INSTRUCTOR MANUAL for Advertising and Integrated Brand Promotion, 6e Thomas O'Guinn Chris Allen Rich by digitaldownload87

INSTRUCTOR MANUAL for Advertising and Integrated Brand Promotion, 6e Thomas O'Guinn Chris Allen Richard Semenik.

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 old-style 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. o Consumers know brands because they hear about them and use them every day— Apple, Nike, Pantene, Starbucks, and literally hundreds of others. o 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 integrated brand promotion (IBP) advertisement

advertising campaign audience target audience household consumers members of business organizations

members of a trade channel professionals trade journals government officials and employees

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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 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 Know what advertising and integrated brand promotion are and what they can do. Because advertising has become so pervasive, it would be reasonable to expect that you might have your own working definition for this critical term. However, 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 an advertiser has placed to persuade an audience. An advertising campaign is a series of ads and other promotional efforts with a common theme placed to persuade an audience over a specified period. 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 advertising communication. Advertising cannot be effective unless some form of communication takes place between the advertiser and the audience. However, advertising is about mass communication. Many models 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. Describe the different ways of classifying audiences for advertising and IBP. While 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. Explain the key role of advertising and IBP business processes.

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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 concept of integrated brand promotion (IBP) and the role advertising plays in the process. Integrated brand promotion (IBP) is the use of various promotional tools like event sponsorship, the Internet, public relations, and personal selling, along with advertising, in a coordinated manner to build and maintain brand awareness, identity, and preference. When marketers use advertising in conjunction with other promotional tools, they create an integrated brand promotion that highlights brand features and value. Note that the word coordinated is central to this definition. Over the past 30 years, the advertising and promotion industry has evolved to recognize that integration and coordination of promotional elements are key to effective communication and lasting brand identity.

CHAPTER OUTLINE INTRODUCTORY SCENARIO: So Just What Is Going On? This introductory scenario sets an important tone for student understanding of the changes taking place in advertising and IBP. And, it should strike some very responsive cords within the class! You will likely have students who have engaged in activities just like the scenario in the last 24 hours: •

Visited MySpace, Facebook, or “tweeted” on Twitter

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Read a blog

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Ordered something from a website (in this scenario, concert tickets)

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IM’ed their friends

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Sent to or received programming on their smartphone l or iPod, or even iPad

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Seen an ad embedded in a video game

Here are the issues to highlight from this scenario: •

Consumers, like your students, want to control their information flow and are turning

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away from mass media message reception which they cannot control

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Consumers trust information sources they believe are under their control more than mass mediated messages

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Firms have been using traditional mass media to communicate with consumers for decades and are struggling to find ways to incorporate messages into those more trusted media, particularly the digital and social media networks highlighted in the scenario.

The New World of Advertising and Integrated Brand Promotion At this point, it is important to provide a perspective on advertising and IPB.

PPT 1-2 here

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Consumer preferences and technology are reshaping the commercial communication environment

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The lines between information, entertainment and advertising/IBP are blurring and this phenomenon is referred to as “Madison and Vine.”

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The mass media are not dead, but they are being supported or supplanted by media choices facilitated by new technologies

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The current “wisdom” is that advertising and IBP will become more digital, interactive and social facilitated through “mobile marketing” efforts (i.e., reaching consumers with messages on their mobile devices)

II. Old Media/Digital Media—It’s All About the Brand • • • • •

PPT 1-3 here

Fundamentally though, regardless of media, firms use advertising and IPB to build brands in the marketplace. The use of Facebook or Twitter do not change the fundamental challenge— communicating effectively about the brand. Firms of all sizes benefit from using advertising and IBP tools. Advertising is one tool in an overall integrated brand promotion effort (along with events, sponsorships, sales promotions, public relations, etc.). Advertising and promotion do not guarantee success—8 out of 10 new products fail, Cadillac market share plummeted from 75 percent in the 1950s to about 9 percent by the end of the 1990s due to poor product design and positioning. Cadillac is reinventing the brand features, using new advertising and promotion now with some early success.

III. What Are Advertising and Integrated Brand Promotion? PPT 1-4 here It is important to start students out with a perspective and clear definitions of the fundamental terms in the advertising process:

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Despite the importance of advertising and IBP to firms, the average person has a hard time understanding and appreciating these processes: • Many people believe advertising deceives others—but not them, of course! • Many people think that those who work in advertising are morally bankrupt. • Advertising is often seen as hype, manipulation, or mind control. • At best, people may see advertising as informative, amusing, or occasionally hip. The truth about advertising is that the reality lies squarely between the extremes: • It can be hard-hitting and informative or boring and ineffective. • It can be creative and entertaining or simply annoying and intrusive. • Highlight that advertising is anything but unimportant. • It plays a pivotal role in world commerce. • It affects the way people experience and live their lives. • It affects language and culture. • It is a complex communication and business process. A. Advertising Defined: Advertising is a paid, mass-mediated attempt to persuade. • Paid means that a client or sponsor is involved. (PSAs are not ads technically) • Mass mediated means that the advertising is delivered through a communication medium like television, radio, newspapers, or new media like the Internet. • Attempt to persuade means that ads are designed to get somebody to believe and/or do something—such as like a brand and eventually buy that brand. B. Integrated Brand Promotion Defined: Integrated Brand Promotion (IBP) is the process of using a wide range of promotional tools working together to create widespread brand exposure. PPT 1-5 here • IBP is a process • IBP uses a wide ranges of tools including: o Advertising o Sales Promotion (coupons, premiums, contests, etc.) o Point of Purchase (in-store) materials o Direct Marketing (catalogs, infomercials, email) o Personal Selling o Internet advertising (display, banner, pop-up/pop-under) o Social networks/Blogs o Podcasting o Event sponsorship o Brand entertainment (product placement on TV shows, in movies) o Outdoor signage/billboards o Public relations o Influencer (peer-to-peer) communications o Corporate advertising C. Advertisements, Advertising Campaigns, and Integrated Brand Promotion PPT 1-6 here

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•

Advertisement: An advertisement refers to a specific message that an organization has placed to persuade an audience. Be sure to distinguish between widespread brand advertising, political advertising, and PSAs. Referring to text Exhibits 1.4 through 1.16 are helpful here.

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Advertising Campaign: A series of coordinated advertisements and other promotional efforts that communicate a single theme or idea. (PPT 1-6 highlights the Altoids campaign ads in Text Exhibits 1.7-1.10)

D. A Focus on Advertising It is extremely important to clarify for students that advertising is an enormously important part of IBP and will be the central focus until Part Five of the text when other IBP tools will be discussed specifically. IV. Advertising as a Communications Process

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Advertising is fundamental to life itself as a form of human communication, and advertising is also a commercial form of communication. To understand advertising, you must understand something about communication in general. A. A Model of Mass-Mediated Communication A simple model of mass-mediated communication is presented in Exhibit 1.11. This contemporary model shows that communication has two major components: production and reception with these components mediated by consumers’ accommodation and negotiation of the communication content. Rather than focus on every detail of this model, it is more useful to focus on the major process aspects: •

Production: Content of a mass communication is produced by institutions—corporations, ad agencies, government—and appears as a message in mass media.

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Reception: The audience interprets an ad according to social networks—family, friends, and peers. Interpretation creates meaning for an ad. 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.

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Accommodation and Negotiation: Production and reception are partially independent but subject to mediation and interpretation—producers of the message cannot control reception or interpretation. No ad contains a single meaning for all audience members, as the Diet Coke break example in the text shows. Exhibit 1.12 highlights this point.

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Highlight that each individual receives and interprets communication according to unique values and experiences

V. The Audiences for Advertising

PPT 1-8 here

An audience is a group of individuals who receives and interprets messages from advertisers through mass media. A target audience is a particular group of consumers singled out for a specific message carried in advertising. A. Audience Categories

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•

• • • •

Household consumers: Individuals who buy and use products for personal use. They are the largest audience for advertising—over 116 million households and more than 300 million people with total retail spending by households in the United States at about $5.0 trillion. Members of business organizations: Firms that buy and use products to make or resell other products. Members of a trade channel: Retailers, wholesalers, and distributors are responsible for distributing and selling goods to business organizations and household consumers. Professionals: Any professional—like a doctor, lawyer, or teacher—who has special training or certification. Professionals merit special communications. Government officials and employees: Members of federal, state, or local governments warrant special communications because of the large volume of business they do with organizations.

B. Audience Geography PPT 1-9 here • Global advertising: Advertising that uses a common theme and presentation in all markets around the world. It is rare for a brand to have universal cultural appeal, but when it does, global advertising can be used. As the global issues box details, many firms such as Motorola are working on developing a global image today. • International advertising: An advertiser prepares and places different advertising (this is the key distinction from global advertising) in each different national market where a brand is sold—ask students to distinguish global from international PPT 1-10 here • National advertising: Advertising that reaches all geographic areas of a nation. National typically refers to U.S. advertising. • Regional advertising: Advertising concentrated in a particular geographic region of a nation. • Local advertising: Advertising directed at a single trading area, typically a city or state. A particular form of local advertising is known as cooperative or co-op advertising in which national advertisers share advertising expenses with local advertisers. Intel, Sony, and Chevrolet invest heavily in co-op advertising.

VI. Advertising as a Business Process A. The Role of Advertising in Marketing PPT 1-11 here Advertising is a business process, with an important role in a firm’s marketing and brand promotion effort. An integrated approach can be the key in the success of a brand. The role of advertising in marketing relates to four important decision-making areas in marketing: 1. The Role of Advertising in the Marketing Mix

PPT 1-12 here

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.

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The marketing mix refers to the four primary areas of decision making in marketing— product, price, promotion, and distribution (or place). Advertising, as part of promotion, plays an important role in bringing the marketing mix decision to life in the market. Advertising can communicate the value created for consumers by the product, price, and distribution strategies of the organization. (Reference Exhibit 1.18 here) 2. The Role of Advertising in Brand Management

PPT 1-13 here

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 integrated brand management (IBM). In many ways, a brand is a firm’s most precious asset. The most valuable brand in the world is Coca-Cola, which is valued at $65.32 billion (from Exhibit 1.19). Effective advertising is a competitive advantage for a brand. 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.

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Introduction of a new brand or brand extensions (variants): A brand extension is an adaptation of an existing brand to a new product area. Advertising is essential to inform consumers about the extension. In addition, advertising aids in obtaining cooperation in the trade channel with wholesalers and retailers.

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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 loyalty can result from habit, attachment, reminder by advertising, incentive from promotions, or tailored communication in direct marketing.

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Brand equity is developed when a firm creates and maintains positive associations with the brand in the minds of consumers.

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Creating an image and meaning for the brand: Advertising can communicate how a brand meets certain 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 channel: 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 (gifts).

3. Advertising’s Role in Market Segmentation, Differentiation, and Positioning. PPT 1-14 here Advertising is critical to segmentation, differentiation, and positioning strategies: •

Market segmentation: Breaking down a large, diverse market into segments that are more homogeneous.

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Differentiation: Creating a perceived difference between an organization’s brand and that of the competition in the mind of an audience.

Chapter 1/The World of Advertising and Integrated Brand Promotion

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Positioning: Designing a product or service so that it can occupy a distinct place in the target audience’s mind. —External position: Competitive niche the brand will occupy. —Internal position: Position of a brand within the firm’s own line of products.

4. Advertising’s Role in Contributing to Revenue and Profit Generation PPT 1-15 here This is a VERY important discussion that is somewhat complex for students. Advertising is not just about spending money. Both top-line revenue and bottom-line profit can be positively affected. •

Advertising communicates the value of the brand created by the marketing mix and contributes to revenue generation—people like the brand, people buy the brand.

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Profits are affected by economies of scale: high-volume sales result in high-volume production, which lowers the unit cost of each item sold. Advertising demand stimulation contributes to high-volume production.

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Profits are affected by brand loyalty: consumer preference for and repeat purchase of a brand to the exclusion of competitors’ brands. Brand loyalty results in inelasticity of demand, whereby consumers are willing to pay more for the brand they prefer (or accommodate price increases). Advertising affects both brand loyalty and inelasticity.

Advertising can be used to create customer satisfaction. •

Advertising can influence social meaning, trends and norms, and cultural identification.

B. Types of Advertising •

PPT 1-16 here

Primary demand stimulation: Stimulating demand for an entire product category is a type of advertising most appropriately used by trade associations. •

A key and very essential point here: Primary demand stimulation is only a possibility in new product categories—currently this would be products like PDAs or TiVo type DVRs. There is no evidence—scientific or anecdotal—that advertising can affect primary demand in mature product categories. In fact, there are decades of economic and marketing research to the contrary. Both the “Got Milk?” campaign and the California Almond Growers campaign are examples of failures to create primary demand in mature product categories. It is important to dispel this myth about the power of advertising among students.

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Selective demand stimulation: Promoting the value of a particular brand compared to competition. The true power of advertising lies here. PPT 1-17 here

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Direct response advertising: Advertising that asks an audience to take immediate action.

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Delayed response advertising: Advertising that uses imagery and emphasizes brand

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features to build demand and loyalty over the long term. •

Corporate advertising vs. brand advertising: Corporate advertising does not focus on a single brand but promotes the company as a whole. Brand advertising focuses on a single brand and specific features and values of that brand.

1. The Economic Effects of Advertising

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a. Advertising’s Effect on Gross Domestic Product. As advertising stimulates the economy and helps ensure the success of new products, consumer spending rises and affects gross domestic product (GDP), which is a measure of the total value of goods and services produced within an economic system. b. Advertising’s Effect on Competition. Advertising can stimulate greater competition as firms strive to develop innovative products to advertise. Large advertising expenditures, though, can act as barriers to entry in a market. c. Advertising’s Effect on Prices. Advertising expenditures average only about 2-4 percent of sales across all industries (refer to Exhibit 1.33 here), and demand stimulation (which affects economies of scale) can lower the unit cost of production. There is no consistent and predictable relationship among advertising, spending, and sales. Different products and different market conditions dictate that firms spend different amounts of money on advertising. 2. Advertising’s Effect on Value. Value refers to consumer perception that a product or service delivers satisfaction beyond the cost incurred to acquire the product or service. •

Symbolic value is the meaning a brand has in a nonliteral way.

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Social meaning refers to what a product or service means in a social context. PPT 1-19 here

VII. From Advertising to Integrated Marketing Communications to Integrated Brand Promotion PPT 1-20 here We must recognize and appreciate that advertising is only one of many promotional tools a marketer can use to communicate about a brand. Integrated marketing communications (IMC) is an old notion about the process of using promotional tools in a unified way so that a synergistic communications effect is created. In an era of targeted communications and new media, organizations are relying on a broad range of communications tools. This mixing of various promotional tools has been a hot topic for the last 30 years. Today, however, Integrated Brand Promotions (IBP) is the focus of promotional efforts for firms. IBP involves the use of various promotional tools, including advertising, in a coordinated manner to build and maintain brand awareness, identity, and preference. The coordination is key to maintaining a clear brand image in the mind of consumers. IBP emphasizes that coordinated messages must have brand-building effects, not just communications effects.

SOLUTIONS TO END OF CHAPTER QUESTIONS 1. As consumers exercise ever greater individual control over when and how they receive

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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 consumerinterest blogs and social media, embedded advertising in video games, and event sponsorship. The traditional media outlets still play a dominant role, but it is one that is expected to continue to shift as those industries struggle against circulation and viewership declines. The issue of whether consumers accept advertising to smartphones remains to be seen. To date, there seems to be some verbal resistance, but not substantive resistance. 2. 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 product or service. 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 particular geographic region (e.g., New England). Local advertising is even more focused and often targets a specific metropolitan area. Cooperative advertising is a joint venture involving more than one firm. Manufacturers and their retailers often pursue cooperative advertising. 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. 4. How do the goals of direct response versus delayed response advertising differ? How would you explain marketers’ growing interest in direct response advertising? 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. In recent years, marketers have become especially interested in assessing the productivity of advertising spending. Because direct response advertising is designed to yield immediate action, it is much easier to quantify the impact and gauge relative productivity of direct response advertising. This feature explains its growing popularity. 5. Differentiate between global advertising and international advertising. Do you think consumers in foreign markets will react favorably to GM’s new pop band-fueled Cadillac commercials as do American consumers? Why or why not? Global advertising uses a common theme and presentation 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 each different national

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market where a brand is sold. Cadillac ads featuring Led Zeppelin would not likely evoke the same nostalgic feelings in consumers overseas as they do for American car buyers. Rock and roll is still very much an American phenomenon—especially rock music from the 1970s. 6. 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. Some common household examples could include Kleenex, Ivory soap, Campbell’s soup, or Smuckers jelly. 7. If a firm developed a new line of athletic shoes, priced them competitively, and distributed them in appropriate retail shops, would there be any need for advertising? Is advertising really needed for a good product that is priced right? Most of today’s “monster brands” had humble beginnings that included little or no budget for advertising and promotion. Without advertising, the marketer depends entirely on favorable word-of-mouth about his or her brand. This typically means slow acceptance of the new product or service. Moreover, if the new brand must compete with existing brands making effective use of advertising, the new brand will be at a severe disadvantage without any budget for advertising or some other form of promotion. 8. Many companies now spend millions of dollars to sponsor and have their names associated with events like NASCAR races or rock concerts. Do these event sponsorships fit the definition for advertising and IBP given in this chapter? These event sponsorships absolutely fit the definition of IBP given in the chapter. Take Budweiser as an example. Bud’s sponsorship of rock concerts and sporting events certainly comes at a significant cost. These events provide Budweiser with access to a large audience and Budweiser pays for this exposure as a way to build preference for its brands. AnheuserBusch sponsors these events with a clear intent to persuade a mass audience. Hence, event sponsorship is a paid, mass-mediated attempt to persuade. Although it may be valuable to think of event sponsorship as a special form of advertising, it much more closely fits the definition of IBP. 9. How does the process of market segmentation lead an organization to spend its advertising dollars more efficiently and more effectively? 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. 10. 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?

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IBP is the use of various promotional tools (coupons, events, contests, premiums, etc.), including advertising, in a coordinated manner to build and maintain brand awareness, identity, and preference. The coordination is 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. Instead of focusing narrowly on the importance of coordinated communications and messages, as in IMC, integrated brand promotion instead emphasizes broader efforts to build brand awareness and preference.

SOLUTIONS TO 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 pre-screenings 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 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 lease 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.

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3. 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. 4. 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 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 Addidas. 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 consultants production facilitator

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

SUMMARY 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 gravitation 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 has emerged as the most significant form of consumer control over information creation and communication most recently. Facebook has over 450 million users worldwide, sharing 3.5 billion pieces of content with each other every week. Twitter has more than 50 million users who post 8 billion tweets a year. As consumers search for more control over their information flow, advertisers, agencies and media 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 seems 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 opportunity 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 – but person 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.

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

Discuss the role played by advertising and promotion agencies, the services provided by these agencies, and how they are compensated. Advertising and promotion agencies come in many varieties and offer diverse services to clients with respect to planning, preparing, and executing advertising and 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. 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 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 creation and execution of 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 campaigns programs. 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, CD-ROMs, electronic kiosks, and e-readers. 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 PPT 2-1 here A note before starting the Lecture 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 for the last two decades—primarily driven by

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

technological change as introduced in Chapter 1—the current era of change is highly significant. The reason? 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. INTRODUCTORY SCENARIO: The Great Digital Divide Advertising agencies have historically struggled to satisfy clients. During the late 1990s, the new innovative dotcom agencies challenged the traditional power base. Then came the dotbomb and it appeared big multinational agencies would reassert themselves. They did for a short time with big mergers. First, because of more media options and more control of those options, consumers started to be harder and harder to reach. With devices like the PC, iPod, smartphones and TiVo, consumers can pick when and how they want information, no longer merely subject to the commercial “breaks” of traditional media, resulting in a plunge in traditional media placements and revenue. So the big power struggle now is how to reach these more elusive consumers who are turning to Facebook, Twitter, and individual blogs to control their communications environments. In response, firms like Coca-Cola are trying to find ways to insert the brand into consumers’ routine life experiences. (Ask students what Coke is doing in this regard—they should cite the American Idol Coke cup strategy.) In addition to the big firms trying to adapt, big media agencies are adapting as well. Big “old media” companies like NBC universal are wooing advertisers with more digital media options. Even MTV is considered an “old” media company and is now offering new media distribution through broadband. Finally, the ascent of new media is dramatically characterized by Internet advertising exceeding $30 billion annually (not counting peer-topeer communication vehicles.) BUT, highlight for students that all Internet advertising is still less than 10 percent of dollars spent on media At the outset, it is important to have students understand that the advertising industry is highly complex due to its great breadth and the fact that communications per se is a complex process. You might get some lively discussion of the future of “old” media versus “controlled” media—it is worth letting the discussion rage! The role of this chapter is to lay out the challenges coming from consumers and how that has created change in the industry. The chapter then fulfills the very important task of laying out the current structure and players in the industry and showing how trends are affecting change. I. Trends Affecting the Advertising and Promotion Industry The basic changes in the industry stem from:

PPT 2-2

A. Consumer Control: From Social Media, to Blogs to TiVo. Consumers are discovering and desiring more ways to control the flow of information they receive. Social media, blogs and TiVo devices are three prime examples. Advertisers are trying to respond with more and better creative execution and technological advances of their own (e.g., those little “runners” at the bottom of the TV screen that can’t be “TiVo-ed” out).

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

B. Media Proliferation, Consolidation and “Multiplatform” Media Organizations. It seems contradictory, but media proliferation and consolidation are taking place simultaneously. Big media companies are merging, but with new technologies (podcasting and Web options) new media organizations are proliferation as well. Some legal changes like the FCC relaxing old ownership rules have spurred consolidation. And big Internet companies, like InterActiveCorp are buying up smaller operators. C. Media Clutter and Fragmentation Means More IBP. With so many options available in the media, it is hard for marketers to break through the clutter. In addition, with proliferation comes fragmentation. With this clutter, big advertisers are looking to target more effectively and efficiently. J&J moved hundreds of millions of dollars away from mass media to more targeted digital media including the Internet and blogs D. Crowdsourcing. Firms allowing experts, enthusiasts, and particularly consumers to “build the brand” with recommendations for brand features or message content posted on sites like YouTube. •

Refer to Ford and Starbucks as prime examples.

E. Mobile Marketing/Mobile Media. Huge potential exits here for marketers to direct messages to consumers via consumers’ smart devices. The challenge will be to make the messages relevant and acceptable to consumers. PPT 2-3 here II. The Scope and Structure of the Advertising Industry

PPT 2-4 here

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A quick examination of Exhibit 2.4 will help students appreciate the scope of the industry. Spending is approaching $300 billion annually in the United States with worldwide advertising exceeding $600 billion.

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It is important to put the gross spending levels in perspective, such as the fact that Verizon spends only about 3 percent of sales on advertising, which results in about $3.7 billion a year in ad spending. Exhibit 2.5 shows the increase in advertising across the 20th and into the 21st century—note the expected global downturn in spending that has been anticipated is not really happening.

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Spending on IBP tools is huge and growing—note from text Exhibit 2.6 the huge investment is digital marketing which already has surpassed product sampling and coupons by a wide margin PPT 2-5 here

The remainder of the chapter clearly and efficiently describes for students the structure of the advertising and promotion industry. Text Exhibit 2.7 can be the guiding framework for the discussion. Understanding structure is important because the talent and expertise needed to create effective advertising and IBP solutions to the new challenges are spread across several levels of the communication process and are represented in several different industries. Advertisers may employ the services of advertising and promotion agencies and may or may

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

not contract for specialized services with various external facilitators. A. Advertisers

PPT 2-6 here

1. Manufacturers and Service Firms. Large national manufacturers of consumer and business products and services are the most prominent users of advertising, spending hundreds of millions or even billions of dollars annually. •

Procter & Gamble, MCI, Chrysler, Colgate-Palmolive, Xerox, and General Electric are examples. These firms can operate in global, national, regional, or local markets. They can target either household consumers or businesses as their primary audience.

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Be sure to alert students that there are small companies that may spend only a few thousand dollars are in this category as well (e.g., the local toy store or deli).

2. Trade Resellers. The term trade reseller is simply a term for all organizations in the channel of distribution. •

As text Exhibit 2.7 shows, trade resellers can be retailers, wholesalers, or distributors. Retailers can sell in global markets (The Gap), national markets (Sears), or regional markets (Dillard’s) but focus primarily on household consumers.

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Wholesalers and distributors, like American Lock & Supply (which supplies contractors with door locks and hardware), are a completely different breed. They focus on business buyers and have little need for mass media. Instead, they focus their advertising on direct mail or highly targeted trade publications.

3. Federal, State, and Local Governments. Although it may seem odd to students to list the government as an advertiser, the U.S. government often among the largest spenders on advertising in the U.S., with expenditures exceeding $1.0 billion in annually. •

The most visible government campaigns are U.S. government advertising for the armed forces recruiting and social issues. The government also spends a great deal on direct marketing by mailing government publications to businesses and consumers.

4. 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, American Cancer Society, the local Humane Society are examples. This advertising is used to stimulate demand for services and to disseminate information. PPT 2-7 here 5. Key Discussion: The Role of the Advertiser in IBP

PPT 2-8 here

Before considering the type of agencies advertisers can rely on and the services they provide, it is critical for students to understand that the advertiser must come to the agency partnership fully prepared to provide the foundation of information with which an agency needs to work. Too many advertisers (often but not always small firms) turn to the agency for both their strategy and communications needs. This is a big mistake— only the advertiser can provide and should provide the strategic direction for the firm.

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

So advertisers should come to the planning meeting with agencies prepared to: •

Describe the value that the firm’s brand provides to users.

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Describe the brand’s position in the market relative to competitive brands.

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Describe the firm’s objectives for the brand in the near term and long term (e.g., brand extensions, international market launches, etc.).

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Identify the target market(s) that are most likely to respond favorable to the brand.

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Identify and manage the supply chain/distribution system that will most effectively reach the target markets.

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Be committed to using advertising and other promotional tools as part of the organization’s overall marketing strategy to grow the brand.

B. Advertising and Promotion Agencies

PPT 2-9 here

Advertisers have a full complement of agencies that specialize in various aspects of advertising and promotion. 1. Advertising Agencies. Advertising agencies provide expertise to help advertisers prepare advertising programs. An advertising agency is an independent organization of professionals who provide creative and business services to clients related to planning, preparing, and placing advertisements. Exhibit 2.8 shows the 2006 worldwide gross income of the ten largest advertising agencies. The top U.S.-based agencies had combined worldwide income of $28.2 billion in 2006. The types of professionals in agencies who can help advertisers in the planning, preparation, and placement of advertising and other promotional activities include the following: PPT 2-10 here Account planners Account executives Art directors Creative directors Copywriters Graphic designers Radio and television producers Researchers Artists Technical staff—printing, film editing, and so forth Marketing specialists Media buyers Web developers Interactive media planners Public relations specialists Sales promotion and event planners

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

Direct-marketing specialists PPT 2-11 here a. Full-Service Agencies.

PPT 2-12 here

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. Young & Rubicam and McCann–Erickson Worldwide are examples of full-service agencies with global capabilities. b. Creative Boutiques. A creative boutique emphasizes copywriting and artistic services to its clients. Other aspects of advertising planning and placement are handled internally by the advertiser or contracted out to other external facilitators. c. Digital/Interactive Agencies. Interactive agencies help advertisers prepare communications for new media like the Internet, interactive kiosks, CD-ROMs, and interactive television. Sometimes referred to as cyberagencies, these new ad agencies have specialized talent and expertise that many traditional full-service agencies do not have. One of the best is Red Sky Interactive. They have prepared the corporate websites for Nike, Levi Strauss, Absolut Vodka, and Altoids. d. In-House Agencies. An in-house agency is often referred to as the advertising department of a firm. 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 as profits the commissions an external agency would earn. e. Media specialists. Independent organizations that specializes in buying media time and space and offer media planning advice. The proliferation of media options has made this type of organization more important. 2. Promotion Agencies focus on promotion efforts that full-service advertising agencies do not specialize in. Promotion agencies handle everything from sampling to event promotions. a. Direct Marketing and Database Agencies (also called direct response agencies). These agencies provide a variety of direct marketing services. They design direct marketing campaigns, assist constructing customer databases, and in many cases maintain fulfillment centers. In addition, many direct marketing agencies can prepare infomercials. b. Sales Promotion Agencies. These specialists design ads and operate contests, sweepstakes, special displays, or coupon campaigns for advertisers. Some firms specialize in consumer sales promotions or trade sales promotions. c. 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. Event sponsorship can also be targeted to household or the trade market. d. Design Firms. Designers and graphics specialists help to create logos and other visual representations for the brand. They also design the supportive communications

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

such as banners, newsletters, phone-cards, and in-store displays. e. Public Relations Firms. Public relations firms manage an organization’s relationships with the media, the local community, competitors, industry associations, and government organizations. 3. Full Agency Services

PPT 2-13 here

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. Text Exhibit 2.12 details the common structure of a full-service agency a. Account Services. Account services entail identifying the benefits a product or service provides, its potential target audiences, and the best competitive positioning, and then developing a complete advertising plan. In some cases, an agency will also provide basic marketing and consumer behavior research. Another primary task in account services is to keep the various agency teams—creative, production, media— on schedule and within budget. b. Marketing Research Services. The research services usually entail the agency locating studies that have a bearing on the client’s advertising and explaining these studies to the client. Account planner positions have been added in many agencies to coordinate the research and planning effort on accounts. c. Creative and Production Services. In simple terms, creative services prepare the client’s message and advertising materials. Production services include producers (and sometimes directors) who take the creative ideas and turn them into radio, television, and print advertisements d. Media-Planning and Buying Services. This service is where placement of the advertising effort is handled. The central challenge is to determine how a client’s message can most effectively and efficiently reach the target audience. This service helps clients sort through the blizzard of new media options like CD-ROM, videocassettes, interactive media, and the Internet. e. Administrative Services. Agencies have personnel departments, accounting departments, and sales staffs. 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. 4. Agency Compensation, Promotion, and Redesign

PPT 2-14 here

a. 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 is retained by the advertising agency as compensation for all costs in creating advertising for the client.

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The only variation is that the rate typically changes to 16 2/3 percent for outdoor media.

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Text Exhibit 2.14 provides students with a simple example.

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

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Be sure to raise the issue that many agencies have challenged this traditional structure and negotiated different percentages for commission.

b. 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. •

Traditional markup has been 17.65 percent to 20 percent.

c. 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 or project fee for different services provided. d. Pay for Results. In this type of program, the agency’s fee is based on the achievement of agreed upon results. Many large companies like Procter & Gamble are moving toward this model; they are using a percentage-of-sales model. •

A difficulty here is coordinating the pay for “results” when multiple agencies are involved in the same campaign—who is responsible for the “results”?

C. External Facilitators

PPT 2-15 here

External facilitators are organizations or individuals that provide specialized services to advertisers and agencies. 1. Marketing and Advertising Research Firms. Research firms like Burke International perform original research for advertisers. Other research firms like SRI International routinely collect data (from grocery store scanners, for example) and make 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 2. Consultants. Advertisers seek out marketing consultants for assistance in the planning stage. 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.

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The newest type of consultant is a database consultant, who works with both advertisers and advertising agencies in developing and managing databases for direct marketing campaigns or “narrow-casting” broadcast advertising.

3. Production Facilitators. 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

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

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. •

In postproduction, further expertise is needed before the ad is placed in a medium. Postproduction processes in broadcast advertising include film developing and transferring, editing, special effects, sound mixing, and color matching.

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In print advertising, film developing and photo enhancement are typically carried out by external organizations.

4. Software firms. In an era when technology continues to evolve, a new category of facilitators has emerged. Software firms help companies with a range of activities ranging from tracking Web-surfing behavior to managing relationships with trade partners. PPT 2-16 here D. Media Organizations

PPT 2-17 here

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 or Fox, as well as national magazines like U.S. News & World Report or People, provide advertisers with time and space at considerable expense. Also included are satellite TV and radio

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Interactive Media

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Support Media Other media options are more useful for reaching narrowly defined target audiences.

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Media Conglomerates. Note the inclusion in this list of “media conglomerates.” This category is included because organizations like Time Warner and Disney own and operate companies in broadcast, print, and interactive media.

E. Target Audiences

PPT 2-18 here

This represents the last element of the structure of the industry. Target audiences were covered in Chapter 1. As a recap for students, the main target audiences are: household consumers, business organizations, members of a trade channel, professionals, and government.

SOLUTIONS TO END OF CHAPTER QUESTIONS

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

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

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Media proliferation, consolidation, and multiplatform media organizations

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Media clutter and fragmentation

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Crowdsourcing

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Mobile marketing and mobile media

Students could literally 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. 2. 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. 3. 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. 4. 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? 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 Verizon 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?

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

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. 6. 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. 7. 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 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. 9. 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?

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

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 story development, or spokesperson placements— 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.

SOLUTIONS TO EXPERIENTIAL 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 nonprofit agency to achieve its social responsibility goals while allowing leading corporations to associate their brands with international charity efforts.

2. 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?

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

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-ofmouth buzz generated in social contexts 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. 4. 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.

Chapter 3/The Evolution of Promoting and Advertising Brands

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 Great Depression Great Recession

subliminal advertising creative revolution Action for Children’s Television (ACT) Federal Trade Commission (FTC) National Advertising Review Board

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

SUMMARY 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 capitalistic economic systems. 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. Describe the past and current relationship between advertisers, retailers, and consumers. Advertising and branding play a key role in the ongoing power struggle between manufacturers and their retailers. U.S manufacturers began branding their products in the late 1800s. Advertising could thus be used to build awareness of and desire for the various offerings of a particular manufacturer. Retailers have power in the marketplace deriving from the fact that they are closer to the customer. When manufacturers can use advertising to build customer loyalty to their brands, they take part of that power back. Lately, big retailers have been reclaiming that power. Of course, in a capitalistic system, power and profitability are usually related.

Chapter 3/The Evolution of Promoting and Advertising Brands

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? Social and economic trends, along with technological developments, are major determinants of the way advertising is practiced in any society. 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. With the Great Depression and World War II, cynicism and paranoia regarding advertising began to grow. This concern led to refinements in practice and more careful regulation of advertising in the 1960s and 1970s. Consumption was once again in vogue during the designer era of the 1980s. The new communication technologies that emerged in the 1990s era seem certain to effect significant changes in future practice. Finally, the interactive, wireless, and broadband technologies that are leading advertising into the 21st century hold great promise but a hard-to-predict future. Tell the story of consumer empowerment and branded entertainment, and understand how it works. Integrated, interactive, and wireless have become the advertising buzzwords of the early 21st century. These words represent notable developments that are reshaping advertising practice. This is so because the technologies present advertisers with new options like Web films or feature films that highlight brands—a process known as advertainment. In addition, consumers can use wi-fi systems, limited-area wireless access systems, to provide more mobility in their use of computers. Integrated brand promotion may continue to grow in importance as advertisers work with more varied media options to reach markets that are becoming even more fragmented. A variety of advertisers are using interactive media to reach consumers in the digital realm, while services like TiVo demonstrate a consumer backlash against the ubiquity of advertising. As for creative, the ads of the ’00s have become more self-aware and self-referential—they are ads that are very aware of being ads. Advertising in the next decade will continue to be a vibrant and challenging profession.

Identify forces that will continue to affect the evolution of advertising. History is practical. Consumers and their behavior and values will continue be affected by social and cultural change and thus represent advertising and IBP opportunities and challenges.

CHAPTER OUTLINE

Chapter 3/The Evolution of Promoting and Advertising Brands

INTRODUCTORY SCENARIO: LUX AD FROM 1935

PPT 3-1 here

This short scenario featuring the Lux soap advertisement in Exhibit 3.1 makes an essential point about advertising and the content of this chapter. Students will find the tone and emphasis of this ad anachronistic—and that is precisely the point. The points to highlight here (particularly since some students might find the ad offensive): •

Advertising evolves over time and with the culture.

•

Advertising is a reflection of a particular social and technological instant in time. Some students will be a little slow on the “uptake” and challenge the political “incorrectness” of this ad. Point out that this is precisely the point—this ad was deemed “appropriate” in the 1930s but would be totally unacceptable in today’s cultural environment.

This chapter begins with the basic influences —social, economic, technological—that gave rise to the creation, delivery and purpose of advertising as a process in a culture and economy. Then, a unique breakdown of different eras of advertising is offered, beginning with the pre-industrialization era and concluding with the current environment. I.

The Rise of Advertising

PPT 3-2 here

An important point to make to students is that while some historical treatments of advertising claim that “as long as men and women have been communicating, there has been advertising,” this is a naive and false perspective. Although there may have been persuasive intent in ancient times and even a commercial context, there was no mass-mediated communication—a necessary condition from advertising as specified in Chapter 1. Note that this treatment is essential for students and unique to this text. Also point out that advertising as a social and economic process needs a particular sort of fertile ground to flourish. The four basic influences that gave rise to advertising as we know it are: 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 organizations’ goods or services, and advertising, as a strategic process, can be used to do so. B. The Industrial Revolution •

The industrialization of societies leads to advertising’s emergence as a business and communication process. The Industrial 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

Chapter 3/The Evolution of Promoting and Advertising Brands

the rapid increase in mass-produced 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. C. The Emergence of Modern Branding •

If a manufacturer can stimulate sizable demand for a brand, that manufacturer can develop power in the distribution channel and force wholesalers and retailers to sell that particular brand. Demand stimulation causes consumers to insist on the brand at the retail level; retailers and wholesalers have virtually no choice but to comply with consumer desires. Intel’s promotion of the Pentium chip is an excellent example.

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A factor that was critical to manufacturers’ pursuit of power was 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, with Levi’s (1873), Maxwell House Coffee (1873), Budweiser (1876), Ivory (1879), and Coca-Cola (1876) among the first.

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. PPT 3-3 here

II. The Evolution of Advertising

PPT 3-4 here

Now we’ll turn our focus to the evolution of advertising in practice. Several periods can be identified that give us various perspectives on the process of advertising. A. The Preindustrialization Era (pre–1800) Advertising did not flourish before industrialization and the creation of concentrated urban markets, but it still existed in a variety of simpler forms: •

Handbills, which were printed on engraved wood or copper, were used to announce the availability of grocery products, household goods, druggists’ wares, and other commodities and services.

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Early printed advertisements appeared in newsbooks (the precursor to the newspaper). The messages were informational and appeared on the last pages of the tabloid.

