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What is advertising? Advertising and marketing are not the same thing. Consumers equate the two because advertising is the most visible component of marketing.

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Presentation on theme: "What is advertising? Advertising and marketing are not the same thing. Consumers equate the two because advertising is the most visible component of marketing."— Presentation transcript:

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2 What is advertising? Advertising and marketing are not the same thing. Consumers equate the two because advertising is the most visible component of marketing. However, it is only one component.

3 Advertising is most important for products and services that are: Identical: If there is little or no difference among brands, the one with the best advertisement wins. Mass marketed Advertising to millions in order to sell products to millions. Easy to describe A complex product needs more than just advertising to encourage people to purchase it; simple products can be easily advertised

4 Advertising is important to: Low priced: Low priced items need an increased awareness amongst consumers for the product. Compare this to luxury items, which are not advertised as much if at all. New: A new product needs to encourage consumers to buy the product Heavily competitive: If there is a lot of competition within a particular industry, advertising is used to attract as many consumers in the limited number to purchase your product as opposed to that of the competition.

5 Goals of advertising Brand Awareness and Positioning: Consumers become aware of brands usually by hearing about it, or seeing others use it. Advertising with a focus on creating brand awareness informs the target market about the brand name, benefits, appearance, how to obtain, etc. Brand Trial To entice customers to try a product, incentive is given through advertising. Often this is in the form of discount coupons, free samples, give aways. Brand Preference Try to convince consumers that your brand has a better value equation than the competition, try to influence consumer’s brand preference.

6 Goals of advertising – cont’d Brand Reminder As new brands come onto the market, older, more established brands need to inform customers that they are still out there. Brand Repositioning As societal and technical changes occur, products are often repositioned for new or different target markets. Often these products are at the decision stage of the PLC. The danger here is the possible alienation of the original customers.

7 Creating the Message Advertising is a form of communication, trying to communicate an idea from one person to another. The process follows a specific flow: Intent→Message→Media→Reception→Action Effective advertising needs to have an objective or goal (intent) which the creators know before making the advertisement. This objective helps in the development of the message.

8 Turning an intent into a message -- Step 1 Research the product to determe the USP and big idea -- USP (Unique Selling Point): look for the feature or benefit that cannot be duplicated by another product or service the big idea is the simple message that will communicate the USP to the audience. Winning USP Examples: Package Shipping Industry Pain - I have to get this package delivered quick! USP - "When it absolutely, positively has to be there overnight.“

9 Winning USP Examples: Food Industry Pain - The kids are starving, but Mom and Dad are too tired to cook! USP - “Put food on the table without stepping foot in the kitchen ” Cold Medicine Industry Pain - You are sick, feel terrible, and can't sleep. USP - "The nighttime, coughing, achy, sniffling, stuffy head, fever, so you can rest medicine." Candy Industry Pain - You get melted chocolate on your hands... USP - " The milk chocolate melts in your mouth, not in your hand"

10 Creating the Message – step 2 Selecting an appeal that will communicate to the target market: Advertisements can appeal to consumers in one of four major motivation areas (sometimes a combination of several of them): Biological Appeals: Focus on consumer’s basic needs for health and security. Emotional Appeals: Focus on consumer’s feelings; Make the consumer believe the product will effect them the same way as the ad. SubaruSubaru Rational Appeals: Focus on consumer’s reasoning abilities, stressing convenience, savings, safety, logical reasons to buy or not buy product. Often uses the value equation to prove worth of product or service. Social Appeals: Focuses on how social pressures influence consumer behaviour. Society sets standards, shows what is acceptable. Usually sets up a negative situation and shows the solution.

11 Selecting the Media Factors Used to Determine Medium: Reach The number of people exposed to your message. Magazine and newspaper use circulation statistics to express reach. Television and radio calculate reach by figuring out the total number of people watching/listening at any one time. Most media set prices based on reach. Frequency Number of times an audience will hear/see ad in a specific time period Selectivity The ability of the chosen medium to focus on your target audience. Some companies want a broad target market, some want to advertise to a small, specific group which will use their product. Specialty products (ie. Protein products for weightlifters) will do better to advertise in a muscle magazine than in a local newspaper; they will reach their target market more effectively because of the selectivity of the medium.

