Oil Corporation weigh most heavily in its selection of Road Warriors as a target segment? What do you think will be the biggest source of frustration for Mobil in trying to make this strategy work? In the segmentation example involving Mobil Oil Corporation, Road Warriors were selected as the target segment because of their high spending levels. Also, targeting Road Warriors allowed Mobil to position itself away from other gasoline retailers who promote low price as their primary competitive emphasis. To make this strategy work, Mobil must deliver high-quality service each time a Road Warrior visits. Finding, training, and motivating its attendants to deliver premium service will be a major challenge for Mobil.

Explain why smaller is better when selecting segments to target in marketing strategies. Smaller really can be better when it comes to selecting target segments. Large segments typically are familiar to most of the key players in the competitive field, and they may be characterized by intense competitive rivalries. Smaller segments can be very attractive in that they may not offer enough business to support more than one company, but if yours is that one company, serving a small segment can be profitable. Those who seek to identify and pursue “one-company” segments are commonly focused on market niches.

What essential elements of a positioning strategy can help overcome the consumer’s natural tendency to ignore, distort, or forget most of the advertisements that she or he is exposed to? Most advertising that consumers are exposed to has no effect on them. A sound positioning strategy can be important in overcoming the consumer’s natural tendency to screen out

Chapter 6/Market Segmentation, Positioning, and the Value Proposition

most commercial messages. The distinctiveness and simplicity of a positioning strategy are essential elements that help an advertiser break through the clutter to reach the consumer. Consistency over time is another critical element for overcoming consumers’ innate perceptual filters—communicating the same basic themes to the target segment over time helps the message to stick in the minds of consumers. 6.

Review the section—Essentials for Effective Positioning Strategies. As you think about failed General Motors’ brands like Pontiac and Oldsmobile, which essentials did they fail to meet? Pontiac began an important turnaround during the 1980s with its "We Build Excitement" and “Grand Am—Excitement Well Built” campaigns. The automaker's positioning strategy had simple, distinctive themes, and was consistent over time. Unfortunately, when Pontiac failed to deliver substance to back up its claim of being "well built," consumers turned away. Plastic fenders, under-powered engines borrowed from GM's Chevy and Buick divisions, and premium pricing turned off the customer segment looking for excitement. With Oldsmobile, the demise started with an ill-conceived and ill-fated campaign “This is not your father’s Oldsmobile.” Problem was—it WAS your father’s Oldsmobile with outdated handling and styling. This was a classic case of failing to deliver on the brand promise.

Which of the market segmenting strategies discussed in this chapter are likely to be most effective for business-to-business marketing? Why would techniques that are highly successful in targeting consumer markets, such as lifestyle segmentation, be less effective? Market segmentation by usage patterns and geographic factors can be highly effective in reaching specific business markets, where customers generally have established purchasing, shipping, and manufacturing schedules. In general, simpler segmentation strategies are likely to be most effective in B2B settings, such as targeting business customers by their experience with the purchasing process. Segmentation strategies based on customer motivation, such as lifestyle measures or psychographics, typically do not translate to business climate where the emotional factor in purchasing decisions is greatly reduced.

Experiential Exercises 1.

Like other reality television programs, Project Runway entertains viewers by staging dramatic competitions between everyday people. A cable-TV hit for many years, Runway features supermodel host Heidi Klum, who follows amateur fashion designers as they make original clothing items with limited time and materials. Each week, contestants face professional judges, and a loser is sent home, leaving one final contestant to win the big money prize and a

Chapter 6/Market Segmentation, Positioning, and the Value Proposition

new career in fashion design. Identify the target viewing audience of Project Runway, and explain how segmenting, targeting, and positioning contribute to the show’s success. Television networks seek loyal viewers so that they can sell lucrative advertising and sponsorship to businesses. For marketers of the Lifetime channel’s Project Runway, the STP process applies both to attracting the viewing audience and attracting advertising sponsors. Segmenting the viewing audience involves breaking down all possible television viewers into manageable subgroups. Runway narrows all possible television viewers using demographic segmentation (women age 18 to 49) and lifestyle segmentation (styleconscious urban professionals). With this audience tuned in, Lifetime is able to attract fashion-related advertisers, including cosmetics companies (L'Oréal), hair-care brands (Garnier, TREsemmé), and clothing retailers (Bluefly, Banana Republic). Finally, Project Runway is positioned in a unique niche: reality television for fashion lovers. 2.

Electronic reading devices are hot, and Amazon’s Kindle and Apple’s iPad are in a heated battle to win over the bookworms of the world. Kindle focuses solely on reading, whereas iPad does reading, movies, music, office computing, and more. Some analysts predict that iPad will eclipse Kindle because it offers many powerful multimedia features; others think Kindle can hold its own. Make a case for how Amazon might use segmentation and a clever value proposition to dominate the growing e-books market with its Kindle stand-alone reader. If Kindle and iPad are equal when it comes to reading books, the outcome of the e-book wars may depend on which company is better at segmenting audiences and formulating a value proposition. The right segmentation and value proposition could give Kindle an edge over iPad, despite the latter’s comprehensive computing features. Kindle has a welldefined niche as a stand-alone reader for people who like to read books. And while “people who like to read books” is a much smaller consumer segment than the one Apple is targeting with iPad, Amazon has the edge on serving that smaller niche. The outcome of the e-book wars may be determined by who has the better online bookstore, who sponsors the best social networking clubs at Facebook and Twitter, and who has the most literary credibility in the minds of people who frequent traditional bookstores. Such functional and emotional benefits can be influenced by advertising and promotion, especially by skillful market segmentation and a well-defined value proposition.

Compose value proposition statements for, Starbucks Coffee and Levi Strauss Jeans. Each value proposition should crystallize what each brand offers to consumers and serve as a clear mission statement for all subsequent STP marketing efforts. This exercise helps students understand the importance of clarity of mission for advertising campaigns and IBP. They should demonstrate an understanding of the three key features of

Chapter 6/Market Segmentation, Positioning, and the Value Proposition

value propositions – the functional, emotional, and self-expressive benefits delivered by that brand that provide value to customers in a target segment. For each of these highlyrecognizable companies, students should provide examples of benefits in all three categories: the functional benefits of flavorful coffee at Starbucks and attractive, goodfitting jeans at Levi; the emotional benefits of Starbucks inviting coffee lounges or Levi’s connection to American lore; and the self-expressive benefits of letting others know you are hip, cultured, urbane in the case of both brands. 4.

The Folgers campaign was distinctive, in part, because the company spent no money on media, instead allowing the new ads to circulate for free through user sites such as YouTube. That strategic decision reflected an understanding that its young target market was more likely to be online than watching the evening news. What might be the most effective media to reach each of the following target segments? a. Upper-income men, ages 45 to 60, for a financial services product. b. Young homeowners, ages 30 to 40, for a new interior paint product. c. Teenage boys who live in rural areas for a new basketball shoe. d. Senior citizens for a new denture paste product. YouTube might have been a great way to find 20-somethings still figuring out their coffee habits, as in the instance of the Folgers campaign. But different campaigns and different target audiences require different media. Students might suggest advertisements in The Wall Street Journal or USA Today to reach the men in example (a) or the evening news to reach the seniors in example (d). But more finely targeted efforts might be needed in other instances—an internet campaign or videogame promotion to reach the teen-agers in example (c), or advertising on a home improvement cable channel in example (b).

Chapter 7: Advertising Research

CHAPTER 7 Advertising Research Key Terms consumer insights concept test lifestyle (AIO) research focus group projective techniques dialogue balloons story construction Zaltman Metaphor Elicitation Technique (ZMET) fieldwork embedded

long interview resonance test normative test scores frame-by-frame test communication test physiological assessment thought listing(cognitive response eye-tracking systems analysis) tracking studies recall tests direct response recognition inquiry/direct response measures recognition tests single-source data Starch Readership Services IRI BehaviorScan implicit memory measures account planning attitude study

Summary PPT 7-2 here Explain the purposes served by and methods used in developmental advertising research. Advertising and promotion research can serve many purposes in the development of a campaign. There is no better way to generate fresh ideas for a campaign than to listen carefully to the customer. Qualitative research involving customers is essential for fostering fresh thinking about a brand. Audience definition and profiling are fundamental to effective campaign planning and rely on advertising research. In the developmental phase, advertisers use diverse methods for gathering information. Focus groups, projective techniques, the ZMET, and fieldwork are trusted research methods that directly involve consumers and aid in idea generation and concept testing. Identify sources of secondary data that can aid the IBP planning effort. Because information is such a critical resource in the decision-making process, several sources of data are widely used. Internal company sources such as strategic marketing plans, research reports, customer service records, and sales data provide a wealth of information on consumer tastes and preferences. Government sources generate a wide range of census and labor statistics, providing key data on trends in population, consumer spending, employment, and immigration. Commercial data sources provide advertisers with a wealth of information

Chapter 7: Advertising Research

on household consumers. Professional publications share insider information on industry trends and new research. Finally, the Internet is a revolutionary research tool that delivers rich data at virtually no cost. In particular, advertisers can obtain sophisticated research data at thousands of consumer- and brand-based online community sites. Discuss the purposes served by and methods used in copy research. Copy research (evaluative research) aims to judge the effectiveness of actual ads. Advertisers and clients try to determine if audiences “get” the joke of an ad or retain key knowledge concerning the brand. Tracking changes in audience attitudes, feelings and emotions, behavior, and physiological response is important in gauging the overall success of an ad, and various methods are employed before and after the launch of a campaign to assess the impact on audiences. Communication tests, recall testing, pilot testing, and the thought-listing technique are a few of the methods that try to measure the persuasiveness of a message. Some agencies, attempting to bypass the high cost and inconclusive results of research, substitute account planning for traditional advertising and promotion research. Advocates of this trend believe an account planning system merges the best in research and brand management. Discuss the basic research methods used after ads are in the marketplace. Once an ad campaign has reached the marketplace, agencies and firms turn to results-oriented research to try to determine whether the ad has succeeded—whether, quite simply, the ad prompted consumers to buy the product or service. One of the most commonly employed methods of results-oriented research is the use of tracking studies to measure the apparent effect of advertising over time. Another long-standing method is the use of reply cards or tollfree numbers, which can track the direct responses of consumers to a particular campaign. Technology is also producing new results-oriented techniques. The development of universal product codes, combined with television monitoring devices, allows advertisers in some instances to track household consumption patterns from the television to the checkout lane. Researchers are also evaluating sophisticated models to more accurately track estimated sales from advertising, what has been a painstaking and expensive endeavor.

Chapter Outline PPT 7-3 here Advertising and brand promotion research is any research that aids in the development, execution, or evaluation of advertising and promotion. Good research can move you closer to producing effective advertising and brand promotion. A lot of what is called “advertising and brand promotion research” actually takes place well before the process begins and is not research “on” ads or promotion at all—it is developmental to the process. The structure of this chapter

Chapter 7: Advertising Research

divides the ad and integrated brand promotion (IBP) research into three parts: • Developmental advertising and promotion research (before ads are made) • Copy research (as the ads are being finished or are finished) • Results-oriented research (after the ads are actually in the marketplace). I. Stage One: Developmental Advertising and IBP Research PPT 7-4 and PPT 7-5 here Developmental advertising and promotion research is used to generate opportunities and messages. It helps creatives (the people who dream up and actually make the ads) and the accounts team figure out the target audience’s identity, what they perceive themselves as needing in a given good or service, and their usage expectations, history, and context, among other things.. It is conducted early in the process to influence the way the ads, branded entertainment, or other IBPs turn out. It is sometimes called consumer insights. A. Design Thinking PPT 7-6 here Design thinking is a newer way of looking at the integration of research and product development. It is finding its way into advertising and brand promotion as well. The idea is to get marketers and advertisers to think like designers. Designers use a type of thought process that emphasizes getting rid of any preconceived notions of what a good or service is currently and replaces it with a process in which designers partner with users/potential users to actually create from scratch what the good or service should actually look like. Design thinking emphasizes data acquired from close work with consumers that reveals what they really need and want in a good or service, not what some engineer screwed together, or what they told you in a focus group. It then uses an ongoing process of prototyping, use, feedback, prototyping again (and again and again sometimes), and then communicating what the brand really does (or could do) for real consumers. B. Concept Testing PPT 7-6 here A concept test seeks feedback designed to screen the quality of a new idea, using customers as the judge and jury. Concept testing may be used to screen new ideas for specific advertisements or to assess new product concepts. Before a new product is launched, the advertiser should have a deep understanding of how the product fits current needs and how much consumers are willing to pay for the new product. Concept tests of many kinds are commonly included to get quick feedback on new product or advertising ideas.

Chapter 7: Advertising Research

C. Audience Profiling PPT 7-7 here Creatives need to know as much as they can about the people to whom their ads will speak. This audience profiling is done in many ways. One way is through lifestyle research, also known as AIO (activities, interests, and opinions). D. Focus Groups PPT 7-8 here A focus group is a discussion session with (typically) 6 to 10 target customers who have been brought together to come up with new insights about the good or service. Focus groups offer the opportunity to gather in-depth data. It takes great skill and training to run focus groups effectively. E. Projective techniques PPT 7-8, PPT 7-9, and 7-10 here Projective techniques are designed to allow consumers to “project” their thoughts, but mostly feelings (conscious or unconscious), onto a “blank” or neutral “surface.” The most common projective techniques are: • Dialogue balloons offer consumers the chance to fill in the dialogue of cartoon-like stories. The story usually has to do with a product use situation. • Story construction asks consumers to tell a story about people depicted in a scene or picture. • The Zaltman Metaphor Elicitation Technique (ZMET) claims to draw out people’s buried thoughts and feelings about products and brands by encouraging participants to in terms of metaphors. ZMET draws metaphors from consumers by asking them to spend time thinking about how they would visually represent their experiences with a particular product or service. F. Method: Fieldwork/Long Interviews Two methods of obtaining information about day-to-day consumer behavior is through fieldwork and long interviews. Fieldwork Fieldwork is conducted outside the agency (i.e., in the “field”), usually in the home or site

Chapter 7: Advertising Research

of consumption. Its purpose is to learn from the experiences of the consumer and from direct observation. Consumers live real lives, and their behavior as consumers is intertwined throughout these real lives. Their consumption practices are embedded; that is, they are tightly connected to their social context. Long interview The long interview is another method of gaining data about the real lives of consumers and the way they think about the brand, the category, and how its consumption fits (or doesn’t) into their lives. Long interviews are not just long (meaning more than 15 minutes, usually more like an hour); they are, when conducted by trained researchers, structured in such a way as to best get at important connections. The role of listening in this method cannot be overstated. II. Sources of Secondary Data PPT 7-11 here A. Mining the Web The Internet has revolutionized developmental research, particularly for smaller agencies and advertisers. Common search engines allow the searching of enormous amounts of data previously available only to the wealthiest agencies. Human search costs have been slashed. Of particular value are Web-based interest groups, or online communities. Social media data from companies like Facebook are great resources. B. Internal Company Sources There is often valuable data within the company: customer service records, warranty registration cards, customer complaints, and various sales data. All of these provide a wealth of information relating to the proficiency of the company’s advertising programs and more generally, changing consumer tastes and preferences. C. Government Sources Various government organizations generate data on factors of interest to advertising planners: information on population and housing trends, transportation, consumer spending, and recreational activities in the United States are examples. D. Commercial Sources

Chapter 7: Advertising Research

Information from these sources is reasonably comprehensive and is normally gathered using reasonably sound methods. The cost of information from these sources is greater than information from government sources but is specifically designed to be of benefit to advertisers and marketers. Professional Publications Professional publications are periodicals in which marketing and advertising professionals report significant information related to industry trends or new research findings. III. Stage Two: Copy Research PPT 7-12 and PPT 7-13 here Copy research also called as evaluative research refers to research on actual ads or promotional texts, finished or unfinished. Copy research is used to judge or evaluate ads and promotions. This research usually occurs right before or after the ad is finalized. Just what do advertising people want out of their message tests? The answer, of course, depends on whom you ask. The account team wants some assurance that the commercial or ad does what it is supposed to do. The client typically wants to see some numbers, generally meaning normative test scores—scores relative to the average for a category of ads. The creatives don’t like copy testing at all. Despite the politics involved, copy testing research is a good idea most of the time. Properly conceived, correctly conducted, and appropriately applied, copy research can yield important data that management can then use to determine the suitability of an ad. A. Evaluative Criteria and Methods This section discusses the major evaluative criteria and the major methods of assessing ads and promotions on these criteria. Communication Tests PPT 7-13 and PPT 7-14 here A communication test simply seeks to discover whether a message is communicating something close to what the advertiser desired. Communications tests are usually done in a group setting, with data coming from a combination of pencil-and-paper questionnaires and group discussion. What do they Remember? PPT 7-15 here

Chapter 7: Advertising Research

It is assumed that if the consumer was exposed to the ad, something of that ad remains in the consumer’s mind: cognitive residue, pieces of the ads mixed with the consumer’s own thoughts and reactions. It might seem obvious to test for what consumers remember, but not so. Memory measures have been extremely difficult to develop and results hard to interpret. So, cognitive residue as a measure has been developed and covered in the next section. B. Common Methods for Assessing Cognitive Impact Thought Listings PPT 7-16 here Copy research that tries to identify specific thoughts generated by an ad is referred to as thought listing, or cognitive response analysis. Here the researcher is interested in the thoughts that an ad or promotion generates in the mind of the audience. Recall Tests PPT 7-16 here These are one of the most commonly employed tests in advertising, and the most controversial. The basic idea is that if the ad is to work, it has to be remembered. Following on this premise is the assumption that the ads best remembered are the ones most likely to work. The objective of these tests is to see just how much of an ad, if anything, the viewer remembers the message. Recall tests are the industry standard in television, while recognition is the industry standard for print. Various forms of recall are tested are: • Unaided recall is when a respondent demonstrates having seen the ad and remembers the brand name without having it mentioned. • Aided recall is when a respondent has to be asked about an ad by using the brand name. • Claim recall measures the percent who claim seeing an ad. • Related recall measures the percent who accurately recall specific elements of an ad. Recognition Tests PPT 7-17 here Recognition tests are the standard memory test for print ads and promotions. Rather than asking you if you recall something, they ask if you recognize an ad, or something in an ad. This type of testing attempts to get a little more than evidence of exposure residue.

Chapter 7: Advertising Research

Starch Readership Services is a company that conducts this type of research. The categories of recognition are noted if they remember seeing the ad; associated if they read or saw enough of the ad to notice the brand name; and read most if they claim to have read at least 50 percent of the copy. This testing is usually conducted just a few days after the current issue becomes available. Implicit Memory Measures PPT 7-17 and 7-18 here Implicit memory measures do not refer back to the ad or exposure but try to get at memory by using tasks like word fragments: say, part of a brand name, like S R N T for Sprint. Subjects are asked to complete the brand name (that is scored) along with other recollections. The idea is that this is a much more sensitive, less demanding (artificial), and perhaps a more meaningful measure of advertising. It is being used occasionally in actual practice, but its intensive procedure and instrumentation make it more of an academic pursuit than an applied one. Knowledge To have knowledge about a brand that could have come only from an ad is a much more meaningful measure of advertising effectiveness. This knowledge may take several forms—a brand claim or belief about a brand. But with the explosion in available information for consumers, it’s really getting hard to figure out just where some piece of knowledge came from. Attitude Change Attitudes suggest where a brand stands in the consumer’s mind. They are influenced both by what people know and by what people feel about a brand. In this sense, attitude or preference is a summary evaluation that ties together the influence of many different factors. Attitude Studies PPT 7-19 here An attitude study measures consumer attitudes after exposure to an ad. Ideally, there would be pre- and post-exposure attitude measurement so that one could see the change related to seeing the ad in question.

Chapter 7: Advertising Research

Feelings and Emotions Ever since the “atmospheric” ads of the 1920s, there has been the belief that feelings may be more important than thoughts as a reaction to ads. Recent research has shown that feelings have three distinct properties that make them very powerful in reactions to advertisements and the advertised goods and services: • Consumers monitor and access feelings very quickly—consumers often know how they feel before they know what they think; • there is much more agreement in how consumers feel about ads and brands than in what they think about them; and • feelings are very good predictors of thoughts. Resonance Tests PPT 7-20 here In a resonance test, the goal is to determine to what extent the message resonates or rings true with target audience members. The method is pretty much the same as a communication test. Frame-by-Frame Tests PPT 7-20 here Frame-by-frame tests are usually employed for ads where the emotional component is seen as key, although they may also be used to obtain thought listing as well. These tests typically work by getting consumers to turn dials (like/dislike) while viewing television commercials in a theater setting. Physiological Changes PPT 7-20 here Every few years there is renewed interest in the technology of physiological assessment of advertising. Most recently, advances in brain imaging have raised hopes of understanding how the human mind actually processes advertisements. Eye Tracking PPT 7-21 here Eye-tracking systems have been developed to monitor eye movements across print ads. Behavioral Intent

Chapter 7: Advertising Research

PPT 7-21 here This is what consumers say they intend to do. The problem with intended behavior: It’s a poor substitute for actual behavior. IV. Stage Three: Results At this stage, the ads are running and advertisers are trying to assess whether or not they are working. A. Method: Tracking Studies PPT 7-22 here Tracking studies are one of the most commonly used advertising and promotion research methods. These studies “track” the apparent effect of advertising and branded entertainment over time by assessing attitude change, knowledge, behavioral intent and self-reported behavior. The difficulty here is linking a tracking measure to changes in sales or ROI. B. Method: Direct Response PPT 7-22 here Direct response advertisements in print, on the Internet, and on broadcast media that offer the audience the opportunity to inquire or respond directly through a reply card, linked response, or toll-free phone number. These ads produce inquiry/direct response measures. C. Method: Estimating Sales Derived from Advertising PPT 7-23 here This measure is, of course, the one every advertiser wants to see. These measures are flawed, but not flawed enough not to use. Advertising and promotion differ greatly in the ability to use sales as a measure of results—advertising builds image, which may not be measurable, many promotions affect short term sales results which may be measurable. Another caution with measuring advertising is that measures may be implemented long after a campaign so that multiple other influencing factors may explain positive or negative effects on sales. D. Method: All-in-One Single Source Data PPT 7-24 here With the advent of universal product codes (UPCs) on product packages and the proliferation of cable television, research firms are now able to engage in single-source research to

Chapter 7: Advertising Research

document the behavior of individuals—or, more typically, households—in a respondent pool by tracking their behavior from the television set to the checkout counter. Single-source data provide information from individual households about brand purchases, coupon use, television advertising exposure by combining grocery store scanner data with TV-viewing data from monitoring devices attached to the households’ televisions, and increasingly search data from internet tracking software. With these different types of data combined, a better assessment can be made of the real impact of advertising and promotion on consumers’ actual purchases. This is not an inexpensive method of assessment, and it still remains difficult (if not impossible) to know exactly what specific aspects of advertising had what effects on consumers. The best-known supplier of this type of testing is IRI BehaviorScan. V. Account Planning vs. Advertising Research PPT 7-25 here Account planning is defined in contrast to traditional advertising research. It differs mostly in three ways. First, in terms of organization, agencies that use this system typically assign an “account planner” to work cooperatively with the account executive on a given client’s business. Second, this organizational structure puts research in a different, more prominent role. In this system, researchers (or “planners”) seem to be more actively involved throughout the entire advertising process and seem to have a bigger impact on it as well. Third, “planning agencies” tend to do more qualitative and naturalistic research than their more traditional counterparts. VI. One Last Thought on Message Testing None of these methods are perfect, not even close. Still, it would be a mistake to throw the baby out with the bathwater; good and appropriate behavioral science can sometimes produce better advertising. VII. What We Need Advertising and IBP research could do with some change. The way we think about ads and advertising is certainly changing. The move to a visual advertising style has also put into question the appropriateness of a set of tests that focus on the acceptance of message claims, as well as verbatim remembrance of words (copy). Also, the Internet has significantly challenged and changed the whole concept of audience, response, and associated measures.

ONLINE CONTENT The online dynamic content provides both content and insights into the ethical, global, and social

Chapter 7: Advertising Research

media aspects of Advertising and Integrated Brand Communication. The integrated assessment components will provide students with assurances that they have mastered the assigned readings and provide feedback to faculty that the students have completed the assigned readings and data on student mastery of the content. In addition to the feedback on the correct answers, all of the assessment objects have been enhanced with additional tags that can be aggregated to provide feedback on how individual students have done on a specific learning outcome such as ethics. The online material can be delivered in one of two formats. For instructors who want to provide students with access to the Ad Age on Campus access as well as the online advertisements and student facing self-assessment quizzes, CourseMate will be provided with each new copy of Advertising and Integrated Brand Communication. Alternatively, students can decide to purchase CourseMate on its own which will also come with the MindTap Reader, which is the ebook version of the print product. For faculty that desire to have a variety of more in-depth assignments to integrate into their course and a desire to have more student data that can be used for analytic purposes, MindTap can be purchased with an enhanced capability. Faculty can customize the student experience and integrate the experience for their students into the campus Learning Management System. For a complete guide into the reporting and analytical capabilities available to faculty, consult the Assurance of Learning section of this manual.

Boxed Feature Questions and Tags QUESTION

DIFFICULTY

BUSPROG

DISC

Primary

BLOOM'S

Chapter 07 Social Media 01

Easy

Technology

Promotion

Knowledge

Chapter 07 Social Media 02

Challenging

Technology

Promotion

Knowledge

Chapter 07 Social Media 03

Moderate

Technology

Promotion

Evaluation

Chapter 07 Globalization 01

Moderate

Diversity

Promotion

Application

Chapter 07 Globalization 02

Challenging

Diversity

Promotion

Synthesis

Chapter 07 Ethics 01

Easy

Ethics

Promotion

Application

Chapter 07 Ethics 02

Moderate

Ethics

Promotion

Application

CHAPTER 7-Social Media http://adage.com/article/digital/twitter-advertisers-target-browsing-history/242974/ •

7.SocialMedia.Q1 A(n) __________ gets at the online community and or culture of a group in a natural or native setting from the member’s perspective. A. Observation B. Experiment C. Survey

Chapter 7: Advertising Research

netnography Answer: D

1. Match the following research method with its characteristics: ZMET

Its purpose is to learn from the experiences of the consumer and from direct observation.

Netnography

draws out people’s buried thoughts and feelings about products and brands by encouraging participants to think in terms of metaphors

Field-work

join an online community and or observe in a naturalistic way the community culture and norms

Answer: ZMET

Its purpose is to learn from the experiences of the consumer and from direct observation.

Netnography

draws out people’s buried thoughts and feelings about products and brands by encouraging participants to think in terms of metaphors

Field-work

join an online community and or observe in a naturalistic way the community culture and norms

Chapter 7: Advertising Research

•

7.SocialMedia.Q2

Do you prefer ads that are targeted to you based on your browser history? Why/not? Answer: This is a preference question. The response should be yes or no and justify why based on their knowledge from the chapter and article.

Chapter 7: Advertising Research

CHAPTER 7-Globalization http://adage.com/article/cmo-interviews/nokia-rethinks-global-marketing-a-challengerbrand/242956/

•

7.Globalization.Q1 Drag each aspect of the branding strategic process for Nokia to its proper place in the diagram.

1 Enhanced creative global brand strategy

2 A market leader

3 An underdog

Answer: 1 A market leader

•

2 An underdog

3 Enhanced creative global brand strategy

7.Globalization.Q2

What do you think about this creative objective? How would you refine it or change it for Nokia? Give at least one change or idea to achieve their stated objective if you like the emotion angle: "We want to [elicit] more emotion and be more daring. We're hoping that with JWT we'll actually drive more disruption."

Answer: The response is an opinion. It should state an opinion of the emotion angle of the stated creative objective. If they do not like it, there should be a change suggested (e.g., I would like to see the Nokia brand do a product benefit campaign because I want to know more about the technology).

Chapter 7: Advertising Research

CHAPTER 7-Ethics http://adage.com/article/creativity-pick-of-the-day/nokia-scares-iphone-users-choosinglumia/242825/

•

7. Ethics.Q1 Nokia used a humor approach to portray their competitor’s consumers (Apple iPhone users) as zombies. Answer: T

•

7. Ethics.Q2 What feature of the Nokia phone is portrayed in this ad? A. The memory B. The battery life C. The camera D. The slimness Answer: C

Homework Grid Homework Description 1-a. Multiple Choice Flavor mashups: Research 2-a. Matching Ad investments 2-b. True/False Copy research 2-c. Matching Research methods 3-a. Multiple choice Dollar Shave Club: Concept test 3-b. Matching Research methods Homework is available to faculty to select and integrate into their customized course. THE FOLLOWING SECTIONS OF THE INSTRUCTOR’S MANUAL HAS A SELECTION OF CASES THAT CAN BE INCORPORATED INTO YOUR COURSE AS OUT OF CLASS ASSIGNMENTS , OR AS A METHOD FOR INITIATING CLASSROOM DISCUSSION.

Chapter 7: Advertising Research

What historic factors led to the development and prominence of advertising and promotion research departments during the mid-1900s? Although some advertising agencies have operated research departments for 90 years or more, their growth occurred mid-20th century, with the 1950s being their real heyday. During this period, agencies adopted research departments for three basic reasons: (1) The popularity of science in the culture during this time legitimized anything called “science” or “research,” (2) other agencies had research departments, and (3) there was a real information vacuum concerning ads, consumers, and consuming.

Focus groups are one of the advertising researcher’s most versatile tools. Describe the basic features of focus group research that could lead to inappropriate generalizations about the preferences of the target audience. A focus group is a discussion session with (typically) 6 to 10 target customers who have been brought together to come up with new insights about the good or service. Although focus groups provide an opportunity for in-depth discussion with consumers, they are not without limitations. Even multiple focus groups represent a very small sample of the target audience and are prone to all sorts of errors caused by group dynamics and pleasing the researcher.

ZMET is a technique that advertisers may use in place of focus groups. What aspects of ZMET and focus groups are similar? What particular features of ZMET could foster richer understanding of consumers’ motives than is typically achieved with focus groups? ZMET and focus groups are similar in that consumers are allowed to express their thoughts and feelings about a product or brand in an open-ended fashion. The differences are that focus groups talk about the realities of their experiences whereas with the ZMET technique, consumers are asked to use metaphors—including pictures and photographs—as a way to represent their feelings. ZMET allows a richer understanding because focus groups discussions can be merely descriptive of experiences. ZMET goes beyond description and tries to get to deep feelings and motivations.

List the sources and uses of secondary data. What are the benefits of secondary data? What are the limitations? Information obtained from existing sources is referred to as secondary data. Sources of secondary data mentioned in the chapter include internal company sources, government sources, commercial sources, professional publications, and the Internet. Secondary data

Chapter 7: Advertising Research

have the distinct advantages of being far less costly to obtain than primary data and more immediately available. Limitations include the following: • The information can be out of date. • The data may be expressed in categories different from the information desired. For example, the variable of interest to a firm may be the total number of women between the ages of 18 and 25 in a certain geographic area. Published secondary data may provide statistics on women less than 18 and from 19 to 29 years of age. • The unit of measurement may be different from the unit needed for analysis. Secondary data sources may report income figures for individuals, families, households, or spending units. If the unit of measure is not the same as the one desired by the decision maker, the data are useless. • The source of the data may not be totally objective. For example, industry trade associations may generate and report data that make the industry look good. • The data may be completely irrelevant. 5.

Criteria for judging ad effectiveness include “getting it,” cognitive residue, knowledge, attitude change, feelings and emotions, physiological changes, and behavior. Identify specific evaluative advertising research methods that could be used to test an ad’s impact on any of these dimensions. A communication test simply seeks to tell if a message is communicating something close to what is desired. Communication tests are usually done in a group setting, with data coming from a combination of pencil-and-paper questionnaires and group discussion. A resonance test is one in which the goal is to determine to what extent the message resonates or rings true with target audience members. This method fits well with consumerexperience research. The question becomes, does this ad match consumers’ own experiences? Message research that tries to identify specific thoughts generated by an ad is referred to as thought listing, or cognitive response analysis. Here the researcher is interested in the thoughts that a finished or near-finished ad generates in the mind of the consumer. The most common method of advertising research is the recall test. The basic idea is that if the ad is to work, it has to be remembered. Following on this premise is the assumption that the ads best remembered are the ones most likely to work. The objective of these tests is to see just how much, if anything, the viewer of an ad remembers the message. Recall is used in the testing of print, television, and radio advertising. Recognition tests ask magazine readers and television viewers whether they remember having seen particular advertisements, and whether they can name the company sponsoring the ad. For print advertising, the actual advertisement is shown to respondents. For television advertising, a script with accompanying photos is shown. The categories of recognition are noted if they remember seeing the ad; associated if they read or saw enough of the ad to notice the brand name; and read most if they claim to have read at least 50

Chapter 7: Advertising Research

percent of the copy. This testing is usually conducted just a few days after the current issue becomes available. An attitude study uses a before-and-after ad exposure design. People from the target market are recruited, and their pre-exposure attitudes toward the advertised brand as well as competitors’ brands are gauged. Then they are exposed to the test ad, along with some dummy ads. Following this exposure, their attitudes are measured again. Physiological measures detect how consumers react to messages, based on physical responses. Eyetracking systems have been developed to monitor eye movements across print ads. Advertisements in both print and broadcast media that offer the audience the opportunity to inquire or respond directly through a reply card or toll-free phone number are called inquiry/direct response measures. A more sophisticated method includes single-source tracking measures that provide information from individual households about brand purchases, coupon use, and television advertising exposure by combining grocery store scanner data with information from devices attached to the households’ televisions to monitor viewing behavior. These measures are used to gauge the impact of advertising and promotions on consumers’ actual purchases. Lastly, frame-by-frame tests are usually employed for ads where affective or emotional components are key. Often consumers turn dials (like/dislike) while viewing television commercials. 6.

How would you explain the finding that ads that achieve high recall scores don’t always turn out to be ads that do a good job in generating sales? Are there some features of ads that make them memorable but could also turn off consumers and dissuade them from buying the brand? Give an example from your experience. Recall tests are informative, but like any other test, they don’t tell the whole story. One of the key issues determining the actual persuasiveness of an ad is the cognitive response that it provokes from the viewer at the time of ad processing. If those cognitive responses are negative, the ad is not going to be effective, even if the viewer is able to recall and recite the ad’s claims accurately. Also, many campaigns over the years have been memorable because of their irritating nature. This raises a challenging question for advertisers: Can ads that irritate the customer also sell the product in the end? No one has the definitive answer to this question, but it makes for a great in-class discussion. Such a discussion can be motivated by first asking the class to describe ad campaigns that they have found irritating. After several examples, the discussion can be turned to the question of effectiveness. For example, does anyone in class find the Eveready Bunny campaign irritating? Since it has run for so long, what must we presume about its effectiveness?

What is single-source research, and what is its connection to the universal product codes

Chapter 7: Advertising Research

(UPCs) one finds on nearly every product in the grocery store? Single-source research combines information on television ad exposure and coupon use with purchase data to help in assessing the effects of advertising on brand choice. UPC codes have eased computerized tracking of household purchase data. 8.

Explain the industry trend of substituting account planning for traditional advertising and promotion research. Why do some agency directors claim that this trend is the biggest thing in advertising? Do you tend to believe the hype surrounding this trend, or are you cynical that forces of downsizing are driving it? Explain your reasoning. The hottest new term and concept in agencies these days is account planning. It is an extension of traditional ad research and planning in these three ways: • From an organizational standpoint, an account planner works as an equal partner on accounts with the account executive. • Research is cast in a different and more prominent role. The research dimension is introduced early in the planning process and remains prominent throughout development. • Contemporary account planning research relies more heavily on qualitative and naturalistic research.

Experiential Exercises 1.

With millions of people interacting on sites like Facebook and Twitter, advertisers have turned to a new form of market research that measures “online buzz.” Buzz-tracking companies sift consumer-generated content online and spot trends that advertisers can use to manage the reputation of brands. Use the Internet to research an online buzz-tracking company and answer the following questions: What information does the firm analyze for clients? How has the firm’s research helped a client achieve its brand goals? Can buzz-tracking services really provide relevant data about brands, products, and media? To answer the questions, students might want to research Nielsen BuzzMetrics, Blogpulse.com, BrandProtect, and Cymfony—tracking firms that help businesses manage their brands’ reputation online. Despite buzz-tracking’s growing popularity as a research method, online chatter about brands can be manipulated by “flogs”—company-sponsored cheerleading blogs that artificially inflate the reputation of brands. In addition, some skeptics of buzz-tracking research emphasize that bloggers aren’t representative of all consumers, or even the consumers of any particular brand. As a result, measuring their websites may not produce relevant data.

Chapter 7: Advertising Research

Is advertising more of an art than a science? As an out-of-class assignment, write a report on a current trend in advertising—such as viral videos or behavioral targeted advertising—and identify the role that research plays in that trend. Describe what research methods are used to support the advertising practice, and list how advertisers use research data in the creation of specific messages and campaign strategies. Do you think scientific testing methods are able to convey the true impact and effectiveness of advertising? Students’ answers will vary, but the following two trends demonstrate that advertisers trust quantitative forms of advertising research. First, viral videos are a hit with advertisers. Whether it’s Old Spice’s “The Man Your Man Could Smell Like” campaign or the “Babies Dancing to Beyonce” sensation, a quirky video can put a brand on the lips of millions of people worldwide. One research firm, Visible Measures, specializes in measuring the consumption and distribution of Internet video. Advertisers look to the researcher’s “True Reach” metric to find out how many individuals have seen a specific viral video campaign. Another trend involves words testing. Market researcher Frank Luntz developed a groundbreaking “response dial” technology to gauge the immediate emotional impact of specific words on audiences. Luntz, whose clients include Disney and American Express, has done extensive work on green issues, including the public’s response to words like “global warming,” “climate change,” “energy exploration,” and healthy forests.’

Advertisers increasingly are using metaphor associations in promotional development, tapping into the powerful organizing and expressing function metaphor serves in the human brain. Test this method on yourself using each of these well-known brands or products discussed in the chapter: Coca-Cola, Crest Whitestrips, and milk. For each example, consider how you would visually represent your experiences with that brand or product, and then find photographs or graphics from magazines that best convey that experience. By serving as a test consumer in this exercise, students should gain a better understanding of how advertisers use projective techniques to evaluate consumer awareness, understanding, and approval of brands, products, and services. Common projective techniques include methods such as association tests, dialogue balloons, or sentence or picture completion. But advertisers in recent years also have turned to the Zaltman Metaphor Elicitation Technique, which claims to draw out subconscious thoughts about brands and products by encouraging participants to think in terms of metaphors. The chapter gives the example of a female consumer equating the image of a spilled ice cream cone with the discovery of a run in her stockings. That might be a useful example to help students understand the exercise, but their answers should be deeply varied and highly personal.

The chapter identified several online sources that provide a wide variety of demographic

Chapter 7: Advertising Research

information compiled by the government. This type of widely-available, no-cost information can be a boon to advertisers—particularly small businesses that might otherwise be unable to afford information compiled by commercial data vendors. Identify the city or metro area where your school is located, and then develop a demographic portrait of the area using online government resources. What are your primary findings? How accurate do you think this demographic snapshot is? What brands or products do you think would find the community to be attractive? Why? While the chapter discusses a wide range of advertising research techniques – many enormously complex and costly – it is important for students to recognize that there are vast amounts of demographic data available at no cost through government websites. This exercise allows students to explore many of those resources, building a more detailed picture of a community they are likely to discover they did not know as well as they thought they did. Students also should demonstrate in this exercise an understanding of what value different demographic data points can offer to advertising and promotional research—whether it is available for free from the government, or at a premium from commercial data vendors.

Chapter 8: Planning Advertising and Integrated Brand Promotion

CHAPTER 8 Planning Advertising and Integrated Brand Promotion Key Terms advertising plan situation analysis ethnocentrism self-reference criteria (SRC) industry analysis market analysis competitor analysis

brand awareness top-of-the-mind awareness purchase intent trial usage repeat purchase brand switching percentage-of-sales approach

share of voice advertising response function objective-and-task approach build-up analysis

Summary PPT 8-2 here Describe the basic components of an advertising plan. An advertising plan is motivated by the marketing planning process and provides the direction that ensures proper implementation of an advertising campaign. An advertising plan incorporates decisions about the segments to be targeted, communications and/or sales objectives with respect to these segments, and salient message appeals. The plan should also specify the dollars budgeted for the campaign, the various communication tools that will be employed to deliver the messages, and the measures that will be relied on to assess the campaign’s effectiveness. Compare and contrast two fundamental approaches for setting advertising objectives. Setting appropriate objectives is a crucial step in developing any advertising plan. These objectives are typically stated in terms of either communications or sales goals. Both types of goals have their proponents, and the appropriate types of objectives will vary with the situation. Communications objectives feature goals such as building brand awareness or reinforcing consumers’ beliefs about a brand’s key benefits. Sales objectives are just that: They hold advertising directly responsible for increasing sales of a brand. Explain various methods for setting advertising budgets.

Chapter 8: Planning Advertising and Integrated Brand Promotion

Perhaps the most challenging aspect of any advertising campaign is arriving at a proper budget allocation. Companies and their advertising agencies work with several different methods to arrive at an advertising budget. A percentage-of-sales approach is a simple but naive way to deal with this issue. In the share-of-voice approach, the activities of key competitors are factored into the budget-setting process. A variety of quantitative models may also be used for budget determination. The objective-and-task approach is difficult to implement, but with practice it is likely to yield the best value for a client’s advertising dollars. Discuss the role of the agency in formulating an advertising plan. An advertising plan will be a powerful tool when firms partner with their advertising agencies in its development. The firm can lead this process by doing its homework with respect to marketing strategy development and objective setting. The agency can then play a key role in managing the preparation and placement phases of campaign execution.

CHAPTER OUTLINE There is great complexity involved in executing a comprehensive advertising and integrated brand promotion (IBP) effort. Spending millions of dollars promoting a brand that is vital to the success of a firm is not done without giving the entire endeavor considerable forethought. Such an endeavor will call for a plan. An advertising plan is the culmination of the planning effort needed to deliver effective advertising and IBP. I. The Advertising Plan and Marketing Context PPT 8-3 and PPT 8-4 here An ad plan should be a direct extension of a firm’s marketing plan. One device that can be used to explicitly connect the marketing plan with the advertising plan is the statement of a brand’s value proposition. The advertising plan, including all IBPs, is a subset of the larger marketing plan. An advertising plan specifies the thinking, tasks, and timetable needed to conceive and implement an effective advertising effort. NOTE: PPT 8-4 shows the entire list of components in the Advertising Plan. Subsequent PPTs show individual factors. II. Introduction PPT 8-5 here

Chapter 8: Planning Advertising and Integrated Brand Promotion

The introduction of an advertising plan consists of an executive summary and an overview. An executive summary, typically two paragraphs to one page in length, states the most important aspects of the plan. As with many documents, an overview is also customary. An overview ranges in length from a paragraph to a few pages. It sets out what is to be covered, and it structures the context. III. Situation Analysis PPT 8-6 here An ad plan situation analysis is where the client and agency lay out the most important factors that define the market and consumer, and then explain the importance of each factor. A lengthy list of factors can define a situation analysis. A. Cultural Context PPT 8-6 and PPT 8-7 here International advertising is advertising that reaches across national and cultural boundaries. Adopting an international perspective is often difficult for marketers and represents a major challenge in developing ad plans. Managers must overcome two related biases to be successful in international markets. Ethnocentrism is the tendency to view and value things from the perspective of one’s own culture. Additionally, self-reference criterion (SRC) is the unconscious reference to one’s own cultural values, experiences, and knowledge as a basis for decisions. B. Historical Context PPT 8-7 here No situation is entirely new, but all situations are unique. Just how a firm arrived at the current situation is very important. Before trying to design a campaign, an agency should certainly know a lot about the history of all the principal players, the industry, the brand, the corporate culture, critical moments in the company’s past, its big mistakes, and big successes. C. Industry Analysis PPT 8-7 here An industry analysis focuses on developments and trends within an industry and on any other factors that may make a difference in how an advertiser proceeds with an advertising plan. An industry analysis should enumerate and discuss the most important aspects of a given industry, including the supply side of the supply-demand equation.

Chapter 8: Planning Advertising and Integrated Brand Promotion

D. Market Analysis PPT 8-8 here A market analysis complements the industry analysis, emphasizing the demand side of the equation. In a market analysis, an advertiser examines the factors that drive and determine the overall market for a product or service category within which the advertiser offers a brand (or brands). E. Competitor Analysis PPT 8-8 and PPT 8-9 here Once the industry and market are studied and analyzed, attention turns to competitor analysis. Here an advertiser determines just exactly who the competitors are to the firm’s brand(s), discussing their strengths, weaknesses, tendencies, and any threats they pose. IV. Objectives PPT 8-10, PPT 8-11, PPT 8-12, here Advertising objectives lay the framework for the subsequent tasks in an advertising plan and take many different forms. Objectives identify the goals of the advertiser in concrete terms. An advertiser’s objectives may be: • To increase consumer awareness of and curiosity about its brand: Brand awareness is an indicator of consumer knowledge about the existence of the brand and how easily that knowledge can be retrieved from memory. Top-of-the-mind awareness is represented by the brand listed first. Ease of retrieval from memory is predictive of market share for many goods or services. Whether through direct, logical arguments or thought-provoking visual imagery, advertisements are frequently designed to deliver their objective of belief formation and attitude change. • To change consumer beliefs or attitudes: One way to go about changing people’s attitudes is to give them information designed to alter their beliefs. • To influence purchase intent: Purchase intent is another popular criterion in setting objectives. Purchase intent is determined by asking consumers whether or not they intend to buy a product or service in the near future. The appeal of influencing purchase intent is that intent is closer to actual behavior, and thus closer to the desired sale than attitudes are. • To stimulate trial use: Trial usage reflects actual behavior and is commonly used as an advertising objective. In the case of new products, stimulating trial use is critically important. • To convert one-time users into repeat purchasers: The repeat purchase, or conversion, objective is aimed at the percentage of consumers who try a new product and then purchase it a second time. A second purchase is reason for great rejoicing. The odds of long-term

Chapter 8: Planning Advertising and Integrated Brand Promotion

•

product success go way up when this percentage is high. To encourage brand switching: In some categories, brand switching is commonplace, even the norm. When setting a brand-switching objective, the advertiser must neither expect too much, nor rejoice too much over a temporary gain. Convincing consumers to switch brands permanently can be a long and expensive task. A. Communications versus Sales Objectives PPT 8-13 and PPT 8-14 here Some analysts argue that communications objectives are the only legitimate objectives for advertising because advertising is but one variable in a firm’s overall marketing mix and cannot be held solely responsible for sales. Rather, advertising should be held responsible for creating awareness of a brand, communicating information about product features or availability, or developing a favorable attitude that can lead to consumer preference for a brand. There are two major benefits to maintaining a strict communications perspective in setting advertising objectives. By viewing advertising as a communications effort, marketers can consider a broader range of advertising strategies. Second, advertisers can gain a greater appreciation for the complexity of the overall communications process. Designing an integrated marketing communications program with sales as the sole objective neglects aspects of message design, media choice, public relations, or sales force deployment that should be effectively integrated across all phases of a firm’s communications efforts. Although there is a natural tension between those who advocate sales objectives and those who push communications objectives, nothing precludes a marketer from using both types when developing an overall plan for a brand. Indeed, combining marketing plan sales objectives like market share and household penetration with advertising plan communication objectives like awareness and attitude change can be an excellent means of motivating and evaluating the planning effort. Objectives that enable a firm to make intelligent decisions about resource allocation must be stated in an advertising plan in terms specific to the organization. Articulating such wellstated objectives is easier when advertising planners do the following: • Establish a quantitative benchmark: Objectives for advertising are measurable only in the context of quantifiable variables. Advertising planners should begin with quantified measures of the current status of market share, awareness, attitude, or other factors that advertising is expected to impact. • Specify measurement methods and criteria for success: It is important that the factors being measured be directly related to the objectives being pursued. It is of little use to try to increase the awareness of a brand with advertising and then judge the effects based on changes in sales.