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Pennsylvania Gazette was the first newspaper to separate ads with lines of white space and was the first to use illustrations in advertisements.

B. The Era of Industrialization (1800 to 1875)

Chapter 3/The Evolution of Promoting and Advertising Brands

•

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.

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Newspaper circulation was fostered by the railroads.

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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 3-5 here

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During the years from about 1875 to 1918, advertising ushered in what is known as consumer culture, or a way of life centered around consumption.

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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; and Charles Austin Bates, another brilliant advertising copywriter.

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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.

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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) •

The 1920s were 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.

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Ads of the era exhorted consumers to have a good time and enjoy life. Consumption was not only respectable, but also expected. The average citizen had become a “consumer.”

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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.

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The style of the 1920s ads was much more visual and far less wordy. They showed slices of life or lessons in what historian Roland Marchand called the social tableau—lessons about how to fit in with the smart crowd. PPT 3-6 here

E. The Depression (1929 to 1941)

PPT 3-7 here

Chapter 3/The Evolution of Promoting and Advertising Brands

•

The Great Depression was brutal, broke lives and families and made people think differently about government, business, saving and advertising.

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As sure as advertising was heroic in the 1920s, it was villainous 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.

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Advertisers responded to this attitude by adopting a tough, no-nonsense advertising style. The stylish and aesthetic ads of the 1920s gave way to harsher and more cluttered ads.

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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. PPT 3-8 here

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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.

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Advertising, like the rest of the country, suffered dark days 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 (1941 to 1960)

PPT 3-9 here (repeat of 3-7)

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. •

During World War II and again during the 1950s, 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.

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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.

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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 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.

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This era saw huge growth in the U.S. economy and household incomes.

Chapter 3/The Evolution of Promoting and Advertising Brands

•

Technological change was relentless—television, telephone, the automatic washer and dryer led advertisers to portray the “modern life.” PPT 3-10 here

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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-hard-sell 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 3-11 here

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Advertising 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.

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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.

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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) •

This was the age of polyester, disco, and driving 55. Advertising retreated to the triedand-true but hackneyed styles of earlier decades with a return to the hard sell.

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Advertisers actually started to present women in new roles and to include people of color in ads for a wide variety of products.

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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 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).

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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.

Chapter 3/The Evolution of Promoting and Advertising Brands

PPT 3-12 here I. The Designer Era (1980 to 1993)

PPT 3-13 here

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The average American had twice as much real income as his or her parents had at the end of WWII.

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The country made a sharp right turn, and conservative politics were the order of the day.

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Ads from this era were class- and values-conscious and openly promoted consumption, but in an understated and conservative way.

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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.

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This was also the age of the infomercial—a long advertisement that looks like a talk show or a half-hour product demonstration.

J. The E-Revolution Begins (1993 to 2000) •

This was Stage I of the Web revolution in advertising and it ended with mixed results.

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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.

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It was believed Interactive media would allow direct measurement of ad exposure and impact and thus make agencies more accountable for ad performance—the measurement never came about but the accountability did

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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 Empowerment, Branded Entertainment, and the Great Recession (2000 – present) PPT 3-14 here •

This section puts the “consumer control” issues raised in Chapters 1 and 2 into historical perspective.

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Technological changes continued to progress even as many dotcoms declared bankruptcy.

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Phase II of the e-ad-evolution (Web 2.0) has been much more successful than Phase I in the late 1990s.

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Consumer control emerges in this era. The issues of consumers “co-creating” ads is raised here and defined as consumer generated content (CGC).

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Cultural contradictions, social disruptions, and identity issues emerge which can be leveraged by advertising images and themes.

Chapter 3/The Evolution of Promoting and Advertising Brands

•

Alert students to the very important, though less visible, business-to-business promotion on the Web referred to as E-business.

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Firms start to invest heavily in new means of connecting with consumers through interactive websites and social media. PPT 3-15 here

III. Branded Entertainment

PPT 3-16 here

No aspect of the evolution of advertising is more important than branded entertainment-the blending of advertising and integrated brand promotion with entertainment— primarily film and television programming. A subset of branded entertainment is product (brand) placement—the significant and prominent placement of brands within film or television programs. •

Examples are Tom Cruise wearing Ray Bans or asking for a Red Stripe beer during a film.

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The Chapter 2 example highlighting Coke’s placement of Coke cups on the desk of the American Idol set.

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The BMW Web-film series.

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Beyond just placing brands within a film, large projects, like “Pirates of the Caribbean,” are considered hour-long advertainment efforts. It is argued that this film is simply a 90 minute ad for Disney theme parts.

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If advertainment goes too far, consumers may turn more aggressively to TiVo-like devices to shield themselves from the onslaught of advertising and promotion.

IV. The Value of History

PPT 3-17 here

It is important to leave students with this main thought: As exciting as new technologies are, the fundamental purpose of advertising has not changed. To understand advertising in an evolutionary perspective is to appreciate the reasons for advertising’s use in a modern industrialized society. •

Advertising was spawned by a market-driven system and grew through self-interest in capitalistic, free enterprise market economies.

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Advertising is still a paid attempt to persuade

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Advertising still contributes to revenue generation and profits and still nurtures brand success.

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Big firms still spend billions of dollars on traditional media

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Technology has changed the way people shop and the way they seek out and control information flow.

SOLUTIONS TO END OF CHAPTER QUESTIONS

Chapter 3/The Evolution of Promoting and Advertising Brands

1. Why does advertising that resolves cultural contradictions work? Advertising that resolves cultural contradictions works because as people live these contradictions, brands that emphasize contradiction in imagery and messaging become relevant and meaningful. Brands can also offer themselves as solutions to contradiction and conflict. 2. 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 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. 3. How do manufacturers gain or lose power in the channel of distribution? What other parties are involved in this power struggle? Manufacturers rely on wholesalers and retailers to supply their brands to the market; it is these channel partners that decide which products and manufacturers will get shelf space. If a manufacturer can stimulate consumer demand through brand advertising and promotion, wholesalers and retailers will then be forced to meet that demand by carrying those brands in stores. Many manufacturers have been losing power to retailers for various reasons. One of the basic reasons for this loss of power is the proliferation of brands. As marketers bring more types and variants of products into the marketplace, they inevitably encounter a fundamental constraint in the form of a finite amount of retail shelf space. Without shelf space for a brand, everything else that a marketer can do, including advertising, will go for naught. As shelf space becomes more precious, the retailer naturally gains power relative to the manufacturer. 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. 5. 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

Chapter 3/The Evolution of Promoting and Advertising Brands

the threat to consumer privacy from spam and transgressions at social media networking sites. 6. 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 self-aware 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 is quoted in the chapter from 1967: “Youth has won. Youth must always win.” 7. There were many important developments in the 1970s that set the stage for advertising in the Reagan 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.” 8. 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. 9. 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

Chapter 3/The Evolution of Promoting and Advertising Brands

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, 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.

SOLUTIONS TO 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. 2. 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 20acre 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 20acre 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 and Warner Bros. will have a year-round theme park driving the sale of book and film merchandise 3. The practice of advertising has steadily evolved over the past century, adapting to the

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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 Aadflip’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. 4. 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 t

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 & bloggers self-regulation consumerism

behavioral targeting spam phishing premiums appropriation defamation slander libel

SUMMARY 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, 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.

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Explain how ethical considerations affect the development of advertising and IBP campaigns. Ethical considerations are a concern when creating advertising, especially when that 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 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 legislation has 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 ways in which companies can contact consumers with a sales offer. The legislation is a reaction to new technologies that have enabled firms to match consumers’ online behavior with offline 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 offline 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.

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CHAPTER OUTLINE INTRODUCTORY SCENARIO: Who Do You Trust?

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Students should relate to this scenario immediately since it is likely that virtually everyone of them has a Facebook account. You 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 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.

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But, Facebook launched “Beacon” which would have automatically shared a user’s Web behavior and Web purchases with their entire friends network.

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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.

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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 write 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. I. The Social Aspects of Advertising

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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

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1. Pro: Advertising Informs. 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. 2. Con: Advertising Is Superficial and Intrusive. Critics argue that advertising does not provide good product information. The information it does provide is shallow and meaningless. Critics claim that ads should contain functional feature information and performance results. 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 and 4.4 really highlight this issue—both are good ads and DO communicate information—one functional, one emotional. B. Advertising Improves the Standard of Living 1. Pro: Advertising Lowers the Cost of Products •

Due to the economies of scale produced by advertising, consumers may pay less.

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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.

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The pressures of competition and the desire to have products that are easy to advertise stimulate firms to produce improved products.

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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.

2. Con: Advertising Wastes Resources and Raises the Standard of Living Only for Some. Advertising represents an inefficient, wasteful process that “shuffles existing total 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. PPT 4-3 here C. Advertising Affects Happiness and General Well-Being

PPT 4-4 here

1. Con: Advertising Creates Needs. The argument is that consumers are relatively easy to seduce into wanting the next shiny bauble offered by marketers or encourages consumers to try to look and act like models in advertisements. 2. Pro: Advertising Addresses a Wide Variety of Basic Human Needs. 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. 3. Con: Advertising Promotes Materialism. Advertising, which portrays products as

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symbols of status, success, and happiness, contributes to the materialism and superficiality in a society. It creates wants and aspirations that are artificial and selfcentered. This results in an overemphasis on the production of private goods to the detriment of public goods (such as highways, parks, schools, and infrastructure). 4. 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 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. PPT 4-5 here D. Advertising: Demeaning and Deceitful, or Liberating and Artful?

PPT 4-6 here

1. 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. 2. 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. 3. 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 satiric to another. The text lays out several examples of honest, worthy organizations that inadvertently offended consumers with their ads. Perhaps consumers—overloaded with commercial stimuli—are losing their tolerance. 4. 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. We appreciate modern conveniences that liberate us from the more foul facets of the natural, such as body odor, close contact with dirty diapers, and washing clothes by hand.

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Before the modern consumer age, the consumption of many goods was restricted by social class. Modern advertising has helped bring us a democracy of goods. There is a liberating quality to advertising that should be appreciated.

5. Con: Advertisers Deceive via Subliminal Stimulation. Because there is 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. To 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. 6. Pro: Advertising Is Democratic Art. There are those who argue that one of the best

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aspects of advertising is its artistic nature. The pop art movement of the late 1950s and 1960s, particularly in London and New York, was fascinated with commercial culture. The text describes how Andy Warhol demonstrated that art was for the people and that the most accessible art was advertising. PPT 4-7 and 4-8 here E. Advertising Has a Powerful Effect on the Mass Media

PPT 4-9 here

1. 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, and television and radio stations are supported by advertising expenditures. In 2009, advertising expenditures on mass media in the United States reached nearly $300 billion.

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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.

2. 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.

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A related issue is the extent to which brands are being placed and featured in programming (branded entertainment) from American Idol to re-runs of Friends.

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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 (e.g., South Park, Bridezilla) because cultural and educational programs, which draw smaller and more selective markets, are dropped in favor of mass-market programs.

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Finally, programming for important controversial issues like poverty and AIDS have a hard time attracting advertisers.

II. The Ethical Aspects of Advertising

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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.

There are three areas of advertising on which ethics are centered: A. Truth in Advertising

PPT 4-11 here

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

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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.

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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. Because these appeals are legal, the ethics of such appeals fall into a gray area.

B. Advertising to Children

PPT 4-12 here

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.

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Children are considered inexperienced consumers and easy prey for the sophisticated persuasions of advertisers.

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Advertising influences children’s demands for everything from toys to snack foods. These demands create an environment of child-parent conflict.

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This is one of those times to ask students to set aside their intuition and consider the literature. Literature is cited in the text (and there is vast literature beyond what is cited) which demonstrates that children at very early age (5-7 yrs. old) understand the rules of commerce, are skeptical of advertising and recognize its intent.

. C. Advertising Controversial Products

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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. 1. Critics have also called into question the targeting of ethnic and minority groups with products and advertising, such as malt liquor ads. Similarly, the tobacco and alcohol industries have been the target of boycotts over their sponsorship of professional sporting events patronized heavily by underage consumers. 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. 2. 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. 3. Gambling and state-run lotteries are another controversial product with respect to

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advertising. What is the government’s obligation to protect vulnerable citizens by restricting the placement or content of gaming or lottery advertising? Is the government above the criticisms it levels at advertisers? 4. 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 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

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1. Deception and Unfairness. The Federal Trade Commission (FTC) has a policy statement on deception. It specifies the following three elements as essential in declaring an ad deceptive: a. There must be representation, omission, or practice that is likely to mislead the consumer. b. This representation, omission, or practice must be judged from the perspective of a consumer acting reasonably in the circumstance. c. 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 inquiry is likely because consumers are likely to have chosen differently if not for the deception. 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 longrunning 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.” 2. Competitive Issues. There are several advertising practices relating to competition that can result in regulation: cooperative advertising, comparison advertising, and using 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 technique. 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.

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Comparison advertisements are those in which an advertiser makes a comparison between the firm’s brand and competitors’ brands. Again, comparison ads are

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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. •

Some firms are so powerful in their use of advertising that monopoly 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.

3. Advertising to Children. 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 like 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 exhortive 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 4-15 here

1. 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 six agencies that have legal powers over advertising. The FTC is the most powerful of the regulatory bodies and warrants special attention. The FTC’s Legislative Mandates a. 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. b. In 1938, the effects of deceptive advertising on consumers became an issue. 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). c. Several other acts provide the FTC with legal powers over advertising. o The Robinson-Patman Act (1936) prohibits firms from providing phantom cooperative-advertising allowances as a way to court important dealers. o Regulatory power over labeling and advertising disclosure was provided to the commission by the Wool Products Labeling Act (1939), the Fur Products Labeling Act (1951), and the Textile Fiber Products Act (1958). o 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).

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d. Recent legislation relates to the FTC’s role in monitoring and regulating advertising. The Nutrition Labeling and Education Act (1990) requires uniformity in the nutritional labeling of food products and sets strict rules for health claims. The Children’s Television Act (1990) limits the minutes of advertising during television programs for children. The FTC’s Regulatory Programs and Remedies

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a. The advertising substantiation program of the FTC was initiated in 1971 with the intention of ensuring that advertisers make available to consumers supporting evidence for claims made in ads. b. 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. c. In a consent order, an advertiser accused of running deceptive or unfair advertising agrees to stop running the advertisements in question, without admitting guilt. i. A cease-and-desist order requires that advertising in question be stopped within 30 days so a hearing can be held to determine whether the advertising is deceptive or unfair. ii. The FTC may require affirmative disclosure where important information that was left out of ads must be included in subsequent ads. d. The most severe 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. e. The FTC has specific rules for advertisements that use celebrity endorsements. 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 Michael Jordan as a spokesperson for McDonald’s), guidelines indicate that the celebrity must be an actual user of the product, or the ad is considered deceptive. o New regulations here with respect to “incentivized” bloggers. State Regulation

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a. State governments do not have extensive policing powers because most firms engage in interstate commerce making jurisdiction federal. b. The attorneys’ general offices do have some powers. c. Some states have enacted state-specific sweepstakes regulation.

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2. Industry Self-Regulation.

PPT 4-18 here

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 National Advertising Review Board. The NARB is the operations arm of the National Advertising Division (NAD) of the Council of Better Business Bureaus. Complaints received from consumers, competitors, or local branches of the Better Business Bureau 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 complete procedure for dealing with complaints is detailed in Exhibit 4.17 in the text.

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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.

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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 publish guidelines on advertising messages for its members.

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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 the 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. The Direct Marketing Association (DMA) is active in promoting ethical behavior and standards among its members. It has published guidelines for ethical business practices.

3. Internet Self-Regulation •

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PPT 4-19 here

As of publication, no industry-wide trade association has emerged to set guidelines or code of conduct, but •

Anti-spam act

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COPPA: Children’s On-line Privacy Protection Act

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Emerging international organizations

Little progress has been made on consumer privacy concerns

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4. Consumers as Regulatory Agents

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Students often forget that consumers wield enormous power over marketers and advertisers simply through the act of withholding patronage. More formal, organized efforts include: •

Consumerism. 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 in the early 1900s, 1920s, 1930s, 1960s, and 1970s.

These movements have focused on the same issue: Consumers want a greater voice in the whole process of product development, distribution, and information dissemination. Consumer Organizations a. The Consumer Federation of America (CFA) was founded in 1968 and now includes over 200 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. b. Consumers Union is a nonprofit consumer organization best known for its publication of Consumer Reports. Established in 1936, Consumers Union has as its stated purpose “to provide consumers with information and advice on goods, services, health, and personal finance; and to initiate and cooperate with individual and group efforts to maintain and enhance the quality of life for consumers.” c. Consumer Alert champions consumer causes through testimony and comments to regulatory bodies. It also promotes the use of sound science and sound economic data in policy formation. d. Commercial Alert was founded by Ralph Nader and has a stated mission of keeping commercial culture in proper perspective and preventing the exploitation of children and subversion of family, community, and environmental integrity. These three 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. C. The Regulation of Other Promotional Tools

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As other promotional tools gain prominence, the regulation of these promotions become more relevant. This is a regulatory environment that is emerging.

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1. Regulatory Issues in Direct/Mobile Marketing and E-Commerce The most pressing issue was discussed in the introductory section of this chapter – database marketing and consumer privacy. •

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Privacy. Online privacy issues focus on •

Cookies, which advertisers place on a Web server’s hard drive to track online behavior. Some sites require that consumers enable cookies to use the site. The fear is that cookies may be used in the future to link to personal information.

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Behavioral targeting and GPS tracking via consumers smart devices

Spam. Spam, the unsolicited messages sent en-mass over the Internet, is a serious problem. •

30 million spam emails were being sent every minute worldwide—about 100 billion messages a day. Internet providers have tried to form coalitions to fight spam.

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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.

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“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—like a bank or mortgage company in an electronic communication.

Contests, Sweepstakes, 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.

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Coupon fraud regulation is needed to protect marketers rather than consumers

Telemarketing. Telemarketing is another area with regulation concerns. 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.

2. Regulatory Issues in Sales Promotion. •

Premium Offers. Premiums are items offered for free or at a greatly reduced price. Marketers must state the fair retail value of the item offered as a premium.

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Trade Allowances. Customers need to be offered similar prices on similar merchandise. This means marketers cannot use special allowances to highly attractive customers.

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Contests and Sweepstakes. The issues discussed in the e-marketing section apply as well to the following mandates from the FTC that marketers must: 1) misrepresentation of value; 2) failure to provide complete disclosure about the conditions necessary to win; 3) failure to disclose the conditions necessary to obtain a prize; 4) failure to ensure the contest or sweepstakes is not classified as a lottery.

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Product/Brand Placement. Concerns about “branded entertainment” not being recognized as promotion.

3. Regulatory Issues in Public Relations. Regulations in this area relate to dealing with the press and public figures. Specifically, legal issues include respecting privacy, copyright infringement, or defamation through slander and libel. •

Privacy. Public relations firms cannot use pictures or images owned by someone else – appropriation.

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Copyright Infringement. Public relations efforts must not use written, recorded, or photographic material without permission.

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Defamation. When a communication occurs that damages the reputation of an individual because the information is not true, that 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.

SOLUTIONS TO 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 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

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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. 3. 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 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 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. 5. 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?

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

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 5 to 6 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. 6. What are 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. 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. 8. 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. 9. Various methods of industry self-regulation are discussed in this chapter. Do you think selfregulation 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 selfregulation. 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 smoking-related 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

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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? 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.

SOLUTIONS TO 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 shocklogic was necessary and justified given the urgency of the message, the challenges of media clutter, and the problem of teenage indifference. 2. 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”

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

didn’t come from GM profits—it was a 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 selfregulation, 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. 4. 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 4-inch 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 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.

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END OF PART ACTIVITY (PAGES 158-161) Project One: Understanding the process of Advertising and Integrated Brand Promotions Grading Rubric INTRODUCTION Does the introduction make the reader want to read the paper? Does the introduction introduce the topic in some way (i.e. opening narrative, secondary data, vignette, etc.)? Does the introduction provide a clear purpose statement? Does the introduction provide any reasons that support the importance of the purpose statement? Does the purpose statement follow the appropriate format? Does the introduction clearly address a specific audience (i.e. the brand the group has chosen for this project)? Does the introduction provide an overview of what’s to come? Does the introduction clearly transition into the next section?

Yes

Somewhat

Pts

PRODUCT CATEGORY ANALYSIS Does the product category analysis provide an introduction to the section? Does the product category analysis include a separate section for the product history, the current product state, and the ethical and social issues? Does the product history provide a thorough overview of the product category and how it has evolved over the years? Does the product history cover more than just the reel mower history and include a history of lawn-care products and services in general? Does the history tell an interesting story? Is the history provided of an appropriate length? Does the narrative of this history flow logically (i.e. is there a beginning, middle, and end or is it like a Tarantino movie)? Does the current product state contain a sophisticated understanding of the current state of the product category including (but not limited to) the major players in the category, size of the market, etc.? Does the paper include and thoroughly describe any ethical issues surrounding lawn care and lawn-care products? Does the paper include and thoroughly describe what has been accomplished in addressing these ethical issues? Does the paper include and thoroughly describe any social issues surrounding lawn care and lawn-care products? Does the paper include and thoroughly describe what has been accomplished in addressing these social issues? Are any direct quotes and paraphrasing used appropriately? Is this product category analysis built from reliable sources (i.e. not Wikipedia or ask.com)? Does the product category analysis clearly transition into the next section?

Yes

Somewhat

Total No

Pts

MAJOR BRAND ANALYSIS Does the major brand analysis provide an introduction to the section? Does the major brand analysis include a separate brand history for each of the three brands chosen for this project? Does each brand history include the past and present advertising efforts utilized for that brand?

Yes

Somewhat

Total No

Pts

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

Does each brand history contain at least 15 promotional efforts for each brand discussed? Does the major brand analysis include a separate brand meaning section for each of the three brands chosen for this project? Does the brand meaning section for each brand describe the “story” that is told through the advertising for each of the three brands? Does the brand meaning section for each ad make sense in that the “story” told reflects the advertisements provided? Does the major brand analysis culminate in a product meaning section? Does this product meaning section describe the comparisons between all three brands chosen? Does the product meaning section describe the contrasts between all three brands chosen? Does the product meaning section describe the central meaning of the product category gleaned from the comparison and contrast of the three sets of brand advertisements? Does the product meaning section provide an ethical and social assessment of the product category meaning? Is the major brand analysis built from reliable sources? Are direct quotes and paraphrasing used appropriately? Does the major brand section clearly transition into the next section? CLIENT ANALYSIS Does the client analysis provide an introduction to the section? Does the client analysis provide a thorough company history of the client? Does the client analysis provide an overview of the company’s mission statement and what it means? Does the client analysis include an understanding of what the company wants to accomplish with its promotional efforts? Does the client analysis provide recommendations for how the company can promote its brand in relation to other brands? Does the client analysis provide recommendations for how the company can position its brand within the product category? Does the client analysis include a description of how these recommendations will help the company achieve its goals? Are direct quotes and paraphrasing used appropriately? Is the client analysis built from reliable sources? Does the client analysis clearly transition into the next section?

Yes

Somewhat

Total No

Pts

SELF-ANALYSIS Does the self-analysis provide an introduction to the section? Does the self-analysis provide a description of your advertising agency? Does the self-analysis provide a description of the services your agency offers? Does the self-analysis provide a description of the fee structure your agency offers? Does the self-analysis provide an overview of other features and benefits offered by the agency?

Yes

Somewhat

Total No

Pts

CONCLUSION (10 Points) Does the conclusion provide a brief summary of the paper? Does the conclusion provide an overview of what the reader should take away from reading the paper? Does the conclusion wrap up any and all loose ends? Does the conclusion close with a bang (i.e. closing vignette, etc.)?

Yes

Somewhat

Total No

Pts

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Does the conclusion echo the introduction in any way? PAPER QUALITY (40 Points) Does the paper properly cite using APA style? (If no, then an automatic 0 in paper quality) Does the paper have a references section with complete references? Does the paper appear to have an appropriate number of references? Does the paper address an audience and not the professor? (If no, then an automatic 0 in paper quality) Was the paper handed in via the appropriate format? Is the paper well-written? Is the paper relatively misspelling-free? (no more than five noticeable misspellings) Is the paper relatively grammatically correct? (no more than five noticeable grammar mistakes) Is the paper written in a cohesive fashion where I cannot tell which sections were written by different people? Does the paper have appropriate section and subsection headings? Does the paper follow appropriate formatting requirements (i.e. 1 inch margins, 11 or 12 point font, page numbers, single-spacing, space between paragraphs)? Is there a table of contents? Is there an executive summary of the paper? Are there organized appendices with appropriate materials? Does the paper appear to be an appropriate length? Is there a logical flow to the paper? Is there a title page with a title and author names? Are there page numbers? Is the paper written and presented in an interesting fashion (i.e. with pictures, charts, title page, etc.)? Does the paper appear to be of professional quality?

Yes

Somewhat

Total No

Total

Pts

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

PART 2 Analyzing Advertising and Integrated Brand Promotion Environments PPT 5-1, 5-2 here

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 need state functional benefits emotional benefits internal search consideration set external search evaluative criteria customer satisfaction cognitive dissonance involvement extended problem solving limited problem solving habit

variety seeking brand loyalty attitude brand attitudes beliefs salient beliefs multi-attribute attitude models (MAAMs) cognitive consistency advertising clutter selective attention cognitive responses elaboration likelihood model (ELM)

peripheral cues meaning culture values rituals stratification (social class) taste intergenerational effect life-stage celebrity gender community brand communities

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

SUMMARY 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 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. Post-purchase 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 are, 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 how advertising may influence consumer behavior through its effects on various psychological states. 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 multi-attribute 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 process an advertiser’s message thoughtfully, 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 in creating effective ads. Advertisements are cultural products, and culture provides the context in which an ad will be interpreted. Advertisers who overlook the influence of culture are bound to struggle in their attempt to communicate with the target audience. Two key concepts in managing the impact of culture are values and rituals. Values are enduring beliefs that provide a foundation for more transitory psychological states, such as brand attitudes. 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 co-created by consumers and advertisers.

Discuss the role of sociological factors in consumer behavior and advertising. ..

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

Consumer behavior is an activity that each of us undertakes before a broad audience of other consumers. Advertising helps the transfer of meaning. Reference groups of various types have a dramatic influence on the consumption behavior of their individual members. 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 how effective advertising uses sociocultural meaning in order to sell things. Advertising transfers a desired meaning to the brand by placing it within a carefully constructed social world represented in an ad, or “slice of life.” The advertiser paints 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 INTRODUCTORY SCENARIO: Ay Caramba! The introductory scenario delivers a contemporary and interesting demonstration of the changes the advertising and promotion industry is experiencing as highlighted in Chapters 1, 2 and the end of Chapter 3. It is worth pointing out to students that this is what those chapters were describing—more varied communications tools, branded entertainment, more consumer involvement in the message. •

7-Eleven Corp. teamed up with the television show characters (branded entertainment) to draw attention (buzz promotion) to the release of The Simpson Movie

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7-Elevens were turned into Kwik-E-Marts from the The Simpson’s television show

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The whole process was described as “as pop culture commenting on pop culture commenting on itself”

The main point here—advertising and promotions are deeply embedded in consumers’ lives and consumer culture. Introduction This chapter is one of the most important for students of advertising and IBP. Issues in consumer behavior provide an essential framework for the conception and execution of effective ads. It may take some general discussion of the broad context of consumer behavior to have students truly understand the importance of this chapter’s content. And, it is worth alerting students to the ENORMOUS amount of information in this chapter—we did our best to keep it as direct and the points as possible. PPT 5-3 here Consumer behavior is defined as the entire broad spectrum of things that affect, derive from, or form the context of human consumption. Like all human behavior, the behavior of ..

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

consumers is complicated. However, advertisers must make it their job to understand consumers if they are to have sustained success in creating effective advertising and IBP materials. This chapter provides a summary of the concepts and frameworks we believe are most helpful to understanding consumer behavior. We will describe consumer behavior from two different, major perspectives: 1. The first portrays consumers as reasonably systematic decision makers who seek to maximize the benefits they derive from their purchases. 2. The second views consumers as active interpreters (meaning makers) of advertising, whose membership in various cultures, subcultures, societies, and communities significantly affects their interpretation and response to advertising. A teaching emphasis here is to point out to students that no one perspective can adequately explain consumer behavior. Consumer behavior is complex and multifaceted— psychological, social, cultural, historical, and economical all at the same time. I.

Perspective One: The Consumer as Decision Maker

PPT 5-4 here

One way to view consumer behavior is as a logical, sequential process culminating with the individual gaining benefits from a product or service. In this basic view, individuals act as purposeful decision makers who take matters one step at a time. A. The Consumer Decision-Making Process—One way to view consumer decision making is as a 4-step sequential process PPT 5-5 here 1. Need Recognition. The consumption process begins when people perceive a need. A need state arises when the desired state of affairs differs from one’s actual state of affairs. Many factors can influence the need states of consumers. a. Basic human needs as suggested by Maslow’s well-known hierarchy—physiological, safety, love and belonging, esteem, self-actualization—may be manifest in the need recognition stage of consumption. b. Another element of need recognition is that brands should provide benefits that fulfill consumers’ needs; hence, one of the advertiser’s primary jobs is to make the connection between the two for the consumer. •

Some are functional benefits, that is, they derive from the more objective performance characteristics of a product or service—convenience, reliability, nutrition, durability, and economy are examples.

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Consumers may also choose brands that provide emotional benefits that are more subjective and may be perceived differently from one consumer to the next. Brands help consumers feel pride, avoid guilt and shame, relieve fear, and experience intense pleasure. These are powerful consumption motives that advertisers often try to activate.

2. Information Search and Alternative Evaluation. a. Information for the decision is acquired through an internal or external search.

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

•

The consumer’s first option for information is to draw on personal experience, prior knowledge, and prior exposure to advertising and is known as internal search.

•

The internal search can create a 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. An external search involves visiting retail stores 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 publications like Consumer Reports. When consumers are in an active information-gathering mode, they also may be receptive to detailed, informative advertisements delivered through print media.

b. Consumers will then form evaluations based on the characteristics or attributes that brands in their consideration set have in common. These are referred to as evaluative criteria. Evaluative criteria will differ from one product category to the next and can include many factors, such as price, texture, warranty terms, color, scent, or fat content. 3. Purchase. At this point, the consumer makes a commitment to a brand and a source of supply. The decision includes whether to buy from traditional retail or new retail options like television shopping or Internet buying. Included here is the decision to buy on credit or with cash. 4. Post-purchase Use and Evaluation. The goal for marketers and advertisers must not be simply to generate a sale; the goal must be to create satisfied and perhaps even loyal customers. • 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. PPT 5-6 here •

Cognitive dissonance is the anxiety or regret that lingers after a difficult decision. Cognitive dissonance is most common: • when there are several close alternatives, • the item is higher priced, • and the product or service warrants a long-term commitment. • Examples are stereos, automobiles, life insurance, and computers. • When dissonance is expected, it makes good sense for the advertiser to reassure buyers with detailed information about its brands. PPT 5-7 here

B. Four Modes of Consumer Decision Making ..

PPT 5-8 here

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

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 complexity of consumer behavior. These four modes of consumer decision making are determined by a consumer’s involvement and prior experiences with the product or service in question. 1. Sources of Involvement Involvement is the degree of perceived relevance and personal importance accompanying the choice of a certain product or service. Many factors contribute to level of involvement in any given decision. a. Interests and avocations, like cooking, photography, pet ownership, or exercise and fitness, can enhance involvement. b. When risk is associated with a purchase—high price of the item or because the consumer will have to live with the decision for a long time— elevated involvement is likely. c. Consumers can also derive important symbolic meaning from products and brands. d. Some purchases can also tap into deep emotional concerns or motives—like friendship or patriotism. e. Involvement varies between product categories and between individuals PPT 5-9 here 2. Prior experiences with product categories and brands is pretty self explanatory—the more experience, the more astute the consumer, and typically lower involvement. 3. 4 Modes of Consumer Decision Making

PPT 5-10 here

The ideas of involvement and prior experience produce four different types of consumer decision making. These four modes are shown in text Exhibit 5.10.

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Extended Problem Solving. When consumers are inexperienced and the setting is highly involving, they 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.

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Limited Problem Solving. Experience and involvement are both low in limited problem solving. This is a common mode of decision making. A consumer will be less systematic. It is not a problem that is interesting or engaging, so information search is limited simply to trying the first brand encountered. Examples are low-cost products with some utilitarian value like the disposable diaper example on page 173 in the text.

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

•

Habit or Variety Seeking. Habit refers to buying a single brand repeatedly. This occurs where a decision is not involving and a consumer repurchases from the category over and over again. Convenience goods of all sorts represent this decisionmaking context. Variety seeking refers to the tendency of consumers to switch among various brands in a 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. However, from one purchase occasion to the next, the individual will switch brands within this set, for the sake of variety.

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Brand Loyalty. This mode is typified by high involvement and rich prior experience. Consumers demonstrate brand loyalty when they repeatedly purchase a single brand. It is important to distinguish brand loyalty from simple habit. Brand loyalty is based on highly favorable attitudes toward a brand and a conscious commitment to find this brand each time. Conversely, habits are merely consumption simplifiers that are not based on deeply held convictions.

C. Key Psychological Processes

PPT 5-11 here

To complete our consideration of the consumer as a thoughtful decision maker, one key issue remains. We need to examine the explicit psychological consequences of advertising. What is it that advertising leaves in the minds of consumers that ultimately may influence their behavior? Two ideas borrowed from social psychology are usually the center of attention when discussing the psychological aspects of advertising. •

Attitude is defined as an overall evaluation of any object, person, or issue that varies along a continuum, like favorable to unfavorable or positive to negative. Attitudes are learned, and if they are based on substantial experience with the object or issue in question, can be held with great conviction. Brand attitudes are summary evaluations that reflect preferences for various products and brands. The Creativity Box details how marketers today, such as Coca-Cola, are using digital storytelling to build brand stories that authentically include people’s emotional feelings toward a brand.

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A second idea from social psychology, beliefs, represents the knowledge and feelings a person has accumulated about an object or issue. They can be logical and factual in nature, or biased and self-serving.

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Salient beliefs are a small number of key beliefs—maybe five to nine—that underline brand attitudes.

The relationship between attitudes, beliefs, and the effect of advertising can be understood by addressing the three topics below. 1. Multi-Attribute Attitude Models (MAAMs).

PPT 5-12 here

Multi-attribute attitude models (MAAMs) provide a framework and set of procedures for collecting information from consumers to assess their salient beliefs and attitudes about competitive brands. MAAMs analysis has four fundamental components: •

Evaluative criteria are the attributes or performance characteristics that consumers use in comparing competitive brands.

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

•

Importance weights reflect the priority that a particular evaluative criterion receives in the consumer’s decision-making process. Importance weights can vary dramatically from one consumer to the next.

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Consideration set is that group of brands that represents the real focal point for the consumer’s decision. For example, the potential buyer of a luxury sedan might only be focusing on Acuras, BMWs, and Saabs.

•

Beliefs represent the knowledge and feelings that a consumer has about various brands. In a MAAMs analysis, beliefs about each brand’s performance on all relevant evaluative criteria are assessed.

2. Information Processing and Perceptual Defense. There are two major obstacles advertisers must overcome if a message is to have its intended effect. PPT 5-13 here •

Cognitive consistency impetus: A person develops and holds beliefs and attitudes to help make efficient decisions that yield pleasing outcomes. When a consumer is satisfied with these outcomes, there is really no reason to alter the belief system. Cognitive consistency will result in the rejection of new information that challenges existing beliefs. This desire for cognitive consistency can be a major roadblock for an advertiser. • Advertising clutter: Clutter derives from the context—many ads of all sorts competing for attention. Even if a person wanted to, it would be impossible to process and integrate every advertising message. • Consumers employ perceptual defenses to simplify and control their own ad processing. Selective attention means that most ads are ignored by consumers because the brand and the message are not seen as relevant to current needs. • When a consumer is involved, attentive, and encounters a claim that challenges current beliefs, cognitive consistency impetus kicks in, and cognitive responses can be expected. Cognitive responses are the thoughts that occur to individuals at that exact moment in time when their beliefs and attitudes are being challenged by some form of persuasive communication. When these thoughts are negative in any way, the advertiser’s goals are not served. PPT 5-14 here

3. The Elaboration Likelihood Model (ELM). The basic premise of ELM is that to understand how persuasive communications may affect a person’s attitudes, we must consider his or her motivation and ability to elaborate on the message during processing. ELM uses the involvement dichotomy to describe two unique routes to attitude change: the central and peripheral route. a. Shaping attitudes through the central route. When involvement is high, the central route to shaping attitudes is taken; In the central route, cognitive responses lead to attitudes. b. Shaping Attitudes via a Peripheral Route. For low-involvement products, like batteries or tortilla chips, cognitive responses to advertising claims are not expected. In such situations, attitude formation will often follow a more peripheral route, and peripheral cues become the focal point for judging the ad’s impact. ..

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

•

Peripheral cues are features of the ad other than the actual arguments about the brand’s performance. They include an attractive spokesperson, novel imagery, humorous incidents, or a catchy jingle. PPT 5-15 here

II. Perspective Two: The Consumer as Social Being

PPT 5-16 here

The consumer as decision maker tells only part of the story—this approach often takes consumer behavior out of its natural social context, making consumers appear overly rational. A second perspective on consumer behavior is concerned with social and cultural processes. It draws on anthropology, sociology, and communications. Both industry and academics have added qualitative fieldwork, interpretive and textual approaches in their effort to better understand consumer behavior. These researchers took a view of consumers as more than “information processors” and meaning is more important in this perspective than information. This second perspective is broken into two parts: 1. The sociocultural environment—consuming in the real world—within which consumers make decisions 2. Advertising as Social text—a context whereby the ad itself provides sociocultural context PPT 5-17 here

A. Consuming in the Real World

PPT 5-18 here

1. Culture is “the total life ways of a people, the social legacy the individual acquires from his/her group.” It is the way we eat, groom ourselves, celebrate, and mark our space and position. A very important point for students is that: •

Cultures are not necessarily geographic. It can be teen tech nerd culture, Goth culture, country club culture, etc.

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Culture is what each of us takes as ordinary and appropriate.

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It surrounds the creation, transmission, reception, and interpretation of ads. Advertisements are cultural products.

