1. Advertising: The Media Support System  © 2008 The McGraw-Hill Companies, Inc. All rights reserved Chapter Outline  History  Industry  Controversies

2.  Advertising is an Ancient Activity  Ancient Egyptians had roadside billboards carved in stone.  Gladiatorial shows were advertised on the walls of ancient Rome.  Ancient Greeks had town criers who shouted advertising in the streets. ▪ Sometimes accompanied by musicians ▪ Ancient advertisers understood value of entertainment in conveying their message.  © 2008 The McGraw-Hill Companies, Inc. All rights reserved

3.  Advertising is an Ancient Activity  The first printed advertisements were handbills ▪ Announcements on single sheets of paper ▪ Often posted on the doors of churches.  © 2008 The McGraw-Hill Companies, Inc. All rights reserved

4.  Advertising Comes to America  Many settlers came to America because of advertisements they read in England touting free and fertile farmland.  American newspaper, the Boston News Letter, ▪ Trade advertising ▪ Notices of wares for sale from manufacturers & local merchants. ▪ Not much use for consumer advertising ▪ Most Americans made their own clothing and grew their own food.  © 2008 The McGraw-Hill Companies, Inc. All rights reserved

5.  Ads and the Industrial Revolution  Advertising led to the diffusion of almost every type of innovation. ▪ Encouraged people to bathe more often. ▪ Encouraged teeth brushing and clothes washing. ▪ Encouraged men to shave daily rather than visit a barber every few days. ▪ Autos advertised as the solution to air pollution caused by dried horse manure blowing through the streets.  © 2008 The McGraw-Hill Companies, Inc. All rights reserved

6.  Early Industry Control  Advertisers were prone to exaggeration, or puffery.  By the late 1800s, advertisers were making outrageous claims and outright deceptions.  Miracle elixirs promised to cure gout, tuberculosis, and heart disease but many were flavored drinks that were mostly alcohol and often contained addictive drugs such as heroin and morphine.  © 2008 The McGraw-Hill Companies, Inc. All rights reserved

7.  Early Industry Control  The Pure Food and Drug Act was passed in 1906 largely in reaction to patent medicine claims. ▪ Pure Food and Drugs Act does not prohibit false therapeutic claims only false and misleading statements about the ingredients or identity of drug.  The Federal Trade Commission (FTC) was established in 1914 as a national watchdog of business and advertising.  © 2008 The McGraw-Hill Companies, Inc. All rights reserved

8.  Ads Take to the Airwaves  As the radio industry developed in the early 20th Century ▪ Movement to leave broadcasting free of advertising and run it as a common carrier of mediated interpersonal communication.  Britain decided to fund its state-run broadcasting system, the BBC, by license fees paid by radio owners, not advertising. ▪ British radio and television did not accept advertising until the 1950s.  © 2008 The McGraw-Hill Companies, Inc. All rights reserved

9.  Ads Take to the Airwaves  In 1922, the first commercial was run by AT&T’s WEAF in New York.  By 1926, when network radio began, advertising had become an acceptable means of supporting radio.  © 2008 The McGraw-Hill Companies, Inc. All rights reserved

10.  Advertising became a specialized art form with the advent of television. ▪ TV ads became 30-second entertainments with characters such as Speedy Alka-seltzer singing catchy jingles like “Plop, plop, fizz, fizz, oh, what a relief it is!” that people were humming the next day.  Commercial Commercial  © 2008 The McGraw-Hill Companies, Inc. All rights reserved

11.  One failed but controversial attempt at a new style of promotion involved subliminal advertising, ▪ Advertising that the consumer was not consciously aware of.  Subliminal Message Video Subliminal Message Video  © 2008 The McGraw-Hill Companies, Inc. All rights reserved

12.  Diversity and Target Marketing  Target marketing  Breaks up the ad audience into diverse segments to reach individuals likely to purchase a particular product. ▪ Advertisers like to minimize circulation waste, ▪ Part of advertising received by people not trying to be reached. ▪ Advertisers direct ad campaigns toward women, African Americans, Hispanics and others.  © 2008 The McGraw-Hill Companies, Inc. All rights reserved

13.  Advertising begins with clients who provide the product to be sold. ▪ Clients spend about 20 percent of revenue on advertising. ▪ The gross dollar amount spent is known as billings.  There are over 13,000 ad agencies in the U.S.  In-house agencies ▪ Are built into the client’s corporate structure.  Boutique agencies ▪ Specialize in creative services but do not cover aspects such as media buys.  Full service agencies ▪ Supply advertising, marketing, and often public relations services the client needs.  © 2008 The McGraw-Hill Companies, Inc. All rights reserved

14.  Positioning ▪ Finding the product’s most specific customer type & creating appeals that will be effective with that customer.  Research can involve focus groups ▪ Potential users who sit around and chat about a potential campaign under the guidance of a researcher.  © 2008 The McGraw-Hill Companies, Inc. All rights reserved