Chapter 8: Planning Advertising and Integrated Brand Promotion

•

Specify a time frame: Objectives for advertising should include a statement of the period of time allowed for the desired results to occur.

V. Budgeting Normally, the responsibility for the advertising and IBP budget lies with the firm itself. Within a firm, budget recommendations come up through the ranks, from a brand manager to a category manager and ultimately to the executive in charge of marketing. To be as judicious and accountable as possible in spending money on advertising and IBP, marketers rely on various methods for setting an advertising budget. A. Percentage of Sales PPT 8-15 here A percentage-of-sales approach to budgeting calculates the budget based on a percentage of the prior year’s sales or the projected year’s sales. This technique is easy to understand and implement. The percentage-of-sales approach is fraught with problems though: • When a firm’s sales are decreasing, the advertising budget will automatically decline. Periods of decreasing sales may be precisely the time when a firm needs to increase spending on advertising. • This budgeting method can easily result in overspending on advertising. Once funds have been earmarked, the tendency is to find ways to spend the budgeted amount. • The percentage-of-sales approach does not relate advertising and IBP dollars to advertising objectives in any way. Basing spending on past or future sales is devoid of analytical evaluation, and implicitly presumes a direct cause-and-effect relationship between advertising and sales. A variation on the percentage-of-sales approach is to base current spending on “historical spending levels” – whatever that is. B. Share of Market/Share of Voice PPT 8-15 here With this method, a firm monitors the amount spent by various competitors on advertising and allocates an amount equal to the amount of money spent by competitors or an amount proportional to (or slightly greater than) the firm’s market share relative to competition. This will provide an advertiser with a share of voice, or an advertising presence in the market, that is equal to or greater than the competition’s share of advertising voice. Although the share-of-voice approach is sound in its emphasis on competitors’ activities,

Chapter 8: Planning Advertising and Integrated Brand Promotion

there are important challenges to consider with this approach. • It may be difficult to gain access to precise information on competitors’ spending. • There is no reason to believe that competitors are spending their money wisely. • The flaw in logic in this method is the assumption that every advertising/IBP effort is of the same quality and will have the same effect from a creative-execution standpoint. C. Response Models PPT 8-16 here Using response models to aid the budgeting process is a fairly widespread practice among larger firms. The belief is that greater objectivity can be maintained with such models. An advertising response function is a mathematical relationship that associates dollars spent on advertising and sales generated. To the extent that past advertising predicts future sales, this method is valuable. Using marginal analysis, an advertiser would continue spending on advertising as long as its marginal spending was exceeded by marginal sales. D. Objective and Task PPT 8-17 here The only method of budget setting that focuses on the relationship between spending and advertising/IBP objectives is the objective-and-task approach. This method begins with the stated objectives for a campaign. Goals related to production costs, target audience reach, message effects, behavioral effects, media placement, duration of the effort, and the like are specified. The budget is formulated by identifying the specific tasks necessary to achieve different aspects of the objectives. E. Implementing the Objective-and-Task Budgeting Method PPT 8-18 here Proper implementation of the objective-and-task approach requires a data-based, systematic procedure. Because the approach ties spending levels to specific advertising goals, the process depends on proper execution of the objective-setting process described earlier. A series of well-defined steps can be taken to implement the objective-and-task method and are outlined below: Determine Costs Based on Build-Up Analysis In using a build-up analysis—building up the expenditure levels for tasks—the following factors must be considered in terms of costs: • Reach. The geographic and demographic exposure that advertising is to achieve.

Chapter 8: Planning Advertising and Integrated Brand Promotion

• • • •

• •

Frequency. The number of exposures required to accomplish desired objectives. Time frame. Estimate when communications will occur and during what period of time. Production costs. The decision maker can rely on creative personnel and producers to estimate the costs associated with the planned execution of advertisements. Media expenditures. Definition of the appropriate media, media mix, and frequency of insertions that will directly address objectives. Differences in geographic allocation, with special attention to regional or local media strategies, and digital and mobile strategies are considered at this point. Ancillary costs. Prominent among these are costs associated with advertising to the trade and specialized research unique to the campaign. Integrating other promotional costs. In this era of advertising and IBP, sometimes it is the novel promotion that delivers the best bang for the buck. New and improved forms of brand promotion, like the one illustrated in Exhibit 8.14, must also be considered as part of the planning and budgeting process.

Compare Costs against Industry and Corporate Benchmarks After compiling all the costs through a build-up analysis, an advertiser will want to make a quick reality check. This is accomplished by checking the percentage of sales that the estimated set of costs represents relative to industry standards for percentage of sales allocated to advertising. Another recommended technique is to identify the share of industry advertising that the firm’s budget represents. Another relevant reference point is to compare the current budget with prior budgets. Reconcile and Modify the Budget A proposed budget may not be viewed as consistent with corporate policy related to advertising expense, or it may be considered beyond the financial capabilities of the organization. Modifications to a proposed budget are common. Determine a Time Frame for Payout It is important that budget decision makers recognize when the budget will be available for funding the tasks associated with the proposed effort. Travel expenses, production expenses, and media time and space are tied to specific calendar dates. VI. Strategy PPT 8-19 here

Chapter 8: Planning Advertising and Integrated Brand Promotion

Strategy is the mechanism by which something is to be done. It is an expression of the means to an end. All of the other factors are supposed to result in a strategy. Strategy is what you do, given the situation and objectives. There are numerous possibilities for advertising strategies. VII. Execution PPT 8-19 here Execution is the actual “doing” in the execution of an ad plan—the making and placing of ads across all media. There are two elements to the execution of an advertising plan: determining the copy strategy and devising a media plan. A. Copy Strategy A copy strategy consists of copy objectives and methods, or tactics. The objectives state what the advertiser intends to accomplish, while the methods describe how the objectives will be achieved. B. Media Plan The media plan specifies exactly where ads will be placed, and what strategy is behind their placement. In an integrated marketing communications environment, this is much more complicated than it might appear. Devising a media plan is where all the money is spent and so much could be saved. C. Integrated Brand Promotion The IBP effort should be designed to accompany the advertising effort in launching or maintaining a brand and be spelled out in the overall plan. VIII. Evaluation PPT 8-20 here Last, but not least, in an ad plan is the evaluation component. This is where an advertiser determines how the agency will be graded—what criteria will be applied and how long the agency will have to achieve the agreed-on objectives. IX. The Role of the Agency in Planning Advertising and IBP PPT 8-21 here Because many marketers rely heavily on the expertise of an advertising agency, understanding

Chapter 8: Planning Advertising and Integrated Brand Promotion

the role an agency plays in the advertising planning process is important. The point to emphasize is that the marketer is responsible for the marketing planning inputs as a type of self-assessment that identifies the firm’s basis for offering value to customers.

ONLINE CONTENT The online dynamic content provides both content and insights into the ethical, global, and social media aspects of Advertising and Integrated Brand Communication. The integrated assessment components will provide students with assurances that they have mastered the assigned readings and provide feedback to faculty that the students have completed the assigned readings and data on student mastery of the content. In addition to the feedback on the correct answers, all of the assessment objects have been enhanced with additional tags that can be aggregated to provide feedback on how individual students have done on a specific learning outcome such as ethics. The online material can be delivered in one of two formats. For instructors who want to provide students with access to the Ad Age on Campus access as well as the online advertisements and student facing self-assessment quizzes, CourseMate will be provided with each new copy of Advertising and Integrated Brand Communication. Alternatively, students can decide to purchase CourseMate on its own which will also come with the MindTap Reader, which is the ebook version of the print product. For faculty that desire to have a variety of more in-depth assignments to integrate into their course and a desire to have more student data that can be used for analytic purposes, MindTap can be purchased with an enhanced capability. Faculty can customize the student experience and integrate the experience for their students into the campus Learning Management System. For a complete guide into the reporting and analytical capabilities available to faculty, consult the Assurance of Learning section of this manual.

Boxed Feature Questions and Tags QUESTION

DIFFICULTY

BUSPROG Primary

DISC Primary

BLOOM'S

Chapter 08 Social Media 01

Moderate

Technology

Promotion

Application

Chapter 08 Social Media 02

Challenging

Technology

Promotion

Synthesis

Chapter 08 Globalization 01

Moderate

Diversity

Promotion

Application

Chapter 08 Globalization 02

Moderate

Diversity

Promotion

Application

Chapter 08 Ethics 01

Moderate

Ethics

Promotion

Application

Chapter 08 Ethics 02

Challenging

Ethics

Promotion

Synthesis

CHAPTER 8-Social Media http://adage.com/article/creativity-pick-of-the-day/domino-s-pizza-fresh-ipad/231155/

Chapter 8: Planning Advertising and Integrated Brand Promotion

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8.SocialMedia.Q1

What feature of Domino’s brand is being featured via social media? A. The cheese B. The management C. The freshness D. The cleanliness of the stores Answer: C • 8.SocialMedia.Q2 From a planning advertising and IBP lens, how would you as a marketing VP of Domino’s suggest the brand use social media? Think of three specific social media strategies. Answer: I would use the brand to deliver price promotions via online codes shared through various channels of social media. I would also tweet with customers about their order status. Last, I would use social media to portray the way that the brand is engaged with the community, by showing photo and video of donations of pizza’s to non-profits or other organizations in the community.

Chapter 8: Planning Advertising and Integrated Brand Promotion

CHAPTER 8-Globalization To promote Mercedes Smart cars to Russians (who like driving big cars), BBDO Russia actively proved to potential customers the benefits of having a smaller vehicle. Many Russians get towed on weekend shopping trips for parking illegally; and the traffic is also notoriously bad in the city. So in March Smart offered free rides to those stranded by having their vehicles towed -- getting them to take a test drive without requesting one, and see what a difference having a small car makes when parking is scarce and traffic heavy. 623 car-less drivers were rescued during three days. The agency encouraged people to thank the Smart brand on social media, while blogs and news portals picked up on the stories and test drives increased 10 fold. Sales increased by 300% in the two weeks following the event. The campaign is the latest in a slew of intelligent test drive campaigns we've seen. Chevrolet's "Rescue Drives" partnered with a towing company to send cars to drivers when their own vehicles broke down, while MINI turned its cars into stores in Paris so people could take test drives from anywhere. (2013, May 13). Smart Rescues Stranded Drivers in Moscow. adage.com. Retrieved August 15, 2013, from http://adage.com/article/creativity-pick-of-the-day/smart-rescuesstranded-drivers-moscow/241448/. •

8.Globalization.Q1 In planning IBP in Russia, one of the things to plan around is the fact that Russians tend to prefer: A. Highway driving versus road driving B. Road driving versus highway driving C. Big Cars D. Small cars Answer: C

•

8.Globalization.Q2

One way that BBDO Russia showed the effectiveness of their campaign is that they increased sales by _______ in the two weeks post event. A. 300% B. 20% C. 12% D. 3% Answer: A

Chapter 8: Planning Advertising and Integrated Brand Promotion

CHAPTER 8-Ethics http://adage.com/article/creativity-pick-of-the-day/iq-whisky-alcohol-advertising-atwist/231020/

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8. Ethics.Q1 The ethical question about planning IBP in the alcohol business entails how the product is advertised. The ethical issue of this campaign from the Swedish agency is that the advertisement is: A. About the health benefits of whiskey B. About the price of whiskey C. About the quality of whiskey D. Not about whiskey at all Answer: D

• 8. Ethics.Q2 This spot about alcohol advertising is unique (despite the usual tactics of ambiance setting in alcohol advertising). But, is it ethical to “trick” consumers into them thinking it is an ad about one thing (say whiskey), but to lead them down a wrong path and surprise them? Make your response in reference to this Swedish spot. Answer: This is an opinion question; In my opinion, it is not unethical to lead consumers down a path with a story line, then to change it. It is shockvertising- adding shock value. This tactic can help ads cut the clutter. In this case, the viewer is tricked of sorts to think this is a whiskey ad, but it is not about whiskey at all.

Homework Grid Homework 1-a. True/False 1-b. Multiple Choice 1-c. Multiple Choice 1-d. Multiple Choice 2-a. Multiple Choice 2-b. Multiple Choice 2-c. Multiple Choice 3-a. Multiple Choice

Description Pop culture thermometer Kanye West: Pop culture JC Penney: Pop culture Big Data: Pop culture Procter & Gamble: Company results Procter & Gamble: Business Public trading Cannes Awards

Chapter 8: Planning Advertising and Integrated Brand Promotion

3-b. Multiple Choice Presentations 3-c. Multiple Choice Digital growth Homework is available to faculty to select and integrate into their customized course. THE FOLLOWING SECTIONS OF THE INSTRUCTOR’S MANUAL HAS A SELECTION OF CASES THAT CAN BE INCORPORATED INTO YOUR COURSE AS OUT OF CLASS ASSIGNMENTS , OR AS A METHOD FOR INITIATING CLASSROOM DISCUSSION.

End of Chapter Questions 1.

Review the materials presented in this chapter (and anything else you may be able to find) about Apple’s launch of the iPad. Based on the advertising utilized, what do you surmise must have been the value proposition for iPhone at the time of its launch? The discussion of the iPad reminds students about Apple’s string of high-profile advertising successes, first with its colorful iMac computers in the late 1990s and more recently with the success of its iPod and iTunes and iPhone. In moving into the e-reader market, Apple is tapping into a massive, potentially multi-billion business – but they still sought to do so in a way that would build on the tradition of portraying Apple users as independent, creative, and different.

Now that some time has passed since the official launch of the iPad, has this product lived up to its early hype? Has it become the next “big thing” for Steve Jobs and Apple? Evaluation is the last component of an advertising plan, and even in the case of such muchhyped products as the iPad, students should recognize that the advertising agency still must evaluate whether a given campaign achieved the agreed-upon objectives outlined at the start of a campaign. In the case of the iPad, students can assess reports of high early sales numbers, which boosted Apple’s stock prices. But they also should consider other factors. Early reports also raised concerns about whether the tablets were subject to security breaches or had the video capability that everyone expected. Some early adopters were disappointed when they learned a slimmer, smaller, and faster version of the iPad already was in the works.

Explain the connection between marketing strategies and advertising plans. What is the role of target segments in making this connection? Marketing strategy development as discussed in Chapter 6 should be a major point of reference in developing the ad plan. The elements of situation analysis discussed in this

Chapter 8: Planning Advertising and Integrated Brand Promotion

chapter as part of ad planning will likely have been considered in formulating marketing plans and strategies. For example, the client’s marketing managers are likely to have conducted market and competitor analyses (perhaps on their own, but often in direct consultation with the ad agency) in deciding on their target segments. (Recall the example of Mobil Oil Corporation and the Road Warriors from Chapter 6.) The focal target segments will be a critical consideration in setting objectives, budgets, strategies, and execution in the advertising plan. Marketing strategy formulation and advertising planning often are overlapping processes in a dialogue between client and agency. 4.

Describe five key elements in a situation analysis and provide an example of how each of these elements may ultimately influence the final form of an advertising campaign. The five key elements are cultural context, historical context, industry analysis, market analysis, and competitor analysis. Demographic trends can be a critical determinant of the target segments that are the focus for the campaign, and historical context must be considered to ensure consistency of the campaign with the brand’s past advertising. Industry and market analyses will be important in formulating the segmentation strategy that motivates the campaign. Competitor analysis will affect the campaign in many ways but may be especially important in setting budgets for achieving campaign objectives.

How would it ever be possible to justify anything other than sales growth as a proper objective for an advertising campaign? Is it possible that advertising could be effective yet not yield growth in sales? This question taps into the distinction between sales and communication objectives. Often, campaign objectives are set in terms of communication goals like brand awareness levels or attitude favorability. Focusing exclusively on communication objectives reflects an acknowledgment that advertising per se is only one of many factors that determine sales of a brand. We may not see advertising register its effects on sales in the short run. Using a blend of sales and communication objectives is advisable for proper orientation of advertising efforts.

Write an example of a workable advertising objective that would be appropriate for a service like the Geek Squad. The Geek Squad is a 24-hour computer help desk, with IT services provided by phone, online, or through home visits. Advertising emphasizes both the expertise and efficiency of the service, but it also aims to raise awareness of the brand in this still relatively young industry. A workable advertising objective could propose to increase top-of-mind awareness, proffering that at the conclusion of a 10-week campaign, 80 percent of

Chapter 8: Planning Advertising and Integrated Brand Promotion

consumers in the target segment would identify Geek Squad as an efficient and reliable way to seek computer and IT assistance at home with the effectiveness to be gauged through a consumer telephone survey. 7.

In what situations would share of voice be an important consideration in setting an advertising budget? What will be the drawbacks of trying to incorporate share of voice in budgeting decisions? Share-of-voice assessments are important in highly competitive markets and merit special emphasis when introducing a new brand into a crowded competitive field. The method can be impossible to implement because detailed information about competitors’ ad-spending levels is not always available. In addition, an emphasis on share of voice may be misleading because it does not speak to the quality of advertising plans and executions. Ignoring quality and giving priority to relative spending may simply perpetuate the status quo.

What is it about the objective-and-task method that makes it the preferred approach for the sophisticated advertiser? Describe how build-up analysis is used in implementing the objective-and-task method. The objective-and-task method is the only way of budgeting that seeks to set expenditure levels according to the specific goals established for the campaign. In working through a build-up analysis, the first step will be to assess the reach and frequency levels needed to fulfill the stated objectives and establish an appropriate time frame for the campaign. Next, cost estimates are secured for basic elements such as ad production, media placement, and other costs for integrated promotions. After these cost estimates are made, they can be compared against past campaign expenditures to check on the quality of the estimates.

Briefly discuss the appropriate role to be played by advertising agencies and their clients in the formulation of marketing and advertising plans. Clients must bring a good understanding of their customers and competitors to the ad planning process. The client should have a comprehensive marketing plan with some preliminary thinking about how its integrated marketing communications will support the other elements of the marketing mix in presenting a strong value proposition to the customer. The agency’s responsibility is to assist in articulating specific communication and sales objectives and to devise an advertising strategy to achieve the objectives. When the stage of the process is reached where it is time for actual preparation and placement, the client should look to its agency to execute the nuts and bolts of the advertising campaign.

Chapter 8: Planning Advertising and Integrated Brand Promotion

Experiential Exercises 1.

Without energy companies, the world would lack health care, farm equipment, automobiles, indoor plumbing, and computers. Despite the many ways in which energy businesses improve the quality of life for the world’s nearly seven billion people, ad agencies face enormous challenges planning campaigns for energy firms. Analyze a current advertisement for a global energy company and explain how current and past events in the company’s political, social, and competitive surroundings have shaped the campaign’s message and visuals. Despite the world’s need for energy, the environmental movement has successfully transformed its once-parochial anti-development message into the worldwide green movement. As a result, global energy companies are on the defensive, and their brands have suffered enormous damage from political pressure groups. Global warming and disasters like the 2010 Deepwater Horizon rig explosion in the Gulf of Mexico are foremost in the minds of ad planners as they develop campaigns for energy firms. As an illustration of how difficult the situation has become for oil and gas advertisers, a recent campaign for BP had the slogan “Beyond Petroleum.” It is remarkable that any company would promote the need to “get beyond” its core product. Likewise, Exxon has never lived down the historic Valdez spill—a disaster that continues to affect advertising planning for the entire industry.

Form into teams and devise a campaign for a brand using one of the seven advertising objectives discussed in the chapter (increase awareness, change consumers’ beliefs, influence purchase intent, stimulate trial use, create repeat purchasers, cause brand switching, increase sales). What messages and themes did you use to achieve your objective? How did the advertising objective guide the planning process for your group? Present your idea to the class and let others judge the ad’s effectiveness as it relates to your chosen objective. Although answers will vary, an example of a campaign with a focused objective is Subway’s “Five Dollar Footlong” promotion. The ad’s catchy jingle and exuberant dancers had a goal to increase sales of footlong sandwiches through a limited-time discount offer. Although the promotion was initially expected to run for a short time, the campaign became the company’s most successful promotion ever. Commercials ran for multiple years and prompted management to create a permanent five-dollar footlong value menu for select sandwiches.

Working in small teams, prepare a situation analysis that could be included in an advertising plan for the online employment site Monster.com. The analysis should identify key factors that you consider most relevant to such a campaign and a brief assessment of each. Present your

Chapter 8: Planning Advertising and Integrated Brand Promotion

findings to the class a 10- to 15-slide presentation. This exercise helps students understand first-hand the complex task of preparing an effective advertising plan. The situation analyses prepared by the student teams should identify what they consider to be the most important factors for the employment site’s advertising campaign and explain the importance of each factor. Students should demonstrate that they have researched the current advertising situation for Monster.com and the historical context for the firm’s advertising. (Students who have never combed through a newspaper classified for a summer job still should be mindful that the online equivalent is still a relatively new player.) Answers also should include a brief analysis of the online employment industry, its current and potential users, and the primary competitors. 4.

Working in the same teams, identify potential placement and promotional opportunities that could be part of the media plan for a Monster.com campaign. A media plan specifies where ads will be placed and what strategy is behind their placement. Students also should demonstrate an understanding that media placement strategies have major implications for the cost of an advertising campaign and potential profits or losses. Answers also should reflect an awareness of the vast possibilities of today’s media landscape and demonstrate some creative thinking. Magazine ads and billboards are fine, but what about in-flight audio ads to capture the attention of traveling business people who might be wishing they had a job that required less travel or ad posters on the inside of lavatory stalls on campuses to catch the eye of young job seekers?

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

PART 3 The Creative Process Lecture Alert: It is necessary to alert students that their study of Advertising and IBP is making a major transition. Having finished the Planning Phase, which included developing a managerial orientationsegmentation/positioning/value proposition, research, and planning, it is time to move on to the creative aspect. The Creative Process involves the preparation of messages and campaigns for advertising and IBP. The basis for the creative effort includes, message strategy, copywriting, and art direction and production and are covered in detail in the chapters in this section. Students will likely come to this situation without much formal exposure to these topics. The main goal here is to engender in them a healthy appreciation and respect for the creative effort— and the complexity that the structure of the industry creates in managing the creative effort. In addition the main objective is for students to appreciate that overcoming the challenges in creative development and execution is the way in which all the elements of planning and the value of the brand are communicated to the audience.

CHAPTER 9 Managing Creativity in Advertising and IBP Key Terms creativity account executive (AE) account team

creative brief cognitive style creative abrasion

interpersonal abrasion brainstorming 3P’s creativity framework

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

Summary PPT 9-2 here Describe the core characteristics of great creative minds. A look at the shared sensibilities of great creative minds provides a constructive starting point for assessing the role of creativity in the production of great advertising. What Picasso had in common with Gandhi, Freud, Eliot, Stravinsky, Graham, and Einstein—including a strikingly exuberant self-confidence, (childlike) alertness, unconventionality, and an obsessive commitment to the work—both charms and alarms us. Self-confidence, at some point, becomes crass self-promotion; an unconstrained childlike ability to see the world as forever new devolves, somewhere along the line, into childish self-indulgence. Without creativity, there can be no advertising. How we recognize and define creativity in advertising rests on our understanding of the achievements of acknowledged creative geniuses from the worlds of art, literature, music, science, and politics. Contrast the role of an advertising agency’s creative department with that of business managers/account/executives and explain the tensions between them. What it takes to get the right idea (a lot of hard work), and the ease with which a client may dismiss that idea, underlies the contentiousness between an agency’s creative staff and its AEs and clients. Creatives provoke. Managers restrain. Ads that win awards for creative excellence don’t necessarily fulfill a client’s business goals. All organizations deal with the competing agendas of one department versus another, but in advertising agencies, this competition plays out at an amplified level. The difficulty of assessing the effectiveness of any form of advertisement only adds to the problem. Advertising researchers are put in the unenviable position of judging the creatives, pitting “science” against “art”. None of these tensions changes the fact that creativity is essential to the vitality of brands. Creativity makes a brand, and it is creativity that reinvents established brands in new and desired ways. Assess the role of teams in managing tensions and promoting creativity in advertising and IBP applications. There are many sources of conflict and tension in the business of creating great advertising. It’s the nature of the beast. One way that many organizations attempt to address this challenging issue is through systematic utilization of teams. Teams, when effectively managed, will produce outputs that are greater than the sum of their individual parts. Teams need to be managed proactively to promote creative abrasion but limit interpersonal abrasion if they are to produce “beautiful music together.” Guidance from a maestro (like Lee Clow or

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

an Alex Bogusky) will be required. Another important tool to get teams headed in the right direction and to preempt many forms of conflict in the advertising arena is the creative brief. It’s a little document with a very big function. Examine yourself and your own passion for creativity. Self-assessment is an important part of learning and growing, and now is the perfect time to be thinking about yourself and your passion for creativity. If advertising is a profession that interests you, then improving your own creative abilities should be a lifelong quest. Now is the time to decide to become more creative.

Chapter Outline I. Why Does Advertising Thrive on Creativity? PPT 9-3 here Clutter is the enemy of effective advertising. Great creativity can defeat clutter. But in an attempt to overcome clutter, advertisers generate more ads that just increase the clutter. A primary benefit of award-winning, creative ads is that they break through the clutter and get remembered. Great brands make meaningful, often emotional connections, with consumers. II. Creativity across Domains PPT 9-4 and PPT 9-5 here Creativity is the same across domains. Creativity is the ability to consider and hold together seemingly inconsistent elements and forces, making new connection. Creativity is usually seen as a gift, a special way of seeing the world. Creativity reflects early childhood experiences, social circumstances, and cognitive styles. Great creative often exhibit total commitment to the craft. They are usually good self-promoters. Highly creative people throughout history had a childlike view of the world. They were also marginalized outsiders—many suffering major mental breakdowns.

A. Creative Genius in the Advertising Business PPT 9-6 and PPT 9-7 here Perhaps not as influential as creative geniuses in other domains, it is common to see individuals from the ad business praised for remarkable creative careers. B. Creativity in the Business World

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

Creativity is viewed in the business world as a positive quality for employees but is often hard to recognize and difficult to assimilate. C. Can You Become Creative? This is a very big question. It really depends on what one means by creativity. D. Notes of Caution First, just because someone is in a “creative” position, does not necessarily mean they are creative. Conversely, those who are not in creative positions, i.e., the “suits,” are not necessarily uninspired. III. Agencies, Clients and the Creative Process PPT 9-8 and PPT 9-9 here A. Oil and Water: Conflicts and Tensions in the Creative/Management Interface Advertising is produced through a social process of struggles for control and power that occur within departments, between departments, and between agencies and clients on a daily basis. Most research concerning the contentious environment in advertising agencies places the creative department at the center within these conflicts. The tension is not just between agency and client though it can also be between creative department and account services within the agency. Regardless of the conflict, the creative department is clearly recognized as an essential (probably the essential) part of the agency’s success. The conflict in agencies, however, is not just about creative work. Conflict arises over the research process as well. The conflict between creatives and the research department centers about the difficulty of measuring advertising effectiveness—creatives want impact, whereas research wants to see sales. Clients often do not recognize their role in killing breakthrough ideas they claim they are looking for from their agencies. Account executives (AEs) are the liaison between the agency and the client and their prime responsibility is to ensure that the client is happy. A key challenge is to get creatives to create award winning ads (for which they receive career-making awards and praise) that also help sell the client’s brand. What is the solution to conflict and tension? While there may not be an ultimate” solution, the observations of John Sweeney are notable—bad advertising is more a matter of structure than talent. The proper structure needs to be in place to allow people to produce their best work.

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

Exhibit 9.10, the insights of John Sweeney—a true expert on advertising creativity—makes it clear what not to do of creativity is the goal: PPT 9-10 and PPT 9-11 here • Treat your target audience like a statistic • Make your strategy a hodgepodge • Have no philosophy • Analyze your creative as you do a research report • Make the creative process professional • Say one thing and do another • Give your client the candy store • Mix and match your campaigns • “Fix it” in production • Blame the creative for bad creative • Let your people imitate • Believe posttesting when you get a good score IV. Making Beautiful Music Together: Coordination, Collaboration, and Creativity PPT 9-12 here Many individuals make unique contributions to the whole. “maestro” brings it all together. During “warm-up” of a symphony it sounds disjointed and random. Musicians focus on “sheet music” much like an ad plan. In advertising, the situation is just like a symphony with many players having distinct jobs. Collaboration and coordination is required through teams. A. What We Know About Teams Teams have become the primary means of getting things done in many business situations including IBP. PPT 9-13 here Teams Rule! There can be little doubt that in a variety of organizations, teams have become the primary means for getting things done. The growing number of performance challenges faced by most businesses—as a result of factors such as more demanding customers, technological changes, government regulation, and intensifying competition—demand speed and quality in work products that are simply beyond the scope of what an individual can offer. It’s All about Performance

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

Research shows that teams are effective in organizations where the leadership makes it perfectly clear that teams will be held accountable for performance. Teams are expected to produce results that satisfy the client and yield financial gains for the organization. Synergy through Teams Modern organizations require many kinds of expertise to get the work done. The only reliable way to mix people with different expertise to generate solutions where the whole is greater than the sum of the parts is through team discipline. The Demise of Individualism? Effective teams find ways to let each individual bring his or her unique contributions to the forefront. When an individual does not have his or her own contribution to make, then one can question that person’s value to the team. Teams Promote Personal Growth An added benefit of teamwork is that it promotes learning for each individual team member. In a team, people learn about their own work styles and observe the work styles of others. Leadership in Teams PPT 9-14 here The leader’s first job is to build consensus. Once goals and purpose are agreed on, the leader ensures the work of the team is consistent with the plan. Leaders must also do real work with the team and contribute. Direct Applications to the Account Team The account team can be envisioned as a bicycle wheel with the leader as the hub. Spokes come from direct marketing, PR, creative, graphics, digital etc. Fostering Collaboration through the Creative Brief PPT 9-15 here The creative brief is a little document that sets up the goal for the advertising IBP effort and gets everyone moving in the same direction. The creative brief does not mandate a solution though. It can prevent conflicts.

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

Teams Liberate Decision Making The right combination of talent, with a leader and a creative brief can result in breakthrough decisions. Teams with members that trust one another are liberated to be more creative. B. When Sparks Fly: Igniting Creativity through Teams PPT 9-16 here Managed properly, teams come up with better ideas than independently working individuals. Just the right amount of “tension” can have a positive effect. Cognitive Styles The right brain/left brain metaphor reminds us that people approach problems differently. Cognitive style is the unique preferences of individuals to approaching problems. Creative Abrasion PPT 9-17 here Creative abrasion refers to the clash of ideas from which new ideas and breakthrough solutions can evolve. Interpersonal abrasion is the clash of people, from which communication shuts down and new ideas get slaughtered. Leadership is needed to promote creative abrasion and limit interpersonal abrasion. Using Brainstorming and Alien Visitors PPT 9-18 and PPT 9-19 here Brainstorming is an organized approach to idea generation in groups. Exhibit 9.15 lays out eight rules for brilliant brainstorming: • Build off each other • Fear drives out creativity • Prime individuals before and after group sessions • Make it happen • It’s a skill • Embrace creative abrasion • Listen and learn • Follow the rules or you are not brainstorming.

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

C. Final Thoughts on Teams and Creativity PPT 9-20 here Creativity is fostered through trust and open communication in teams. Both personal and team creativity are critical. The position of the creative director is critical as well. In orchestrating creative teams, these are some good principles to follow: • Take great care in assigning individuals to teams • Get to know the cognitive style of each individual • Make teams responsible to the client • Beware of adversarial and competitive relationships between individuals • Rotate team assignments to foster fresh thinking V. Have You Decided to Become More Creative? PPT 9-21 and PPT 9-22 here A great way to summarize the factors that foster creativity is via the 3Ps creativity framework. People is the first P. The Process used in developing creative work and the Place or environment wherein the work is done are also big factors in generating creative outcomes. To make yourself more creative, decide now to: • Redefine problems to see them differently from other people • Be the first to analyze and critique your own ideas, since we all have good ones and bad ones • Be prepared for opposition whenever you have a really creative idea • Recognize that it is impossible to be creative without adequate knowledge • Recognize that too much knowledge can stifle creativity • Find the standard, safe solution and then decide when you want to take a risk by defying it • Keep growing and experiencing, and challenging your own comfort zone • Believe in yourself, especially when surrounded by doubters • Learn to cherish ambiguity, because from it comes the new ideas • Remember that research has shown that people are most likely to be creative when doing something they love

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

on student mastery of the content. In addition to the feedback on the correct answers, all of the assessment objects have been enhanced with additional tags that can be aggregated to provide feedback on how individual students have done on a specific learning outcome such as ethics. The online material can be delivered in one of two formats. For instructors who want to provide students with access to the Ad Age on Campus access as well as the online advertisements and student facing self-assessment quizzes, CourseMate will be provided with each new copy of Advertising and Integrated Brand Communication. Alternatively, students can decide to purchase CourseMate on its own which will also come with the MindTap Reader, which is the ebook version of the print product. For faculty that desire to have a variety of more in-depth assignments to integrate into their course and a desire to have more student data that can be used for analytic purposes, MindTap can be purchased with an enhanced capability. Faculty can customize the student experience and integrate the experience for their students into the campus Learning Management System. For a complete guide into the reporting and analytical capabilities available to faculty, consult the Assurance of Learning section of this manual.

Boxed Feature Questions and Tags QUESTION

DIFFICULTY

BUSPROG Primary

DISC Primary

BLOOM'S

Chapter 09 Social Media 01

Easy

Technology

Promotion

Application

Chapter 09 Social Media 02

Moderate

Technology

Promotion

Application

Chapter 09 Globalization 01

Moderate

Diversity

Promotion

Application

Chapter 09 Globalization 02

Challenging

Diversity

Promotion

Synthesis

Chapter 09 Ethics 01

Moderate

Ethics

Promotion

Application

Chapter 09 Ethics 02

Moderate

Ethics

Promotion

Application

CHAPTER 9-Social Media Twitter's great. It's your time-waster, your breaking news source, your way to keep in touch with the latest trends and the greatest people. So when it's time to wish your mom a very happy Mother's Day, what do you do? Send her a tweet? I don't think so, buster. For more Mother's Day goodies from tech companies, check out Google's heartwarming "Here's to the Moms" spot, and watch Skype connect a husband and wife just before the birth of their child. (2013, May 10). Twitter Tells You to Get Off Twitter for Mother's Day. adage.com. Retrieved August 15, 2013, from http://adage.com/article/creativity-pick-of-the-day/twitter-tells-twittermother-s-day/241419/. •

9.SocialMedia.Q1

Check out this holiday spot from Twitter. Twitter says that is not okay to:

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

A. Tweet Santa your shopping gift wish list B. Tweet Cupid for a Valentine lover C. Tweet your mom “happy mothers day” D. Tweet the Pope on Christmas Answer: C •

9.SocialMedia.Q2 Drag each aspect of the branding strategic process to its proper place in the diagram.

In this spot, Twitter is suggesting that you use its social media product: A. On a daily basis B. In the mornings C. Anywhere but at work D. Not as a replacement for more communication in more meaningful relationship moments Answer: D

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

CHAPTER 9-Globalization http://adage.com/article/creativity-pick-of-the-day/difficulties-driving-human-hondacampaign/237451/

•

9.Globalization.Q1

Honda, a Japanese motor company launched some print ads in their creative process. The point of this creative is to show: A. Drivers are robots B. Drivers are only human C. The problems of texting while driving D. The problems of applying makeup while driving Answer: B

• 9.Globalization.Q2 After seeing and thinking about the Honda print ad here, is this creative message one that can be easily adapted globally? Defend your response with why or why not. Answer: Yes, the idea that drivers are only human is a global theme. No matter if in Japan, the U.S., or Europe, all drivers have blind spots at times, or go in the wrong lane, or have missed a traffic signal before as a mistake. This is a universal theme.

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

CHAPTER 9-Ethics http://adage.com/article/digital/facebook-s-pr-blunder-opens-trust-gap/227564/ •

9. Ethics.Q1

The ethical issue Facebook has according to this article is about: A. security and privacy B. advertising pricing C. their business model D. the product brand management Answer: A • 9. Ethics.Q2 A probable consequence, according to the article, is that facebook can loose: A. profit sharing B. status C. consumers’ trust D. market share Answer: C

Homework Grid Homework Description 1-a. Multiple Choice Super Bowl Ads 1-b. Multiple Choice Super Bowl Ads 2-a. Multiple choice Netflix Posters 2-b. Multiple choice Netflix Posters 3-a. Multiple Choice Coke Campaign 3-b. Multiple Choice Coke Campaign 3-c. Multiple Choice Coke Campaign 4-a. Multiple Selection Choose the rules for brainstorming. Homework is available to faculty to select and integrate into their customized course. THE FOLLOWING SECTIONS OF THE INSTRUCTOR’S MANUAL HAS A SELECTION OF CASES THAT CAN BE INCORPORATED INTO YOUR COURSE AS OUT OF CLASS ASSIGNMENTS , OR AS A METHOD FOR INITIATING CLASSROOM DISCUSSION.

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

End of Chapter Questions 1.

Over the years, creativity has been associated with various forms of madness and mental instability. In your opinion, what is it about creative people that prompt this kind of characterization? Students will have to think about this for a while. It is a difficult question because many students have not had a lot of contact with creative people. And if they have, such as in high school, many of these creative people were ostracized from the main group because they were so different. The essential point is that truly creative people see the world quite differently. As such, they can be seen as strange or even abnormal by the average person. And, if the creative person does not score “appropriately” (that is, average) on all sorts of standardized tests, then they may be seen as mentally ill. It is worth being a little more patient with student responses to this question. They may have a hard time starting to talk about it. However, once they get going, the discussion should be fruitful.

Think about a favorite artist, musician, or writer. What is unique about the way he or she represents the world? What fascinates you about the vision he or she creates? This is a written assignment. The thing about “liking” an artist or musician or writer is that they make you feel a certain way. The mere act of trying to express the “feeling” creativity gives a person is the real reason behind this question, which will help students appreciate why it is so hard to get consumers to express themselves about ads.

Much credence is given in this chapter to the idea that tension (of various sorts) is part of creative pursuits. Explain the connection between creativity and tension. The main source of tension runs from between the client and the agency and within the agency between account management and the creatives. There are struggles for control and power between agencies and clients. Research on agency/client conflict places the creative department at the center of the conflict. The tension is not just between agency and client though—it can also be between creative department and account services within the agency.

Which side of this debate do you have more affinity for: Are people creative because they can produce creative results or are they creative because of the way they think? Explain.

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

This can either be a written assignment that will get students to think in a complex way about creativity, or the class can be broken into two groups and assigned one position or the other for debate. One argument says that something is creative only when it is manifest in something tangible—then it is a “work” that can affect others. On the other hand, it is argued that creative thinking is the essence of creativity whether it is recognized in the work or not. 5.

Describe the conflict between the creative department and the research department. Do you think creatives are justified in their hesitancy to subject their work to advertising researchers? Why? Is science capable of judging art any more than art is capable of judging science? Explain. The conflict in agencies arises over the research process. The conflict between creatives and the research department centers on the difficulty of measuring advertising effectiveness. The conflict is understandable and is philosophical much like Idealism vs. Materialism or Rationalism vs. Empiricism. Whether one can judge the other is dependent on your point of view.

Examine Exhibit 9.10. Using this exhibit as your guide, generate a list of ten principles to facilitate creativity in an advertising agency. A mini-creative test, if you will, this question is designed to get students to turn the “principles” that lead to bad creative work, as outlined in the exhibit, around and to restate them as principles that facilitate exemplary creative work. Exhibit 9.10 lists the following. • Treat your audience like a statistic • Make your strategy a hodgepodge • Have no philosophy • Analyze your creative like you do a research report • Make the creative process professional • Say one thing and do another • Give your client a candy store • Mix and match your campaigns • Fix it in production • Blame the creative for bad creative • Let your people imitate • Believe posttesting when you get a good score

The creative director in any agency has the daunting task of channeling the creative energies of dozens of individuals, while demanding team accountability. If the expression

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

of creativity is personal and highly individualized, how can teamwork possibly foster creativity? What might a creative director do to “allow creativity to happen” in a team environment? Explain how the saying, “The whole is greater than the sum of its parts,” fits into a discussion of creativity and teamwork. The growing reliance on teamwork does not diminish the importance of individual creativity. But it does require that care is taken, particularly by creative directors, to ensure that teams are structured and operate in such a way that unique individual contributions are supported – not duplicated – by other team members. An effective team should indeed be greater than the sum of its parts, with individual members each bringing a distinct talent and creative strength to the table. Or, as the text notes, when two people on a given team think alike, “one of us is unnecessary.” Creative directors can promote creativity in a team environment as well by ensuring a diverse mix of team members, treating them well, and allowing team-based decision making to provide a safe environment for more daring, more creative outcomes. 8.

Advertising always has been a team sport, but the advent of advertising and IBP has made effective teamwork more important than ever. It also has made it more difficult to achieve. Explain how the growing emphasis on IBP makes effective teamwork more challenging. Creating effective IBP campaigns requires the efforts of many different individuals, each with different areas of expertise and talent. The challenge lies in coordinating these many varied, sometimes conflicting, roles to reach one smooth, compelling result. Creative directors must work with account executive, who must work with creatives, who must work with public relations professionals – and each professional group is likely to bring their own cognitive style of planning and decision making to the team. That kind of crossdepartmental, cross-functional teamwork can come with both creative abrasion and interpersonal abrasion. The challenge for team leaders and advertising managers is to ensure that teams have the right mix of tension to foster creativity and produce the best ideas.

Choose any ad from this book that represents exemplary creativity to you. Explain your choice. This is designed purely to be a written assignment. Again, this is an exercise in trying to get students to think analytically about the creative process and become more comfortable thinking about creative. Recall that this is a major transition chapter.

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

To be successful in the twenty-first century, advertisers must find creative ways to transform customers into life-long purchasers and diehard advocates. The lifetime value of a loyal customer far exceeds any short-term buzz generated by a one-time promotion gimmick. Form into teams and think up a creative advertising concept that would help a client initiate and maintain relationships with new customers. Teams should brainstorm ways in which the client could establish regular, ongoing marketing interactions with individual customers. After the breakout session, each team should present its campaign idea to the class for evaluation. Teams will produce a range of creative ideas and themes. A travel retailer, for example, could use the following campaign activities to establish and maintain ongoing relationships with travel-minded customers: Sponsor an travel blog for enthusiasts to share travel experiences; launch a travel sweepstakes in which the winner's daily travel adventures are broadcast to other travel enthusiasts in a multi-part podcast; create a smartphone app that delivers fresh tips for exotic getaways—linked to the client’s travel goods and services, of course.

Since great advertising and teamwork go together, test your teamwork skills with this gravity-defying teambuilding activity. Divide students into teams of eight and provide each team with a light wooden dowel rod approximately six to eight feet in length. Each team’s objective is to lower the long dowel rod to the ground while the rod rests atop members’ outstretched index fingers. To begin, team members should stand and form two lines facing each other, extending index fingers outward as if pointing to the opposite member. Next, have a facilitator lay the long dowel rod on top of the group’s outstretched index fingers. The team must try to lower the rod slowly to the ground—no easy task. This fun-yet-tricky exercise requires students to use coordination, collaboration, and communication to accomplish their task. Students will find it perplexing that the rod tends to rise upward despite their determined attempts to lower it to the ground. This fun challenge mirrors many aspects of team dynamics. Students will come away from the activity with a deeper understanding of how teams require creativity, leadership, and disciplined coordination to accomplish goals.

This chapter emphasizes the importance of coordination and collaboration in the creative process for IBP campaigns. Break into small groups to conduct the following creative brainstorming exercises. When you are done, present your ideas to the class and explain how the “Eight Rules for Brilliant Brainstorming” listed in Exhibit 9.15 helped your team’s collaborative effort. How did your ideas, in number and in substance, compare to others in the class?

Chapter 5: Advertising, Integrated Brand Promotion, and Consumer Behavior

• • • •

Spend 10 minutes brainstorming each of these topics: How many uses can you identify for baking soda? Put a ballpoint pen, a baseball cap, and a belt on a desk. How many alternative uses can you identify for those objects? What words do you associate with the following well-known brands? Taco Bell, Pampers, and John Deere.

This creativity exercise will both stretch students’ individual capacity for creative thinking, but it also will underscore the chapter’s lessons about the importance (and even pitfalls) of teamwork in the creative process. In sharing their ideas with other teams, students should pay attention to team outcomes both in terms of quantity and quality. A team might come up with 100 uses for baking soda; but are theirs as creative or compelling as a team that compiled half as many? The brand identification exercise should get students thinking about the importance of having a unified single message and clear understanding of a product when developing IBP strategies. 4.

Working in the same small teams, develop a creative brief for one of the three brands listed above. The brief should establish the goal of any future advertising efforts and offer some basic guidance to the creative division. Your team should use the template at Exhibit 9.14 to develop the creative brief, but you may make adjustments as necessary to that model. Done correctly, a creative brief should be able to establish basic ground rules and goals for an IBP campaign without mandating a specific outcome or result. Students can modify the creative brief template offered in the chapter, but each team’s answers should demonstrate a clear understanding of the product or service, the competition, consumer attitudes, and what the IBP campaign should attempt to make consumers believe. Remind students that the brief should be written plainly, in the kind of language that consumers really use, not the language of business case studies.

Chapter 10: Creative Message Strategy

CHAPTER 10 Creative Message Strategy Key Terms unique selling proposition (USP) comparison advertisements testimonial infomercial

Summary PPT 10-2 here Identify 10 objectives of message strategy. Advertisers can choose from a wide array of message strategy objectives as well as methods for implementing these objectives. Three fundamental message objectives are promoting brand recall, linking key attributes to the brand name, and persuading the customer. The advertiser may also wish to create an affective association in consumers’ minds by linking good feelings, humor, and sex appeal with the brand itself. Such positive feelings associated with the advertised brand can lead consumers to a higher probability of purchase. The advertiser may try to scare the consumer into action or change behavior by inducing anxiety, using negative emotional states as the means to motivate purchases. Transformational advertising aims to transform the nature of the consumption experience so that a consumer’s experience of a brand becomes connected to the glorified experiences portrayed in ads. A message may also situate the brand in an important social context to heighten the brand’s appeal. Finally, advertisers seek to define a brand’s image by linking certain attributes to the brand, mostly using visual cues. Identify methods for executing each message strategy objective. Advertisers employ any number of methods to achieve their objectives. To get consumers to recall a brand name, advertisers use repetition, slogans, and jingles. When the advertiser’s objective is to link a key attribute to a brand, USP ads emphasizing unique brand qualities are employed. If the goal is to persuade a consumer to make a purchase, reason-why ads, hardsell ads, comparison ads, testimonials, demonstrations, and infomercials all do the trick. Feelgood ads, humorous ads, and sexual-appeal ads can raise a consumer’s preferences for one brand over another through affective association. Fear-appeal ads, judiciously used, can

Chapter 10: Creative Message Strategy

motivate purchases, as can ads that play on other anxieties. Transformational ads attempt to enrich the consumption experience. With slice-of-life ads, product placement, and short Internet films, the goal is to situate a brand in a desirable social context. Finally, ads that primarily use visuals work to define brand image. Discuss the strategic implications of various methods used to execute each message strategy objective. Each method used to execute a message strategy objective has pros and cons. Methods that promote brand recall or link key attributes to a brand name can be extremely successful in training consumers to remember a brand name or its specific, beneficial attributes. However, these methods require long-term commitment and repetition to work properly, and advertisers can pay high expense while generating disdain from creatives. Methods used to persuade consumers generally aim to provide rhetorical arguments and demonstrations for why consumers should prefer a brand, resulting in strong, cognitive loyalty to products. However, these methods assume a high level of involvement and are vulnerable to counterarguments that neutralize their effectiveness—more-sophisticated audiences tune them out altogether, rejecting them as misleading, insipid, or dishonest. Methods used in creating affective association have short-term results and please creatives; however, the effect on audiences wears out quickly and high expense dissuades some advertisers from taking the risk. Methods designed to play on fear or anxiety are compelling, but legal and ethical issues arise, and most advertisers wish to avoid instigating consumer panic. Finally, methods that transform consumption experiences, situate the brand socially, or define brand image have powerful enduring qualities but often get lost in the clutter and can ring false to audiences.