2. Values. Values are the defining expressions of culture. They express in words and deeds what is important to a culture. For example, some cultures value individual freedom, while others value duty. Advertisers try to associate their brand with a cultural value or criticize a competitor for being out of step with one. Values are becoming more global as evidenced by the “global brandscape.” 3. Rituals. Rituals are “often-repeated formalized behaviors involving symbols.” Cultures participate in rituals.

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

•

Cultures affirm, express, and maintain their values through rituals. If an advertiser can successfully incorporate the consumption of brand into an existing ritual, success is much more likely.

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Rituals often are, but do not need to be, big events like holiday or mating rituals. There are everyday rituals (grooming, morning coffee, an evening drink), that can define behavior as well.

B. Five Sociological Factors in Consumer Behavior and Advertising Response PPT 5-19 here Stratification (Social Class) provides a broad context refers to a person’s standing in the social system produced by systematic inequalities in wealth, income, education, power, and status. Although Americans like to think of themselves as a classless society, this is clearly not the case. There are rich and poor, upper and lower classes. Income alone does not, however, define social class effectively. •

Members of society within social strata behave similarly, have similar views and most importantly, from an advertiser’s perspective, consume similarly.

•

Taste refers to a generalized set or orientation to consumer preferences. Social class impacts consumption through tastes, media habits, and exposure to advertising. Marketers of social class include what one wears, where one lives, and how one talks. Consumption marks or indicates social class in myriad ways. We think of tennis rather than bowling as belonging to the upper classes, chess rather than checkers, and Brie rather than Velveeta. Advertising uses markers of class on target audiences.

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Cultural capital is the value that cultures place on certain consumption practices— ordering wine with dinner, flying first class, having an original piece of artwork hanging on your walls is cultural capital for some consumers. Big pick-ups, Carhardt jeans, and country music are cultural capital for other consumers. •

A modern context for cultural capital include knowing the coolest new bands on YouTube, having an iPhone or a Blackberry—but to whom and what cultural group?

1. Family. 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—decisions just get made. Advertisers capitalize on the flexibility of this social system by suggesting in their ads who should take charge of a given consumption task.

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One of the best predictors of the brands adults use is the ones their parents used—this is called an intergenerational effect.

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Advertisers focus on the major gross differences in families as this impacts consumption. 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:

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

there are many single parent households, second marriages, and gay and lesbian households. •

Life Stage. 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).

•

Celebrity is a unique sociological concept applied to consumer behavior and can help link identities to brands. Identities have become a fashion accessory and consumers are very good at displaying multiple identities throughout the day. Celebrity means a great deal to advertisers as celebrities and brands can be used by consumers to display identities.

2. 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. 3. Politics. 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.” 4. Gender. Gender is the social expression of sexual biology, sexual choice, or both. 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.

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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.

5. Community. Community is defined as a “wide-ranging relationship of solidarity over a rather undefined area of life and interests.” It 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. ..

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

•

Community is where consumption is grounded. Brands 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.

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Brand communities are groups of consumers who feel a commonality and a shared purpose grounded or attached to a consumer good or service. Owners of Doc Martens or Saturns experience a sense of connectedness by virtue of their common ownership. PPT 5-20 here

B. Advertising Social Rift, and “Revolution.” Advertisers see opportunity to provide the “costumes” and consumable accessories that “revolutions” require—particularly within youth markets. Certain “looks” offer consumers the chance to signal they are part of a political-social group. C. How Ads Transmit Meaning

PPT 5-21 here

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Advertising can be thought of as “text” which is read and interpreted by consumers

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Ads can turn already meaningful things into things with very special meaning—brands can become “cool” or develop high cultural capital through advertising.

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Ads turn products into brands. Meaning to consumers is transmitted from ads only because there is an intelligible social context for the ad. Exhibit 5.51 offers students a visual representation of the movement of meaning from the world to goods to consumers and ultimately in advertisements.

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Ads have become part of consumers’ everyday language and conversation. Ads in many ways are the sociocultural text of our time.

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Ads also become part of consumers’ everyday language by picking up phrases, slogans, ideas and agendas from ads. PPT 5-22 here

This PPT summarizes the whole process of CB influences

PPT 5-23 here

SOLUTIONS TO 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 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

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

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. 3. 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. 4. Explain the difference between brand-loyal and habitual purchasing. When a brand-loyal customer arrives at a store and finds 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 brandloyal 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 stockout simply provides an incentive to try another brand. 5. 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

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

discussion if students are given an assignment before class to collect examples of advertising campaigns that feature each of the three change strategies. 6. 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 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. 7. 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. 8. 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? 9. 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?

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

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 gender-specific 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 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.

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

3. 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 post-purchase evaluation can lead consumers to return the item in the short-term, or fail to make repeat purchases when it comes 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 target segment positioning positioning strategy STP marketing market segmentation heavy users nonusers brand-loyal users 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 market niche benefit positioning user positioning competitive positioning repositioning value proposition

SUMMARY 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. Although 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 target 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 used for choosing a target segment. 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

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

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. As exemplified by Pontiac’s “We Build Excitement” and “Designed for Action” campaigns, 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 that creates 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 INTRODUCTORY SCENARIO: How Well Do You “Tolerate Mornings?”

PPT 6-1 here

This is an excellent introduction to the “strategy” of using advertising and IBP tools. Point out to students that up to now, the text has needed to “describe” various aspects of the advertising and IBP process. Now we can turn to application through segmentation, targeting, and positioning. •

Firms struggle with reaching consumers with messages at that precise point when they are just experimenting with a product category so that the firm’s brand can be at the right place at the right time with respect to brand messages.

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Folgers Coffee does not take for granted new users—it launches campaigns specifically targeted to the next generation of coffee drinkers.

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People may be introduced as teens to coffee at Starbucks, but choosing a brand to “brew at home” is a different decision.

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The Folgers brand team, along with its agency Saatchi & Saatchi came up with a short film titled “Happy Mornings: The Revenge of the Yellow People” to show that fresh brewed Folgers was the way to “tolerate your mornings”

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

•

The unique aspect of this campaign is that Folgers team submitted the film to three websites —Adcritic, BestadsonTV.com and Boards, where 20 somethings could shape the ad (recall for students the concept of consumer generated content from Chapter 3).

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The film got posted on YouTube, earned 4 out of 5 stars and quickly ran to 300,000 viewings

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The story of Folgers and Tolerate Mornings shows that careful consideration of the target market, its orientation and interests, can result in highly effective placement and reception of a brand message.

STP Marketing and the Evolution of Marketing Strategies

PPT 6-2 here

This is an important introduction to STP. Although students in an advertising or promotion class should have had extensive exposure to these concepts, we all know it doesn’t always stick. So the first step is to get the definitions out. A target segment is the subgroup (of the larger market) chosen as the focal point for the marketing program and advertising campaign. A key distinction to highlight for students is that markets are segmented, but products are positioned. KEY TEACHING NOTE: It might worth pausing here for a moment and re-emphasizing a point made in Chapter 4. There is nothing illegal, unethical, or sinister about targeting. The word has acquired some heavy politically incorrect baggage in the last 10 years by uninformed critics of marketing and advertising who don’t understand the process. Targeting is merely a way to focus a firm’s resources in a way that increases the probability that the firm will serve customers’ needs better. As an analogy—is it sinister for a doctor to become a surgeon rather than a dermatologist? To pursue a target segment, a firm organizes its marketing and advertising efforts around a coherent positioning strategy. •

Positioning is the act of designing and representing one’s product or service so that it will occupy a distinct and valued place in the consumer’s mind.

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Positioning strategy involves the selection of key themes or concepts that the organization will feature for communicating this distinctiveness to the target segment.

Marketing strategy evolves as a result of segmenting, targeting, and positioning. This sequence of activities is often referred to as STP marketing, and it represents a sound basis for generating effective advertising. PPT 6-3 here •

Break the broad market into smaller, homogeneous segments

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Target discrete market segments

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Position the brand to appeal to the targeted segments

Although there are no formulas or models that guarantee success, the STP approach is strongly recommended for markets characterized by diversity in consumers’ needs and preferences. In markets with any significant degree of diversity, it is impossible to design one

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

product that would appeal to everyone or one advertising campaign that would communicate with everyone. Text Exhibits 6.4 and 6.5 demonstrate the concept perfectly. A. Beyond STP Marketing

PPT 6-4 here

Even when STP marketing yields profitable outcomes, one must presume that success will not last indefinitely. To maintain the vitality and profitability of a brand, an organization has two options. •

Reassess segmentation strategy: This may come through a more detailed examination of the current target segment to develop new and better ways of meeting its needs, or it may be necessary to change the target and reposition the offering to a new segment, as was the case with the Slurpee.

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Pursue product differentiation strategy: Product differentiation focuses the firm’s efforts on emphasizing or even creating differences for its brands to distinguish them from the offerings of competitors. Advertising plays a critical role as part of the product differentiation strategy because often the consumer will have to be convinced that the intended difference is in fact meaningful.

II. Identifying Target Segments

PPT 6-5 here

The first step in STP marketing involves market segmentation, breaking down large, diverse markets into more manageable submarkets or segments. Advertisers need to identify a segment with common characteristics that will lead the segment to respond distinctively to a marketing program. This section reviews several ways that consumer markets are commonly segmented. A. Segmenting by Usage Patterns and Commitment Levels

PPT 6-6 here

It is important to recognize that for most products and services, some users will purchase much more frequently than others will. It is common to find that heavy users in a category account for the majority of a brand’s sales and become the focus of the marketing effort. However, a heavy user focus takes attention and resources away from those who need encouragement to purchase the brand. Perhaps most importantly, heavy users may be significantly different in their motivations to consume, their approach to the product, or their image of the product. Another segmentation option combines consumers’ prior usage with commitment levels to identify four fundamental segments: • Heavy users are the “cream” of the segmentation effort—high volume but often heavily pursued by all competitors. Can be the primary target segment. •

Nonusers (particularly of the product category) offer the lowest level of opportunity relative to the other three groups. Recall primary demand stimulation problems here.

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Brand-loyal users are a tremendous asset if they are the advertiser’s customers but they are difficult to convert if they are loyal to a competitor.

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Switchers or variety seekers 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 an

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

expensive segment to try to win. Much can be spent in getting their business merely to have it disappear just as quickly as it was won. •

Emergent consumers offer the organization an important business opportunity. In most product categories, there is a gradual but constant influx of first-time buyers. •

Point-of-entry marketing is a phrase used to describe advertising campaigns used to win over first time users—just as Folgers did.

B. Demographic Segmentation

PPT 6-7 here

Demographic segmentation is used in selecting target segments based on 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 reach that segment efficiently 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 by product usage rates, the next step would be to describe or profile its heavy users’ demographic characteristics like age or income.

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Demographic categories are frequently used as the starting point in market segmentation. •

Demographic segments are often given descriptive names like “woopies” which stands for well off older people—who in the U.S. control 2/3 of the wealth in the U.S. PPT 6-8, 6-9 here

C. Geographic Segmentation

PPT 6-10 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 (that is, zip codes) around the country with 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. D. Psychographics and Lifestyle Segmentation

PPT 6-11 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. Focus on consumers’ activities, interests, and opinions produces insights into differences in the lifestyles of various segments and can

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

result 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. The text cites how Pillsbury identified five basic eating-style segments based on lifestyle: Chase & Grabbits, Functional Feeders, Down-Home Stokers, Careful Cooks, and Happy Cookers. The VALS system is highlighted here as well. Developed by SIR International, the approach highlights lifestyles as displayed in text exhibit 6.10. E. Benefit Segmentation

PPT 6-12 here

In benefit segmentation, target segments are delineated by the benefit packages that different consumers want from the same product category. With automobiles, some consumers want economical and reliable transportation; others want speed and excitement; and still others want luxury, comfort, and prestige. The importance weights collected from individual consumers in MAAMs research (from Chapter 5) provide the raw material needed for identifying benefit segments. Exhibits 6.11 (Bed Head) and 6.12 (catwalk) demonstrate vividly for students that two brands in the same product category can promise very different benefits (note, however, the nearly identical visual presentation). F. Segmenting Business-to-Business Markets

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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. However, huge time, energy, and money are put into business markets, the institutional buyers who purchase items to be used in manufacturing other products and services or to resell to other businesses or households. Remember, Microsoft, Apple Computer, Boeing, and Xerox are all businesses that buy billions of goods and services—most worthy of a segmentation analysis. Business markets can be segmented using several of the options already discussed. •

Business customers differ in their usage rates and geographic locations, so these variables may be productive bases for segmenting business markets.

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One of the most common approaches uses the NAICS (North American Industry Classification System) codes prepared by the U.S. Census Bureau. SIC information is helpful for identifying categories of businesses and then pinpointing the precise locations of these organizations.

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In business markets, advertisers fall back on simpler strategies that are easier to work with from the perspective of the sales force. Segmentation by a potential customer’s stage in the purchase process is one such strategy. First-time prospects, novices, and sophisticates want very different packages of benefits from their vendors, and they should be targeted separately in advertising and sales programs. PPT 6-14 here

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

III. Prioritizing Target Segments

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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 a potentially confusing mix of segments to a selected subset that will become the primary target(s). Prioritizing segments can be based on: •

The distinct competency of the organization, for example, manufacturing, service personnel, distribution, and so on—what the segment wants versus what the firm can provide.

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The size and growth potential of the segment.

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The competitive field—companies that compete for a segment’s business must decide whether they have a particular expertise, or perhaps just a bigger budget, that would allow them to serve the segment more effectively than competitors.

Recently, many firms have learned that small segments can be more profitable than large segments. The smaller-is-better principle is now referred to as niche marketing. A market niche is a relatively small group of consumers with a unique set of needs who are often willing to pay a premium price to satisfy those needs. IV. Formulating the Positioning Strategy

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A. Essentials for Effective Positioning Strategies Effective positioning strategies are based on meaningful commitments of organizational resources to produce substantive value for the target segment. They also are consistent internally and over time, and they feature simple and distinctive themes. •

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.

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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 of what a brand stands for.

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Make it Different Simply: 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 to be communicated effectively to the target segment.

B. Fundamental Positioning Themes

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Three fundamental options should always be considered in selecting a positioning theme. These options are benefit positioning, user positioning, and competitive positioning. •

Benefit Positioning: Consumers purchase products to derive functional or emotional benefits, so an emphasis on the primary benefit they can expect to receive is fundamental. Although it might seem that more compelling positioning themes would

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

result from promising consumers a wide array of benefits, keep in mind that multiplebenefit strategies are hard to implement. •

User Positioning: This option takes a specific profile of the target user as the focal point of the positioning strategy. User-oriented positioning themes are common when demographic and psychographic variables have been combined to reveal a target segment’s distinctive lifestyle.

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Competitive Positioning: This option is sometimes useful in well-established product categories with a crowded competitive field. Here, the goal is to use an explicit reference to an existing competitor to help define precisely what the brand can do. Many times this approach is used by smaller brands to carve out a position relative to the market share leader in their category. PPT 6-18 here

C. Repositioning

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One of the best ways to revive an ailing brand or to fix the lackluster performance of a new market entry is to redeploy the STP process to revise positioning strategy (revisit the Pontiac example earlier). This effort is commonly referred to as repositioning. •

This problem is common for brands that become popular with one generation but fade from the scene as that generation ages and emergent consumers come to view the brand as passé. When brands are not revitalized regularly and strong competitors emerge to fill the void, the repositioning challenge can be formidable.

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It is also common for trendy themes to age and be seen as irrelevant by target segments.

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Advertising is essential in repositioning. New features, new styling, new image, and new theme are fundamental to repositioning and need to be communicated through advertising to target audiences.

V. Capturing Your Strategy in a Value Proposition

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In the end, consumers seek value. A firm’s basic strategies in segmentation and positioning will be futile without consumers’ perceiving superior value in the brand. A firm should be able to articulate clearly the value proposition for its brand. A brand’s value proposition is a statement of the functional, emotional, and self-expressive benefits delivered by the brand that provide value to customers in the target segment A balanced value proposition is the basis for brand choice and customer loyalty and is critical to the ongoing success of a firm. Alert students to the fact that this value proposition focuses on three types of benefits and must be balanced against the price consumers are willing to pay. Exhibit 6.26 visually expresses the concept. The text offers value propositions for two global brands—McDonald’s and Nike: McDonald’s: Functional—good tasting food, playgrounds, premiums, and prizes Emotional—fun for kids, warmth for adults via time spent with kids, and admiration of McDonald’s charities Nike:

Functional—high technology and performance

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

Emotional—exhilaration of athletic achievement Self-expressive—using shoes famous athletes use, desire to compete and excel You can bring up other brands in class and have students come up with the value propositions for these brands. PPT 6-21 here VI. Putting It All Together. This section will help students bring all the concepts in the chapter together. Text Exhibit 6.23 shows the relationship between: •

Identifying and profiling the target segment

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Selecting a mix of persuasion tools

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Consolidating the value proposition for the brand

This section also alerts students to the coverage of IBP tools in Chapters 13 through 18.

SOLUTIONS TO END OF CHAPTER QUESTIONS 1. Although STP marketing often produces successful outcomes, there is no guarantee that these successes will last. What factors can erode the successes produced by STP marketing, forcing a firm to reformulate its marketing strategy? No marketing strategy is permanent. Two fundamental forces demand constant attention and can erode the successes achieved through STP marketing: These forces are consumers’ preferences and competitors’ actions. When consumer preferences undergo substantial change, marketing strategy must be redesigned to accommodate them. Also, nothing attracts the attention of competitors like success. A dramatic success will inevitably provoke competitors to change their strategies, which then may call for a modification of the original, successful strategy. Finally, social and cultural trends change consumption attitudes and behavior which can change perceptions of brands using “outdate” positioning and differentiation strategies. Change is permanent. 2. Why does the persuasion required with a product differentiation strategy present more of a challenge than the persuasion required with a market segmentation strategy? In product differentiation strategies, the key point of reference is being different from the competition. In market segmentation strategies, the key point of reference is constructing a unique offering for the target segment. The persuasive challenge in product differentiation can be more severe because identifying a differentiating feature does not mean that consumers will automatically prefer the difference. Consumers will need to be convinced that a clear gasoline, purple potato chip, or round tea bag has merit. 3. Explain the appeal of emergent consumers as a target segment. Identify a current ad campaign (not Folgers!) 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 may be able to cultivate lifetime relationships that can lead to substantial revenue streams.

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

Check your college newspaper for the credit-card companies working your campus to solicit new cardholders: this is emergent-consumer targeting. 4. 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. 5. 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 highquality service each time a Road Warrior visits. Finding, training, and motivating its attendants to deliver premium service will be a major challenge for Mobil. 6. 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. 7. 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. Sound positioning strategy can be important in overcoming the consumer’s natural tendency to screen out 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. 8. 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.

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

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. A classic case of failing to deliver on the brand promise. 9. 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. 10. Carefully examine the two ads displayed in Exhibits 6.4 and 6.5. What positioning theme (benefit, user, or competitive) is the basis for these ads? If you say benefit positioning, what form of benefit promise (functional, emotional, or self-expressive) is being made in these ads? With Exhibit 6.5 most students will (correctly) argue that this ad is highlighting the targeted user of Hard Candy cosmetics, with an unequivocal statement about the kind of edgy, stylish young woman who would be attracted to the brand. Students also should recognize that while the basic functional benefits of the cosmetics are downplayed, emotional benefits are tapped to some extent. Exhibit 6.4 is a bit more complicated. This also is primarily a user ad, focusing on the kind of young woman committed to serving in the U.S. military. But the ad also addresses emotional or self-expressive benefit appeals, suggesting the broader social benefit that comes with the decision to enlist in the Marines.

SOLUTIONS TO 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 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 (style-conscious urban professionals). With this audience tuned in, Lifetime is able to attract fashion-related advertisers,

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

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 well-defined 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. 3. 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 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 highly-recognizable companies, students should provide examples of benefits in all three categories: the functional benefits of flavorful coffee at Starbucks and attractive, good-fitting 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 featured in this chapter’s introductory scenario 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.

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

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 and Promotion Research

CHAPTER 7 Advertising and Promotion Research KEY TERMS concept test focus group projective techniques dialogue balloons story construction sentence and picture completion Zaltman Metaphor Elicitation Technique (ZMET) field work embedded

normative test scores communication test thought listing, or cognitive response analysis recall tests recognition recognition tests Starch Readership Services implicit memory measures surveys attitude study resonance test

frame-by-frame test physiological measures eye-tracking systems tracking studies direct response inquiry/direct response measures single-source data IRI BehaviorScan account planning

SUMMARY 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 field work 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 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.

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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 affect 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 also is 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 also are evaluating sophisticated models to more accurately track estimated sales from advertising, what has been a painstaking and expensive endeavor.

CHAPTER OUTLINE INTRODUCTORY SCENARIO: It’s the Brand, Not the Product.

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The New Coke debacle is classic among those of us who have made a career out of marketing and advertising. Be prepared though—most of your students won’t have a clue about the importance of this episode in Coke’s history—or its meaning to the history of advertising, promotion and brand strategy. Spending some time walking them through what Coca-Cola did in introducing New Coke is worthwhile—but the scenario provides enough info to do that. Note: After the Coke history, the scenario goes on to lay out the history of ad research. 1. There are three extremely important points for students to take away from this scenario •

The New Coke research was about the “product” not about the “brand.” The reason the research led to wrong conclusions is because brands create “meaning” for consumers (as highlighted in Chapter 5) and the actual product can be secondary.

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The scenario then highlights just how difficult it is to take advantage of all the great scientific applications there are in research with advertising that is so artful and stylistic.

Chapter 7/Advertising and Promotion Research

Also, be sure to highlight that research has as many huge fans as it does vocal distracters. PPT 7-2 here 2. First clarification: Advertising and Brand Promotion Research: Any research that helps in the development, execution, or evaluation of advertising and promotion. To be good advertising research, it must move one closer to producing effective (i.e., on strategy) advertising and promotion. 3. Other Clarifications in the introduction: •

The 1950’s was when ad research became popular—anything “scientific” became popular. But there were real reasons too, such as a dearth of information about ads, consumers and consuming

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Long-standing research methods came under suspicion in the 1980s and most agencies dispensed with their in-house, stand-alone research departments. Instead, a broader view highlighted by account planning has been put into place. And outsourcing of research to specialty firms is common—but only when there seems to be a need for specific research.

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Current status of Advertising and Promotion Research

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o Used to assist in determining market segments o Plays a key role in helping creatives understand the audience o Used to make go/no go ad decisions and when to pull ads o Used to evaluate agency performance PPT 7-4 here •

Highlight Text Exhibit 7.4 for students. Most of your students probably had a basic research class, but getting these terms as part of their orientation to this chapter early will facilitate discussions: o Reliability means that the method generates generally consistent findings over time. o Validity means that the information generated is relevant to the research questions being investigated. In other words, the research measured what it sought to measure. o Trustworthiness is a term usually applied to qualitative data, and it means exactly what it implies: Can one, knowing how the data were collected, trust them, and to what extent? o Meaningfulness indicates what a piece of research really means. It is important for advertising professionals to take a moment and consider the limitations inherent in their data and in their interpretations.

Chapter 7/Advertising and Promotion Research

Advertising and IBP Research Some important points of clarification for students here: •

A lot of what is called “advertising and 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.

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The structure of this chapter divides the discussion into three parts:

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o Developmental Advertising and IBP Research (before ads are made) o Copy Research (as ads are being finished) o Results-oriented Research (after the ads are running) I. Stage One: Developmental Advertising and IBP Research

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Developmental advertising research is used to generate advertising opportunities and messages. It helps the creatives and account team figure out things like the target audience’s identity, expectations, and profile. It is conducted early in the process to influence the nature of ads, promotions or branded entertainment execution. It is often called “consumer insight” research. Multiple methods are used for developmental advertising research: •

Design Thinking tries to get marketers and advertisers to think like designers in getting the brand to meet consumers’ perceptions.

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Concept Testing seeks feedback designed to screen the quality of new ideas or concepts. For example, are consumers willing to use a paint that does give you that “new paint smell” (see Text Exhibit 7.5)?

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Audience Profiling. 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 of the most popular is through lifestyle research (AIO—activities interests and opinions). These profiles present the creative staff with a fine-grained picture of the target audience, and its needs, wants, and motivations.

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Focus groups. A focus group (with 6-12 participants) is a brainstorming session with target customers to come up with new insights about the brand. Focus groups offer the opportunity to gather in-depth data. It takes great skill and training to run focus groups effectively. PPT 7-7 here •

Projective techniques. Projective techniques are designed to allow consumers to project thoughts and feelings (conscious or unconscious) in an indirect and unobtrusive way onto a theoretically neutral stimulus. (Seeing faces in clouds is an example of projection.) The most common projective techniques are: • Dialogue balloons offer consumers the chance to fill in the dialogue of cartoon-like stories, much like those in the comics in the Sunday paper. The story usually has to do with a product use situation.

Chapter 7/Advertising and Promotion Research

•Story construction asks consumers to tell a story about people depicted in a scene or picture. •Sentence and picture completion presents consumers with part of a picture or a sentence with words deleted and asks them to complete the item. The picture or sentence relates to one or several brands of products in the category of interest. •A new method gaining popularity is the Zaltman Metaphor Elicitation Technique, or ZMET. This technique tries to draw out people’s buried thoughts and feelings about brands by getting people to think in metaphors. Researchers ask consumers to say how they would visually represent their experiences or feelings about a brand. •

Field Work is conducted outside the agency in the real world typically in consumers homes or at the site of consumption. •

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More and more, researchers are attempting to capture the experiences of consumers and understand their embedded consumption—consumption tightly connected to the consumer’s social context. Mining the Web: Seeking information from Web sources on consumer perceptions and preferences particularly on-line community groups. PPT 7-8 here

PPT 7-9 here Developmental Advertising Research Methods: Other Sources of Information o Internal Company Sources. There is often valuable data within the company: customer service records, warranty registration, old research, customer complaints, and sales figures. All provide a wealth of information about the proficiency of the company’s advertising programs and consumer tastes and preferences. o 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. The text gives a number of good websites where this information is available. o Commercial Sources. Information from these sources is reasonably comprehensive and is normally gathered using sound methods. The cost of information from these sources is greater than information from government sources. Despite the greater expense, information from commercial sources still costs less than primary data generation. o Professional Publications. Professional publications are periodicals in which marketing and advertising professionals report significant information related to industry trends or new research findings.

II. Stage Two: Copy Research

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Copy research is also called evaluative research and is used to judge or evaluate ads or promotional text, finished or unfinished. 1. Motives and expectations of the agency/client for copy research

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Chapter 7/Advertising and Promotion Research

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.

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The client typically wants to see some numbers, generally meaning normative test scores. In other words, the client wants to see how well a particular ad scored against the average commercial of its type.

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The creatives don’t like copy testing at all because it generates a type of report card, and those who like to think of themselves as artists resent getting report cards from people in suits. (Who wouldn’t?)

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Despite the politics involved, copy testing research is a good idea most of the time. Properly conducted, such research can yield important data that management can use to determine the suitability of an ad.

2. Evaluative Criteria and Methods

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There are many standards against which ads are judged. Picking the right criteria is not always an easy task, but it is the essence of effective message evaluation. However, we will discuss four basic dimensions on which a message could be evaluated: A. Getting it. Do consumers get an ad? Do they understand it? Do students get the ads in Exhibits 7.21 and 7.22? •

Method: Communication Test A communications test simply seeks to tell if a message is communicating something close to what is desired. Communications tests are usually done in a group setting, with data coming from a combination of penciland-paper questionnaires and group discussion.

B. What do they Remember? 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. 3. Common Methods of Assessing Cognitive Residue. The assumption here is that if a consumer was exposed to an ad, that something of that ad remained with the consumer—cognitive residue. A. Thought Listings. 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. B. Recall Testing. One of the most common tests in advertising research and, interesting, one of 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. In television, recall is the primary test.

Chapter 7/Advertising and Promotion Research

o Recognition used in the testing of print. Various forms of recall are tested: •

Unaided recall is when a respondent demonstrates having seen the ad and remembers the brand name without having it mentioned

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Aided recall is when a responded has to be asked about an ad by using the brand name.

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Claim recall (percent who claim seeing an ad) is a Burke measure

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Related recall (percent who accurately recall specific elements of an ad) is another Burke measure.

C. Recognition Testing. 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. Starch Readership Services 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. Bruzzone Research company provides recognition scores for television. D. Implicit Memory Measures. Do not refer back to the ad, per se, but rather try to get a memory through word fragments PPT 7-13 here 4. Knowledge. Some ads are judged effective if they create knowledge about the brand. This knowledge may take many different forms—a brand claim or belief about a brand. But with all the information sources today, including peer-to-peer, it is hard to attribute knowledge to an ad or promotion directly. • Communication Tests: see earlier discussion • Surveys: Consumers are asked, by Internet or telephone, about an advertised brand after a commercial runs. This can be immediately afterwards or hours or even days later. 5. 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. Advertisers may view attitude change as a key and common sense dimension for assessing advertising effectiveness. • Attitude Studies. An attitude study measures consumer attitudes after exposure to an ad. You can also do pre- and post-exposure attitude change studies. ARS Persuasion Method uses a theater-type setting to conduct this type of research.

Chapter 7/Advertising and Promotion Research

•

Resonance Tests. 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 consumer-experience research. The question becomes, does this ad match consumers’ own experiences? Frame-by-frame tests are used for ads where an emotional component is key. The procedure measures consumers’ interest levels throughout an ad. Text Exhibit 7.26 highlights this technique.

6. Feelings and Emotion •

Resonance tests: Does a message “ring true” with consumers

•

Frame by Frame tests: Used with emotional appeals to identify positive and negative components within an ad

7. Physiological Changes detect how consumers react to messages, based on physical responses. Every few years more measures are tried. At this point, most of the work involves PT scans—related to brain activity--where subjects breathe radioactive isotopes and are scanned by sensing devises. The idea is to see what part of the brain “lights up” after exposure to stimuli • Eye-tracking systems have been developed to monitor eye movements across print ads. Although a variety of measures has been used historically, few have ever provided useful information. • Voice Response analysis is a measure of voice inflections when discussing an ad to indicate excitement and other physiological states. Note: Advertising measurement has a fascination with science but these physiological measures really tell little more than simple arousal from an ad— there is little qualitative interpretation that can be gained 8. Behavioral Intent. This is what consumers say they intend to do. This measure is often taken right after people are exposed to an ad. We all know the obvious problem—once the “glow” wears off people frequently don’t do what they thought they would. PPT 7-14 here III. Stage Three: Results: Ads are running and advertisers try to assess if they are working PPT 7-15 here 1. Tracking Studies. One of the most commonly used research methods to understand results. These studies “track” effects 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. 2. Direct Response. Advertisements in print, on the Internet, and on broadcast media that

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offer the audience the opportunity to inquire or respond directly through a reply card, linked response, or toll-free phone number are called inquiry/direct response measures. 3. Estimating Sales Derived from Advertising: 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. • The Internet provides an ideal venue for measure sales because of the actual behavior taking place after a “click through” • 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. 4. All-in-One Single Source Data. Universal Product Codes on product packages and the proliferation of cable television allows for single-source data that provides information from individual households about brand purchases, coupon use, and television advertising exposure by combining grocery store scanner data with information from devices (called peoplemeters) 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. The best known source is IRI BehaviorScan. . Account Planning vs. Advertising Research

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A concept that invaded ad agencies about 10 years ago is account planning. It is a contrast to traditional ad research and planning in these three ways: a. From an organizational standpoint, an account planner works as an equal partner on accounts with the account executive. b. 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. c. Contemporary account planning research relies more heavily on naturalistic qualitative inquiry and ethnographic research studies. One Last Thought on Message Testing

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None of these methods is perfect. There are enormous challenges to reliability, validity, trustworthiness, and meaningfulness with all of them. Advertisers sometimes think that consumers watch new television commercials the way they watch new, eagerly awaited feature films; that they listen to radio spots the way they listen to a symphony; or read a magazine ad like a Steinbeck novel. The truth is that we watch TV while we work, talk, eat, and study. We use it as a night-light, background noise, and baby-sitter. We thumb through magazines very, very quickly. Although these traditional methods of message testing have their strengths, more naturalistic methods are clearly recommended. What We Need

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What we need is to realize that advertisements and promotions are complex social text and

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that may cause us to question the appropriateness of a set of tests that focus on the acceptance and remembrance of claims. Research is not magic truth. Research is a wonderful tool when used properly. In advertising and IBP, it is often difficult match research methods to real world situations.

SOLUTIONS TO END OF CHAPTER QUESTIONS 1. Read the chapter opening and list two important lessons that can be learned from Coca-Cola’s advertising-and-promotion research blunder with New Coke. Coca-Cola’s nearly 200,000 blind taste tests had revealed that consumers preferred New Coke over both Pepsi and regular Coke—and yet New Coke became a major flop. The New Coke fiasco serves to illustrate the limitations of advertising and promotion research. First, Coke’s marketers failed to ask the right questions: in this case, whether consumers would mind their precious brand being taken away. This oversight during the early stages of the research process doomed the final results. Second, the research team broke the cardinal rule of advertising and marketing; they failed to distinguish between a product and a brand, and confused objective taste tests with cultural reality. The Coke brand possessed a cultural meaning way beyond anything that some guys in white lab coats would ever understand or be able to quantify in a taste test. 2. 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. 3. 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. Focus groups are a forum for exploring many issues. Concept tests, resonance tests, and communication tests all could be conducted in this forum. For example, focus groups are a proper forum for pre-testing ad prototypes to discern whether they ring true, or communicate the appropriate information, for intended consumers. These reflect the goals of resonance and communication testing, respectively. Limitations of focus groups are the small number of individuals who actually participate and the unique dynamics that can emerge in these group discussions. One must be wary not to presume that the feedback from focus groups is a true approximation for the sentiments of the target audience. 4. 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

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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. 5. 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 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.

6. Identify issues that could be a source of conflict between account managers and advertising creatives in the message-testing process. What could go wrong if people in an ad agency take the position that what the client wants, the client gets? There are enormous challenges to reliability, validity, trustworthiness, and meaningfulness with all of them. Creatives sometimes think that consumers watch new television commercials the way they watch new, eagerly awaited feature films; that they listen to radio spots the way they listen to a symphony; or read a magazine ad like a Steinbeck novel. The truth is that we watch TV while we work, talk, eat, and study. We use it as a night-light, background noise, and baby-sitter. We thumb through magazines very quickly. Creatives also like the prospect of wining Addy and Clio awards, and view copy testing as the guarantor of artistic mediocrity. On the other hand, account managers are trying to keep the client satisfied. If the agency is out to give the client exactly what they want the client may not get the best possible ad because he or she does not benefit from the fresh perspective of the agency. In addition, the traditional methods of message testing have their strengths, but more naturalistic methods may be best to use. 7. 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

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dimensions. A communications test simply seeks to tell if a message is communicating something close to what is desired. Communications 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 consumer-experience 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 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. Other physiological measures such as measures of galvanic skin response (GSR), voice inflections, brain-wave activity, and heart rate typically produce few insights for the cost. Pursuing message evaluation with experimentation in the marketplace is known as pilot testing. This extended testing can be of the do-it-yourself variety, or it can be accomplished, again, with a commercial service provider. . 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. 8. 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

Chapter 7/Advertising and Promotion Research

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? 9. What is single-source research, and what is its connection to the universal product codes (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. 10. 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 since the famous Berndach Volkswagen campaign? 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: 1.

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 naturalistic inquiry and ethnographic research studies.

SOLUTIONS TO 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?

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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.

2. 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.’

3. 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

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students understand the exercise, but their answers should be deeply varied and highly personal. 4. The chapter identified several online sources that provide a wide variety of demographic 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 international advertising 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 share of voice

advertising response function percentage-of-sales approach objective-and-task approach build-up analysis

SUMMARY 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 communications or sales goals. Both types of goals have their proponents, and the appropriate types of objectives to emphasize 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. 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

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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 firm’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

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INTRODUCTORY SCENARIO: Polishing the Apple (Again and Again).

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There will, no doubt, be many Apple fans in your class and they will love the story of the iPad introduction. Recent Apple product introductions and their advertising/IBP campaigns have been huge successes. The candy-colored iMacs and then iPod + iTunes combo took the market by storm. The introduction of the iPhone was the next huge success. Now, Apple has again used well conceived and clever advertising and IBP strategies to introduce the iPad. •

The iPad was scheduled to go on sale in Spring 2010.

•

The “launch” started months before, however, with rumors circulating weekly about features, price, applications, etc.

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Steve Jobs provided a sneak preview in January 2010 again teasing Apple fans with allusions to capabilities and innovativeness.

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No ads ran for the two months, but the buzz was already built as bloggers started to speculate about the functionality and virtues of the iPad.

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The first ads ran during the Oscars in March 2010 followed by 2.4 million views on YouTube—a huge viral effect for the brand.

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Next, branded entertainment kicked in with the iPad featured during the entire episode of Modern Family on March 31, 2010

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The official sales date was finally set as April, 3, 2010.

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Long lines began to form outside retail outlets on April 2, 2010.

A couple of essential lessons for students to begin to understand the complex process of advertising and IBP planning come from this scenario.

•

Apple did NOT spend just spend millions on advertising for this launch.

•

They used buzz created by Jobs at a media event and the viral effect of bloggers, social media, and branded entertainment to increase awareness and visibility

Chapter 8/Planning Advertising and Integrated Brand Promotion

•

Jobs offered high praise for the role of the ad agency TWA/Chiat/Day in the process.

The Advertising Plan and Its Marketing Context

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An ad plan should be a direct extension of a firm’s marketing plan. The marketing plan articulates the company’s entire marketing effort, from product to distribution. The advertising plan, including all integrated brand communication elements and strategies, is a subset of the larger marketing plan, and is defined as the thinking and tasks needed to conceive and implement an effective advertising and IBP effort. Exhibit 8.4 shows the components of an advertising plan. Each component is discussed below. PPT 8-4 here NOTE: PPT 8-4 shows the entire list of components in the Advertising Plan. Subsequent PPTs show individual factors. A. Introduction

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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.