12 Factors Used to Determine Medium – cont’d Durability The length of time the advertisement lasts. Newspapers last 24 hours, magazines last longer. TV/radio ads have no durability, unless the program is recorded. The more durable the ad, the more frequently the audience can refer to it. Lead-Time The amount of time required to prepare an ad for that medium. TV and magazines require a lead-time of a few weeks, radio and newspaper need only a few days. A short lead-time may be advantageous if an ad is in response to a special event. Mechanical Requirements The technical complexity of preparing the ad for the selected medium. Radio ads are simple to prepare, TV ads are a lot more complex. This complexity is part of the reason companies will hire ad agencies rather than try to film commercials themselves.

13 Factors Used to Determine Medium – cont’d - 2 Clutter The competition for the audience’s attention while they are reading/listening to your advertisement: External clutter refers to other activities which accompany the consumption of media—is the person sitting in a quiet chair, relaxed, or in bumper-to-bumper traffic in the 401 (and therefore not listening to your ad on the radio because they’re concentrating on the car in front of them)? Internal clutter refers to other ads on the same page which are vying for your audience’s attention;

14 Factors Used to Determine Medium – cont’d - 3 Costs The amount of money involved in preparing the ad and paying for the space and time in the selected medium. Cost is usually expressed as how much it costs to reach 1000 people using that type of media at that time, the short form being CPM (M is Roman numeral for 1000). A $2,000 advertising campaign which will reach 200,000 people has a CPM of $10. The price of advertising on TV varies greatly: the price of a 30-second time slot during the 2012 NFL Super Bowl was about $3 million. By comparison, a local commercial, running on a less-popular program during prime time hours, will only cost about $100,000. Local advertising during the day can be even cheaper, running from $90 to $1,500. This does not include the cost to produce the commercial which averages $350,000.

15 Break... To do: 1.Compete Study Notes on this section 2. Name the “appeal” of the ads on slides 43, 45, 50 and 51

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17 Types of Media Magazines - Used to reach very specific consumers. - Most consumers are reluctant to throw magazines away, so they are often read several times. - Generally printed in colour. Since advertisements on the inside front and back cover are seen the most often a premium is charged for them. -A full colour ad is costly, most small companies cannot afford to advertise in magazines. - Often requires a lot of lead time (many magazines are monthly)

18 Types of Media - 2 Newspapers -Excellent media for local advertisers, usually community based. - Wide variety of ad sizes/prices. Short lead time required. - Newspapers are retained for up to a week, but rarely referred to more than once, - Difficult to establish a demographic, outside of specific sections of the paper. -Ads sometimes get lost in the clutter. Television -Can reach hundreds of millions of people at once, sometimes only a few hundred (ie. Local community station, 3:00am). -TV ads are costly to create, and require a lot of lead time. - Technically more complex than magazine ads. - Clutter is a major problem, often the consumer leaves during commercials. - Not durable.

19 Types of Media - 3 Radio -Radio is everywhere, has a good local reach, ads don’t require a lot of lead time and are not as complex (expensive) to create. - Can be selective about advertising based on day parts: early morning, wake-up, morning drive… Station format (type of programming) will attract specific audience, can tailor message to a certain demographic easier than TV. - A radio ad has no frequency or durability, so more spots need to be bought. -Ads can be more creative because of lack of visual. Out-of-home - Billboards, bus and subway advertising, shelters, taxis, etc. - Have excellent frequency (you may see the same billboard 40 times a month) To achieve 100% frequency, advertisers must purchase (rent) many showings or faces (space). -Ad prep takes a lot of lead time, technically complex (can’t simply “print” billboard ad on regular printer). - A lot of clutter, but an effective ad can cut through that. Ads need to be brief (most often viewed while moving), usually a large headline and illustration.

20 Types of Media - 4

21 Types of Media - 5 Direct-to-home Most often called “junk mail”. Come in two forms: Target campaigns: use specific mailing lists to reach a specific group of people. Small reach, but high selectivity. Junk mail specifically addressed to you. Aggregate campaigns: local distribution company used to saturate an area with advertising. These have reach but no selectivity. - Mailing costs may be expensive, ad needs to look polished and professional - - Unless well thought, there is little durability.