Chapter Outline I. Message Strategy The first thing needed for creating messages is an objective. The message strategy defines the goals of the advertiser. II. Essential Message Objectives and Strategies A. Objective #1: Promote Brand Recall PPT 10-3 here Since modern advertising’s earliest days, getting consumers to remember the advertised brand’s name has been a goal. The very obvious idea behind this objective is that if consumers remember the brand name, and can easily recall it, they are more likely to buy it.

Chapter 10/Creative Message Strategy

Advertisers not only want consumers to remember their name, but also want to be the first name consumers remember—they want their brand to be “top of mind.” At a minimum, they want them to be in the evoked set, a small list of brand names (typically five or less) that comes to mind when a product or service category is mentioned. The odds of being either top of mind or in the evoked set increase with recall. There are two popular methods by which advertisers promote easy recall. Method A: Repetition Repetition is a tried-and-true way of gaining easier retrieval of brand names from consumer’s memory. Advertisers do this by buying a lot of ads and/or by frequently repeating the brand name within the ad itself. Method B: Slogans and Jingles Slogans are linguistic devices that link a brand name to something memorable, by means of the slogan’s simplicity, meter, rhyme, or some other factor. Method C: Point-of-Purchase Branding PPT 10-4 here In the contemporary advertising IBP world, marketers often use point-of-purchase displays that help trigger, or cue, the brand name (and maybe an ad) from memory. That is the main idea behind point-of-purchase advertising—to provide a memory trigger. Strategic Implications of Repetition, Slogans, and Jingles • • • • •

Extremely resistant to forgetting—the residual impact is lasting and huge. Efficient for consumer—consumers like simple decision rules. Long-term commitment / expense—achieving the positive effects of repetition requires commitment and spending. Competitive interference—brand name has to be linked to the repetition or consumer brand confusion can occur. Creative resistance—creatives hate this method as they are un-creative.

B. Objective #2: Link Key Attribute(s) to the Brand Name PPT 10-5 here Sometimes advertisers want consumers to remember the brand and associate it with one or at most two attributes. This type of advertising is most closely identified with the unique selling

Chapter 10: Creative Message Strategy

proposition (USP) style, a type of ad that strongly emphasizes a supposedly unique quality (or qualities) of the advertised brand. Method: USP Ads that try to link several attributes to a brand while working to establish recall generally fail—they are too confusing and give too much information. Sometimes this type of advertising relies on a soft logic. Evaluation of the USP method is typically done through recall tests, communication tests, and tracking studies. Strategic Implications of the USP method • • • •

Big carryover—USP advertising is very efficient. Once this link has been firmly established, it can last a very long time. Very resistant—this type of advertising can be incredibly resistant to competitive challenge. Long-term commitment and expense—if advertisers are going to use the USP method, they have to be in it for the long haul. Some creative resistance—creatives tend not to hate this quite as much as simple repetition, but it does seem to get old with them pretty fast.

C. Objective #3: Persuade the Consumer This style of advertising is about arguments. In this type of advertising, advertisers pose one or more (usually more) logical arguments to an engaged consumer. This is high-engagement advertising. For this general type of advertising to work as planned, the consumer has to think about what the advertiser is saying. The receiver must “get” the ad, understand the argument, and generally agree with it. Method A: Reason-Why Ads PPT 10-6 here In a reason-why ad, the advertiser reasons with the potential consumer. The ad points out to the consumer that there are good reasons why this brand will be satisfying and beneficial. Strategic Implications of Reason-Why Ads • •

Permission to buy Socially acceptable defense.

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• • • •

High level of involvement Potential for counterarguments Legal/regulatory challenges/exposure. Some creative resistance.

Method B: Hard-Sell Ads PPT 10-7 here Hard-sell ads are characteristically high pressure and urgent. Phrases like “act now,” “limited time offer,” “your last chance to save,” and “one-time-only sale” are representative of this method. The idea is to create a sense of urgency so that consumers will act quickly. Strategic Implications of Hard-Sell Approaches • • • • •

“Permission to buy now.” Socially acceptable defense Low credibility Legal/regulatory challenges/exposure Some creative resistance

Method C: Comparison Ads PPT 10-7 here Comparison advertisements try to demonstrate a brand’s ability to satisfy consumers by comparing its features to those of competitive brands. Comparisons can be an effective and efficient means of communicating a large amount of information in a clear, interesting, and convincing way, or they can be extremely confusing and create a situation of information overload in which the market leader usually wins. The following are research conclusions about the use of comparison as a message tactic: • Direct comparison by a low-share brand to a high-share brand increases receivers’ attention and increases their intent to purchase the low-share brand. • Direct comparison by a high-share brand to a low-share brand does not attract additional attention to the high-share brand but actually helps the low-share brand. o Direct comparison is more effective if members of the target audience have not demonstrated clear brand preference in their product choices. Strategic Implications of Comparison Ads PPT 10-8 and PPT 10-9 here

Chapter 10: Creative Message Strategy

• • • • •

• •

Can help a low-share brand. Provides social justification for purchase of the less popular brand. Gives permission to buy. Significant legal/regulatory exposure. Not done much outside the United States; in much of the world, they are outlawed, not done by mutual agreement, or simply considered in such poor taste as to never be done. Not for established market leaders. These ads are sometimes evaluated as more offensive and less interesting than noncomparative ads.

Method D: Testimonials PPT 10-10 here When an advocacy position is taken by a spokesperson in an advertisement, it is known as a testimonial. The value of the testimonial lies in the authoritative presentation of a brand’s attributes and benefits by the spokesperson. There are three versions of the testimonial message tactic. The most conspicuous version is the celebrity testimonial. The belief is that a celebrity will increase an ad’s ability to attract attention and produce a desire in receivers to emulate or imitate the celebrities. Expert spokespersons for a brand are viewed as having expert product knowledge. There is also the average-user testimonial. The philosophy is that the target market can relate to this person. Solid theoretical support for this testimonial approach comes from reference-group theory. Simply put, the consumer’s logic in this situation is, “That person is similar to me and likes that brand; therefore, I will also like that brand.” Strategic Implications of Testimonial Advertising • • • •

Very popular people can generate popularity for the brand. People perceived to be very similar to the consumer, or the expert, can be powerful advocates for the brand. Consumers often forget who likes what, particularly when stars promote multiple brands. Can generate more popularity for the celebrity than for the brand.

Method E: Demonstration PPT 10-11 here

Chapter 10/Creative Message Strategy

An ad that shows how close an electric razor shaves, how green a fertilizer makes a lawn, and how easy an exercise machine is to use are all product features that can be demonstrated by using a method known simply as demonstration. “Seeing is believing” is the motto of this school of advertising. Strategic Implications of Demonstration Ads • • • •

Inherent credibility of “seeing is believing.” Can be used as social justification; helps the consumer defend his or her decision to buy. Provides clear permission to buy. Fairly heavy regulatory/legal exposure.

Method F: Infomercials PPT 10-12 here With the infomercial message method, an advertiser buys from 5 to 60 minutes of television time and runs an information/entertainment program that is really an extended advertisement. Strategic Implications of Infomercials • • • •

Long format gives advertisers plenty of time to make their case. As network ratings fall, day-parts (e.g., Sunday mornings 9–11) that were previously unaffordable have now opened up, making infomercials better deals for advertisers. Has the advantage of looking like an entertainment show. The genre of ads has a somewhat negative public image, which doesn’t help build credibility or trust in the advertised brand.

D. Objective #4: Affective Association: Get the Consumer to Feel Good about the Brand Affective (means liking) Association is fairly universal. Advertisers want consumers to like the brand, which is presumed to lead to preference for their brand. Liking is different from brand recall. Liking is measured in attitudes and expressed as a feeling rather than a thought. Method A: Feel-Good Ads PPT 10-13 here Feel-good ads work by positive affective association or pre-decisional distortion. They link

Chapter 10: Creative Message Strategy

the good feeling elicited by the ad with the brand or leverage the propensity for humans to distort information in the favor of liked brands without even knowing they are doing so. The basic idea is that by creating ads with positive feelings, consumers will associate those positive feelings with the advertised brand, leading to a higher probability of purchase. More recent research offers more complicated insights into the effectiveness of this ad. It seems this method tapes into a more primitive system of human response that responds quickly to stimuli, but the effect may not be as enduring as other methods. Strategic Implications of Feel-Good Advertising • • •

Eager creatives May perform better in cluttered media environment May generate competing thoughts and connections

Method B: Humor Ads PPT 10-14 here The goal of humor in advertising is to create a pleasant and memorable association with the brand in the receiver. However, research shows that humorous versions of advertisements are often not any more persuasive than non-humorous versions of the same ad. Strategic Implications of Humor Advertising • • • •

If the joke is integral to the copy platform, humor can be very effective; otherwise it is just free entertainment. Very eager creatives. Humorous messages may adversely affect comprehension. Very funny messages can wear out as quickly, leaving no one laughing, especially the advertiser. Rotating messages in an ongoing gag can help.

Method C: Sex Appeal Ads PPT 10-15 here Sex ads are feeling-based advertising. But does sex sell? In a literal sense, no, because nothing, not even sex, makes someone buy something. However, sexual appeals are attention getting, which affects how consumers feel about a product The most important element is sex appeal ads—match the brand category to the appeal. The subtlety that “recall” which sex ads may be good ad is totally different from effectiveness.

Chapter 10/Creative Message Strategy

Strategic Implications of Sexual-Appeal Advertising • • • • •

Higher attention levels. Higher arousal and affect (feelings). Possible poor memorability of brand due to interference at the time of exposure is possible. Product-theme continuity is a necessity and excludes many product categories. Legal, political, and regulatory exposure.

E. Objective #5: Scare the Consumer into Action Sometimes advertisers adopt the “scare the consumer into action” objective using fear appeals. It must be used strategically to work well in advertising. Method A: Fear-Appeal Ads PPT 10-16 and 10-17 here A fear appeal highlights the risk of harm or other negative consequences of not using the advertised brand or not taking some recommended action. Traditional research indicates that intense fear appeals actually short-circuit persuasion and result in a negative-attitude effect. Other researchers argue that the tactic is beneficial to the advertiser. Strategic Implications of Fear-Appeal Advertising • • •

Threat must be entirely plausible. There must be a completely clear and easy-to-discern link between the alleviation of the threat and the use of the advertised brand. Some fear ads are just ridiculous and thus have low impact.

F. Objective #6: Change Behavior by Inducing Anxiety People try to avoid feeling anxious. Often people will buy or consume things to help them in their continuing struggle with anxiety and advertisers pursue a change-behavior-by-inducinganxiety objective by playing on consumer anxieties. Method A: Anxiety Ads PPT 10-18 here Advertisers use many settings to demonstrate why you should be anxious and what you can do to alleviate the anxiety. Social, medical, and personal-care products frequently use

Chapter 10: Creative Message Strategy

anxiety ads. The message conveyed in anxiety ads is that (1) there is a clear and present problem, and (2) the way to avoid this problem is to buy the advertised brand. Method B: Social Anxiety Ads PPT 10-18 here The danger in these ads is negative social judgment, as opposed to physical threat. Strategic Implications of Anxiety Advertising PPT 10-19 here • • • • • • •

Can generate perception of widespread (and thus personal) threat and thus motivate action (buying and using the advertised product). The brand can become the solution to the ever-present problem, which results in long-term commitment to the brand. Efficient—a little anxiety goes a long way. Too much anxiety, like fear, may overwhelm the consumer, and the ad and the brand may be avoided becomes it’s just too much discomfort. If the anxiety-producing threat is not linked tightly enough to the brand, you may increase category demand and provide business for your competitors. Ethical issues: Some believe there is enough to feel anxious about without advertisers adding more. Typically targeted at women—critics claim inherent unfairness and sexism.

G. Objective #7: Define the Brand Image Images are the most apparent and most prominently associated characteristics of a brand. They are the thing consumers most remember or associate with a brand. Method A: Image Ads PPT 10-20 here Image advertising often has a complete absence of hard product information, or it is almost exclusively visual. They may use images to point to a brand quality or attribute or evoke a certain set of feelings about the brand. Evaluation of image ads is typically done through qualitative methods, and sometimes associative tests are used, along with attribute-related attitude tracking studies done over time. Strategic Implications of Image Advertising PPT 10-21 and PPT 10-22 here

Chapter 10/Creative Message Strategy

• • • • • • • •

Generally, less counterarguments generated by consumers. Relatively little or no legal/regulatory exposure. Iconic potential. Very common, can get lost in clutter. Can be rejected if advertised image rings untrue or poorly matches what the consumer currently thinks of the brand, particularly through direct experience. Don’t tend to copy-test well. Managerial resistance. Creatives love the technique.

H. Objective #8: Give the Brand the Desired Social Meaning Objects have social and cultural meanings. Advertisers situate the brand socially by creating an ad that places a brand in a socially-desirable context. Method A: Slice-of-Life Ads PPT 10-23 here By placing a brand in a social context, it gains social meaning by association. Slice-of-life advertisements depict a usage situation for the brand. Strategic Implications of Slice-of-Life Ads • • • • • • •

Generally, fewer counterarguments made by the consumers. Legal/regulatory advantages. Advertisers’ attorneys like pictures more than words because determining the truth or falsity of a picture is much tougher than words. Iconic potential. Creation of ad-social/realities. You can create the desired social worlds for your brand on the page. Fairly common, can get lost in clutter. Don’t tend to copy-test well. Creative love these ads.

Method B: Branded Entertainment: Product Placement PPT 10-24 here We have moved, over the years, from product placements in films and TV shows to a more and more broad-spectrum and integrated set of methods for bring brand messages to consumers. This can be accomplished with product (really brand) placement in a film or

Chapter 10: Creative Message Strategy

TV show, or the advertiser can create a Web film or ads and trailers promoting all of the above. Strategic Implications of Branded Entertainment PPT 10-25 here • • • • • • •

Low counterargument, if placement is not too obvious. May reduce defensive measures by consumers, such as source discounting. May increase consumer estimates about how many other people use the brand. Perceived cost advantage over network TV ads. Non-standardized rate structure—hard to price these deals. May not be very effective for high involvement categories. Science is unclear as to how well this technique works.

I. Objective #9: Leverage Social Disruption and Cultural Contradictions The strategy here is to identify areas of social and cultural tension and create a message that suggests the brand is the only one that “gets it” and is therefore, the most relevant to the movement(s). Method: Tie the Brand to Social/Cultural Movement PPT 10-26 here This is a very sophisticated and typically difficult method. The reason it is difficult is not in the execution, but being culturally attuned enough to know in the present what various target marketers are conflicted about, and how to offer a brand as a solution, even a partial one. J. Objective #10: Transform Consumption Experiences PPT 10-26 here We have all had the sensation that something was really good but it wasn’t one particular thing we could point to. Advertisers try to provide anticipation or familiarity, bundled up in a positive memory of an advertisement, activated during the consumption experience itself. The advertising or promotional experience is thus said to have transformed the actual consumption experience, both at the time of consumption and in the consumer’s memory. Method A: Transformational Ads The idea behind transformational advertising is that it can actually make the consumption

Chapter 10/Creative Message Strategy

experience better. Transformational advertising messages attempt to create a brand feeling, image, and mood that are activated when the consumer uses the product or service. Strategic Implications of Transformational Advertising PPT 10-27 and PPT 10-28 here • • • •

Can be extremely powerful due to the merging of the ad and the experience. Fosters long-term commitment. Can ring absolutely false and hurt the brand. Ethical issues—this manipulation of experience is unethical.

III. In the End Message development is where the advertising and branding battle is won or lost. It’s where: • Creatives have to turn the wishes of clients into effective advertising • Creatives have to get into the mind and culture of the consumer • Advertisers merge culture, mind, and brand.

ONLINE CONTENT The online dynamic content provides both content and insights into the ethical, global, and social media aspects of Advertising and Integrated Brand Communication. The integrated assessment components will provide students with assurances that they have mastered the assigned readings and provide feedback to faculty that the students have completed the assigned readings and data on student mastery of the content. In addition to the feedback on the correct answers, all of the assessment objects have been enhanced with additional tags that can be aggregated to provide feedback on how individual students have done on a specific learning outcome such as ethics. The online material can be delivered in one of two formats. For instructors who want to provide students with access to the Ad Age on Campus access as well as the online advertisements and student facing self-assessment quizzes, CourseMate will be provided with each new copy of Advertising and Integrated Brand Communication. Alternatively, students can decide to purchase CourseMate on its own which will also come with the MindTap Reader, which is the ebook version of the print product. For faculty that desire to have a variety of more in-depth assignments to integrate into their course and a desire to have more student data that can be used for analytic purposes, MindTap can be purchased with an enhanced capability. Faculty can customize the student experience and integrate the experience for their students into the campus Learning Management System. For a complete guide into the reporting and analytical capabilities available to faculty, consult the Assurance of Learning section of this manual.

Chapter 10: Creative Message Strategy

Boxed Feature Questions and Tags QUESTION

DIFFICULTY

BUSPROG

DISC

Primary

BLOOM'S

Chapter 10 Social Media 01

Easy

Technology

Promotion

Application

Chapter 10 Social Media 02

Moderate

Technology

Promotion

Application

Chapter 10 Globalization 01

Moderate

Diversity

Promotion

Application

Chapter 10 Globalization 02

Easy

Diversity

Promotion

Application

Chapter 10 Ethics 01

Easy

Ethics

Promotion

Application

Chapter 10 Ethics 02

Moderate

Ethics

Promotion

Application

CHAPTER 10-Social Media http://adage.com/article/creativity-pick-of-the-day/nissan-promotes-healing-painthealing-ipad-ad/241364/ • 10.SocialMedia.Q1 Nissan, in this ad, uses social media and an interactive iPad ad to showcase what feature about the Nissan 370Z?: A. the paint B. the wheels C. the interior room D. the cargo space Answer: A • 10.SocialMedia.Q2 After isolating the benefit, what is the feature presented with this ad? A. the car drives faster B. the car is scratch proof C. the car can hold 5 passengers D. the car has a more comfortable ride Answer: B

CHAPTER 10-Globalization

Chapter 10/Creative Message Strategy

http://adage.com/article/creativity-pick-of-the-day/firstworldproblems-recited-campaignwater-life/237601/ •

10.Globalization.Q1

Water is Life is the mission behind this Hashtag Killer campaign. What is the point to this campaign? A. To increase sales of recycled water bottles B. To increase Twitter use in third world countries C. To raise awareness about serious developing world issues D. To raise awareness about global warming Answer: C • 10.Globalization.Q2 The responses to the this ad are delivered by: A. children B. politicians C. managers D. celebrities Answer: D

CHAPTER 10-Ethics http://adage.com/article/media/mad-men-recap-trouble-scdp-fo-chaough/240892/ •

10. Ethics.Q1 According to the article, the moral center of the show is over, in the advertising industry show of MadMen.

Chapter 10: Creative Message Strategy

Answer: True

• 10. Ethics Q2 One of the most recalled scenes in MadMen is the pitch for a certain brand in what category? A. catsup B. automobiles C. makeup D. books Answer: A

Homework Grid Homework Description 1-a. Multiple Choice Dove Strategy 1-b. Multiple Choice Dove Strategy 1-c. Multiple Choice Dove Strategy 2-a. Multiple Choice Dove Cannes Award 2-b. Multiple Choice Dove Cannes Award 3-a. Multiple Choice Corona Moon Advertising 3-b. Multiple Choice Corona Moon Advertising 3-c. Multiple Choice Corona Moon Advertising 4-a. Matching Advertising Objectives/Achievements Homework is available to faculty to select and integrate into their customized course. THE FOLLOWING SECTIONS OF THE INSTRUCTOR’S MANUAL HAS A SELECTION OF CASES THAT CAN BE INCORPORATED INTO YOUR COURSE AS OUT OF CLASS ASSIGNMENTS , OR AS A METHOD FOR INITIATING CLASSROOM DISCUSSION.

End of Chapter Questions 1.

What are the advantages of a simple repetition strategy? What kind of brands are most likely to use it? Repetition works for consumers. They like simple decision rules. Brands in the convenience goods category—toothpaste, laundry detergent, etc.—are most well suited to repetition due to the simple, well know features of the product categories and the highly cluttered ad environment.

Chapter 10/Creative Message Strategy

Under what circumstances would it be relatively tough to successfully link one attribute to a brand name and thereby increase sales? This is a “loaded” question is a couple of ways. First, linking a single attribute to brand name is actually a preferred strategy in many ways. That is whole idea behind the USP— the unique selling proposition. But, it would indeed be tough if a brand did not have a single, outstanding attribute but rather offered a bundle of values. Advertising and IBP messages and campaigns do not “increase sales” by themselves. A brand needs the full complement of the marketing mix function properly and effectively for sales to result—not just advertising and IBP.

For reason-why ads to work, what has to happen? In order for a “reason-why” ad to work, creatives have to offer the consumer: • “Permission to buy,” that is a good set of “reasons-why” versus the competition • A socially acceptable defense for making the purchase

Explain the difference between brand recall and affective association as message objectives. Affective association is a much more ambitious objective than brand recall. Affective association presumes that brand recall has been achieved and that some way now must be found to motivate the consumer to select a brand over the competitive field. Preferences may evolve based on consumers’ beliefs about the performance benefits of a particular brand. However, creating brand preferences through affective associations linked to the brand requires persistent advertising effort. Brand-name recall can be accomplished fairly easily with a good slogan and consistent ad spending.

Does sex sell? Explain. The simple answer is “no,” not even sex can make someone buy something. Sex appeals in advertising can draw attention to a brand among certain target segments and that attention might motivate the receiver to consider brand attributes more seriously.

Review the do’s and don’ts of comparison advertising and then think about each of the brand pairs listed below. Comment on whether you think comparison ads would be a good choice for the product category in question, and if so, which brand in the pair would be in the most appropriate position to use comparisons: Coors Light versus Bud Light beer, Nuprin versus Tylenol pain reliever, Wendy’s versus McDonald’s hamburgers.

Chapter 10: Creative Message Strategy

The many specific features that could be built into a pickup truck would make this a logical category for comparative advertising. Chevy and Ford are long-time rivals in this category, so either could be expected to use comparatives. Because it is hard to come up with concrete performance features that distinguish one light beer from the next, this category is not a strong candidate for comparatives. As a low-share brand, it could be valuable for Nuprin to use comparatives versus Tylenol. As the market leader, Tylenol would have absolutely no reason to make explicit comparisons to Nuprin. Colognes must be sold on an emotional basis, so this would not be a good category for comparative advertising. Finally, fast-food restaurants can have many differentiating features that may form the basis for a comparative campaign. With McDonald’s the market leader, Wendy’s would more likely choose the comparative approach. 7.

Is social anxiety advertising generally effective? Why? Social anxiety ads do have a high potential for success. Such ads raise the issue of an ever present, embarrassing social threat and propose the brand as the solution. There are ethical issues in that such “fear” ads could be argued to be insidious. Additionally, these types of ads are also typically aimed at women raising an issue of sexism.

Think about something that is disruptive in your society right now. How would you use it to make an effective brand advertising and brand promotion? This, of course, is one of those “student answers will vary” kinds of questions. But, the challenge as an instructor is to try to encourage students to think of true “social” movements rather than technology products as being the only “disruptive” thing they can think of. Technology is not nearly as disruptive as social movements (e.g., massive disproportionate distribution of wealth into the hands of a very few).

Do you think product placement and short Internet films are effective in executing the message strategy of situating the brand socially? What are the major advantages? Product placement and short Internet films have been very successful as of late. It is likely that students are impacted by these attempts to situate the brand socially. They will likely recall Pierce Brosnan driving a $200,000 Aston Martin Vanquish in Die Another Day, Simon Cowell drinking Coke at the American Idol judges’ table, Ross eating Oreos on Friends, or E.T. hoarding Reese’s Pieces in E.T: The Extra Terrestrial. The short BMW Internet films mentioned in the chapter were groundbreaking in 2001, and the 2004 Adventures of Seinfeld & Superman films from American Express were a hit with audiences. The major advantages of product placement and short Internet films is that they place the brand in a more "natural" setting as part of consumers' lifestyle activities.

Chapter 10/Creative Message Strategy

10. Think of a major purchase you have made recently. Which of the 10 message strategy objectives do you think were the most effective in influencing your purchase decision? Explain. This is a good way for students to see how the message strategy objectives work and to think about which ones work best for a particular product category and effecting brand choice in that product category.

Experiential Exercises 1.

Fear-based message strategies are powerful yet difficult to implement. In addition, ads that scare the consumer into action tend to have limited application, since few product categories are well suited to messages that invoke fear. Divide into teams and have each group plan a fear based ad. The ads should include visual and written components, and each team must present its ad to the class for evaluation. Have a panel of student judges assess the effectiveness of ads using the guidelines for fear-based strategies discussed in the chapter. Students’ ads will vary in effectiveness due to the inherent challenges of fear-based message strategies. Fear-appeal ads are difficult to create and are generally limited to product categories such as home-security devices, identity-theft prevention services, and healthcare. Evaluations of fear-based ads should discuss: • The fit between the product and valid public fears • The level of fear generated by the ad (too little fear is ineffective, but too much fear may create negative attitudes towards the brand) • A clear explanation of how the product will remove the consumer from harm’s way.

Ford Motor Company is increasingly dedicated to message strategies that give social meaning to its brand. As an example, this chapter cites Ford’s partnership to develop African-American family films with Ford models making cameo appearances. Ford’s most popular venture into social situations is the Ford Music Video series— branded entertainment produced exclusively for American Idol. Research this multi-season music video campaign and answer the following questions: What desired social meaning does Ford want to convey to audiences? What are the benefits and risks to showing Ford music videos during the American Idol program? Ford’s music video series is unique in that it runs during the American Idol program and features top Idol contestants. Recent seasons have featured Ford’s Escape hybrid, the Fusion hybrid, and the Fiesta. Idol contestants are stars of the Ford music videos, and the American Idol website showcases all Ford videos along with a sweepstakes. The sweepstakes winner receives a free automobile and a trip to the Ford music video set to meet the top Idol singers.

Chapter 10: Creative Message Strategy

For each of the ten message strategies identified in the chapter, find one example of an advertisement, commercial, or specific product placement that demonstrates that strategy in action. For each example, also identify what method the advertising agency employed to achieve the objective and state briefly whether you think it was an appropriate and effective message strategy. While not an exhaustive list, the chapter identifies ten primary message strategies and various methods used to achieve that objective. In this exercise, students should demonstrate a basic familiarity with each strategy: promoting brand recall, linking a key attribute to a brand, persuading the consumer, instilling brand preference, scaring the consumer into action, changing behavior by inducing anxiety, transforming consumption experiences, situating brands socially, defining brand image and resolving social disruption and cultural contradictions. Students also should recognize that many ads employ multiple strategies. As students share their findings in class, discuss with them what mix of strategies might be at work and why.

Humor can be effective as a method to help consumers feel good about a particular brand. But humorous ad messages also can be difficult to pull off and are not always successful in building brand awareness. Identify three current ad campaigns where you think the creator has attempted to use humor to boost the brand’s likability factor, then consider these questions. Does the joke work? Is the joke quickly and easily linked to the brand’s name or identity? Could the same joke work over a long period of time? Humor ads, much like other so-called feel-good ads, have as their primary goal affective association. Advertisers want consumers to like and feel good about their brand. A sly joke or even outright slapstick sometimes can be an effective way to promote a brand’s likability factor. As intuitive as that seems, research has suggested that humorous advertisements do not generally prove to be more persuasive than other types of advertising. Also, humor-themed ads can face some specific hurdles. Audiences don’t always “get” the joke. Worse, they might get and remember the joke, but they don’t remember the brand or product connected with the clever ad campaign. As students complete this exercise, they should recognize that just as not everyone can tell a good joke, not every good joke makes a good ad.

Chapter 11/Executing The Creative

CHAPTER 11 Executing the Creative INSTRUCTOR NOTE - This chapter will require at least two full lecture days. As authors, it was felt that the copywriting, illustration, design, and production topics needed to be covered in one, comprehensive chapter. The result was a somewhat longer chapter than in prior editions. (Chapter 12 and 13 content from the fifth edition has been combined here.)

KEY TERMS media planner account planner creative team creative brief copywriting headline subhead straight-line copy dialogue testimonial narrative direct response copy storyboard long-copy landing page short-copy landing page long copy email teaser email pop-up/pop-under ad

pop-up/pop-under copy social media copy slogan/tagline developmental copy research evaluative copy research illustration design principles of design balance formal balance informal balance proportion order unity axis three-point layout structure parallel layout structure layout

thumbnails rough layout comp type font blackletter roman script serif sans serif miscellaneous (type) point pica consumer-generated content (CGC) preproduction script production stage/shoot

Summary PPT 11-2 and 11-3 Identify the main members of a creative team and how the creative brief guides their efforts. Effective creative execution depends on the input of the creative team: art director, copywriter, account planner, and media planner. The creative team will have access to a wide variety of inputs, including the client’s, and information sources, such as market research. A creative brief is used as a device to assist the creative team overall and the copywriter in

Chapter 11/Executing The Creative

particular in dealing with this challenge. Key elements in the creative brief include brand features and benefits that must be communicated to the audience, the mood or tone appropriate for the audience, and the intended media for the ad. Detail the elements of copywriting for print media, including the headline, subhead, and body copy. The three unique components of print copy are the headline, subhead, and body copy. Headlines need to motivate additional processing of the ad. Good headlines communicate information about the brand or make a promise about the benefits the consumer can expect from the brand. If the brand name is not featured in the headline, then that headline must entice the reader to examine the body copy or visual material. Subheads can also be valuable in helping lead the reader to and through the body copy. A subhead appears above or below the main headline and carries additional information beyond the headline. In the body copy, the brand’s complete story can be told. Effective body copy must be crafted carefully to engage the reader, furnish supportive evidence for claims made about the brand, and avoid clichés and exaggeration that the consumer will dismiss as hype. Detail the elements of copywriting for television and video, and radio. Several formats can be considered in preparing television ad copy. These are demonstration, problem and solution, music and song, spokesperson, dialogue, vignette, and narrative. To achieve effective copy in the television medium, it is essential to coordinate the copy with the visual presentation, seeking a synergistic effect between audio and video. Entertaining to attract attention should again not be emphasized to the point that the brand name or selling points of the ad get lost. Developing copy consistent with the heritage and image of the brand is also essential. Finally, copy that can be adapted to various time lengths and modified to sustain audience interest over the life of a campaign is most desirable. Four basic formats can be used to create radio copy. These are the music format, the dialogue format, the announcement format, and the celebrity announcer format. Guidelines for writing effective radio copy start with using simple sentence construction and language familiar to the intended audience. When the copy stimulates the listener’s imagination, the advertiser can expect improved results as long as the brand name and the primary selling points don’t get lost. When using music or humor to attract and hold the listener’s attention, the copywriter must take care not to shortchange key selling points for the sake of simple entertainment. Describe the common copywriting approaches for digital/interactive ads. Digital/interactive ads are hybrids between print and broadcasting advertisements. The

Chapter 11/Executing The Creative

receiver does encounter a message in a print format either at a website, in an email, at a blog, or from social media communication. But the message is delivered electronically similar to television or radio. Common approaches to copywriting include long-copy landing page, short-copy landing page, long copy email, teaser email copy, pop-up/pop-under ad copy, and social media copy. Copywriting in each of these digital/interactive formats may or may not employ the elements of headline and subhead or even body copy (in the case of pop-ups and pop-unders). But there are “copy” elements in each case that communicate brand information. Identify the components of art direction that are essential in creative execution of print ads. In print ad design, all the verbal and visual components of an ad are arranged for maximum impact and appeal. Several principles can be followed as a basis for a compelling design. These principles feature issues such as balance, proportion, order, unity, and emphasis. The first component of an effective design is focus—drawing the reader’s attention to specific areas of the ad. The second component is movement and direction—directing the reader’s eye movement through the ad. The third component is clarity and simplicity—avoiding a complex and chaotic look that will deter most consumers. The layout is the physical manifestation of all design planning for print ads. An art director uses various forms of layouts to bring a print ad to life. There are several predictable stages in the evolution of a layout. The art director starts with a hand-drawn thumbnail, proceeds to the digitized rough layout, and continues with a tight comprehensive layout that represents the look of the final ad. With each stage, the layout becomes more concrete and more like the final form of the advertisement. In the last stage, the digitized ad is sent out for placement in print media. Describe the production process in creating a television commercial. The intricate process of TV ad production can be broken into three major stages: preproduction, production, and postproduction. In the preproduction stage, scripts and storyboards are prepared, budgets are set, production houses are engaged, and a timetable is formulated. Production includes all those activities involved in the actual filming of the ad. The shoot is a high-stress activity that usually carries a high price tag. The raw materials from the shoot are mixed and refined in the postproduction stage. Today’s editors work almost exclusively with computers to create the final product—a finished television ad. If all this sounds expensive, it is!

Chapter Outline I. The Creative Team and the Creative Brief

Chapter 11/Executing The Creative

PPT 11-4 The contemporary creative team includes: an art director, a copywriter, a media planner and/or an account planner. The creative team is responsible for coming up with the creative brief— the unique creative thought behind a campaign. During this process, copywriters, in addition to their role in creating the “language” of the messages, also sometimes suggest the idea for the visuals. Likewise, art directors sometimes come up with the headline or tagline. Media planners convey what is possible through the ever-expanding media choices, and account planners try to keep the profile of the target consumer in the team’s mind. Teaching Note: There is a wonderful quote by creative Tim McElligott that you can use here: “Imagination is one of the last remaining legal means to gain an unfair advantage over your competition.” II. Copywriters and Art Directors PPT 11-5 and 11-6 Copywriting is the process of crafting the meaning of a brand through words. An astute advertiser will go to great lengths to provide copywriters with as much information as possible about the objectives for a particular advertising effort. The responsibility for keeping copywriters informed lies with the client’s brand managers, filtered through the account executives and creative directors in the ad agency or brand communication firm. The creative brief serves as the guide used during the copywriting process to specify the message elements that must be coordinated during the preparation of copy. These elements include main brand claims, creative devices, media that will be used, special creative needs a brand might have, and what we want the message recipients to think once they receive the message. Some of the elements considered in devising a creative brief are: • The single most important thought you want a member of the target market to take away from the advertisement • The product features to be emphasized • The benefits a user receives from these features • The media chosen for transmitting the information and the length of time the advertisement will run • The suggested mood or tone for the ad or promotion • The production budget for the ad or brand promotion

III. Copywriting

Chapter 11/Executing The Creative

A. Copywriting for Print Advertising The first step in the copy development process is deciding how to use (or not use) the three separate components of print copy: the headline, the subhead, and the body copy. The Headline PPT 11-7 The headline in an advertisement is the leading sentence(s), usually at the top or bottom of the ad, that attracts attention, communicates a key selling point, or achieves brand identification. The Subhead PPT 11-8 and 11-9 A subhead consists of a few words or a short sentence and usually appears above or below the headline. It includes important brand information not included in the headline. The Body Copy PPT 11-10 and 11-11 Body copy is the textual component of an advertisement and tells a more complete story of a brand. Effective body copy is written so that it takes advantage of and reinforces the headline and subhead, is compatible with and gains strength from the visual, and is interesting to the reader. There are several standard approaches for preparing body copy: • Straight-line copy explains in straightforward terms why a reader will benefit from use of a brand. • Body copy that uses dialogue delivers the selling points of a message to the audience through a character or characters in the ad. Dialogue can also depict two people in the ad having a conversation, a technique often used in slice-of-life messages. • A testimonial uses dialogue as if the spokesperson is having a one-sided conversation with the reader through the body copy. • Narrative is a method for preparing body copy that simply displays a series of statements about a brand. A person may or may not be portrayed as delivering the copy. • Direct response copy is, in many ways, the least complex of copy techniques. In writing this, the copywriter is trying to highlight the urgency of acting immediately.

Chapter 11/Executing The Creative

B. Copywriting for Television and Video PPT 11-12 and 11-13 Relative to the print media, television presents totally different challenges for a copywriter. The audio and visual capabilities of television and video provide different opportunities for a copywriter. Compared to print media, however, video media have inherent limitations for a copywriter. In the print media, a copywriter can write longer and more involved copy to better communicate complex brand features. The printed page allows a reader to dwell on the copy and process the information at a personalized, comfortable rate. The opportunities inherent to television as an advertising medium represent challenges for the copywriter as well. First, the copywriter must remember that words do not stand alone. Visuals, special effects, and sound techniques may ultimately convey a message far better than the cleverest turn of phrase. Second, television commercials represent a difficult timing challenge for the copywriter. It is necessary for the copy to be precisely coordinated with the visuals. The copywriter not only has to fulfill all the responsibilities of proper information inclusion (based on creative platform and strategy decisions) but also has to carefully fit all the information within, between, and around the display. To make sure this coordination is precise, the copywriter, producer, and director assigned to a television advertisement work closely together to make sure the copy supports and enhances the video element. The road map for this coordination effort is known as a storyboard. A storyboard is an important shotby-important-shot sketch depicting in sequence the visual scenes and copy that will be used in the advertisement. Guidelines for Writing Television Copy PPT 11-14 • • • • • • • •

Use the video. Support the video. Coordinate the audio with the video. Sell the brand as well as entertain the audience. Be flexible. Use copy judiciously. Reflect the brand personality and image. Build campaigns.

C. Writing Copy for Radio PPT 11-15

Chapter 11/Executing The Creative

Some writers consider radio the ultimate forum for copywriting creativity because it can stimulate “a theater of the mind,” which allows a copywriter to create images and moods for audiences that transcend those created in any other medium. Despite these creative opportunities, the drawbacks of this medium should not be underestimated. Few radio listeners ever actively listen to radio programming, much less the commercial interruptions. Radio has been labeled by some as “audio wallpaper”—radio is used as a filler or unobtrusive accompaniment to reading, driving, household chores, or homework. Guidelines for Writing Radio Copy PPT 11-16 The unique opportunities and challenges of the radio medium warrant a set of guidelines for the copywriter to increase the probability of effective communication. The following are a few suggestions for writing effective radio copy: • Capture attention and get to the point early. • Use common, familiar language. • Use short words and sentences. • Stimulate the imagination. • Repeat the brand name. • Stress the main selling point or points. • Use sound and music with care. • Tailor the copy to the time, place, and specific audience. D. Copywriting for Digital/Interactive Media PPT 11-17 In digital and interactive media, audience has a significantly different meaning than it does in traditional one-way (noninteractive) media. Audience members often seek out the ads or other online IBP material, rather than the other way around, and they are doing it in much smaller formats like a computer screen or smartphone display. Digital and interactive media copywriters are trying to meet the demands of vastly different audiences and often real-time media creation (as in tweets). The basic principles of good print and broadcast copywriting just discussed generally apply. But the copy should assume a more active and engaged audience and has to adapt the creative brief objectives to the smaller format and potentially real-time challenges of the reception environment. Common Copywriting Approaches to Digital/Interactive Advertising PPT 11-18, 11-19, and 11-20

Chapter 11/Executing The Creative

• • • • • •

A long-copy landing page A short-copy landing page A long-copy email A teaser email A pop-up/pop-under ad Social media copy

E. Slogans/Taglines PPT 11-21 Copywriters are often asked to come up with a good slogan or tagline for a product or service. A slogan or tagline is a short phrase that is in part used to help establish an image, identity, or position for a brand or an organization, but is most often used to increase memorability of the key benefit of a brand. A good slogan can serve several positive purposes for a brand or a firm: • A slogan can be an integral part of a brand’s image and personality. • If a slogan is carefully and consistently developed over time, it can act as shorthand identification for the brand and provide information on important brand benefits. • A good slogan can provide continuity across media and between advertising campaigns. F. The Copy Approval Process PPT 11-22 The final step in copywriting is getting the copy approved. The challenge at this stage is to keep the creative potency of the copy intact. The copy approval process usually begins within the creative department at the advertising agency. A copywriter submits a draft copy to either a senior writer or creative director, or both. From there, the redrafted copy is forwarded to the account management team within the agency. A main concern at this level is to evaluate the copy on legal grounds. After the account management team has made recommendations, a meeting is likely held to present the copy to the client’s product category manager, brand manager, and/or marketing staff. Inevitably, the client feels compelled to make recommendations for altering the copy. Depending on the assignment, the client, and the traditions of the agency, the creative team may also decide to turn to various forms of copy research to resolve any differences. Typically, copy research is either developmental or evaluative. Developmental copy research can actually help copywriters at the early stages of copy development by providing audience interpretations and reactions to the proposed copy. Evaluative copy research is used to judge the copy after it has been produced. Here, the audience expresses its approval or disapproval of the copy used in an ad. Finally, the copy should always be submitted for final

Chapter 11/Executing The Creative

approval to the advertiser’s senior executives. Often, these executives have little interest in evaluating advertising and they leave this responsibility to middle managers. IV. Art Direction PPT 11-23 This section focusses on the process of how the visual elements of an advertisement and IBP materials are developed. Advertising has become mostly visual. There are several reasons for the rise of the visual in advertising. Among them are (1) improved technologies, which facilitate better and more affordable illustration and the opportunity to rotate visuals nearly instantaneously in digital media; (2) the inherent advantage of pictures to quickly demonstrate the values of a brand; (3) the ability to build brand “images” through visuals; (4) the legal advantage of pictures over words in that the truth or falsity of a picture is almost impossible to determine; (5) the widely held belief that pictures, although just as cultural as words, permit a certain type of global portability that words do not; and (6) pictures allow advertisers to place brands in desired social contexts, thus transferring important social meaning to them. A. Illustration, Design, and Layout PPT 11-24 The three primary visual elements of a print or digital ad are: illustration, design, and layout. An advertiser must appreciate the technical aspects of coordinating the visual elements in an ad with the mechanics of the layout and ultimately with the procedures for print production or Web placement. Illustration Illustration is the actual drawing, painting, photography, or computer-generated art that forms the picture in an advertisement. Illustration is the look of the ad. A primary role of illustration, along with the headline, is to attract and hold attention. Perhaps the most straightforward illustration is one that simply displays brand features, benefits, or both. Brand image is projected through illustration. PPT 11-25 Design PPT 11-26 Design is “the structure itself and the plan behind that structure” for the aesthetic and stylistic aspects of a print advertisement. Design represents the effort on the part of the creative team to physically arrange all the components of a printed or digital/interactive

Chapter 11/Executing The Creative

advertisement in such a way that order and beauty are achieved. Principles of Design PPT 11-27 and 11-28 Principles of design govern how a print advertisement should be prepared. The principles of design relate to each element within an advertisement and to the arrangement of and relationship between elements as a whole. Balance Balance in an ad is an orderliness and compatibility of presentation. Balance can be either formal or informal. Formal balance emphasizes symmetrical presentation and creates a mood of seriousness and directness. Informal balance emphasizes asymmetry. Informal balance in an ad should not be interpreted as imbalance. Rather, components of different sizes, shapes, and colors are arranged in a more complex relationship providing asymmetrical balance to an ad and a visually intriguing presentation to the viewer. Proportion PPT 11-29 Proportion has to do with the size and tonal relationships between different elements in an advertisement. Specifically, the width, depth, size, and space between elements in an ad affect proportion. Order PPT 11-29 Order in an advertisement is also referred to as a sequence or, in terms of its effects on the reader, “gaze motion.” The designer’s goal is to establish a relationship among elements that leads the reader through the ad in some controlled fashion. Order also can induce a reader to jump from one space in the ad to another, creating a sense of action. Unity PPT 11-30 Ensuring that the elements of an advertisement are tied together and appear to be related is the purpose of unity. Considered the most important of the design principles, unity

Chapter 11/Executing The Creative

results in harmony among the diverse components of an advertisement: headline, subhead, body copy, and illustration. Several design techniques contribute to unity. The border surrounding an ad keeps the ad elements from spilling over into other ads or into the printed matter next to the ad. White space can be dramatic and powerful and draw the receivers’ attention to the most critical elements of an ad. The axis is a line, real or imagined, that runs through an ad and from which the elements in the advertisement flare out. A single ad may have one, two, or even three axes running vertically and horizontally. A three-point layout structure establishes three elements in the ad as dominant forces. The uneven number of prominent elements is critical to creating a gaze motion in the viewer. Parallel layout structure employs art on the right-hand side of the page and repeats the art on the left-hand side. Emphasis PPT 11-31 and 11-32 At some point in the decision-making process, someone needs to decide which major component—the headline, subhead, body copy, or illustration—will be emphasized. The key to good design relative to emphasis is that one item is the primary but not the only focus in an ad. Layout PPT 11-33 A layout is a drawing or digital rendering of a proposed print advertisement, showing where all the elements in the ad are positioned. The following are the different stages of layout development include thumbnails, rough layout, and comprehensive. Thumbnails Thumbnails, or thumbnail sketches, are the first drafts of advertising layout. It is likely that the art director will produce several sketches in an attempt to work out the general presentation of the ad. Rough Layout

Chapter 11/Executing The Creative

The second stage is the rough layout, in which greater detail is worked into the design. A rough layout is done in the actual size of the proposed ad and is usually created with a computer layout program. Comprehensive The comprehensive layout, or comp, is a polished version of the ad—but not the final version. Comps make it very easy for the client to imagine (and approve) what the ad will look like when it is published. The client will make one last approval of the digital file before it is sent to the printer. Typography in Print Production PPT 11-34 The issues associated with typography have to do with the typeface chosen for headlines, subheads, and body copy, as well as the various size components of the type (height, width, and running length). Categories of Type Typefaces have distinct personalities and each can communicate a different mood and image. A type font is a basic set of typeface letters. There are six basic typeface groups: blackletter, roman, script, serif, sans serif, and miscellaneous. Type Measurement There are two elements of type size. Point refers to the size of type in height. Picas measure the width of lines. A pica is 12 points wide, and each pica measures about onesixth of an inch. Readability It is critical in choosing type to consider readability. Type should facilitate the communication process. The following are some traditional recommendations when deciding what type to use: • Use capitals and lowercase, NOT ALL CAPITALS. • Arrange letters from left to right, not up and down. • Run lines of type horizontally, not vertically. • Use even spacing between letters and words.

Chapter 11/Executing The Creative

B. Art Direction and Production in Digital/Interactive Media PPT 11-36 Cyberspace is its own space and medium. The cyber media are fundamentally different in the way the audience comes to them, navigates them, and responds to them. This difference presents one of the real challenges of electronic advertising. The Web is not print or television: It is electronic and fluid and must be thought of in this way. In terms of design, this means trying to understand why people come to various sites, who they are, what they are looking for, what they expect to encounter, and what they expect in return for their very valuable click. One of the most valuable lessons out there right now is the case of consumergenerated content (CGC): where people are making their own ads for their favorite brands. C. Art Direction and Production in Television Advertising PPT 11-37 The Creative Team in Television Advertising At some point, individuals who actually shoot the film or the tape are brought in to execute the copywriter’s and art director’s concepts. At this point, the creative process becomes intensely collaborative: The film director applies his or her craft and is responsible for the actual production. The creative team (i.e., the art director, copywriter, media director, and account planner) rarely relinquishes control of the project, even though the film director may prefer that. Someone has to be in charge on the set, and that is usually the chief creative on site. Creative Guidelines for Television Advertising PPT 11-38 • • • • •

Use an attention-getting and relevant opening. Emphasize the visual. Coordinate the audio with the visual. Persuade as well as entertain. Show the brand.

V. The Production Process in Television Advertising PPT 11-39 The television production process can best be understood by identifying the activities that take place before, during, and after the actual production of an ad. These stages are referred to as preproduction, production, and postproduction, respectively.