B. Situation Analysis An ad plan situation analysis is where the advertiser lays out the most important factors that define the marketing situation facing the firm and explains the importance of each factor. A lengthy list of factors are important: market demographics, technology, social and cultural trends, economic conditions, etc.) affect the choice of advertising and IBP tools and the message content. 1. Cultural Context a. All advertising demands an assessment of cultural context to effectively create language and images that are relevant and communicate to audiences in and on their terms. b. International advertising is advertising a that reaches across cultural boundaries and demands a careful assessment of cultural context c. Ethnocentrism is the tendency to view the world from one’s own cultural perspective—a huge mistake in advertising and IBP d. Self-reference criteria is the unconscious reference to one’s own cultural values, experiences, and knowledge as a basis for decisions. 2. Historical Context. 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

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past, its big mistakes, and big successes. 3. Industry Analysis. 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 or the supply side of the supply-demand equation. The McDonald’s example in the text is excellent. 4. Market Analysis. A market analysis is the flip side of industry analysis; it is the demand side of the equation. In a market analysis, an advertiser examines the factors that drive current demand and growth for both the overall market and for the firm’s brand. 5. Competitor Analysis. Once the industry and market are studied and analyzed, attention is turned to competitor analysis. Here an advertiser determines exactly who the competitors are, discussing their strengths, weaknesses, tendencies, and any threats they pose. PPT 8-6 here C. Objectives

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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 create or maintain brand awareness. This is a popular advertising objective. 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 when consumers are quizzed. Ease of retrieval from memory is predictive of market share.

•

To change consumer beliefs or attitudes. Beliefs are the way consumers express the knowledge that certain things are true. Attitudes—predispositions to respond based on experience and knowledge—about products are typically measured by tracking studies and survey research. Both beliefs and attitudes affect consumers’ potential for choosing a brand.

•

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 are attitudes.

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To stimulate trial use. Trial use is an indicator of actual behavior and is commonly used as an advertising objective. In the case of new products, stimulating trial use is critically important.

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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 purchase it a second time. A second purchase is reason for great rejoicing. The odds of long-term product success go way up when this percentage is high.

Chapter 8/Planning Advertising and Integrated Brand Promotion

•

To encourage brand switching. In some categories, brand switching is commonplace, even the norm. When setting a brand-switching advertising 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 arduous task.

1. Communications versus Sales Objectives.

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Some analysts argue that communications objectives are the only legitimate objectives for advertising because advertising is but one variable in the 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, communications recognizes 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 can 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 categories of objectives when developing an advertising plan. Indeed, combining sales objectives like market share and household penetration with communication objectives like awareness and brand imagery can be an excellent means of motivating and evaluating an advertising campaign.

2. Characteristics of Workable Advertising Objectives

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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.

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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.

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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. The interactive media like the World Wide Web present a substantial challenge in establishing success criteria.

•

Specify a time frame: Objectives for advertising should include a statement of the period of time allowed for the desired results to occur. In some cases, like with direct response advertising, the time frame may be immediate or a 24-hour period. For communicationbased objectives, the measurement of results may not be undertaken until the end of an

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entire 13-week campaign. D. Budgeting

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Normally, the responsibility for the advertising budget lies with the firm itself. Budget recommendations come up through the ranks, from a brand manager to a product manager and ultimately to the executive in charge of marketing. Several options are available: 1. Percentage of Sales. A percentage-of-sales approach to advertising budgeting calculates the advertising budget based on a percentage of the prior year’s sales or the projected year’s sales. This technique is easy to understand and put into operation. 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.

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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 dollars to advertising objectives. Basing spending on past or future sales implicitly presumes a direct cause-and-effect relationship between advertising and sales.

A variation on the percentage-of-sales approach that firms may use is the unit-of-sales approach. Unit-of-sales approach to budgeting simply allocates a specified dollar amount of advertising for each unit of a brand sold (or expected to be sold). 2. Share of Market/Share of Voice. With this method a firm monitors the amount spent by various competitors 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. With this method, an advertiser will achieve a share of voice, or an advertising presence in the market, equal to or greater than the competition. Drawbacks: •

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.

•

A likely outcome of budgeting advertising in this fashion is that the advertiser will make little headway against the competition and simply maintain the status quo.

•

The flaw in logic in this method is the presumption that every advertising effort is of the same quality and will have the same effect from a creative execution standpoint.

3. Response Models. 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.

Chapter 8/Planning Advertising and Integrated Brand Promotion

•

Using marginal analysis, an advertiser would continue its spending on advertising as long as its marginal spending was exceeded by marginal sales.

4. Objective and Task.

PPT 8-11 here

The only method of budget setting that focuses on the relationship between spending and advertising objectives is the objective-and-task approach. This method begins with the stated objectives for an advertising effort. 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 simply formulated by identifying the specific tasks necessary to achieve the objectives. •

Implementing the Objective-and-Task Budgeting Method. Proper implementation of the objective-and-task approach requires a databased, systematic procedure. Because the approach ties spending levels to specific advertising goals, the process is dependent 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 shown in text Exhibit 8.14 and outlined below: o Determine Costs Based on Build-Up Analysis. In 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 the advertising is to achieve.

▪

Frequency: The number of exposures required to accomplish desired objectives.

▪

Time frame: Specification of the time frame for communications.

▪

Production costs: An estimate of costs associated with the 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, 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 integrated brand promotions, an advertising budget must be considered in the context of spending on other IBP efforts. Some of these promotional expenditures will be directly supportive of mass media advertising. Others will have distinct objectives, but as we have seen from an IBP standpoint, the theme and any spending issues need to be coordinated with advertising.

Compare Costs against Industry and Corporate Benchmarks. After

Chapter 8/Planning Advertising and Integrated Brand Promotion

compiling all the costs, an advertiser will want to make a quick reality check. ▪

Check the percentage of sales that the estimated costs represent relative to industry standards. If most competitors are spending 4 to 6 percent of gross sales on advertising, how does the current budget compare to this percentage?

▪

Compare the current budget with prior budgets. If the total dollar amount is extraordinarily high or low compared to previous years, this variance should be justified based on the objectives being pursued.

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 Time Frame for Payout. Specify 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. E. Strategy

PPT 8-12 here

Strategy is the mechanism by which something is 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 an infinite number of possible advertising strategies. For example, if you were trying to get more top-of-the-mind awareness for your brand of chewing gum, a simple strategy would be to employ a high-frequency, namerepetition campaign. More sophisticated goals call for more sophisticated strategies. You are limited only by your financial, organizational, and creative resources. PPT 8-13 here F. Execution

PPT 8-14 here

Execution is the actual doing of an ad plan—the making and placing of ads across all media. To quote a famous bit of advertising copy from a tire manufacturer, this is where “the rubber meets the road.” There are two elements to the execution of an advertising plan: determining the copy strategy and devising a media plan. 1. 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. Chapters 10 and 11 detail the copy strategy and copywriting processes. 2. Media Plan. The media plan specifies exactly where ads will be placed and what strategy is behind their placement. In a truly integrated marketing communications environment, this is much more complicated than it might appear. Devising a media plan is where all the money is spent so much could be saved. 3. Integrated Brand Promotion. The IBP effort should be designed to launch or maintain a brand and be spelled out in the media plan and should be seamless with the rest of the plan. The role for every component of promotion being used—advertising, sales

Chapter 8/Planning Advertising and Integrated Brand Promotion

promotion, event sponsorship, interactive media, direct marketing, and public relations— needs to be specified for decision making in the execution stage of the plan. G. Evaluation. Last, but not least, in an ad plan is evaluation. This is where an advertiser determines how the campaign and the agency will be graded—what criteria will be applied and how long the agency will have to achieve the agreed-upon objectives. II. The Role of the Agency in Planning Advertising and IBP

PPT 8-15 here

Because many advertisers rely heavily on the expertise of an agency, understanding the role an agency plays in the advertising planning process is important. The point to emphasize is that the advertiser is responsible for the marketing planning inputs: value to customers, the external environment, the opportunities and challenges that can be addressed with advertising, a brand’s competitive position, and the marketing mix strategies designed to gain and sustain competitive advantage. The agency’s role, as a partner in the effort, is to be responsible for taking the marketing plan and translating it into: A. advertising objectives, B. advertising strategy, C. finished advertisements and IBP materials D. preparation, placement, and execution of advertising and IBP

SOLUTIONS TO 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? This exercise tries to get students to recall the discussion of Chapter 6 so that they do not lose sight of the fact that excellent advertising is based on careful planning. The segmentation, positioning, and value proposition discussions in Chapter 6 are now coming home to roost as the basis for ad planning. The discussion of the iPad that opens this chapter 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 ereader 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. This relates specifically to the self-expressive basis for value proposition discussed in Chapter 6. 2. 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 much-hyped 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

Chapter 8/Planning Advertising and Integrated Brand Promotion

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. 3. 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 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 demographic trends, historical context, industry, market, 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. 5. 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. 6. What types of objectives would you expect to find in an ad plan that featured direct response advertising? Direct response advertising is designed to produce an immediate, measurable effect. For instance, direct mail and infomercials are commonly used to carry direct appeals with campaign objectives stated as specific sales goals. However, direct response advertising may also be designed to encourage consumers to request more information about a product or service. In this application, advertising objectives could be set in terms of numbers of calls to

Chapter 8/Planning Advertising and Integrated Brand Promotion

a toll-free number requesting information in the form of a brochure, videotape, or demonstration CD. 7. 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 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. 8. 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. 9. 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 objectiveand-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. 10. 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

SOLUTIONS TO 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. 2. 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. 3. 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 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

Chapter 8/Planning Advertising and Integrated Brand Promotion

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?

END OF PART ACTIVITY (PAGES 299-303) Project Two: Understanding the Role of Analyzing Advertising and IBP Environments in Planning Grading Rubric

INTRODUCTION Does the introduction make the reader want to read the paper? Does the introduction introduce the topic in some way (i.e. opening narrative, secondary data, vignette, etc.)? Does the introduction provide a clear purpose statement? Does the introduction provide any reasons that support the importance of the purpose statement? Does the purpose statement follow the appropriate format? Does the introduction clearly address a specific audience (i.e. the brand the group has chosen for this project)? Does the introduction provide an overview of what’s to come? Does the introduction clearly transition into the next section?

Yes

Somewhat

Pts

SITUATION ANALYSIS Does the situation analysis contain an introduction of this section? Does this introduction provide an overview of what is to come in this section? Does the situation analysis contain a description of the historical context of the advertising campaign? Does the situation analysis contain a description of the product that GM offers? Does the product analysis contain a description of the attributes and benefits that make up the value proposition offered in the advertising campaign? Does the product analysis provide an overview of what consumers think about the product? Does the product analysis provide any additional information about the product? Does the situation analysis provide an analysis of the industry GM is in? Does this industry analysis include the size and makeup of the industry? Does this industry analysis include the important trends associated with the industry? Does this industry analysis include any information about where the industry is heading in the future?

Yes

Somewhat

Total No

Pts

Chapter 8/Planning Advertising and Integrated Brand Promotion

Does this situation analysis provide a description of the market? Does this market analysis provide a description of who uses the product and why? Does this market analysis provide information concerning the size of the market? Does this market analysis provide additional information concerning the market? Does the situation analysis provide a description of GM’s competitors? Does this competitor analysis include direct competitors who advertise the consumption of the same or similar products? Does this competitor analysis include “indirect” competitors who advertise the deconsumption of the same or similar products? Do these competitor analyses include the strengths and weaknesses of each of the competitors? Does the situation analysis provide a description of the company itself? Does the company analysis include an honest assessment of GM’s strengths? Does the company analysis include an honest assessment of GM’s weaknesses? Does the situation analysis transition neatly into the next section?

OBJECTIVES Is there an introduction to the objectives section? Does the objectives section contain a description of what the advertising and other communications efforts are expected to accomplish? Do these objectives extend from the situational analysis? Does each objective contain a quantitative benchmark? Does each objective contain a method of measurement? Does each objective contain criteria for success? Does each objective contain a timeframe for success? Are the objectives realistic? Are the objectives achievable? Are the objectives measurable? Does the objectives section transition neatly into the next section?

Yes

Somewhat

Total No

Pts

BUDGETING Is there an introduction to the budgeting section? Does the budgeting section include a description of the method(s) to be used for budgeting the campaign? Does the budgeting section include an assessment of the amounts utilized in various arenas important to the campaign? Does the budgeting section include justification for the amounts to be used? If the budgeting goes beyond the allotted amount, is there a justification for this overage? Is this overage convincing? Does the budgeting section transition neatly into the next section?

Yes

Somewhat

Total No

Pts

STRATEGY Is there an introduction to the strategy section? Does the strategy section provide a description of the creative mix for the campaign? Does the creative mix fit with the objectives set forth in an earlier section? Does the creative mix fit with GM’s strengths and weaknesses? Does the creative mix fit within the resources available for the campaign? Does the strategy include the positioning strategy for the product? Does the strategy include a description of the target audiences to be addressed? Do the creative mix, positioning strategy, and target audiences “fit” with one another?

Yes

Somewhat

Total No

Pts

Chapter 8/Planning Advertising and Integrated Brand Promotion

Does the strategy section transition neatly into the next section?

EXECUTION Is there an introduction to the execution section? Does the execution section discuss the message strategy to be adopted by the campaign? Is the message strategy justified based upon the situation analysis, objectives and strategy discussed earlier? Does the execution section discuss the media strategy to be adopted by the campaign? Is the media strategy justified based upon the situation analysis, objectives, and strategy discussed earlier? Are examples of media and message strategy provided? Does the execution section transition neatly into the next section?

Yes

Somewhat

Total No

Pts

EVALUATION Is there an introduction to the evaluation section? Does the evaluation section provide a description of the methods used to test how effective the communications efforts will be? Does the evaluation section provide a description of the consequences associated with a lack of effectiveness? Does the evaluation section provide a description of the contingencies associated with a lack of effectiveness? Does the evaluation section transition neatly into the conclusion?

Yes

Somewhat

Total No

Pts

CONCLUSION Does the conclusion provide a brief summary of the paper? Does the conclusion provide an overview of what the reader should take away from reading the paper? Does the conclusion wrap up any and all loose ends? Does the conclusion close with a bang (i.e. closing vignette, etc.)? Does the conclusion echo the introduction in any way?

Yes

Somewhat

Total No

Pts

PAPER QUALITY Does the paper properly cite using APA style? (If no, then an automatic 0 in paper quality) Does the paper have a references section with complete references? Does the paper appear to have an appropriate number of references? Does the paper address an audience and not the professor? (If no, then an automatic 0 in paper quality) Was the paper handed in via the appropriate format? Is the paper well-written? Is the paper relatively misspelling-free? (no more than five noticeable misspellings) Is the paper relatively grammatically correct? (no more than five noticeable grammar mistakes) Is the paper written in a cohesive fashion where I cannot tell which sections were written by different people? Does the paper have appropriate section and subsection headings? Does the paper follow appropriate formatting requirements (i.e. 1 inch margins, 11 or 12 point font, page numbers, single-spacing, space between paragraphs)? Is there a table of contents? Is there an executive summary of the paper? Are there organized appendices with appropriate materials?

Yes

Somewhat

Total No

Pts

Chapter 8/Planning Advertising and Integrated Brand Promotion

Does the paper appear to be an appropriate length? Is there a logical flow to the paper? Is there a title page with a title and author names? Are there page numbers? Is the paper written and presented in an interesting fashion (i.e. with pictures, charts, title page, etc.)? Does the paper appear to be of professional quality? Total

Chapter 9/Managing Creativity in Advertising and IBP

PART 3 The Creative Process

PPT 9-1 and 9-2 here

Once again, 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 orientation-segmentation/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

CHAPTER 9 Managing Creativity in Advertising and IBP KEY TERMS creativity account executive account team

creative brief cognitive style creative abrasion

interpersonal abrasion brainstorming 3P’s creativity framework

SUMMARY 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 or agency manager may dismiss that idea, underlies the contentiousness between an agency’s creative staff 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 an 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.

Chapter 9/Managing Creativity in Advertising and IBP

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 issues 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 Alex Bogusky) will be required. Another important tool to get teams headed in the right direction and to pre-empt 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 INTRODUCTORY SCENARIO: Creativity Begets a Creepy King This is an outstanding scenario in that it demonstrates for students that high creativity can have huge impact, but also that high creativity is squarely founded in the fundamentals of market analysis and market segmentation. The focus here is definitely on creativity fueled by hard core analytical preparation. The outline of the scenario is: 1. Ad agency Crispin Porter + Bogusky (CP+B) was a small, high buzz agency that did niche campaigns for brands like Mini, IKEA and Molson but never a big mass market campaign. But, it was regarded as the prototype of the ad agency fused with a PR firm. 2. Burger King was a fast food chain in trouble in 2004. Traffic was declining, the brand had no image or position in the market, and management had burned through four ad agencies in four years. 3. CP+B dove right in. The agency started with clear focus on the most significant fast food segment—18 to 35 year old males—among the heaviest users of fast foods. 4. The agency then introduced a series of advertising and IBP efforts to attract attention and engage the segment:

Chapter 10/Managing Creativity in Advertising and IBP

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5. CP+B moved beyond advertisements into featuring the King in Xbox advergames including Pocketbike Racer and Big Bumpin. Every time gamers played, they experienced a stealth ad for Burger King—thus reaching a segment notorious for not watching TV ads. 6. How did it all work? Five years into the campaign, Burger King was celebrating 20 consecutive quarters of revenue growth. 7. The final point of the scenario is key—creative people and creative organizations take risks, they shake things up. That risk taking results in huge successes and huge failures—the King is a huge success story, for now. I.

Why Does Advertising Needs Creativity

PPT 9-3 here

•

Advertising effectiveness is plagued by ad clutter and ineffectiveness begets more ads which begets more clutter.

•

Brands, especially mature brands like Burger King become boring to consumers and boring brands are irrelevant. Great creativity breaks through the boredom and makes brands relevant in consumers’ lives again.

•

Great advertising can help create great brands which make an emotional connection with consumers. o The iPod was not first MP3 player, but great advertising made the iPod hip and cool and a market leader. PPT 9-4 here

II. Creativity across Domains

PPT 9-5 here

•

Creativity is the same across domains. One way to try to understand creativity is to appreciate that it bridges all sorts of domains—music, poetry, art, physics, crafts, dance, film, building design, and advertising.

•

Creativity is the ability to consider and hold together seemingly inconsistent elements and forces, making new connections

•

Creativity is a gift, a special way of seeing the world. Creativity reflects early childhood experiences, social circumstances, and mental styles. Great creatives of this world include Freud, Einstein, Picasso, Stravinsky, Eliot, Martha Graham, and Mahatma Gandhi. These were great creative minds and had many similarities. They were: •

Self-confident

•

Alert

•

Unconventional

Chapter 9/Managing Creativity in Advertising and IBP

•

Hardworking

•

Obsessively committed to their work

•

Their social life and hobbies were almost immaterial.

•

It appears total commitment to the craft is critical. Creatives are usually good selfpromoters.

•

Highly creative people throughout history had a childlike view of the world.

•

Great creatives through history were also marginalized outsiders—many suffering major mental breakdowns. PPT 9-6 here

A. Creative Genius in the Advertising Business PPT 9-7 here • Perhaps not as influential as creative geniuses in other domains, ad execs have had remarkable creative careers. o For example, Lee Clow conceived of the Energizer Bunny and billboards for Nike and was best known for the famous Apple “1984” ad and the iPod silhouettes. B. Creativity in the Business World • Creativity in the business world is a positive quality but often hard to recognize and difficult to assimilate. C. Can One Become Creative?

PPT 9-8 here

•

This is a very big question. It really depends on what one means by creativity.

•

Is it the result or the way of thinking or is it merely a creative result?

•

Public acceptance is not always an accurate measuring stick (Van Gogh did not sell a single painting while he was alive).

•

The main point is that in the advertising business, we can’t do without it. PPT 9-9, 9-10 here

D. Against Stereotype

PPT 9-11 here

•

First, just because someone is in a “creative” position, does not necessarily mean they are ‘creative”.

•

Conversely, those that are not in creative positions, i.e. the “suits,” it does not mean they are uninspired.

•

Tension and conflict (a.k.a., the suits versus the creatives) are regular occurrences in the process of creating great advertising.

III. Agencies, Clients and the Creative Process.

PPT 9-12 here

This section opens with a good commentary from a copywriter on the creative process and how you spend a great deal of time trying to get to an idea.

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Creative efforts need to result in “magic” even thought the process for doing so does not promote such a result—there are time pressures and problems and goals are typically poorly defined. 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 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.

•

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 is not just about creative work, however. Conflict arises over the research process as well.

•

The conflict between creatives and the research department centers on the difficulty of measuring advertising effectiveness—creatives want “impact” research wants to see sales.

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Clients often do not recognize their role in killing breakthrough ideas they claim they are looking for from their agencies

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Account executives 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. Text Exhibit 9-14 lays out Sweeney’s philosophy for Assuring Poor Creative PPT 9-13 here

•

–Treat your audience like a statistic –Make your strategy a hodgepodge –Have no philosophy –Analyze creative like a research report –Make the creative process professional

PPT 9-14 here

–Say one thing, do another –Give your client the candy store –Mix and match your campaigns –”Fix it” in production

PPT 9-15 here

Chapter 9/Managing Creativity in Advertising and IBP

–Blame the creative for bad creative –Let your people imitate –Believe post-testing when you get a good score IV. Making Beautiful Music Together: Coordination, Collaboration, and Creativity PPT 9-16 here A. Executing an IBP campaign is like a symphony creating beautiful music. • Many individuals make unique contributions to the whole. • A “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. B. What We Know About Teams-Teams have become the primary means of getting things done in many business situations including IBP PPT 9-17 here • Teams Rule! Most challenges are beyond the scope of an individual • It’s All About Performance. Research shows teams are effective when leaders are clear that the team is accountable for performance results • Synergy through Teams. Many kinds of expertise are needed to solve problems and blending talent through teams creates synergies. • The Deminse of Individualism? Effective teams find ways to let individuals excel within the team structure. • Teams Promote Personal Growth. Team members learn from each other and the experience of working in a team. • Leadership in Teams. PPT 9-18 here o Leaders first job is to build consensus o Once goals and purpose are agreed on, the leader ensures the work of the team is consistent with the plan o Leaders must also do real work with the team and contribute • Direct Applications to the Account Team o The account team can be envisioned as a bicycle wheel with the leader as the hub o Spokes come from direct marketing, pr, creative, graphics, digital etc. • Fostering Collaboration through the Creative Brief PPT 9-19 here o 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. o The creative brief does not mandate a solution though. o It can prevent conflicts o See Text Exhibit 9.15 • Teams Liberate Decision Making o The right combination of talent, with a leader and a creative brief can result in breakthrough decisions o Teams with members that trust one another are liberated to be more

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creative C. When Sparks Fly: Igniting Creativity Through Teams. PPT 9-20 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. o The right brain/left brain metaphor reminds us that people approach problems differently o Cognitive style is the unique preferences of individuals to approaching problems. • Creative Abrasion—The clash of ideas from which new ideas and breakthrough solutions can evolve • Interpersonal Abrasion—The clash of people which shuts down communication and kills new ideas. • Leadership is needed to promote creative abrasion and limit interpersonal abrasion. • Brainstorming is an organized approach to idea generation in groups. Eight Rules for brilliant brainstorming PPT 9-21 here 1.Build off each other 2.Fear drives out creativity 3.Prime individuals before and after group sessions 4. Make it happen 5.It’s a skill 6.Embrace creative abrasion 7.Listen and learn 8. Follow the rules or you are not brainstorming. D. Final Thoughts on Teams and Creativity • • •

PPT 9-22 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 1.Take great care in assigning individuals to teams 2. Get to know the cognitive style of each individual 3.Make teams responsible to the client 4.Beware of adversarial and competitive relationships between individuals 5.Rotate team assignments to foster fresh thinking

V. Have You Decided to Become More Creative?

PPT 9-23 here

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

Chapter 9/Managing Creativity in Advertising and IBP

• • • • • • • •

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; PPT 9-24 here 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

SOLUTIONS TO 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. 2. 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 definitely a written assignment. It is also a difficult 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. 3. 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

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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. Regardless of the conflict, the creative department is clearly recognized as an essential (probably the essential) part of the agency’s success. 4. 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. 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. What forces inside an advertising agency can potentially compromise its creative work? Is compromise always to be avoided? Imagine that you are an agency creative. Define compromise. Now imagine that you are an account executive. How does your definition of compromise change? The second half of this question suggests the answer to the first half. The forces inside the agency that compromise creative work are the demands by the client for accountability of the effects of advertising, which in turn put pressure on the agency account executive to try to shape the nature of the creative. A creative in an agency, at the extreme, would define compromise as any change in the proposed creative work. An account executive would likely define compromise as the client and the agency giving a little to come to consensus on the nature of the creative emphasis. 6. 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. 7. Examine Exhibit 9.14. 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. The list from the text follows. –Treat your audience like a statistic –Make your strategy a hodgepodge –Have no philosophy –Analyze creative like a research report

Chapter 9/Managing Creativity in Advertising and IBP

–Make the creative process professional –Say one thing, 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 post-testing when you get a good score 8. 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 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. 9. 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 cross-departmental, 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. 10. 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.

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SOLUTIONS TO THE EXPERIENTIAL EXERCISES 1. 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 travelminded 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. 2. Since great advertising and teamwork go together, test your teamwork skills with this gravitydefying 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. 3. 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 9.17 helped your team’s collaborative effort. How did your ideas, in number and in substance, compare to others in the class? •

Spend 10 minutes brainstorming each of these topics:

•

How many uses can you identify for baking soda?

Chapter 9/Managing Creativity in Advertising and IBP

•

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 9.15 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 Identify ten 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. Advertisers seek to define a brand’s image by linking certain attributes to the brand, mostly using visual cues. Each of the ten message strategies is presented with recommendations for executing the strategy and strategic implications. 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, repetition, slogans, and jingles are used. 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, hard-sell ads, comparison ads, testimonials, demonstrations, and infomercials all do the trick. Feel-good 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 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. Ads that primarily use visuals work to define brand image. Finally, ads can create a mood that portrays the brand as transformational for consumer experiences.

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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 anxieties 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

PPT 10-2 here

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Message strategy consists of objectives and methods and defines the goals of the advertiser and how those goals will be achieved.

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This section of the chapter offers ten common message strategy objectives and the methods often used to satisfy them.

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This is not an exhaustive list—the creative effort is too expansive for that—but it covers many of the most important message strategy objectives.

II. Essential Message Objectives and Strategies 1. Objective #1: Promote Brand Recall

PPT 10-3 here

A major goal of advertisers is simply to get consumers to remember the brand name. This is typically referred to as the brand recall objective. Advertisers not only want consumers to remember the name, but also want that name to be the first name consumers remember— they want their brand to be “top of mind.” A. Method A: Repetition Ads. As simple as it sounds, repetition is the tried-and-true way of gaining easy retrieval from memory. This is done not only through buying a lot of ads, but also through repeating the brand name within the ad copy itself. The example shown in Exhibit 10.2, the Kibbles and Bits ad, is classic repetition. PPT 10-4 here Note the discussion here of ways in which IBP creates repetition—end of aisle displays, packaging, stadium names, Internet etc.

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Back to PPT 10-3 here B. Method B: Slogan and Jingle Ads. Slogans are rhetorical devices that link a brand name to something memorable, either due to the slogan’s simplicity, meter, rhyme, or any other factor. Examples are numerous: You Deserve a Break Today; Tide’s In, Dirt’s Out; The Best Part of Waking Up Is Folgers in Your Cup; You’re in Good Hands with Allstate. C. Method C: Point of Purchase Branding • Point-of-purchase can trigger brand name and possibly an ad • In-store visuals trigger brand recall Strategic Implications of Repetition, Slogans, and Jingles. Consumers have to remember brand names for advertising to work. In the cluttered environment, repetition is needed to instill recall. Developing recall is expensive and the advertiser will without doubt be faced with competition. •

Extremely resistant to forgetting—the residual impact is lasting and huge.

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Efficient for the consumer—consumers like simple decision rules.

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Long-term commitment/ expense—to achieve the positive effects of repetition requires commitment and spending.

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Competitive interference—brand name has to be linked to the repetition or consumer brand confusion can occur.

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Creative resistance—creatives hate this method as un-creative.

2. Objective #2: Link Key Attribute(s) to the Brand Name

PPT 10-5 here

This objective focuses on a brand feature that forms the basis for the brand’s competitive advantage. If Intel processors are faster than AMD’s, or Chrysler has a better warranty than Ford, then this sort of key feature becomes the objective of the message strategy. A. Method A: Unique Selling Proposition Ads. A unique selling proposition (USP) is a promise contained in an advertisement in which the advertised brand offers a specific, unique, and relevant benefit to the consumer. Text Exhibit 10.3 of the Lexus ad is a good example of an USP PPT 10-6 here Strategic Implications of USP. This method can be very efficient, but it is expensive. •

Big carryover—impact can last a long time as long as brand market positioning remains the same.

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Very resistant—hard for competition to challenge.

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Long-term commitment/initial expense.

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Some creative resistance–not as bad as repetition

3. Objective #3: Persuade the Consumer

PPT 10-7 here

Chapter 10/Creative Message Strategy

The persuasion objective requires a significantly high level of cognitive engagement with the audience. The receiver has to think about what the advertiser is saying. A. Method A: Reason-Why Ads. In a reason-why ad, the advertiser reasons with the potential consumer. The ad points out in a highly structured way that there are reasons why this brand will be satisfying and beneficial. Strategic Implications •

Gives consumer “permission to buy.”

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Gives the consumer a socially acceptable defense for making the purchase.

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Assumes a high level of involvement; consumers have to be paying attention for these ads to work.

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Generates potential for considerable counterarguments—consumers can come up with reasons “why not” to buy the brand with these cues.

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Legal/regulatory challenges/exposure claims have to stand up in court.

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Some creative resistance

B. Method B: Hard-Sell Ads. 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. Strategic Implications •

Gives consumer “permission to buy NOW.”

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Gives the consumer a socially acceptable defense for making a potentially poor choice: “I had to act”; “It was on sale that day”; “It was such a good deal.”

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Legal/regulatory challenges/exposure; the makers of these ads tend to get dragged into court quite a bit.

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Some creative resistance

C. Method C: Comparison Ads. Comparison advertisements are ads in which a brand’s ability to satisfy consumers is demonstrated by comparing features to those of competitive brands. PPT 10-8 here The following are research conclusions about the use of comparison as a message tactic:

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Direct comparison by a low-share brand to a high-share brand increases the attention and purchase intention of the low-share brand.

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Direct comparison by a high-share brand to a low-share brand does not attract additional attention and increases awareness of the low-share brand.

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Non-comparative claims by high-share brands are more effective at enhancing purchase intention than either direct or indirect comparison.

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Indirect comparison by moderate-share brands to either high- or low-share brands is more effective at enhancing the purchase intention of moderate-share brands than direct comparison.

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Direct comparison is more effective if members of the target audience have not demonstrated clear brand preference in their product choices.

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Direct comparison is more effective if the television medium is employed to make the comparison.

There is also evidence that comparison advertising is not appropriate and will not be effective when one or more of the following are true: •

The fundamental brand appeal is emotional rather than logical.

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The brand is a new product in the product category.

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The product category is characterized by insignificant functional differences between brands.

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The competition has powerful counterclaims that can be made in retaliation.

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The brand has distinctive features that can differentiate it from the competition without use of comparison.

Strategic implications of Comparison ads: •

Can help a low-share brand, largely through awareness.

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Provides social justification for purchase.

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Gives permission to buy.

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Significant legal/regulatory exposure.

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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.

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Not for established market leaders.

Ads are sometimes evaluated as more offensive and less interesting than noncomparative ads. PPT 10-9 here D. Method D: Testimonial Ads. When an advocacy position is taken by a spokesperson in an advertisement, this is known as a testimonial. The value of the testimonial lies in the dedicated, authoritative presentation of a brand’s attributes and benefits by the spokesperson. There are three versions of the testimonials: •

The most conspicuous 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. Research shows that there is little consistency in the effect of using celebrities as champions for a brand.

Chapter 10/Creative Message Strategy

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Expert spokespersons for a brand are viewed as having expert product knowledge. The GM Parts Service Division created an expert in Mr. Goodwrench as a knowledgeable source of information.

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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 Testimonials: •

Very popular people can generate popularity for the brand.

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People perceived to be very similar to the consumer or the expert can be advocated for the brand.

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Consumers often forget who likes what when stars promote multiple brands.

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Can generate more popularity for the celebrity than the brand

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Celebrities, being human, are not as easy to manage as packages or cartoon characters: Tony the Tiger vs. Martha Stewart.

E. Method E: Demonstration Ads. An ad that shows how close an electric razor shaves or how green a fertilizer makes a lawn uses a method known simply as the demonstration ad. Strategic implications of Demonstration ads: •

Inherent credibility of “seeing is believing,” however slight.

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Can be used as social justification; helps the consumer defend his or her decision to buy.

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Provides clear permission to by (“I saw the test”)

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Heavy regulatory/legal exposure.

F. Method F.: Infomercials. With the infomercial message method, an advertiser buys from 5 to 60 minutes of television time and runs a documentary/information/entertainment program that is really an extended advertisement. An infomercial is the television equivalent of an advertorial. Strategic implications of Infomercials:

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Long format gives advertisers plenty of time to make their case.

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As network ratings fall, day-parts (e.g., Sunday mornings 9–11) previously unaffordable have now opened up, making infomercials better deals for advertisers.

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Has the advantage of looking like entertainment

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The genre of ads has a somewhat negative public image, which doesn’t help build credibility or trust in the advertised brand.

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4. Objective #4: Affective Association: Get the Consumer to Feel Good about the Brand PPT 10-10 here 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. A. Method A.: Feel-Good Ads. Feel-good ads work by positive affective association. They link the good feeling elicited by the ad with the brand. 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. Several examples in the chapter but ask students for the ads that make them “feel good” and why? 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 Ads: •

Eager creatives.

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May perform better in cluttered media environment.

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Can have wear-out problems if the emotional appeal is very strong.

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May generate competing thoughts but not connection to brand

B. Method B: Humor Ads. The goal of humor in advertising is to create in the receiver a pleasant and memorable association with the product. However, research shows that humorous versions of advertisements are often not anymore persuasive than nonhumorous versions of the same ad. Research is simply inadequate to detect the difference. In light of research findings, there are several cautions associated with the use of humor as a message tactic: •

Humorous messages may adversely affect comprehension.

Humorous messages can wear out as quickly as three exposures, leaving no one laughing, especially the advertiser Strategic implications of Humor Ads: •

If the joke is integral to the copy platform, can be very effective otherwise it is free entertainment.

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Very eager creatives.

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Humorous messages may adversely affect comprehension.

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Humorous messages can wear out as quickly as after three exposures, leaving no one laughing, especially the advertiser. . Rotating messages in an ongoing gag (e.g., Gieco ads) can help

C. Method C: Sex Appeal: Sex ads are feeling type ads. They are simple stimulus arousal ads. But does sex sell? In a literal sense, no, because nothing, not even sex, makes

Chapter 10/Creative Message Strategy

someone buy something. However, sexual appeals are attention getting, which affects how consumers feel about a product. Ethical issues include what’s the difference between the celebration of a beautiful body and its objectification? The most important element is sex appeal ads—match the brand category to the appeal. Alert students the subtlety that “recall” which sex ads may be good ad is totally different from effectiveness. Strategic implications of Sex Appeal Ads: •

Higher attention levels.

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Higher arousal (feeling) levels.

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Poor recall due to interference at the time of exposure is possible.

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Product-theme continuity is a necessity and eliminates many product categories.

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Legal, political, ethical and regulatory exposure.

5. Objective #5: Scare the Consumer into Action

PPT 10-11 here

Sometimes advertisers adopt the scare the consumer into action objective using fear appeals. It must be used strategically and judiciously to work well in advertising. A. Method A: Fear-Appeal Ads. A fear appeal highlights the risk of physical harm or the negative consequences of not using the advertised brand or taking some recommended action and is expected to motivate the receiver to take action. The current social environment is working in favor of fear appeals—drive by shootings, terrorist attacks, random acts of violence. However, research does not offer such an absolute conclusion on the effectiveness of fear as a message tactic. •

Traditional research indicates that intense fear appeals actually short-circuit persuasion and result in a negative attitude effect.

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Other researchers argue that the tactic is beneficial to the advertiser.

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More recent research on fear appeals suggests that the effectiveness of this method is difficult to evaluate.

Strategic implications of Fear Appeals: •

Moderate level of fear is probably best.

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Threat must be entirely plausible.

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Clear, reliable solution must be offered.

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Too little or too much fear may to nothing.

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Legal, regulatory, and ethical exposure and problems.

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Some fear ads are just ridiculous and thus have low impact.

6. Objective #6: Change Behavior by Inducing Anxiety

Chapter 10/Creative Message Strategy

Most 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 inducing anxiety objective by playing on consumer anxieties. A. Method A: Anxiety Ads. 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 anxiety ads. The message conveyed in anxiety ads is that (1) there is a clear and present danger, and (2) the way to avoid this danger is to buy the advertised brand. B. Method B: Social Anxiety Ads. The danger in these ads is negative social judgment. This approach has long been used by Procter & Gamble for personal care products and household products. Text Exhibits 10-14 and 10-15 are examples of social anxiety ads. Strategic implications of Anxiety Ads: •

Can generate perception of widespread 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.

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Efficient—a little anxiety goes a long way.

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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.

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If the anxiety-producing threat is not linked tightly enough to the brand, you may increase category demand and provide business for your competitors.

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Ethical issues: Some believe there is enough to feel anxious about without advertisers adding more.

•

Typically targeted at women—critics claim sexism.

7. Objective #7: Define the Brand Image

PPT 10-12 here PPT 10-13 here

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. A. Method A: Image Ads. Image advertising often has a complete absence of hard product information or it is almost exclusively visual. In both cases, it means an attempt to link certain attributes to the brand, rather than to engage the consumer in any kind of discourse. Evaluation of image ads is tricky in that qualitative tests must be used with managers hate. Strategic implications of Image Ads:

•

Generally, less counterargument.

•

Relatively little legal/regulatory exposure.

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Iconic potential.

•

Very common, can get lost in clutter

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•

Can be rejected as clearly false.

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Don’t tend to copy-test well.

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Managerial resistance.

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Creatives love the technique.