22 Types of Media - 6 Internet Three major types: - company web sites, - banner ads - advertising. -Selectivity of web sites is high because most people are there because they want to be. - Banner ads may or may not be effective depending on the number of hits a site receives. - The biggest problem with is spammers, although many legitimate companies maintain subscription lists with the permission of the individual. Overall, internet advertising is relatively inexpensive, but it takes an impressive banner ad/website layout/ to attract the attention of the consumer.

23 Types of Media - 7 Specialty Advertising Also known as premium and incentive marketing. Place brand identification on promotional tools (pens, key chains, matchbooks, watches, desk accessories, etc.). Prices range from relatively inexpensive to very expensive. It takes some time to make the products, limited reach, not really used for public advertising.

24 Break...2 To do: 1.Compete Study Notes section on types of media 2.Take one of the logos you created in a previous project and put it on a baseball cap and a water bottle (Use MS Publisher). - See graphics on next slide.

25 If these are not to your liking use Google Images to find more suitable ones

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27 Sales Promotion Sales promotion consists of non-personal activities used to increase sales over time. Done to: - Build traffic in a store - Create extra interest in a product - Motivate staff - Introduce a new product and generate brand trial - Clear out discontinued/end-of-season stock

28 Couponing Gives customers refund on product purchased. Placed in promotional media Canadian marketers distributed 2.67 billion coupons with an average value of $1.25 in 2001 About 5% of coupons are redeemed A woman in Vancouver saved $23,000 in coupons one year TV show created – extreme couponing Value-centric shoppers saved $3.7 Billion in 2010 using coupons Last year set a record for coupon use in the US., 3.3 billion coupons used Advantage: People value saving money. Disadvantage: A lot of costs, it takes effort for customers.

29 Virtual Couponing: iButterfly Augmented Reality App, allows consumers to ‘catch’ coupons

30 Sampling When a company gives away quantity of product to prospective customers. Advantage: encouraging brand trial Disadvantage: very expensive.

31 Contests and Sweepstakes Award a prize to selected participants. Contests – skill required Sweepstakes – random draw Advantage: consumers get interactive Disadvantage: many customers assume they will not win, sales may drop over time. Example of Contest: Roll up the Rim to Win

32 Bonus Packs Package offers increased quantity for price of smaller package. E.g. buy one – get one free (soap sold in multi-packs) Advantage: Customers get more for their money Disadvantage: Costly

33 Premium Packs Products that include a free item (Nintendo + free store gift card) Advantage: Customers get more for their money Disadvantage: Costly

34 Rebates Money provided back to consumer when sent in Advantage: Increases demand Disadvantage: Easily copied

35 Cross Promotions Two or more companies team up to offer a special deal. E.g. Festive Special - Swiss Chalet, Lindor, IndigoKids In Lindor Chocolate Box you also receive: IndigoKids - $5 promotional Gift Card Swiss Chalet Coupon –BOGO Coupon Advantage: More incentive for customers Disadvantage: Must be sure target markets are similar

36 Bonus Programs (Loyalty Cards) Encourages repeat purchases Advantage: Helps create loyalty Disadvantage: High cost for customer

37 Sales Promotion - Disney “Give a Day, Get a Disney Day” Walt Disney – Won Best Promotion of 2010 Pro Award First 1 million people who donated a day of their time to charity received a free-one day ticket to either Disneyworld or Disneyland. Guests were given the option to donate their ticket to a charitable organization. Results: 67 days to reach goal of inspiring 1 million people to sign up and commit to a volunteer activity

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39 Product Placement Product placement is based on the concept of Product Integration Products embedded within TV shows in a natural way Product Placement – Let’s learn more... Example A Example B

40 Product Placement Summary Product Placements: Try to link emotions that are tied up with character to the brands. By late 2004, embedded advertising emerged as one of the fastest growing segments of the ad market Prediction: Next year, more than 75% of TV network shows will feature product placements NOW: 6.6 billion US dollars of commercials were being fast forwarded through (social media/PVRs on the rise) The key is keeping the placements believable and seamless

41 To do: 1.Compete Study Notes on types on Sales Promotion. 2.Take the scene on the last slide and insert a baseball cap or water bottle in a subtle way. (your logo must be on the item -- use MS Publisher) 3.Create a bitstrips comic that advertises one of the products you developed in a previous assignment.

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50 Slide 50

51 Slide 51

52 Cannes International Advertising Festival: 2010 Lion Winners

53 Scene from “Tower Heist”


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