Chapter 11/Executing The Creative

A. Preproduction The preproduction stage is that part of the television production process in which the advertiser and the advertising agency carefully work out the precise details of how the creative planning behind an ad can best be brought to life with the opportunities offered by television. Storyboard and Script Approval The preproduction stage begins with storyboard and script approval. A storyboard is a shot-by-shot sketch depicting, in sequence, the visual scenes and copy that will be used in an advertisement. A script is the written version of an ad; it specifies the coordination of the copy elements with the video scenes. Budget Approval The producer needs to work carefully with the creative team and the advertiser to estimate the approximate cost of the shoot, including production staging, location costs, actors, technical requirements, staffing, and a multitude of other considerations. It is essential that these discussions be as detailed and comprehensive as possible, because it is from this budget discussion that the producer will evaluate candidates for the directing role and solicit bids from production houses to handle the job. Assessment of Directors, Editorial Houses, Music Suppliers A producer has dozens (if not hundreds) of directors, postproduction editorial houses, and music suppliers from which to choose. An assessment of those well suited to the task takes place early in the preproduction process. The combination of the creative talents of ad agencies and production houses can produce creative, eye-catching ads. Review of Bids from Production Houses and Other Suppliers Production houses and other suppliers, such as lighting specialists, represent a collection of specialized talent and also provide needed equipment for ad preparation. The expertise in production houses relates to the technical aspects of filming a commercial. The agency sends a bid package to several production houses. The package contains all the details of the commercial to be produced and includes a description of the production requirements and a timetable. Most agencies send out a bid package on a form developed by the agency. By using a standardized form, an agency can make direct comparisons between production house bids. The producer reviews each of the bids and revises them if necessary. Once the

Chapter 11/Executing The Creative

advertiser has approved the estimate, one of the production houses is awarded the job. Selection of Location, Sets, and Cast Once a bid has been approved and accepted, both the production house and the agency production team begin to search for appropriate, affordable locations if the commercial is to be shot outside a studio setting. Although not every ad uses actors and actresses, when an ad calls for individuals to perform roles, casting is crucial. Production PPT 11-40 and 11-41 The production stage of the process, or the shoot, is where the storyboard and script come to life and are filmed. The actual production of the spot may also include some final preparations before the shoot begins. The most common final preparation activities are lighting checks and rehearsals. An entire day may be devoted to prelight, which involves setting up lighting or identifying times for the best natural lighting to ensure that the shooting day runs smoothly. Similarly, the director may want to work with the on-camera talent along with the camera operators to practice the positioning and movement planned for the ad. This work, known as blocking, can save a lot of time on a shoot day, when many more costly personnel are on the set.

ONLINE CONTENT The online dynamic content provides both content and insights into the ethical, global, and social media aspects of Advertising and Integrated Brand Communication. The integrated assessment components will provide students with assurances that they have mastered the assigned readings and provide feedback to faculty that the students have completed the assigned readings and data on student mastery of the content. In addition to the feedback on the correct answers, all of the assessment objects have been enhanced with additional tags that can be aggregated to provide feedback on how individual students have done on a specific learning outcome such as ethics. The online material can be delivered in one of two formats. For instructors who want to provide students with access to the Ad Age on Campus access as well as the online advertisements and student facing self-assessment quizzes, CourseMate will be provided with each new copy of Advertising and Integrated Brand Communication. Alternatively, students can decide to purchase CourseMate on its own which will also come with the MindTap Reader, which is the ebook version of the print product. For faculty that desire to have a variety of more in-depth assignments to integrate into their course and a desire to have more student data that can be used for analytic purposes, MindTap can be purchased with an enhanced capability. Faculty can customize the student experience and integrate the experience for their students into the campus

Chapter 11/Executing The Creative

Learning Management System. For a complete guide into the reporting and analytical capabilities available to faculty, consult the Assurance of Learning section of this manual.

Boxed Feature Questions and Tags QUESTION

DIFFICULTY

BUSPROG Primary

DISC Primary

BLOOM'S

Chapter 11 Social Media 01

Easy

Technology

Promotion

Application

Chapter 11 Social Media 02

Moderate

Technology

Promotion

Application

Chapter 11 Globalization 01

Moderate

Diversity

Promotion

Application

Chapter 11 Globalization 02

Moderate

Diversity

Promotion

Application

Chapter 11 Ethics 01

Easy

Ethics

Promotion

Application

Chapter 11 Ethics 02

Moderate

Ethics

Promotion

Application

CHAPTER 11-Social Media http://adage.com/article/creativity-pick-of-the-day/snickers-bids-misspelled-googlewords-offer-candy-antidote/241189/ •

11.SocialMedia.Q1

In this smart social media creative execution by Snickers, they: A. feature a child dressed as a unicorn B. bid on misspelled Google search terms C. feature two football players D. post photos of teenagers eating Snickers on Instagram Answer: B •

11.SocialMedia.Q2

As a result of this strategy, consumers A. think of a new name for the candy bar B. share what their favorite candy bar is C. get a Snickers bar ad as a solution D. are shown a video with a promotional coupon code for a free Snickers Answer: C

CHAPTER 11-Globalization

Chapter 11/Executing The Creative

http://adage.com/article/creativity-pick-of-the-day/samsung-life-insurance-transformsseoul-suicide-site-healing-bridge/239615/ Samsung executes its creative in a unique way in Korea, by •

11.Globalization.Q1 A. sponsoring a bridge B. sponsoring a mental health organization C. working with families of suicide victims D. donating products to families of suicide victims

Answer: A • 11.Globalization.Q2 One of the best things about this creative execution is that it: A. sells more phones B. sells more technology devices C. sells more advertising space in the bridge D. highlights a health issue in Korea Answer: C

CHAPTER 11-Ethics http://adage.com/article/creativity-pick-of-the-day/kid-fill-a-shopping-cart/241049/ •

11. Ethics.Q1 What brand uses ethics as a basis of showing an ad how a child would fill up a shopping cart? A. Subway B. McDonalds

Chapter 11/Executing The Creative

C. Wendy’s D. Chic-fil-et Answer: A •

11. Ethics.Q2

The point of this campaign is to raise awareness of: A. Child Obesity month in the U.S. B. Child Obesity month in Puerto Rico C. The Heart Association of America D. The Kidney Foundation Answer: B

Homework Grid Homework Description 1-a. Multiple Choice Coke Strategy 1-b. Multiple Choice Coke Strategy 2-a. Multiple choice New Era MLB Strategy 2-b. Multiple choice New Era MLB Strategy 3-a. Multiple choice New Era MLB Strategy 3-b. Multiple choice New Era MLB Strategy 4-a. Matching Match the brand with the slogan. 5-a. Drag and Drop Copy Approval Sequence 6-a. Drag and Drop Pre-production stages of TV ads Homework is available to faculty to select and integrate into their customized course. THE FOLLOWING SECTIONS OF THE INSTRUCTOR’S MANUAL HAS A SELECTION OF CASES THAT CAN BE INCORPORATED INTO YOUR COURSE AS OUT OF CLASS ASSIGNMENTS , OR AS A METHOD FOR INITIATING CLASSROOM DISCUSSION.

Questions for Review and Critical Thinking 1.

Who are the main participants in the “creative team” when it comes to copywriting, art direction, and production? What “roadmap” do they use to guide the creative effort? The creative team is composed of the art director, copywriter, and in recent years, a media planner and account planner have been added. Each contributes a different and important perspective to the proper preparation of copy and art for a brand. All members of the creative team are guided by the “roadmap” known as the creative brief, which specifies the message elements that must be coordinated in all brand message claims, creative devices,

Chapter 11/Executing The Creative

and media placements. 2.

Compare and contrast the dialogue and narrative formats for television ads. What common requirements must be met to construct convincing TV ads using these two formats? The key distinction is that in dialogue, a story is told by having two or more people act out a scenario. In narrative, a story is told usually by a narrator. So, this makes a good written assignment that would highlight: Dialogue—in dialogue format ads, a copywriter composes dialogue that is believable and keeps the ad moving forward. Most slice-of-life ads in which a husband and wife or friends are depicted using a brand, employ a dialogue format. Narrative—narrative is a method for preparing body copy that simply displays a series of statements about a brand. A person may or may not be portrayed as delivering the copy. It is difficult to make this technique lively for the reader, so the threat of writing a dull ad using this technique is ever-present.

Entertainment is both the blessing and the curse of a copywriter. Is it conceivable that ads that merely entertain could actually prove valuable in stimulating sales? If so, how? This is a good question for a class discussion. Students might answer this question in a purely common-sense manner—and their answers would be pretty close to right. There is an effect, well-researched, called “affect (liking) toward the ad.” As affect toward the ad increases, so too does the attitude toward the brand. A positive attitude can influence brand choice. People who like the Geico Gecko, the AFLAC Duck, or the animated M&M’s Candies may be more likely to choose those brands.

Copywriters often are asked to develop slogans for a product or service. What role does an effective slogan play in promoting a brand’s image and personality? Exhibit 11.10 provides a list of some of the historically recognized slogans. Pick three of the listed brands and try to write a new slogan for each. Done well, slogans can have a substantial impact on the image and personality of a brand or product. Also, if it is developed in a careful and consistent manner, a good slogan becomes a sort of short hand for a brand over time. It also can offer continuity across different media and between advertising campaigns – used as a headline in a print ad, for instance, and as the tagline for radio and television spots. However, writing an effective slogan is no easy feat. As students attempt to build a better slogan, so to speak, for some of the popular brands offered as examples in the chapter, they are likely to quickly realize

Chapter 11/Executing The Creative

how challenging this type of copywriting can be – and how ingrained long-standing slogans are in our consumer minds. 5.

Identify the strategic roles that illustration plays in increasing the effectiveness of a print advertisement from a communications and marketing perspective. Advertisers must appreciate the importance of coordinating visual aspects of a print advertisement with the technical aspects or design, layout, and production. The first step in that process is creating or selecting the drawing, photograph, or other art that will form the primary picture in the advertisement. To be most effective, the illustration should: • Attracts the attention of the target segment • Make the brand heroic • Communicate product features or benefits • Associate a particular mood, feeling, or image with the brand • Encourage reading of the ad’s body copy • Create the desired social context for the brand

This chapter reviewed five basic principles for print ad design: balance, proportion, order, unity, and emphasis. Give an example of how each of these principles might be employed to enhance the selling message of a print ad. Just as we have pressed the marketing students to be more aesthetic, here we are trying to get the creative-oriented students to think about the commercial impact of aesthetic design aspects. It seems that each student will merely need to express how each of the design components will enhance the look of a brand, thus increasing the perception of the brand’s value in the eyes of receivers.

Digital/interactive media present a new and unique challenge for both the copywriting and art direction processes. When you visit a website, does it seem like there is “copy” or “design” at the site? What about when you use your favorite social networking sites? Do Twitter, Facebook, or YouTube show evidence of persuasive copy or design principles? Here, students should rely on the guidelines for writing print copy and the guidelines for good design presented in the chapter. It is likely that websites will not measure up particularly well because these message components are “hybridized” for digital/interactive application.

Identify the creative guidelines for developing television advertising. Think of an ad you have seen that does a particularly good job of employing items listed in the guidelines. Think of an ad that does not. Which one do you like better?

Chapter 11/Executing The Creative

The creative guidelines for TV are as follows: use an attention-getting opening, emphasize the visual, coordinate the audio and visual, persuade as well as entertain, maintain continuity in the commercial, and show the product. These points of emphasis about attention, visual impact, coordination of elements, and following through on one’s persuasive intent closely parallel the advice we offered for magazine ads. From here, students can follow these guidelines in discussing the ads they found that follow and violate the guidelines. 9.

Identify the three main stages of the production process for television advertising. Describe the activities that take place within each stage. 1. Pre-Production a) Storyboard and script approval b) Budget approval. c) Assessment of directors, editorial houses, music suppliers d) Review of bids from production houses and other suppliers e) Selection of location, sets, and cast 2. Production Process a) Filming the commercial or “the shoot” b) The shoot involves large numbers of diverse people: • Creative performers • Trained technicians • Skilled laborers c) Sets often feature tension and spontaneity d) Typical national commercial costs $100,000 to $500,000 3. Post-Production • The raw materials from the shoot are mixed and refined

Experiential Exercises 1.

Although the elements of copywriting differ greatly for print and television ads, integrated brand promotion campaigns use both print and broadcast media alike to deliver consistent brand messages. Select a television ad and analyze its copy, visual aesthetics, tone, style, and persuasive strategy. Then write your own print version of the ad, attempting to provide a similar presentation of the brand’s features and benefits. As you write your headline, subhead, and body copy, be sure to align your message and style with those seen in the television ad. Use the tips for writing print ads listed in the chapter.

Chapter 11/Executing The Creative

Copywriting methods vary from medium to medium. However, since integrated brand promotion campaigns use multiple media to convey one cohesive brand image, copywriters must learn to deliver a consistent sales message across different ad formats. This exercise asks students to study a television ad and convert its copy, aesthetics, and method of persuasion into a print ad, using the tips for writing print ads outlined in the chapter. To complete this exercise, students should produce a headline, subhead, and body copy. The headline is the leading sentence—usually at the top or bottom of the ad—that attracts attention, communicates a key selling point, or achieves brand identification. Well-written headlines get attention, identify the brand, offer news about the brand, emphasize a brand claim, and set the tone and emotion. The subhead is the few words set in smaller print above or below the headline that quickly communicate key selling points or brand information. The subhead should reinforce the headline and stimulate a more complete reading of the full ad. Body copy is the lengthier part of the ad that reinforces the headline and subhead while offering a complete story of the brand. Body copy may use techniques such as straight-line copy, dialogue, testimonial, or narrative. Good copywriting employs present tense, singular nouns, active verbs, and familiar language to involve the reader. Professional copy avoids clichés and superlatives while providing support for unbelievable claims. 2.

Some ads are amateurish, poorly written, even downright annoying—especially cyberads created for the Web. Identify a digital ad that you consider to be ineffective or annoying, and offer a detailed critique on why the ad’s copy and illustration left you with a negative impression and failed to stimulate you to action. Although answers will vary, students should base their critiques on the principles of digital advertising found in the chapter. Digital/interactive ads are hybrids between print and broadcasting advertisements. Whether in the form of email, pop-ups, or social media, digital advertisements should be interactive, customizable, contextual, entertaining, playable, and useful. Copy for digital ads should adapt to smaller size restrictions while assuming active audience participation. Basic principles of good print and broadcast copywriting generally apply to digital media; typical copywriting mistakes include vagueness, wordiness, triteness, bad taste, laundry lists, and creativity for creativity's sake.

Working in small teams, write a script for a 15- to 60-second radio commercial for the campus bookstore that you will then present to the class. As you work on this project, clearly identify which of the radio advertising formats the script will follow. Also, pay close attention to the

Chapter 11/Executing The Creative

radio copy guidelines and word count relative to airtime as you prepare the script. This exercise gives students a chance to try their hand at radio copywriting while also ensuring that they recognize the four distinct formats – music, dialogue, announcement, or celebrity announcer – and the guidelines for this type of advertising copy. By presenting the scripts aloud in class, students also will be able to gain feedback and to judge for themselves what works and what doesn’t in radio copywriting. 4.

Pull 10 print ads from a favorite magazine. Using the classifications outlined in the chapter, identify for each ad the headline, the subhead, and the body copy. For each ad, also offer a brief assessment of what you think was the copywriter’s intended purpose and whether it was accomplished. By dissecting various print ads, students will gain a clearer understanding of the distinct roles that headlines, subheads, and body copy play within print advertising. As they assess the likely creative plan and goals for each ad, students also should gain appreciation for the ways that effective copywriters blend and shape the complexities of marketing strategy, consumer behavior, and ad planning into succinct, powerful communications.

Chapter 12/Media Planning Essentials

PART 4 Placing the Message in Conventional and “New” Media Lecture Alert: Alert the students that the book and their study of advertising and IBP makes another major transition at this point to the “placement” challenge of the advertising and IBP process. These transitions are great opportunities to help students integrate, in their own minds, the various aspects of the advertising and IBP process. Remind students that they began their study of this topic with the “process” aspects of advertising and IBP. Chapters 1 through 4 laid out how advertising and IBP work and the origins of these business processes. Then they took on the “planning” effort in Chapters 5 through 8 and learned about analyzing the environment within which advertising and IBP would be taking place. The most recent section of the book, (Chapters 9-11) highlighted the creative development of the messages. Part 4 of the text raises issues and examines strategies related to placing the message in both conventional and new, digital/interactive media. Placement certainly has to do with the traditional mass media of television, radio, newspapers, and magazines. The vast majority of money spent around the world on advertising and IBP still ends up with these major, traditional media. However, as firms search for more efficiency and effectiveness in the promotional programs, more new and different placement options have emerged including mobile media and smart devices.

Chapter 12/Media Planning Essentials

CHAPTER 12 Media Planning Essentials KEY TERMS above-the-line promotion measured media below-the-line promotion unmeasured media media plan media class media vehicle media mix Big Data micro-target single-source tracking services

geographic scope geo-targeting reach frequency effective frequency effective reach message weight gross impressions between-vehicle duplication within-vehicle duplication continuity

continuous scheduling flighting pulsing forgetting function square root law share of voice cost per thousand (CPM) net promoter scores media buying agency of record upfronts media-buying service

Summary PPT 12-2 and 12-3 Describe measured versus unmeasured media and about how much each represents of total advertising and IBP dollars. Measured media include network TV, cable TV, spot TV, syndicated TV, network Spanish TV, the Internet (excluding broadband video and paid search), Net radio, spot radio, local radio (500 stations, top 28 markets), magazines (Sunday, consumer, business-to-business, and 30 local magazines), 250 local newspapers, Spanish newspapers, national newspapers (The Wall Street Journal, USA Today, The New York Times), and outdoor (200-plus markets). They represent a little more than half of all dollars spent on IBP (56 percent in 2011). Unmeasured media are everything else: paid Internet search, coupons, product placement, events, and the like (44 percent in 2011). Describe the basic ideas and essential terms in media planning. Although many important changes are taking place in the advertising industry, the components of the media planning process remain essentially the same. A media plan specifies the media vehicles that will be used to deliver the advertiser’s message. Developing a media plan entails setting objectives such as effective reach and frequency and determining

Chapter 12/Media Planning Essentials

strategies to achieve those objectives. Media planners use several quantitative indicators, such as CPM, to help them judge the efficiency of prospective media choices. The media planning process culminates in the scheduling and purchase of a mix of media vehicles expected to deliver the advertiser’s message to specific target audiences at precisely the right time to affect their consumption decisions. Although media planning is a methodical process, it cannot be reduced to computer decision-making models and statistical measurements; data quality and human and personal factors prohibit media planning from being an exact science. Understand the meaning of competitive media assessment and share of voice. Competitive media assessment is simply determining how much your brand is spending on IBP relative to the category as a whole. Share of voice is a calculation of any one advertiser’s brand expenditures relative to the overall spending in a category.

Discuss media efficiency. Media efficiency is traditionally evaluated in terms of the cost of reaching a certain number of prospective consumers. Traditionally, this has been in CPM, but today there are also costper-click on the Internet (see Chapter 14) and other measures. The basic idea remains the same: how much to reach how many?

Discuss what makes social media different. Lots of things, but one basic thing is that this is where consumers talk to lots of other consumers, and that changes everything about the way we think about media. Discuss the basics of branded entertainment. Branded entertainment is where advertisers create entertainment vehicles for promoting their brands. They are not traditional ads, and we believe consumers don’t see them as ads, but just how effective they are remains to be seen. Discuss the benefits and realities of media planning models. Most media buys are determined through the use of computerized planning models. These mathematically optimize media schedules for cost efficiency. They are, however, no substitute for applying strategic planning principles to the media buy. You need to be able to explain why you are buying what you are buying.

Chapter 12/Media Planning Essentials

Discuss making the buy. There are several critical points such as the upfronts, and there are terms such as agency of record and media-buying services that must be understood.

Chapter Outline I. Measured and Unmeasured Media PPT 12-4 and 12-5 A lot has changed in media land, but there are still some ideas, concepts, and principles that are just as they always were. Advertising requires money, usually a lot of it. True, there are some big brands that do very little mass advertising, but the vast majority do. The truth is that for most goods and services, you have to have access to a considerable amount of money to play at the national or international level. This is an enormous barrier to small companies. A. Where the Money Goes: The Big Pie Traditionally, companies have made the distinction between: • Above-the-line promotion, which meant traditional measured media advertising. • Below-the-line promotion, which was called unmeasured media, was everything else. II. The Basic Ideas and Terms PPT 12-6 The broad range of media options demands attention to detail in the media planning process. A media plan specifies the media in which advertising messages will be placed to reach the desired target audience. A media class is a broad category of media, such as television, radio, or newspapers. A media vehicle is a particular option for placement within a media class. The media mix is the blend of different media that will be used to effectively reach the target audience. A. Media Strategies, Objectives, and Data PPT 12-7 and 12-8 The most obvious media objective is that the vehicle chosen reaches the target audience. The definition of a target audience can be demographic, geographic, lifestyle, attitude dimensions, or usage category. Media planners are often put in the awkward and unenviable position of

Chapter 12/Media Planning Essentials

trying to deliver very specific audience characteristics based on inadequate data from media organizations. But new media has changed that. Because just about everything is tracked in new media at the individual level, this problem no longer exists, at least not to the extent it used to. If advertisers effectively leverage new media they can reach incredible levels of specificity. This incredible mass of detailed consumer information is now called Big Data. Social networking sites and search engines know all your search behavior; they know if you have a GPS-enabled device, where you go, when you go; they search your email, and they can target you down to the store, the time of day, and sometimes who you are with. From analyzing your emails (which you gave them permission to do when you signed up for social media services), they can make some assumptions about how you feel about certain things without ever asking you a single question. They may then micro-target you with various messages, pay to optimize your smartphone browser for their benefit, or place an ad on your smartphone for a store you will pass in two blocks. Even more sophisticated data have become available. Research services such as A. C. Nielsen’s Homescan and Information Resources’ BehaviorScan are referred to as singlesource tracking services that offer information not just on demographics but also on brands, purchase size, purchase frequency, prices paid, and media exposure. PPT 12-9 Another critical element in setting advertising objectives is determining the geographic scope of media placement. Media planners need to identify media that cover the same geographic area as the advertiser’s distribution system. Some analysts suggest that when certain geographic markets demonstrate unusually high purchasing tendencies by product category or by brand, then geo-targeting should be the basis for the media placement decision. Geotargeting is the placement of ads in geographic regions where higher purchase tendencies for a brand are evident. PPT 12-10 and 12-11 Reach is the number of people or households in a target audience that will be exposed to a media vehicle or schedule at least one time during a given period of time. Frequency is the average number of times an individual or household within a target audience is exposed to a media vehicle in a given period of time (typically a week or a month). Effective frequency is the number of times a target audience needs to be exposed to a message before the objectives of the advertiser are met—either communications objectives or sales impact. Effective reach is the number or percentage of consumers in the target audience that are exposed to an ad some minimum number of times.

Chapter 12/Media Planning Essentials

PPT 12-12 Message weight is the gross number of advertising messages or exposure opportunities delivered by the vehicles in a schedule. Gross impressions represent the sum of exposures to the entire media placement in a media plan. Planners often distinguish between two types of exposure. Potential ad impressions, or opportunities to be exposed to ads, are the most common and refer to exposures by the media vehicle carrying advertisements (e.g., a program or publication). Message impressions, on the other hand, refer to exposures to the ads themselves. The text example of the exposures to a media placement is: Television: Program A audience=16,250,000 Program B audience=4,500,000 Program C audience=7,350,000 ——————————————— Sum of TV exposures=28,100,000 Newspapers: Newspaper 1=1,900,000 Newspaper 2=450,000 ——————————————— Sum of NP exposures=2,350,000 Total gross impressions=30,450,000 Students should realize that this does not mean that 30,450,000 separate people were exposed. Some people who watched TV Program A also saw Program B and read Newspaper 1, as well as all other possible combinations. This is called between-vehicle duplication. It is also possible that someone who saw the ad in Newspaper 1 on Monday saw it again in Newspaper 1 on Tuesday. This is within-vehicle duplication. Data available from services such as SMRB actually report both these types of duplication so that they may be removed from the gross impressions to produce the unduplicated estimate of audience or reach. PPT 12-13 Continuity is the pattern of placement of advertisements in a media schedule. There are three strategic scheduling alternatives: • Continuous scheduling is a pattern of placing ads at a steady rate over a period of time. • Flighting is achieved by scheduling heavy advertising for a period of time, usually two weeks, then stopping advertising altogether for a period, only to come back with another heavy schedule. • Pulsing combines elements from continuous and flighting techniques. Advertisements are scheduled continuously in media over a period of time, but with periods of much heavier scheduling (the flight). Pulsing is most appropriate for products that are sold

Chapter 12/Media Planning Essentials

fairly regularly all year long but have certain seasonal requirements, such as clothing. B. Continuity and the Forgetting PPT 12-14 It turns out that people’s forgetting is fairly predictable. It seems to obey a mathematical function pretty well; thus it is often called the forgetting function. If an audience receives 13 ads in the first 13 weeks of a year (called a flighting schedule) that audience scores much higher in terms of peak unaided recall, but the level of recall falls off very fast, and by halfway through a year is very low. A group that gets ads at an evenly spaced schedule (called a continuous schedule) never attains as a high a level of recall as the other group, but at the end of a year, has an overall higher average recall. This research has been very influential in terms of guiding industry media planners for several decades. The real-world implications are pretty clear. If you need rapid and very high levels of recall—say for the introduction of a new product—use a flighting (sometimes called “heavy-up”) schedule. A continuous schedule would be more broadly effective and would be used for established brands with an established message. C. Length or Size of Advertisements PPT 12-15 The decision about the length or size of an advertisement depends on the creative requirements for the ad, the media budget, and the competitive environment within which the ad is running. From a creative standpoint, ads attempting to develop an image for a brand on TV may need to be longer. Some research shows increase in recognition of print ads with increasing image size—this is referred to as the square root law—the recognition of print ads increase with the square of the illustration. From a competitive perspective, matching a competitor’s presence with messages of similar size or length may be needed to maintain the share of mind in a target audience. III. Competitive Media Assessment PPT 12-16 Media planners normally do not base an overall media plan on how much competitors are investing or where competitors are placing their ads, but a competitive media assessment can provide a useful perspective. Share of voice is a calculation of any one advertiser’s brand expenditures relative to the overall spending in a category.

Chapter 12/Media Planning Essentials

Share of voice =

one brand's advertising expenditure in a medium total product category advertising expenditures in a medium

IV. Media Efficiency PPT 12-17 Which media deliver the largest target audiences at the lowest cost? A common measure of media efficiency is cost per thousand (CPM), which is the dollar cost of reaching 1,000 members of an audience using a particular medium. cost of the media buy CPM =  1,000 total audience If the target audience is restricted to male college graduates in professional occupations, the cost per thousand—target market (CPM—TM) calculation might be much higher for a general publication like USA Today than for a more specialized publication like Fortune magazine. The same sort of efficiency calculation is possible for television in the form of a cost per rating point (CPRP): a relative comparison between media options. In this calculation, the cost of a spot on television is divided by the program’s rating (a rating point is equivalent to one percent of the television households in the designated rating area tuned to a specific program). A. Internet Media PPT 12-18 The internet media are “pull media” in that the consumer goes looking for advertisers or advertising. Traditional media are “push media,” where the “brand” is pushed at the consumer. V. Social Media: What Is Different A. Social networking PPT 12-19 • • • •

New paradigm exists: marketer to consumer, then consumer to consumer Fraction of the cost of traditional media Social media create a “buzz’ and “viral’ effect Brand conversions are tracked with net promoter scores

VI. Media Choice and Integrated Brand Promotions PPT 12-20

Chapter 12/Media Planning Essentials

A final complicating factor in the media environment is that more firms are adopting an integrated brand promotion perspective, which relies on a broader mix of communication tools. Promotional options such as event sponsorship, direct marketing, branded entertainment, sales promotion, and public relations are drawing many firms away from traditional mass media advertising. A. Branded Entertainment Madison & Vine is the combination and meaningful merger of entertainment media and advertising. This concept is also referred to as branded entertainment. It began many years ago with product placements in TV and film. For clients seeking branded entertainment opportunities, there typically are three primary approaches. • Least expensive is product placement on TV or in film • More sophisticated is storyline integration with brands in video games as an example • Most sophisticated and expensive is original content like BMW short films VII. Planning Models PPT 12-21 and 12-22 The explosion of available data on markets and consumers has motivated media planners to rely more on electronic databases, computers, and software in the media planning effort. Major syndicated research services offer databases (and the software to analyze them) that contain information in identifying target audiences, estimating media costs, and analyzing competitors’ spending. The various syndicated services do not, however, offer standardized data, reports, and analyses that are necessarily comparable across media categories. Computer modeling is not a substitute for judgment but does allow for the assessment of a wide range of possibilities before making costly media buys. VIII. Making the Buy PPT 12-23 and 12-24 Media buying entails securing the electronic media time and print media space specified in the schedule. Another important part of the media-buying process is the agency of record, which is the advertising agency chosen by the advertiser to purchase time and space. Each spring, television programming and ad executives participate in a ritual called the “upfronts.” The upfronts is a period where the television networks reveal their fall-lineups and presell advertising on them. Advertisers buy about 75 percent of all available time during this upfront period. Some advertisers use a media-buying service, which is an independent organization that specializes in

Chapter 12/Media Planning Essentials

buying large blocks of media time and space and reselling it to advertisers.

ONLINE CONTENT The online dynamic content provides both content and insights into the ethical, global, and social media aspects of Advertising and Integrated Brand Communication. The integrated assessment components will provide students with assurances that they have mastered the assigned readings and provide feedback to faculty that the students have completed the assigned readings and data on student mastery of the content. In addition to the feedback on the correct answers, all of the assessment objects have been enhanced with additional tags that can be aggregated to provide feedback on how individual students have done on a specific learning outcome such as ethics. The online material can be delivered in one of two formats. For instructors who want to provide students with access to the Ad Age on Campus access as well as the online advertisements and student facing self-assessment quizzes, CourseMate will be provided with each new copy of Advertising and Integrated Brand Communication. Alternatively, students can decide to purchase CourseMate on its own which will also come with the MindTap Reader, which is the ebook version of the print product. For faculty that desire to have a variety of more in-depth assignments to integrate into their course and a desire to have more student data that can be used for analytic purposes, MindTap can be purchased with an enhanced capability. Faculty can customize the student experience and integrate the experience for their students into the campus Learning Management System. For a complete guide into the reporting and analytical capabilities available to faculty, consult the Assurance of Learning section of this manual.

Boxed Feature Questions and Tags QUESTION

DIFFICULTY

BUSPROG

DISC

Primary

BLOOM'S

Chapter 12 Social Media 01

Moderate

Technology

Promotion

Application

Chapter 12 Social Media 02

Moderate

Technology

Promotion

Application

Chapter 12 Globalization 01

Easy

Diversity

Promotion

Application

Chapter 12 Globalization 02

Easy

Diversity

Promotion

Application

Chapter 12 Ethics 01

Moderate

Ethics

Promotion

Application

Chapter 12 Ethics 02

Challenging

Ethics

Promotion

Synthesis

CHAPTER 12-Social Media http://adage.com/article/creativity-pick-of-the-day/budweiser-lets-make-facebookfriends-a-clink-pint/241175/

Chapter 12/Media Planning Essentials

• 12.SocialMedia.Q1 Media planning essentials must include social media, In this campaign, Budweiser (a beer brand) allows customers to use social media to: A. Volunteer to be a sober driver B. Find a sober driver C. Sign up for a taste test at a local brewery D. Connect with others via a ‘buddy cup’ Answer: D •

12.SocialMedia.Q2

Social media can help a brand with international campaigns; this particular campaign was launched in what country? A. Canada B. South Africa C. Brazil D. Russia Answer: C

Chapter 12/Media Planning Essentials

CHAPTER 12-Globalization http://adage.com/article/creativity-pick-of-the-day/david-beckham-strips-skivvies-guyritchie-film-h-m/239634/ •

12.Globalization.Q1

One of the best media global venues consists of soccer. In this ad, a famous soccer player-David Beckham promotes which global brand? A. Haynes B. Fruit of the Loom C. Calvin Klein D. H&M Answer: D •

12.Globalization.Q2

The ad features the celebrity David Beckham mainly doing what? A. talking about his family B. talking about his soccer team C. running and swimming D. talking about the nature of soccer in the U.S. vs. Europe Answer: C

Chapter 12/Media Planning Essentials

CHAPTER 12-Ethics http://adage.com/article/creativity-pick-of-the-day/mcdonald-s-print-ad-shows-time-eata-burger/240962/ • 12.Ethics.Q1 One media planning essential is to consider the print ad—and its message. The McDonald’s message here is that: A. the napkin is a media vehicle B. there are always appropriate times to eat a burger C. there is a new bun recipe D. there is a new menu in Swedish McDonald’s Answer: B •

12.Ethics.Q2

Please think about this media strategy and message strategy from an ethics stance. How could some find it unethical? Are there any other brands that use a similar strategy? Answer: Some may find the concept or strategy of suggesting that anytime is appropriate to eat a burger is unethical due to the obesity epidemic. Taco Bell uses a similar strategy and media placement in the U.S., by airing late night ads calling for time for the “fourth meal”. The two brands are similar in this way, by encouraging eating fast food any time.

Homework Grid Homework 1-a. Multiple Choice 1-b. True/False 1-c. Multiple Choice 2-a. Multiple Choice 2-b. Multiple Choice 2-c. Multiple Choice 3-a. True/False 3-b. Multiple Choice 3-c. Multiple Choice 4-a. Fill in the Blank

Description Miller Lite Strategy Miller Lite Strategy Miller Lite Strategy MTV Strategy MTV Strategy MTV Strategy TV advertising planning TV advertising planning TV advertising planning Determining number of ad insertions for TV shows based on rating Homework is available to faculty to select and integrate into their customized course. THE FOLLOWING SECTIONS OF THE INSTRUCTOR’S MANUAL HAS A SELECTION OF CASES THAT

Chapter 12/Media Planning Essentials

CAN BE INCORPORATED INTO YOUR COURSE AS OUT OF CLASS ASSIGNMENTS , OR AS A METHOD FOR INITIATING CLASSROOM DISCUSSION.

Questions for Review and Critical Thinking 1.

The proliferation of media options has created increasing complexities for media planners, but useful distinctions can still be made concerning the relative standing of the different choices available to advertisers. What advertising and brand promotion options dominate the “big pie” of total promotion options? The big pie includes mass media advertising, direct mail, point-of-purchase promotion, coupons, promotional emails, buzz marketing, product placement, brand integration in computer games, and everything spent to promote a good or service. Traditionally, companies would make the distinction between (1) above-the-line promotion, which meant traditional measured media advertising, and (2) below-the-line promotion, which is everything else. The most recent data (2011, reported in 2013) reveal that measured media account for 56 percent and unmeasured account for 44 percent of total upfront investing.

Media plans should of course take a proactive stance with respect to customers. Explain how geo-targeting can be used in making a media plan more proactive with regard to customers. Geo-targeting entails placement of advertising dollars to maximize yields. Geo-targeting refers to spending focused in geographic areas that have produced strong results in the past. This strategy is a commonsense approach for reaching out to the customer at the right place.

Media strategy models allow planners to compare the impact of different media plans, using criteria such as reach, frequency, and gross impressions. What other kinds of criteria should a planner take into account before deciding on a final plan? Many criteria factor in setting the final media plan. It is important to assess competitive activity and select a continuity pattern that fits with objectives and resources. Geo-targeting is a good way to concentrate the impact of spending. A qualitative decision also needs to be made about the correct assortment of media to engage for the campaign. Will the message be more likely to break through to consumers when they hear it in multiple media, or is it better to try to achieve concentration in a single medium? Finally, there is the question of effectiveness. The objectives of some campaigns dictate the use of particular media to maximize message effectiveness.

Chapter 12/Media Planning Essentials

Review the mathematics of the CPM and CPRP calculations, and explain how these two indicators can be used to assess the efficiency and effectiveness of a media schedule. Cost per thousand (CPM) is the dollar cost of reaching 1,000 members of an audience using a particular medium. Cost per rating point (CPRP) is the dollar cost incurred for each rating point achieved by a particular television program. Both of these indicators can help assess the efficiency of a vehicle for reaching a target audience. CPM is a more generalpurpose measure, while CPRP is obviously specific to television. Neither of these indicators says anything about the quality of the advertising, so it would be a mistake to interpret them as measures of advertising effectiveness.

Why is data quality becoming an increasingly important issue in real-world media planning? Media exposure data are often inaccurate or irrelevant. Media data are not totally useless, but what it means to be exposed to an advertisement is not adequately addressed by most exposure data. Nielsen, which holds a virtual monopoly on television ratings in the U.S., has been under pressure to improve the accuracy of its ratings.

In the real world, do media planners always make strategic decisions based on sophisticated data, or are there other influences that sway their media-buying decisions? Explain. Much media buying does not depend on sophisticated math from a computer program, but on good old-fashioned schmoozing and sales pitches, like at company parties and events. The decisions of media planners in the real world are not always bound by the cold data of number crunchers. Media planners can—and do—play favorites for the right perks.

How has the increased emphasis on branded entertainment and the meteoric rise in popularity of social networking sites such as Facebook influenced media planning? As the strength of traditional advertising has eroded, branded entertainment has emerged as an attractive method to merge branding messages across various media platforms, from television and film to videogames and mobile phones. For media planners, this has demanded a more creative and holistic approach, often one that also can be more rewarding. Other new creative challenges have emerged with the rising popularity of social networking sites. Media planners now must also determine ways to involve brand messages in what is essentially strictly consumer-to-consumer communication. New data gathering systems are emerging, though, that could offer a strategic new tool for media planners assessing the opportunities within social networking sites.

Experiential Exercises

Chapter 12/Media Planning Essentials

When BP needed to reach the public about oil gushing from the Deepwater Horizon rig in the Gulf of Mexico, the company developed an interesting media strategy. In addition to allocating $50 million for TV ads, BP spent an estimated $1 million per month to purchase search engine keywords like “oil spill,” “Gulf spill” and other related terms. When keyed in at popular search engines, the words directed audiences to BP’s disaster-response website. Using the Internet, search for key words related to one or more of your favorite products. Identify sponsored links that appear among search results, and click to see where those links lead. Which brands are getting top spots in the paid search results? Where do the sponsored links take Web users, and for what purpose? Is this an effective form of advertising for these brands? Why or why not? Answers will vary, but a recent search for “shoes” at Google revealed that Macy’s, Zappos, and Victoria’s Secret were high bidders investing in paid search campaigns. In each case, clicking on the sponsored links directed Web users to the footwear selections of the companies’ respective e-commerce sites. In the case of Victoria’s Secret, the linked page featured a 50% off clearance sale for sandals, pumps, and more. The Macy’s online store offered a “$15 off your next purchase” promotion for visitors willing to sign up for email marketing alerts. The appropriateness of using Internet media depends on the fit between the brand and Web audiences, as well as on whether the company is trying to buy simple awareness, establish an image, respond to bad publicity, or counter a competitor’s marketing strategy. Advertisers flock to paid search for its robust audience analytics capabilities. In the case of BP, marketers recognized that Web users were searching on specific key words and arriving at BP’s website—a trend that led to BP’s paid search campaign.

The proliferation of media options, in combination with the trend towards longer ads, is leading some analysts to predict the end of the traditional 30-second television spot. Using the Internet, identify and review two or three video ads that extend well beyond the length of the 30-second traditional spot. Do you think the longer ads are more compelling and engaging than a traditional television spot? What goals might advertisers have for the ads? In your view, did the length of the ads help advertisers achieve their goals? Explain. It is increasingly difficult to justify the use of expensive, restrictive TV advertising when Internet films can be any length. In today’s high-tech world of video gadgets, ads can be produced and broadcast on YouTube channels or through social media for a fraction of the cost of a 30-second TV commercial. Although the 30-second spot continues to perform a valuable function, top advertisers are testing long ad formats. For example, McDonald’s recently created a 60-minute, seven-segment film called “Dreaming in Mono” for audiences in Scandinavia. When multinational corporations are experimenting with long ad formats, you know the idea is going mainstream.

Chapter 12/Media Planning Essentials

Assume that you are advising a regional snack-food manufacturer whose brands have a low share of voice. Which pattern of continuity would you recommend for such an advertiser? Would you place your ads in television programming that is also sponsored by competing national brands such as Pringles and Doritos? Why or why not? A regional snack-food marketer with low share of voice will face high competitive clutter from national brands like Pringles and Doritos. Regional brands may also have modest ad budgets. Because the regional player does not have the resources to compete on the same terms as the national players, it would not be advantageous to use the same vehicles as those brands. Also, continuous scheduling would likely be a waste of resources. We would recommend flighting as the best scenario for the regional brand. Some efficiencies could be achieved with this continuity pattern, and scheduling around events that might call for snacks (e.g., holidays or graduation parties) could help the regional player break through the clutter during key seasons.

As discussed in the chapter, context is a critical part of the media planning equation. To better understand context effects, obtain recent copies of the following magazines: Sports Illustrated, InStyle, and The New Yorker. For each magazine, what are the primary types of brands, products, and services advertised? What similarities do you find between brands and their ad messages? What social meaning does the magazine itself lend to the advertisers? Also list five examples of brands, products, or services you would least expect to advertise in each magazine and explain why. As discussed in the chapter, even in advertisers can be known by the company that they keep. Different media vehicles each provide a distinct feel, spirit, look, or image that will, to some extent, reflect on the brands that advertise within it. Students should find vastly different editorial climates between the three magazines in this exercise, helping them to better understand why context effects are such a crucial issue in media planning. The bed linen and paint swatch ads in Martha Stewart Living would seem downright strange in Sports Illustrated, for instance. At the same time, though, Living offers a certain sophisticated veneer to its advertisers, just as The New Yorker offers an air of authentic intellectualism to the many understated, obscure small ads that fill its back pages, and Sports Illustrated provides its advertisers with the stamp of American male authenticity.

Chapter 13/Media Planning: Newspapers, Magazines, TV, and Radio

CHAPTER 13 Media Planning: Newspapers, Magazines, TV, and Radio KEY TERMS display advertising co-op advertising preprinted insert free-standing insert (FSI) classified advertising hyper-localism pay-for-inquiry advertising model pass-along readership network TV cable TV video on demand (VOD)

television syndication off-network syndication first-run syndication barter syndication local TV satellite and closed-circuit narrowcasting channel grazing digital video recorder (DVR) dayparts TV households

households using TV (HUT) program rating ratings point share of audience radio networks radio syndication local spot radio advertising network radio advertising national spot radio advertising

Summary PPT 13-2, 13-3, and 13-4 Understand the changes taking place in the traditional mass media of newspapers, magazines, TV, and radio relative to new digital media options. The changes in the advertising industry are tangible and dramatic with respect to advertisers’ use of the traditional media of newspapers, magazines, TV, and radio. For decades, advertisers would work with their advertising agencies to develop messages for their brands and then the agencies would negotiate for airtime with TV and radio networks or for space in newspaper and magazines. Most of these media options were owned by a few big media companies. Now, advertisers are fast adopting the belief that digital and interactive media— primarily Internet ads and mobile device ads—offer a more cost-effective and timely way to reach target markets. In addition, digital media allow advertisers to rapidly make changes in campaigns that might take months to accomplish with traditional media. Also, if the advertiser chooses, an Internet campaign can easily be a global campaign—a monumental task in traditional media. Advertisers are shifting literally billions of dollars out of traditional media in preference for digital media.

Chapter 13/Media Planning: Newspapers, Magazines, TV, and Radio

Detail the pros and cons of newspapers as a media class, identify newspaper categories, and describe buying and audience measurement for newspapers. Newspapers can be categorized by target audience, geographic coverage, and frequency of publication. As a media class, newspapers provide an excellent means for reaching local audiences with informative advertising messages. Precise timing of message delivery can be achieved at modest expenditure levels. But for products that demand creative and colorful executions, this medium simply cannot deliver. Newspaper costs are typically transmitted via rate cards and are primarily a function of a paper’s readership levels. Newspapers are struggling to survive in the digital age and are looking for ways to adopt pay-for-inquiry advertising models to attract advertisers back to the medium. In addition, traditional newspapers are offering digital editions, which could be successful on e-readers and tablet devices. Detail the pros and cons of magazines as a media class, identify magazine categories, and describe buying and audience measurement for magazines. Three important magazine categories are consumer, business, and farm publications. Because of their specific editorial content, magazines can be effective in attracting distinctive groups of readers with common interests. Thus, magazines can be superb tools for reaching specific market segments. Also, magazines facilitate a wide range of creative executions. Of course, the selectivity advantage turns into a disadvantage for advertisers trying to achieve high-reach levels. Costs of magazine ad space can vary dramatically because of the wide range of circulation levels achieved by different types of magazines. Like newspapers, magazines are adapting to the digital/interactive era. Paid electronic subscriptions with access through a variety of mobile devices is just beginning to take hold as options for magazines. Detail the pros and cons of TV as a media class, identify TV categories, and describe buying and audience measurement for TV. The four basic forms of TV are network, cable, syndicated, and local TV. Television’s principal advantage is obvious: Because it allows for almost limitless possibilities in creative execution, it can be an extraordinary tool for affecting consumers’ perceptions of a brand. Also, it can be an efficient device for reaching huge audiences; however, the absolute costs for reaching these audiences can be staggering. Lack of audience interest and involvement certainly limit the effectiveness of commercials in this medium, and digital devices like DVRs that allow the viewer to skip commercials make TV advertising nonexistent for many. As with any medium, advertising rates will vary as a function of the size and composition of the audience that is watching—yet audience measurement for TV is not an exact science, and its methods are often disputed. The spread of broadband access to more consumers both at home

Chapter 13/Media Planning: Newspapers, Magazines, TV, and Radio

and through mobile devices is allowing transmission of TV programming in new and different ways. Advertisers are taking advantage of this opportunity to reach target markets beyond just in-home TV advertising. Detail the pros and cons of radio as a media class, identify radio categories, and describe audience measurement for radio. Advertisers can choose from three basic types of radio advertising: local spot, network radio, or national spot advertising. Radio can be a cost-effective medium, and because of the wide diversity in radio programming, it can be an excellent tool for reaching well-defined audiences. Poor listener attentiveness is a drawback to radio, and the audio-only format places obvious constraints on creative execution. Satellite radio, which is subscriber-based, does away with advertising entirely on its music stations. Radio ad rates are driven by considerations such as the average number of listeners tuned to a station at specific times throughout the day. Buying and placing ads for radio is becoming easier due to everincreasing consolidation in the industry. Like the other traditional mass media, radio is taking advantage of mobile transmission through smartphones and tablet devices. And, again, advertisers find this new access attractive in reaching target markets.

Chapter Outline I. The Present and Future of Traditional Mass Media PPT 13-5 and 13-6 The last two decades have witnessed unprecedented change in media options and applications. Consumers have turned to multiple new sources of information and entertainment and are more active in their media choice and patronage. As a result, advertisers are turning more often to digital media that offer new, different, and cost-effective ways to reach target markets— including when those target markets are on the move with their mobile devices. In addition, digital media allow advertisers to make rapid changes in campaigns—changes that might take months to accomplish with traditional media. A digital campaign can be a global campaign if the advertiser chooses to make it so—a monumental task in traditional media. II. Media Strategy PPT 13-7 Media decision are critically important for two reasons. • Advertisers need media to reach audiences that are likely in need of the information or to buy their brands. • Advertisers’ media choices direct billions of dollars to media companies.