8. Objective #8: Give the Brand the Desired Social Meaning

PPT 10-14 here

PPT 10-15 here

Recall from Chapter 5 the proposition that objects have social meanings and this fact is at the center of consumer cultures. Advertisers situate the brand socially objective by creating an ad that places a brand in a socially desirable context. A. Method A: Slice-of-Life Ads. By placing a brand in a social context, it gains social meaning by association. Slice-of-life advertisements depict an idealized user in a typical usage situation gaining benefits and satisfaction from using the brand. Strategic implications of Slice of Life ads: •

Generally, less counterargument.

•

Legal/regulatory advantages. Advertisers’ attorneys like pictures more than words because determining the truth or falsity of a picture is much tougher than words.

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Iconic potential. To make their brands another Coca-Cola is many advertisers’ dream. Socially set pictures of a brand give you this chance.

•

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.

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If not done very well, rejected as clearly false.

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Managerial resistance. Managers tend not to “get” it; Don’t tend to copy-test well; Delayed results.

•

Creative love these ads. Most creative latitude.

B. Method B: Branded Entertainment: Product Placement/Short Internet Films/Other Madison & Vine Techniques. We have moved, over the years, from product placements in films and TV shows to an integrated set of methods for bring brand exposure and messages to audiences. The brand is integrated into desired settings. This can be accomplished with product (really brand) placement in a film or TV show, or the advertiser can create a Web film or ads and trailers promoting all of the above. In addition, the mass media vehicles can drive traffic to brand websites. Strategic implications of Branded Entertainment Product Placement/Short Internet Films: •

Low counterargument, if not too obvious.

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•

Outside normal ad context; may reduce all sorts of defensive measures by consumers, such as source discounting.

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May increase consumer estimates about how many people use the brand.

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Perceived cost advantage over network TV ads.

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Horribly ineffective when blatantly obvious.

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Nonstandardized rate structure—hard to price these deals.

PPT 10-16 here

PPT 10-17 here 9. Objective #9: Resolve Social Disruption and Cultural Contradiction The strategy here is to identify areas of social and cultural tension and create message that suggest the brand is the only one that “gets it” and is therefore the most relevant to the movement(s) A. Tie the Brand to Social/Cultural Movement. The idea here is fairly simple and the message execution is extremely difficult. Identify a social/cultural tension and creatively place the brand in a context which demonstrates it is relevant to this contemporary context. 10. Objective #10: Transform Consumption Experiences We have all had the sensation that something was really good but it wasn’t one particular thing we could point to—this is transformational advertising. Advertisers use a transform consumption experiences objective by creating a mood, image, or feeling about a brand. Advertisers try to provide anticipation or familiarity, bundled up in a positive memory of an advertisement, activated during the consumption experience itself. A. Method A: Transformational Ads. The idea behind transformational advertising is that it can actually make the consumption 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 Ads:

PPT 10-18 here

•

Can be extremely powerful due to the merging of the ad and the experience.

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Fosters long-term commitment.

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Can ring absolutely false to the audience.

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Ethical issues—this manipulation of experience is unethical.

In the End.

PPT 10-19 here

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

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• •

Creatives have to get into the mind and culture of the consumer Advertisers merge culture, mind and brand.

SOLUTIONS TO QUESTIONS FOR REVIEW AND CRITICAL THINKING 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.

2. 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. Second, the last part of this question is a total sucker punch. Advertising and IBP messages and campaigns do not “increase sales” by themselves. This point will take students back to the communications vs. sales argument and the role of advertising/IBP covered in Chapter 1. A brand needs the full complement of the marketing mix function properly and effectively for sales to result—not just advertising and IBP. 3 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.

4. 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. 5. 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 my

Chapter 10/Creative Message Strategy

motivate the receiver to consider brand attributes more seriously. 6. 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. 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.

8. 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). 9. 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 (1) the fit between the product and valid public fears, (2) the level of fear generated by the ad (too little fear is ineffective, but too much fear may create negative attitudes towards the brand), and (3) a clear explanation of how the product will remove the consumer from harm’s way.

2. 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. 3. 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

Chapter 10/Creative Message Strategy

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. 4. 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, we 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 brandscape 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 copy social media copy slogan/tagline

developmental copy research evaluative copy research illustration medium illustration format 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 picas consumer generated content (CGC) fact sheet radio ad live script radio ad preproduction script production timetable production stage shoot

SUMMARY Identify the main members of the 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

Chapter 11/Executing The Creative

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 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 radio and television broadcast media. 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. 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. Describe the process and common copywriting approaches for digital/interactive ads. Digital/interactive ads are hybrids between print and broadcasting advertisements. The 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, social media copy. Copywriting in each of these digital/interactive formats may or may not employ the elements of

Chapter 11/Executing The Creative

headline and subhead or even body copy (in the case of pop-up and pop-unders). But, there are “copy” elements in each case that communicates 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. Discuss the specific stages and costs in television ad production. 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

Chapter 11/Executing The Creative

INTRODUCTORY SCENARIO—General Motors? Creative?

PPT 11-1 here

The point of this scenario is threefold: 1. Demonstrate that a firm like General Motors did not trust or invest in the creative effort in advertising to create awareness and preference for the brand. BUT, advertising alone could not overcome poor product designs. 2. Other firms, like Nike and BMW have respected and invested in creative. 3. General Motors is now turning back to creativity as they also redesign products

Executing the Creative: Perspective

PPT 11-2 here

1. Creative principles matter regardless of the medium to be used •

Good writing

•

Good visuals

2. The world in which ads exist has changed; •

Media and technology

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Economic environment

•

Social/cultural environment

The Creative Team and the Creative Brief

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1. The contemporary creative team includes: an art director, copywriter, and now a media planner and account planner. Copywriters and art directors work as partners and are referred to as the creative team in agencies. 2. The creative team is responsible for coming up with the creative brief—the unique creative thought behind a campaign that is turned into individual advertisements. 3. During this process, copywriters often suggest ideas for visuals. Likewise, art directors often come up with headlines. 4. Brandscapes result from creative: the total environment within which brands are presented creatively.

Teaching Note: There is a wonderful quote by creative Tim McElligott that you can use here:

Chapter 11/Executing The Creative

“Imagination is one of the last remaining legal means to gain an unfair advantage over your competition.” I.

Copywriters and Art Directors

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A. Copywriting is the process of expressing the value and benefits a brand has to offer, via written or verbal descriptions. B. 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 advertiser’s marketing managers. 1. Highlight for students here that though the advertiser will provide a lot of information, the creatives get to manifest creative in ads like text exhibits 11-411-5. C. A creative brief is a guide used during the copywriting process to specify the message elements that must be coordinated during the preparation of copy. These elements include main product claims, creative devices, media that will be used, and special creative needs a product or service might have. Some of the elements considered in devising a creative plan are: •

the single most important thought you want a member of the target market to take away from the advertisement

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the product features to be emphasized

•

the benefits a user receives from these features

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the media chosen for transmitting the information and the length of time the advertisement will run

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the suggested mood or tone for the ad

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the ways in which mood and atmosphere will be achieved in the ad

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the production budget for the ad

II. Copywriting for Print Advertising The first step in the copy development process is to understand that copy will vary from medium to medium but will always rely on the creative brief. Copywriting is consider first for print, then traditional broadcast, then digital/interactive.

A. The Headline

PPT 11-5 here

Chapter 11/Executing The Creative

The headline in an advertisement is the leading sentence or sentences, usually at the top or bottom of the ad, that attracts attention, communicates a key selling point, or achieves brand identification. 1. Purposes of a Headline. In general, a headline can be written to pursue the following purposes: •

Give news about the brand.

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Emphasize a brand claim.

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Give advice to the reader.

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Select prospects.

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Stimulate the reader’s curiosity.

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Set a tone or establish an emotion.

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Identify the brand.

B. The Subhead

PPT 11-6 here PPT 11-7 here

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 subhead in the ad for Clorox in Text Exhibit 11-12 is an excellent example the PPT 11-8 is another good example. •

The subhead should reinforce the headline and entice the reader to proceed to the body copy.

•

Subheads should stimulate a more complete reading of the entire ad.

•

A good rule of thumb is the longer the body copy, the more appropriate the use of subheads.

•

Most creative directors try to keep the use of subheads to a minimum—they can clutter an ad and can’t make up for a poor headline or body copy anyway. PPT 11-8 here

C. The Body Copy

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Body copy is the text component of an ad that tells the 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. 1. Standard approaches to preparing body copy:

•

Straight-line copy explains in straightforward terms why a reader will benefit from use of a brand.

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Dialogue copy delivers the selling points of a message to the audience through a character or characters in the ad.

•

A testimonial uses dialogue as if the spokesperson is having a one-sided conversation with the reader through the body copy. The Nicorette ad in text Exhibit

Chapter 11/Executing The Creative

11-13 is a classic testimonial. Dialogue can also depict two people in the ad having a conversation, a technique often used in slice-of-life messages. •

Narrative copy 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 the copy techniques. The copywriter is simply trying to highlight the urgency of acting immediately— phone now, log on now, etc.

2. Guidelines for Writing Body Copy.

PPT 11-10 here

Regardless of the specific technique used to develop body copy, the probability of writing effective body copy can be increased if certain guidelines are followed: •

Use the present tense whenever possible

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Use singular nouns and verbs

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Use active verbs

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Use familiar words and phrases

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Vary the length of sentences and paragraphs

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Involve the reader

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Provide support for the unbelievable

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Avoid clichés and superlatives.

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III. Copywriting for Broadcast Advertising

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Relative to the print media, radio and television present totally different challenges for a copywriter. The audio and audiovisual capabilities of radio and television provide different opportunities. Compared to print media, however, broadcast media actually have inherent limitations for a copywriter: •

In the print media, a copywriter can write long and involved copy necessary to communicate complex brand features.

•

The printed page allows a reader to dwell on the copy and process the information at a personalized, comfortable rate.

•

Radio and television, on the other hand offer a fleeting exposure.

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Sight and sound capabilities of broadcast can actually be a distraction to the message content.

A. Writing Copy for Radio

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Some analysts 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 ..

Chapter 11/Executing The Creative

for an audience that transcend those created in any other medium. Writing radio copy beings the same way as writing print copy—start with the creative brief and the appealing features of the brand. 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 “verbal wallpaper”—radio is used as filler or unobtrusive accompaniment to reading, driving, household chores, or homework.

1. Radio Advertising Formats There are four basic formats for radio advertisements: •

Music. Because radio provides audio opportunities, music is often used in radio ads. One use of music is to write a song or jingle in an attempt to communicate in an attention-getting and memorable fashion. Another use of music in radio commercials is to open the ad with a musical score and/or have music playing in the background while the copy is being read. The role of music here is generally to attract attention.

•

Dialogue. The dialogue technique, described in the section on print copywriting, is commonly used in radio. There are difficulties in making narrative copy work in the short periods of time afforded by the radio medium (typically 15 to 60 seconds).

•

Announcement. Radio copy delivered by an announcer is similar to narrative copy in print advertising. The announcer reads important product information as it has been prepared by the copywriter.

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Celebrity Announcers. Having a famous person or persons deliver the copy is argued to increase the attention paid to a radio ad.

2. Guidelines for Writing Radio Copy

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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:

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Use common, familiar language.

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Use short words and sentences.

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Stimulate the receiver’s imagination.

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Repeat the name of the product.

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Stress the main selling point or points.

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Use sound and music with care.

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Tailor the copy to the time, place, and specific audience.

Chapter 11/Executing The Creative

B. Writing Copy for Television/Video

PPT 11-15 here

Television has a tremendous advantage over radio in that action as well as sound can be used in the message. The ability to create a mood or demonstrate a brand in use gives television its superior capability, but this also changes the whole concept of copy for the copywriting effort. Copy for television must be highly sensitive to the ad’s visual aspects as specified by the creative director. The opportunities in television represent challenges for the copywriter as well. •

The copywriter must remember that words do not stand alone. Visuals, special effects, and sound techniques may convey a message far better than the cleverest phrase.

•

Television commercials represent a difficult timing challenge for the copywriter. Copy must be precisely coordinated with the video.

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The road map for a TV ad is a storyboard: a frame-by-frame sketch depicting in sequence the visual scenes and copy that will be used in a television advertisement.

1. Guidelines for Writing Television Copy

PPT 11-16 here

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Use the video.

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Support the video. Make sure that the copy doesn’t simply hitchhike on the video. If all the copy does is verbally describing what the audience is watching, an opportunity to either communicate additional information or strengthen the video communication has been lost.

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Coordinate the audio with the video.

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Sell the brand as well as entertain the audience.

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Be flexible. Due to media-scheduling strategies, commercials are produced to run as 10- 15-, 20-, 30-, or 60-second spots. The copywriter may need to ensure that the audio portion of an ad is complete and comprehensive within varying time lengths.

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Use copy judiciously.

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Reflect the brand personality and image.

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Build campaigns. When copy is being written, evaluate its potential as a sustainable idea, long-term campaign.

IV. Copywriting for Digital/Interactive

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1. Although it is still early in the history of digital/interactive ads, this medium seems to be developing its own copywriting style.

•

A hybrid of print and broadcast

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The audience is not as passive as television or radio audiences are.

•

Much of the copy is direct response.

Chapter 11/Executing The Creative

•

Generally speaking, the rules for writing digital/interactive copy are not all that different from the basic rules for copywriting.

2. Copywriting Approaches to Digital/Interactive Advertising • Long-copy landing page • Short-copy landing page • Long-copy email • Teaser email copy • Pop-up/pop-under copy • Social media copy

V. Slogans/Taglines

PPT 11-18 here

PPT 11-19 here

Copywriters are often asked to come up with a good slogan or tag line for a brand. A slogan or tagline is a short phrase in part is used to help establish an image, identity, or position for a brand or an organization, but mostly used to increase recall of a key brand feature. 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 as in BMW’s slogan, “The Ultimate Driving Machine.”

•

A good slogan provides a short-hand identification for the brand and communicates information quickly.

•

A good slogan can provide continuity across media and enhance integrated brand communications.

VI. Common Mistakes in Copywriting

PPT 11-20 here

Beyond the guidelines for effective copy in each media area, there are common mistakes made in copywriting that should be avoided:

•

Vagueness. Avoid generalizations and words that are imprecise in meaning.

•

Wordiness. Being economical is paramount. Copy has to fit in a limited time frame (or space), and audiences bore easily.

•

Triteness. Using clichés and worn-out superlatives was mentioned as a threat to print copywriting. The same threat (to a lesser degree, due to audio and audiovisual capabilities) exists in radio and television advertising. Trite copy creates a boring, outdated image for a brand or firm.

•

Bad Taste. Sexist, racist, offensive and vulgar copy may attract attention but it is simple minded and often damages brand image.

•

Laundry lists. It is tempting to list all brand features and advantages, but receivers will tune out.

Chapter 11/Executing The Creative

•

Creativity for creativity’s sake. Some copywriters get carried away with a clever idea. It’s essential that the copy in an ad remain true to its primary responsibility: communicating the selling message.

VII. The Copy Approval Process

PPT 11-21 here

In copy approval, copy may be subjected to research scrutiny. Developmental copy research provides audience interpretations and reactions to the proposed copy. Evaluative copy research is where the audience expresses its approval or disapproval of the copy used in an ad. The final step in copywriting is getting the copy approved. A typical copy approval process goes as follows (see text Exhibit 11.17). A. In the advertising agency, a copywriter submits draft copy to either the senior writer or the creative director, or both. B. A 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. C. After the account management team has made recommendations, a meeting is likely held to present the copy to the marketing staff. Inevitably, the client feels compelled to make recommendations for altering the copy. D. Finally, copy should always be submitted for final approval to the advertiser’s senior executives. Often, these executives have little interest in evaluating advertising and they leave this responsibility to middle managers. VIII. Art Direction

PPT 11-22 here

The Evolution from Words to Pictures • Improved technology for better illustration • Digital media allow frequent rotation of visuals • Brand values communicated better with visuals • Visuals can be protected legally • Visuals are more globally portable than words across cultures • Visuals allow placing the brand in a social context A. Illustration

PPT 11-23 here

Illustration is the drawing, painting, photography, or computer-generated art that forms the picture in an advertisement. 1. Illustration Purposes There are several specific, strategic purposes for illustration, which can greatly increase the chances of effective communication: •

Attract the Attention of the Target Audience. One of the primary roles of an illustration is to attract and hold attention. However, an illustration must support other components of the ad to achieve the intended communication impact.

Chapter 11/Executing The Creative

•

To Make the Brand Heroic. An old adage in advertising is that the brand needs to be the “hero.” That is, the focal point of the ad with illustration and lighting is the brand itself—message complete.

•

Communicate Product Features or Benefits. The most straightforward illustration is one that simply displays brand features, benefits, or both.

•

Create a Mood, Feeling, or Image. This depends on the technical execution of the illustration. The lighting, color, tone, and texture of the illustration have a huge impact on these goals.

•

Stimulate Reading of the Body Copy. Just as a headline can stimulate examination of the illustration, the illustration can stimulate reading of the body copy. Illustrations can create curiosity and interest in readers

•

To create the desired social context for the brand. Consumers are sensitive the fact that a brand “fits” their situation and lifestyle. The visual context for a brand creates a social context of appropriateness. PPT 11-24 here

2. Illustration Components

PPT 11-25 here

•

Size. Generally speaking, regardless of the size of an illustration, the clarity of visual impression seems to be the most important factor with respect to effectiveness.

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Color. Color is a creative tool with important potential. Some products are heavily dependent on color to accurately communicate a principal value. Color can also be used to attract the reader’s attention to a particular part of an ad.

•

Medium. The choice of a medium for an illustration is the decision regarding the use of drawing, photography, or computer graphics. –Drawing represents a wide range of creative presentations, from cartoons to penand-ink drawings to elaborate watercolor and oil paintings. –Photography can emphasize detail and have an element of believability. –Computer graphics specialists can create and manipulate images for both print and broadcast production. The most important development in computer graphics in the last 5 years is the ability to digitize images.

3. Illustration format: the choices the advertiser has for displaying the brand. PPT 11-26 here •

This can include the product alone, the product in use,

•

The product in a social context.

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A key issue is shaping the illustration to fit the copy/creative strategy.

4. Design

PPT 11-27 here

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 creatives to

Chapter 11/Executing The Creative

physically arrange all the components of a printed advertisement in such a way that order and beauty are achieved. 1. Principles of Design 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. Principles of design suggest that the visual aspects of the ad be evaluated for balance, proportion, order, unity, and emphasis: •

Balance.

PPT 11-28, 11-29, 11-30, 11-31 here

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 is more difficult to manage in that the placement of unusual shapes and sizes must be precisely coordinated. •

Proportion.

PPT 11-32 here

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 11-33 here

Order in an advertisement is also referred to as sequence or, in terms of its effects on the reader, gaze motion. The goal is to lead 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 11-34 here

Considered the most important of the design principles, unity results in harmony among the diverse components of print ads: headline, subhead, body copy, and illustration. Several design techniques contribute to unity.

•

Border surrounding an ad keeps the ad elements from spilling over into other ads or into the printed matter next to the ad.

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White space can be dramatic and powerful and draw the receivers’ attention to the most critical elements of an ad.

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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.

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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 11-35, 11-36 here

Chapter 11/Executing The Creative

The key to good design is to decide which major component—the headline, subhead, body copy, or illustration—will be emphasized. One needs to be primary, but not the only focus of the ad. 5. Layout

PPT 11-37 here

A layout is a drawing of a proposed print advertisement, showing where all the elements in the ad are positioned. The following are the different stages of layout development: •

Thumbnails

Thumbnails, or thumbnail sketches, are the rough first drafts of advertising design. It is likely that the designer will produce several sketches in an attempt to work out the general presentation of the ad. •

Rough Layout

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 the headline is lettered in. •

Comprehensive

A comp layout is a polished, drawn version of the ad. A comp layout is produced to give strategists as close an approximation to the final product as possible.

6, Typography in Print Production •

PPT 11-38 here

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. Families of fonts include: Blackletter, also called Gothic, is ornate. Roman is the most common and most legible. Script emulates cursive handwriting and is elegant. Serif refers to the “feet” at the end of letters. Sans serif fonts have no “feet.” Miscellaneous includes a wide range of stylish and just plain goofy-looking type.

•

Type Measurement. There are two elements of type size. Point refers to the size of type in height. In the printing industry, type sizes run from 6 to 120 points. Pica measures the width of lines. A pica is 12 points wide, and each pica measures about one-sixth of an inch. Therefore, it is possible to judge, based on the typeface chosen, the amount of running space occupied. Text Exhibit 11-39 shows type point sizes.

IX. Art Direction and Production in Digital/Interactive Media •

Cyberspace is its own space and medium.

PPT 11-39 here

Chapter 11/Executing The Creative

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The audience is not passive. Recall the discussion from Chapter 2 where consumers through social media and blogs are more in control of their information flow.

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Closer to print that TV or radio

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Advances in streaming audio and digital video keep art direction and production in cyberspace a moving target.

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Revision can happen overnight giving these ads a sense of freshness.

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Clients and agencies are struggling with the problem of persuasive content versus entertainment. As with other media, clutter is becoming a big problem.

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Consumer generated content (CGC) are part of the production issue.

X. Art Direction and Production in Radio

PPT 11-40 here

•

Highlights the role of the copywriter

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Other members of creative typically not involved—more tech people involved

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Process begins with soliciting bids

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Next step is casting talent – Announcer – Music talent

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Final prep and production=sound studio – Fact sheet ad – Live script ad

XI. Art Direction and Production in Television

PPT 11-41 here

1. TV has changed the face of advertising • TV is about moving visuals • It can leave impressions, set moods, tell stories • It can get consumers to notice the brand • TV production is complex, with many people and requires tremendous organizational skills 2. The Creative Team in Television Advertising • •

Agency participants Production company participants

3. Creative Guidelines for TV Advertising

PPT 11-42 here

PPT 11-43 here

Chapter 11/Executing The Creative

• • • • •

Use an attention-getting and relevant opening. Emphasize the visual. Coordinate the audio with the visual. Persuade as well as entertain. Show the product. (MBAs really like this one.)

4. Production Process for TV Advertising • •

• • • •

PPT 11-44 here

Preproduction: How creative can be brought to life Multiple activities that occur prior to filming the commercial Production (shoot) Activities that occur during filming Postproduction Activities that occur after filming to ready the commercial

5. Pre-Production Process for TV Advertising

PPT 11-45 here

The preproduction stage is that part of the television production process in which the advertiser and the agency (or in-house agency staff) work out the details of how the creative planning can best be brought to life with the opportunities offered by television. a. Storyboard and Script Approval. A storyboard is a frame-by-frame 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. b. Budget Approval. Once there is agreement on the scope and intent of the production as depicted in the storyboard and script, the advertiser must give budget approval. The producer works with the creative team and the advertiser to estimate the approximate cost including production staging, location costs, actors, technical requirements, staffing, and a multitude of other considerations. c. Assessment of Directors, Editorial Houses, Music Suppliers. An assessment of these participants must take place early in the preproduction process. Directors develop specializations and reputations. Choosing the proper director is crucial to the execution of a commercial. A good director commands a fee anywhere from $5,000 to $20,000 per day or more and can have a tremendous effect on the quality and impact of the presentation. Similarly, editorial houses and music suppliers (and musicians) have particular expertise and reputations. In most cases, geographic proximity to the agency facilities is important. d. 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 provide needed equipment for ad preparation. The expertise in production houses relates to the technical aspects of filming a commercial.

Chapter 11/Executing The Creative

e. Creation of a Production Timetable. The producer will be working on a production timetable. This timetable projects a realistic schedule for all the preproduction, production, and postproduction activities. Exhibit 11.50 is a timetable for a national 30-second spot, using location shooting. Students should realize that a reasonable timetable is rarely achieved. Advertisers often request (or demand) that an agency provide a finished spot (or even several spots) in times as short as four or five weeks. f. Selection of Location, Sets, and Cast. Both the production house and the agency production team search for appropriate, affordable locations if the commercial is to be shot outside of a studio setting. Although not every ad uses actors and actresses, when an ad calls for individuals to perform roles, casting is crucial. Every individual appearing in an ad is, in a very real sense, a representative of the advertiser. 6. Production Process

PPT 11-46 here

a. Filming the commercial, or “the shoot” b. The shoot involves large numbers of diverse people: o Creative performers o Trained technicians o Skilled laborers c. Sets often feature tension and spontaneity d. Typical national commercial costs $100,000 to $500,000

7. Post-Production

PPT 11-47 here

a. Directors rough cut b. Digital editing c. Audio edit d. Master, dubs and distribution

SOLUTIONS TO 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 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 guide ..

Chapter 11/Executing The Creative

by the “roadmap” knows as the creative brief which specifies the message elements that must be coordinated in all brand message claims, creative devices 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? We felt that students might have difficulty keeping these two straight. 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 distinct in that it tells a story, but the mood of the ad is highly personal, emotional, and involving. A narrative ad often focuses on storytelling and only indirectly touches on the benefits of the brand. 3. 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 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. As Chapter 6 emphasized, 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. 4. Describe the common mistakes that copywriters must avoid. From your personal experience with all types of ads, are there other common mistakes that you believe copywriters are prone to make on a regular basis? This is another good written assignment. The four categories of mistakes are listed below. It has been our experience that students will cite very specific examples of the kinds of ad they think are bad but those examples invariably fit into one of these four categories:

•

Vagueness. Avoid generalizations and words that are imprecise in meaning.

•

Wordiness. Being economical with descriptions is paramount. Copy has to fit in a limited time frame (or space), and receivers bore easily.

•

Triteness. Using clichés and worn-out superlatives was mentioned as a threat to print copywriting.

•

Bad Taste. Sexist, racist, offensive and vulgar copy may attract attention but it is simple minded and often damages brand image.

•

Laundry lists. It is tempting to list all brand features and advantages, but receivers will tune out.

Chapter 11/Executing The Creative

•

5. 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 11.16 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. But 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 how challenging this type of copywriting can be – and how ingrained long standing slogans are in our consumer minds. 6. 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.

7. 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.

Chapter 11/Executing The Creative

8. 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 “hybrid-ized” for digital/interactive application.

9. 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? 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.

10. Identify the three main stages of the production process for television advertising. Describe the activities that take place within each stage. 1. Pre-Production Process for TV Advertising 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. Creation of a Production Timetable. f. 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: o Creative performers o Trained technicians o Skilled laborers c. Sets often feature tension and spontaneity d. Typical national commercial costs $100,000 to $500,000

3. Post-Production

Chapter 11/Executing The Creative

a. Directors rough cut b. Digital editing c. Audio edit d. Master, dubs and distribution

SOLUTIONS TO 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. 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 ..

Chapter 11/Executing The Creative

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.

3. 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 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, subheds, 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.

END OF PART ACTIVITY (PAGES 420-423) Project Three: Planning the Creative Grading Rubric

THE CREATIVE PORTFOLIO Is there an introduction to the creative portfolio? Does this introduction address the specific audience that has “requested” this portfolio? Does the introduction provide a clear and appropriate purpose statement? Does the introduction provide an overview of what’s to come? Does the introduction clearly transition into the next section?

Yes

Somewhat

Pts

THE CREATIVE BRIEF Is there an introduction to the creative brief? Does the introduction provide an overview/summary of the creative brief?

Yes

Somewhat

Total No

Pts

Chapter 11/Executing The Creative

Does the introduction transition neatly into the client overview? The Client Overview Is there an introduction to the client overview? Does the client overview provide a thorough history/overview of Trader Joe’s? Does the client overview provide a thorough description of the products and services that Trader Joe’s provides to its customers? Does the client overview provide an overview of the overall strategy of Trader Joe’s advertising campaign? Does the client overview provide a list of direct and indirect competitors Trader Joe’s might face in your geographic area? Does the client overview provide a “snapshot of the brand situation” Trader Joe’s is facing? Does the client overview transition neatly into the target overview? The Target Overview Is there an introduction to the target overview? Does the target overview identify and describe each of the local segments that they wish to address with their advertising? Does the target overview identify the unmet needs for each of these local segments? Does the target overview discuss how Trader Joe’s can address those unmet needs? Does the target overview describe the attitude of each of these segments as it pertains of Trader Joe’s Does the target overview describe the behaviors of each of these segments as they relate to Trader Joe’s (e.g. how do these targets shop, prepare meals, etc.)? Does the target overview transition neatly into the message overview? The Message Overview Is there an introduction to the message overview? Does the message overview provide a recommendation of the one thing the target segments should believe about Trader Joe’s? Does this one thing address each of the targeted segments? Does the message overview provide recommendations for what to tell these segments to believe in this one thing? Does the message overview provide recommendations for the words and images that should be associated with that one thing? Does the message overview provide recommendations about the personality of the advertising messages? Is there a conclusion to the Creative Brief?

THE MESSAGE STRATEGY Is there an introduction to the message strategy? Does the introduction provide an overview of the strategy or strategies that will be utilized? Do the strategies recommended relate to the creative brief provided in this portfolio? Do the strategies recommended fit with Trader Joe’s needs? Do the strategies recommended fit with Trader Joe’s brand personality? Do the strategies recommended fit with each targeted segment? Are the strategies recommended address each target segment individually? Does the message strategy provide an overview of how the messages recommended may evolve over time? Does the message strategy provide a conclusion for this section?

Yes

Somewhat

Total No

Pts

THE ART AND COPY

Yes

Somewhat

Total No

Pts

Chapter 11/Executing The Creative

Is there an introduction to the creative plan? Does the creative plan provide a list of the guidelines to be used in the advertisements? Does the creative plan provide a list of the various message elements to be used in the advertising copy? Do these message elements relate to the message strategy developed? Does the creative plan provide a list of the various message elements to be used in the advertising art? Do these message elements relate to the message strategy developed? Does the message strategy contain mockups of at least one advertisement for each targeted segment for day one of the campaign? Does the message strategy contain mockups of at least one advertisement for each targeted segment for the year one stage of the campaign? Does the message strategy contain mockups of at least one advertisement for each targeted segment for the year two stage of the campaign? Does the copywriting show an understanding of the media to be used in the campaign? Does the art show an understanding of the media to be used in the campaign? Do the art and copy fit seamlessly together? Do the art and copy fulfill the elements of the creative plan? Do the art and copy address the needs of the creative brief? PAPER QUALITY Does the paper properly cite using APA style? (If no, then an automatic 0 in paper quality) Does the paper have a references section with complete references? Does the paper appear to have an appropriate number of references? Is the paper well-written? Is the paper relatively misspelling-free? (no more than five noticeable misspellings) Is the paper relatively grammatically correct? (no more than five noticeable grammar mistakes) Can I tell which sections were written by different people? Does the paper have appropriate section and subsection headings? Does the paper follow appropriate formatting requirements (i.e. 1 inch margins, 11 or 12 point font, page numbers, single-spacing, space between paragraphs)? Is there a table of contents? Is there an executive summary of the paper? Are there organized appendices with appropriate materials? Does the paper appear to be an appropriate length? Is there a logical flow to the paper? Is there a title page with a title and author names? Are there page numbers? Is the paper written and presented in an interesting fashion (i.e. with pictures, charts, title page, etc.)? Does the paper appear to be of professional quality?

Yes

Somewhat

Total No

Total

Pts

Chapter 12/Media Planning Essentials

PART 4 Placing the Message in Conventional and “New” Media PPT 12-1, 12-2 here 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 deal-proneness price/cost transparency above-the-line promotion measured media below-the-line promotion unmeasured media media plan media class media vehicle media mix 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 context effects share of voice cost per thousand (CPM) cost per thousand–target market (CPM–TM) cost per rating point (CPRP) RSS (Really Simple Syndication) net promoter scores media buying agency of record upfronts media-buying service

SUMMARY Describe the important changes that have altered the advertising and IBP media landscape such as agency compensation, ROI demands, globalization, and multicultural media. The demise of the 15% commission means that there is less economic incentive for agencies to buy media advertising. With more media of all sorts of advertising and IBP out there, dollars get spread around a lot more than they used to. The consolidated media buying allows agencies to get better deals and exert more power on the media. Still, agencies now operate with fewer staff to do even bigger jobs, thus making the newer and more lucrative types of media more attractive than traditional media. Furthermore, the globalization of media is exerting considerable pressure on the industry to standardize media measurement across the globe. Consumers who are spoiled by free content are less and less interested in obtrusive advertising, thus favoring alternative pull communication forms going forward. The increasing deal-proneness and cost transparency provided by the Internet has made consumers considerably more powerful in their ability to get consumer information without having to rely on traditional media advertising. Add to this the increasingly ad-cluttered state of traditional media, and you can see why nothing in advertising media is sacred, nothing. Also, don’t forget the growing influence of multicultural media available across the globe. It’s a new world of media out there. Last, but far from least, advertisers are now demanding greater accountability and documented return on investment (ROI) from their media buys, tradition or ..

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new media. Describe the fundamentals of 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 strategies to achieve those objectives. Media planners use several quantitative indicators, such as CPM and CPRP, 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. Know the bottom line of IBP’s impact on media planning. You should know that there is the very real possibility of a continued decline in advertising’s reliance on traditional media. IBP efforts that rely on database efforts are very attractive due to their highly selective targeting and measured response. It’s also true that better and better measures of advertising effectiveness will be required with more reliance on IBP. To work in the contemporary ad and IBP environment, you will have to know a lot about a much wider array of “media.” Furthermore, central control of these far-flung promotional efforts is a must. Things can really get away from you in this new environment.

Discuss the data quality problem in media planning. In the real ad and IBP world, there is an illusion of precision because of all the numbers used. In reality, there is a lot of slop in the media measurement system. Data quality is just not all that great. They are good enough for some purposes, but don’t be fooled into thinking numbers equal truth. Not so. Bad measurement is still bad measurement no matter how many computers crunch the data. Also, a lot of real-world media planning comes from ads for advertisers. Media planners are the target market of lots of ads for lots of media outlets. And never forget the power of the media lunch: the “free lunch” or cocktail party hosted by your friendly media rep. That’s how a lot of media get planned. Discuss the essentials of the contemporary media planning environment. You should know the particular measurement demands and essential terms of Internet media. You should also know the importance of share-of-voice calculations; they allow you to see, across all kinds of contemporary media, what percentage of your brand’s spending is of the total category, and they provide quick and easy competitive comparisons. You should also understand that standard practice these days involves the uses of computer-media models that optimize media schedules for the most mathematically cost-efficient media buy. This should be used as a tool, but not a substitute for media strategy. You should also understand that the ..

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growing category of interactive media demands special attention from media planners and will probably make traditional media less important over time. You should also know that more and more media buys are made by a stand-alone media buying company. Discuss the value of traditional advertising. You should know that a lot of very smart, creative, and powerful people believe in traditional advertising, and don’t see it going away . . . at all, ever.

CHAPTER OUTLINE I.

The Very Wide World of Brand Media Vehicles

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This introduction to media is important for students. •

Advertising is definitely not dead.

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New media are merging with old

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Ad agencies are more than advertising—digital media and IBP have been added.

A. Very Important Changes in Media

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1. Agency Compensation Thirty-five years ago, agency compensation was a simple system: Around 80 percent of all advertising and promotional dollars went to media advertising (television, radio, newspapers, magazines, and outdoor). The advertising was created, produced, and placed by full-service advertising agencies—most everything was done under one roof. The agency purchased the media at a 15 percent discount, and that’s how ad agencies made their money. Agency compensation has changed completely:

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The 15 percent commission has pretty much gone away.

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Most media placement is done by individually negotiated deals.

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Most clients now pay agencies on a fee-for-service basis—they pay for specific jobs.

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There is still revenue generated through media discounts to agencies, but it is neither constant nor uniform.

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The people who actually create the ads may work at an entirely different agency from the people who actually buy the media.

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Much media planning and buying is outsourced from the agency

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2. More Media The word “media” has gone through a huge transition with all sorts of new media classes: the Internet, cross-promotions, product placements, buzz and viral marketing, movies that are really feature-length commercials, and so on. •

Many traditional media lines are blurred.

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Companies supply and push “news” stories about their brands or categories to media outlets as part of their overall integrated brand promotion.

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Public relations firms create ads as “news” and referred to as “earned media” rather than “paid media”.

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Movies can work as promotional vehicles for products while still entertaining.

3. Going Public • Agencies have become leaner operations since moving from being privately held to publicly traded companies. • There is much more stockholder pressure for short-term profitability. The two quickest routes to greater short-term profit are (1) to fire staff and (2) to make more money on fees and media buys. • As the ad world has moved away from flat media commissions, traditional media, and privately held companies, they have become much more like other traditional businesses and are constantly searching for ways to optimize short-term profits. • This often pushes them in the direction of higher-return media buys and deals, often in the non-standardized realm of “new media 4. Globalization •

Media today exist in transnational space—CNN to Al Jazeera.

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The Web is worldwide—search engines do not recognize national boundaries.

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Many of these global media organizations have large audiences outside of North America. BBC Worldwide TV, based in London, has several million viewers throughout Asia, and NBC has 65 million viewers in Europe.

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The BRIC (Brazil, Russia, India and China) represent huge markets for media. --India has 1.1 billion people with 25% under age 16 and a growing (consuming) middle class.

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There are big problems with transnational media: --A lack of international standardized audience measurement and pricing makes for a very complicated situation. --Agencies are partnering with local agencies to deal with pricing complications.

5. Free Content • ..

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The single biggest change in the media world is a flood of “free” media content.

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•

Due to the Internet and other telecommunications changes, consumers are getting used to getting cool stuff for free, or next to free.

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Why should they buy a magazine at a bookstore for $4.50 that’s full of ads when they can go online and get much of the same content without paying a dime, and can avoid the ads—if there are any ads at all?

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Advertisers are putting more of their total promotional budget into the non-traditional media environments that contemporary consumers clearly enjoy and use more.

6. Consumer in Charge • Marketer is not is sole control of brand image. •

Brands are co-created with consumers.

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E-commerce has experienced huge success and has truly revolutionized the way consumers shop and consume.

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It has given consumers considerably more power in the marketing channel: access to more and better information, access to millions of other consumers and their opinions of goods and services, and much higher expectations of good deals and responsible behavior.

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Two of the biggest changes the Internet has wrought are the rise of deal-proneness in consumers and price/cost transparency.

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Being deal-prone and having access to price/cost information has given consumers marketplace power.

7. Hyper-Clutter and Ad Avoidance

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Clutter is worse than ever on broadcast channels and in magazines.

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Now consumers can watch no-ad premium channels such as HBO; they can DVR out the ads from network television shows

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Satellite radio is growing in popularity rapidly

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On the Internet, pop-up ad filters are some of the most popular software offerings available.