15.  Newspapers ▪ Easy-to-find ads on the most current local sales, have the advantage of “money off” coupons shopper can take to the store.  Television ▪ Perfect for image advertising and encourages name recognition better than most other media. ▪ TVs biggest disadvantage is that it is extremely expensive. ▪ Another disadvantage is clutter, ▪ The glut of commercials that compete for the viewer’s attention. ▪ Infomercials ▪ Are program length commercials disguised as information and talk shows.  © 2008 The McGraw-Hill Companies, Inc. All rights reserved

16.  The advantages of advertising in magazines include ▪ Pass-along rate (4 to 5 extra people read them, besides the purchaser) ▪ Shelf life (people keep them for weeks, and sometimes longer). ▪ Glossy paper makes them appropriate for fine art work. ▪ Magazines have been medium of choice for special-interest advertising since 1950s ▪ Partly because of very little wasted circulation.  Outdoor ads ▪ Big and impressive, and can’t be turned off like TV or thrown away like a newspaper.  © 2008 The McGraw-Hill Companies, Inc. All rights reserved

17.  The Internet is the most rapidly growing medium of advertising, earning nearly $7 billion annually by 2007.  Web ads are a convergence of all former ads. ▪ Like newspapers & yellow pages, online ads are placed where consumers are looking for product information. ▪ Online ads compete with magazines in terms of artwork. ▪ They involve motion and sound, and have the entertainment advantages of radio and TV. ▪ Some users resent Internet ads because they are developing a clutter problem. ▪ Do you think internet ads are effective  © 2008 The McGraw-Hill Companies, Inc. All rights reserved

18.  Advertising Objectives ▪ Image advertising – ▪ Promoting an idea that is associated with the product in the audiences mind. ▪ Adding value to the product that is not inherently within it ▪ A sexy model draped over the hood of a car,  Seemingly offering herself to the male consumer who is the main customer for new cars.  © 2008 The McGraw-Hill Companies, Inc. All rights reserved

19. ▪ Advocacy ads ▪ Designed to affect public opinion or government policy. ▪ Corrective ads try to rectify impressions from by earlier ads. ▪ Sometimes legally mandated, the FTC required from Listerine, whose ads falsely claimed its mouthwash could kill the germs that cause colds. ▪ Counter ads ▪ Usually run by a non profit agency to fight images created by large scale campaigns they feel are not in the public interest. ▪ Counter ads based on parody are called guerrilla ads because they use unorthodox tactics. ▪ Public service announcements (PSAs) Public service announcements (PSAs) ▪ Ads presented as a community service.  © 2008 The McGraw-Hill Companies, Inc. All rights reserved

20.  Advertisers believe messages should be treated like other protected forms of free speech ▪ Courts and legislators feel that the paid, persuasive nature of advertising makes it a special case.  Bait and switch advertising ▪ Provides bait in the form of an advertised bargain and a “switch” when the customer is talked into a more expensive product.  Parity statements ▪ Wording to make a product or service sound superior to others when all the ad claims is the product is just as good as its competition - no better, no worse. ▪ “Bayer: Nothing’s stronger for everyday pain” is a parity statement.  © 2008 The McGraw-Hill Companies, Inc. All rights reserved

21.  Critics feel that ads should not be directed toward very young children ▪ Because they see ads as more entertainment & don’t understand commercials are to persuade them.  Kids as consumer trainees: ▪ The belief that ads mold a child’s character and personality by encouraging greed ▪ By suggesting that people’s importance stems from personal possessions rather than who they are.  Junk food ads: ▪ Critics are concerned about unrestricted “junk food ads” directed at children. ▪ Blame the growing obesity problem in the US at least partially on these ads.  © 2008 The McGraw-Hill Companies, Inc. All rights reserved

22.  Alcohol and cigarette ads: A 1999 settlement between tobacco companies and states’ attorneys general banned: ▪ Transit and billboard advertising in the U.S. ▪ The distribution of apparel and other merchandise with brand names or logos. ▪ Brand-name sponsorship of concerts and events with a significant youth audience. ▪ Payments for the use of tobacco products in movies, TV shows and theater productions.  Where do you see cigarette ads today  © 2008 The McGraw-Hill Companies, Inc. All rights reserved

23.  Advertiser Influence on Media Content  Devices such as remote controls, videotape recorders, and TiVo assist viewers in skipping ads.  Many industry professionals feel product placement (product integration) – making commercials part of the program – is their only recourse.  What do you think of these?  © 2008 The McGraw-Hill Companies, Inc. All rights reserved

24.  Economic Clout: Influencing the News  Revenue generated by advertising gives advertisers an extraordinary amount of power.  This power becomes controversial when used to influence the content of the news or information that the medium carries.  Sometimes advertisers try to influence content by canceling ads if they don’t agree with ideas expressed in editorial content.  Too often, the media are willing to be influenced by their advertisers.  © 2008 The McGraw-Hill Companies, Inc. All rights reserved