Chapter 13/Media Planning: Newspapers, Magazines, TV, and Radio

This chapter focuses on the challenges advertisers face in evaluating the major print and broadcast media operations as key ways to reach audiences. The inherent advantages and disadvantages of each media option are discussed. While much is said about spending on new media, over 70 percent of all advertising dollars in the United States still go to traditional print, radio, and TV media. The vast majority of creative effort and money spent is expended on print and broadcast advertising campaigns. The discussions in this chapter will focus on why these media represent such rich communication vehicles for advertisers. The chapter progresses from discussions of, first, the print media— newspapers and magazines—through television and radio and key mass media communications options. III. Print Media—Strategic Planning Considerations The story of Absolut vodka at this point in the chapter is one that demonstrates the power of print advertising. Most students should be familiar with the innovative and highly visible print ad campaign featured here. Some key points from the scenario: • At one point, Absolut was selling only 12,000 cases per year. • Consumers gave no credibility to vodka produced in Sweden. • Bartenders thought the Absolut bottle was ugly and hard to pour from. TBWA ad agency in New York set about the task of overcoming these liabilities of the brand and decided to rely on print ads alone—primarily because spirits ads were banned from broadcast at the time. The agency came up with one of the most famous and successful print campaigns of all time. The concept was to feature the strange-shaped Absolut bottle as the hero of each ad, in which the only copy was a two-word line always beginning with Absolut and ending with a quality word like perfection or clarity. In the end, the Absolut campaign was not only a creative masterpiece, but also a resounding market success. A. Newspapers and Digital Newspapers The newspaper is a medium accessible to a wide range of advertisers; digital newspapers provide new legs to synergize with the traditional paper flagship. Advantages of Newspapers PPT 13-8 Newspapers now reach only about 25 percent of U.S. households, representing about 50 million adults. Key advantages of newspapers include geographic selectivity, timeliness,

Chapter 13/Media Planning: Newspapers, Magazines, TV, and Radio

creative opportunities, credibility, audience interest and demographics, and cost. Geographic Selectivity Daily newspapers in cities and towns across the United States offer advertisers the opportunity to reach a geographically well-defined target audience—particularly densely populated urban markets. Timeliness The newspaper is timely even in its printed form. Because of the short time needed for producing a typical newspaper ad and the regularity of daily publication, the newspaper allows advertisers to reach audiences in a timely way. Creative Opportunities Because the newspaper page offers a large and relatively inexpensive format, there is an opportunity to provide a lot of information to the target audience at relatively low cost. Credibility Newspapers still benefit from the perception that “If it’s in the paper it must be the truth.” Audience interest and Demographics Many readers buy the newspaper specifically to see what’s on sale at stores in the local area, making it an ideal environment for local merchants. Cost Both in terms of production and space, newspapers offer a low-cost alternative. Disadvantages of Newspapers PPT 13-9 Limited segmentation Newspapers can achieve good geographic selectivity and reach upscale customers, but the ability to target a specific audience with any precision is limited. Circulation cuts

Chapter 13/Media Planning: Newspapers, Magazines, TV, and Radio

across too broad an economic, social, and demographic audience to allow for the isolation of specific targets. Creative constraints Newspapers have comparatively poor reproduction quality. Newspapers are also a unidimensional medium—no sound, no action. Cluttered environment Newspapers are filled with headlines, subheads, photos, and announcements—not to mention news stories. This presents a terribly cluttered environment for an advertisement. Short life In most homes, newspapers are read quickly and then discarded. Categories of Newspaper Advertising PPT 13-10 and 13-11 Display Advertising Display advertising includes the standard components of a print ad—headline, body copy, and often an illustration—to set it off from the news content of the paper. An important form of display advertising is co-op advertising—a manufacturer pays part of the media bill when a local merchant features the manufacturer’s brand in advertising. Inserts There are two types of insert advertisements. A preprinted insert is an advertisement delivered to the newspaper fully printed and ready for insertion into the newspaper. A free-standing insert (FSI) contains cents-off coupons for a variety of products and is typically delivered with Sunday newspapers. Classified Advertising Classified Advertising is newspaper advertising that appears as all-copy messages under categories such as sporting goods, employment, and automobiles.

Chapter 13/Media Planning: Newspapers, Magazines, TV, and Radio

The Future of Newspapers PPT 13-12 and 13-13 To survive as a viable advertising medium, newspapers will have to evolve with the demands of both audiences and advertisers: • Continue to provide in-depth coverage of issues that focus on the local community. This is now referred to as a “hyper-localism” strategy. • Pursue a pay-per-inquiry advertising model, not unlike websites. • Maintain and expand their role as the best local source for consumers to find specific information on advertised product features, availability, and prices. • Provide customers/buyers the option of shopping through an online newspaper computer service ( e-Bay like auctions), which will match online classifieds. • Use bloggers to cover local events. • Become more mainstream in integrated brand promotions particularly relating to new digital media. B. Magazines Advantages of Magazines PPT 13-14 In addition to being synergistic with digital media, magazines have some advantages relative to newspapers or even broadcast media. Audience Selectivity The key advantage of magazines relative to other media is their ability to target a highly selective audience. This selectivity can be based on demographics, lifestyle (Muscle & Fitness), or special interests. Audience Interest Magazines attract an audience because of content, which has the advantage of voluntary exposure to the advertising. Creative Opportunities Magazines offer a wide range of creative opportunities—size of an ad, use of color, use of white space, and special features, such as pop-up ads.

Chapter 13/Media Planning: Newspapers, Magazines, TV, and Radio

Long Life. Many magazines are saved issue to issue by their subscribers. Magazines offer multiple exposure and pass-along readership. Disadvantages of Magazines PPT 13-14 Limited reach and frequency The selectivity of targeting can be a disadvantage in that a relatively small market will be reached. Since many magazines only publish once a month, there is little chance for an advertiser to achieve frequent exposure using a single magazine. Clutter Clutter occurs both within a magazine and within a magazine’s market segment as more new magazines are issued. Long lead times. Advertisers are required to submit their ads as much as 90 days in advance of the date of publication. Cost The absolute cost for a single insertion can be prohibitive. For magazines with a large circulation, like AARP and Good Housekeeping, the cost for a one-time, full-page, fourcolor ad can run from $100,000 to about $250,000. The Future of Magazines PPT 13-15 Two important factors need to be considered as influences on magazines as an advertising medium in the future. Magazines will, like other media, have to determine how to adapt to new media options. Some marketers are publishing their own magazines for greater selectivity. The second factor affecting the future of magazines is that publishers are exploring other ways to take advantage of the interactive digital environment beyond digital version publications. IV. Television and Radio: Strategic Planning Considerations Television and radio are the most powerful media, and advertisers invest billions of dollars a year in these media.

Chapter 13/Media Planning: Newspapers, Magazines, TV, and Radio

A. Television Television Categories PPT 13-16 Network television Network TV broadcasts programming over airwaves to affiliate stations across the United States under a contract agreement. Cable Television Cable TV transmits a wide range of programming to subscribers through wires rather than over airwaves. Aside from more channels and hence more programming, two other aspects distinguish cable from network TV. First is the willingness of cable networks to invest in original programming. Second, there is huge potential revenue from video on demand (VOD). Syndicated Television PPT 13-17 Television syndication is either original programming or programming that first appeared on network television. It is then rebroadcast on either network or cable stations with pending distribution on the Internet. Off-network syndication refers to programs that were previously run in network prime time. First-run syndication refers to programs developed specifically for sale to individual stations. Barter syndication takes both off-network and first-run syndication shows and offers them free or at a reduced rate to local TV stations, with some national advertising presold within the programs. Local Television PPT 13-18 Local TV is the programming other than the network broadcast that independent stations and network affiliates offer local audiences. Satellite. Programming transmitted to audiences via satellite transmission is another popular option for consumers. Another version of satellite transmission is direct transmission or closed circuit. The distinction is the technology for delivery.

Chapter 13/Media Planning: Newspapers, Magazines, TV, and Radio

Web/Tablet/Smartphone TV Since this technology is just emerging, it is difficult to call this a “category.” Video over the Web is showing consumer interest. Cell or smartphone TV seems to have potential. Advantages of Television PPT 13-19 Creative Opportunities The overriding advantage of TV compared to other media is the ability to send a message using both sight and sound. Coverage, Reach, and Repetition Television reaches more than 98 percent of all households in the United States. These households represent every demographic segment in the United States, which allows advertisers to achieve broad coverage. No other medium allows an advertiser to repeat a message as frequently as TV. Cost per Contact For advertisers that sell to broadly defined mass markets, television offers a costeffective way to reach millions of members of a target audience. Audience Selectivity Television programmers are doing a better job of developing shows that attract welldefined target audiences. Narrowcasting is the development and delivery of specialized programming to well-defined audiences. Cable and satellite TV are far and away the most selective TV options. Disadvantages of Television PPT 13-20 Fleeting Message The fleeting nature of a TV message, as opposed to a print ad (which a receiver can contemplate), makes message impact difficult. High Absolute Cost

Chapter 13/Media Planning: Newspapers, Magazines, TV, and Radio

Although the cost per contact of TV advertising is the best of all traditional media, the absolute cost may be the worst. Poor geographic Selectivity Although programming can be developed to attract specific audiences, program transmission cannot target small geographic areas nearly as well. Poor Audience Attitude and Attentiveness Channel grazing refers to using a remote control to monitor programming on other channels while an advertisement is being broadcast. Digital video recorders (DVRs) like TiVo provides viewers yet another way to avoid ads altogether. Clutter The major TV networks run about 15 minutes of advertising during each hour of primetime programming, and cable channels carry about 14 minutes of advertising per hour. Consumers feel this is too much, with 65 percent of survey viewers feeling they are bombarded with too much advertising. Measuring Television Audiences PPT 13-21 and 13-22 TV Households TV households are an estimate of the number of households that are in a market and own a TV. Households Using TV Households using television (HUT), also referred to as sets in use, is a measure of the number of households tuned to a television program during a particular time period. Program Rating A program rating is the percentage of TV households that are in a market and are tuned to a specific program during a specific time period. Expressed as a formula, program rating is:

Chapter 13/Media Planning: Newspapers, Magazines, TV, and Radio

program rating =

TV households tuned to a program total television households in the market

A ratings point indicates that 1 percent of all the television households in an area were tuned to the program measured. Share of Audience Share of audience is a measure of the proportion of households that are using television during a specific time period and are tuned to a particular program. The Future of Television PPT 13-23 • •

Interactive era will affect TV as an advertising medium Massive consolidation of media companies into many TV categories

B. Radio PPT 13-24 and 13-25 Radio Categories Networks Radio networks operate much like television networks in that they deliver programming by satellite to affiliate stations across the United States. Syndication Radio syndication provides complete programs to stations on a contract basis. Large syndicators offer stations complete 24-hour-a-day programming packages that relieve a station of any programming effort. AM versus FM AM radio broadcasts, even the new stereo AM transmissions, cannot match the sound quality of FM. Thus, most AM stations focus on local community broadcasting or news and talk formats that do not require high-quality audio. FM radio stations transmit using frequency modulation (FM). FM radio transmission is of a much higher quality. Because of this, FM radio has attracted the wide range of music formats that most

Chapter 13/Media Planning: Newspapers, Magazines, TV, and Radio

listeners prefer. Satellite Radio PPT 13-26 The advantages of satellite radio have to do with variety of programming, more crisp and clear sound reproduction, access to radio in places where broadcast does not reach, and no ads (on most music stations). Internet/Mobile Radio Internet radio has a wide and enthusiastic following. Mobile access once again provides advertisers the opportunity to reach target audiences while they are at the gym, on the train, jogging, or taking a walk in the park. Types of Radio Advertising PPT 13-27 In local spot radio advertising, an advertiser places advertisements directly with individual stations rather than with a network or syndicate. Network radio advertising is placed within national network programs. There are few network radio programs being broadcast. National spot radio advertising offers an advertiser the opportunity to place advertising in nationally syndicated radio programming. Advantages of Radio PPT 13-28 Cost From both a cost-per-contact and absolute-cost basis, radio is often the most costeffective medium for an advertiser. Reach and Frequency Radio has the widest exposure of any medium. The low cost of radio time gives advertisers the opportunity to repeat messages at low absolute cost and cost per contract. Target Audience Selectivity Radio can selectively target audiences on a geographic, demographic, and

Chapter 13/Media Planning: Newspapers, Magazines, TV, and Radio

psychographic/lifestyle basis. The narrow transmission of local radio stations gives advertisers the best opportunity to reach well-defined geographic audiences. Radio programming formats and different dayparts (i.e., times during the day) also allow target audience selectivity. Flexibility and Timeliness Radio is the most flexible medium because of very short closing periods for submitting an ad. Creative Opportunities Radio has been described as the “theater of the mind.” Disadvantages of Radio PPT 13-28 Poor audience Attentiveness Radio has also been described as “verbal wallpaper.” It provides a comfortable background distraction while the consumer does something else—hardly an ideal level of attentiveness for advertising communication. Creative Limitations Although the theater of the mind may be a wonderful creative opportunity, the audioonly nature of radio communication is a tremendous creative compromise. Fragmented Audiences A large number of stations try to attract the same audience in a market. This fragmentation means that the percentage of listeners tuned to any one station is likely very small. Chaotic Buying Procedures Because national networks and syndicated broadcasts do not reach every geographic market, an advertiser has to buy time in individual markets on a station-by-station basis. The Future of Radio

Chapter 13/Media Planning: Newspapers, Magazines, TV, and Radio

PPT 13-29 Several areas to watch are: subscription satellite radio, emerging technologies (HD radio), consolidation in the traditional radio market.

ONLINE CONTENT The online dynamic content provides both content and insights into the ethical, global, and social media aspects of Advertising and Integrated Brand Communication. The integrated assessment components will provide students with assurances that they have mastered the assigned readings and provide feedback to faculty that the students have completed the assigned readings and data on student mastery of the content. In addition to the feedback on the correct answers, all of the assessment objects have been enhanced with additional tags that can be aggregated to provide feedback on how individual students have done on a specific learning outcome such as ethics. The online material can be delivered in one of two formats. For instructors who want to provide students with access to the Ad Age on Campus access as well as the online advertisements and student facing self-assessment quizzes, CourseMate will be provided with each new copy of Advertising and Integrated Brand Communication. Alternatively, students can decide to purchase CourseMate on its own which will also come with the MindTap Reader, which is the ebook version of the print product. For faculty that desire to have a variety of more in-depth assignments to integrate into their course and a desire to have more student data that can be used for analytic purposes, MindTap can be purchased with an enhanced capability. Faculty can customize the student experience and integrate the experience for their students into the campus Learning Management System. For a complete guide into the reporting and analytical capabilities available to faculty, consult the Assurance of Learning section of this manual.

Boxed Feature Questions and Tags QUESTION

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Chapter 13 Social Media 01

Moderate

Technology

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Moderate

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Chapter 13 Globalization 01

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Diversity

Promotion

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Chapter 13 Globalization 02

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Chapter 13 Ethics 01

Moderate

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Chapter 13 Ethics 02

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Chapter 13/Media Planning: Newspapers, Magazines, TV, and Radio

CHAPTER 13-Social Media http://adage.com/abstract?article_id=243600 • 13.SocialMedia.Q1 Media planning on television must have social media integration. Here, in this ad, Swiffer links advertising with A. Instagram B. the #everyday effect hashtag C. Facebook search D. LinkedIn Answer: B •

13.SocialMedia.Q2

One thing social media can help a brand do is to tell a great story. Here, the story is about Swiffer’s Golden Couple, who are: A. Swiffer’s sweepstakes winners B. 90-year old lovebirds C. Swiffer’s millionth customer D. Swiffer’s biggest social media users E. a couple that posts cleaning how-to videos on YouTube Answer: B

CHAPTER 13-Globalization http://adage.com/article/creativity-pick-of-the-day/ridley-scott-coke-reintroduce-polarbears-short-film/238984/ • 13.Globalization.Q1 The most famous of all of Coca-Cola’s television media spots was based on this animal: A. A Clydesdale horse B. A small dog C. A frog D. A polar bear

Chapter 13/Media Planning: Newspapers, Magazines, TV, and Radio

Answer: D • 13.Globalization.Q2 One of the best reasons to use animals in television advertising for brands like Coca-Cola is that: A. All countries have similar animals, so they can relate B. Animals are safe to film C. Animals don’t talk and body language is universal D. Specific animals represent the same thing in every culture Answer: C

Chapter 13/Media Planning: Newspapers, Magazines, TV, and Radio

CHAPTER 13-Ethics http://adage.com/article/creativity-pick-of-the-day/apple-remembers-steve-jobs-videomontage/237621/ •

13.Ethics.Q1 Watch this video montage of clips from Apple. What is one of the points? A. Google is going more international B. Apple is launching a new computer C. Apple is launching a new type of computer monitor D. The founder Steve Jobs gave a creative vision for Apple

Answer: D •

13.Ethics.Q2

While not discussed in the video montage, some rumors about Apple say that Steve Jobs was against the idea of launching the ipad mini, because it was too close to the size of the iphone or did not provide a certain value that Apple products have with each new product. After his death, the brand released it. If this is indeed a true rumor, what is the ethical issue? What do you think? Answer: The ethical issue is twofold: one-releasing a product that is very similar to an extant product but marketing it in a completely new way as a new product solution, and two: going against a founder’s wishes after his death.

Homework Grid Homework Description 1-a. True/False Media Buying 1-b. Multiple Choice Media Buying 1-c. True/False Media Buying 2-a. Multiple choice Spin magazine 2-b. True/False Spin magazine 2-c. True/False Spin magazine 3-a. Multiple Choice Fox TV advertising 3-b. Multiple Choice Fox TV advertising 3-c. Multiple Choice Fox TV advertising 3-d. True/False Fox TV advertising. Homework is available to faculty to select and integrate into their customized course. THE FOLLOWING SECTIONS OF THE INSTRUCTOR’S MANUAL HAS A SELECTION OF CASES THAT © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 13/Media Planning: Newspapers, Magazines, TV, and Radio

CAN BE INCORPORATED INTO YOUR COURSE AS OUT OF CLASS ASSIGNMENTS , OR AS A METHOD FOR INITIATING CLASSROOM DISCUSSION.

Questions for Review and Critical Thinking 1.

With reference to the chapter opener, why are advertisers shifting billions of dollars from the traditional media of newspapers, magazines, television, and radio to digital media? What is your preference for viewing brand message –traditional media or the Internet and mobile devices? About fifty percent of all advertising spending in the United States still goes to traditional media, but advertisers are steadily moving their budgets and attention to digital media. Advertisers see several specific benefits in new forms of digital media. Primarily, digital media is seen as a more cost-effective way to reach a more specific audience. Advertisers also are able to be more nimble working in digital media, making changes to the scope or direction of an ad campaign that would be cumbersome if not impossible in traditional media. Finally, advertisers want to go where they can find the best audience. As traditional media lose readers, viewers, and listeners, advertisers are going online to engage those consumers.

Why are newspapers losing circulation, and what effect does it have on their advertising revenue? Newspaper circulation and readership habits have been steadily dropping for more than three decades. Circulation declines have accelerated in recent years, too, as papers that had slowly lost news consumers to television programming began competing with all-news cable programming, such as CNN and FOX News. Over the last five years, circulation losses have become even more dramatic as readers stopped buying the daily newspaper and began accessing news for free online from all manner of news websites. The circulation losses have caused advertisers to drastically pull back their newspaper spending and the newspaper industry has struggled to find ways to recoup that lost revenue from its online business models.

Magazines certainly proved to be the right media class for selling Absolut Vodka. Why are magazines a natural choice for vodka advertisements? What has Absolut done with its advertising to take full advantage of this medium? Given the restricted options available to spirits marketers, magazines were an obvious choice for Absolut’s revival campaign. Absolut was able to accomplish much more with

Chapter 13/Media Planning: Newspapers, Magazines, TV, and Radio

this medium than most of its competitors. Absolut used the visual capabilities of magazines to create advertising that approached artwork. The consistency of the campaign over many years made Absolut a well-known brand name and elevated its image to one of prestige and distinctiveness. Absolut’s maker is so proud of its advertising that it has created a “virtual gallery” called the Absolut Museum initially made available to consumers on PC diskettes—a nice example of leveraging the brand-building power of a long-running traditional campaign into a new medium. 4.

Place your local newspaper and an issue of your favorite magazine side by side and carefully review the content of each. From the standpoint of a prospective advertiser, which of the two publications has a more dramatic problem with clutter? Identify tactics being used by advertisers in each publication to break through the clutter and get their brands noticed. Clutter is a real problem in both these vehicles, so declaring one more cluttered than the other is a matter of opinion. Our take on the issue is that newspapers are more cluttered because of a general “busy-ness factor” and because magazine advertisers have more options at their disposal for creating a unique or appealing look. Additionally, we expect that looking at ads is part of the experience of reading many magazines, whereas with newspapers the whole point is to process the text. While many magazine ads have aesthetic appeal, rarely is a newspaper ad anything more than an eyesore. Advertisers must use contrast and design principles like proportion and informal balance to get their ads noticed.

The costs involved in preparing and placing ads in television programming like the Super Bowl broadcast can be incredible. How is it that advertisers like PepsiCo and Nissan can justify the incredible costs that come with this media vehicle? For advertisers like Pepsi that sell to a broad market, network television offers a costeffective way to reach millions of households. So while the costs of a 30-second spot during the Super Bowl can be more than a million dollars, running an ad during the Super Bowl can mean exposure to over 80 million households. On a cost-per-contact basis, the Super Bowl can be a good buy.

Think about the television viewing audience behavior you’ve observed in your household. Of the five ways people avoid TV ad exposure discussed in this chapter, which have you observed in your household? What other avoidance tactics do your friends and family use? One of the major disadvantages of television is selective exposure: Consumers use a variety of methods to avoid exposure to television ads. Advertising breaks can be a perfect time to chat or run to the refrigerator for another icy cold beverage. High-tech avoidance also manifests in five ways: channel grazing, zapping, zipping, V-chip, and TiVo. This can

Chapter 13/Media Planning: Newspapers, Magazines, TV, and Radio

be a fun question to discuss with the class because most people can relate to the desire to avoid exposure to TV ads. Students usually have some funny anecdotes about avoidance behavior they have observed in their households. 7.

The choice between print and broadcast media is often portrayed as a choice between highand low-involvement media. What makes one medium inherently more involving than another? How will the characteristics of an ad’s message affect the decision to employ an involving versus an uninvolving medium? Media involvement might be defined as the mental energy that people typically bring to their encounter with a specific medium. For example, it takes almost no mental energy to listen to the radio playing in the background, but to derive anything at all from the newspaper will require some attention and cognitive effort. For low-energy media like television and radio, it is unrealistic to expect consumers to process an information-laden message. They won’t make the mental effort. A good way to remind oneself of the task at hand with television ads is to always imagine the target customer lying on the couch just ready to doze off. Conversely, for newspapers or some magazines, a higher level of mental effort can be assumed, and a more complex ad has a chance to absorb some of the reader’s mental energy.

Have you started to listen to radio over the Internet either at your computer or through your smartphone? What if you have to start paying a monthly subscription fee to listen to stations? Will you do so? Would you switch to satellite radio where you might also have to pay a subscription but won’t have the ads? These questions allows students the opportunity to discuss an issue from their own perspective. The challenge will be to revert the discussion back to issues in the text related to advertisers and the option of using digital media and the threat that subscription, no advertising media pose to both advertisers and media organizations.

What are the potential liabilities and risks to consumers and advertisers of the consolidation of radio station ownership by a few, large media companies? Consolidation provides both opportunities and liabilities for both consumers and advertisers. Opportunities for consumers relate to the consistency of quality in the radio programming available and advertisers will have an easier time buying and placing radio spots. Liabilities for consumers involve the likelihood of fewer programming choices and less variety on the airwaves. From the advertiser’s perspective, consolidation may lead to greater competition among advertisers for fewer placement opportunities.

Chapter 13/Media Planning: Newspapers, Magazines, TV, and Radio

Experiential Exercises 1.

Since 1970, Mother Earth News has been the magazine of choice for environmentalminded consumers. The bimonthly lifestyle rag, which boasts national circulation of 470,000 readers, covers topics ranging from organic gardening and natural foods to green homemaking. Mother Earth News is not suitable for all advertisers, however; the magazine’s diehard environmentalist readers loudly protest companies that don’t meet high standards of sustainability. List pros and cons of placing ads in Mother Earth News, and identify two brands that should advertise in the magazine and two that should not. To complete this exercise, students will need to understand the advantages of magazines, research Mother Earth News in particular, and identify respected green brands. The advantage of magazines is that they have the ability to attract and target a highly selective audience; Mother Earth News is selective with regard to lifestyle and special interest. Since it is a bimonthly publication, the magazine provides long life for ads—Mother Earth News has been known to reside on subscribers’ coffee tables for extended periods. However, Mother Earth News has limited frequency. In addition, many advertisers worry that it may be too selective, due to its demanding eco-minded readers. Even so, brands like Numi, Preserve, Whole Foods and Toyota Prius have much to gain by advertising with Mother Earth News. Businesses like Pepsico and Kellogg’s aren’t likely to appeal to the magazine’s readers.

Newspapers are struggling to survive as readers increasingly go online to get news and information. Nevertheless, newspapers continue to offer unique benefits to advertisers. Write a report about the state of newspapers and make an argument for what may happen to newspaper advertising during the next decade. Be sure to answer the following questions: Could newspapers go extinct? Do advertisers still need this medium? Can news organizations find a way to make newspapers a viable business again? Although answers will vary, students will uncover some of the following trends in their research. First, some news organizations may stop offering free news content online. In addition, E.W. Scripps Co. and NewsCorp are asking news aggregators like Google and Yahoo! to pay for the news that they list in their search engines. If aggregators won’t pay, the news producers have said they may block their news from showing up at sites like Google. However, newspapers that do block Google and other online aggregators stand to loose their online reader traffic practically overnight. Another possibility for the future of newspapers is “hyper-localism.” Since newspapers have excellent geographic selectivity, some analysts predict newspapers will abandon national issues and become specialists in local news and business interests.

Chapter 13/Media Planning: Newspapers, Magazines, TV, and Radio

Finally, newspapers continue to offer many benefits to advertisers. While newspaper ads have short life, they lead in timeliness, affordability, and geographic targeting. To stay competitive with the Internet, newspapers may need to offer local advertisers a pay-perinquiry model for ad costs. They may also find new life by integrating with local social networking. 3.

Program sponsorship is one way for advertisers to cut through the clutter of television advertising. Working in small teams, propose both existing and potential television series or specials that would present powerful sponsorship opportunities for the sports drink maker Gatorade. Identify any additional marketing opportunities that could accompany such a sponsorship. Sponsorship arrangements present a powerful opportunity for advertisers, who are able to stand out from the clutter of television advertising by paying for the production of a television program and dominating the advertising that appears in the program. Students should suggest programming for a Gatorade sponsorship that would match the company’s athletic, can-do image. (Note that Gatorade has gone down this path: the company financed about half the cost of the film Gracie, scheduled for release in 2007, about a girl who plays soccer on a boy’s team. Students should come up with other ideas, focused on television sponsorship.)

Draft a media plan for a new cosmetics line with a target segment of young Hispanic women, between the ages of 15 and 25. Identify examples within each of the traditional media groups – newspapers, magazines, television, and radio –that could be effective and then recommend which of the four areas is the best choice for the campaign. Good options exist within each traditional media outlet for such a campaign, and students should demonstrate their understanding of the major media players in this exercise. Newspapers targeting Hispanic populations or alternative weekly newspapers in major metro areas could be an effective vehicle. In magazines, students should be able to identify a host of magazines aimed at young women that could work. They also should identify television programs with large teen audiences on such cable channels as MTV, E!, or VH1, as well as radio programming aimed at a primarily young, often female audience or radio markets with large Hispanic audiences.

Chapter 14: Media Planning: Advertising and IBP in Digital and Social Media

CHAPTER 14 Media Planning: Advertising and IBP in Digital and Social Media Key Terms Web 2.0 user-generated content (UGC) consumer-generated media (CGM) earned media owned media paid media social media blog micro-blogs video sharing websites photo sharing sites social news websites

virtual identity pay-per-click (PPC) sponsored stories post ads Web ads app ads display/banner ads I-Traffic Index pop-under ad pop-up ad interstitial e-search paid search search engine optimization

(SEO) big data digital footprint interactivity click-through cyber-identity theft online resistance privacy seal advergaming social couponing viral marketing mobile marketing

Summary PPT 14-2 and 14-3 Understand the role of digital and social media in advertising and IBP along with the options available to brands through digital or social media. In sum, the role of digital and social media in advertising and IBP is a crucial one. Web 2.0 distinguishes the progression of the Internet to interactive online communication, participation, and engagement. There is an array of creative and strategic options to brands available through digital or social media. See the importance in virtual identity for consumers and brands online. To best execute in digital platforms, it is key to understand online consumer behavior, namely the importance of virtual identity for consumers and brands online. Brands can measure their online reputation score and should manage their brand identity and online reputation.

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Understand the basics of digital advertising and e-search. Digital advertising and e-search have progressed, so know the basics of them and the pricing models such as CPC. The basics of e-commerce relate to IBP, and it can stem from eadvertising, social media, and/or e-search. Know the basics of e-commerce as related to IBP and how it can stem from e-advertising, social media, and e-search. E-commerce can be leveraged by understanding e-search and online advertising; digital advertisers should look for ways to enhance click-through and conversions to sales. Note the advantages of digital and social media for implementing advertising and IBP campaigns, along with noting the dark side of social media, such as security and privacy concerns. The advantages of digital and social media for implementing advertising and IBP campaigns include target market flexibility, interactivity, consumer engagement, and the ability to leverage a consumer’s digital footprint with a brand relationship among others. The main dark side issues about social media are privacy, security, and authenticity concerns. See how to synergize with different IBP tools. Digital and social media have many advantages for implementing advertising and IBP campaigns and synergize with different IBP tools such as advergaming, sponsorship, events, viral video, mobile marketing, e-mail, sampling, POP, and traditional media.

Chapter Outline I. The Role of Digital and Social Media as a Synergistic IBP Tool PPT 14-4 The role of digital and social media in advertising is a big one, and one that is here to stay and grow with new technology such as mobile media. New media bring new vernacular to consumers. Friend me. Facebook graph search him. Tweet that. LinkedIn him for a job lead. Groupon. Re-tweet that. Facetime tonight? These online terms and brands have changed the way of online consumer behavior, advertising, and branding—and the way one can search for and obtain a career in advertising or otherwise. Hence, it is crucial to understand how consumers think, feel, and act regarding social media, online advertising, and e-commerce. A. Social Media and Web 2.0

Chapter 14/Media Planning: Advertising and IBP in Digital/Interactive Media

PPT 14-5 Web 2.0 distinguishes the progression of the Internet to interactive online communication, participation, and engagement. It describes what people are doing with technology and how they are using it. Users can now create information and post comments while adding (or subtracting with a negative post) value to socially embedded websites. This content is called user-generated content (UGC) or consumer-generated media (CGM). Web 2.0 depends on mass collaboration as individuals simultaneously create value for themselves and others. B. Media Types in Social Media PPT 14-6 There are three media types in social media: earned, owned, and paid. Earned media is the incremental exposure that your brand earns through viral engagement and interactions with the brand. The second type is owned media. Owned media are brand assets or objects created within social networks by your organization, such as a Facebook page or an application. Paid media are advertisements that can be purchased on a social network or other digital platforms. C. Options via Digital or Social Media: Definitions and Categories Definitions of Social Media PPT 14-7 Social media are “media designed to facilitate dissemination of content through social interaction between individuals, groups and organizations using Internet and web-based technologies to enable the transformation of broadcast monologues (one to many) into social dialogues (many to many).” Social Media Categories PPT 14-8 Here are some brief descriptions of social media categories, along with their use for integrated brand promotion (IBP) and digital advertising or messaging. Specifically, here is an overview of social networking, blogs and micro-blogs, video and picture sharing, and social news websites.

Chapter 14/Media Planning: Advertising and IBP in Digital/Interactive Media

Social Networking Websites Social networking sites and apps are services on which users can create an individual profile page, find and add friends and contacts, send messages, and update their personal profiles to notify friends, contacts, or colleagues about themselves. Blogs are sites maintained and written by individuals but hosted and technically owned by an organization that provides access to Web space and a content management system. Micro-blogs are social networking services that enable users to post and read short messages. Video and Photo Sharing Websites PPT 14-9and 14-10 A favorite of many consumers to show their Starbucks cups with misspelled names, new purchases, family, friends, and pets, as well as some stupidly funny sightings such as a baby monkey riding on a pig’s back or a goat that sounds like a yelling human (juxtaposed over Taylor Swift music), these websites allow users to watch, upload, and share videos. The best known of the video sharing websites, or social media sites that have consumers and companies upload videos and watch others’ videos for free, is YouTube, which dominates market share. Photo sharing sites operate in much the same way as video sharing websites but with content based on still images instead of video. Social news websites are sites that allow people to discover and share content from anywhere on the Internet by submitting links and stories to a central service II. Consumer and Brand Virtual Identity A. Consumer Virtual Identity PPT 14-11 Virtual identity is how the consumer or brand uses images and text online to construct or showcase its identity. This concept is crucial to understand as it relates to IBP, social media,

Chapter 14/Media Planning: Advertising and IBP in Digital/Interactive Media

and digital advertising. Consumers have their “real-world” image. The twist is that this image is not necessarily congruent with their image in the virtual world. The twist is that this image is not necessarily congruent with their image in the virtual world. We must understand that virtual identities are indeed real to consumers. Understanding this concept can help consumerminded businesses and organizations cater better to customer wants. B. Social Media as a Brand Management Tool: Brand Image and Visibility PPT 14-12 Social media are important tools for brand managers who are keenly interested in establishing and maintaining a brand image, reputation, or position. Especially during times of crisis (e.g., after an oil spill), companies are expected to communicate directly with the impacted consumers and their communities. A predominant concern relates to privacy, so brand managers must keep their consumers’ identities as a trusted component of their relationship. Brand managers must track what is being said by consumers, interpret consumer-generated information, and respond to social media posts and comments. This entails spending time scanning Facebook, following Twitter feeds, looking at Pinterest pins, and reading comments on YouTube. III. Basics of Digital Advertising and Online Search A. Digital Advertising PPT 14-13 Much of digital advertising is based on pay-per-click (PPC). PPC is an advertising revenue model where the advertiser is charged by the number of people who click on, or tap, the ad to pull it up for more information or to see the ad in entirety. Types of Digital Ads PPT 14-14, 14-15, 4-16, 14-17, and 1418 There are several types of digital ads, including social media ads, display/banner ads, and pop-up and pop-under ads. Social Media Ads

Chapter 14/Media Planning: Advertising and IBP in Digital/Interactive Media

Note that even within one social media site, such as Facebook, there are different types of ads. Facebook has sponsored stories that are ad-like stories that can be promoted with payment. Post ads are ads in a post and tend to have higher relative response rates because they are within a consumer’s post to his or her network. Web ads in digital and social media are intended to drive traffic off of the site where the digital ad is run. App ads are ads associated with third party application. Display/Banner Ads. Display/banner ads are paid placements of advertising on sites that contain copy or images. One feature of a display/banner ad is that consumers can click on the ad. The I-Traffic Index is an index that computes a site’s advertising value based on traffic, placement and size of ads, ad rates, and evaluations of the site’s quality. Pop-under ads are ads that are present under the active window and are only visible once the surfer closes that window. B. E-Search E-search is electronic search; it refers to how consumers look for ideas, brands, and information online for purchases or entertainment. Paid Search and Search Engine Optimization Paid search is the process by which advertisers pay websites and portals to place ads in or near relevant search results based on key words. For example, if you Google “running shoes,” you will find links to Onlineshoes.com and Zappos.com next to the search results as sources for purchasing running shoes. Another key paid search concept is search engine optimization (SEO). SEO is a process whereby the volume and quality of traffic to a website from search engines are improved based on surfers’ profiles. IV. Importance of IBP in E-Tail: Emergence of Social E-Commerce and Big Data PPT 14-19 Big data refers to a huge volume of structured and unstructured data that is much too large to analyze or process using traditional ways. Digital advertising or social media plugs may spark

Chapter 14/Media Planning: Advertising and IBP in Digital/Interactive Media

consumers to browse e-tail sites, place items or service tickets into virtual shopping carts, and hopefully convert cart placements into sales turned relationships. Amazon has traditionally been known for e-tailing goods such as books, movies, and other consumer household products, so a repositioning to focus on the emerging fashion component of the brand is a change. V. Advantages of Digital and Social Media for Implementing Advertising and IBP Campaigns, as w ell as the Dark Side Social media have many challenges and opportunities. Here, we start with the pros, then turn to the cons—or even the dark side of social media. A. Advantages of Digital and Social Media PPT 14-20 Advantages of digital and social media include interactivity, target market selectivity, integration, and ease of use, and it is a way to engage and integrate brands with consumers’ lifestyles that they have shared in their open book—or digital footprint, the trail of social media posts, videos, photos, status updates, and online information on a person, organization, or brand. Interactivity Two-way communications that can feed off one another, is an advantage of digital media. Click-Through It is a measure of the number of page elements (hyperlinks) that have actually been requested (i.e., “clicked through” from the display/banner ad to the link). Integration It is digital and mobile advertising is most easily integrated and coordinated with other forms of promotion. The integration of Web activities with other components of the marketing mix is one of the easiest integration tasks in the IBP process. Investing in Internet Digital Advertising It is on a cost-per-thousand (CPM) basis, the cost of Web ads for the most part compares favorably with ads placed in traditional media.

Chapter 14/Media Planning: Advertising and IBP in Digital/Interactive Media

Engagement via a Digital Footprint Companies, nonprofits, and human brands alike can engage others via their online presence. B. Privacy Issues and the Dark Side of Digital and Social Media PPT 14-2, 14-22 and 1223 The Dark Side It is harder to judge authenticity behind a screen. The thought of having one’s identity stolen by online or digital means, or cyber-identity theft, is enough to inhibit some consumers from shopping and banking online. Online Resistance There is some online resistance which is an attitude or behavior against the digital movement at times. Privacy and Information in Social Media Marketplace exchanges embedded with social media may be more publicly visible. Privacy involves the control of information disclosure and unwanted intrusions into a consumer’s environment. Often, online consumers do not use the privacy tools available to them, such as clearing out needless cookies, reading privacy policies, or paying attention to logos that show the site has been endorsed or is a member of a third-party privacy endorser, known as a privacy seal. Main Social Media Platforms and Disclosure Disclosure on each of these main platforms (e.g. Google+, Facebook/Instagram, LinkedIn, and Pinterest) helps you build and maintain relationships and conduct business. Is your social media digital footprint ready for employers to see? If not, you may try to find ways to keep your social media activity private. Realizing that future employers do not want to see spring break trips, fraternity parties, and your brother’s new dog, you may keep your settings private. VI. Synergizing with Other IBP Tools

Chapter 14/Media Planning: Advertising and IBP in Digital/Interactive Media

It is a must-do to synergize a brand’s digital presence with the other marketing tools in your toolkit. Not every communication or sales objective needs a hammer (national advertising); some objectives are much better suited to a precise, small screwdriver (a local event sponsorship). A. Video Games and Advergaming PPT 14-24 Consumers spent $24.75 billion on video games and related accessories the last year data was available. Different than an ad shown during a game, advertising and brand placement within video games is called advergaming. B. Sales Promotion PPT 14-25 The digital and interactive options on the Internet are ideally suited to executing various aspects of sales promotion as part of the IBP effort. Coupon distribution and contests are the leading tools that are well suited to digital/interactive implementation, but sampling and trial offers can be promoted as well. Coupons Companies such as Retail-Me-Not from Austin, Texas, share online coupon codes with the world for e-commerce. Other social couponing sites, or sites that give or sell price discounts under the condition that a set number of other consumers buy or download the deal, like Groupon, distribute coupons via the sites of other commercial online services. Contests and Sweepstakes Sites like iwon.com and LuckySurf.com run ongoing contests to try to gain the loyalty of Web users. Sampling, Trial Offers, Price-Off Deals Firms can use their websites or email communications to offer consumers a wide range of sales promotion special deals. Samples, trial offers, and price-offs (discounts) can be offered over the Internet either with email campaigns, pop-up or banner ads, or directly at the company website. C. Public Relations and Publicity PPT 14-26

Chapter 14/Media Planning: Advertising and IBP in Digital/Interactive Media

Companies can use the Web to disseminate information about the firm in a classic public relations sense. Web organizations like Business Wire (www.businesswire.com) and PR Newswire (www.prnewswire.com) offer services where firms can request the dissemination of a press release over the Internet. Email The strength of email marketing is due to inherent cost and media advantages. For one, email is one of the least expensive marketing tools and provides the highest return on investment relative to other forms of online marketing. Second, email marketing is fast, flexible, and up-to-date. And so on. Viral Video While it sounds like a disease, viral is a good thing in industry lingo. The top viral brand messages have over 100 million views. Consumers or advertisers can encourage viral marketing. Viral marketing is the process of consumers marketing to consumers over the Internet through electronic or in-person word of mouth transmitted through emails and electronic mailing lists. Mobile Marketing Is the process of reaching consumers on Internet-enabled mobile devices like smartphones, iPods, and tablet e-readers.

Chapter 14/Media Planning: Advertising and IBP in Digital/Interactive Media

book version of the print product. For faculty that desire to have a variety of more in-depth assignments to integrate into their course and a desire to have more student data that can be used for analytic purposes, MindTap can be purchased with an enhanced capability. Faculty can customize the student experience and integrate the experience for their students into the campus Learning Management System. For a complete guide into the reporting and analytical capabilities available to faculty, consult the Assurance of Learning section of this manual.

Boxed Feature Questions and Tags QUESTION

DIFFICULTY

BUSPROG Primary

DISC Primary

BLOOM'S

Chapter 14 Social Media 01

Easy

Technology

Promotion

Application

Chapter 14 Social Media 02

Moderate

Technology

Promotion

Application

Chapter 14 Globalization 01

Moderate

Diversity

Promotion

Application

Chapter 14 Globalization 02

Moderate

Diversity

Promotion

Application

Chapter 14 Ethics 01

Easy

Ethics

Promotion

Application

Chapter 14 Ethics 02

Challenging

Ethics

Promotion

Synthesis

CHAPTER 14-Social Media http://adage.com/article/creativity-pick-of-the-day/navy-creates-human-coupon-celebrate-5million-facebook-fans/237685/ • 14.SocialMedia.Q1 A media planning issue in digital relates to analytics. Here, the clothing retail brand Old Navy recently reached how many Facebook fans? A. 1 million B. 10 million C. 15 million D. 5 million • 14.SocialMedia.Q2 As a way to celebrate this popularity, Old Navy created: A. A ‘human coupon’ for 30% off B. A digital coupon code for 70% off C. A Groupon for 50% off D. An online fashion show for back to school Answer: A

Chapter 14/Media Planning: Advertising and IBP in Digital/Interactive Media

CHAPTER 14-Globalization http://adage.com/article/creativity-pick-of-the-day/creativity-2012-p-g-s-emotional-olympicsfilm/238951/

•

14.Globalization.Q1

For media planning in digital and television, P&G, a large consumer products company gave this emotional film that focused mainly on the Olympic athletes’: A. baby pictures B. weddings C. high school sporting events D. moms Answer: D • 14.Globalization.Q2 As a result of this ad and the video film and social media views, the spot “Best Job” A. won 2nd place in the television category for a top ad award B. won 1st place in the television category for a top ad award C. inspired a new television show series D. is linked in with an online game on P&G’s website E. Answer: A

Chapter 14/Media Planning: Advertising and IBP in Digital/Interactive Media

CHAPTER 14-Ethics http://adage.com/article/creativity-pick-of-the-day/bodyform-apologizes-admits-thing-a-happyperiod/237797/

• 14.Ethics.Q1 In this digital media mishap, the brand Bodyform apologizes to what group? A. children B. men C. women D. students Answer: C •

14.Ethics.Q2 What is the main ethical issue that Bodyform had in this campaign? Answer: The main ethical issue is that the brand offended women by discussing their menstruation; typically a topic advertisers (besides feminine products such as Tampax, etc.) should steer clear of in advertising.

Homework Grid Homework Description 1-a. True/False YouTube strategy 1-b. Multiple Choice YouTube strategy 1-c. Multiple Choice YouTube strategy 2-a. Multiple Choice Agency growth/spending 2-b. Multiple Choice Agency growth/spending 2-c. Multiple Choice Agency growth/spending 3-a. True/False Facebook logo change 3-b. Multiple Choice Facebook logo change 3-c. Multiple choice Facebook logo change Homework is available to faculty to select and integrate into their customized course. THE FOLLOWING SECTIONS OF THE INSTRUCTOR’S MANUAL HAS A SELECTION OF CASES THAT CAN BE INCORPORATED INTO YOUR COURSE AS OUT OF CLASS ASSIGNMENTS , OR AS A METHOD

Chapter 14/Media Planning: Advertising and IBP in Digital/Interactive Media

FOR INITIATING CLASSROOM DISCUSSION.

QUESTIONS FOR REVIEW AND CRITICAL THINKING 1.

Despite its ups and downs during the past decade, the Internet and digital/interactive media are experiencing a strong recovery. Why is there reason to believe that the current Internet boom could be permanent? In the next decade, new technologies like WiMax, Mi-Fi, and Ultrabroadband will provide high-speed wireless access to the Net that extends up to and perhaps beyond 30 miles. This will open up more ways for consumers to tap into their favorite information sources, like Ask.com, and more ways for advertisers to reach those surfers. Wireless is the future of computing, and the Internet is the killer app for wireless technology. The combination of wireless and Web will enable users to conduct work, shopping, and leisure activities from any location.

What may have driven advertisers to embrace the Internet early on in its development despite considerable uncertainty about audience size, audience composition, and cost-effectiveness? The rush to develop a Web presence during the early development of the medium has been one of the most remarkable developments in advertising since the inception of television. No doubt there was some faddishness driving this rush, but there were substantive motivations as well. Among the substantive motives was the simple desire to experiment with the technology so as not to get left behind if and when the mass market embraced it. This experimentation was facilitated by a low cost of entry. Also, advertisers were attracted by the demographic profile of lead users on the Web, as well as its potential for developing a meaningful dialogue with the customer. Having a website also was an image-building strategy: to find out whether an advertiser can be trendy and contemporary without a presence on the World Wide Web, is food for thought.

How effective do you think mobile advertising and IBP will be through delivery systems like the iPod, iPad, and smartphones? Wireless and portable devices like the iPod, iPad, and smartphones represent the new frontier for marketers, as they explore new opportunities to reach consumers – anywhere, anytime – with messages and communications about their products, brands, and services. But marketers must step lightly. Weary from battling streams of spam, telemarketing calls, and direct mail flyers, many consumers are unwilling to make their cell phone numbers widely available to marketers. A recent survey of mobile phone users indicated that only 10 percent were willing

Chapter 14/Media Planning: Advertising and IBP in Digital/Interactive Media

to receive advertising and promotional messages over their cell phone; 51 percent said they were “not willing at all” to receive such messages. 4.

What unique characteristics of digital/interactive advertising and IBP offer advantages over traditional forms? Digital/interactive advertising and IBP have many advantages over traditional forms. Digital and interactive campaigns can target market segments with amazing precision while tracking and quantifying results in real time. The deliverability and flexibility associated with the 24/7 presence of the Web means consumers can see advertisements any time night or day. The click-through interactivity of the Internet enables consumers to respond to advertisements at the moment of contact. Finally, the cost of digital and interactive advertising and IBP is relatively low, and it integrates easily with other forms of promotion.

Explain the two basic strategies for developing corporate home pages, exemplified in this chapter by Crayola Web home page. Corporate home pages come in two basic varieties. One focuses primarily on the company and information about its products and services. These sites can be informative and functional. For example, if you’d like advice about a stock purchase or wish to buy or sell stock, visit www.schwab.com. Conversely, many corporate home pages are developed more as entertainment centers to engage consumers with fun and fantasy, while making frequent associations to the site’s sponsor. For an example, visit www.barbie.com.

Niche marketing will certainly be facilitated by the Web. What is it about the Web that makes it such a powerful tool for niche marketing? The Internet is ideally suited for niche marketing—that is, for reaching only those consumers most likely to buy what the marketer is selling. This aspect of the Internet as an advertising option has always been its great attraction: the ability to identify segments and deliver almost customized (or in the case of email, actually customized) messages directly to them—one by one. Small communities of like-minded individuals are constantly evolving on the Web. The Web provides them with a tool for finding and interacting with one another. These individuals are drawn to one another because of common interests and lifestyles. These new Web communities might be thought of as market niches. The Web provides both the device that allows them to emerge and the means to reach them with information about products and services.

Visit some of the corporate home pages and websites described in this chapter, or think about

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websites you have visited previously. Of those you have encountered, which would you single out as being most effective in giving the visitor a reason to come back? What conclusions would you draw regarding the best ways to motivate repeat visits to a website? Because most college students are experienced Web surfers, a class discussion can be built around people’s reactions to what makes a good or bad website (i.e. “what makes a site ‘sticky’?”). Success in getting repeat visitors depends on substance, ease of use, and entertainment value. While your students are likely to offer many unexpected examples, motivating repeat visits on the Web usually comes down to one of two factors: Did the site provide fresh entertainment (such as videos or games), or did it provide up-to-date information when last visited (such as news and sports scores)? Because college students are the relevant target audience of many sites on the Web, this question is of great interest to site sponsors. 8.