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People will pay to avoid ads, and this is quickly becoming the rule rather than the exception.

Multicultural Media •

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The growing population of several prominent ethnic groups has given rise to more ethnic media.

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In the United States, the most attention is on the Hispanic/Latin/Latino market, due mostly to its size and growth rate.

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Asians are the other fastest growing ethnic group in the U.S.

II. The Fundamentals of Media Planning

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A lot has changed in media but here are the ideas, concepts, and principles that are just as they always were. Traditional concepts still matter. Some basic tools remain the same. •

Good planning remains good planning regardless of the media employed.

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Poor message placement will undermine even a great message.

A. The Big Pie—A wide range of media options • Traditionally, companies have made the distinction between (1) above-the-line promotion, which meant traditional measured media advertising, • All TV • All radio • Magazines • Newspapers • Outdoor (2) below-the-line promotion which was called unmeasured media, was everything else: • desirable retail shelving, • paid Internet search • product placement • in-store promotions, • coupons, • events •

Exhibits 12.4, 12.5, and 12.6 give students a feel for the way advertising and promotional dollars are allocated between media advertising and promotions.

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A key point here is that IBP is not a media “placement.” It is the strategy behind devising the allocation of dollars between advertising (which uses media) and other forms of promotion.

III. Media-Planning

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The broad range of media options demands attention to detail in the media-planning process. Some basic terminology will help students at the outset:

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A media plan specifies the media in which advertising messages will be placed to reach the desired target audience.

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A media class is a broad category of media, such as television, radio, or newspapers.

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A media vehicle is a particular option for placement within a media class.

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•

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

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1. Reach the target audience. The definition of a target audience can be demographic, geographic, or based on lifestyle or attitude dimensions. Media research organizations can provide detailed information on the media habits and purchase behaviors of target audiences. Text Exhibit 12.7 shows market statistics for four brands of men’s aftershave and cologne. Single-source tracking services are also available that offer information not just on demographics but also on brands, purchase size, purchase frequency, prices paid, and media exposure. 2. Geographic scope. This is a relatively easy objective to set. Media planners merely need to identify media that cover the same geographic area as the advertiser’s distribution system. Competitors’ spending can complicate the strategy a bit. • Geo-targeting is the placement of ads in geographic regions where higher purchase opportunities for a brand are possible. • 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. • Effective reach is the number or percentage of consumers in the target audience that is exposed to an ad some minimum number of times, again, to achieve advertiser objectives. • Message weight. Message weight is the gross number of advertising messages delivered by a vehicle in a schedule. •

Gross impressions represent the sum of exposures to all the media placement in a media plan. (Of course, when we say exposures, we really mean opportunities to be exposed.) 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

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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 called reach. 3. Continuity. Continuity is the pattern of placement of advertisements in a media schedule. There are three strategic scheduling alternatives: PPT 12-13 here •

Continuous scheduling is a pattern of placing ads at a steady rate over a period of time, running one ad each day for four weeks, for example.

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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.

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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 fairly regularly all year long but have, like clothing, certain seasons.

4. Continuity and the Forgetting Function. It turns out people’s forgetting is fairly predictable. It seems to obey a mathematical function pretty well; thus it is often called the “forgetting function.”

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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.

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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.

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Implications for media strategy: 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.

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5. Length or Size of Advertisements. 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.

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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.

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From a competitive perspective, matching a competitor’s presence with messages of similar size or length may be needed to maintain share of mind in a target audience.

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The length or size of the ad is a judgment that has to be made by the creative team and the media planner.

6. Media Context. This is the editorial climate for an ad. The tone of the ad and where it appears. .

B. Competitive Media Assessment PPT 12-14 here Media planners normally do not base a media plan on how much competitors are spending 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.

Share of voice =

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

C. Media Efficiency.

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Which media deliver the largest target audiences at the lowest cost? The standard measure of media efficiency is cost per thousand. Cost per thousand (CPM) is the dollar cost of reaching 1,000 members of an audience using a particular medium. CPM =

cost of the media buy  1,000 total audience

CPM =

$72,000  1,000 = $13.83 5,206,000

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 ..

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equivalent to 1 percent of the television households in the designated rating area tuned to a specific program).

D. Internet Media

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The internet media are “pull media” in that consumer goes looking for advertisers. Traditional media are “push media” where messages are directed at consumers.

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Advertisers buy search terms on search engines so that user searches put the companies brand near the top of the search list.

E. Interactive Media. •

Interactive media is an overused and ill-defined term.

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The term can include things from kiosks to Internet shopping sites to RSS (Really Simple Syndication) RSS is a feed for blogs, podcasts and other content.

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Current perspective on Internet media: (1) this type of advertising and IBP is growing rapidly, (2) it works, for the most part, in a fundamentally different way: consumers seek out the advertiser/advertising (pull) and then interact (two-way, or multi-way communication) with brand communication, rather than the traditional model where ads intrude in programming and seek consumers out.

F. Social Media. PPT 12-17 here • Social networking o New paradigm exists: marketer to consumer, then consumer to consumer o Fraction of the cost of traditional media o Social media create a “buzz’ and “viral’ effect o Brand conversions are tracked with “net promoter” scores

IV. Media Choice and Integrated Brand Promotions

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A final complicating factor in the media environment is that more firms are adopting an integrated brand promotion perspective, which relies on a broader range of promotion tools. Promotional options such as event sponsorship, direct marketing, sales promotion, and public relations are drawing many firms away from traditional mass media advertising. Some of the more significant implications for media planning to achieve IBP are as follows: A. Madison & Vine Media • Madison & Vine is the merger of entertainment and advertising. • Also referred to as branded entertainment • Began many years ago with product placements in TV and film • Branded entertainment options ..

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--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 PPT 12-19 here PPT 12-20 here B. Data Quality •

There is a big Garbage In Garbage Out issue in media

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We have a cultural hang-up about using numbers to justify decisions—numbers seem to make things more precise.

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In media planning, sophisticated mathematical models are often used—many are referred to as “optimization programs.”

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Media exposure (i.e., being in the room with a medium) data are not a good representation of what it means for someone to be exposed to an ad.

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Nielsen released Project Apollo to provide advertisers with better data.

C. Ads for Advertisers •

One aspect of the advertising process that often gets overlooked is that advertisers advertise for advertisers.

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Text Exhibit12.19 shows an example of how media companies try to lure advertisers. PPT 12-21 here

D. The Media Lunch •

Media buyers will be entertained by media sellers.

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The media business is still a relationship-based, deal-making business.

V. Contemporary Essentials in Media A. Computer Media-Planning Models

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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.

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Major syndicated research services such as Nielsen, Arbitron, MRI, SMRB, and the Audit Bureau of Circulations offer databases (and the software to analyze them) that contain information in identifying target audiences, estimating media costs, and analyzing competitors’ spending.

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The various syndicated services do not, however, offer standardized information that is comparable across media categories. This is where specialized software houses like

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Interactive Market Systems (IMS) and Telmar Information Services offer assistance. Data from these organizations like these are displayed in text Exhibit 12.20. •

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

B. Making the Buy

VI.

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Media buying entails securing the electronic media time and print media space specified in the schedule. All aspects of timing, reach, frequency, and competitive media assessment are evaluated during the scheduling phase.

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Another important part of the media-buying process is the agency of record: the advertising agency chosen by the advertiser to purchase time and space.

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Each spring there is the ritual of the “upfronts” which is where the television networks reveal their fall programming. Advertisers buy about 75 percent of all available time during this upfront period.

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Some advertisers use a media-buying service, which is an independent organization that specializes in buying large blocks of media time and space and reselling it to advertisers.

In Defense of Traditional Advertising

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Traditional advertising, even the “30 Net-TV” ad and the magazine ad, are not dead. They still perform a very valuable function. There are just some things you can’t accomplish without them.

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Sometimes traditional ad qualities get lost in the optimized promotional numbers.

Brand building still needs traditional ads. Yet the traditional ad world has learned that it can never rest on its laurels, nor can the traditional media. However, throwing around planning buzzwords doesn’t work either.

SOLUTIONS TO QUESTIONS FOR REVIEW AND CRITICAL THINKING 1. The opening section of this chapter describes radical changes that have taken place in the world of media planning. Compare and contrast the way things used to be and the way they are now. What factors contributed to this shift? Do you think the job of media planning has become more or less complicated? Explain. In the past, 80 percent of all promotional dollars went to media advertising (television, radio, newspapers, magazine, and outdoors). Ad agencies prepared the ads and bought the media at a 15% discount. The more advertising they could persuade the client to do, the more money they made. Those days are pretty much gone. The 15% commission is largely history, and in its place are negotiated deals that have resulted in thinner margins. There are many new media options, many due to technology advancements. The majority of dollars are not spent on media advertising, but on other promotions. Media planning and buying is often ..

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outsourced. Consolidation in the industry has shifted the channel power to big agencies. Advertisers’ demands for greater accountability and increased ROI are driving trends away from traditional media and toward more quantifiable media like direct mail advertising. Media planners are required to think globally to keep up with international media properties like ESPN, MTV, CNN, and Al Jazeera. Free content on the Web and elsewhere is severely hampering print media, and e-commerce/e-media are empowering consumers like never before. Increased media options have created a clutter situation of crisis proportions, and ethnic media are increasing competition in the field. Do not be mistaken; advertising is not dead. However, good media planning and placement are more important now than ever. 2. Of all the changes taking place in the world of media planning, which do you think will continue to have the greatest impact on the future of the advertising industry? Answers will vary, but the single greatest change may be the proliferation of free content. Consumers will not pay for magazines or other ad-laden media when they can access the same information for free through the Web or other emerging technologies. Continued pressure will be put on traditional advertising media that cannot quantify effectiveness in the way digital-based promotions are now doing. E-commerce has empowered consumers to obtain product information with a precision and depth that traditional advertising communications can’t even begin to compete with. Finally, while the death of the 15% commission has been brutal with regard to agency commissions, much of the damage has been done. It is unclear how the newer fee-for-service deals will continue to affect the industry going forward—a 15% cut may never be normative again. 3. 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? Who is doing the most ad spending? No one knows the exact numbers for sure, but we know that traditional media advertising accounts for around 30–35% of all things promotional. Then there is the relative standing of the various media. One out of every three traditional ad dollars is still spent on television. Although everyone is excited about the Internet, it accounts for a tiny slice of all total spending. As for who is spending: retailers and auto-related businesses spend the most on traditional media. 4. 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 respect 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. 5. 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

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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. 6. 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 general-purpose 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. 7. 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. 8. 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. 9. 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. 10. Discuss the issues raised in this chapter that represent challenges for those who champion integrated brand promotions. Why would central control be required for achieving IBP? If media planners wish to play the role of central controller, what must they do to qualify for the role? ..

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Today’s media planners are challenged by the increasing array of vehicles available to the advertiser. In addition, the IBP perspective encourages the use of more diverse media in achieving marketing objectives. IBP also encourages promotional activities like event sponsorship or direct marketing that have not traditionally fallen under the media planner’s areas of expertise. To speak to the customer with a single voice, and at the same time use multiple vehicles to engage the consumer, someone must coordinate the array of activities. If media planners wish to play the role of central coordinator, they will need to acquire additional expertise with a broad range of communication tools like direct marketing, interactive media, event sponsorship, and public relations.

SOLUTION TO EXPERIENTIAL EXERCISES 1. 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 ecommerce 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. 2. 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 30second 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 ..

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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. 3. 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. 4. 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, Television, and Radio

CHAPTER 13 Media Planning: Newspapers, Magazines, Television, and Radio KEY TERMS display advertising co-op advertising preprinted insert free-standing insert (FSI) classified advertising rate card column inch standard advertising unit (SAU) run-of-paper (ROP), or runof-press preferred position full position circulation paid circulation controlled circulation readership hyper-localism pay-for-inquiry advertising model bleed page gatefold ads first cover page second cover page third cover page

fourth cover page double-page spreads space contract space order closing date on-sale date cover date guaranteed circulation pass-along readership network television cable television video on demand (VOD) off-network syndication first-run syndication barter syndication local television satellite and closed-circuit narrowcasting channel grazing V-chip digital video recorder (DVR) sponsorship participation spot advertising

dayparts television households households using television (HUT) program rating ratings point share of audience direct broadcast by satellite (DBS) radio networks radio syndication local spot radio advertising network radio advertising national spot radio advertising average quarter-hour persons average quarter-hour share average quarter-hour rating cume RADAR (Radio’s All Dimension Audience Research)

SUMMARY Understand the changes taking place in the traditional media of newspapers, magazines, television, and radio relative to new electronic media options. The changes in the advertising industry are tangible and dramatic with respect to advertisers’ use of the traditional media of newspapers, magazines, television, 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 television and radio networks or for

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

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 media—primarily Internet ads—offer a more cost-effective way to reach target markets. In additional, digital media allow advertisers to rapidly make changes in campaigns that might take months to accomplish with traditional media. In addition, 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.

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. However, 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. 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 array of circulation levels achieved by different types of magazines. Detail the pros and cons of television as a media class, identify television categories, and describe buying and audience measurement for television. The four basic forms of television are network, cable, syndicated, and local television. 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 TiVo that allow the viewer to skip commercials make TV advertising nonexistent for many. The three ways that advertisers can buy time are through sponsorship, participation, and spot advertising. 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 television is not an exact science and its methods are often disputed. Detail the pros and cons of radio as a media class, identify radio categories, and describe buying and audience measurement for radio.

Chapter 13/Media Planning: Newspapers, Magazines, Television, and 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 problematic with 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.

CHAPTER OUTLINE INTRODUCTORY SCENARIO: The Present and Future World of “Traditional” Mass Media PPT 13-1, 13-2 here • • • • • •

Change in the ad industry is dramatic within ‘traditional” media of television, radio, newspapers and magazines. Advertisers believe that digital media offer more cost effective way to reach target audiences Digital/interactive media now attract $30 billion annually in advertising revenue that is only 146% of total worldwide media spending, but up from 4% in 2004. Traditional mass media—particularly newspapers--are losing placement to digital media Television has been hit by the shift to digital, but is responding with partnerships with digital organizations. Delta was an advertiser that used both traditional media and digital in its campaign as it emerged from bankruptcy. PPT 13-3 here

Which Media? Strategic Planning Consideration

PPT 13-4 here

The strategic media decision is important for two reasons 1. Advertisers need media to reach target audiences 2. Advertisers media choices direct billions of dollars to media companies This chapter focuses on the challenges advertisers face in evaluating major media audiences as key ways to reach their target audience. • The inherent advantages and disadvantages of each media option are discussed. • While much is said about spending on new media, about 50 percent of all advertising dollars in the United States still go to traditional print, radio, and television media. • The vast majority of non-media money spent on the creative effort is spent 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.

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

II. Print Media 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: •

In 1980, Absolut was selling only 12,000 cases per year.

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Americans associated vodka almost exclusively with Russia.

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Bartenders thought the Absolut bottle was ugly.

Despite these devastating marketing research findings, the president of Carillon Importers assigned the agency handling Absolut to give the brand a personality by making it distinctively upscale. This creative challenge was matched by an equally large media challenge. Spirits advertisers in the United States cannot use television (at that time) or radio advertising, which meant that Absolut advertisements would have to be placed only in print media. •

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. To move things along, Absolut was outspending its rivals in the vodka market, dramatically investing $10.68 per case in advertising, compared to Stolichnaya’s $8.68 per case.

•

In the end, the Absolut campaign was not only a creative masterpiece, but also a resounding market success. By 1994, Absolut had become the leading imported vodka in the United States, selling nearly 2.4 million cases.

The lesson for students here is that not every brand needs a multimedia, new media, interactive, database-managed advertising effort to achieve outstanding communications and sales impact. A. Newspapers Newspaper is the medium that is most accessible to the widest range of advertisers. Exhibit 13.2 shows students the top ten advertisers in newspapers. 1. Advantages of Newspapers.

PPT 13-5 here

Newspapers now reach only about 30 percent of U.S. households, representing about 80 million adults. Key advantages of newspapers are:

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Geographic selectivity.

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Timeliness. Newspapers have short closing times to take advantage of short-term events.

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Creative opportunities. Because the newspaper page offers a large and relatively inexpensive format, there is the opportunity to provide a lot of information to the target audience at relatively low cost.

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Credibility. If it’s in print it must be true.

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

•

Audience interest. Many readers buy the newspaper specifically to see what’s on sale in the local area, making it an ideal environment for local merchants.

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Cost. Both in terms of production and space, newspapers offer a low-cost alternative.

2. Disadvantages of Newspaper

PPT 13-6 here

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Limited segmentation. Newspapers can achieve good geographic selectivity, but the ability to target a specific audience ends there. Circulation cuts across too broad an economic, social, and demographic audience to allow the isolation of specific targets.

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Creative constraints. Newspapers have poor reproduction quality. Newspapers are also a one-dimensional medium—no sound, no action.

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Cluttered environment. Newspapers are filled with headlines, subheads, photos, and announcements—not to mention news stories—a terribly cluttered environment for an advertisement.

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Short life. In most homes, newspapers are read quickly and then discarded.

3. Categories of Newspaper Advertising

PPT 13-7 here

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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.

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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.

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Classified advertising. Classified advertising is newspaper advertising that appears as all-copy messages under categories such as sporting goods, employment, and automobiles.

4. Costs and Buying Procedures for Newspaper Advertising

PPT 13-8 here

When an advertiser wishes to place advertising in a newspaper, the first step is to obtain a rate card, which contains information on costs, closing times (when ads have to be submitted), and specifications for submitting an ad, and special pages or features available in the newspaper.

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Advertising space is sold by column inch, which is a unit of space one inch deep by one column wide. Each column is 2 1/16 inches wide.

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Most newspapers have adopted the standard advertising unit (SAU) system for selling ad space. There are 57 defined SAU sizes for advertisements.

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When an advertiser buys space on a run-of-paper (ROP) basis, the ad may appear anywhere in the paper. A higher rate is charged for a preferred position, in which

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

the ad is placed in a specific section of the paper. Full position places an ad near the top of a page or in the middle of editorial material. 5. Measuring Newspaper Audiences

PPT 13-9 here

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Circulation is the number of newspapers distributed each day (for daily newspapers) or each week (for weekly publications). Paid circulation reports the number of copies sold through subscriptions and newsstand distribution. Controlled circulation refers to the number of copies of the newspaper given away free.

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Readership is a measure of the circulation multiplied by the number of readers of a copy.

6. The Future of Newspapers

PPT 13-10 here

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

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Pursue a pay-per-inquiry advertising model, not unlike websites

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Maintain and expand their role as the best local source for consumers to find specific information on advertised product features, availability, and prices

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Provide the option of shopping through an online newspaper computer service (provide e-Bay like auctions) which will match online classifieds

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Use bloggers to cover local events

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Become more mainstream in integrated brand promotions particularly relating to new digital media

B. Magazines 1. Advantages of Magazines

PPT 13-11 here

Their many advantages lead analysts to conclude that magazines are superior even to broadcast media alternatives. Data on individual magazine circulation and magazine advertisers is provided in Exhibits 13.9 and 13.10. PPT 13-12 here

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Audience selectivity. The overwhelming advantage of magazines relative to other media—print or broadcast—is the ability to target a highly selective audience. This selectivity can be based on demographics (Woman’s Day), lifestyle (Muscle & Fitness), or special interests (Mountain Biking).

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Audience interest. Magazines attract an audience because of content, which has the advantage of voluntary exposure to the advertising.

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Creative opportunities. Magazines offer a wide range of creative opportunities—size of an ad, use of color, use of white space, and special features like fold-out and popup ads.

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

•

Long life. Magazines offer multiple exposure and pass-along readership.

2. Disadvantages of Magazines •

Limited reach and frequency. The selectivity of targeting can be a disadvantage in that a relatively small market will be reached. And, many magazines only publish once a month.

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Clutter. Clutter occurs both within a magazine and within a magazine genre as more new magazines are issued.

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Long lead times. Advertisers are required to submit their ads as much as 90 days in advance.

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Cost. The cost for a single insertion can be prohibitive. For magazines with a large circulation, like Modern Maturity and Good Housekeeping, the cost for a one-time four-color ad runs from $100,000 to about $250,000. PPT 13-13 here

3. Categories of Magazines

PPT 13-14 here

The magazine medium is highly fragmented, with more than 12,000 magazine titles published annually in the United States and literally hundreds of magazines introduced every year. •

Consumer publications. Magazines that appeal to consumer interests run the gamut from international news to sports, education, age-group information, and hobbies. Leading titles are in Exhibit 15.16

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Business publications. The top 10 business magazines are listed in Exhibit 15.17.

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Farm publications. These magazines provide technical information about farming as well as business management articles to improve farmers’ profitability.

4. Costs and Buying Procedures for Magazine Advertising

PPT 13-15 here

As with newspapers, the size of an ad, its position in a publication, its creative execution (black and white, color, or any special techniques), and its placement in a regular or special edition of the magazine all affect costs. The main cost, of course, is based on the magazine’s circulation. Besides standard rates, there is an extra charge for: •

a bleed page where the background color of an ad runs to the edge of the page, replacing the standard white border.

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gatefold ads that fold out of a magazine to display an extra-wide advertisement.

The following key terms are used for placement and payment: •

A run-of-paper advertisement can appear anywhere in the magazine at the discretion of the publisher.

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

•

First cover page is the front cover of a magazine; second cover page is the inside front cover; third cover page is the inside back cover; and fourth cover page is the back cover.

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Double-page spreads are advertisements that bridge two facing pages.

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A space contract establishes a rate for all advertising placed in a publication by an advertiser over a specified period. A space order, also referred to as an insertion order, is a commitment by an advertiser to advertising space in a particular issue.

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The closing date is the date when production-ready advertising materials must be delivered to a publisher for an ad to make an issue.

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The on-sale date is the date on which a magazine is issued to subscribers and for newsstand distribution.

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The cover date is the date of publication appearing on a magazine.

5. Measuring Magazine Audiences

PPT 13-16 here

Most magazines base their published advertising rates on guaranteed circulation, which is a stated minimum number of copies of a particular issue that will be delivered to readers. In addition, publishers estimate pass-along readership, which is an additional number of people, other than the original readers, who may see a publication. 6. The Future of Magazines

PPT 13-17 here

Currently, revenues and ad pages are up, and advertisers are finding the advantages of magazines well suited to their current needs. •

Magazines will, like other media, have to determine how to adapt to new media options: e-readers and e-subscriptions.

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Some publications turning to e-commerce

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Some marketers are publishing their own magazines for greater selectivity.

III. 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. A. Television 1. Television Categories

PPT 13-18 here PPT 13-19 here

Text Exhibit 13.17 shows students spending in the major television categories for 2009 and 2008. Exhibit 13.18 lists the top 10 network TV advertisers.

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Network television. Network television broadcasts programming over airwaves to affiliate stations across the United States under a contract agreement.

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Cable television. Cable television transmits a wide range of programming to subscribers through wires rather than over airwaves. In the United States, more than 70 million households (68 percent of all U.S. households) are wired. Video on

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

demand (VOD) is being considered by cable companies but there is no certainty that advertising can be included in this format. •

Syndicated television. Television syndication is either original programming or programming that first appeared on network television. It is then rebroadcast on either network or cable stations. 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 for free or at a reduced rate to local television stations with some national advertising pre-sold within the programs.

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Local television. Local television is the programming other than the network broadcast that independent stations and network affiliates offer local audiences.

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Satellite/Closed Circuit. New technology offers another version of television to advertisers. Satellite and closed circuit transmission can be sent to highly segmented audiences.

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Web/iPod/Smartphone TV. Since this technology is just emerging, it is difficult to call this a “category.” 1. Video over the Web is showing consumer interest. 2. Hard to know if iPod users will tolerate ads. 3. Smartphone TV seems to have potential as Verizon has aggressive expansion plans, but the fees may limit subscriptions.

2. Advantages of Television •

Creative opportunities. The overriding advantage of television compared to other media is, of course, the ability to send a message using both sight and sound.

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Coverage, reach, and repetition. Television reaches more than 98 percent of all households in the United States. These households represent every demographic, economic, and ethnic segment in the United States, which allows advertisers to achieve broad reach. No other medium allows an advertiser to repeat a message as frequently as television.

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Cost per contact. For advertisers that sell to broadly defined mass markets, television offers a cost-effective way to reach millions of members of a target audience.

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Audience selectivity. Programmers are doing a better job of developing shows that attract well-defined target audiences. Narrowcasting is the development and delivery of specialized programming to well-defined audiences. Cable television is far and away the most selective of the television options.

3. Disadvantages of Television

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PPT 13-21 here

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Fleeting message.

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High absolute cost. The average cost of airtime for a single 30-second television spot during prime time is about $100,000 with popular shows such as American Idol

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

commanding $400,000 for a 30-second spot. The average cost of producing a 30second television spot is around $200,000. •

Poor geographic selectivity.

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Poor audience attitude and attentiveness. —Channel grazing uses the remote control to monitor programming on other channels while an advertisement is broadcast. --V-Chip is a device that can block television programming based on the newly developed program rating system. --DVR/TiVo provides viewers yet another way to avoid ads altogether.

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Clutter. The major television networks run about 15 minutes of advertising during each hour of prime-time programming, and cable broadcasts 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.

4. Buying Procedures for Television Advertising

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Sponsorship. In a sponsorship arrangement, an advertiser agrees to pay for the production of a television program and for most (and often all) of the advertising that appears.

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Participation. Participation means that several different advertisers buy commercial time during a specific television program.

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Spot advertising. Spot advertising refers to all television advertising time purchased from and aired through local television stations.

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Text Exhibit 13.20 shows that programming times are broken into dayparts, which represent segments of time during a television broadcast day.

5. Measuring Television Audiences

PPT 13-23 through 13-26 here

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Television households. Television households is an estimate of the number of households that are in a market and own a television.

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Households using television. 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.

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Program rating. A program rating is the percentage of television 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: 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.

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

•

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.

6. Controversy in Television Measurement.

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The advent of DVRs has caused some controversy between advertisers and rating services like Nielsen Media. Advertisers want to be sure that they are not paying for viewers who have ways of completely avoiding advertising while they watch. 7. The Future of Television PPT 13-28 here • Interactive era will affect TV as an advertising medium • DVRs increase viewer satisfaction but may compromise advertising • Increase in direct broadcast by satellite • HDTV increases viewer satisfaction • Massive consolidation of media companies into many TV categories B. Radio

PPT 13-29 here

1. Radio Categories •

Networks. Radio networks operate much like television networks. They deliver programming by satellite to affiliate stations across the United States.

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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.

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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 listeners prefer.

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Satellite Radio. Satellite radio provides all sorts of advantages to the listener and none to advertisers. As of 2010 Sirius had grown to over 20 million subscribers. Internet Radio. Internet radio was launched because the technology was available. Cost of programming may kill this radio option. PPT 13-30 here

2. Types of Radio Advertising

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In local spot radio advertising, an advertiser places advertisements directly with individual stations rather than with a network or syndicate.

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Network radio advertising is placed within national network programs. There are few network radio programs being broadcast.

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National spot radio advertising offers an advertiser the opportunity to place advertising in nationally syndicated radio programming.

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

3. Advantages of Radio

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Cost. From both a cost-per-contact and absolute-cost basis, radio is often the most cost-effective medium for an advertiser.

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Reach and frequency. Radio has the widest exposure of any medium. The low cost of radio time gives advertisers the opportunity to repeat messages frequently and affordably.

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Target audience selectivity. Radio can selectively target audiences on a geographic, demographic, and psychographic basis. The narrow transmission of local radio stations gives advertisers the best opportunity to reach narrowly defined geographic audiences.

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Flexibility and timeliness. Radio is the most flexible medium because of very short closing periods for submitting an ad.

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Creative opportunities. Recall that radio has been described as the theater of the mind.

4. Disadvantages of Radio •

Poor audience attentiveness. Remember also that radio has also been described as “verbal wallpaper.” It provides a comfortable background distraction.

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Creative limitations. Although the theater of the mind may be a wonderful creative opportunity, the audio-only nature of radio communication is a tremendous creative compromise.

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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.

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Chaotic buying procedures. Because national networks and syndicated broadcasts do not reach every geographic market, an advertiser has to buy time in individual markets station by station.

6. Measuring Radio Audiences

PPT 13-32 here

Several specific measures are used:

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Average quarter-hour persons: The average number of listeners tuned to a station during a specified 15-minute segment of a daypart.

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Average quarter-hour share: The percentage of the total radio audience that was listening to a radio station during a specified quarter-hour daypart.

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Average quarter-hour rating: The audience during a quarter-hour daypart expressed as a percentage of the population of the measurement area. This provides an estimate of the popularity of each station in an area.

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Cume: The cumulative audience, the total number of different people who listen to a station for at least 5 minutes in a quarter-hour period within a specified daypart. Cume is the best estimate of the reach of a station.

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

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RADAR (Radio’s All Dimension Audience Research). This is measurement sponsored by major radio networks and collects audience data twice a year based on interviews with radio listeners.

7. The Future of Radio

PPT 13-33 here

Several areas to watch are: subscription satellite radio, emerging technologies (Internet radio, mobile access, and HD radio), and like television, consolidation.

SOLUTIONS TO 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 messages – 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. 2. 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. About 52 percent of American adults say they read a daily newspaper today, down from 78 percent in 1970. 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 – total ad spending in newspapers has dropped from about 23 percent to 18 percent – and the newspaper industry has struggled to find ways to recoup that lost revenue from its online business models. 3. 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 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 they have 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

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

traditional campaign into a new medium. There are also many shrines to Absolut’s advertising on the World Wide Web: For a sample, check out http://www.absolutad.com. 4. Peruse several recent editions of your town’s newspaper and select three examples of co-op advertising. What objectives do you believe the manufacturers and retailers are attempting to achieve in each of the three ads you’ve selected? This exercise in pulling cooperative ads will help students get a hands-on appreciation for this valuable tool. In the cooperative ads, students should see that part of the goal is brand building for the manufacturer. Equally important, they should see that retailers (and in many cases, specific retail locations) are featured as part of these ads. These ads reflect a partnership between manufacturers and their retailers. From the manufacturer’s perspective, recruiting retailers to form this partnership can be more important than the actual impact of the advertising per se. Cooperative advertising is an important vehicle for promoting balance in the relationship between manufacturers and retailers in a world where the balance of power has been shifting to the retailer. 5. 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. 6. 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. 7. 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 be a fun question to discuss with the class because most people can relate to the desire to avoid

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

exposure to TV ads. Students usually have some funny anecdotes about avoidance behavior they have observed in their households. 8. The choice between print and broadcast media is often portrayed as a choice between high- and 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. 9. 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. 10. 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.

SOLUTION TO EXPERIENTIAL EXERCISES 1. Since 1970, Mother Earth News has been the magazine of choice for environmental-minded 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.

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

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. 2. 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. 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-per-inquiry 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

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

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.) 4. 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/Interactive Media

CHAPTER 14 Media Planning: Advertising and IBP in Digital/Interactive Media KEY TERMS WiFi WiMax Mi-Fi (Mobile-Fi) Ultrabroadband opt-in email spam World Wide Web (WWW) surfing search engine portal website mash-up

blog blogger click-through paid search search engine optimization (SEO) display/banner ads sponsorship pop-up ad splash screen pop-under ad rich media/video and audio corporate/brand home page

widget Second Life/ virtual worlds permission marketing viral marketing mobile marketing virtual mall e-commerce hits page views visits unique visitors Web analytic software click fraud

SUMMARY Understand the current role of digital and interactive media in advertising and IBP. First, it is unlikely that digital and interactive media will replace all other forms of advertising and promotion. It is even unlikely that the biggest spenders on advertising and promotion will use the digital and interactive media as the main method of communicating with target audiences. Second, technologies and opportunities are changing dramatically regarding all aspects of these new media. Auction sites like eBay have provided huge opportunities for small business all over the world. Web 3.0 and its social networking affinity provide a whole new way of delivering promotional messages. Consumers’ mobile devices offer the opportunity to communicate in ways that have not existed before. Third, the structure of digital and interactive media as advertising and IBP options offer ways for advertisers to both create and deliver messages that are significantly different from traditional mass media. Identify the advantages of using digital and interactive media for implementing advertising and promotion campaigns. Digital and interactive media have several advantages for delivering advertising and IBP campaigns: target market selectivity, tracking, deliverability, flexibility, reach, interactivity, and integration.

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

Target Market Selectivity. The Web offers advertisers a way to target market segments very precisely. This precision allows targeting that is more finely tuned than traditional segmentation schemes such as demographics, geographics, and psychographics. Advertisers can focus on specific interest areas of Internet users and can also target users based on geographic regions (including global), time of day, computer platform, or browser. Tracking. The Internet allows advertisers to track how users interact with their brands and learn what interests current and potential customers. Deliverability, Flexibility, and Reach. Online advertising and website content is delivered 24hours a day, seven days a week, at the convenience of the receiver. Whenever receivers are logged on and active, advertising is there and ready to greet them. A campaign can be tracked on a daily basis and updated, changed, or replaced almost immediately. In addition, the Internet is immediately a global medium unlike any traditional media option. Interactivity. A marketer is able to engage a prospective customer with the brand and the firm with Internet advertising in a way that just cannot be accomplished in traditional media. A consumer can go to a company website or click through from a display/banner ad and take a tour of the brand’s features and values. Integration. Web advertising is the most easily integrated and coordinated with other forms of promotion. In the most basic sense, all traditional media advertising being used by a marketer can carry the website URL. Web display/banner ads can highlight themes and images from television or print campaigns. Special events or contests can be featured in display/banner ads and on websites. Overall, the integration of Web activities with other components of the marketing mix is one of the easiest integration tasks in the IBP process.

Describe the different advertising options available through digital and interactive media on the Internet. 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. Display/banner ads are paid placements of advertising on other sites that contain editorial material. These ads allow advertisers to have their brands associated with popular websites. Sponsorship occurs when a firm pays to maintain a section of a site. In some instances a firm may also provide content for a site along with sponsorship. A pop-up/pop-under ad is an Internet advertisement that appears as a website page is loading or after a page has loaded. Through email, the Internet is the only mass medium capable of customizing a message for thousands or even millions of receivers delivered directly to each receiver. Rich media/video and audio is the process of inserting TV- and radio-like ads into music and video clips that advertisers send to Web users as they visit content networks.

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

A corporate/brand home pages are websites where a marketer provides current and potential customers with information about the firm in great detail. These websites can also function as ecommerce sites if consumers can order products directly. A widget is a module of software that people can drag and drop on to their personal Web page of their social network (e.g., Facebook) or on to a blog. Advertisers can create widgets that feature their brands or that direct the widget clicker to an e-commerce site. Second Life/virtual worlds are online virtual venues where participants log into a space, then use their mouse and keyboard to roam landscapes, chat, create virtual homes, or conduct real business. Participants “exist” in Second Life and other virtual worlds as avatars—on screen graphic characters. Advertisers can create billboards, virtual storefronts, or “islands” within the virtual world and avatars can wear branded apparel or use branded items. Video games. Video games offer an attractive option for advertisers because they reach the elusive 18-to-34-year-old-male segment that has abandoned many traditional media for digital media. Advertisers insert brand logos or brand packages into the video games to gain more “natural” exposure to the brand. Discuss the different ways Integrated Brand Promotion tools (other than advertising) can use digital and interactive media. Literally every form of IBP can use digital and interactive media in some way. Sales promotions can be implemented through web distribution of coupons, premium offers, or web based contests. Public relations press releases are easily posted on the Web. Direct marketing is used for e-commerce efforts by firms and is implemented through email, mobile marketing or overall online retailing. Personal selling can use digital and interactive media to facilitate communication between a firm and its customers. Discuss issues related to the future of advertising and IBP using digital and interactive media. The future of advertising and IBP using digital and interactive media is directly link to the continued evolution of technology and consumers’ adoption of new technology. Wireless communication and Web launched audio and video are likely to have the biggest impact on advertising and IBP opportunities. The merger of big powerful media companies—particularly those media companies that own both traditional media and digital media properties—will also impact options for reaching consumers. Finally, consumers’ affinity for social networking sites and marketers’ desires to incorporate brands in more natural settings will make these sites heavily pursued by marketers.

CHAPTER OUTLINE ..

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

INTRODUCTORY SCENARIO: Racing Through the Web

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Students should find this scenario about NASCAR and Miss Sprint Cup entertaining and relevant. The scenario highlights how a big, aggressive marketing organization has found a way to use new digital/interactive media—Facebook and Twitter—to engage consumers with the brand. The main points to make with students are as follows: •

Sprint is using social media and a brand icon—Miss Sprint Cup—to engage consumers in a way that traditional media are unable to.

•

The communications from and through Miss Sprint Cup are not specifically brand feature oriented regarding Sprint products, but rather create visibility and affinity for the brand.

•

Finally, the power of using these types of new digital/interactive media is that consumers seek out the contact with the brand rather than the marketer “pushing” brand information on to the consumer as television, radio, newspapers or magazines would.

I. No Wires Means New Rules

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Digital and interactive media options are made possible because of the Internet. Business-to business e-commerce is $4 trillion annually and consumer e-commerce is $300 billion annually. The central discussion here should focus on the technological progression of access to the Internet and what it means relative to the Web as a digital/interactive advertising and IBP medium. Be sure students understand these variations: •

WiFi became widely popular in 2004 because it provided wireless Internet access connections reaching out about 300 feet.

•

WiMax is similar to WiFi in that both create wireless “hot spots” around a central antenna with one major difference—WiMax has a range of 25–30 miles! WiMax is spreading more rapidly outside the U.S. due to communication interference problems that are being worked out in the U.S.

•

Mi-Fi (Mobile-Fi) is similar to WiMax in that it has a multi-mile access but adds the capability of accessing the Net while the user is moving in a car or a train.

•

Ultrabroadband is a technology that will allow people to move extremely large files quickly over short distances. On the road, a driver could download a large file from an onboard PC to a handheld computer. Or, at home, you could do a wireless upload of your favorite concert from your PC to your TV. •

An important take-away is that with this new technology, consumers can be reached through the Internet in more mobile settings through their smartphones and other mobile devices but will they accept the intrusion?

