1 Chapter 1 Introduction to Advertising

2 Learning Objectives Definition and roles of advertising Major players of advertising An overview of what makes effective advertising Current advertising issues

3 EXH4-9

4 U.S. Advertising Volume, 1997 ($ million) SOURCE: Reprinted with permission from the May 18, 1998, issue of Advertising Age. Copyright Crain Communications Inc., 1998.

5 What is Advertising? Advertising is: (1) Paid, (2) Nonpersonal Communication, (3) From An Identified Sponsor (4)Using Mass Media, (5) To Persuade or Influence an Audience.

6 Roles and Functions of Advertising To identify and differentiate from other offerings To communicate information about the product To induce consumers to try new products and to suggest reuse To induce consumers to try new products and to suggest reuse To stimulate the distribution of a product To increase product use To build value, brand preference, and loyalty To lower the overall cost of sales

7 Roles of Advertising (cont’d) To associate feelings with brand To link brand with peers and group norms (And…. More?) To …

8 A model of the communication/persuasion process Awareness/Familiarity with Brand Information re Brand Attributes or Benefits Creation of Brand Image/Personality Association of Feelings with Brand Linkage of Brand With Peers/Experts and Group Norms Reminder or Inducement about Brand Trial Creation of Brand Image/Personality Creation of Brand Image/Personality

9 The Classifications of Advertising By Target audience By Geographic Area By Medium By Purpose Consumer Business - Trade - Professional - Agriculture Local (retail) Regional National Global Print Broadcast (electronic) - Radio - TV Out-of-Home Direct-Mail Internet Product Nonproduct Commercial Non- commercial Action Awareness “Teaser”

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11 Five Players of Advertising Advertiser (Client) Advertising Agency Media Organization Suppliers Target Audience Marketing strategy and final approval Creative and media plan Audience delivery Marketing communication specialists, collateral services Receivers of marketing communications

12 Name great advertising campaigns or great ads:

13 What Makes Effective Advertising? Extension from sound marketing strategy Focus on consumer’s view Persuasive Break through the clutter Never promise more than deliverable The creative idea not overwhelming the strategy

14 Broad Dimensions That Characterize Great Advertising StrategyStrategy CreativityCreativity ExecutionExecution The ultimate test for the greatness of an ad is whether it achieved its intended objectives.

15 Good or Great Ads Work on Two Levels Achieve the Sponsor’s Objectives Achieve the Sponsor’s Objectives Satisfy the Customer’s Objectives by Engaging Them & Delivering a Relevant Message Characteristics of Great Ads

16 Interest Knowledge Attitude Change Behavioral Change/ Trial Repurchase/Commitment/ Reminder Repurchase/Commitment/ Reminder Identify Personal Needs Gather Relevant Information Support Risk Associated With Attitude Change Support Risk Associated With Attitude Change Enhance Need Reduction Reinforce Trial and Need Reduction Reinforce Trial and Need Reduction Dual Process of Great Advertising: Reaching Objectives (Fig. 1.1) ADVERTISING OBJECTIVES Satisfy Curiosity/Memory/ Entertainment Satisfy Curiosity/Memory/ Entertainment CONSUMER’S OBJECTIVES Attention/ Awareness

17 Interactive Advertising Integrated Marketing Communication Consumer Power, Relationship Marketing and Customization Consumer Power, Relationship Marketing and Customization Globalization Niche Marketing Current Advertising Issues

18 Differential Promotion Intensity/Investment Historical Marketing New Marketing Mass Communications (One Message Fits All) Customized Communications (Discrete Messages Targeted According To Customer Profile) Undifferentiated Promotion Intensity/Investment (Same for all) “Marketing on the Average” “Marketing on the Differences”

19 Growing Importance of IMC Reduced faith in mass media advertising Increased reliance on highly targeted communication methods Greater demands imposed on marketing communications suppliers Increased efforts to assess communications’ return on investment

20 Growing Importance of IMC Fragmented media environment Changes in media buying practices Price conscious consumers Technology

21 How SW Airlines Used the Concept of IMC (video case)

22 Review Definition and roles of advertising Major players of advertising An overview of what makes effective advertising Current advertising issues