The Internet was obviously not conceived or designed to be an advertising medium. Thus, some of its characteristics have proven perplexing to advertisers. If advertising professionals had the chance to redesign the Internet, what single change would you expect they would want to make to enhance its value from an advertising perspective? If advertising professionals were given a free hand to redesign the Internet, they probably would do many things: We suspect that audience measurement would be at the top of their wish list. The anonymity of the Web surfer makes ad-efficiency assessment difficult. If they were redesigning the current rules, advertisers might require all Web surfers to apply for a “driver’s ID” as a condition of passage. While these IDs would be free of charge, individuals would have to identify themselves and provide basic descriptive information to get an ID. Signing on to the Web would require posting an ID number. Advertisers would get concrete data on site traffic and up-to-date information on the kind of persons who surf various sites. This is beginning to take place with new “opt-in,” permission-based marketing. Opt-in marketing allows advertisers to gather much personal information without violating consumer privacy.

What are the challenges that face advertisers when they try to measure the impact of advertising and IBP digital and interactive campaigns on the Internet? If you were manager, which metric(s) would you rely on to judge success of a campaign? There are all sorts of problems with metrics that can be obtained regarding Internet traffic. Of all the metrics, click-through means the most. Some students will argue that “sales” should be the one and only statistic that counts. Once again, this is a chance to drive the idea home that advertising and IBP cannot be responsible for sales—it takes a complete marketing mix. If a digital campaign is good enough to get a consumer to a website or an

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e-commerce site, then brand features, pricing, and distribution have to take over from there. 10. How do you feel consumers will react to the use of location-based mobile-marketing techniques for advertising messages and IBP programs? It will be interesting to hear what students have to say about this. On the one hand, it is easy to envision some outrage over the intrusion of advertising on their mobile devices. On the other hand, research is showing that people are not really upset when they do receive messages. And, if students offer very negative prospects, log on to foursquare.com and watch posts appear literally 1-2 per second from people all over the world who are voluntarily participating in IBP programs.

EXPERIENTIAL EXERCISES 1.

Now that everyone and their grandmothers are plugged into the social networking craze, brands are expanding digital campaigns to include Facebook, Twitter, and YouTube. Examine the digital campaigns of Old Spice, Aeropostale, Zappos, and Starbucks, and give your view on which campaign does the best job of establishing sustained interaction with customers. What features do the campaigns use to hold consumers’ interest? Propose an idea for how one of these brands might use social networking tools to develop long-lasting brand communities. Answers will vary, but advertisers are excited about the explosive growth of Facebook, Twitter, and YouTube. Most firms are now exploring ways to use these social networking sites in a way that integrates with their corporate homepages. The key is to build brand awareness and affinity through interactivity and online community. Campaigns that combine rich media and peer-to-peer networking with trial offers, sweepstakes, and other sales promotion are effective at creating brand-loyal communities.

When skiing and skateboarding enthusiasts want the best deals on used and closeout model sports gear, they look to Evo. In addition to operating a flagship store in Seattle, Evo sells merchandise and promotes its brand internationally through two e-commerce sites, Evogear. com and Culture.evogear.com. Research Evo online and explain how the company uses Websites to integrate its business with active skiing and skateboarding communities around the world. While Evogear.com is an effective e-commerce cite, Evo understands the importance of using digital tools to create a virtual community for snow, skate, and water sports enthusiasts. First, Evogear.com offers 24-hour online shopping, expert product reviews,

Chapter 14/Media Planning: Advertising and IBP in Digital/Interactive Media

and enhanced personalization features such as its Package Builder product-matching tool. To build communities, however, Evo promotes Culture.Evogear.com, a site where boarding enthusiasts can watch viral videos, share sports tips, and sign up for guided travel opportunities led by company figureheads. Evo’s young, sports-minded executives believe that social networking is critical to Evo’s success. 3.

Do shoppers really enjoy the online shopping experience? Compare and contrast the experience of shopping at your favorite retail store with the experience of shopping online. Make one list of things you enjoy about shopping in stores, and create a separate list of things you like about shopping online. How do your lists differ? What are the advantages and disadvantages of shopping in a physical store? What are advantages and disadvantages of shopping online? Can Internet based businesses deliver the rich shopping experience that brick-and-mortar stores provide? How might smartphones and other handheld devices change the way people shop? Answers will vary, but students should reflect on their personal shopping experiences and digital habits as they think about both the opportunities and limits of digital media. In the early Web era, e-commerce and online advertising focused heavily on transactions; today’s digital marketers are looking to create experiences that enable customers to connect emotionally with brands online. Unlike store shoppers, online shoppers typically conduct quick searches on Google or at electronic storefronts yet don't become immersed in the shopping experience. Smart e-marketers try to engage online customers more personally through a mix of hip content, social networking, interactive media, and blogs. However, some analysts have suggested that smartphones and apps will cause digital media consumers and shoppers to focus strictly on transactions, due to their small size.

Much of traditional advertising now incorporates some form of online promotion or information, even if it is as simple as including a website URL on a magazine, newspaper, or television advertisement. Each of the web addresses below leads to the online component of a traditional media ad campaign. Review each site and then answer these questions: What added value does the online component bring to the campaign? What other ways could the advertiser incorporate digital media in the campaign? Why would a consumer go the website, and why would he or she stay? • • • •

http://www.drinkarizona.com http://www.schickhydro.com/ http://www.apple.com/ipad/ http://www.goarmy.com/

Instead of replacing traditional media advertising, the Internet has opened a new door for

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marketers to provide additional messaging and information about their products and services online. Integrated brand promotions that rely on the web often are clever and effective. A good discussion results from asking students if they think the websites for these brands is engaging and whether there is any evidence of coordination with mass media messages or offline IBP.

Chapter 15/Sales Promotion, Point-of-Purchase Advertising, and Support Media

PART 5 Integrated Brand Promotion LECTURE ALERT At this point, it is important to alert students before another major transition in the study of advertising and Integrated Brand Promotion (IBP) takes place. After learning about the process of advertising and IBP (Part 1), analyzing the environment for advertising and IBP (Part 2), understanding the creative elements in preparing advertising and IBP materials (Part 3), and the media placement of materials in advertising and IBP campaigns (Part 4), the emphasis now turns to a focus on the tools of IBP other than advertising. While the other IBP tools have been addressed throughout the first four parts of the text, Part 5 offers detailed descriptions and strategic implications of using a wide variety of IBP tools. Its emphasis to students is that: • • •

Each of the specialized tools of Integrated Brand Promotion has unique capabilities. Marketers have been diverting funds over the last 20 years from advertising to these tools in an effort to identify the impact of promotion more specifically. New technologies and consumers’ use of mobile devices has created even more opportunities for marketers to use the broad range of IBP tools.

Part 5 marks the transition to specifically studying the promotional tools—beyond advertising—that marketers use to develop the brand and maintain brand loyalty among consumers. While the variety of tools of IBP—event sponsorship, branded entertainment, sales promotion, point-of-purchase, direct marketing, personal selling, public relations, and corporate advertising—have been frequently cited and described through Parts 1–4, this section of the text describes the details and strategic application of each tool. It has been a long journey for student to work their way through the book. However, some of the most interesting and entertaining aspects of promotion lie in these pages. Furthermore, the true power of integrating brand promotion lies with the details of how to deploy these IBP tools.

Chapter 15/Sales Promotion, Point-of-Purchase Advertising, and Support Media

CHAPTER 15 Sales Promotion, Point-of-Purchase Advertising, and Support Media KEY TERMS sales promotion consumer-market sales promotion trade-market sales promotion business-market sales promotion coupon price-off deal premiums free premium self-liquidating premium advertising specialties contest sweepstakes sampling

in-store sampling door-to-door sampling mail sampling on-package sampling mobile sampling trial offers rebate frequency programs push strategy push money merchandise allowances slotting fees bill-back allowances off-invoice allowance cooperative advertising trade shows

point-of-purchase (P-O-P) advertising short-term promotional displays permanent long-term displays support media riding the boards out-of-home media advertising transit advertising aerial advertising cinema advertising directory advertising packaging

Summary Explain the importance and growth of sales promotion. Sales promotions use diverse incentives to motivate action on the part of consumers, members of the trade channel, and business buyers. They serve different purposes than mass media advertising does, and for some companies, sales promotions receive substantially more funding. The growing reliance on these promotions can be attributed to the heavy pressures placed on marketing managers to account for their spending and meet sales objectives in short time frames. Deal-prone shoppers, brand proliferation, the increasing power of large retailers, and media clutter have also contributed to the rising popularity of sales promotion. Describe the sales promotion techniques used in the consumer market. Sales promotions directed at consumers can serve various goals. For example, they can be

Chapter 15/Sales Promotion, Point-of-Purchase Advertising, and Support Media

employed as means to stimulate trial, repeat, or large-quantity purchases. They are especially important tools for introducing new brands or for reacting to a competitor’s advances. Coupons, price-off deals, gift cards, and premiums provide obvious incentives for purchase. Contests and sweepstakes can be excellent devices for stimulating brand interest. A variety of sampling and trial offer techniques are available to get a product into the hands of the target audience with little or no risk to the consumer. Rebates and frequency (continuity) programs provide rewards for repeat purchase. Describe the sales promotion techniques used in the trade channel and business markets. Sales promotions directed at the trade can also serve multiple objectives. They are a necessity in obtaining initial distribution of a new brand. For established brands, they can be a means to increase distributors’ order quantities or obtain retailers’ cooperation in implementing a consumer-directed promotion. Incentives and allowances can be offered to distributors to motivate support for a brand. Sales-training programs and cooperative advertising programs are additional devices for effecting retailer support. In the business market, professional buyers are attracted by various sales promotion techniques. Frequency (continuity) programs are very valuable in the travel industry and have spread to business-product advertisers. Trade shows are an efficient way to reach a large number of highly targeted business buyers. Gifts to business buyers are a form of sales promotion that is unique to this market. Finally, premiums, advertising specialties, and trial offers have proven to be successful in the business market. Identify the risks to the brand of using sales promotion. There are important risks associated with heavy reliance on sales promotion. Offering constant deals for a brand can erode brand equity and reputation, and sales resulting from a promotion may simply be borrowing from future sales. Constant deals can also create a customer mindset that leads consumers to abandon a brand as soon as a deal is retracted. Sales promotions are expensive to administer and fraught with legal complications. Sales promotions yield their most positive results when carefully integrated with an overall advertising plan. Understand the role and techniques of point-of-purchase advertising. Point-of-purchase (P-O-P) advertising refers to materials used in the retail setting to attract shoppers’ attention to a firm’s brand, convey primary brand benefits, or highlight pricing information. The effect of P-O-P can be to reinforce a consumer’s brand preference or change a consumer’s brand choice in the retail setting. P-O-P displays may also feature price-off deals or other consumer and business sales promotions. A myriad of displays and

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presentations are available to marketers. P-O-P materials generally fall into two categories: short-term promotional displays, which are used for six months or less, and permanent longterm displays, which are intended to provide P-O-P presentation for more than six months. In trade and business markets, P-O-P displays encourage retailers to support one manufacturer’s brand over another; they can also be used to gain preferred shelf space and exposure in a retail setting. Recently, new technologies have made P-O-P a mobile marketing device as deals and offers can be sent to consumers via mobile devices like smartphones, iPods, and iPads. Describe the role of support media in a comprehensive IBP strategy. The traditional support media include billboard, transit, aerial, cinema, and directory advertising. Billboards and transit advertising are excellent means for carrying simple messages into specific metropolitan markets. Street furniture is becoming increasingly popular as a placard for brand builders around the world. Aerial advertising can also be a great way to break through the clutter and target specific geographic markets in a timely manner. Directory advertising can be a sound investment because it helps a committed customer locate an advertiser’s brand. Again, new technologies have allowed for digitization of billboard, transit, and aerial ads. Cinema advertising is becoming more prevalent, and despite consumer protests, most consumers are not vehemently opposed to ads in theaters. Finally, packaging can be considered in the support media category because the brand’s package carries important information for consumer choice at the P-O-P, including the brand logo and the “look and feel” of the brand.

Chapter Outline PPT 15-2 and 15-3 Introduction The chapter gives an insight into techniques of both consumer and trade sales promotion. Coupons, price-off deals, premiums, contests, sweepstakes, sampling, trial offers, refunds, rebates, frequency programs, and point-of-purchase displays are highlighted for the consumer market, while incentives, allowances, trade shows, and cooperative advertising are presented in this chapter as they relate to trade and business promotion. Coverage of sales promotion and new media provides the most forward-thinking discussion of using new distribution and communication techniques for sales promotion as well as the use of mobile or location marketing for point-of-purchase promotions. The chapter concludes with extensive treatment of the wide array of out-of-home support media available to advertisers, including outdoor signage, billboards, transit advertising, aerial advertising, cinema advertising, packaging, and good old (and new media) directory advertising. I. The Role of Sales Promotion, Point-of-Purchase Advertising, and Support Media

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Sales promotion, point-of-purchase (P-O-P) advertising, and support media (like billboards, transit advertising, and packaging) offer advertisers a wide range of opportunities to communicate to consumers that are vastly different from traditional mass media or digital media. II. Sales Promotion Defined PPT 15-5 Sales promotion is the use of incentive techniques that create a perception of greater brand value among consumers, the trade, and business buyers. The intent is to generate a short-term increase in sales by motivating trial use, encouraging larger purchases, or stimulating repeat purchases. Consumer-market sales promotion can be either price promotions or not and includes coupons, price-off deals, premiums, contests and sweepstakes, sampling and trial offers, rebates, frequency programs, and gift cards. All are ways of inducing household consumers to purchase a firm’s brand rather than a competitor’s brand. Trade-market sales promotion uses the following ways of motivating distributors, wholesalers, and retailers to stock and feature a firm’s brand in their store merchandising programs—P-O-P displays, incentives, allowances, cooperative advertising, and sales training. Business-market sales promotion is designed to cultivate buyers in organizations or corporations who are making purchasing decisions about a wide array of products. The techniques are similar to trade-market techniques and include trade shows, premiums, incentives, and loyalty programs. III. The Importance and Growth of Sales Promotion PPT 15-6 Sales promotion is designed to affect demand differently than advertising. The role of sales promotion is to elicit an immediate purchase from a customer group. The purposes of sales promotion versus the purposes of advertising are compared in Exhibit 15.5 of the text. Text Exhibit 15.5: The Purposes of Sales Promotion versus Purposes of Advertising Purpose of Sales Promotion Stimulate short-term demand Encourage brand switching Induce trial use

Purpose of Advertising Cultivate long-term demand Encourage brand loyalty Encourage repeat purchases

Chapter 15/Sales Promotion, Point-of-Purchase Advertising, and Support Media

Promote price orientation Obtain immediate, measurable results

Promote image/feature orientation Obtain long-term effects, often difficult to measure

A. The Importance of Sales Promotion PPT 15-6 The importance of sales promotion should not be underestimated. Sales promotion may not seem as stylish and sophisticated as mass media advertising or as exciting as new digital media opportunities, but expenditures on this tool are impressive. Big consumer products firms began shifting dollars out of media advertising and into promotions several years ago. Effective sales promotions require a big commitment from a firm. Often, as much as 30 percent of brand management time is spent on sales promotions. B. Growth in the Use of Sales Promotion Marketers have shifted the emphasis of their promotional spending away from mass media advertising and toward sales promotions. The reasons for heavy sales promotion investment are listed below. Demand for Greater Accountability When promotional activities are evaluated for their contribution to sales and profits, it is often difficult to draw specific conclusions regarding the effects of advertising. Conversely, the immediate effects of sales promotions are easy to document. Short-Term Orientation Several factors have created a short-term orientation among managers. Pressures from stockholders and a bottom-line mentality are two factors. This being the case, tactics that can have short-term effects are sought by companies. Consumer Response to Promotions The precision shopper in the contemporary marketplace is demanding greater value across all purchase situations and that trend is battering overpriced brands. Coupons, premiums, price-off deals, and other sales promotions increase the value of a brand in these shoppers’ minds. Proliferation of Brands

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Each year, thousands of new brands are introduced into the consumer market. Gaining attention in this blizzard of brands is no easy task. Marketers turn to sales promotions— contests, coupons and premiums, loyalty programs, P-O-P displays—to gain some recognition in a consumer’s mind. Increased Power of Retailers Big retailers like Home Depot, Target, Costco now dominate retailing in the United States. Because of the lower price component of the retailing environment, these retailers are demanding more deals from manufacturers. Many of the deals are delivered as tradeoriented sales promotions. Clutter A nagging and traditional problem in the advertising process is clutter. One way to break through the clutter is to feature a sales promotion in print and broadcast ads and now increasingly on the Internet. IV. Sales Promotion Directed at Consumers U.S. consumer-product firms have made a tremendous commitment to sales promotion in their overall marketing plans. Today nearly 75 percent of spending is allocated to sales promotion for consumer goods. This is the opposite of 1970, where 70 percent of the budget was allocated to mass media advertising. A. Objectives for Consumer-Market Sales Promotion PPT 15-7 Stimulate Trial Purchase A reduced price or offer of a rebate may attract attention and stimulate trial purchase. NOTE: Reinforce here the point from Chapter 2 that advertising and promotion cannot initiate product category use in mature product categories—like coffee or automobile tires. It can only affect brand choice among people who already use the product category. Stimulate Repeat Purchases In-package coupons good for the next purchase or the accumulation of points with repeated purchases can keep consumers loyal to a particular brand. Loyalty or frequent purchase programs are the best techniques for pursuing this objective.

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Stimulate Larger Purchases Price reductions or two-for-one sales can motivate consumers to stock up on a brand, thus allowing firms to reduce inventory or increase cash flow. Introduce a New Brand Because sales promotion can attract attention and motivate trial purchase, it is commonly used for new brand introduction. Combat or Disrupt Competitors’ Strategies Because sales promotions often motivate consumers to buy in larger quantities or try new brands, they can be used to disrupt competitors’ marketing strategies. Contribute to Integrated Brand Promotion In conjunction with other programs being carried out by a firm, sales promotion can add yet another type of communication to the mix by suggesting an additional value, with price reductions, premiums, or the chance to win a prize. B. Consumer-Market Sales Promotion Techniques Several sales promotion techniques are used to stimulate demand and attract attention in the consumer market. Some of these are coupons, price-off deals, premiums, contests and sweepstakes, samples and trial offers, gift cards, rebates, and frequency (continuity) programs. Coupons PPT 15-8 A coupon entitles a buyer to a designated reduction in price for a product or service. Coupons are the oldest and most widely used form of sales promotion. Annually, about 360 billion coupons are distributed to American consumers, with redemption rates ranging from 2 percent for gum purchases to nearly 45 percent for disposable diaper purchases. Text Exhibit 15.11 displays the percentage of purchases made with coupons in various product categories. PPT 15-9 The advantages of using coupons are as follows: • A coupon makes it possible to give a discount to a price-sensitive consumer while still

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selling the product at full price to other consumers. • The coupon-redeeming customer may be a competitive-brand user, so the coupon can induce brand switching. • A manufacturer can control the timing and distribution of coupons. • A coupon is an excellent method of stimulating repeat purchases. Once a consumer has been attracted to a brand, with or without a coupon, an in-package coupon can induce repeat purchase. • Coupons can get regular users to trade up within a brand array. PPT 15-10 The use of coupons also has problems: • While coupon price incentives and the timing of distribution can be controlled by a marketer, the timing of redemption cannot. • Heavy redemption by regular brand buyers merely reduces a firm’s profitability. • There are costs for production and distribution and for retailer and manufacturer handling. • Fraud is a chronic and serious problem in the couponing process. It relates directly to misredemption practices. Price-Off Deals PPT 15-10 A price-off deal offers a consumer cents or even dollars off merchandise at the P-O-P through specially marked packages. The typical price-off deal is a 10 to 25 percent price reduction. The reduction is taken from the manufacturer’s profit margin rather than the retailer’s. Priceoff promotions can create inventory and pricing problems for retailers. Also, most price-off deals are snapped up by regular customers, so the retailer often doesn’t benefit from new business. Premiums and Advertising Specialties PPT 15-11 and 15-12 Premiums are items offered free, or at a reduced price, with the purchase of another item. There are two options available for the use of premium. A free premium provides consumers with an item at no cost. The item is either included in the package of a purchased item, mailed to the consumer after proof of purchase is verified, or simply given away at the P-O-P or at an event. A self-liquidating premium requires a consumer to pay most of the cost of the item received as a premium. Advertising specialties have three key elements: a message placed on a useful item, given free to consumers, with no obligation to make a purchase.

Chapter 15/Sales Promotion, Point-of-Purchase Advertising, and Support Media

Contests and Sweepstakes PPT 15-13 and 15-14 Contests and sweepstakes can draw attention to a brand like no other sales promotion technique. A contest has consumers competing for prizes based on skill or ability. Whereas, a sweepstakes is a promotion in which winners are determined purely by chance. Consumers need only to enter their names in the sweepstakes as a criterion for winning. Contests and sweepstakes create excitement and generate interest for a brand, but the problems of administering are substantial. Primary among the problems are the regulations and restrictions on such promotions. Another problem is that the game itself may become the consumer’s primary focus, while the brand becomes secondary. The final problem with contests and sweepstakes relates to the IBP effort a firm may be attempting. It is hard to get any meaningful message across in the context of a game. Sampling and Trial Offers PPT 15-15 and 15-16 Sampling is a sales promotion technique designed to provide a consumer with an opportunity to use a brand on a trial basis with little or no risk. Estimates suggest that consumer-product companies spend $2.2 billion a year on sampling. Survey has shown that consumers have been favorable toward sampling, with 43 percent indicating they would consider switching brands if they liked a free sample that was being offered. Sampling is useful for new products but should not be limited to new products. Five techniques are used in sampling: in-store sampling, door-to-door sampling, mail sampling, on-package sampling, and mobile sampling, which is carried out by logoemblazoned vehicles that dispense samples, coupons, and premiums to consumers at malls, shopping centers, fairgrounds, and recreational areas. Trial offers have the same goal as sampling—to induce consumer trial use of a brand—but they are used for more expensive items and offer the consumer a trial for a longer period—as long as 90 days. Gift Cards PPT 15-17and 15-18 Gift cards represent an increasingly popular form of sales promotion manufacturers or retailers offer either free or for-purchase debit cards that provide the holder with a preset spending limit. The cards are designed to be colorful and memorable. Luxury car manufacturers like Lexus and retailers like the Gap, have made effective use of gift cards.

Chapter 15/Sales Promotion, Point-of-Purchase Advertising, and Support Media

Rebates PPT 15-19 A rebate is a money-back offer requiring a buyer to mail in a form requesting the money back from the manufacturer rather than from the retailer. The rebate technique has been refined throughout the years and is now used by a wide variety of marketers for products as diverse as computers to mouthwash. Rebates are particularly well suited for increasing the quantity purchased by consumers, so rebates are commonly tied to multiple purchases. Relatively few consumers actually take advantage of the rebate offer after buying the brand. Frequency (Continuity) Programs PPT 15-20 Frequency programs, also referred to as continuity programs or loyalty card programs, offer consumers discounts or free product rewards for repeat purchase or patronage of the same brand company, or retailer. These programs were pioneered by airline companies. Research shows that loyalty programs tend to benefit larger firms more than smaller firms in highly competitive markets. V. Sales Promotion Directed at the Trade Channel and Business Markets Sales promotions directed at members of the trade channel—wholesalers, distributors, and retailers—are designed to stimulate demand in the short term and help push the product through the distribution channel or cause business buyers to act more immediately and positively toward the marketer’s brand. Firms spend big money to attract businesses to their brands with sales promotions. A. Objectives for Promotions in the Trade Channel PPT 15-21 Promotions in the trade market are used to executing a push strategy—to push a product into the distribution channel and ultimately to the consumer. There are four primary objectives for these promotions: Obtain Initial Distribution Because of the proliferation of brands in the consumer market, there is fierce competition for shelf space. Sales promotion incentives can help a firm gain initial distribution and shelf placement.

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Increase Order Size One of the struggles in the channel of distribution is over the location of inventory. Sales promotion techniques can encourage wholesalers and retailers to order in large quantities, thus shifting the inventory burden to the trade channel. Encourage Cooperation with Consumer-Market Sales Promotions Wholesalers may need to maintain larger inventories, and retailers may need to provide special displays or handling during consumer-market sales promotions. To achieve synergy, marketers often run trade promotions simultaneously with consumer promotions. Increase Store Traffic Retailers can increase store traffic through special promotions or events. Door-prize drawings, parking-lot sales, or live radio broadcasts from the store are common sales promotion traffic builders. B. Trade-Market Sales Promotion Techniques The sales promotion techniques used within the trade market are incentives, allowances, trade shows, sales training programs, and cooperative advertising. Incentives PPT 15-22 Incentives to members of the trade include a variety of tactics not unlike those used in the consumer market. Awards in the form of travel, gifts, or cash bonuses for reaching targeted sales levels can induce retailers and wholesalers to give a firm’s brand added attention. Another technique is to offer push money to sales people in the channel. Push money is a program in which retail salespeople are offered a monetary reward for featuring a marketer’s brand with shoppers. If a salesperson sells a particular brand of a refrigerator for a manufacturer as opposed to a competitor’s brand, the salesperson will be paid an extra $50 or $75 “bonus” as part of the push money program. Allowances Various forms of allowances are offered to retailers and wholesalers with the purpose of increasing the attention given to a firm’s brands. Merchandise allowances, in the form of free products packed with regular shipments, are payments to the trade for setting up and

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maintaining displays. Shelf space is in such high demand, especially in supermarkets, that manufacturers are making direct cash payments, known as slotting fees, to induce food chains to stock an item. Bill-back allowances provide retailers a monetary incentive for featuring a marketer’s brand in advertising or in-store displays. Off-invoice allowance is where advertisers allow wholesalers and retailers to deduct a set amount from the invoice they receive for merchandise. Sales-Training Programs PPT 15-24 and 15-25 An increasingly popular trade promotion is to provide training for retail store personnel. This method is used for consumer durables and specialty goods, such as computers, mobile devices, and home theater systems. Manufacturers can hold special classes that feature product information, demonstrations, and training about sales techniques. Cooperative (Co-Op) Advertising Cooperative advertising as a trade promotion technique is also referred to as vertical cooperative advertising and provides dollars directly to retailers for featuring company’s brand in local advertising. Manufacturers try to control the content of this co-op advertising in two ways. They may set strict specifications for the size and content of the ad and then ask for verification that such specifications have been met. Alternatively, manufacturers may send the template for an ad, into which retailers merely insert the names and locations of their stores. C. Business Market Sales Promotion Techniques PPT 15-26 Trade Shows Trade shows are events where several related products from many manufacturers are displayed and demonstrated to members of a trade. Business Gifts These gifts are given as part of building and maintaining a close working relationship with suppliers. Premiums and Advertising Specialties

Chapter 15/Sales Promotion, Point-of-Purchase Advertising, and Support Media

Business buyers are not immune to the value perceptions that an advertising specialty can create. They idea of getting something for nothing appeals to business buyers as much as it does to household consumers. Advertising specialties create awareness and add to the satisfaction of a transaction. Trial Offers They are well suited to the business market. The high cost of many business products mean a big time commitment to a brand, trial offers provide a way for buyers to lower the risk of making a commitment to one brand over another. A trial offer is a good way to attract new customers who need a good reason to try something new. Frequency Programs Frequency programs are an ideal form of sales promotion often used in business markets to help retain customers. VI. The Risks of Sales Promotion PPT 15-27 Apart from meeting important sales objectives, sales promotions also have significant risks associated with them. A. Creating a Price Orientation Because most sales promotions rely on some sort of price incentive or giveaway, a firm runs the risk of having its brand perceived as cheap, with no real value or benefits beyond the low price. Creating this perception in the market contradicts the concept of IBP. B. Borrowing from Future Sales Management must admit that sales promotions are typically short-term tactics designed to reduce inventories, increase cash flow, or show periodic boosts in market share. The downside is that a firm may simply be borrowing from future sales. C. Alienating Customers When a firm relies heavily on sweepstakes or frequency programs to build loyalty among customers, it risks alienating these customers with any change in the program.

Chapter 15/Sales Promotion, Point-of-Purchase Advertising, and Support Media

D. Managerial Time and Expense Sales promotions are both costly and time-consuming. The process is time-consuming for the marketer and the retailer in terms of handling promotional materials and protecting against fraud and waste in the process. E. Legal Considerations With the increasing popularity of sales promotions, particularly contests and premiums, legal scrutiny at both the federal and state levels has increased. VII. Point-of-Purchase Advertising PPT 15-28 Annual expenditures on P-O-P advertising are estimated to be more than $23 billion per year. PO-P is the only medium that places advertising, brands, and a consumer together in the same place at the same time. Research indicates that 76 percent of all brand selections involve some final deliberation by consumers at the P-O-P. A study found that P-O-P advertising boosted the sales of coffee, paper towels, and toothpaste by 567 percent, 773 percent, and 119 percent, respectively. A. Point-of-Purchase Advertising Defined Point-of-purchase (P-O-P) advertising refers to materials used in the retail setting to attract shoppers’ attention to a brand, convey primary product benefits, or highlight pricing information. The P-O-P displays may also feature price-off deals or other consumer sales promotions. Effective deployment of P-O-P advertising requires careful coordination with the marketer’s sales force. B. Objectives for Point-of-Purchase Advertising The goal of P-O-P advertising is to create a short-term impact on sales while preserving the long-term image of the brand being developed and maintained by advertising for the brand. Specifically, the objectives for P-O-P advertising are as follows: • Draw consumers’ attention to a brand in the retail setting. • Maintain purchase loyalty among brand-loyal users. • Stimulate increased or varied usage of the brand. • Stimulate trial use by users of competitive brands. C. Types of Point-of-Purchase Advertising and Displays

Chapter 15/Sales Promotion, Point-of-Purchase Advertising, and Support Media

PPT 15-29 and 15-30 P-O-P materials generally fall into two categories: short-term promotional displays, which are used for six months or less, and permanent long-term displays, which are used for more than six months. A list of the various types of displays is provided in the text on pages 318–319. D. P-O-P Advertising and Mobile or Location Marketing PPT 15-31 Some argue that new P-O-P advertising is mobile marketing. Mobile marketing through smartphones and other mobile devices adds another dimension to the retailers’ in-store or near-store marketing. The full breadth of potential for location marketing and P-O-P is still being explored—particularly consumers’ attitude and reaction toward the practice. E. P-O-P Advertising and the Trade and Business Markets This promotional tool is strategically valuable to manufacturers as they try to secure the cooperation in the trade and business markets. Product displays and information sheets often encourage retailers to support one distributor or manufacturer’s brand over another. P-O-P promotions can help win precious shelf space and exposure in a retail setting. From a retailer’s perspective, a P-O-P display can enhance the atmosphere of the store and make the shopping experience easier for customers. When a retailer is able to move a particular brand off the shelf, it in turn positively affects both the manufacturer’s and distributor’s sales. VIII. Support Media PPT 15-32 Support media include outdoor signage and billboard advertising, transit and aerial advertising, cinema advertising, directory advertising, and packaging. Support media are used to reinforce or supplement a message being delivered by some other media vehicle. They can be especially productive when used to deliver a message near the time or place where consumers are actually contemplating product selections. A. Outdoor Signage and Billboard Advertising PPT 15-33 Billboards, posters, and outdoor signs are perhaps the oldest advertising form. Posters first appeared in North America when they were used during the Revolutionary War to keep the

Chapter 15/Sales Promotion, Point-of-Purchase Advertising, and Support Media

civilian population informed. The total spending on outdoor advertising in the United States now stands at $8 billion per year. Outdoor advertising offers several distinct advantages. It is an excellent way to achieve wide exposure for a message and a brand in specific local markets. Size of the display is a powerful attraction of this medium, and when combined with special lighting and moving features, billboards can be captivating. Billboards also offer around-the-clock exposure for an advertiser’s message and are well suited to showing off a brand’s distinctive packaging or logo. Billboards are especially effective when they reach viewers with a message that speaks to a need or desire that is immediately relevant. Billboards also have drawbacks. Long and complex messages simply make no sense on billboards; some experts suggest that billboard copy should be limited to no more than six words. The impact of billboards can vary dramatically depending on their location, and assessing locations is a tedious and time-consuming activity known in the industry as riding the boards. Environmentalists also argue that billboards are a form of visual pollution. Important to the future of billboard advertising is the development of digital and wireless technologies that will let advertisers rotate their messages on boards at different times of the day. This capability is especially appealing to local marketers—like television stations and food sellers—whose businesses are very time-sensitive. B. Out-of-Home Media Advertising: Transit, Aerial, Cinema PPT 15-34 and 35 Out-of-home media advertising includes various advertising venues that reach primarily local audiences. Transit advertising can appear in many venues, including on backs of buildings, in subway tunnels, throughout sports stadiums, and on taxis, buses, and trucks. Transit ads also appear as signage on terminal and station platforms or actually envelop mass transit vehicles. Transit advertising is especially valuable when an advertiser wishes to target adults who live and work in major metropolitan areas. It offers an excellent means for repetitive message exposure. Transit advertising can also be appealing to local merchants because their messages may reach a passenger as he or she is traveling to a store to shop. Transit advertising works best for building or maintaining brand awareness. But, as with outdoor billboards, lengthy or complex messages simply cannot be worked into this medium. Also, transit ads can easily go unnoticed in the hustle and bustle of daily life. PPT 15-36 Aerial advertising involves airplanes pulling signs or banners, skywriting, or those majestic blimps.

Chapter 15/Sales Promotion, Point-of-Purchase Advertising, and Support Media

Cinema Advertising includes those ads that run in movie theaters before the film and other advertising appearing off-screen within a theater. Consumers often claim that they are not particularly favorably inclined to watching advertising before a film they paid to see. But research shows more than half of the movie goers don’t mind the ads before the film. Cinema advertising is not just on-screen. Off-screen ads advertising and promotion include sampling, concession based promotion (the ad on the side of popcorn box), and lobby-based advertising. C. Directory Advertising PPT 15-37 Directory advertising includes all the local phone directory and local business advertising books published by a variety of firms—the most well known being the Yellow Book. About $8 billion is spent annually on this medium. It helps people follow through on their decision to buy, by providing information that consumers need to actually find a particular product or service. On the down side, the proliferation and fragmentation of phone directories can make this a difficult medium to work because many metropolitan areas are covered by multiple directories. Working in this medium requires long lead times, and throughout the course of a year, information in a directory ad can easily become dated. Flexibility for creative execution in the traditional paper format is limited. Growth in the use of mobile devices has also clouded the future of printed directories. Access to online directories offers consumers a faster and more convenient way of not just finding a phone number but also getting the location of a desired store or service. D. Packaging PPT 15-38 Packaging is considered a support medium because it carries important brand information and that information carries a message. Promotional Benefits of Packaging to the Advertiser PPT 15-39 and 15-40 Packaging provides several strategic benefits to the brand manufacturer. First, there is a general effect on IBP strategy. The package carries the brand name and logo and communicates the name and symbol to a consumer. Additional value of packaging has to do with creating a perception of value for the product, which is a key part of IBP communication. The color, design, and shape of a package have been found to affect

Chapter 15/Sales Promotion, Point-of-Purchase Advertising, and Support Media

consumer perceptions of a brand’s quality, value, and image—and their willingness to pay a premium price over other brands.

ONLINE CONTENT The online dynamic content provides both content and insights into the ethical, global, and social media aspects of Advertising and Integrated Brand Communication. The integrated assessment components will provide students with assurances that they have mastered the assigned readings and provide feedback to faculty that the students have completed the assigned readings and data on student mastery of the content. In addition to the feedback on the correct answers, all of the assessment objects have been enhanced with additional tags that can be aggregated to provide feedback on how individual students have done on a specific learning outcome such as ethics. The online material can be delivered in one of two formats. For instructors who want to provide students with access to the Ad Age on Campus access as well as the online advertisements and student facing self-assessment quizzes, CourseMate will be provided with each new copy of Advertising and Integrated Brand Communication. Alternatively, students can decide to purchase CourseMate on its own which will also come with the MindTap Reader, which is the ebook version of the print product. For faculty that desire to have a variety of more in-depth assignments to integrate into their course and a desire to have more student data that can be used for analytic purposes, MindTap can be purchased with an enhanced capability. Faculty can customize the student experience and integrate the experience for their students into the campus Learning Management System. For a complete guide into the reporting and analytical capabilities available to faculty, consult the Assurance of Learning section of this manual.

Boxed Feature Questions and Tags QUESTION

DIFFICULTY

BUSPROG Primary

DISC Primary

BLOOM'S

Chapter 15 Social Media 01

Easy

Technology

Promotion

Application

Chapter 15 Social Media 02

Moderate

Technology

Promotion

Application

Chapter 15 Globalization 01

Easy

Diversity

Promotion

Application

Chapter 15 Globalization 02

Challenging

Diversity

Promotion

Synthesis

Chapter 15 Ethics 01

Moderate

Ethics

Promotion

Application

Chapter 15 Ethics 02

Challenging

Ethics

Promotion

Synthesis

CHAPTER 15-Social Media

Chapter 15/Sales Promotion, Point-of-Purchase Advertising, and Support Media

http://adage.com/article/creativity-pick-of-the-day/musical-intel-tells-story-facebooklife/236356/ • 15.SocialMedia.Q1 In this social media based campaign, what company here uses Facebook as not only a media channel, but as content for their ad? A. Sony B. Dell C. Intel D. Apple Answer: C • 15.SocialMedia.Q2 The name of this digital campaign is themed around one’s Facebook life, and is called: A. Me the Musical B. Animation Animal C. Life Story D. Decades of Change Answer: A

Chapter 15/Sales Promotion, Point-of-Purchase Advertising, and Support Media

CHAPTER 15-Globalization http://adage.com/article/creativity-pick-of-the-day/oreo-caps-100th-birthday-deliveryantarctica/238791/ • 15.Globalization.Q1 One issue in sales promotion internationally, is that there are various laws and concerns. In this promotional activity, Oreo delivers 5,000 cookies to: A. Iran B. Egypt C. Antarctica D. Sweden Answer: C • 15.Globalization.Q2 When few people live in a region such as Antarctica, why would an American company send a product there? What are some intended outcomes for the brand from an IBP perspective? Answer: The reason that the agency and their client Oreo made this decision is to celebrate a big deal-their 100th birthday with something that is buzzworthy. Although the product is sent to a remote place such as this, the story brings PR and WOM.

Chapter 15/Sales Promotion, Point-of-Purchase Advertising, and Support Media

CHAPTER 15-Ethics http://adage.com/article/creativity-pick-of-the-day/mother-london-sends-gay-iconnesting-dolls-kremlin/245666/

• 15.Ethics.Q1 As a form of support media, a company Mother London sent Russian dolls of gay British famous people such as Sir Elton John. This was done because: A. Russia does not have a gay community B. Russia is hosting the Olympics C. Russia has a large homosexual market D. Russia passed a law banning gay propaganda Answer: D •

15.Ethics.Q2

Please think about this situation (sending the dolls depicting famous gay stars) to Russia. Note the article says the dolls will be auctioned for charity. Do you think this is an ethical thing to do? Support your response. Answer: This is an opinion. Either way is fine, as long as their opinion on this move is supported. Personally, I think it is ethical. I also think it is a brilliant way to cut the clutter of traditional macro level communication. It is humorous and stands for equality of all people, no matter who they choose to love.

Homework Grid Homework Description 1-a. Multiple Choice Grabarz & Partner ad 1-b. Multiple Choice Grabarz & Partner ad 1-c. Multiple Choice Grabarz & Partner ad 2-a. True/False Cinco de Mayo holiday ad 2-b. Multiple choice Cinco de Mayo holiday ad 2-c. Multiple choice Cinco de Mayo holiday ad Homework is available to faculty to select and integrate into their customized course. THE FOLLOWING SECTIONS OF THE INSTRUCTOR’S MANUAL HAVE A SELECTION OF CASES

Chapter 15/Sales Promotion, Point-of-Purchase Advertising, and Support Media

THAT CAN BE INCORPORATED INTO YOUR COURSE AS OUT OF CLASS ASSIGNMENTS , OR AS A METHOD FOR INITIATING CLASSROOM DISCUSSION.

Questions for Review and Critical Thinking 1.

Compare and contrast sales promotion and mass media advertising as promotional tools. In what ways do the strengths of one make up for the limitations of the other? What specific characteristics of sales promotions account for the high levels of expenditures that have been allocated to them in recent years? Sales promotion and mass media advertising serve varied purposes for the marketer. Generally, sales promotion is used for short-term demand stimulation, while advertising is a tool for long-term demand cultivation. The strengths of one are the weaknesses of the other. The recent growing popularity of sales promotions can be traced to the immediate, measurable results that they can generate – unlike in traditional mass media advertising. However, promoting price incentives without a commitment to brand building can be a risky long-term strategy. When used in careful combination, these tools can compliment one another and produce impressive results.

What is brand proliferation and why is it occurring? Why do consumer sales promotions become more commonplace in the face of rampant brand proliferation? Why do trade sales promotions become more frequent when there is excessive brand proliferation? Every year, thousands of new brands—many of them actually variations on old brands— enter the marketplace. The drive by marketers to develop products for newly identified target segments, or to differentiate existing brands from the competitive field, causes brand proliferation. That proliferation, in turn, frequently only adds to the clutter in the marketplace, leading brand managers to turn to sales promotions in an effort to win immediate results for the new offering. However, before there can be any showing of sales results, the product must find its way to retail shelves. Hence, brand proliferation also motivates promotions directed at the trade market.

What role does sales promotion play in the trade channel and in business markets? Sales promotion might be most commonly associated with the consumer market in the form of coupons and other incentives. It also plays an important role in the trade channel and in business markets. The purpose of sales promotion does not change radically from the consumer to the trade or business market– the marketers’ goal still is to stimulate demand and push the product through distribution channels. There are some key

Chapter 15/Sales Promotion, Point-of-Purchase Advertising, and Support Media

distinctions in approach, however. In the trade channels, marketers rely on key techniques such as incentives, allowances, P-O-P displays, sales training programs and cooperative advertising. For business markets, the importance of trade shows is highlighted, along with techniques such as frequency programs, incentives, and premiums, which benefit businesses with heavy spending on travel, for instance, or office supplies. 4.

Why are sales promotions considered “risky” as an IBP tool? While sales promotions can produce quick results in stimulating product demand, marketers must balance those outcomes against some significant risks association with various sales promotion techniques. At the most basic level, because most sales promotions rely on some type of discounting scheme, marketers risk leaving the perception of having a cheap product in the marketplace and diluting the value of the brand. As well, because of the time-sensitive nature of sales promotions, managers must realize that any promotion strategy is necessarily borrowing against future sales and can make it even more difficult to measure the effectiveness of any broader promotional campaigns. Firms also must weigh the risk of alienating existing, loyal customers, the time and expense of running sales promotions, and potential legal pitfalls, which are most commonly associated with sweepstakes and other contest promotions.

Consumers often rationalize their purchase of a new product with a statement such as, “I bought it because I had a 50-cent coupon, and our grocery store was doubling all manufacturers’ coupons this week.” What are the prospects that such a consumer will emerge as a loyal user of the product? What must happen if he or she is to become loyal? When consumers explain their brand selections with a rationale such as, “I had a coupon,” marketers often face an uphill battle. Such a rationale is evidence that the marketers is buying patronage with price incentives and likely would lose that customer as soon as the coupon offer expired (or when the competition came along with a better deal). This is the downside of aggressive sales promotions. They train consumers to be price sensitive and deal oriented rather than brand loyal. Building brand loyalty typically involves a long-term investment in the brand, including advertising support. Of course, if the brand will automatically be judged superior by consumers simply by using it, any effort to encourage trial use can help build loyalty. Unfortunately, most brands do not enjoy immediate and superior performance advantages over the competitive field.

In the chapter, it was suggested that large retailers like Target are assuming greater power in today’s marketplace. What factors contribute to retailers’ increasing power? Explain the connection between merchandise allowances and slotting fees and the growth in retail power.

Chapter 15/Sales Promotion, Point-of-Purchase Advertising, and Support Media

Retailers gain power in the marketplace as a result of unbridled brand proliferation. The resulting pressure on shelf space hands the major retailers a broad advantage in their relations with manufacturers. The proximity of retailers to the marketplace also allows them better access to information about what is popular and what is not, trend knowledge that also can make some manufacturers vulnerable. As they gain power, retailers make more demands on manufacturers. Some of these demands can manifest in the form of merchandise allowances and slotting fees. 7.

What role does point-of-purchase advertising play as an IBP tool? In what ways can a firm ensure coordination of its P-O-P with other promotional efforts? Research indicated that 76 percent of all product selections involve some final deliberations by consumers at the point of purchase. P-O-P is used in the retail setting to attract shoppers’ attention to specific products, convey primary product benefits, or highlight pricing information. P-O-P displays may also feature price-off deals or other consumer sales promotions. Whether for short- or long-term purposes, P-O-P displays come in a wide range of choices, including dump bins, motions displays, floor stands and cash register racks, and these many in-store options allow marketers to reinforce key messages from other components of the advertising plan. To ensure integration with other promotional efforts, the marketer’s field sales force might work with retailers to develop effective P-O-P programs. Without retail-level cooperation, P-O-P programs are likely to fall flat. P-O-P has also become a key technique in mobile marketing because marketers can reach consumers on their smart devices with timely promotional offerings.

What advantages do billboards and transit advertising offer an advertiser as part of an IBP program? Out-of-home media, such as billboards and transit advertisements, offer marketers key advantages in both size and location, and they can be a particularly useful tool for marketers seeking to reach a specific geographic audience. In some instances, out-of-home media emerge as edgy – and often inexpensive campaigns which can be tailored for specific audiences. Most students will probably rely on the examples in the text, such as Coca-Cola’s usage of LED screens where they run their ads exclusively for 24 hours a day.

A consumer can go to various websites to find local businesses and services. Is the Internet a threat to traditional directories like the Yellow Pages? Although Web-based directories might appear to be in direct competition with print directories, consumers have demonstrated that they still want their old-style Yellow Pages. Research has established that people who spend the most time on the Internet searching for

Chapter 15/Sales Promotion, Point-of-Purchase Advertising, and Support Media

addresses and phone numbers are also the same people who make heavy use of paper directories. (The paper directory, in that role, becomes one of the final links in the consumer’s decision to buy a brand or locate retail outlets where they can purchase or examine a desired brand.) To date, the Internet has been more of an opportunity than a threat for Yellow Pages publishers. However, if consumers do more shopping online and get information from shopping sites, there could be a dramatic decline in the use of directories, electronic or not. 10. How does packaging function as a support medium? What sort of “message” does a consumer get from a brand package? While it is not a support medium in the classic sense, packaging nonetheless plays a vital role in conveying product information to consumers in the final moments before they make purchasing decisions. That is a crucial moment, as research by the Point-of-Purchase Advertising Institute has shown that more than 70 percent of supermarket purchases result from in-store decisions. Packaging can relay many key messages to consumers, conveying both basic information about the brand and function as well as creating the perception of value and usefulness. Consider the example in the text of Kraft Dairy Group which believes that significant package changes helped its Breyer’s ice cream brand make inroads in markets west of the Mississippi.. A package consulting firm came up with a package with a black background, a radically different look for an ice cream product.

Experimental Exercises 1.