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

II. The Role of Digital/Interactive Media in the Advertising and IBP Process A few key points here PPT 14-3 here 1. The Internet is not going to take over all other advertising media as some predicted. 2. Advertisers are discovering ways to use the Internet as a key component of integrated brand promotions. 3. Auction sites like eBay are providing small business with new opportunities. 4. Web 3.0 social networking provides a whole new way of communicating commercial messages from a technological standpoint, but from a strategic standpoint the venue is still mostly unknown regarding effectiveness III. The (R)evolution of the Internet

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Technology has the power to change everything and the Internet has changed something fundamental about human existence. This is a short “history” of the Internet to provide students some perspective •

The Internet has connected consumers and empowered them to control at least part of the commercial information flow directed to them (recall Chapters 1 and 2).

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In 1994, the first Internet providers began to offer services to consumers and progressed through 2000, then retreated, then re-emerged with strength beginning in 2004

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Today the Internet is accessed worldwide by over 1.8 billion users. Advertising revenues are estimated to grow to about $40 billion by 2012.

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The Internet is a valuable medium to companies of all sizes and consumers.—Text Exhibit 14.3 provides stats on worldwide Internet usage.

IV. Using Internet Digital/Interactive Media: The Basics

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Most students think they know all about the Internet because they use it on a daily basis. It is worth taking them through the basics to provide perspective and context. •

The Internet is a global collection of computer networks linking both public and private computer systems.

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It was originally designed by the U.S. military to be a decentralized, highly redundant, and thus reliable communications system in the event of a national emergency.

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Today the Internet is composed of a combination of computers from governmental, educational, military, and commercial sources. Internet connection has risen from 2 million in 1994 to 5 million in 1995 to about 10 million in 1996 to about 945 million worldwide by 2004. Estimates put connectivity at 1.8 billion as of 2009.

•

It is worth pointing out to students from Exhibit 14.3 that estimates the Internet users worldwide in 2009 that still only about 26% of the world is connected—a stat they will likely find surprising—they think literally everyone is connected.

A. Digital/Interactive Media There are several ways for advertisers to communicate with consumers using the Internet. Three will be discussed here: Email, Usenet, and the World Wide Web.

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

1. Email. Email is an Internet function that allows users to communicate much as they do using standard mail. Advertisers, of course, use this function of the Internet to communicate their messages. A variety of companies collect email addresses and profiles that will allow advertisers to direct email to a specific group. a. Opt-in Email. A list of consumers who have given permission to have email sent to them about topics that interest them. Consumers’ vigorously negative response to spam has motivated many firms to use only opt-in lists. b. Spam. Uninvited email commercial messages. Again, the fraudulent spamming practice called “phishing” should be highlighted here. Spam is now estimated at 14.5 billion messages daily but spam persists because consumers respond to 3-5 percent of spam messages—about double the rate for direct mail. 2. World Wide Web. The World Wide Web (WWW) is a universal database of information available to most Internet users, and its graphical environment makes navigation simple and exciting. •

Of all the options available for Internet advertisers, the WWW holds the greatest potential.

It supports detailed and full-color graphics, audio transmission, the delivery of in-depth messages, 24-hour availability, and two-way information exchanges between the advertiser and customer. • Surfing the World Wide Web By using software such as Internet Explorer or Modzilla, consumers can input addresses of websites they wish to visit and directly access information. However, the Web is a library with no card catalog. There is no central authority that lists where specific sites are located. This condition leads to surfing—gliding from home page to home page. To use a search engine, a user types in a few keywords, and the search engine then finds all sites that correlate with the keywords. PPT 14-6 here B. Portals • •

•

A portal is a starting point for Web access and search. Portals can be general, like Yahoo!; vertical (serving a specialized market or industries, such as Jobster, http://www.jobster.com, for employment opportunities); horizontal (providing access and links across industries, such as Verticalnet, with access to business trade communities); or community-based such as Latina Online Big portals like Google have 8 billion pages in their search indexes, PPT 14-7 here

C. Personal Websites and Blogs. PPT 14-8 here • Website is a collection of Web pages, images, videos, and other digital content that is hosted on a Web server. A variation of the standard website is the “mash-up.” A mash-up is the combination of one or more Websites into a single site. An example is Chicagocrime.org, where local crime statistics are overlaid on GoogleMaps so you

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

• •

can see what crimes have been committed in your neighborhood. Many people have created their own Web pages that list their favorite sites. A blog, a short form for Weblog, is a personal journal that is frequently updated and intended for public access and accessible at a personal website. • Lots of publicity, but 88 percent of Internet users never read a blog.

V. Advertising on Digital/Interactive Media

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In 1995, $54.7 million was spent on advertising on the Web. By 1998 that number had grown to about $2 billion, by 2003 that had risen to $7.25 billion, estimates place advertising on the Internet at $23 billion in 2010. But, help students keep perspective: about $350 billion was spent on traditional major media, Web advertising only amounts to 6-8 percent of all advertising in the U.S. and less than 5 percent of all promotion dollars. A. The Advantages of Digital/Interactive Media Advertising

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1. Target Market Selectivity. The Web offers advertisers a new and precise way to target segments. Marketers can target based on interests, geographic regions, time of day, pyschographics, digital platform, or browser. The technology in mobile devices (GPS) now allows advertisers to target consumers near purchase points. 2. Tracking. The Internet allows tracking of consumers’ movements in ways that are not available in traditional media. 3. Deliverability, Flexibility, Reach. Online advertising can be delivered 24-hours a day, 7 days a week. In addition, advertising can be tracked, changed, or replaced almost immediately. Digital and interactive media offer global reach by definition. 4. Interactivity. The Internet can engage consumers in ways that are not possible in traditional media. A click-through is a measure of the number of page elements that have actually been requested. 5. Integration. Web advertising can be easily integrated with other forms of promotion. The Web is one of the easiest components to integrate in the IBP process due to deliverability and flexibility. Social media like Facebook are providing even greater integration opportunities. B. The Cost of Internet Advertising

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On a cost per thousand (CPM) basis, the cost of Web ads for the most part compare favorably with ads placed in traditional media—not a huge savings as intuition may suggest. Text Exhibit 14.10 gives a rough comparison to traditional media. The real attraction of the Web is not in real numbers, but in the audience, which is highly desirable, segmentable, and highly motivated (see Text Exhibit 14.11). C. Types of Digital/Interactive Internet Advertising

PPT 14-12 here

There are many ways for advertisers to post advertising messages on the Web.

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

1. Paid Search. Paid search is the process by which companies pay Web search engines and portals to place ads in or near relevant search results from a surfer’s search. Paid search has grown astronomically and reached $15 billion by 2010. The catalyst for growth in paid search has been the success of Google’s technology allowing placement for paid search and tracking of paid search results. An element of paid search is search engine optimization (SEO). SEO is a process whereby the volume and quality of traffic to a website from search engines is improved based on surfers’ profiles. Basically, the higher a site is presented in a surfer’s search results, the more likely surfers are to visit that site. 2. Display/Banner Ads: Display/Banner ads are paid placements on other sites that contain editorial material. An additional feature of banner ads is that consumers not only see the ad but also can make a quick trip to the advertiser’s home page by clicking on the ad. 3. Sponsorship. Sponsorship occurs when a firm pays to maintain a section of a website. In some instances, a firm may also provide content for a site along with sponsorship. 4. Pop-Up/Pop-Under Ads. A pop-up ad is an advertisement that appears on a website page as it is loading or after it has loaded. A variation of the pop-up is the interstitial which appears on a site after the site page has been requested, but before it has loaded. Pop-under ads are ads that are present “under” the Web user’s active screen and are visible only once the surfer leaves the original website. 5. Rich Media/Video and Audio. This is the process of inserting TV- and radio-like ads through streaming technology that is activated when a surfers mouse passes over the ad. Research shows that streaming technology increases click through rates. 6. Corporate/Brand Home Pages. A corporate home page that focuses on the entire corporation and all of its brands. A brand-oriented site features a single brand and makes it possible for consumers to evaluate individual brand characteristics. 7. Widgets. A very new piece of technology that has potential as an advertising option is a “widget.” A widget is a module of software that people can drag and drop on to their personal Web page of their social network (e.g., Facebook) or on to a blog. Widgets look like a website window, but carry the power of a full website. 8. Second Life/Virtual Worlds. A new Internet option available to advertisers is within virtual worlds. The most prominent of the virtual worlds is Second Life, an online virtual world where participants log into a space, then use their mouse and keyboard to roam landscapes, chat, create virtual homes, or conduct real business. Participants “exist” in Second Life as avatars—onscreen graphical characters. It is unknown if advertising will be accepted by participants in virtual worlds. 9. Video Games. Placing ads in the form of logos, billboards or brand packaging within video games is popular option for advertisers because they can reach the hard to reach 18-34 male segment. There is some question as to whether ads are noticed in the heat of game competition. VI. Integrated Brand Promotion Tools and Digital/Interactive Media

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

A. Sales Promotion on the Internet 1. Coupons • Easier/ lower cost distribution • Higher redemption rates 2. Contests and sweepstakes • Coordinated with off-line programs • Interactive media facilitates participation • Digital media facilitates partnerships 3. Sampling, trial offers, price-off deals • Ease of consumer access • Promoted with advertising tools—pop-ups, etc.

PPT 14-13 here

B. Public Relations and Publicity

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• • • •

Classic PR news dissemination Highly targeted press releases Global distribution is inexpensive and instant Variety of Web organizations exist to facilitate PR programs

C. Direct Marketing/E-Commerce

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1. Email • Customized/target messages • Better with opt-in lists 2. Mobile marketing • Smartphone, MP3, laptop tablet message transmission • Video, TV reception and use by consumers • Surprisingly favorable consumer response 3. Virtual malls • Gateways to Internet storefronts 4. E-commerce and Online Retailing • B-to-B as well as consumer commerce • Direct selling from websites as well as promotion

D. Personal Selling PPT 14-16 here • Seems like a misnomer • Digital/interactive media used to facilitate sales staff contact with customers • VII. Using Social Media for Advertising/IBP •

Social media use by consumers is huge and global o Facebook alone has 500 million users worldwide

PPT 14-17 here

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

• • •

Demographics are broader, more diverse than expected o Fastest growing segments are 50+ years old Big firms having some success o Ford Fiesta Movement, MyStarbucks, Pepsi Refresh Everything Does brand exposure at social network sites build brand awareness and affinity? o This is multi-billion dollar question

VIII. Issues in Developing a Website

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Setting up a website can be done quite easily;

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Setting up a commercially viable one is a lot harder and a lot more expensive. The top commercial sites today cost $1 million to develop, about $4.9 million to launch, and $500,000 to a $ 1 million a year to maintain.

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There are actually some inexpensive ways of setting up a website and finding hosts to maintain it for small- and medium-sized businesses. Firms like 1&1 can provide a full range of services for the small business at a low cost.

•

Websites not reserved for consumer brands—B-to-B firms rely on websites to communicate about brand and service attributes.

IX. Measuring the Effectiveness of Digital/Interactive Advertising and IBP PPT 14-19 here The information a website typically gets when a user connects with a site is the IP address of the Internet site that is requesting the page, what page is requested, and at what time. A. Measurement Terminology Several terms, such as hits, pages, visits, and users are used in Web audience measurement. 1. Hits provide almost no indication of actual Web traffic. When a user requests a page with four graphical images, it counts as five hits. Thus, by inflating the number of images, a site can quickly pull up its hit count. Thus, hits do not translate into the number of people visiting a site. 2. Page views are defined as the pages (technically the html files) sent to the requesting site. However, if a downloaded page occupies several screens, there is no indication that the requester examined the entire page. 3. Visits are the number of occasions on which a user X looked up Y site during Z time. Users are the number of different people visiting X site during Y time. 4. Unique Visitors Unique visitors are the number of different “people” visiting a site (a new user is determined from the user’s registration with the site) during a specified period of time. 5. Web analytic software is measurement software that not only provides information on hits, pages, visits, and users, but also lets the site track audience traffic within the site. A site could determine which pages are popular and expand on them. It is also possible to

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

track the behavior of people as they go through the site, thus providing inferential information on what people find appealing and unappealing. 6. New Methods. Advertisers are demanding better accountability of Web reach and consumer use. Companies like Arbitron and Net Ratings are starting to generate the type of data advertisers want. The methods rely on tracking the behavior of a sample of “Internet families” and projecting their behavior to a larger universe. The technique is designed to establish more accurate reach numbers. A list of companies providing measurement services is provided on page 521-522. B. Internet, Data, Measurement and Click Fraud

PPT 14-20 here

•

Impressions. The number of times a page with an advertiser’s ad is viewed. Unfortunately, this really is only a measure of “hits” to the page. Usually priced in flat fees.

•

Pay-per-click. Basically the same as impressions.

•

Click-throughs. This is the most rigorous measure because user must click on the ad and go directly to the advertiser’s site.

•

Click Fraud. This is an increasingly difficult problem. Web advertisers are victimized by bogus visits to ads or websites when they are on a pay-per-click program.

X. Managing the Brand in an E-Community

PPT 14-21 here

•

Aside from the shopping aspect, the Internet provides consumers with a convenient and efficient way to communicate with each other. The growing concept of “brand communities” talked about earlier in the book is manifest in the Web as well.

•

Social networks are energizing brand communities

•

The relevance for advertisers is that the members of these communities like to communicate with one another. This has two implications. First, the corporate or brand Web page allows for the chance for an advertiser to set up a listserv. Second, this is an ideal chance for advertisers to try to stimulate positive word-of-mouth because of the speed and convenience of communication. PPT 14-22 here

XI. The Future of Advertising and IBP on the Internet

PPT 14-23 here

From a technological standpoint, two technologies, wireless communication and Weblaunched video, will have the biggest impact.

•

Introduction of new technologies such as wireless communication and web launched video/audio are new opportunities

•

Mergers and partnerships (Microsoft and Yahoo!?) would facilitate delivery of campaigns

•

Merging of traditional and new media with wireless communication technology for “broadcast web” offers a new venue for advertising-like messages

•

As more consumers use mobile devices, the potential of location based mobile

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

marketing for advertising and IBP campaigns (e.g. Foursquare) offer advertisers new ways to deliver messages and IBP campaigns at the point of purchase

SOLUTIONS TO 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. 2. 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: Can an advertiser be hip and contemporary without a presence on the World Wide Web? 3. 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 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

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

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. 5. 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. 6. 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. 7. Visit some of the corporate home pages and websites described in this chapter, or think about 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?

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

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. 9. 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 a 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-throughs mean 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 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.

SOLUTION TO 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

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

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-topeer networking with trial offers, sweepstakes, and other sales promotion are effective at creating brand-loyal communities.

2. 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, 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. 4. 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

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

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 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 off-line IBP.

END OF PART ACTIVITY (Pages 530 – 533) Part Four: Planning The Media Grading Rubric

INTRODUCTION Does the introduction make the reader want to read the paper? Does the introduction address the appropriate audience? Does the introduction provide a clear and appropriate purpose statement? Does the introduction provide an overview of what’s to come? Does the introduction clearly transition into the next section?

Yes

Somewhat

Pts

MEDIA STRATEGY Does the media strategy provide an introduction to the section? Does the media strategy provide a description of Mystic’s brand personality? Does the brand personality description relate to the scenario provided? Does the media strategy show an understanding of what Mystic is attempting to accomplish? Does the media strategy provide a set of Mystic’s media objectives? Does the media strategy expand upon Mystic’s objectives with additional information and possible objectives? Does the media strategy provide information concerning the media strategy of Mystic’s competitors? Does the media strategy provide a comparison and contrast between Mystic’s media strategy and those of its competitors? Does the comparison and contrast between Mystic’s media strategy and its competitors make sense? Does the media strategy transition neatly into the next section?

Yes

Somewhat

Total No

Pts

MEDIA ANALYSIS Does the media analysis section provide an introduction to the section? Does the introduction provide an overview of the section? Does the introduction list the media options available in Mystic’s geographic area?

Yes

Somewhat

Total No

Pts

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

For each traditional media option, does the section provide an overview of that media option? For each traditional media option, does the section provide an analysis of that media option? For each traditional media option, does the section provide an overview of the advantages and disadvantages of that media option? For each Internet, digital and/or interactive media option, does the section provide an overview of that media option? For each Internet, digital and/or interactive media option, does the section provide an analysis of that media option? For each Internet, digital and/or interactive media option, does the section provide an overview of the advantages and disadvantages of that media option? For each alternative media option, does the section provide an overview of that media option? For each alternative media option, does the section provide an analysis of that media option? For each alternative media option, does the section provide an overview of the advantages and disadvantages of that media option? Does the media analysis section transition neatly into the next section? MEDIA AND ADVERTISING RECOMMENDATIONS Is there an introduction to the media recommendations section? Does this introduction provide an overview of what is to come? Are there recommendations for traditional media to be utilized by Mystic? Are there recommendations for vehicles within the traditional media suggested? Are there recommendations for the length of time to use the traditional media suggested? Is there justification for the traditional media recommended to Mystic? Is there a cost associated with the traditional media suggested? Are there recommendations for Internet, digital and/or interactive media to be utilized by Mystic? Does the section provide advertising recommendations associated with the traditional media? Do the advertising recommendations provided account for Mystic’s clear advertising message? Are there recommendations for vehicles within the Internet, digital and/or interactive media suggested? Are there recommendations for the length of time to use the Internet, digital and/or interactive media suggested? Is there justification for the Internet, digital and/or interactive media recommended to Mystic? Is there a cost associated with the Internet, digital and/or interactive media suggested? Does the section provide advertising recommendations associated with the Internet, digital and/or interactive media? Do the advertising recommendations provided account for Mystic’s clear advertising message? Are there recommendations for alternative media to be utilized by Mystic? Are there recommendations for vehicles within the alternative media suggested? Are there recommendations for the length of time to use the alternative media suggested? Is there justification for the alternative media recommended to Mystic? Is there a cost associated with the alternative media suggested? Does the section provide advertising recommendations associated with the

Yes

Somewhat

Total No

Pts

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

alternative media? Do the advertising recommendations provided account for Mystic’s clear advertising message? Does the section conclude with an analysis of the cost associated with the recommendations? If the cost is greater than the budget, is there a justification for this cost? Does the media recommendation section transition cleanly into the conclusion? CONCLUSION Does the conclusion provide a brief summary of the paper? Does the conclusion provide an overview of what the reader should take away from reading the paper? Does the conclusion provide an overview of how the group can execute the media plan? Does the conclusion provide an overview of what the group can provide in the future?

Yes

Somewhat

Total No

Pts

PAPER QUALITY Does the paper properly cite using APA style? (If no, then an automatic 0 in paper quality) Does the paper have a references section with complete references? Does the paper appear to have an appropriate number of references? Is the paper well-written? Is the paper relatively misspelling-free? (no more than five noticeable misspellings) Is the paper relatively grammatically correct? (no more than five noticeable grammar mistakes) Can I tell which sections were written by different people? Does the paper have appropriate section and subsection headings? Does the paper follow appropriate formatting requirements (i.e. 1 inch margins, 11 or 12 point font, page numbers, single-spacing, space between paragraphs)? Is there a table of contents? Is there an executive summary of the paper? Are there organized appendices with appropriate materials? Does the paper appear to be an appropriate length? Is there a logical flow to the paper? Is there a title page with a title and author names? Are there page numbers? Is the paper written and presented in an interesting fashion (i.e. with pictures, charts, title page, etc.)? Does the paper appear to be of professional quality?

Yes

Somewhat

Total No

Pts

Total

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

PART 5 Integrated Brand Promotion Once again, it is time to alert students to a major shift in the study of advertising and IBP. 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 newspaper sampling on-package sampling mobile sampling trial offers rebate frequency programs push strategy push money merchandise allowances slotting fees bill-back allowances off-invoice allowances cooperative advertising

trade shows point-of-purchase (P-O-P) advertising short-term promotional displays permanent long-term displays support media riding the boards transit advertising out-of-home media 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 than advertising. 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 main sales promotion techniques used in the consumer market.

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

Sales promotions directed at consumers can serve various goals. For example, they can be 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, phone and gift cards, and premiums provide obvious incentives for purchase. Contests, sweepstakes, and product (brand) placements within television, film, video, and video games can be excellent devices for stimulating brand interest. A variety of sampling techniques are available to get a product into the hands of the target audience. Rebates and frequency programs provide rewards for repeat purchase. New digital/interactive opportunities created by mobile devices have contributed to the use of a variety of sales promotion techniques. Describe the main 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 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 the 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 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 long-term displays, which are intended to provide point-of-purchase presentation for more than six months. In trade and business markets, P-O-P displays encourage retailers to support one manufacturer’s brand

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

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 more potent as a mobile marketing tool because 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 plan. The traditional support media include billboard, transit, aerial, 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, primarily the Yellow Pages directories, can be a sound investment because it helps a committed customer locate an advertiser’s product. Finally, packaging can be considered in the support media category because the brand’s package carries important information for consumer choice at the point of purchase including the brand logo and “look and feel” of the brand.

LECTURE ALERT - THIS IS A LONG LECTURE AND AN EXTENSIVE SET OF PPT. YOU MAY WANT TO CONSIDER TWO DAYS TO COVER THIS MATERIAL. ALSO NOTE, THE NEXT CHAPTER LECTURE IS SHORT AND TIGHTLY FOCUSED WITH A SHORT SLIDE DECK REQUIRING PERHAPS HALF A DAY LECTURE.

PART 5: INTEGRATED BRAND PROMOTION

PPT 15-1 AND 15-2

HERE

At this point, it is important to alert students that another major transition in the study of advertising and IBP takes place. After learning about the process of advertising and IBP (Part 1), the planning of advertising and IBP materials (Part 2), executing on 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 these other IBP tools have been addressed throughout the first four parts of the text, the part offers detailed descriptions and strategic implications of using a wide variety of IBP tools. Emphasize to students 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

CHAPTER OUTLINE

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

INTRODUCTORY SCENARIO: OK. This is Getting a Little Weird This scenario highlights the evolution of IBP tools based on the fact that new technologies are offering new opportunities to marketers. A series of examples are offered describing how mobile devices can be used as part of overall IBP campaigns. •

e-Readers can deliver coupons to consumers for retailers in close geographic proximity

•

Hotels can key room features to traveler’s preferences based on frequency program profiles.

•

Text messages can be sent to consumers as they enter grocery stores based on GPS location technologies in smartphones alerting consumers to deals on preferred brands.

•

About 1/3 of all consumer searches on Google are local in nature creating the potential for making these location-based promotions highly effective.

I. Sales Promotion Defined

PPT 15-3 here

Sales promotion is the use of incentive techniques that create a perception of greater brand value among consumers or members of the trade channel. Sales promotions like coupons, giveaways, contests and sweepstakes can give energy to advertising and IBP campaigns. Consumer-market sales promotion includes coupons, price-off deals, premiums, contests and sweepstakes, sampling and trial offers, product placements, refunds, rebates, and frequency programs. All are ways of inducing household consumers to purchase a firm’s brand rather than a competitor’s brand. Trade-market sales promotion uses point-of-purchase displays, incentives, allowances, trade shows, or cooperative advertising as ways of motivating distributors, wholesalers, and retailers to stock and feature a firm’s brand in their merchandising programs. Business-market sales promotion is designed to cultivate buyers in large corporations who are making purchasing decisions about a wide array of products. The techniques are similar to trade-market sales promotions. PPT 15-4 here

II. The Importance and Growth of Sales Promotion Sales promotion is designed to affect demand differently than advertising. The role of sales promotion is to elicit an immediate purchase from a customer. The goals for sales promotion versus advertising are compared in text Exhibit 15.3. PPT 15-5 here Text Exhibit 15.3: The Purposes of Sales Promotion vs. Advertising

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

Purpose of Sales Promotion

Purpose of Advertising

Stimulate short-term demand

Cultivate long-term demand

Encourage brand switching

Encourage brand loyalty

Induce trial use

Encourage repeat purchases

Promote price orientation

Promote image/feature orientation

Obtain immediate, measurable results

Obtain long-term effects, often difficult to measure

A. The Importance of Sales Promotion

PPT 15-6 here

•

Sales promotion expenditures have grown an annual rate of about 4-8 percent, compared to a 3-5 percent rate for advertising.

•

The investment by marketers in sales promotions is estimated to be $300 billion annually.

•

Note that advertising agencies usually do not design sales promotions; there are agencies that specialize in sales promotions.

•

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 consumer and trade sales promotions. Currently about 17.5 percent of promotion budgets are spent on advertising, 54 percent on business and trade promotions, and 28.5 percent on consumer promotions. The reasons for heavy sales promotion investment are: 1. Demand for Greater Accountability. When promotional activities are evaluated for their contribution to sales and profits, it is difficult to draw specific conclusions regarding the effects of advertising. Conversely, the immediate effects of sales promotions are easy to document. 2. Short-Term Orientation. Several factors have created a short-term orientation among managers. Pressures from stockholders and a bottom-line mentality are two reasons. This being the case, tactics that can have short-term effects are sought. 3. Consumer Response to Promotions. The precision shoppers of the 1990s search for extra value in every product purchase. Coupons, premiums, price-off deals, and other sales promotions increase the value of a brand in these shoppers’ minds. 4. Proliferation of Brands. Each year literally 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—product placements, contests, coupons, and

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

premiums—to gain some recognition in a consumer’s mind and stimulate a trial purchase. 5. Increased Power of Retailers. Retailers like Home Depot, The Gap, Toys ‘R’ Us, and Walmart now dominate retailing. 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 trade-oriented sales promotions. 6. Media 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. III. Objectives for Consumer Market Sales Promotion

PPT 15-7 here

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 advertising.

•

Although the fundamental goal of sales promotion is to generate a sharp increase in short-term demand, there are some marketing strategists who also believe that proper use of these techniques can make a long-term contribution.

A. Objectives for Consumer-Market Sales Promotion 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 stimulate trial purchase of a mature product category—like coffee or automobile tires. It can only stimulate trial use of a new brand in mature product categories. In new product categories, it is a legitimate objective to stimulate trial use of 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. Frequency “points” programs encourage repeat purchases as well. 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 communications: 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

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

PPT 15-8 lists all forms of consumer-market sales promotions as an intro. PPT 15-8 here then each sales promotion tool has a separate PPT. 1. Coupons

PPT 15-9 here

A coupon entitles a buyer to a reduction in price for a brand. Coupons are the oldest and most widely used form of sales promotion. Annually, about 350 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 15-7 displays the percentage of purchases made with coupons by product category. Advantages of coupons: •

A coupon makes it possible to give a discount to a price-sensitive consumer while still selling the product at full price to other consumers.

•

The coupon-redeeming customer is often 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, an in-package coupon can induce repeat purchase.

•

Coupons can get regular users to trade up within a brand array. PPT 15-10 here

The use of coupons also has problems:

PPT 15-11 here

•

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 simply reduces

•

There are costs for production and distribution and for retailer and manufacturer handling.

•

Fraud is a chronic and serious problem in the couponing process.

2. Price-Off Deals

PPT 15-12 here

A price-off deal offers a consumer cents or even dollars off merchandise at the point of purchase 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. Price-off promotions can create inventory and pricing problems for retailers. Also, most price-off deals are snapped up by regular customers, so the retailer doesn’t benefit from new business. 3. Premiums and Advertising Specialties

PPT 15-13 here

Premiums are items offered free, or at a reduced price, with the purchase of another item. There are two options. •

A free premium provides consumers with an item at no cost; the item is either included in the package of a purchased item or mailed to the consumer after proof of purchase is verified.

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

•

A self-liquidating premium requires a consumer to pay most or all of the cost of the premium. Cigarette brands, like Camel and Marlboro, have their own catalog of items from which consumers can order brand-logo products.

•

Advertising specialties have three key elements: a message, placed on an item, given to consumers with no obligation. It is estimated that firms spend $14 billion a year on advertising specialties.

Advertising specialty items have three defining elements: •

They contain a promotional message including the marketer’s logo.

•

Placed on a useful item.

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The item is given freely, as a gift from the sponsor.

4. Contests and Sweepstakes

PPT 15-14 here PPT 15-15 here

Contests and sweepstakes can draw attention to a brand like no other sales promotion technique. •

A contest has consumers compete for prizes based on skill or ability.

•

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, but the problems 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 brand feature message across in the context of a game. 5. Sampling and Trial Offers

PPT 15-16 here

Sampling is a technique designed to provide a consumer with a trial opportunity. Estimates suggest that consumer-product companies spend $2.3 billion a year on sampling.

•

Historically, consumers have been favorable toward sampling, 43 percent indicating they would switch brands if they liked the sample being offered.

•

Six techniques are used: in-store sampling, door-to-door sampling, mail sampling, newspaper sampling, on-package sampling, and mobile sampling, which is carried out by logo-emblazoned vehicles that dispense samples, coupons, and premiums to consumers at malls, shopping centers, fairgrounds, and recreational areas.

•

Sampling is useful for new products but should not be limited to new products.

•

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—a week or a month.

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

6. Phone and Gift Cards

PPT 15-17 here

Phone and gift cards represent a new and increasingly popular form of sales promotion. This technique is similar to a premium offer, but has enough unique characteristics to warrant a separate category of sales promotions. The cards are designed to be colorful and memorable. iTune downloads have recently become a popular version of the gift card. 7. Rebates

PPT 15-18 here

The rebate technique has been refined over the years and is now used by a wide variety of marketers. Rebates are particularly well suited to increasing the quantity purchased by consumers, so rebates are commonly tied to multiple purchases. Many consumers fail to redeem their rebates. 8. Frequency Programs

PPT 15-19 here

Frequency programs, also referred to as continuity programs, offer consumers discounts or free product rewards for repeat purchase or patronage of the same brand or company. These programs were pioneered by airline companies, but are now used by many types of national and local marketers. IV. 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. With the massive proliferation of new brands and brand extensions, manufacturers need to stimulate enthusiasm and loyalty among members of the trade. A. Objectives for Promotions in the Trade Channel

PPT 15-20 here

Promotions in the trade market are used to execute a “push” strategy—to push a product into and through the distribution channel 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. 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 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 at retail: Retailers can increase store traffic through special promotions or events. Door prize drawings, parking lot sales, or live radio broadcasts are common sales promotion traffic builders.

B. Trade-Market Sales Promotion Techniques ..

PPT 15-21 here

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

1. Incentives. 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 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 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. 2. Allowances. Various 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 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. 3. Sales-Training Programs: An increasingly popular trade promotion is to provide training for retail store personnel. A popular method for getting sales-training information to retailers is the use of videotapes and brochures. Manufacturers can also send sales trainers into retail stores to work side by side with store personnel. 4. Cooperative Advertising: As we have seen previously, cooperative advertising refers to joint advertising efforts between retailers and manufacturers. The manufacturer shares the cost of media—usually on a 50-50 basis—with the retailer. Cooperative advertising as a trade promotion technique is referred to as vertical cooperative advertising. C. Business Market Sales Promotion Techniques

PPT 15-22 here

1. Trade Shows. Trade shows are events where several related products from many manufacturers are displayed and demonstrated to members of the trade. 2. Business Gifts. Gifts are given to build and maintain business relationships. 3. Premiums and Advertising Specialties. A significant part of the $14 billion spent on specialty items is spent in the business market. 4. Trial Offers. Trial offers are well suited to the business market. The high cost of many business products mean a big commitment in purchase, so trials help to make the best commitment. A trial offer is a good way to attract new customers. 5. Frequency Programs. Frequency programs are often used in business markets to help retain customers. There are good examples of these types of programs in the IBP box.

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

PPT 15-23 here V. The Risks of Sales Promotion

PPT 15-24 here

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 low price. Creating this perception in the market contradicts the concept of integrated brand promotion. 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 borrow from future sales. C. Alienating Loyal 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. D. 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. VI. Point-of-Purchase Advertising

PPT 15-25 here

•

From 1981 to 2008, marketers’ annual expenditures on point-of-purchase (P-O-P) advertising rose from $5.1 to over $20 billion a year.

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Growth is due to P-O-P advertising and mobile location marketing being the only media that places advertising, products, and a consumer together in the same place at the same time.

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Research indicates that 70 percent of all brand selections involve some final deliberation by consumers at the point of purchase.

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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, to convey primary product benefits, or highlight pricing information.

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

•

The P-O-P displays may also feature price-off deals or other consumer sales promotions.

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P-O-P requires careful coordination with the sales force.

B. Objectives for Point-of-Purchase Advertising •

Draw consumers’ attention to a brand in the retail setting.

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Maintain purchase loyalty among brand loyal users.

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Stimulate increased or varied usage of the brand.

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Stimulate trial use by users of competitive brands.

C. Types of Point-of-Purchase Advertising and Displays •

Short-term promotional displays are used for six months or less.

•

Permanent long-term displays are used for more than six months.

•

A long list of the various types of displays is provided in the text on pages 559-560.

D. P-O-P and Mobile/Location Marketing • • •

PPT 15-26 here

Some argue that P-O-P is Mobile Location Marketing But, new technologies allow sending P-O-P offers through mobile devices Consumer attitudes toward location marketing are still unknown

E. P-O-P Advertising and the Trade and Business Markets PPT 15-27 here • 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 should be designed to draw attention to a brand, increase turnover, and possibly distribute coupons or sweepstakes entry forms. • In an attempt to combat losing business to online shopping, retailers are trying to enliven the retail environment, and point-of-purchase displays are part of the strategy. VII. Support Media

PPT 15-28 here

Support media include outdoor signage and billboard advertising, transit and aerial advertising, cinema advertising, directory advertising, and packaging. Support media are used to reinforce 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 brand selections.

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

A. Outdoor Signage and Billboard Advertising

PPT 15-29 here

1. 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 civilian population informed. 2. About $6 billion is spent annually to deliver advertisers’ messages on the literally hundreds of thousands of billboards in the United States. 3. Outdoor advertising offers several distinct advantages: • It is an excellent way to achieve wide exposure of a message in specific local markets. • Size 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 passersby with a message that speaks to a need or desire that is immediately relevant. • New digital technology makes billboards more visible and interesting 4. Billboards 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.

•

Most billboard messages are “static” (except new digital boards) and that it may take months to get changed.

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The impact of billboards can vary dramatically depending on their location.

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Assessing locations is a tedious and time-consuming activity known in the industry as riding the boards.

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The Institute of Outdoor Advertising rates billboards as expensive in comparison to several other media alternatives.

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Environmentalists argue that billboards are a form of visual pollution.

5. 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 mitigates one of the primary disadvantages of boards—a static medium. 6. Another huge change in billboard technology is new ways to track audiences who have viewed boards. Nielson Outdoor has developed a GPS satellite system to track minuteby-minute movements in impact zones of Nielson panel drivers. 7. Another innovation in billboards is the ability to use RFID tags in vehicles to communicate with a billboard for a customized message. B. Out-of-Home Media Advertising: Transit, Aerial, Cinema Advertising PPT 15-30 here 1.Transit advertising refers to ads that appear as both interior and exterior displays on

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

mass transit vehicles and in terminal stations. The phrase out-of-home media is commonly used to refer to the combination of transit and billboard advertising. • Transit advertising can be 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 be appealing to local merchants because their message 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; like 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 15-31 here 2. Aerial advertising can involve airplanes pulling signs or banners, skywriting, or those majestic blimps. PPT 15-32 here • Brand-name exposure can be achieved at a small fraction of the cost of similar exposure through television advertising. • Common at sporting events • Digital technology offers more opportunities • TV networks are taking control of aerial devices

3. Cinema Advertising •

Both on- and off-screen in theaters

•

Consumers say they are annoyed.

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But, research shows general acceptance of in-cinema ads

C. Directory Advertising

PPT 15-34 here

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About $16 billion is spent annually on directory advertising.

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Directory advertising helps people follow through on their decision to buy by providing information consumers need to actually find a particular product or service.

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On the down side, the proliferation and fragmentation of phone directories can make this a difficult medium because many metropolitan areas are covered by multiple directories.

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This medium requires long lead times, and over the course of a year, information in a Yellow Pages ad can easily become dated.

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Flexibility for creative execution in the traditional paper format is limited.

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Many websites now offer directory advertising. These are useful, but people still want their paper-based directories.

D. Packaging

PPT 15-33 here

PPT 15-35 here

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

Packaging is considered a support medium because it carries important brand information like the logo. Several firms have experienced both promotional and sales impact from strategic package design changes. 1. Promotional Benefits of Packaging to the Advertiser PPT 15-36 here • • •

The package carries the brand name and logo The package can communicate “value” The package can communicate “image” and “quality

SOLUTIONS TO 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. 2. 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. But 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. 3. 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 distinctions in approach, however. In the trade channels, marketers rely on key techniques such as incentives, allowances, trade shows, sales and training programs and cooperative advertising.

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

For business markets, the importance of trade shows is highlighted, along with incentives such as frequency rewards, 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. 5. 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. 6. In the chapter, it was suggested that large retailers like Walmart 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. 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 some 70 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

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

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, members of the outside 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. 8. 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 known as “guerilla marketing,” which can be tailored for specific audiences. Most students will probably rely on the examples in the text, such as Altoids’ use of signage to reach urban young adults in major U.S. cities, or IKEA’s unusual decorative renovations of train stations and elevators. 9. 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 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 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 Dean Food’s “Milk Chug,” the first single-serving milk packaging. By its packaging size and shape alone, the Milk Chug distinguished itself as a fresh convenience item – and more sharply aligned the product as a direct competitor to soft drink and bottled water manufacturers.

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

SOLUTIONS TO EXPERIENTIAL 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 longterm 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 gas-guzzlers 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. 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

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

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.” 3. 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 auto maker 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. 4. 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 Gapclad 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 – indeed, like the chapter’s examples of the campaigns for IKEA and Altoids, student answers should aim for a successful, potentially inexpensive, guerilla-style 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 product placement

authenticity branded entertainment

SUMMARY Justify the growing popularity of event sponsorship as another means of 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 entertainment properties in building a brand. 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 ..

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

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 over saturation 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. The tremendous variety of media options we have 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. We will return to this issue in subsequent chapters as we explore other options available to marketers in their quest to win customers.

LECTURE ALERT: This is a tightly focused chapter and therefore a relatively short lecture and accompanying PPT deck. You may want to allocated less than a full lecture day to this chapter or set an in-class exercise to accompany this day’s lecture.

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

CHAPTER OUTLINE INTRODUCTORY SCENARIO: Brand + Entertainment2 = IBP!

