1. PowerPoint Presentation by Charlie Cook The University of West Alabama Eighth Edition © 2010 South-Western, a part of Cengage Learning All rights reserved. Other Advertising Media CHAPTER 14 INTEGRATED MARKETING COMMUNICATIONS IN ADVERTISING AND PROMOTION

2. 1.Explain why postal mail advertising is an efficient and effective ad medium. 2.Understand p-mails five distinctive features compared to mass forms of advertising. 3.Appreciate the role of database marketing, data mining, and lifetime-value analysis. 4.Appreciate branded entertainment and brand placements in various venues (movies, TV, etc.). 5.Appreciate the value of yellow-pages advertising. 1.Explain why postal mail advertising is an efficient and effective ad medium. 2.Understand p-mails five distinctive features compared to mass forms of advertising. 3.Appreciate the role of database marketing, data mining, and lifetime-value analysis. 4.Appreciate branded entertainment and brand placements in various venues (movies, TV, etc.). 5.Appreciate the value of yellow-pages advertising. Chapter Objectives After reading this chapter you should be able to: © 2010 South-Western, a part of Cengage Learning. All rights reserved.14–2

3. 6.Recognize the growth and role of video-game advertising (advergaming). 7.Understand the role of cinema advertising. 8.Appreciate the potential value of various alternative ad media. 6.Recognize the growth and role of video-game advertising (advergaming). 7.Understand the role of cinema advertising. 8.Appreciate the potential value of various alternative ad media. Chapter Objectives (contd) After reading this chapter you should be able to: © 2010 South-Western, a part of Cengage Learning. All rights reserved.14–3

4. © 2010 South-Western, a part of Cengage Learning. All rights reserved.14–4 Framework for Various Forms of Other Advertising Table 14.1 Direct Advertising via Postal Mail Brand Placements in Movies, in TV Programs, and Elsewhere Yellow-Pages Advertising Video-Game Advertising (Advergaming) Cinema Advertising Potpourri of Alternative Ad Media

5. © 2010 South-Western, a part of Cengage Learning. All rights reserved.14–5 Direct Advertising via Postal Mail Postal Mail (P-mail) AdvertisingPostal Mail (P-mail) Advertising Is any advertising matter the postal service delivers to the person whom the marketer wishes to influence. Is any advertising matter the postal service delivers to the person whom the marketer wishes to influence. Letters, postcards, programs, calendars, folders, catalogs, videocassettes, blotters, order blanks, price lists, and menus. Letters, postcards, programs, calendars, folders, catalogs, videocassettes, blotters, order blanks, price lists, and menus. Why Use P-mailWhy Use P-mail Less expensive than television advertising Less expensive than television advertising Better targeting of messages to desired prospects Better targeting of messages to desired prospects Easier identification of prospects who purchased advertised product Easier identification of prospects who purchased advertised product Favorable attitudes of consumers toward mail ads Favorable attitudes of consumers toward mail ads

6. © 2010 South-Western, a part of Cengage Learning. All rights reserved.14–6 Illustrations of Successful P-mail Campaigns Caterpillar 414E Industrial Loader Campaign (B2B) Stacys Pita Chip Campaign (Consumer Packaged Good) The Saab 9–5 Campaign (Consumer Durable Good) Highly Successful Direct Mail Campaigns

7. © 2010 South-Western, a part of Cengage Learning. All rights reserved.14–7 P-mails Distinctive Features Measurability Targetability Efficiency Flexibility Accountability

8. © 2010 South-Western, a part of Cengage Learning. All rights reserved.14–8 What Functions Does P-mail Accomplish? P-mail Campaigns Can:P-mail Campaigns Can: 1.Increase sales and usage from current customers 2.Sell products and services to new customers 3.Build traffic at a specific retailer or Web site 4.Stimulate product trial with promotional offers and incentives 5.Generate leads for a sales force 6.Deliver product-relevant information and news 7.Gather customer information that can be used in building a database 8.Communicate with individuals privately to minimize the likelihood of competitive detection

9. © 2010 South-Western, a part of Cengage Learning. All rights reserved.14–9 The Special Case of Catalogs Effects of CatalogsEffects of Catalogs Two-thirds of recipients visit cataloguers web site Two-thirds of recipients visit cataloguers web site Sales to catalog recipients are 150% greater Sales to catalog recipients are 150% greater Catalog recipients buy more items and spend more money Catalog recipients buy more items and spend more money Advantages of Using CatalogsAdvantages of Using Catalogs Saves time No fear for security Saves time No fear for security No shopping pressure Ease of purchasing No shopping pressure Ease of purchasing Comparable goods Attractive guarantees Comparable goods Attractive guarantees