The “Cash for Clunkers” program was one of the most talked about sales promotions of recent memory. As part of the government’s $3 billion effort to jumpstart sales at slumping auto dealerships, owners of old gas-guzzling vehicles received a $4,500 rebate if they traded in their “clunkers” for new fuel-efficient vehicles. Research the Cash for Clunkers sales promotion and have an in-class debate on what impact, if any, the stimulus program had on short- and long-term auto sales. The class should also debate the environmental benefits of the program. In an attempt to stimulate the economy, the government-backed Car Allowance Rebate System (CARS) program—better known as “Cash for Clunkers”—ran for 30 days in summer 2009, producing a short-term spike in U.S. auto sales. Under the terms of the program, the government offered a $4,500 rebate to consumers willing to trade in old gasguzzlers for more fuel-efficient vehicles. During the sales promotion period, auto dealerships sold a total of 690,000 vehicles—125,000 vehicles more than estimated monthly sales projections.

Chapter 15/Sales Promotion, Point-of-Purchase Advertising, and Support Media

While the program produced a short-term spike in auto sales, the “Cash for Clunkers” trade allowance encountered many of the risks of sales promotion discussed in the chapter. First, analysts noted that the spike in sales was merely borrowing from future sales—that is, most of the buyers were already looking to purchase a new vehicle in approximately the same time period. Second, the increased sales volume dropped dramatically once the sales promotion ended. Third, the high cost of the sales promotion was unparalleled: achieving the sale of 125,000 additional vehicles cost taxpayers $3 billion, or a whopping $24,000 per vehicle sold as a result of the sales promotion. Finally, the environmental benefits of the program were equally mixed. While participating consumers boosted their average fuel mileage from 15.8 mpg to 25.4 mpg, analysts point out that the overall carbon emissions generated from building new cars, shipping them, and scrapping old cars cancelled out any environmental benefits achieved by the sale of more fuel-efficient vehicles. 2.

Billboard ad campaigns often make headline news as advertisers from fashion designers to political groups use this roadside support media to communicate splashy or controversial messages. Search recent news headlines about billboards and write a report on a hot billboard campaign that’s making waves. Who is responsible for the ads? Does the billboard make its appeal primarily through visuals or through text? Are the billboard ads placed in locations that make strategic sense? Write an evaluation of the billboard campaign and provide detailed answers to these questions, drawing upon information discussed in the chapter. Answers will vary, but students should search Google news or other news sources to identify a current billboard campaign that is making headlines. Once students have selected a billboard campaign, they should evaluate the billboard visuals, text, location, timing, and controversy (if applicable) to critique its effectiveness at communicating the brand message. Generally speaking, billboards employ a mix of striking visuals and minimal text to grab attention and communicate a message. A billboard’s large size enables highly creative possibilities, and billboards tend to be most effective when they reach audiences regarding a need or event that is immediately relevant. Billboards are an excellent option for targeting specific local markets. Drawbacks to billboards include high cost, location challenges, and the inability of the media to communicate long messages (experts suggest no more than six words). Some critics also deride billboards as “visual pollution.”

Chapter 15/Sales Promotion, Point-of-Purchase Advertising, and Support Media

Working in small teams, imagine that you have been hired by a major American automaker to design a sales promotion campaign to stimulate sales of its newly-developed economy car, known as the Zoom. Identify which of the sales promotions techniques described in the chapter could be most effective and why. Your answer also should outline for the manufacturer what potential risks the firm takes in incorporating sales promotions into its broader IBP campaign. Students should demonstrate an understanding of the various methods of sales promotions and the appropriateness of specific methods for a product like an automobile. Students should suggest techniques such as time-sensitive discounting, loyalty programs, or premium incentives such as stereo upgrades. In their answers, students should address how proposed techniques would allow the automaker to measure consumer response and make the Zoom distinct among the proliferation of fuel-efficient economy cars. Student teams, however, also should address frankly some of the potential risks associated with the campaign. Most significantly, deep discounts or seemingly endless sales promotion strategies risk diminishing the value of the automaker’s overall brand. Consider the chapter’s example of Chrysler, where the auto giant eventually faced backlash from dealers over precisely that issue.

Working in the same teams, imagine that you have been hired by The Gap to develop a support media campaign in Washington, D.C., intended to stimulate sales among young professionals, ages 22 to 30. The clothing manufacturer is particularly interested in developing an edgy, out-of-home media campaign that can capture the attention of the large population of young professionals who work in the city and are frequent users of the Washington subway system. What would you develop, and why do you think it would be effective? This exercise should allow students to show some creative flare, while also demonstrating their understanding of the powerful influence that out-of-home media can have on a brand. Look for ideas about story telling between subway station billboards (an ad’s storyline might begin at one stop and finish at a central hub) and the use of celebrity images (such as Gap’s use of singer John Mayer in Los Angeles billboards for a 2007-08 campaign.) Students might even suggest Gap-clad mannequins/street statues waiting at subway stops or posed near ticket machines. Whatever the ideas, they should reflect an understanding of how support media can play far more than a supporting role, like the chapter’s examples of the campaigns for Coca-Cola and FreshDirect, student answers should aim for a captivating and effective campaign.

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

CHAPTER 16 Event Sponsorship, Product Placements, and Branded Entertainment KEY TERMS Madison & Vine Chaos Scenario event sponsorship

media impressions leveraging consumer-event congruity

product placement authenticity branded entertainment

SUMMARY Justify the growing popularity of event marketing and sponsorship as a modern means of experiential brand promotion. The list of companies sponsoring events grows with each passing year, and the events include a wide variety of activities. Of these various activities, sports attract the most sponsorship dollars. Sponsorship can help in building brand familiarity; it can promote brand loyalty by connecting a brand with powerful emotional experiences, and in most instances it allows a marketer to reach a well-defined target audience. Events can also facilitate face-to-face contacts with key customers and present opportunities to distribute product samples, sell premiums, and conduct consumer surveys. Summarize the uses and appeal of product placements in venues like TV, movies, and video games. Product placements have surged in popularity during the past decade and there are many reasons to believe that advertisers will continue to commit more resources to this activity. Like any other advertising tactic, product placements offer the most value when they are connected to other elements of the advertising plan. One common use of the placement is to help create excitement for the launch of a new product. Implicit celebrity endorsements and authenticity are key issue to consider when judging placement opportunities. High-quality placements are most likely to result from great collaboration among marketers, agents, producers, and writers. As always, the best team wins. Explain the benefits and challenges of connecting with an event venue or entertainment properties in building a brand.

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

Brand builders want to connect with consumers, and to do so they are connecting with the entertainment business. Even though not everyone can afford a NASCAR sponsorship, in many ways NASCAR sets the standard for celebrating brands in an entertaining setting. Many marketers, such as BMW and Unilever, are now developing their own entertainment properties to feature their brands. However, the rush to participate in branded entertainment ventures raises the risk of oversaturation and consumer backlash, or at least consumer apathy. As with any tool, while it is new and fresh, good things happen. When it gets old and stale, advertisers will turn to the next “big thing.” Discuss the challenges presented by the ever-increasing variety of communication and branding tools for achieving integrated brand promotion via the consumer experience. The tremendous variety of media options has been seen thus far represents a monumental challenge for an advertiser who wishes to speak to a customer with a single voice. Achieving this single voice is critical for breaking through the clutter of the modern advertising environment. However, the functional specialists required for working in the various media have their own biases and subgoals that can get in the way of integration. This issue will be raised in subsequent chapters as other options available to marketers will be explored in their quest to win customers.

Chapter Outline PPT 16-2 and 16-3 I. The Role of Event Sponsorship, Product Placements, and Branded Entertainment in IBP This chapter discusses an array of tools and tactics that marketers use to create unique experiences with and for consumers. Events, product placements, and branded entertainment offer the advertiser some of the most exciting opportunities for integrated brand promotion (IBP). Companies often take assistance from firms engaged in advertising to energize sagging and boring brands. • Healthy Choice teamed with Second City improv group to create an entertaining and engaging campaign for the Fresh Mixers brand of microwave lunch specialties. • Procter & Gamble enlisted the help of Saatchi and Saatchi to liven up the promotion for an old (some say tired) brand—Folgers Coffee—so that the younger 20-something segment would take notice. This chapter first assesses event sponsorship, one of marketers’ long-time favorites. Next, the IBP tactic of product placement is considered. This is the strategy where brands are prominently featured in television shows, films, and even video games. Finally, we’ll examine a newer form of brand building, branded entertainment, and assess what’s new and different about it.

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

II. The Convergence of Madison & Vine PPT 16-4 and 16-5 At various points throughout the text, a very important issue of the blending of advertising, promotion, and entertainment referred to as “Madison & Vine” have been raised. Madison refers to Madison Avenue in New York City (home of many ad agencies) and Vine refers to Hollywood & Vine in L. A. (home to many entertainment organizations). The summary here is: Advertising, branding, and entertainment are converging through social networking, videogames, and events. The erosion of the effectiveness of mass media—particularly broadcast media—has fueled the convergence. An expansion of options has provided more opportunities for brand visibility. Advertising Age’s Bob Garfield predicted a mass exodus from traditional media referred to as the “Chaos Scenario.” He predicted that dollars will leave traditional media because of audience fragmentation; ad avoidance has eroded their effectiveness, and ad-avoidance hardware are undermining their value. Reduced funds from ads will compromise programming on broadcast media, which will ultimately lead to the “inexorable death spiral” for traditional media. Events, product placements, and branded entertainment offer exciting ways to build brands in the market. III. Event Sponsorship PPT 16-6 and 16-7 Many marketers use event sponsorship to get closer to their customers. Event sponsorship provides opportunities to tie in the additional tools of sales promotions and public relations. Event sponsorship involves a marketer providing financial support to help fund an event, such as a rock concert or golf tournament. In return, that marketer acquires the rights to display a brand name, logo, or advertising message on-site at the event. Event spending has continued to grow at about 8 percent a year and now exceeds $27 billion in the United States, and it is estimated to be approaching $50 billion worldwide. A. Who Else Uses Event Sponsorship? Large firms like Best Buy, Sprint, GM, and Delta Air Lines sponsor events. Local events are an ideal format for small firms to gain recognition through this form of support media. Events can attract news coverage, thus extending the visibility of the sponsor. The events can be international in scope, as in the FIFA World Cup with big-name sponsors like Adidas, McDonald’s, Coke, Sony, Hyundai, and Visa. Or they may have a distinctive local flavor, like the Smucker’s Stars on Ice tour, which targets more local audiences. Events provide a captive

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

audience for a sponsor, may receive radio and television coverage, and often are reported in the print media and covered online. Hence, event sponsorship can yield face-to-face contact with real consumers and receive simultaneous and follow-up publicity—all good things for a brand. English professional soccer has become one of the darlings of the sports business because of the valuable marketing opportunities it supports. For example, Manchester United of the English Premier Soccer League surpasses the New York Yankees in its ability to generate revenues. In this world of big-time sports, global companies like Pepsi, Nike, and Vodafone pay huge amounts to have their names linked to the top players and teams. B. Finding the Sweet Spot for Event Sponsorship Advertisers look for those opportunities where there is significant overlap between the event participants and the brand’s target market. If the event has big numbers of fans and/or participants, then that’s even better. Moreover, marketers stand to gain the most in supporting an event as its exclusive sponsor. However, exclusivity can be extremely pricey, if not cost prohibitive, except in those situations where one finds a small, neighborhood event with passionate supporters just waiting to be noticed. There is much to be said for the sponsorship opportunity that a brand can uniquely own, and it doesn’t have to be the soccer World Cup or the Olympics to have a huge positive impact on a brand. C. Assessing the Benefits of Event Sponsorship PPT 16-8 and 16-9 Critics, in the earlier days of sponsorships, argued that the impact of event sponsorships is hard to determine and often driven by the ego of the CEO. But John Hancock carefully estimated that the college football bowl sponsorship yielded the equivalent of $5.1 million in advertising exposure for $1.6 million fee. Nielsen Media Research then developed Sponsorship Scorecard to assess effectiveness of sponsorships, so sponsors could see how effective their signage were at events. Advertisers are seeking a measure of media impressions to compare sponsorships to traditional advertising. Sponsorships provide a unique opportunity to foster brand loyalty. When marketers connect their brand with the potent emotional experiences often found at rock concerts, in soccer stadiums, at the Bunco table, or on Fort Lauderdale beaches, positive feelings may be attached to the sponsor’s brand that linger well beyond the duration of the event. D. Leveraging Event Sponsorship

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

Leveraging is any collateral communication that reinforces the link between the brand and the event—word-of-mouth, publicity, or news coverage. Events can be leveraged as ways to entertain important clients, recruit new customers, motivate the firm’s salespeople, and enhance employee morale. Events provide unique opportunities to entertain key customers. Marketers commonly use this point of contact to distribute specialty-advertising items so that attendees will have a branded memento to remind them of the rock concert or soccer match. Marketers may also use this opportunity to sell premiums such as T-shirts and cigarette lighters; administer consumer surveys as part of their marketing research efforts; or distribute product samples. PPT 16-9 Event participation is a way to leverage public relations efforts, creating an integrated IBP. See Exhibit 16.9 for guidelines on event sponsorship. IV. Product Placements PPT 16-10 Product placement is the practice of placing any branded product into the content and execution of any entertainment product. Working collaboratively, agents, marketers, producers, and writers find ways to incorporate the marketer’s brand as part of a show. The show can be of any kind— movies, short films on the Internet, and reality TV. Anywhere and anytime people are being entertained, there is opportunity for branded entertainment. A. On Television On Time Warner’s WB network, a shiny orange Volkswagen Beetle convertible played an important role in the teen superhero drama, Smallville. Ray Romano chased his wife around the grocery store, knocking over a display of Ragu products in an episode of the CBS sitcom, Everybody Loves Raymond. Pepperidge Farm Mint Milano cookies were prominently featured on Frasier. There were estimated to be 100,000 product placements on television shows in 2005. B. At the Movies Auto firms have frequently featured cars in films—James Bond (BMW, Aston-Martin), IRobot (Audi). White Castle, American Express, and Nokia also featured their brands in recent years. Research indicates that viewers under 25 are most likely to notice brand placements and are also most likely to try brands they see in movies and films. C. In Video Game

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

Over 100 million U.S. households have gaming capability, out of which 40 percent of gamers are in the highly sought after 18–34 age cohort. Game placements estimated to exceed $1 billion by 2010. Billboards and virtual products are the most common techniques. Tom Clancy’s Splinter cell shows Diet Sprite vending machines, and Puma is prominently shown as the brand worn by Nick Kang in True Crime: Streets of L.A., examples of advergaming firms include LG, Coke, Radio Shack, U.S. Army and many more. D. What We Know About Product Placement What was earlier rare, haphazard, and opportunistic, has become more systematic and, in many cases, even strategic. Even though product placement will never be as tidy as crafting and running a 30-second TV spot, numerous case histories make several things apparent about using this tool, both in terms of challenges and opportunities. Integrate the Placement within the IBP Campaign PPT 16-11 Placements have greatest value when integrated with other IBP techniques running simultaneously. As with event sponsorship, the idea is to leverage the placement. One should avoid isolated product placement opportunities but rather create connections to other elements of the advertising plan. For instance, placements combined with a welltimed public relations campaign can yield synergy. Recent research suggests that brands stand to gain the most from product placements when consumers are engaged enough to make it a part of their daily conversation. Make the Placement Look Authentic Authenticity is the key to the success of product placement. Authenticity refers to the quality of being perceived as genuine and natural. Authenticity is emerging as a powerful influence on brand loyalty among consumers. Develop the Right Industry Relationships Success with product placements is fostered through developing deep relationships with the key players in this dynamic business. Advertising is a team sport. Good teams take time to develop. They also move product placement from an opportunistic and haphazard endeavor to one that supports IBP. Don’t Expect Quantifiable ROI

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

Finally, much like event sponsorship, product placements present marketers with major challenges in terms of measuring the success or ROI of the activity. Product placements can vary dramatically in the value they offer to the marketer. One key item to look for is the celebrity connection in the placement. When Tom Cruise puts on Wayfarer shades in one of his movies or reaches for a Red Stripe beer as he did in Top Gun, the implied endorsement can drive sales of the product. The next section deals with “branded entertainment.” Another topic that is closely related to everything considered in this chapter thus far. To set the stage, one way to see branded entertainment is as a natural extension and outgrowth of product placement. Branded entertainment raises the stakes but also raises the potential payout. V. Branded Entertainment PPT 16-12 and 16-13 Branded entertainment entails the development and support of any entertainment property (e.g., a sporting event, TV show, theme park, short film, movie, or video game) where the primary objective is to feature one’s brand or brands in an effort to impress and connect with consumers in a unique and compelling way. NASCAR is the premier example of branded entertainment. What distinguishes branded entertainment from product placement is that in branded entertainment, the entertainment would not exist without the marketer’s support, and in many instances, it is marketers themselves who create the entertainment property. BMW’s efforts in product placement versus branded entertainment provide a perfect example. The appearance of the Z3 in the 1995 James Bond thriller Goldeneye is a nice example of product placement. But BMW did not stop there. In 2001, BMW and its ad agency Fallon Minneapolis decided it was time to make their own movies with BMW vehicles as the star of the show. The result was a series of original, Web-distributed short films like Beat the Devil, starring Clive Owen, James Brown, Marilyn Manson, and, most especially, the BMW Z4. The success of these custom-made BMW films helped launch the new era of branded entertainment. A. Where are Product Placement and Branded Entertainment Headed? PPT 16-14 No one can really say how rapidly advertising dollars will flow into branded entertainment in the next decade although current estimates suggest that annually about $4 billion finds its way to branded entertainment and product placement combined. The surge of these techniques relates to reaching the unreachable segments. There is the risk of oversaturation, resulting in

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

consumer annoyance. Marketers and entertainment providers can have trouble working together and agreeing on priorities. Consumer advocacy groups like Consumer Alert argue that product (brand) placements are really just paid advertising, and consumers should be informed of such. Attitudes and regulations vary from country to country. B. What’s Old is New Again It turns out that marketers, media moguls, ad agencies, and entertainers have much in common. They do what they do for business reasons. And they have and will continue to do business together. Procter & Gamble really started doing branded entertainment in the 1920s on the radio with the Crisco Cooking Talks show, a 15-minute show that featured recipes using Crisco. Now P&G is still in the branded entertainment business with widespread involvement in the America’s Next Top Model show. VI. The Coordination Challenge PPT 16-15 In concluding this chapter, a critical point about the media explosion needs to be reinforced. Advertisers have a vast and ever-expanding array of options for delivering messages to their potential customers. The keys to success for any IBP campaign are choosing the right set of options to engage a target segment and then coordinating the placement of messages to ensure coherent and timely communication. Many factors work against coordination: • As advertising has become more complex, organizations often become reliant on functional specialists. Specialists, by definition, focus on their specialty and can lose sight of what others in the organization are doing. • Internal competition for budget dollars often leads to rivalries and animosities that work against coordination. • Coordination is also complicated because few ad agencies have all the internal skills necessary to fulfill clients’ demands for integrated marketing communications. • The objective underlying this coordination is to achieve a synergistic effect. Individual media can work in isolation, but advertisers get more from their advertising dollars if various media build on one another and work together. • The chapters that follow highlight that more highly effective promotion options are available, adding more layers of complexity to the IBP coordination challenge.

ONLINE CONTENT The online dynamic content provides both content and insights into the ethical, global, and social

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

Boxed Feature Questions and Tags QUESTION

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Chapter 16 Social Media 01

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Technology

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Chapter 16 Social Media 02

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Chapter 16 Globalization 01

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Chapter 16 Globalization 02

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Chapter 16 Ethics 01

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CHAPTER 16-Social Media http://adage.com/article/digital/meet-brands-instagram-video/242753/ • 16.SocialMedia.Q1 The big change for Instagram announced in this article is the use of what in social media? A. Graphics B. 3-D Images C. Virtual Reality D. Video Answer: D

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

• 16.SocialMedia.Q2 Why did Instagram decide to give social media users 15 seconds, while the competitor Vine gives 6 seconds? A. This was a result of a consumer focus group B. Because Twitter gives 15 seconds as well C. Because of legal issues D. To not constrain creativity Answer: D

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

CHAPTER 16-Globalization http://adage.com/article/creativity-pick-of-the-day/toyota-launches-gt86-a-dystopian-filmsaatchi-london/236731/

• 16.Globalization.Q1 Toyota, a Japanese automaker, uses branded entertainment in what way, as seen from this Ad Age spot? A. Photo boots for consumers at events B. A short film C. Event sponsorship in soccer D. Event sponsorship in a cultural event in Japan Answer: B •

16.Globalization.Q2

From their London office, which global ad agency did this idea for Toyota? A. Saatchi & Saatchi B. Grey Worldwide C. R&R Partners D. Strawberry Frog Answer: A

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

CHAPTER 16-Ethics http://adage.com/abstract?article_id=245783 •

2.Ethics.Q1 In this form of branded entertainment from Liquid-plumr, what does the brand use, despite that consumers find it unethical in advertising. A. Race-based advertising B. Subliminal advertising C. Fear appeals D. Sex appeals

Answer: D •

2.Ethics.Q2

With the promotional materials for the Liquid-Plumr campaign, handsome men are featured on a calendar to show off their masculine bodies. An ethics question about sex in advertising is about using sex appeal to sell a non-related product—like cleaning fluid. What is your stance on this topic? Support your response. Answer: Opinion question. It is smart to consider if a sex appeal is really needed, because it can turn off consumers who are opposed to objectifying people’s bodies in advertising. As noted in the textbook, a sex appeal may lead the consumer to remember the ad, or the appeal, but not remember the brand.

Homework Grid Homework Description 1-a. True/False Progressive Insurance’s Flo 1-b. Multiple Choice Progressive Insurance’s Flo 2-a. Multiple Choice Yahoo SNL clips acquisition 2-b. Multiple Choice Yahoo SNL clips acquisition 3-a. Multiple Choice Oakley’s Strategy 3-b. Multiple choice Oakley’s Strategy Homework is available to faculty to select and integrate into their customized course. THE FOLLOWING SECTIONS OF THE INSTRUCTOR’S MANUAL HAVE A SELECTION OF CASES THAT CAN BE INCORPORATED INTO YOUR COURSE AS OUT OF CLASS ASSIGNMENTS , OR AS A METHOD FOR INITIATING CLASSROOM DISCUSSION.

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

Questions for Review and Critical Thinking 1.

Read the opening section of this chapter, and briefly describe the Working Lunch promotion. In what ways does it exemplify the latest trends in integrated brand promotion? The key elements of this promotion are: • The marketer worked closely with an agency • The marketer understood the target market and their behaviors • The promotion was highly coordinated • The promotion integrated a variety of IBP tools and technologies This promotion exemplifies the lastest trends in IBP in that: • There was celebrity involvement—the Second City performers • The promotion reached a hard to reach segment • The product placement created “buzz

Who is Bob Garfield? Do you agree with his Chaos Scenario? Ad Age critic Bob Garfield first published the “Chaos Scenario,” in 2005, predicting a near total collapse of traditional media models over the next 10 to 15 years. (Instructors can guide their students to the full piece at this link: http://adage.com/article?article_id=45561) In the piece, Garfield predicts that as audiences become increasingly fragmented, advertising budgets for traditional media will erode. Fewer advertising dollars will mean reduced budgets for major television networks and other national media, leading to reductions in their production budgets and, in turn, even smaller audiences for the programming that is produced. Garfield calls it an “inexorable death spiral” for traditional media. That is the crux of the argument that students should respond to in their assessment of the Chaos Scenario. Do students agree that traditional media faces such a dire threat? Are they convinced that marketing and branding efforts in this new world will have little reliance on the 30-second television spot or the traditional magazine ad spread?

Present statistics to document the claim that the television viewing audience is becoming fragmented. What are the causes of the fragmentation? Develop an argument that links this fragmentation to the growing popularity of event sponsorship and branded entertainment. In today’s world, people have an ever-expanding set of options to fill their leisure time, from video games to Web surfing to watching DVDs. Research shows that the use of these options is increasing, as is the ability of consumers to ignore traditional advertising

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

methods. Forester Research has predicted that DVR penetration will rise to 50 percent of households in the United States by 2010; with it will come ever greater ability for television audiences to watch what they want, when they want – and to skip over traditional commercials. The reduced reach of television has led marketers to consider other avenues, such as event sponsorship and branded entertainment, as potentially more effective ways to reach target market segments. 4.

Event sponsorship can be valuable for building brand loyalty. Search through your closets, drawers, or cupboards and find a premium or memento that you acquired at a sponsored event. Does this memento bring back fond memories? Would you consider yourself loyal to the brand that sponsored this event? If not, why not? This take-home assignment should uncover some interesting mementos and make for a stimulating class discussion. Ask four or five volunteers who said they did instantly relate to the idea of an event-based memento. Ask them to share with the class what the memento was and describe how they acquired the item. This form of story telling should help other students appreciate just how much emotionality can be derived from and connected to major events such as football games, car races, or rock concerts. One goal of marketers who sponsor these events is to associate their brands with the deep emotions that such events can produce. When such a connection is made, it may affect consumer loyalty to the brand.

What lessons can we learn from Prilosec’s sponsorship of the WBA regarding the things one should look for in judging sponsorship opportunities? In partnering with the World Bunco Association, the makers of heartburn medication Prilosec OTC discovered the coveted “sweet spot” in event sponsorship – the important overlap between an event’s participants and the sponsor’s target market, and an exclusive sponsorship arrangement that was not cost prohibitive. Some 70 percent of regular heartburn sufferers are women, and in discovering Bunco, Prilosec tapped into a community of some 59 million women in America who have played the dice game, with 21 million women playing regularly and six out of 10 women saying that advice from fellow Bunco players influences their purchasing decisions. Prilosec essentially followed the most basic guidelines for assessing an event sponsorship opportunity (see Exhibit 18.9). The drug maker matched the brand to the event, tightly defined its target audience, developed a compelling plot line through the competition and effectively planned for the before and after.

Why have videogames attracted so much interest recently as a venue for product placements? What makes this venue even more appealing for advertisers as games and

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

game players move to the Internet? Product placements in videogames have helped marketers reach a vast, but in many ways unreachable, audience. Research shows that there are some 100 million households in the United States with gaming capability, and an estimated 40 percent of hardcore gamers are between the ages of 18 and 34 – a highly sought-after demographic, but one that is difficult to reach due to severe audience fragmentation. For marketers, the videogame provides not only access to that audience but access to an audience that is singly focused on what appears on the screen. As games move to the Web, that offers marketers greater opportunity to create more dynamic ad placement and to more accurately track where and how often gamers focus more closely on product placements. 7.

What is the role for celebrities in the business of product placement and branded entertainment? Describe a scene from a TV show or movie that illustrates the best way to involve a celebrity as part of a product placement. The effects of product placement and branded entertainment can be difficult to measure, but celebrity connections can play a key role in helping marketers measure the results of their efforts. The implied endorsement when a celebrity appears on the screen or in public wearing a specific brand or drinking a specific soda can quickly drive sales of the product. But as the chapter notes, it is important for marketers that the placement appears authentic. It can be an illusive quality, but unless a product placement using a celebrity appears to be natural, sincere, and inconspicuous, the effort might backfire with savvy consumers.

Why is NASCAR a good affiliation for the Old Spice brand? They might not seem like an obvious match, but NASCAR and the Old Spice brand have combined to make a formidable marketing team. Underlying the successful partnership are two basic facts: Procter & Gamble is trying to reach the 24-35 segment of men, and data has shown that race fans are three times more likely to purchase a product promoted by their favorite NASCAR driver, relative to fans of all other sports. The NASCAR-Old Spice connection shows advertisers connecting with consumers in a compelling way and is a clear example of successful branded entertainment.

Using BMW as the example, explain the difference between product placements and branded entertainment. The key distinction between product placements and branded entertainment is that in the latter, the underlying entertainment product would not exist without the marketers’ support. Indeed, in many instances, the product is created entirely by a brand’s marketing division.

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

The chapter offers the example of German automaker BMW to clarify this point. The appearance of a BMW Z3 in the 1995 James Bond film Goldeneye was a clear example of product placement. The vehicle was included in a film that was conceived and created entirely by an independent studio. But BMW also has subsequently branched into branded entertainment, partnering with its primary ad agency to create Internet-distributed short films that include some big-name actors but exist primarily to feature the real star: the automaker’s sporty Z4. 10. Explain the need for functional specialists in developing IBP campaigns. Who are they and what skills do they offer? What problems do these functional specialists create for the achievement of integrated brand promotion? The proliferation of media options creates the need for specialists who are able to manage those varied media platforms for integrated campaigns. As such, an advertiser might use separate managers for advertising, event sponsorship, branded entertainment, and Web development. This outsourcing and decentralization can create problems, however. New functional specialists who focus on their specialized tasks may not necessarily appreciate the need for coordination with more traditional players. Indeed, with the vast array of media and promotional options available to marketers, the coordination challenge can become daunting. Too much decentralization in campaigns can subvert successful integration. Without good coordination, there can be no integrated brand promotion.

Experiential Exercises 1.

Walmart has a new logo, new stores, and a new green business model, and now the retail giant is working on a new way to advertise. Walmart’s Family Moments campaign integrates the retailer’s store brands into films and activities for the whole family. Write a report on Walmart’s recent move to sponsor Friday night films at NBC, and explain how the films provide targeted advertising opportunities for the retailer. In your report, brainstorm a new idea for this Walmart campaign that makes use of product placement, branded entertainment, or event sponsorship. In partnership with NBC, P&G, FedEx and other top businesses, Walmart sponsors a movie night for the whole family on select Fridays throughout the year. The company’s early productions, Secrets of the Mountain and The Jensen Project, have successfully attracted family audiences and showcased familiar actors like LeVar Burton of Star Trek: The Next Generation and Patricia Richardson of Home Improvement. Teens stay connected to the films by downloading soundtrack music provided by American Idol’s Randy Jackson, Jordin Sparks, Brooke White, and other pop stars. Not surprisingly, Walmart’s store brands make cameo appearances in scenes throughout the films. Students should be

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

able to suggest creative ideas for how Walmart might further integrate its products into events, films, or other activities targeted to families. 2.

Event sponsorship is becoming increasingly important to advertisers as the effectiveness of traditional media is eroded due to audience fragmentation. Event sponsorship can take many forms – it’s even commonplace on college campuses. Select an example of event sponsorship at your school and describe the relationship between the advertiser and the event. What role does the advertiser perform during the event? Why would a company consider the event an effective method to reach its target audience? Students should find an array of examples close to campus, including sponsored sporting events, music concerts, even giveaway bags for arriving freshmen featuring various items they might need away from home. Once they have identified a sponsored event, students should demonstrate a clear understanding of how well the brand is matched to the event and how tightly the brand appears to have defined its target market. As likely members of the target audience, students also should be able to assess the effectiveness of the sponsorship marketing.

Video-game maker Incredible Technologies Inc. has in recent years steadily expanded its corporate partnerships and product placements in its most popular game, the pub-based, Web-connected golfing game Golden Tee Live. Players can purchase Top-Flite branded virtual golfing equipment and, as they work through the course, they spot Coca-Cola vending machines, billboards, and even groundhogs that pop up on the screen guzzling from a Coke can. Working in small groups, brainstorm other possible product placement opportunities for the game and identify how they could be incorporated. Your answers should address specifically how the unique characteristics of a videogame, particularly one with a Web-linked console, support the product placement suggestions. Videogames present marketers and brand managers with a vast new realm of opportunity for product placement and branded entertainment. This exercise is intended to help students focus on the unique marketing possibilities afforded by the steady advances in videogame technology. Many students likely will be familiar with the bar-based Golden Tee Live game, and the also can learn more from the game maker’s website: www.goldentee.com. Product placement suggestions might range from branded clothing such as Nike or Puma for the game’s virtual golfer, promotions for real-world golfing venues, or even sponsorship opportunities for the virtual golfers. With their proposals, the student teams should demonstrate the distinct opportunities for each brand in so-called “game-vertising” and the production and tracking advantages offered by the game’s online interactivity.

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

Working in the same teams, create a branded entertainment proposal for the coffee giant Starbucks. As discussed in the chapter, your proposal should identify a specific target audience and describe in detail a proposed storyline for a short film, television series or other entertainment product that would effectively promote the brand and capture the attention of that market segment. Students should display their creative brainstorming skills with this exercise. But they also should be able to link their proposals back to the basic elements of branded entertainment, demonstrating that they have identified a specific audience to target and understand how the proposed storyline would effective capture the attention of that market segment. It is important in this exercise that students do not merely suggest product placement opportunities for the coffee company, such as having characters on Grey’s Anatomy discuss their various romantic interests while clutching the widely-recognized Starbucks logo cups. Proposals, instead, should demonstrate an understanding that the entertainment product relies solely on the brand – a television series about a twenty-something making her way in Seattle by working at a corner Starbucks might be one proposal aimed at the coveted 18- to 30-year-old demographic. Another proposal might target boomer audiences with a show about the trials and tribulations of a retiree who goes to work at the corner Starbucks to stave off boredom after leaving the corporate world.

Chapter 17: Integrating Direct Marketing and Personal Selling

CHAPTER 17 Integrating Direct Marketing and Personal Selling KEY TERMS direct marketing cost per inquiry (CPI) cost per order (CPO) mailing list internal lists external lists marketing database RFM analysis

frequency-marketing programs cross-selling direct response advertising direct mail telemarketing infomercial marcom manager

personal selling order taking creative selling system selling missionary salesperson customer relationship management (CRM)

Summary Identify the three primary purposes served by direct marketing and explain its growing popularity. Many types of organizations are increasing their expenditures on direct marketing. These expenditures serve three primary purposes: direct marketing offers potent tools for closing sales with customers, for identifying prospects for future contacts, and for offering information and incentives that help foster loyalty. The growing popularity of direct marketing can be attributed to several factors. Direct marketers make consumption convenient: Credit cards, 800 numbers, and the Internet take the hassle out of shopping. In addition, today’s computing power, which allows marketers to build and mine large customer information files, has enhanced direct marketing’s impact. The emphasis on producing and tracking measurable outcomes is also well received by marketers in an era when everyone is trying to do more with less. Distinguish a mailing list from a marketing database and review the many applications of each. A mailing list is a file of names and addresses of current or potential customers, such as lists that might be generated by a credit card company or a catalog retailer. Internal lists are valuable for creating relationships with current customers, and external lists are useful in generating new customers. A marketing database is a natural extension of the internal list but

Chapter 17/ Integrating Direct Marketing and Personal Selling

includes information about individual customers and their specific preferences and purchasing patterns. A marketing database allows organizations to identify and focus their efforts on their best customers. Recognizing and reinforcing preferred customers can be a potent strategy for building loyalty. Cross-selling opportunities also emerge once a database is in place. In addition, as one gains keener information about the motivations of current best customers, insights usually emerge about how to attract new customers. Describe the prominent media used by direct marketers in delivering their messages to the customer. Direct marketing programs emanate from mailing lists and databases, but there is still a need to deliver a message to the customer. Direct mail and telemarketing are common means used in executing direct marketing programs. Email has recently emerged as a low-cost alternative. Because the advertising done as part of direct marketing programs typically requests an immediate response from the customer, it is known as direct response advertising. Conventional media such as television, newspapers, magazines, and radio can also be used to request a direct response by offering an 800 number or a Web address to facilitate customer contact. Explain the key role of direct marketing and personal selling in complementing other advertising activities. Developing a marketing database, selecting a direct mail format, and producing an infomercial are some of the tasks attributable to direct marketing. These and other related tasks require more functional specialists, who further complicate the challenge of presenting a coordinated face to the customer. In addition, many products and services must be supported by well-trained sales personnel. Here again, the message consumers hear in advertising for any brand needs to be skillfully reinforced by the sales team. Fail to get the dialogue right at this final, critical stage of the purchase process and all other advertising efforts will end up being wasted. The sales force plays a critical role in the process because theirs is the job of closing the sale, while at the same time ensuring customer satisfaction.

Chapter Outline PPT 17-2 and 17-3 I. The Evolution of Direct Marketing PPT 17-4 This chapter examines the growing promotional area of direct marketing in addition to the other direct contact with consumers—personal selling. The official definition of direct marketing from

Chapter 17/ Integrating Direct Marketing and Personal Selling

the Direct Marketing Association (DMA) provides an excellent starting point. Direct marketing is an interactive system of marketing that uses one or more advertising media to affect a measurable response and/or transaction at any location. This definition furnishes an excellent basis for understanding the scope of direct marketing. Direct marketing is interactive—the marketer is attempting to develop an ongoing dialogue with the customer. Programs are planned with the notion that one contact will lead to another and then another, so the marketer’s message can become more focused and refined with each interaction. Multiple media can be used in direct-marketing programs. This is an important point, for two reasons. First, direct mail and direct marketing are not equated. Second, as noted before, a combination of media is likely to be more effective than any one medium used by itself. Mobile marketing, including location-based techniques, are ideally suited to direct marketing campaigns. Another key aspect of direct-marketing programs is that they are designed to produce immediate, measurable response. The final element of the definition notes that a direct-marketing transaction can take place anywhere. The key idea here is that customers do not have to make a trip to a retail store for a direct-marketing program to work. A. Direct Marketing—A Look Back From Johannes Gutenberg and Benjamin Franklin to Richard Sears, Alvah Roebuck, Les Wunderman, and Lillian Vernon, the evolution of direct marketing has involved some of the great pioneers in business. Exhibit 17.3 shows students historic milestones in direct marketing dating back to the 15th century. Students may benefit from a quick review of how farreaching events created a favorable route for the evolution and growth of this promotional tool. B. Direct Marketing Today The modern versions of direct marketing are rooted in the legacy of mail-order giants and catalog merchandisers like L.L. Bean, Sears, and JC Penney. Direct marketing programs are commonly used for three principle purposes: • The most common use of direct marketing is to close a sale with a customer. This can be done as a stand-alone program, or it can be carefully coordinated with a firm’s other advertising. • A second purpose of direct-marketing programs is to identify prospects for future contacts and, at the same time, provide in-depth information to selected customers. • Direct-marketing programs are also initiated to engage customers, seek their advice, and furnish helpful information about using a product, reward customers for using a brand, or foster brand loyalty in general.

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C. What’s Driving the Growing Popularity of Direct Marketing? PPT 17-5, 17-6, and 17-7 The growth in popularity of direct marketing stems from a number of factors. Direct marketing’s growing popularity can be summarized in a single word—convenience. Dramatic growth in the number of dual-income and single-person households has reduced the time people have to visit retail stores. More liberal attitudes about the use of credit and the accumulation of debt have contributed to the growth of direct marketing. Developments in telecommunications have also eased the direct-marketing transaction. Toll-free numbers have exploded in popularity along with Web access to brand sites. Computer technology now allows firms to track, keep records on, and interact with some 5 million customers for what it costs to track a single customer in 1950. Future developments in the new media will also add to the prevalence of direct marketing. Shopping opportunities have become widely available on the online services. Direct-marketing programs also offer unique advantages over conventional mass marketing— precise segmentation, ongoing contact for relationship building, and more measurable results than other mass-marketing techniques. It is common to find calculations like cost per inquiry (CPI) or cost per order (CPO) featured in direct-marketing program evaluations. II. Database Marketing PPT 17-8 and 17-9 The one characteristic of direct marketing that distinguishes it from marketing more generally is its emphasis on database development. Databases are the centerpieces in direct-marketing campaigns, take many forms, and can contain many different layers of information about customers. A. Mailing Lists A mailing list is a file of names and addresses that can be used to contact prospective or prior customers. Each time a consumer subscribes to a magazine, orders from a catalog, registers an automobile, fills out a warranty card, redeems a rebate offer, applies for credit, or joins a professional society, the name and address goes on another mailing list. Two broad categories of lists should be recognized: the internal, or house, list versus the external, or outside, list. Internal lists are an organization’s records of its customers, subscribers, donors, and inquirers. External lists are purchased from a list compiler or rented from a list broker.

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B. List Enhancement PPT 17-10 The next step in the evolution of a database is mailing-list enhancement. This involves augmenting an internal list by combining it with external lists or databases. External lists can be appended to or integrated with a house list. The most straightforward list enhancements are adding more names and addresses to an internal list. A second type of list enhancement involves incorporating information from external databases into a house list. Typically, this kind of enhancement includes any of four categories of information: • Demographic data—the basic descriptors of individuals and households available from the Census Bureau. • Geo-demographic data—information that reveals the characteristics of the neighborhood in which a person resides. • Psychographic data—data that allow for a more qualitative assessment of a customer’s general lifestyle, interests, and opinions. • Behavioral data—information about other products and services a customer has purchased; prior purchases can help reveal a customer’s preferences. C. The Marketing Database PPT 17-11 Beyond being a mailing list, a marketing database also includes information collected directly from individual customers. Building a marketing database entails pursuing an ongoing dialogue with customers and continuous updating of records with new information. A marketing database has a dynamic quality that sets it apart: It can be an organization’s living memory of who its customers are, and what they want from the organization. D. Marketing Database Applications PPT 17-12 and 17-13 One of the greatest benefits of a database is that it allows an organization to quantify how much business the organization is actually doing with its current best customers. A good way to isolate the best customers is with a recency, frequency, and monetary (RFM) analysis. An RFM analysis asks how recently and how often a specific customer is buying from a company and how much money he or she is spending per order and over time. With this transaction data, it is a simple matter to calculate the value of every customer to the organization and identify those customers who have given the organization the most business in the past. A marketing database can also be a powerful tool for organizations that seek to create a genuine relationship with their customers. Reinforcing and recognizing preferred customers is another

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valuable application of the marketing database. Marketers use frequency-marketing programs to do so. Frequency-marketing programs have three basic elements: • a database, which is the collective memory for the program; • a benefit structure, which is designed to attract and retain customers; and • a communication strategy, which emphasizes a regular dialogue with the organization’s best customers. Another common application for the marketing database is cross-selling. Most organizations have many different products or services they hope to sell. One of the best ways to build business is to identify customers who already purchase some of a firm’s products, and create marketing programs aimed at these customers and featuring other products. Once an organization gets to know who its current customers are and what they like about various products, it is in a much stronger position to go out and seek new customers. The basic premise is simply to try to find prospects who share many of the same characteristics and interests of current customers. E. The Privacy Concern PPT 17-14 and 17-15 One dark cloud looms on the horizon for database marketers: consumer concern about invasion of privacy. Consumers are uneasy about the way personal information about them is being gathered and exchanged by businesses and the government without their knowledge, participation, or consent. Direct marketing firms are concerned that the Do Not Call Registry could cost telemarketers up to $50 billion a year in lost sales due to lack of access to potential customers. Individual organizations can address their customers’ concerns about privacy if they remember two fundamental premises of database marketing—A primary goal for developing a marketing database is to get to know customers in such a way that an organization can offer those products and services that better meet their needs. If customers are offered something of value, they will welcome being in the database. Second, developing a marketing database is about creating meaningful, long-term relationships with customers. If the organization is planning to sell this information to a third party, it must get customers’ permission. If the organization pledges that the information will remain confidential, it must honor that pledge. PPT 17-16 III. Media Applications in Direct Marketing As we saw in the definition of direct marketing, multiple media can be deployed, and some form of immediate, measurable response is typically an overriding goal. Because advertising

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conducted in direct marketing campaigns is typified by this emphasis on immediate response, it is commonly referred to as direct response advertising. Direct mail and telemarketing are the direct marketer’s traditional media. All conventional media, like magazines, radio, and television can be used to deliver direct response advertising. In addition, email and the infomercial have emerged as useful direct marketing media. A. Direct Mail PPT 17-16 Direct mail has some notable faults as an advertising medium: • It can cost 15 to 20 times more to reach a person with a direct mail piece than to reach that person with a television commercial or newspaper advertisement. • Also, in a society where people are constantly on the move, mailing lists are commonly plagued by bad addresses. • Direct mail delivery dates, especially for bulk, third-class mailings, can be unpredictable. • When precise timing of an advertising message is critical to its success, direct mail can be the wrong choice. Direct mail’s advantages include: • The medium is selective. When an advertiser begins with a database of prospects, direct mail can be the perfect vehicle for reaching those prospects with little waste. • Direct mail is a flexible medium that allows message adaptations on literally a household-by-household basis—personal salutations and the like. • Direct mail lends itself to testing and experimentation. With direct mail it is common to test two or more different appeal letters using a modest budget and small sample of households. • The array of formats an organization can send to customers is substantial to direct mail. It can mail large, expensive brochures or include technology. • It can use pop-ups, foldouts, scratch-and-sniff strips, or simple, attractive postcards. B. Telemarketing PPT 17-17 Telemarketing can be a direct marketer’s most invasive tool. As with direct mail: • Contacts can be selectively targeted. • The impact of programs is easy to track. • Experimentation with different scripts and delivery formats is simple and practical. • Because telemarketing involves real, live, person-to-person dialogue, no medium produces better response rates.

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Telemarketing has a few limitations: • It is expensive on a cost-per-contact basis. • Telemarketing does not share direct mail’s flexibility in delivery options. When you reach people in their home or workplace, you have a limited span of time to convey information and request some response. • Telemarketing is a powerful yet highly intrusive medium that must be used with discretion. • High-pressure telephone calls at inconvenient times can alienate customers. C. Email PPT 17-18 Perhaps the most controversial direct marketing tool of recent years is referred to as “bulk” email or spam. Some issues with email as a direct marketing tool is that it has high risk in offending consumers and of becoming known as a “spammer.” One other issue is that it is important to not confuse email with e-commerce. E-commerce is any purchase transaction consummated between a consumer and a marketer. Highly recommended to stay away from “bulk” email campaigns but instead integrate email after acquiring customers through other database direct marketing techniques. Work to get customers to approve “opt-in” email access for the firm. High potential factor of email is its low cost, timeliness, easy access to email addresses and good targeting potential. D. Direct Response Advertising in Other Media PPT 17-19 The high costs associated with direct mail and telemarketing has led direct marketers to experiment with nearly every other medium. Using magazines, a popular device for executing a direct marketer’s agenda is the bind-in insert card. Insert cards not only promote but also offer the reader an easy way to order. Newspaper ads from The Wall Street Journal provide toll-free numbers for requesting information or ordering products from a wide range of national and global marketers. E. Infomercials PPT 17-20 The infomercial is a novel form of direct response advertising that merits special mention. An infomercial is a long television advertisement made possible by the lower cost of ad space on many cable and satellite channels. Infomercials range from 2 to 60 minutes, but the common length is 30 minutes. A critical factor is testimonials from satisfied users. Celebrity testimonials

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can help catch a viewer as he or she is channel surfing past the program, but celebrities aren’t necessary. Another key is that viewers are not likely to stay tuned for the full 30 minutes. The implication is that the call to action should not come at the end of the infomercial only; most of the audience could be long gone by minute 28 into the show. A good rule of thumb in a 30minute infomercial is to divide the program into 10-minute increments and close three times. IV. Closing the Sale with Direct Marketing or Personal Selling PPT 17-21 Now we need to add the direct-marketing and database manager to the list of functional specialists trying to coordinate IBP programs. Marketing databases commonly lead to interdepartmental rivalries and can create major conflicts between a company and its advertising agency. Typically, direct marketing programs come at the expense of conventional advertising campaigns that might have been run on television, in magazines, or in other mass media. Since direct marketing takes dollars from activities that have been the staples of the traditional ad agency business, it is easy to see why pure advertising agencies view direct marketing with some resentment. There are no simple solutions for achieving integrated marketing communications, but one approach that many organizations are experimenting with is the establishment of a marketing communications manager, or a “marcom” manager for short. A marcom manager plans an organization’s overall communications program and oversees the various functional specialists inside and outside the organization to ensure that they are working together to deliver the desired message to the customer, which ultimately yields a product sale. A. The Critical Role of Personal Selling PPT 17-22 Personal selling is the face-to-face communications and persuasion process. Products that are higher priced, complicated to use, require demonstration, involve trade in or judged at the point of purchase depend heavily on personal selling—think autos, stereos, furniture. Failure to insert personal selling into the IBP process at the proper time for a brand can render all other IBP efforts worthless. PPT 17-23 and 17-24 There are many different types of sales jobs. A salesperson can be engaged in order taking, creative selling, or supportive communication: • Order taking involves accepting orders for merchandise or scheduling services. Order takers deal with existing customers who are lucrative to a business due the low cost of generating additional revenues from them. Order taking is the least complex of selling

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•

efforts. Creative selling is the type of selling where customers rely heavily on the salesperson for technical information, advice, and service. The most demanding and complex selling positions is in business-to-business markets. People in creative selling positions often have advanced technical degrees. System selling entails selling a set of interrelated components that fulfill all or a majority of a customer’s needs in a particular area. System selling has emerged because of the desire on the part of customers for “system solutions.” The missionary salesperson calls on accounts with the express purpose of monitoring the satisfaction of buyers and updating buyers’ needs but may provide product information after a purchase. Many firms also use direct marketing tools like telephone and e-mail reminders to complement the efforts of the missionary salesperson in maintaining a dialogue with key customers.

