ADVERTISING and its importance to Marketing. About Advertising Average person is exposed to more than 2,000 advertisements a week Main Purpose is to present.

ADVERTISING

and its importance to Marketing

About Advertising• Average person is exposed to more than 2,000

advertisements a week• Main Purpose is to present a message that encourages

the customer to buy the product or accept the ideas• Costs are usually lower than other types of promotion• Businesses must choose appropriate mode of

advertising, then the content, for their target market• Can “presell” products before shopping ever starts

Drawbacks to Advertising

• Cannot focus on individual needs because same message is conveyed to all customers

• Some forms can be too expensive

• Inefficient – not everyone exposed is a potential customer

• Messages are often short

Types of Media for Advertising

• Print– Newspaper

– Magazine

– Direct-Mail

– Directory

– Outdoor

– Transit

• Broadcast– Television

– Radio

• Online– Banner Ads– Interstitial– Web Pages

• Other– Specialty – promotional

items– Sports Arena Billboards– Movie Theater Ads– Hot Air Balloons and

Blimps– Instant Coupon Machines

Print Media

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

Newspaper Ads

• Can be daily or weekly• Can be local, regional or

national • Classified

– Grouped by specific category

– Pay by word or line

• Display

– Creative illustration of product

– Mix of art, photographs, headlines, copy, and logo

• Advantages– Large readership with a

high level of involvement by the consumer

– Circulation is known, so businesses can target living area or special interests

– Cost is low– Timely and can change

easily

• What are some disadvantages?

Magazine Advertising Classifications

• Local, regional, national

• Weeklies, monthlies, quarterlies

• Consumer or business/trade

Magazine Advertising

• Can target their audiences because they know circulation and characteristics of readers

• Have longer life span• More likely to be remembered• Print quality is better• People keep magazines longer• Variety of presentation formats• What are the disadvantages?

Direct-Mail Advertising• Can be newsletters, catalogs, coupons, samplers,

price lists, invitations, reply cards• Done by mailing list or in with bill• Highly selective and control timing• Can use incentives• Disadvantages

– Low response level– List becomes dated– Cost is high due to production, postage, buying mailing

list

Directory Advertising

• White and Yellow Pages

• Relatively inexpensive

• Found in 98 percent of American households

• Printed yearly – how is this an advantage and a disadvantage

• Common for local service business

Outdoor Advertising

• Highly visible

• 24-hour a day message

• Can be located to reach specific target markets

• Limited viewing time

• Government regulations

Transit Advertising

• Printed posters found inside commuter trains

• Exterior posters on outside of taxis and buses

• Posters in the station itself

• Economical• Defined urban market

STOP HERE

Newspaper Rates

• Quoted by column inch (1” wide x 1”deep)

• If a column is $17 per column inch and the advertisement is 4 inches wide by 3 inches deep, then– 17 x 4 x 3 = $204

Factors that affect rates

• Run of paper – where the ad is placed in the publication. Does the paper choose or the advertiser choose?

• Use of color• Frequency of advertising• Open rate varies when the ad runs• Contract rate• Cost per thousand readers rate

Which costs more?

• Guaranteed run – Advertiser chooses the last page of the publication

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

Which costs more?

• Black & White ad • Color ad

Which costs more?

• Advertisers who run ads at least once every month

• Advertisers who run ads just during tax season

Which costs more?

• Open Rate– $28 per column inch

on Thursday

– $31 per column inch on Saturday

– $35 per column inch on Sunday

• Contract Rate– Bulk space

• Guarantees that a minimum number of inches will be used during a 12-month period

– Yearly Frequency• Guarantees that an

advertiser will use a minimum number of column inches each week for 52 weeks

Which costs more?

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

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

Assuming you are using the cost per thousand (CPM) rate:

Magazine Rates

• Based on circulation, quality of readership, production technique

• Bleed – costs 15 to 20% more• Color – every time color is added, rates increase; four

color most expensive• Premium position – Back cover, Inside first page• Frequency discounts –Rate per issue decreases as

frequency increases• Commission rate –given by magazine to advertising

agency• CPM

Broadcast Media

• People are more likely to believe broadcast than print

• Merely for entertainment – doesn’t require reading• Average person spends 10 years watching

television by age 70• Average person spends 6 years listening to the

radio by age 70• Good availability, but more expensive

Television Advertising

• Has sound, action and color

• Prime time – between 7 and 10 pm

• 30 to 60 second spot

• Appealing to large companies with widespread distribution

• Directed to a specific audience

Television Ad Costs

• Highest production cost of any media and high dollar cost for time used

• Actual audience size is not assured• Some people leave the room during

commercials• More expensive for Class AA time

(primetime)• Rates are based on viewership

Radio Advertising

• Wide audience – 96% of all people over age 12 in one week

• Best times?– Hint: Drive Time

• 15, 30 or 60 second slots• Effective because of announcer, background music,

jingles, slogans and sound effects• Can select an audience by choosing stations• Messages can be changed easily• Three types – network, national spot, and local

Radio Advertising Disadvantages

• Short life span – once broadcast, it is over

• Lack of visual involvement (that’s why you need a catchy jingle)

Radio Ad Costs

• Each radio station determines rates by time of day

• Run of schedule is cheapest

• Drive time advertising is expensive

• Target audiences, audience size, weekly package plans

Online Advertising

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

Other Media

• Specialty– Items given away with no

obligation

– Printed with company name and address

– Likely to be placed with high visibility

– Distribution is limited

– Fairly inexpensive

• Sports Arena Billboards

• Ads in movie theaters or video rentals

• Hot air balloons and blimps

• Skywriting• Supermarket cart

displays• Instant coupon

machines

Selection of Promotional Media

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

• Three questions– Does the medium have the ability to present the product

and the appropriate business image?

– Does the medium have the ability to target the desired customers?

– Does the medium have the ability to obtain the desired response rate?

Which Media?

• African-American fashion dolls for children ages 7-12

• New line of rain jackets• Vitamins• Movie• Watch that costs $1,500• Computers and computer equipment• Legal services• Used Cars

Promotional Budget Methods

• Percentage of Anticipated Sales– Budget a percentage of last

year’s sales

– Little financial risk

• All you can Afford– After all other expenses are

paid

– Objective to build sales and reputation in the beginning

– Short time only

• Following the Competition– Planned according to

market share– Weak because it is based on

other’s promotional strategies

• Objective and Task– Determines goals and plans

how to reach and determines the cost

– Most effective of the four

Other Activities

• Display print ads around room and have students look, close eyes, and tell which they remember (p.334)

• Institutional advertising graphic and question ( p. 336)• Find an example of a print or broadcast ad you do not like – state what

elements you don’t like, what you would do to improve the ad, despite the dislike of the ad, do you think it is effective? (p. 340)

• Select a magazine and a section of a newspaper that both contain full page ads and answer the following: promotional or institutional; appealing to a want, need or both; target audience; elements that appeal to target; familiar product – other ad campaigns. (p. 341)

• I’m a Pepper – read p. 348 and develop a slogan for next decade (p. 348)• Select a magazine and determine circulation; characteristics of readership;

products advertised; products advertised matched to target (p. 347)• 20 minutes for tv or radio during different intervals – list time, what products,

and other questions (p. 349)

Outside Book Activities

• www.adslogans.co.uk/hofiner.html (Ad Hall of Fame)

• Analyze classified ads (TBE 5/99)

• Computer presentation to make a commercial (TBE 9/00)

• Sell me your idea (TBE 3/3)

• Create an Ad Campaign (TBE 1/99)