10. © 2010 South-Western, a part of Cengage Learning. All rights reserved.14–10 Growth in Catalog Marketing Waning interest in catalogs Increased cost of catalog marketing Third-class postal rates increases Factors in the Slowdown in the Growth Rate of Catalog Marketing

11. © 2010 South-Western, a part of Cengage Learning. All rights reserved.14–11 Audiovisual Advertising Audiovisual AdvertisingAudiovisual Advertising Involves the use of electronic devices to present audiovisual advertising messages captured in the form of videotapes, CD-ROMs, or DVDs. Involves the use of electronic devices to present audiovisual advertising messages captured in the form of videotapes, CD-ROMs, or DVDs. Appears to be both more effective and less expensive than print advertising delivered via direct mail. Appears to be both more effective and less expensive than print advertising delivered via direct mail. Research shows customers are less likely to throw away these mailings than a brochure or other printed material. Research shows customers are less likely to throw away these mailings than a brochure or other printed material.

12. © 2010 South-Western, a part of Cengage Learning. All rights reserved.14–12 The Use of Databases Benefits of an Up-to-date DatabaseBenefits of an Up-to-date Database Directs advertising efforts to the best prospects for a companys products or services Directs advertising efforts to the best prospects for a companys products or services Offers varied messages to different groups of customers Offers varied messages to different groups of customers Creates long-term relationships with customers Creates long-term relationships with customers Enhances advertising productivity Enhances advertising productivity Provides the capability to calculate the lifetime value of a customer or prospect Provides the capability to calculate the lifetime value of a customer or prospect

13. © 2010 South-Western, a part of Cengage Learning. All rights reserved.14–13 The Use of Databases (contd) Customer Lifetime ValueCustomer Lifetime Value Is valuing each present or prospective customer is viewed not as an address but as a long-term asset Is valuing each present or prospective customer is viewed not as an address but as a long-term asset Is the net present value (NPV) of the profit that a firm could realize on average new customer during a given number of years Is the net present value (NPV) of the profit that a firm could realize on average new customer during a given number of years Augmenting the Lifetime Value of CustomersAugmenting the Lifetime Value of Customers Increase the retention rate Increase the retention rate Increase the referral rate Increase the referral rate Enhance the average purchase volume per customer Enhance the average purchase volume per customer Cut direct costs for distribution channel Cut direct costs for distribution channel Reduce marcom costs Reduce marcom costs

14. © 2010 South-Western, a part of Cengage Learning. All rights reserved.14–14 Customer Lifetime-Value Analysis Table 14.2 Note: Discount rate assumes an interest rate of 20 percent: D = (1 + i ) n

15. © 2010 South-Western, a part of Cengage Learning. All rights reserved.14–15 The Use of Databases (contd) Database MiningDatabase Mining The computerized process of discovering hidden facts (i.e., revealing relationships among customer buying behavior variables) contained in a firms databases. The computerized process of discovering hidden facts (i.e., revealing relationships among customer buying behavior variables) contained in a firms databases. Database Manipulation and Mail TargetingDatabase Manipulation and Mail Targeting R-F-M system of point values R-F-M system of point values R ecency of a customers purchase R ecency of a customers purchase F requency of a customers purchases F requency of a customers purchases M onetary value of a customers purchases M onetary value of a customers purchases

16. © 2010 South-Western, a part of Cengage Learning. All rights reserved.14–16 The Use of Databases (contd) RFM System in ApplicationRFM System in Application Testing effectiveness: Testing effectiveness: Categorize customers into quartiles or quintiles cells Categorize customers into quartiles or quintiles cells Take a representative random sample from each cell Take a representative random sample from each cell Distribute a catalogue, brochure or other p-mailing Distribute a catalogue, brochure or other p-mailing Provide sufficient time for sampled customers to respond Provide sufficient time for sampled customers to respond Determine response rate and average expenditure per cell Determine response rate and average expenditure per cell Project these statistics to full membership Project these statistics to full membership Based on response-rate and average-expenditure and with knowledge of the cost of distributing the mailing, calculate whether this mailing is a profitable proposition Based on response-rate and average-expenditure and with knowledge of the cost of distributing the mailing, calculate whether this mailing is a profitable proposition Decision rule: Target direct mailing only to those cells whose revenue potential outstrips mailing expense Decision rule: Target direct mailing only to those cells whose revenue potential outstrips mailing expense

17. © 2010 South-Western, a part of Cengage Learning. All rights reserved.14–17 Brand Placements in Movies and TV Programs Brand Placement (Branded Entertainment)Brand Placement (Branded Entertainment) Shows evidence of limited but growing effectiveness Shows evidence of limited but growing effectiveness Builds brand awareness and enhances recall Builds brand awareness and enhances recall Provides a peripheral route of persuasion Provides a peripheral route of persuasion Is low risk in that it: Is low risk in that it: Is less intrusive that ads Is less intrusive that ads Is less like to be rejected by younger consumers Is less like to be rejected by younger consumers Enhances the brand image when appropriately placed Enhances the brand image when appropriately placed Can be detrimental if placement control is lost Can be detrimental if placement control is lost Can be difficult to calculate its effectiveness and ROI Can be difficult to calculate its effectiveness and ROI Is becoming more expensive Is becoming more expensive