B. Customer Relationship Management PPT 17-25 Salespeople can play a critical role as well in cultivating long-term relationships with customers—which often is referred to as a customer relationship management (CRM) program. CRM views the relationship with buyers as a partnership and a problem solving situation. C. A Case in Point Consider an example of what happens for a company when it strikes just the right balance among advertising, brand building, direct marketing, and personal selling. The Sleep Number Bed by Select Comfort is number one in the specialty bedding business. The Select Comfort story represents a real metamorphosis from a tiny niche brand to a market leader. For years, Select Comfort promoted its air mattresses with late-night infomercials along the lines of the Ronco Showtime Rotisserie & BBQ. Some consumers found value in the product as a good option to pull out of the closet and blow up when friends dropped in for the night. But that’s hardly a mainstream market, and Select Comfort was looking for more. Thus, the company invented a new brand, the Sleep Number bed, where the user can adjust the firmness of the mattress with a simple remote control using a numerical range from 1 to 100. The ad featuring the really big remote in Exhibit 17.17 for the Sleep Number bed is typical of the print advertising that Select Comfort added to its IBP mix as the firm moved away from infomercials only. The Select Comfort example typifies a theme developed throughout this book. Each marketer must find the right balance of IBP tools and tactics to get its points across to targeted consumers. Hence, an organization has no choice but to pursue advertising and IBP.

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ONLINE CONTENT The online dynamic content provides both content and insights into the ethical, global, and social media aspects of Advertising and Integrated Brand Communication. The integrated assessment components will provide students with assurances that they have mastered the assigned readings and provide feedback to faculty that the students have completed the assigned readings and data on student mastery of the content. In addition to the feedback on the correct answers, all of the assessment objects have been enhanced with additional tags that can be aggregated to provide feedback on how individual students have done on a specific learning outcome such as ethics. The online material can be delivered in one of two formats. For instructors who want to provide students with access to the Ad Age on Campus access as well as the online advertisements and student facing self-assessment quizzes, CourseMate will be provided with each new copy of Advertising and Integrated Brand Communication. Alternatively, students can decide to purchase CourseMate on its own which will also come with the MindTap Reader, which is the ebook version of the print product. For faculty that desire to have a variety of more in-depth assignments to integrate into their course and a desire to have more student data that can be used for analytic purposes, MindTap can be purchased with an enhanced capability. Faculty can customize the student experience and integrate the experience for their students into the campus Learning Management System. For a complete guide into the reporting and analytical capabilities available to faculty, consult the Assurance of Learning section of this manual.

Boxed Feature Questions and Tags QUESTION

DIFFICULTY

BUSPROG

DISC

Primary

BLOOM'S

Chapter 17 Social Media 01

Easy

Technology

Promotion

Application

Chapter 17 Social Media 02

Challenging

Technology

Promotion

Synthesis

Chapter 17 Globalization 01

Moderate

Diversity

Promotion

Application

Chapter 17 Globalization 02

Challenging

Diversity

Promotion

Synthesis

Chapter 17 Ethics 01

Moderate

Ethics

Promotion

Application

Chapter 17 Ethics 02

Challenging

Ethics

Promotion

Synthesis

CHAPTER 17-Social Media adage.com/article/creativity-pick-of-the-day/creativity-2013-kmart-s-foul-mouthed-viralhit/245810/ •

17.SocialMedia.Q1

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For the Kmart campaign that went viral via social media, the copywriters for this direct marketing campaign are from what agency? A. Grey B. J. Walter Thompson C. DraftFCB D. GSD&M Answer: C • 17.SocialMedia.Q2 The appeal that can help in improvement in sales used here is: A. Sexual B. Humor C. Affect D. Anxiety Answer: B

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CHAPTER 17-Globalization http://adage.com/article/creativity-pick-of-the-day/love-soccer-puma-commissions-scientificstudy-find-important/236686/ •

17.Globalization.Q1

As a way to help direct marketing efforts and sales of the Puma shoes and clothing, what strategy did Puma use for their global communication? A. Linking the brand to soccer B. Hiring direct sales agents in Europe C. A viral YouTube video for the brand as used by teens in South America D. Personal selling to retailers in Europe and Asia Answer: A • 17.Globalization.Q2 To help grow a global brand, as Puma is doing well with, what do you think about integrating the brand with sport events? Then, how can event marketing in sport link with direct marketing and personal selling? A. g B. D C. The D. The Answer: It is a smart strategy as long as the fit is there. For Puma, a sport shoe and apparel brand, it makes sense and fits well with soccer. To link event marketing in sport to direct marketing, the company can have sales reps or brand ambassadors at an exhibit at the event. They can also sell their products as a vendor at the event to tie it into personal sales.

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CHAPTER 17-Ethics http://adage.com/article/creativity-pick-of-the-day/kids-catch-parents-bed-ragu/236573/

•

17.Ethics.Q1

The brand Ragu here uses what some could think as an unethical or uncomfortable story line to help impact sales of the spaghetti sauce. The story line revolves around: A. Parents having sex and the kids walk in B. A teenager smoking weed and eating spaghetti C. A mother getting a tattoo of spaghetti D. A child sneaking the Ragu spaghetti sauce into the shopping cart Answer: A •

17.Ethics.Q2

Imagine you have the Ragu account in advertising and direct marketing. Instead of using advertising, what idea do you have to enhance sales for the brand? Answer: The correct response must mention personal selling strategies, direct marketing, email marketing, events, or some other way that is direct and not via traditional advertising. It can for example be a B2B sales strategy, where Ragu sales reps do promotions to grocery stores or sponsor an event and a taste testing contest, and selling the sauce directly to vendors or consumers.

Homework Grid Homework Description 1-a. Multiple Choice Google’s thinkDoubleClick campaign 1-b. Multiple Choice Google’s thinkDoubleClick campaign 1-c. True/False Google’s thinkDoubleClick campaign 2-a. Multiple choice Publicis-Omnicom Merger 2-b. Multiple choice Publicis-Omnicom Merger 3-a. Multiple choice Facebook strategy 3-b. Multiple Choice Facebook strategy Homework is available to faculty to select and integrate into their customized course. THE FOLLOWING SECTIONS OF THE INSTRUCTOR’S MANUAL HAVE A SELECTION OF CASES THAT CAN BE INCORPORATED INTO YOUR COURSE AS OUT OF CLASS ASSIGNMENTS , OR AS A

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METHOD FOR INITIATING CLASSROOM DISCUSSION.

Questions for Review and Critical Thinking 1.

Direct marketing is defined as an interactive system of marketing. Explain the meaning of the phrase interactive system. Give an example of a noninteractive system. How would an interactive system be helpful in the cultivation of brand loyalty? In an interactive system, marketing planning begins with the assumption that one goal of the program will be to create a dialogue with key customers. Direct-marketing programs are commonly planned so that one contact will lead to another and then another. The message to the customer can be refined with iteration. Rarely would mass media advertising be undertaken with a goal of creating a dialogue with the customer. For example, customer interaction normally would not be anticipated with the airing of a radio ad. When dialogue is pursued effectively, it can be valuable in tailoring offerings to the specific needs of the customer: This is just the sort of outcome that can foster brand loyalty.

Review the major forces that have promoted the growth in popularity of direct marketing. Can you come up with any reasons why its popularity might be peaking? What are the threats to its continuing popularity as a marketing approach? Many factors have contributed to the growing popularity of direct marketing, including convenience for the customer and computerized customer tracking. Direct marketing is especially appealing because of its emphasis on monitoring and producing measurable results. One possible limit to its growing popularity may be suggested by the bulk of mail, phone calls, and email solicitations we all receive from marketers. Will the effectiveness of direct marketing begin to slide as each of us is bombarded with more direct marketing contacts? Another threat stems from consumers’ concerns about privacy. As direct marketers erode consumers’ trust through continued unwanted intrusions, or in the event of regulatory changes that seek to address consumer privacy concerns, there may be negative implications for the continued use of direct marketing programs and tactics.

Describe the various categories of information that a credit card company might use to enhance its internal mailing list. For each category, comment on the possible value of the information for improving the company’s market segmentation strategy. The chapter discusses four major categories of information that may be used to enhance an internal list: demographic, geodemographic, psychographic, and behavioral data. These

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categories of information are all commonly used in the market segmentation process. They might be combined to identify new target segments or used in developing richer profiles of existing target segments. From the marketing strategist’s point of view, this question reaffirms an important application of the marketing database: It is a tremendous tool for creating and refining market segmentation strategies. 4.

What is RFM analysis, and what is it generally used for? How would RFM analysis allow an organization to get more impact from a limited marketing budget? (Note that every organization views its marketing budget as too small to accomplish all that needs to be done.) An RFM analysis asks how recently and how often a specific customer buys from a company, and how much he or she spends per order and over time. A primary purpose of RFM analysis is to identify the organization’s current, best customers. Since past behavior is the best predictor of future behavior, knowing who your best (and worst!) customers are can be beneficial in enhancing the productivity of marketing spending. Spending to retain or increase business from one’s best customers is typically a very efficient use of funds.

Compare and contrast frequency-marketing programs with those tools described in Chapter 15 as “Sales Promotion Directed at Consumers.” What common motivators do these two types of activities rely on? How are their purposes similar or different? What goal is a frequencymarketing program trying to achieve that would not be a prime concern with a sales promotion? Frequency-marketing programs and consumer-sales promotions commonly feature financial incentives to promote sales. There are important differences between the two types of tactics: The primary goal of a frequency-marketing program is to retain the business of existing customers. When financial incentives are accompanied by other more intangible rewards and information sharing, frequency-marketing programs may be valuable in building long-term relationships with customers. Conversely, sales promotions are designed to produce results in the short run. By teaching the consumer to be more price sensitive and deal prone, they are likely to yield decreased loyalty and destroy relationships with customers when used indiscriminately. Consumer sales promotions are best applied in encouraging people to try your brand for the first time, or as a response to aggressive dealing behavior by a competitor.

On the one hand, it is common to talk about building relationships and loyalty with the tools of direct marketing. On the other hand, it is also true that direct marketing tools such as spam, and telephone interruptions at home during dinner are constant irritants. How does one build relationships with irritants? In your opinion, when is it realistic to think that the tools of direct marketing could be used to build long-term relationships with customers?

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We do see a paradox in the direct-marketing field. Despite all the talk about establishing meaningful dialogues and building long-term relationships with key customers, the reality of the marketplace is mailboxes cluttered with unwanted solicitations and dinners interrupted by unwanted phone calls. Is this relationship building? Ask yourself (or your students)—for all the product categories you might purchase over the course of a year, how many of them do you find important enough to want a regular dialogue with the marketers of those products? If consumers do not want to have dialogues with marketers (and we suspect that most don’t), what’s the point of trying to develop an interactive marketing system? We certainly would agree that database marketing yields important efficiencies. While these efficiencies make us better mass marketers, we fail to see how they fundamentally change the marketing paradigm. 7.

What is it about direct marketing that makes its growing popularity a threat to the traditional advertising agency? The growing popularity of direct marketing means that organizations are investing more of their marketing budgets in this activity. This usually means that someone else’s budget is cut. Typically, direct marketing programs will come at the expense of conventional advertising campaigns placed in the traditional broadcast or print media. Because these “old-style” ad campaigns are the expertise of the traditional advertising agency, it is easy to see how ad agencies could view direct marketing with some envy and apprehension.

Compare and contrast the purposes served by direct marketing versus personal selling. The primary purposes of direct marketing – to close a sale, to identify future prospects, and to engage customers – also are at the core of effective personal selling. In many ways, the purpose of personal selling is to reinforce those goals, especially for products that are high priced, complicated to use, require demonstration, or in other ways are judged at the point of purchase. Often, sales personnel are primarily responsible for closing a sale, much as in direct marketing. But the role of personal selling, whether it involves sales staff taking orders or in engaged in creative selling, is more often highly dependent on product expertise. As in direct marketing, personal selling also plays a key function in customer engagement. Sales staff are deployed to engage both prospective and current customers. Sales people, in particular, play a critical role in long-term customer relationships through customer relationship management (CRM) programs – a process that can be enhanced through many of the techniques of direct marketing.

Use the example of the Sleep Number bed to illustrate the importance of a balanced approach in executing advertising and integrated brand promotion.

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The story of the Select Comfort bed demonstrates how the right balance of advertising, brand building, direct marketing, and personal selling can propel a company to broad success. The firm had its start in a classic direct marketing venue, with late night infomercials that promoted inflatable beds for last-minute house guests. Over time, though, the company adopted an integrated brand promotion strategy to expand its business. New campaigns mixed newspaper ads with local and prime time television spots, direct mail pieces, and the adoption of expertise personal selling techniques at the firm’s new retail stores. The Select Number case proves how different tools and tactics all play important roles in building brand awareness, communicating brand benefits, and closing the sale.

Experiential Exercises 1.

Since launching in 2004, Facebook has grown to more than 500 million users, many of whom frequent the site daily to interact with friends and join interest groups. Despite its popularity, Facebook has encountered ongoing privacy issues related to the capture and management of user data. Investigate a recent privacy controversy surrounding Facebook and answer the following questions: What data was captured without the consent of users? What might have been Facebook’s purpose for capturing the data? Were third-party marketers involved in compromising user privacy? How might privacy concerns affect the relationship between Facebook and its customers? Answers will vary, but Facebook’s information-linking model makes privacy all but impossible. Facebook integrates data with business partners like Microsoft, the company’s exclusive banner ad supplier, and Amazon.com, a retailer that cross-sells products to users based on items users "Like" on the social-networking site. While Facebook claims it does not share information with third parties, its privacy policy once included the possibility for such, and outside Platform Developers get access user data for the purpose of creating applications. Moreover, Facebook is widely criticized for Facebook Beacon, a program to target ads to friends of users based on data mined from users’ online purchases. Consumers generally object to having their purchasing habits revealed to the public. Outside marketers complicate matters. In 2009, an Australian marketing company launched uSocial, a direct marketing service that “sells Facebook friends” to businesses, celebrities, and others who want to expand on the social network. Anyone wanting thousands of new Facebook friends can get them instantly through uSocial for a few hundred dollars. Facebook is investigating uSocial to see if it can block the firm’s use of Facebook information.

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Direct marketing is more than telemarketing and direct mail. The infomercial and directresponse TV commercial are two forms of direct marketing that have proven wildly successful for Time Life Music, the Snuggie ®, ShamWow ®, and Slap Chop™. Break into groups and develop a direct marketing pitch that contains the key elements found in a popular infomercial or direct response TV commercial. Present your product pitch to the class and hold a vote to determine which group delivered the most compelling directresponse appeal. Students will have fun mimicking popular direct-response TV ads like ShamWow ® and OxiClean ®, but pitches should generally include a product demonstration, testimonials, an appealing pitchman, and an immediate call for action, such as dialing a toll-free number to obtain information or make a purchase. Today’s direct response TV pitches often list an accompanying website for online orders. Let students vote to determine their favorite direct marketing skit.

Working in small teams, assess the direct marketing components at the website of Moosejaw, the athletic apparel retailer popular on college campuses. (See http://www.moosejaw.com.) For each direct marketing appeal that you can identify on the site, explain how the company would be able to measure the effectiveness of the appeal. As you evaluate the site, also identify any and all opportunities for the company to gather customer information that could enhance its database marketing efforts. Students will find a wide array of direct marketing appeals at the home page of a retailer they likely already know well. They may already have been the subject of some of these appeals! The website contains some of the traditional direct marketing appeals discussed in the chapter, such as a seasonal catalogue that shoppers can request and direct-response promotions, such as free shipping on specific products for a limited time period. Moosejaw’s home page also promotes the company’s “Rewards” program, a version of the frequency incentives programs discussed in the chapter, and it takes numerous steps toward developing and expanding information for its customer database. Shoppers can register to fill out “wish lists” of their favorite items or join email lists to receive information about upcoming promotions. Going further, the retailer also asks shoppers to sign up to receive instant text messages via cell phone about Moosejaw events. Students must also assess the company’s online privacy policy; “do they find it to be adequate?”

The chapter discusses how database marketing can be used not only as a tool to reach customers and close sales, but also to aid product development. Working again in small teams, identify three distinct offerings that could be developed for well-known brands based on input and knowledge gleaned from customer and sales databases. As you propose the new products or services, identify specific types of database information that could influence the

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development process. Customer databases can provide valuable information for companies as they develop new products and services. The chapter offers the example of the apparel catalog Lands’ End, which developed special autumn promotions to offer college football fans logo gear by working in conjunction with university alumni association information. Students should demonstrate in this exercise an understanding of the distinction between regular mailing lists and internal and external lists that have been augmented with demographic, geo-demographic, psychographic, or behavior data that offer a more detailed examination of buying and spending habits. Encourage students to be creative in their thinking about how those pieces of information could contribute to new product or service development.

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

CHAPTER 18 Public Relations, Influencer Marketing, and Corporate Advertising KEY TERMS public relations publicity proactive public relations strategy reactive public relations strategy

public relations audit public relations plan influencer marketing word-of-mouth buzz marketing viral marketing

corporate advertising advocacy advertising cause-related advertising green marketing

Summary PPT 18-2 and 18-3 Explain the role of public relations (PR) as part of an organization’s overall advertising and IBP strategy. Public relations focuses on communications that can foster goodwill between a firm and constituent groups such as customers, stockholders, employees, government entities, and the general public. Businesses utilize public relations activities to highlight positive events associated with the organization; PR strategies are also employed for damage control when adversity strikes. Public relations has entered a new era, as changing corporate demands and new techniques have fostered a bolder, more aggressive role for PR in IBP campaigns. Detail the objectives and tools of public relations. An active public relations effort can serve many objectives, such as building goodwill and counteracting negative publicity. Public relations activities may also be orchestrated to support the launch of new products or communicate with employees on matters of interest to them. The public relations function may also be instrumental to the firm’s lobbying efforts and in preparing executives to meet with the press. The primary tools of public relations experts are press releases, feature stories, company newsletters, interviews and press conferences, and participation in the firm’s event sponsorship decisions and programs. Describe two basic strategies motivating an organization’s public relations activities.

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

When companies perceive public relations as a source of opportunity for shaping public opinion, they are likely to pursue a proactive public relations strategy. With a proactive strategy, a firm strives to build goodwill with key constituents via aggressive programs. The foundation for these proactive programs is a rigorous public relations audit and a comprehensive public relations plan. The plan should include an explicit statement of objectives to guide the overall effort. In many instances, however, public relations activities take the form of damage control. In these instances the firm is obviously in a reactive mode. Although a reactive strategy may seem a contradiction in terms, it certainly is the case that organizations can be prepared to react to bad news. Organizations that understand their inherent vulnerabilities in the eyes of important constituents will be able to react quickly and effectively in the face of hostile publicity. Illustrate the strategies and tactics used in influencer marketing programs. It is know that consumers are predisposed to talk about brands, and what they have to say is vital to the health and well-being of those brands. Hence it is no surprise that marketers are pursuing strategies to proactively influence the conversation. Influencer marketing refers to tools and techniques that are directed at driving positive word of mouth about a brand. In professional programs, important gatekeepers like veterinarians or any type of health care professional may be a focal point. In peer-to-peer programs, the new mantra has become finding the connectors. But whether it’s professional or peer to peer, the marketer is always challenged to give the influencers something meaningful or provocative that they will want to talk about. Discuss the applications and objectives of corporate advertising. Corporate advertising is not undertaken to support an organization’s specific brands but rather to build the general reputation of the organization in the eyes of key constituents. This form of advertising serves goals such as enhancing the firm’s image and building fundamental credibility for its line of products. Corporate advertising may also serve diverse objectives, such as improving employee morale, building shareholder confidence, or denouncing competitors. Corporate ad campaigns generally fall into one of three categories: image advertising, advocacy advertising, or cause-related advertising. Corporate advertising may also be orchestrated in such a way to be very newsworthy, and thus it needs to be carefully coordinated with the organization’s ongoing public relations programs.

Chapter Outline Introduction

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

Public relations (PR) has brought to life the whole idea of “buzz building” for a brand that is increasingly popular in marketing today. PR can be used to activate social media, engage mainstream media, highlight celebrity spokespersons, bond with a community, or stage a branded experience via an event. There is also the problem of convergence that is taking place among the skill sets of marketers, advertisers, and public relations professionals. This chapter focuses on the fundamentals of buzz building and sponsored events as a PR strategy. Public relations has moved well beyond its traditional role of simply managing goodwill or “relations” with a firm’s many publics, which can take the form of damage control in the face of negative publicity. It is more about corporate communications and image management in times of noncrisis. The traditional functions are still important, but there’s much more going on in PR circles today. Another major topic that is covered in the chapter—influencer marketing— focuses on monitoring the digital environment and managing how consumers view a firm and its brands. In this era of social media, a firm can monitor, understand, and better respond to what consumers are saying to each other about the firm’s brands. And PR is also the tool for implementing helpful pro-social public service announcements (PSAs). Last, the concept of corporate advertising is also included in this chapter. Corporate advertising typically uses major media to communicate a unique, broad-based message that is distinct from more product-specific brand building. It contributes to the development of an overall image for a firm without touting specific products or services. As consumers are becoming increasingly informed and sophisticated, they are also demanding a higher standard of conduct from the companies they patronize. When a company has established trust and integrity, it is much easier to build productive relationships with consumers. I. Public Relations PPT 18-4 and 18-5 The role of public relations is to foster goodwill between a firm and its many constituent groups. These constituent groups include customers, stockholders, suppliers, employees, government entities, citizen action groups, and the public. Public relations function seeks to highlight positive events in an organization like quarterly sales and profits or noteworthy community service programs. Conversely, public relations can be used strategically for damage control when adversity strikes. A. New Era for Public Relations?

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

Consumers are spreading information about brands like never before via social media and other forms of pass-along readership. The challenge is not to make people talk about brands but to give them interesting things to talk about, which would bring a firm’s brand into the conversation in a positive way. Good PR can create a positive social epidemic. Public Relations and Damage Control One of the most important roles PR can play is damage control. Firms can encounter serious public relations problems either of their own doing or outside their control. Students are provided two historic cases—one of each type of problem. Intel created its own PR nightmare by not reacting quickly to a flaw in its new Pentium chip that was released in 1994. They claimed that the chip would produce a computational error only every 27,000 years, whereas IBM, which used this chip in its PCs reported errors every 24 days. In the end, Intel had to confess to the error and offer a free replacement chip. Taco Bell suffered the curse of social media as consumers spread the video of rats in the firms Greenwich Village restaurant across the Internet. B. Objectives for Public Relations PPT 18-6 Even though reacting to a crisis is a necessity, it is always more desirable to take a proactive approach. The key is to have a structured approach to public relations, including a clear understanding of objectives for PR. Within the broad guidelines of image building, damage control, and establishing relationships with constituents, it is possible to identify six primary objectives of public relations: • Promoting goodwill—this is an image-building function of public relations. Industry events or community activities that reflect favorably on a firm are highlighted. • Promoting a product or service—press releases or events that increase public awareness of a firm’s brands can be pursued through public relations. • Preparing internal communications—disseminating information and correcting misinformation within a firm can reduce the impact of rumors and increase employee morale. For events such as reductions in the labor force or mergers of firms, internal communications can do much to dispel rumors circulating among employees and in the local community. • Counteracting negative publicity—this is the damage control function of public relations. The attempt is not to cover up negative events but to prevent the negative publicity from damaging the image of a firm and its brands. • Lobbying—the public relations function can assist a firm in dealing with government

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

•

officials and pending legislation. Industry groups maintain active and aggressive lobbying efforts at both the state and federal levels. Giving advice and counsel—assisting management in determining what (if any) position to take on public issues, preparing employees for public appearances, and helping management anticipate public reactions are all part of the advice and counsel function of public relations.

C. The Tools of Public Relations PPT 18-7 and 18-8 There are several means by which a firm can pursue the objectives just cited. The goal is to gain as much control over the PR process as possible. Press Releases Having a file of information that makes for good news stories puts the firm in a position to take advantage of press coverage. Items that make for good public relations include—new product launches; new scientific discoveries; new personnel; new corporate facilities; innovative corporate practices, such as energy-saving programs or employee benefit programs; annual shareholder meetings; and charitable and community service activities. Feature Stories While a firm cannot write a feature story for a newspaper or any other medium, it can invite journalists to do an exclusive story on the firm when there is a particularly noteworthy event. Company Newsletters/e-Newsletters In-house publications such as newsletters can disseminate positive information about a firm through its employees. As members of the community, employees are proud of their firm’s achievements. Newsletters can also be distributed to important constituents in the community. Interviews and Press Conferences Interviews and press conferences can be highly effective public relations tool. Often they are warranted in a crisis management situation. Firms have also successfully called press conferences to announce important scientific breakthroughs or to explain the details of a corporate expansion or for new product launch.

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

Sponsored Events Marketing and sponsoring events can also serve as an essential PR or community-building component for a brand. Sponsorships run the gamut from supporting community events to mega-events. At the local level, prominent display of the corporate name and logo offers residents the chance to see that an organization is dedicated to supporting their community. Another form of sponsorship is the fundraiser. Fundraisers for nonprofit organizations of all sorts give positive visibility to corporations. Publicity Publicity is essentially free media exposure about a firm’s activities or brands. The public relations function seeks to monitor and manage publicity but obviously can never actually control what the media chooses to say or report. One major advantage of publicity when the information is positive, is that it tends to carry heightened credibility because information shows up in newspapers and on news broadcasts. D. Basic Public Relations Strategies PPT 18-9 Public relations strategies can be categorized as either proactive or reactive. Proactive public relations strategy is guided by marketing objectives, seeks to publicize a company and its brands, and should serve to build goodwill for the brand. Reactive public relations strategy focuses on problems to be solved rather than opportunities and requires a company to make defensive measures. The two strategies involve different orientations to public relations. Proactive Strategy PPT 18-10 In developing a proactive PR strategy, a firm acknowledges opportunities to use public relations efforts to accomplish something positive, programs go unnoticed by important constituents. To implement a proactive public relations strategy, a firm needs to develop a comprehensive public relations program. The key components of such a program are: •

•

A public relations audit—a public relations audit identifies the characteristics of a firm that are positive and newsworthy. Information is gathered in much the same way as information related to advertising strategy is gathered. A public relations plan—the next step is a structured public relations plan. A public relations plan identifies objectives and activities related to the public relations communications issued by a firm. The components of a public relations plan include the

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

following: o Situation analysis—this section of the public relations plan summarizes the information obtained from the public relations audit. o Program objectives—objectives should be set for both short-term and long-term opportunities. The focal point is not sales or profits. Rather, factors such as the credibility of product performance (that is, placing products in verified, independent tests) and the stature of the firm’s research and development efforts (highlighted in a prestigious trade publication article) are legitimate types of PR objective. o Program rationale—the role the public relations program will play relative to all the other communication efforts—particularly advertising and community development—being undertaken by a firm. This is the area where an IBP perspective is clearly articulated for public relations effort. o Communications vehicles—this section of the plan specifies precisely what means will be used to implement the public relations plan. o Message content—PR messages should be researched and developed much the same way as advertising messages. Reactive Strategy PPT 18-11 Firms must implement a reactive public relations strategy when events outside the control of the firm create negative publicity. It is difficult to organize for and provide around reactive PR. Since the events that trigger a reactive effort are unpredictable, a firm must be prepared to act quickly and thoughtfully. Two steps help firms implement reactive public relations strategy: • The public relations audit—the public relations audit that was prepared for the proactive strategy helps a firm also prepare its reactive strategy. The information provided by the audit gives a firm what it needs to issue public statements based on current and accurate data. • The identification of vulnerabilities—the other key step in a reactive strategy is to recognize areas where the firm has weaknesses in its operations or products that can negatively affect its relationships with important constituents. From a public relations standpoint, these weaknesses are called vulnerabilities. E. A Final Word on Public Relations Public relations is a prime example of how a firm (or an individual) can identify and then manage aspects of communication in an integrated and synergistic manner to diverse audiences. Without recognizing public relations activities as a component of the firm’s overall

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

IBP communication effort, misinformation or disinformation could compromise more mainstream communications such as advertising. II. Influencer Marketing PPT 18-12 Public relations is a discipline devoted to monitoring and managing what consumers are saying to one another about the firm. In addition, consumers have become increasingly predisposed to talk about brands, both online and offline. As such, PR can give consumers something positive to talk about. Influencer marketing refers to a series of personalized marketing techniques directed at individuals or groups who have the credibility and capability to drive positive word of mouth in a broader and salient segment of the population. The idea is to give the influencer something positive to talk about with regard to firms and brands. A. Professional Influencer Programs It is the process of targeting professionals (such as doctors, therapists, lawyers, accountants) with positive PR messages with the goal of having these “professionals” influence their clients attitude toward a brand. The process can be thought of as systematic “seeding of conversations” between a consumer, the influencer, and the brand. Professionals in any field of endeavor take their role very seriously, so influencer programs directed to them must be handled with great care. First, their time is money, so any program that wastes their time will be a waste of money and not be implemented. However, tactics designed to encourage professionals to try the product themselves can be very valuable. Also, messaging with professionals needs to provide intellectual currency and help the professionals learn important benefits of the brand and potentially increase their perceived expertise with their clients. Additionally, programs directed at professionals require a long-term commitment. For them to be advocates, trust first must develop, and any marketer must show patience and persistence to earn that trust. B. Peer-to-Peer Programs PPT 18-13 and 18-14 In peer-to-peer programs, the idea is to give influencers something fun or provocative to talk about. Think of it as an emphasis on “social currency” for peer-to-peer programs versus “intellectual currency” for professionals. Buzz and Viral Marketing PPT 18-15

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

Word of mouth in marketing parlance is the process of encouraging consumers to talk to each other about a firm’s brand or marketing activities. Buzz marketing is creating an event or experience that yields conversations that include the brand. Viral marketing is the process of consumers marketing to consumers via the Web (e.g., via blogs or forwarding YouTube links) or through personal contact stimulated by a firm marketing a brand. The idea behind both buzz and viral marketing strategies is to target a handful of carefully chosen trendsetters or connectors as your influencers and let them spread the word. Cultivating Connectors It is the process of cultivating peer to peer influencers to positively tout a firm’s brand. Procter & Gamble has enrolled 600,000 “connectors” in its Vocalpoint program—mostly women with large social networks. III. Corporate Advertising PPT 18-16 and 18-17 Corporate advertising is not designed to promote the benefits of a specific brand but is intended to establish a favorable attitude toward a company as a whole. A. The Scope and Objectives of Corporate Advertising Corporate advertising is a significant force in the overall advertising carried out by organizations around the world. Presumably, large firms have broader communications programs and more money to invest in advertising, which allows the use of corporate campaigns. The objectives for corporate advertising are well focused. In fact, corporate advertising shares similar purposes with proactive public relations when it comes to what companies hope to accomplish. The typical objectives are: • To build the image of the firm among customers, shareholders, the financial community, and the general public. • To boost employee morale or attract new employees. • To communicate an organization’s views on social, political, or environmental issues. • To better position the firm’s products against competition, particularly foreign competition. • To play a role in the overall advertising and IBP strategy of an organization, providing a platform for more brand specific campaigns. PPT 18-17

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

B. Types of Corporate Advertising PPT 18-18, 18-19, and 18-20 There are three basic types of corporate advertising. These three types are corporate image advertising, advocacy advertising, and cause-related advertising. Each is discussed in the following sections. Corporate Image Advertising Majority of corporate advertising efforts focus on enhancing the overall image of a firm among important constituents—typically customers, employees, and the general public. The goal is to enhance the broad image of the firm and may not result in immediate effects on sales, however, attitude can play an important directive force in consumer decision making. Advocacy Advertising Advocacy advertising attempts to establish an organization’s position on important social or political issues. Advocacy advertising meant to influence public opinion on issues of concern to the sponsor. Cause-Related Advertising Cause-related advertising features a firm’s affiliation with an important social or societal cause—examples are reducing poverty, increasing literacy— and takes place as part of the cause-related marketing efforts undertaken by a firm. The goal of cause-related advertising can be to enhance the image of the firm by associating it with social issues of importance to its constituents; this tends to work best when the firm confronts an issue that truly connects to its business. Green Marketing Green marketing refers to corporate efforts that embrace a cause or a program in support of the environment. Such efforts include shoe boxes made out of 100 percent recycled materials at Timberland and the “Dawn Saves Wildlife” program sponsored by Procter & Gamble.

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

components will provide students with assurances that they have mastered the assigned readings and provide feedback to faculty that the students have completed the assigned readings and data on student mastery of the content. In addition to the feedback on the correct answers, all of the assessment objects have been enhanced with additional tags that can be aggregated to provide feedback on how individual students have done on a specific learning outcome such as ethics. The online material can be delivered in one of two formats. For instructors who want to provide students with access to the Ad Age on Campus access as well as the online advertisements and student facing self-assessment quizzes, CourseMate will be provided with each new copy of Advertising and Integrated Brand Communication. Alternatively, students can decide to purchase CourseMate on its own which will also come with the MindTap Reader, which is the ebook version of the print product. For faculty that desire to have a variety of more in-depth assignments to integrate into their course and a desire to have more student data that can be used for analytic purposes, MindTap can be purchased with an enhanced capability. Faculty can customize the student experience and integrate the experience for their students into the campus Learning Management System. For a complete guide into the reporting and analytical capabilities available to faculty, consult the Assurance of Learning section of this manual.

Boxed Feature Questions and Tags QUESTION

DIFFICULTY

BUSPROG

DISC

Primary

BLOOM'S

Chapter 18 Social Media 01

Easy

Technology

Promotion

Application

Chapter 18 Social Media 02

Challenging

Technology

Promotion

Synthesis

Chapter 18 Globalization 01

Moderate

Diversity

Promotion

Application

Chapter 18 Globalization 02

Moderate

Diversity

Promotion

Application

Chapter 18 Ethics 01

Moderate

Ethics

Promotion

Application

Chapter 18 Ethics 02

Easy

Ethics

Promotion

Application

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

CHAPTER 18-Social Media adage.com/article/creativity-pick-of-the-day/santa-google-helpouts/245812/ • 18.SocialMedia.Q1 In public relations and influencer marketing, Google uses what spokescharacter to send their message via social media to consumers? A. Cupid B. Santa C. The tooth fairy D. The Easter bunny Answer: B •

18.SocialMedia.Q2

Lately, there has been much discussion and controversy about using religious figures, such as Santa, or the term Christmas in some forms of communication. What do you think about Google linking with Santa for this campaign from a corporate image or PR viewpoint? Answer: In PR, given the hype that some groups have about religious imagery in branding, it would perhaps be a smart idea to consider other characters that are less associated with certain religions. Frosty the Snowman would have been a more PR worthy choice. Note how Coca-Cola does this with the Polar bears (as well as Santa), and the Polar bears are a personal favorite and don’t offend any one religion. It is safer. CHAPTER 18-Globalization http://adage.com/article/creativity-pick-of-the-day/creativity-2013-boston-mag-s-post-marathonattacks/245816/ • 18.Globalization.Q1 One way to enhance a public relations image of a company as more global, as seen here with Heineken is via: A. Changing the product packaging to show exactly where the product was made B. An event that goes on in various countries on the same day C. A free plane ticket to take a trip internationally right then and there D. Creating a new international day of celebrating the brand Answer: C

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

•

18.Globalization.Q2

The extension of the global “Open Your World” campaign is an example of influencer marketing from what agency? A. GSD&M B. Enviromedia C. Wieden & Kennedy D. LatinWorks Answer: C

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

CHAPTER 18-Ethics http://adage.com/article/creativity-pick-of-the-day/kids-smoke-powerful-anti-tobacco-psa-fomthailand/235554/ 18.Ethics.Q1 In this effort, the tactic used for public relations and an anti smoking objective is a: A. Press Release B. Corporate website C. Celebrity endorser D. Public service announcement Answer: D • 18.Ethics.Q2 The country featured in this public relations campaign, because many of their citizens smoke, is: A. China B. Russia C. Thailand D. Romania Answer: C

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

Homework Grid Homework Description 1-a. Multiple Choice Sport Club Recife campaign 1-b. Multiple Choice Sport Club Recife campaign 2-a. Multiple Choice Facebook Privacy Breach 2-b. True/False Facebook Privacy Breach 3-a. Multiple Select Select the public relations issues. Homework is available to faculty to select and integrate into their customized course. THE FOLLOWING SECTIONS OF THE INSTRUCTOR’S MANUAL HAVE A SELECTION OF CASES THAT CAN BE INCORPORATED INTO YOUR COURSE AS OUT OF CLASS ASSIGNMENTS , OR AS A METHOD FOR INITIATING CLASSROOM DISCUSSION.

Questions for Review and Critical Thinking 1.

Do you agree with the premise that consumers today are spreading the word about brands like never before? Does that assessment apply to you and the people in your network? Modern consumers, and particularly younger consumers, are drastically reshaping how brand messages are shaped and spread. As the class evaluates the changing role of public relations, students can consider how they discuss newly released videogames or computers, films and television shows, or even – as the chapter introduction illustrates – products as basic as toothpaste. Public relations has entered a new realm, one well beyond the traditional role of managing community goodwill or investor relations. While these functions remain critical, public relations has expanded to focus on a more aggressive, proactive role where buzz building is key and harnessing influence marketers is critical. Shaping brand messages remains as critical as ever, though, and that presents a new challenge for marketers: to make sure that as consumers are discussing and commenting and evaluating brands they have something interesting to talk about. Increasingly, public relations is focused as much on its traditional mission as on finding ways to insert brands into the day-to-day, virtual and real-world conversations of key consumers.

Would it be appropriate to conclude that the entire point of public relations activity is to generate favorable publicity and stifle unfavorable publicity? What is it about publicity that makes it such an opportunity and threat? Publicity is unpaid media exposure about a company’s activities, or its products and

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

services. Publicity can have tremendous positive or negative consequences because of the credibility of the news media. Most consumers recognize the persuasive intent of advertising and thus discount its credibility. The same level of discounting would not be expected for most instances of publicity, however. Certainly, public relations activities are undertaken with the hope of influencing the publicity that a firm receives. However, another important contribution of public relations activities is to make certain that a firm’s employees have accurate information about its activities and intentions. This internal communication issue can be tremendously important for employee morale and, in most instances, is not an issue of publicity. 3.

There is an old saying to the effect that “there is no such thing as bad publicity.” Can you think of a situation in which bad publicity would actually be good publicity? How is that possible? Sometimes bad publicity is just that—bad publicity. There seems to be very little positive that could come from the Taco Bell situation. But encourage students to also consider the truth of this old saying by asking if they can identify what types of benefit might come just from some of the perceived bad publicity situations identified in the chapter. Encourage students also to consider the example of celebrity news sites and magazines. Publicity about a popular celebrity’s troubled marriage, substance abuse problems, or even weight gain, might seem likely to tarnish their image and hurt their film or music careers, but students should be able to produce plenty of examples where the buzz about personal issues only increased interest in a celebrity’s professional work.

Most organizations have vulnerabilities they should be aware of to help them anticipate and prepare for unfavorable publicity. What vulnerabilities would you associate with each of the following companies? • R.J. Reynolds—makers of Camel cigarettes • Procter & Gamble—makers of Pampers disposable diapers • Kellogg’s—makers of Kellogg’s Frosted Flakes • ExxonMobil—worldwide oil and gasoline company • McDonald’s—worldwide restaurateur Most organizations have multiple vulnerabilities. For these five companies, here are some of the obvious possibilities: Cigarette marketers have proven vulnerable in the area of being accused of marketing their products to children. P&G must constantly deal with concerns about solid waste problems created by disposable diapers. Cereal makers often come under fire for marketing highly sweetened products to children using adorable cartoon characters. Exxon Mobil has been involved in major environmental catastrophes in the transport of its crude oil. Finally, McDonald’s receives constant criticism for the poor

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

nutrition content of its products and for solid waste problems created by its product packaging. As students identify and assess these vulnerabilities, also encourage them to consider what proactive steps each company has (or could) take to counteract those factors. 5.

What key points need to be managed in creating successful influencer marketing programs with medical professionals? Medical professionals, whether the local vet, dentist, or physician, can be a powerful source of consumer influence. Savvy marketers should try to tap into this important point in conversations about brand, but they also must be considerate of several factors. Professionals in any field take their role seriously, so any influencer program must be approached thoughtfully and honestly. One highly successful approach in building influencer marketing with medical professionals is to allow the professional to try the product themselves and to provide detailed information about its benefits and success record. Time also is an important issue. Health professionals do not want their own time wasted. Just as importantly, programs directed at them typically require a long-term commitment on the part of the marketing or sales team. For a health professional to become a brand advocate required trust – and any marketer must show patience and persistence to develop that trust.

Imagine yourself as a connector. In that role, what kind of inside information would you find interesting enough to tell your friends about a new movie or TV show? What would it take for you to start that conversation? Carefully selected trendsetters or “connectors” can be powerful tools for marketers seeking to build peer-to-peer and viral programs. The underlying challenge is to stimulate a meaningful, engaging discussion – in effect, to give those key consumers something interesting to talk about. Students will gain a greater understanding of this challenge as they assess what could prompt them to act as a connector for a given brand, product, television show, or film. Just because a student might like a new television series, is that prompt enough to promote it to a friend? This discussion offers a good opportunity to revisit the “Five T’s” behind enhanced peer-topeer marketing programs discussed in Exhibit 18.14. Andy Sernovitz has identified five key tools to promote favorable word-of-mouth marketing. They include: • Talkers—find consumers who are predisposed to talk about brands, and who have extensive social networks. • Topics—give those consumers a compelling story line about your brand to discuss. • Tools—build real-world and online promotions that are easy to track and compelling

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

• •

enough that consumers will seek them out. Taking part—emphasize brand conversations as two-way dialogues, not single-minded brand messaging. Tracking—blogs, social networks, and other Internet tools offer companies ways to measure word-of-mouth brand discussions, concerns, and issues.

Review the different forms of corporate advertising and discuss how useful each would be as a device for boosting a company’s image. Is corporate advertising always an effective image builder? The three forms of corporate advertising discussed in this chapter are corporate image advertising, advocacy advertising, and cause-related advertising. Of the three, cause-related corporate campaigns are most likely to attract the attention of the press and generate publicity. The tools of public relations could be used in conjunction with cause-related advertising, and event sponsorship might be folded in as well to yield a highly effective IBP effort. Many forms of advertising can generate publicity, and many advertisers would view this as a desirable outcome for a campaign. For example, in the Benetton case mentioned earlier, provocative advertising was undertaken with an obvious intent to generate publicity. Celebrities, popular music, and entertainment can also commonly attract the attention of the press. Is corporate advertising always an image builder? Not necessarily. Take cause-related advertising for instance: Research cited in the chapter shows that many consumers believe the only reason firms support causes is to enhance the company’s image. The image of a firm as self-serving becomes much greater than the image of a firm as a philanthropic partner. This negative reaction, however, is more prevalent among adults; youth seem to identify well with cause-related corporate campaigns.

10.

Do you ever select a brand based on the company’s environmental track record? Investigate one of your favorite brands at CoopAmerica.org. Did you find anything that changes your feelings about this brand? As with other forms of cause-related corporate advertising, so-called green marketing can enhance a company’s image by associating it with growing social awareness about environmental issues. Research has shown that a firm’s environmental track record increasingly influences consumer buying decisions, and students in class are likely to have their own examples of when they have been motivated to buy or reject a brand or product based on the company’s efforts to support the environment. After exploring CoopAmerica.org, students are likely to discover issues that they might not have considered before.

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

As they evaluate different firms online, students should be reminded of how the Internet has radically changed the rules for green marketing. No longer is it enough for companies to claim that they are taking steps to protect the environment; a broad network of environmental groups tracks those claims and measures the veracity of them in online reports, blogs, and other postings.

Experimental Exercises 1.

Texting while driving is a serious public safety concern, and the U.K.’s South Wales Police Department achieved international buzz recently by sending out a message that texting kills. The organization’s graphic Hollywood-styled video featured three teenage girls on a joy ride when they text-and-drive their way into a head-on collision with another vehicle. The video went viral and left international viewers shocked and in tears; some complained the PSA was too terrifyingly realistic to air on television. What companies could benefit from making texting-and-driving a focus for ongoing cause-related advertising? Make your case by identifying companies that have successfully used cause-related advertising for similar causes. First, research conducted on this highway safety video found it to be highly persuasive. A full 86 percent of viewers said the PSA was extremely effective; 80 percent said they would be less likely to text and drive after watching the video. This growing highway safety issue is a perfect corporate advertising opportunity for businesses that want to engage in corporate social responsibility efforts. Firms that could benefit from causerelated advertising about the dangers of texting include automakers like Ford and Toyota, as well as smartphone manufacturers like Apple, Research in Motion, Motorola, and Samsung. Safety and health organizations also could use such appeals equally well. Effective safety messages use a mix of staggering statistics and scare tactics to persuade audiences—especially teens.

Celebrity endorsements present opportunities and threats to top sports brands. Golf great Tiger Woods was leading the world in product endorsements until personal revelations stunned the public and damaged the golfer’s pristine image. Write a report on the role public relations played in responding to the negative publicity, and be sure to answer the following questions: How did top brands react to the bad news? What public relations tools did management teams use to conduct damage control? Was the golfer’s public relations strategy proactive or reactive? What was the primary public relations objective? What else might the golfer have done to rehabilitate his image and the brands with which he was associated? In the months following the bad news, top global brands AT&T, Gatorade, and Accenture

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

dissolved their agreements with Tiger Woods. Damage control efforts included a Tiger Woods Nike commercial, in which the golfer conducts a mea culpa conversation with his departed father, Earl Woods. Also, Tiger Woods issued a 14-minute televised public apology to address the situation head on, saying: “I want to say to each of you, simply, and directly, I am deeply sorry for my irresponsible and selfish behavior.” The PR objective was to counteract negative publicity, and it may have worked in the short-term, for Nike and EA Sports continued working with the golfer. 3.

To better position itself in the competitive college admissions field, your college or university is planning to launch a public relations campaign to encourage more highlyqualified high school seniors to apply for admission. Working in small teams, identify what steps you would take to create a proactive public relations strategy for the school’s admissions office. Your proposal should clearly identify the plan’s objectives and rationale, what steps should be taken prior to the campaign’s launch, and what communication methods and content would be most effective. Even when developing a proactive public relations strategy for a brand that students should know very well–their own college–they should demonstrate an understanding of the importance of developing a comprehensive public relations program as outlined in the chapter. In their proposal, students should acknowledge the importance of a public relations audit and detail what information such an audit could reveal about the college. (For example, why do students apply? What is the grade point average of the typical high school applicant? What do they hope to achieve with a college education?) With that information, the students can outline the broad objectives of an admissions office public relations plan, including a situational analysis, and the program objectives and rational. The student teams also should identify the most effective communication vehicles for such a plan and propose effective messaging for the campaign.

Working in the same teams, propose what steps you would take to launch an effective peerto-peer marketing campaign as part of the effort to raise awareness of the college and increase applications to the school. In your answer, identify what types of individuals would make the most influential connectors to generate buzz about the school and explain what types of virtual and real-world tools could be developed to help those connectors have a compelling story about the college to share with others. The last chapter of the text emphasizes the emerging importance of influencer marketing, and this exercise gives students the opportunity to demonstrate their understanding of the important role of connectors and a compelling marketing narrative in building buzz and creating effective peer-to-peer marketing programs. In their answers, students might suggest that current student leaders at the college could be effective connectors; so might

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

the school’s alumni network. It is critical that students recognize that identifying potential connectors is not enough by itself. They also should demonstrate what online tools or realworld campaigns could be adopted to provide those connectors with an interesting story to tell about the college, one that is able to help the admissions office realize its goals of boosting applications.