PPT 16-1, 16-2 here

This introductory scenario highlights that there are many creative ways marketers are using promotional tools to establish and maintain meaningful connections to consumers beyond traditional media or even the use of a broad range of IBP tools. •Healthy Choice brand needed to reach young professionals who eat lunch at their desks to effectively promote Fresh Mixers— a rice or fresh pasta single serving lunch. •The marketer and agency had extensive research on the target market •

25-35 year olds

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Heavy users of social media networking sites

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Busy young professionals who ate lunch at their desks

•An IBP campaign was created: “Fresh Mixers Working Lunch” o Live improvs were performed by Second City at lunchtime o The Web portal to view the improvs was sponsored by Fresh Mixers. o Characters in the improv used Fresh Mixers in skits o The campaign, designed in this way, featured both branded entertainment and “buzz” marketing I. Why the Convergence of Madison (NYC) & Vine (LA)?

PPT 16-3 here

At various points throughout the text, we have raised the very important issue of the blending of advertising, promotion and entertainment referred to as “Madison & Vine.” Madison refers to Madison Ave. in NYC (home of many ad agencies) and Vine refers to Hollywood & Vine in L.A. (home to many entertainment organizations). The summary here is:

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Advertising, branding and entertainment are converging though social networking, videogames, and events.

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The erosion of the effectiveness of mass media—particularly broadcast media—has fueled the convergence.

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An expansion of options has provided more opportunities for brand visibility

•

Some are predicting a mass exodus from traditional media referred to as “Chaos Scenario:”

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

o Dollars will leave traditional media because of audience fragmentation and ad avoidance have eroded their effectiveness o Reduced funds from ads will compromise programming on broadcast media o Compromised programming will reduce audience size leading to more ad erosion o Billions of dollars will flow to alternative IBP techniques • Events, product placements, and branded entertainment offer exciting ways to build brands in the market PPT 16-4 here II. Event Sponsorship

PPT 16-5 here

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 like 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.

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In 2010, expenditures on event marketing were about $50 billion worldwide.

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The value and appeal of event sponsorship: •

Events can grab effective media coverage and exposure

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Fan loyalty may convert to sales through the “affinity” effect

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Events can foster brand loyalty

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Events attract well-defined audiences

PPT 16-6 here

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.

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Events can attract news coverage, thus extending the visibility of the sponsor.

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The focus of the event—like a popular recording artist or highly popular event—can result in a positive “halo” effect for the brand. The consumer says, “I like this (performer) event and this brand supports what I like.” B. Finding the Sweet Spot: Guidelines for Effective Sponsorship •

Advertisers look for those opportunities where there is significant overlap between the event participants and the brand’s target market. Making the most of event sponsorship is facilitated by: o Matching the brand and the event o Define the target audience precisely

PPT 16-7 here

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

o Stick to a few key messages o Develop a plot line o Deliver exclusivity o Deliver relevance o Use the Internet o Plan for the before and after the event C. Assessing the Benefits of Event Sponsorship

PPT 16-8 here

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Critics argue that the impact of event sponsorships are hard to determine and often driven by the ego of the CEO.

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But, John Hancock carefully estimated that their college football bowl sponsorship yielded the equivalent of $5.1 million in advertising exposure for $1.6 million fee.

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Nielsen Media has developed Sponsorship Scorecard to assess effectiveness.

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Advertisers are seeking a measure of media impressions to compare sponsorships to traditional advertising.

D. Leverage, Leverage, Leverage •

Leveraging is any collateral communication that reinforces the link between the brand and the event—word-of-mouth, publicity, news coverage, etc. Remind students of Miss Sprint Cup and the social media effect.

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Events can be leveraged as ways to entertain important clients, recruit new customers, motivate the firm’s salespeople, and enhance employee morale.

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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.

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Marketers may also use this opportunity to sell premiums like T-shirts and cigarette lighters; administer consumer surveys as part of their marketing research efforts; or distribute product samples. PPT 16-9 here

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Event participation is a way to leverage public relations efforts, creating an integrated IBP.

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See Exhibit 16.9 for guidelines on event sponsorship.

III. Product Placements

PPT 16-10 here

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

•

Product placement is the practice of placing any branded product into the content and execution of any entertainment product.

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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 any time 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.

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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.

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Mint Milano cookies were prominently featured on Frasier.

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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, AstonMartin), I-Robot (Audi)

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White Castle, American Express, and Nokia also featured their brands in recent years

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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 Your Video Game •

Over 100 million U.S. households have gaming capability

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40 percent of gamers are in the highly sought after 18-34 age cohort

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Game placements estimated to exceed $1 billion by 2010

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Billboards and virtual products are the most common technique

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Examples include LG, Coke, Radio Shack, U.S. Army and many more

D. What We Know About Product Placement

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Placements have greatest value when integrated with other IBP techniques running simultaneously

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Novel product placements create “buzz” Example: When James Bond traded his Aston Martin for a BMW, the buzz was huge.

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Celebrity connection with placement is critical for effectiveness.

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

•

Authenticity is key to success. Authenticity is the quality of being perceived as genuine and natural

IV. Branded Entertainment

PPT 16-11 here

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 in an effort to impress and connect with consumers in a unique and compelling way. NASCAR is the premier example of branded entertainment. A. Where are Product Placement and Branded Entertainment Headed? •

The surge of these techniques relates to reaching the unreachable segments.

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There is the risk of oversaturation resulting in consumer annoyance.

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Marketers and entertainment providers can have trouble working together and agreeing on priorities.

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Consumer advocacy groups like Consumer Alert argue that product (brand) placements are really just paid advertising and consumers should be informed of such.

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Attitudes and regulations vary from country to country.

B. What’s Old is New Again •

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.

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Now P&G is still in the branded entertainment business with widespread involvement in the America’s Next Top Model show. PPT 16-12 here

V. The Coordination Challenge

PPT 16-13 here

A. 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. B. 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. C. Many factors work against coordination: •

PPT 16-14 here

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.

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

•

Internal competition for budget dollars often leads to rivalries and animosities that work against coordination.

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Coordination is also complicated because few ad agencies have all the internal skills necessary to fulfill clients’ demands for integrated marketing communications.

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Remind students of discussions of IBP in previous chapters: 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.

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The chapters that follow highlight that ever more highly effective promotion options are available, adding more layers of complexity to the IBP coordination challenge.

SOLUTIONS TO 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

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The marketer understood the target market and their behaviors

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The promotion was highly coordinated

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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

2. 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?

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

3. 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 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. 5. 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. 6. 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 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 ..

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

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. 8. 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. 9. 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. 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 ..

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

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.

SOLUTION TO 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 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. 3. 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..

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

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. 4. 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.

VIDEO To view the Healthy Choice video for this chapter, go to the book companion website, http://www.cengage.com/marketing/oguinn Bolded answer indicates the correct answer in the multiple-choice video questions. 1. The authors make the distinction between branded entertainment and product placement. In the Healthy Choice video, what makes the Working Lunch video into branded entertainment and not simply product placement? If this were simply product placement, the Working Lunch videos would exist separate from the brand. In this case, the videos were created with Healthy Choice’s support and guidance. ..

Chapter 16/Event Sponsorship, Product Placements, and Branded Entertainment

2. Healthy Choice provides a form of branded entertainment that other brands might not provide. What is that form? a) Integration b) Web Access c) Product Placement d) Interactivity 3. In order to be a truly integrated brand promotion, what complex issue must Healthy choice address with regards to the Working Lunch web video? a) Making the promoted brand central to the video b) Coordinating with other advertising and promotion efforts c) Developing an event to promote the video d) Choosing the agency to assist with all of the above 4. Healthy Choice developed the Working Lunch videos with the basic goal of having an audience watch the videos and be part of the process. However, the audience still needed to be gathered. In what ways could Healthy choice have promoted the videos themselves in order to gather an audience? Various social networking opportunities could have been utilized, particularly in assisting the grass roots nature of the branded entertainment. They might have also generated an opt-in email campaign for people who already chose to visit the website, enlisting their help in promoting the video. 5. Which of the following is a potential problem associated with the Working Lunch videos? a) Instant oversaturation b) Matching the brand with the entertainment c) Losing the brand in the entertainment d) There are not potential problems with the videos

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 brand 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 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

Chapter 17/Integrating Direct Marketing and Personal Selling

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 the most 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, or 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 welltrained 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 INTRODUCTORY SCENARIO: Don’t Mess with Les.

PPT 17-1, 17-2 here

This scenario relays the classic direct marketing story of how Columbia House, the marketer of records, used a late night advertising, direct marketing approach, and a little “gold box” devised by Les Wunderman to increase sales by as much as 80 percent over previously used, traditional television advertising. The lesson for students is that direct marketing for the right product with the right message is a technique that can impact sales specifically. Other key features of direct marketing highlighted in this scenario are:

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Testing “in-market” is a hallmark of the direct marketer.

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The Wunderman gold box tactic was a keen insight on how to initiate a dialogue with the consumer. Use a little bit of mystery and throw in the prospect of winning something, and consumers get interested and send you back a response. This proclivity for promoting dialogue is another defining characteristic of the direct marketer’s style.

Chapter 17/ Integrating Direct Marketing and Personal Selling

•

Getting in a dialogue with consumers leads to relationships that can mean multiple purchases over time (as in a CD/DVD club like Columbia’s). And that’s where the real gold lies—in those multiple purchases.

I. The Evolution of Direct Marketing

PPT 17-3 here

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 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, we do not want to equate direct mail and direct marketing. Second, as noted before, a combination of media is likely to be more effective than any one medium used by itself.

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Mobile marketing, including location-based techniques are ideally suited to direct marketing campaigns.

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Direct-marketing programs are designed to produce some form of immediate, measurable response.

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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

PPT 17-4 here

From Johannes Gutenberg to Benjamin Franklin to Richard Sears, Alvah Roebuck, 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 far-reaching events created a favorable route for the evolution and growth of this promotional tool. PPT 17-5, 17-6 here B. Direct Marketing Today

PPT 17-7 here

The modern versions of direct marketing are rooted in the legacy of mail-order giants and catalog merchandisers like L.L. Bean, Lillian Vernon, Publishers’ Clearinghouse, and JC Penney. However, in the 1990s, direct marketing broke free from its mail-order heritage to become a complex and diverse tool used by all types of organizations throughout the world. •

With these defining features in mind, we can see that direct-marketing programs are commonly used for three principle purposes:

Chapter 17/Integrating Direct Marketing and Personal Selling

• • • •

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. The Foursquare programs covered in previous chapters demonstrate the implementation of the prior point using new technology

C. What’s Driving the Growing Popularity of Direct Marketing?

PPT 17-8 here

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.

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Continued liberal attitudes about the use of credit and the accumulation of debt.

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Developments in telecommunications have also eased the direct-marketing transaction. Toll-free 800 and 888 numbers have exploded in popularity along with Web access to brand sites.

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Computer technology now allows firms to track, keep records on, and interact with some 5 million customers for what it cost to track a single customer in 1950.

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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.

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Direct-marketing programs also offer unique advantages over conventional mass marketing. •

precise segmentation

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ongoing contact for relationship building

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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 directmarketing program evaluations. PPT 17-9 here

II. Database Marketing

PPT 17-10 here

The one characteristic of direct marketing that distinguishes it from marketing more generally is its emphasis on database development. Databases are the centerpieces in directmarketing campaigns, take many forms, and can contain many different layers of information about customers. PPT 1711 here A. Mailing Lists

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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. •

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.

B. List Enhancement

PPT 17-12 here

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.

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Geodemographic data—information that reveals the characteristics of the neighborhood in which a person resides.

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Psychographic data—data that allow for a more qualitative assessment of a customer’s general lifestyle, interests, and opinions.

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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 17-13 here

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 17-14 here

The database 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 these transaction data, the value of every customer to the organization and identify those customers who have given the organization the most business in the past.

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•

A marketing database can also be a powerful tool for organizations that seek to create a genuine relationship with their customers. The makers of Ben & Jerry’s® ice cream use their database for two things: to find out how customers react to potential new flavors and product ideas, and to involve their customers in social causes.

•

Reinforcing and recognizing preferred customers is another valuable application of the marketing database. Marketers use frequency-marketing programs to do so. Frequencymarketing programs have three basic elements: •

a database, the collective memory for the program;

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a benefit structure, designed to attract and retain customers;

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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 17-15 here

As highlighted in Chapter 4, one dark cloud looms on the horizon for database marketers, and that cloud is consumer concern about invasion of privacy. Many Americans 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:

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1. 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. 2. 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 here III. Media Applications in Direct Marketing

PPT 17-17 here

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 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 prime media. All conventional media, like magazines, radio, and television, however, 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 17-18 here

1. 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.

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Direct mail delivery dates, especially for bulk, third-class mailings, can be unpredictable. When the timing of an advertising message is critical to its success, direct mail can be the wrong choice.

2. Direct mail’s advantages: •

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.

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Direct mail is a flexible medium that allows message adaptations literally household by household.

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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.

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The choice of formats an organization can send to customers is virtually limitless, ranging from large, expensive brochures, videotapes, computer disks, or CDs to popups, foldouts, scratch-and-sniff strips, or just simple postcards.

B. Telemarketing

PPT 17-19 here

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1. Telemarketing can be a direct marketer’s most potent tool. As with direct mail: •

Contacts can be selectively targeted.

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The impact of programs is easy to track.

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Experimentation with different scripts and delivery formats is simple and practical.

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Because telemarketing involves real, live, person-to-person dialogue, no medium produces better response rates.

2. Telemarketing shares many of direct mail’s limitations: •

Telemarketing is very expensive on a cost-per-contact basis.

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Just as names and addresses go bad as people move, so too do phone numbers. In addition, the rise of cell phone use had made directories nearly obsolete.

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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.

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Telemarketing is a powerful yet highly intrusive medium that must be used with discretion. High-pressure telephone calls at inconvenient times can alienate customers.

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Telemarketing is the most effected by FTC regulations, Do Not Call list, restricting marketer access to consumers.

C. Email

PPT 17-20 here

The most controversial direct marketing tool of recent years is referred to as “bulk” email or spam, including the insidious spam know as “phishing” Issues with email as a direct marketing tool: 1. High risk in offending consumers and high risk of becoming known as a “spammer” in the tight-knit Internet community. 2. High potential because of

•

low cost

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timeliness

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easy access to email addresses

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excellent targeting potential

Best recommendation is to stay away from “bulk” email campaigns but instead integrate email AFTER acquiring customers through other database direct marketing techniques.

4. Work to get customers to approve “opt-in” email access for the firm

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D. Direct Response Advertising in Other Media

PPT 17-21 here

The high costs associated with direct mail and telemarketing have led direct marketers to experiment with nearly every other medium. 1. Using magazines, a popular device for executing a direct marketer’s agenda is the bindin insert card. Insert cards not only promote but also offer the reader an easy way to order. 2. Newspaper ads in national and local newspapers give toll-free numbers for requesting information or ordering products from a wide range of national and global marketers. 3. Radio also offers an effective medium for direct response. E. Infomercials The infomercial, one of the basic message tactics of advertisers, is a novel form of direct response advertising. 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 3 to 60 minutes, but the common length is 30 minutes. Infomercials are about direct selling, with several keys to their success: 1. A critical factor is testimonials from satisfied users. Celebrity testimonials can help catch a viewer as he or she is channel surfing by the program, but celebrities aren’t necessary. 2. 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. Most of the audience could be long gone by minute 28 into the show. A good rule of thumb in a 30-minute infomercial is to divide the program into 10-minute increments and close three times. 3. New research shows that direct response infomercial-like ads are the least likely to be zapped by DVR users. PPT 17-22 here

IV. Closing the Sale with Direct Marketing or Personal Selling •

Now we must add the direct-marketing manager and the sales manager to the list of functional specialists trying to coordinate IBP programs

•

Marketing database 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. Because direct marketing takes dollars from activities that have been the staples of traditional ad-agency business, it is easy to see why advertising agencies view direct marketing with some resentment.

•

PPT 17-23 here

There are no simple solutions for achieving integrated marketing communications, but one approach that many organizations are experimenting with is the establishment of a

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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. A. The Critical Role of Personal Selling •

Personal selling is the face-to-face communications and persuasion process.

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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, etc

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Failure to insert personal selling into the IBP process at the proper time for a brand can render all other IBP efforts worthless.

B. Types of Personal Selling

PPT 17-25 here

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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 sophisticated of selling efforts.

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Creative selling is the type of selling where customers rely heavily on the salesperson for technical information, advice, and service. It is the most sophisticated and complex selling effort. Examples are technical products or service products with intangible features. People in creative selling positions often have advanced technical degrees.

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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.” System selling is often executed by a “team” of sales people.

•

The missionary salesperson calls on accounts with the purpose of monitoring the satisfaction of buyers and updating buyers’ needs. They may provide product information after a purchase. Many firms also use direct marketing tools like telephone, fax, and email reminders to complement the efforts of the missionary salesperson in maintaining a dialogue with key customers.

C. Customer Relationship Management

PPT 17-24 here

PPT 17-26 here

•

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.

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•

Newer descriptions of CRM refer to the process as “customer experience management”

SOLUTIONS TO QUESTIONS FOR REVIEW AND CRITICAL THINKING 1. Who is Lester Wunderman, and in what ways does his historic campaign for Columbia House illustrate the mindset of direct marketing? Lester Wunderman was a pioneer of direct marketing, and his famous campaign for Columbia House Music Club in the mid-20th century is mentioned in the chapter opener. Wunderman’s agency was charged with the job of increasing the number of new members for the Columbia Record Club. After evaluating the task and making a wager with another agency to see who could do the best work, Wunderman decided that conventional media were not sufficient to attain his goals—new channels had to be exploited. Wunderman developed two techniques of direct marketing for Columbia: magazine insert cards and gold boxes. The rest, as they say, is history. Through the coordination of these direct response options with TV ads, Wunderman’s direct marketing campaign generated an 80 percent boost in club membership, handily defeated the competing firm. Wunderman’s campaign illustrates the mindset of direct marketing in two ways: First is the idea of staging a test—direct marketers always seek to be in a position to judge results. Clients want results, and the Les Wundermans of the world first recommend going to the marketplace to see what works, and then spend the big dollars after you know the winner. Testing “in-market” is a hallmark of the direct marketer. Second, we see in the Wunderman gold box tactic how to initiate a dialogue with the consumer: Use a little bit of mystery and throw in the prospect of winning something and consumers get interested and send you back a response. This proclivity for promoting dialogue is another defining characteristic of the direct marketer’s style. 2. 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 each 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. 3. 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

Chapter 17/Integrating Direct Marketing and Personal Selling

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. 4. 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 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. 5. 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? (Keep in mind 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. 6. 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. 7. There’s a paradox here, right? 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

Chapter 17/ Integrating Direct Marketing and Personal Selling

think that the tools of direct marketing could be used to build long-term relationships with customers? 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. 8. 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. 9. 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. 10. Use the example of the Sleep Number bed to illustrate the importance of a balanced approach in executing advertising and integrated brand promotion. 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

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Number case proves how different tools and tactics all play important roles in building brand awareness, communicating brand benefits, and closing the sale.

SOLUTIONS TO 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. 2. 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 direct-response 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. 3. 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

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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 also should assess the company’s online privacy policy; do they find it to be adequate? 4.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 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 buzz marketing viral marketing corporate advertising

advocacy advertising cause-related advertising green marketing

SUMMARY Explain the role of public relations as part of a firm’s overall advertising and IBP strategy. Public relations focuses on communication 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. When companies perceive public relations as a source of opportunity for shaping public opinion, they are more 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

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

take the form of damage control, and in these instances, the firm is obviously in a reactive public relations strategy mode. Although a reactive strategy may seem a contradiction in terms, organizations must 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. We 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 uses various media—but primarily magazine and television ads—and 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 INTRODUCTORY SCENARIO: Bring on the Buzz

PPT 18-1, 18-2 here

This introductory scenario does a good job of revealing the breadth of contemporary public relations/influencer promotional campaign and the many new techniques being used. The scenario features what students will consider a “boring” brand—toilet tissue—rather something hip and new like an iPad. But that is the power of the scenario, using contemporary techniques to enliven an old brand. Procter & Gamble used a variety of tactics to build “buzz” about Charmin. A brand in a category characterized by low consumer interest and “commodity-like” product features. Given this marketing situation, P&G created buzz for the brand:

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

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“Enjoy the Go!” Campaign

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A dozen support agencies involved

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Created on site “go teams” who greeted visitors but were also screened for social media skills

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Celebrities get into the act—Charmin’s “King of the Throne”

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Sponsor a Broadway show and get news media involved—TV, newspaper, blogs

I. Public Relations

PPT 18-3 here

Public relations focuses on communications that can foster goodwill between a firm and its many constituent groups. The constituent groups include customers, stockholders, suppliers, employees, government entities, educators, citizen action groups, the local communities where a firm has operations, and the general public. Public relations can be used 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. A New Era for Public Relations?

PPT 18-4 here

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Consumers are spreading info about brands like never before—YouTube, blogs, social media brand mentions, etc.

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PR lacks the strategic control needed to establish a brand within the segment in the manner desired by a firm

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But, people talk about brands if you give them the right things to talk about, you have more control.

•

Good PR can create a positive social epidemic PPT 18-5 here

B. Public Relations and Damage Control

PPT 18-6 here

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. 1. Intel—Intel created its own PR nightmare by not reacting quickly to a flaw in its new Pentium chip that was released in 1994. Claiming that the chip would produce a computational error only every 27,000 years, high-end users were reporting errors on a weekly basis. In the end, Intel had to confess to the error and offer a free replacement chip. 2. Taco Bell suffered the curse of social media as consumers spread the video of rats in the firms Greenwich Village restaurant across the Internet. 3. Walmart—Another example of a firm slow to respond to the brand trashing initiated by a group called “Wake Up Walmart.” Research shows that a significant number of people

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

have stopped shopping at Walmart based on the groups effort. PR could have helped her. C. Objectives of Public Relations

PPT 18-7 here

The public relations function in a firm, usually handled by an outside agency, is prepared to engage in positive public relations efforts and to deal with any negative events related to a firm’s activities. Objectives for public relations include: •

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 support. For events like 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.

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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.

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Lobbying: The public relations function can assist a firm in dealing with government officials and pending legislation. Industries 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.

D. Tools of Public Relations

PPT 18-8 here

Several vehicles allow a firm to make positive use of public relations and pursue the objectives just cited. The goal is to gain as much control over the process as possible. 1. Press Releases. Having a file of information that makes good news stories puts the firm in a position to take advantage of free press coverage. Items that make for good public relations include:

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new products

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new scientific discoveries

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new personnel

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new corporate facilities

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

•

innovative corporate practices, like energy-saving programs or employee benefit programs

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annual shareholder meetings

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charitable and community service activities.

2. Feature Stories. While a firm cannot write a feature story for a newspaper or broadcast a story over local television networks, it can invite journalists to do an exclusive story on the firm when there is a particularly noteworthy event. 3. Company Newsletters. In-house publications, like a newsletter, can disseminate positive information about a firm through its employees. As members of the community, employees are proud of achievements by their firm. Newsletters can also be distributed to important constituents in the community. 4. Interviews and Press Conferences. Interviews and press conferences can be a highly effective public relations tool. Often, interviews and press conferences 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. 5. Sponsored Events. Event sponsorship was discussed as a form of support media in Chapter 17. Sponsoring events can also serve as an important public relations tool. A firm can become involved in local community events through sponsorships. 6. Publicity. Publicity is unpaid-for media exposure about a firm’s activities or its products and services. Publicity is handled by the public relations function but cannot, with the exception of press releases, be strategically controlled like other public relations efforts. One major advantage of publicity—when the information is positive—is that it has credibility because information shows up in newspapers and on news broadcasts. . E. Basic Public Relations Strategies

PPT 18-9 here

Public relations strategies can be categorized as either proactive or reactive. Proactive public relations strategy is dictated by marketing objectives, seeks to publicize a company and its brands, and in spirit is offensive rather than defensive. Reactive public relations strategy is dictated by influences outside the control of a company, focuses on problems to be solved rather than opportunities, and requires defensive rather than offensive measures. The two strategies involve different orientations to public relations. 1. Proactive Public Relations Strategy

PPT 18-10 here

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.

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

•

A public relations plan: The next step is a structured public relations plan. A public relations plan identifies objectives and activities. The components of a public relations plan include the following: •

Current situation analysis: This section summarizes the information obtained from the public relations audit.

•

Program objectives: Objectives should be set for both short-term and long-term opportunities. As with advertising, the focal point is not sales or profits. Rather, factors like the credibility of product performance (that is, placing products in verified, independent tests) or the stature of the firm’s research and development efforts (highlighted in a prestigious trade publication article) are legitimate statements of objective.

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Program rationale: The role the public relations program will play relative to all the other communication efforts—particularly advertising—is identified. This is where an integrated marketing communications perspective is clearly articulated.

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Communications vehicles: This section specifies precisely what means will be used to implement the public relations plan.

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Message content: PR messages need to be researched and developed much like advertising messages.

2. Reactive Public Relations Strategy

PPT 18-11 here

As stated earlier, firms must implement a reactive public relations strategy when events outside the control of the firm create negative publicity or circumstances. It is much harder to organize and structure reactive public relations. Because the events that trigger the public relations effort are uncontrollable, a firm must be prepared to react quickly and effectively. Two steps help firms implement reactive public relations strategy: •

The public relations audit: Part of the preparation will occur during the public relations audit prepared for the proactive public relations strategy.

•

The identification of vulnerabilities: The other key step in reactive public relations strategy is to recognize areas where the firm has weaknesses in its operations or products that can negatively affect its relationships with important constituents. These weaknesses are called vulnerabilities from a public relations standpoint.

G. A Final Word on Public Relations PR plays a support role in IBP. It is the main tool for damage control and can contribute to a positive attitude toward a brand. PR cannot be implemented quickly enough or with enough control to be the main IBP tool used to build a brand or maintain a brand.

II. Influencer Marketing

PPT 18-12 here

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

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

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 PR 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 respect to firms and brands. A. Professional Influencer Programs.

PPT 18-13 here

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The process of targeting professionals (doctors, therapists, lawyers, accountants, etc.) with positive PR messages with goal of having these “professionals” influence their clients attitude toward a brand.

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The process can be thought of as “seeding the conversation” between the professionals and their clients.

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Tactics include trade show displays, direct mail communications, and personal selling calls—all IBP techniques.

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The process provides professionals with “intellectual currency”

B. Peer-to-Peer Programs

PPT 18-14 here

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The process of targeting social networks with positive messages about a brand to pass along through their social networks.

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The programs provide “social currency” within peer networks

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Buzz and Viral Marketing

PPT 18-15 here

o Buzz marketing is creating an event or experience that yields conversations that include the brand. o 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. simulated 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 • The sophisticated 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 wide social networks

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

III. Corporate Advertising

PPT 18-16 here

Corporate advertising is not designed to promote a specific brand but is intended rather 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 in the United States. Presumably, these 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. The typical objectives are: •

to build the image of the firm among customers, shareholders, the financial community, and the general public;

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to boost employee morale or attract new employees;

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to communicate an organization’s views on social, political, or environmental issues;

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to better position the firm’s products against competition, particularly foreign competition, which is often perceived to be of higher quality; and

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to play a role in the overall integrated marketing communications of an organization. PPT 18-17 here

B. Types of Corporate Advertising

PPT 18-18 here

There are three basic types of corporate advertising. These three types are image advertising, advocacy advertising, and cause-related advertising. Each is discussed in the following sections. 1. Corporate Image Advertising. Most 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, but as we saw in Chapter 5, attitude can play an important directive force in consumer decision making. 2. Advocacy Advertising. Advocacy advertising attempts to establish an organization’s position on important social, political, or environmental issues. Advocacy advertising is defined as “advertising that addresses and attempts to influence public opinion on issues of concern to the sponsor.” 3. Cause-Related Advertising. Cause-related advertising is part of cause-related marketing efforts undertaken by a firm. Firms often affiliate themselves with worthwhile social causes—reducing poverty, increasing literacy, or curbing drug abuse. Cause-related advertising is advertising that identifies corporate sponsorship of philanthropic activities. 4. 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

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

sponsored by Procter & Gamble. General Electric and its “Ecomagination” campaign is another high-profile exemplar of this movement. PPT 18-19 here

SOLUTIONS TO QUESTIONS FOR REVIEW AND CRITICAL THINKING 1. Review the Charmin restrooms example and identify three of its elements that made it a record setting buzz builder for Procter & Gamble. While there are many elements that could be identified, students my consider these: •

P&G worked with a dozen support agencies

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The firm featured the campaign on a “world stage:” Time Square

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The firm recruited “go teams” with attractive salaries and deployed them with inperson contact and social media assignments.

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Celebrities got into the act including a celebrity icon “King of the Throne”

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Aspects of the campaign attracted widespread media attention from television and newspapers.

2. Do you agree with our 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 dayto-day, virtual and real-world conversations of key consumers. 3. Obviously, some events will have more potential for generating favorable publicity than others. What particular criteria should be emphasized in event selection when a firm has the goal of gaining publicity that will build goodwill? How might the benefits of sponsorship be similar or different if that sponsorship involves a sporting event versus a noble cause? If the objective in event sponsorship is to gain publicity that will help build goodwill, several criteria are worth considering. Involvement with cause-related events such as Earth Day celebrations, especially at the local level, should provide more favorable publicity than concerts or sports sponsorship. Exclusivity should also be examined, because sole support for

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

the event will yield the most positive impressions. Continuity of the event should be a consideration as well: Long-term commitments in the support of important causes build goodwill. Don’t forget your target segment—is this really a cause that your target segment cares about deeply? You can build a mini-lecture around this topic. Here is an interesting assessment from Promo Magazine: Ten Rules for Successful Sponsorship •

Audience composition: First and foremost, does the audience for the event represent an audience with whom the firm wants to communicate?

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Image compatibility: Is the stature of the event consistent with the stature of the firm? This is particularly important for firms that want to develop or protect an upscale image.

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Exclusivity: Can the event promoters offer exclusivity of sponsorship in the product category, or will competitors also be sponsoring the event? Being the “official airline” or “official beverage” of an event creates a positive impression.

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Media coverage: Will the event be covered by television? Will the firm’s brand be prominently displayed in the coverage area?

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Administrative ease: Will the sponsor handle all administrative details, or will the organization have to allocate staff to the event?

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Leveragability: Is the event sponsorship easily promotable in other ways? For example, Powerfoods’ print ads feature the Power Bar Women’s International Challenge cycling race.

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Measurability: Who measures the attendance and media coverage of the event? If the sponsor doesn’t, the firm will incur costs.

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Continuity: Is this a one-time sponsorship, or is the event annual? Long-term association with an event can create relationships with target markets.

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Efficiency: Are the terms of the sponsorship offering everything, or only what the firm needs? If the conditions include an official event, auto, or sponsor’s tent and the firm will not use them, the costs are superfluous.

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Trade and employee tie-ins: Will the event excite trade partners and employees? Exciting events are all the more potent for an organization.

(Source: “Ten Steps to Evaluating an Event,” Promo, November 1995, 61.) 4. 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 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

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

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. 5. 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 saw 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. As mentioned in the text, Walmart is a frequent target of criticism for its labor practices and environmental practices. Doesn’t that exposure, however, also remind people of the retail giant’s most basic promise of low prices, everyday? 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. 6. 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?

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R.J. Reynolds—makers of Camel cigarettes

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Procter & Gamble—makers of Pampers disposable diapers

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Kellogg’s—makers of Kellogg’s Frosted Flakes

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ExxonMobil—worldwide oil and gasoline company

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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 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. 7. What key points need to be managed in creating successful influencer marketing programs with medical professionals?

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

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 longterm 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. 8. 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-to-peer marketing programs discussed in the chapter’s Doing it Right feature box. Marketing guru Andy Sernovitz has identified five key tools to promote favorable word-of-mouth marketing. As outlined in the feature box, 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 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. 9. 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

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

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. 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.

SOLUTIONS TO EXPERIENTIAL 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-anddriving 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 cause-related 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

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

use such appeals equally well. Effective safety messages use a mix of staggering statistics and scare tactics to persuade audiences—especially teens. 2. 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 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 highly-qualified 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. 4. Working in the same teams, propose what steps you would take to launch an effective peer-topeer 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.

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

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 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 real-world 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.

END OF PART ACTIVITY (PAGES 656-659) Project Five: Planning Integrated Brand Promotion Grading Rubric

INTRODUCTION Is there an introduction to the event proposal? Does this introduction address the specific audience that has “requested” this event proposal? Does the introduction provide a clear and appropriate purpose statement? Does the introduction provide an overview of what Victoria’s Secret hopes to accomplish with the planned event? Does the introduction provide an overview of what’s to come? Does the introduction clearly transition into the next section?

Yes

Somewhat

Pts

EVENT ANALYSIS Is there an introduction to the event analysis? Does the introduction provide an overview/summary of the event analysis? Does the introduction transition neatly into the brand analysis? Brand Analysis Is there an introduction to the brand analysis? Does the brand analysis provide a thorough description of the Victoria’s Secret brand? Does the brand analysis provide an assessment of the “essence” of the brand? Does this information come from reliable resources? Does the brand analysis transition neatly into the next section? Audience Analysis Is there an introduction to the audience analysis? Does the audience analysis provide a description of who will be attending the planned event? Do these audiences “fit” with the Victoria’s Secret brand? Does the audience description provide an understanding of where the audience is coming from? Does the audience description provide an understanding of why they will come to the planned event? Does the audience analysis transition neatly into the next section? Brand Analysis Is there an introduction to the brand analysis? Does the brand analysis provide a description of the brands that will be playing the event?

Yes

Somewhat

Total No

Pts

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

Does the brand analysis describe how each brand fits with the Victoria’s Secret brand? Does the brand analysis describe how each brand fits with the cause that Victoria’s Secret is supporting with this event? Does the brand analysis describe how each brand fits with the audience or audiences that will attend the event? Does the brand analysis transition neatly into the next section? Event Details Is there an introduction to the event details section? Do the event details contain a description of all the activities that will take place over the course of the festival? Do these event details “fit” with the Victoria’s Secret brand? Are logistical details included (e.g. how many days, cities, and venues will be required)? Are the event details detailed enough? Do the event details transition neatly into the next section? SPONSORSHIP ANALYSIS Is there an introduction to the sponsorship analysis? Does this introduction contain an overview of this section? Does the introduction transition neatly into the analysis of potential sponsors? Are there at least four nationally/internationally recognized sponsors suggested? For each national/international sponsor, is there a description of why and how they fit with the event (i.e., both with the Victoria’s Secret brand and the audiences)? For each national/international sponsor, is there a description of what benefits the brand should receive from engaging in the sponsorship? For each national/international sponsor, is there a description of the sponsorship requirements expected from each? Are there at least four local recognized sponsors suggested? For each local sponsor, is there a description of why and how they fit with the event (i.e., both with the Victoria’s Secret brand and the audiences)? For each local sponsor, is there a description of what benefits the brand should receive from engaging in the sponsorship? For each local sponsor, is there a description of the sponsorship requirements expected from each? Does the sponsorship analysis discuss how the potential sponsors will be approached? Does the sponsorship analysis transition neatly into the next section?

Yes

Somewhat

Total No

Pts

PROMOTIONAL EFFORTS Is there an introduction to this section? Does this section describe various sales promotion efforts to be utilized in boosting attendance to the event? Do the promotional efforts include a description of potential POP advertising? Do the promotional efforts include a description of potential sales promotion techniques? Do the promotional efforts include a description of social networking opportunities? Do the promotional efforts include a description of support media opportunities? Do the promotional efforts include a description of any alternative promotional efforts? Does this section transition neatly into the next?

Yes

Somewhat

Total No

Pts

Total

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

PUBLIC RELATIONS EFFORTS Is there an introduction to this section? Does the public relations section contain a description of the proactive strategy Victoria’s Secret should adopt? Does this proactive strategy provide the reason for the event? Does this proactive strategy provide the where and when of the event? Does the public relations section contain a description of the reactive strategy Victoria’s Secret should adopt? Does the reactive strategy anticipate potential problems the event could face? Does the reactive strategy provide a plan for dealing with the potential problems the event could face? Does the public relations section transition neatly into the conclusion?

Yes

Somewhat

Pts

Yes

Somewhat

Total No

Pts

PAPER QUALITY Does the paper properly cite using APA style? (If no, then an automatic 0 in paper quality) Does the paper have a references section with complete references? Does the paper appear to have an appropriate number of references? Is the paper well-written? Is the paper relatively misspelling-free? (no more than five noticeable misspellings) Is the paper relatively grammatically correct? (no more than five noticeable grammar mistakes) Can I tell which sections were written by different people? Does the paper have appropriate section and subsection headings? Does the paper follow appropriate formatting requirements (i.e. 1 inch margins, 11 or 12 point font, page numbers, single-spacing, space between paragraphs)? Is there a table of contents? Is there an executive summary of the paper? Are there organized appendices with appropriate materials? Does the paper appear to be an appropriate length? Is there a logical flow to the paper? Is there a title page with a title and author names? Are there page numbers? Is the paper written and presented in an interesting fashion (i.e. with pictures, charts, title page, etc.)? Does the paper appear to be of professional quality?

Yes

Somewhat

Total No

Pts

Total

VIDEO To view the Charmin video for this chapter, go to the book companion website, http://www.cengage.com/marketing/oguinn Bolded answer indicates the correct answer in the multiple-choice video questions.

Chapter 18/Public Relations, Influencer Marketing, and Corporate Advertising

1. The Broadway show in a bathroom can best be described as: a) Public relations b) Branded entertainment c) Product placement d) Corporate advertising 2. Charmin enlisted the help of a variety of celebrities who designed toilet seats that were to be auctioned off for their various charities. Charmin’s promotion of this activity may best be described as what type of corporate advertising? a) Corporate image advertising b) Advocacy advertising c) Cause-related advertising d) All of the above 3. What part does buzz and/or viral marketing relate to the Charmin Times Square campaign? The Charmin campaign is definitely designed to get people talking about the toilet paper they use, developing branded entertainment and public relations so that people will engage in the conversation. In other words, it is designed with buzz in mind. Additionally, when these consumers take that buzz to the web, they’ve engaged in viral marketing. 4. A variety of news organizations caught wind of the Charmin campaign and wrote stories that featured the brand’s activities. What type of public relations tools best describes this activity? a) Feature stories b) Company newsletters c) Publicity d) Sponsored events 5. What is the primary public relations objective incorporated within Charmin’s attempt to achieve a billion impressions with their campaign? a) Promoting goodwill b) Promoting a product or service c) Counteracting negative publicity d) All of the above