18. © 2010 South-Western, a part of Cengage Learning. All rights reserved.14–18 Brand Placements in Movies and TV Programs (contd) Factors determining the value of a brand placement:Factors determining the value of a brand placement: The amount of onscreen time and foreground or background positioning of the brand in a scene The amount of onscreen time and foreground or background positioning of the brand in a scene Whether characters use the brand, mention it, and exclaim its virtues Whether characters use the brand, mention it, and exclaim its virtues Whether the brand appears during an important plot point Whether the brand appears during an important plot point Younger consumers appear to be the most responsive to brand placement in moviesYounger consumers appear to be the most responsive to brand placement in movies

19. © 2010 South-Western, a part of Cengage Learning. All rights reserved.14–19 Yellow-Pages Advertising Yellow PagesYellow Pages Is an online and print ad medium for both local and national advertisers that 60% of consumers use weekly to: Is an online and print ad medium for both local and national advertisers that 60% of consumers use weekly to: Save time when they are seeking a product or service supplier and are prepared to make a purchase Save time when they are seeking a product or service supplier and are prepared to make a purchase Save energy and money Save energy and money Find information quickly Find information quickly Typical UsersTypical Users Are in the 25-to-49 age category Are in the 25-to-49 age category Are college educated Are college educated Have household incomes of $60,000 and up Have household incomes of $60,000 and up

20. © 2010 South-Western, a part of Cengage Learning. All rights reserved.14–20 Yellow-Pages Advertising (contd) Distinguishing Features of Yellow-Pages AdvertisingDistinguishing Features of Yellow-Pages Advertising Ads actively sought by consumers Ads actively sought by consumers Quality of ad placements determined by ad size and long-term participation of advertisers Quality of ad placements determined by ad size and long-term participation of advertisers Creative limits on ad format and for entire year Creative limits on ad format and for entire year Annualized method of purchasing ad space Annualized method of purchasing ad space

21. © 2010 South-Western, a part of Cengage Learning. All rights reserved.14–21 Video-game Advertising (a.k.a. Advergaming) Market CharacteristicsMarket Characteristics In-game advertising totaled $400 million in 2008 In-game advertising totaled $400 million in 2008 Paid advertising to total nearly $2 billion by 2011 Paid advertising to total nearly $2 billion by 2011 60+ million gamers by 2009 60+ million gamers by 2009 UsersUsers Are young and over 40 percent are female Are young and over 40 percent are female Play a game for an average of 40 hours Play a game for an average of 40 hours Have an average household income between $35,000 and $75,000 Have an average household income between $35,000 and $75,000 Play online with multiple other players Play online with multiple other players

22. © 2010 South-Western, a part of Cengage Learning. All rights reserved.14–22 Cinema Advertising Market FeaturesMarket Features In-theater advertising is a $1 billion market In-theater advertising is a $1 billion market Advertisements appearing prior to a featured film do not antagonize consumers Advertisements appearing prior to a featured film do not antagonize consumers Target Market CharacteristicsTarget Market Characteristics Younger consumers are more positively disposed toward cinema advertising than older individuals Younger consumers are more positively disposed toward cinema advertising than older individuals

23. © 2010 South-Western, a part of Cengage Learning. All rights reserved.14–23 Potpourri of Alternative Advertising Media Alternative Media ExamplesAlternative Media Examples Post-it notes Post-it notes Stadium cup holders Stadium cup holders Sides of garbage trucks Sides of garbage trucks Restroom space Restroom space Labels on fruits and vegetables Labels on fruits and vegetables Back covers of comic books Back covers of comic books Skywriting Skywriting Human body Human body

24. © 2010 South-Western, a part of Cengage Learning. All rights reserved.14–24 3Ms Post-it Notes as an Advertising Medium Figure 14.1

25. © 2010 South-Western, a part of Cengage Learning. All rights reserved.14–25 A Football Stadiums Cup Holders as an Advertising Medium Figure 14.2

26. © 2010 South-Western, a part of Cengage Learning. All rights reserved.14–26 Closing Advice to Advertisers Contact brand users wherever and whenever possibleContact brand users wherever and whenever possible Use all appropriate touch points to convey messages that will increase brand awareness and augment imagesUse all appropriate touch points to convey messages that will increase brand awareness and augment images Be sure to integrate messages across all touch points to assure they speak with a single voice.Be sure to integrate messages across all touch points to assure they speak with a single voice.