Advertising Chapter 19

Advertising Media 19.1 After finishing this section you will know: The concept and purpose of advertising The different types of advertising media

Advertising and Its Purpose Promotional advertising- advertising designed to increase sales Institutional advertising- attempts to create a favorable impression and goodwill for a business or organization Allows large numbers of people to see the advertiser’s message

Advertising Drawbacks Cannot focus on individual needs because the same message is conveyed to all customers Some forms of advertising can be too expensive- TV Advertising can be inefficient—not everyone who reads a magazine is a potential customer

Types of Media Media- the agencies, means, or instruments used to convey advertising messages to the public There are four general categories of advertising media: Print media Broadcast media Online advertising Specialty media

Print Media Print media- written advertising that may be included in newspapers, magazines, direct mailings, signs, and billboards

Print Media-Newspaper Newspaper advertising- main form of print media for most businesses Advantages of newspaper advertising: Large readership High level of reader involvement Relatively low cost, ads are timely Advertisers can easily change ads up to 24 hours before printing 55% of US adults read a newspaper every day

Print Media-Newspaper Limitations of newspaper advertising: Wasted circulation—sent to more than target market Short advertising life—papers are thrown away Black and white format is less appealing

Print Media-Magazine Magazine advertising- can be classified as local, regional, national, as well as weekly, monthly, and quarterly

Print Media-Magazine Advantages of magazine advertising: Can target audience because they know the circulation and characteristics of their readers Longer life span and are often read more slowly and thoroughly than newspapers Information in a magazine ad is more likely to be remembered Print quality is better Magazines are kept longer—increasing the chances that the ads will be reread Variation of presentation formats—full page, two-page spreads, or heavy stock inserts

Print Media-Magazine Drawbacks to magazine advertising: Less mass appeal within a geographical area More expensive than newspapers Deadlines for submitting ads are months in advance

Print Media-Direct Mail Direct-mail advertising- sent by businesses directly through the mail to prospective customers Types of direct-mail advertising include: newsletters, catalogs, coupons, samplers, price lists, circulars, and invitations to special events

Print Media-Direct Mail Mailing lists: Assembled by the advertiser from current customer records Can be purchased from a direct-mail specialty firm Must be accurate, or using them is useless

Print Media-Direct Mail Advantages of direct mail: Highly selective about who receives mailing Control timing and prevent competitors from seeing the initial mailing Wide choice of sizes and formats Can easily incorporate coupons or incentives Customers can order directly by using an order form or toll-free number

Print Media-Direct Mail Disadvantages of direct-mail advertising: Low level of response—less than 1% Customers see it as “junk mail” Dated customer lists Cost is high

Print Media-Directory Directory advertising- an alphabetical listing of houses and businesses Example: telephone directories- white pages (houses) yellow pages (businesses)

Print Media-Directory Advantages of directory advertising: Relatively inexpensive Can be used with all demographic groups Disadvantage of directory advertising- printed yearly- advertisers cannot change prices or sales for over a year

Print Media-Outdoor Outdoor advertising- used by both local and national businesses Nonstandardized outdoor signs- used by local firms at their places of business or around their community Standardized outdoor signs- available to local, regional, or national advertising companies in standard sizes and placed near highly traveled roadways where there is high visibility

Print Media-Outdoor Three types of standardized outdoor signs: Posters- pre-printed sheets put up like wallpaper on outdoor billboards which are changed 3 to 4 times per year Painted bulletins- painted billboards that are changed about every 6 months to a year Spectaculars- outdoor advertising signs which use lights or moving parts and are suited in high traffic areas

Print Media-Outdoor Advantages of outdoor signs: Highly visible Relatively inexpensive 24 hour a day message Disadvantages of outdoor signs: Some states have banned billboard advertising because they distract viewers Size restrictions and spacing requirements

Print Media-Transit Transit advertising- uses public transportation facilities to bring advertising message to people Advantages of transit advertising: Reaches a wide captive audience Defined market

Print Media-Transit Disadvantages of transit advertising: Unavailable in smaller towns and cities Subject to defacement Restricted to predetermined travel routes E-billboards- video screens used to advertise products popular in bus stops, train stations, and gas stations

Broadcast Media Broadcast media- includes radio and television The average person spends: 10 years watching television 6 years listening to the radio

Broadcast Media-Television Television advertising- ultimate advertising medium for many businesses because it can communicate a message with sound, motion, and color Prime time- between 8 and 11 p.m. when millions of viewers are watching Television commercial advertisements- 30-60 seconds long Infomercials- 30 minute advertisements

Broadcast Media-Television Advantages of television advertising: Can be directed to an audience with a specific interest News, comedy, history, movies, sports, or science Messages can be adapted to holidays, season changes, or special events programming

Broadcast Media-Television Disadvantages of television advertising: Highest production costs of any advertising media Prime-time costs prohibit smaller companies from using television advertising Actual audience size is not assured Television commercials are seen as an opportunity to leave the room

Broadcast Media-Radio Radio advertising- it is estimated that radio reaches 95% of all people age 12 and over in a given week Best radio advertising times- when people are going to and from work 15, 30, or 60-second time period commercials

Broadcast Media-Radio Advantages of radio advertising: Can select an audience More flexible than print media because messages can be changed easily Mobile medium that can be taken just about anywhere

Broadcast Media-Radio Disadvantages of radio advertising: Messages have a short life span Lack of visual involvement causes listeners to become easily distracted and miss the message

Online Advertising Online advertising- placing advertising messages on the Internet Banner ad- a wide shallow rectangle seen at the top or bottom of Web pages which takes the user to the advertiser’s Web page if clicked with a mouse Banner ads use rich media- animation, sound, and video Interstaitial ads- screens pop up to interrupt Web surfing

Online Advertising Advantages of online advertising: Easily measure effectiveness by the number of click throughs Bold colors, top-of-page placement increase the number of click throughs Disadvantages of online advertising: People see online advertisements as an annoyance or distraction Concerned by privacy or reliability issues

Specialty Media Specialty media- relatively inexpensive, useful items with an advertiser’s name printed on them Items given away with no obligation attached to receiving and keeping them

Specialty Media To be successful items must be: Practical Subject to frequent use Placed in locations with high visibility Limitations of specialty items: Distribution of items Items given to people who would never consider buying the product

Other Advertising Media Other advertising media- businesses are constantly creating innovative means of transmitting messages to potential customers Examples: sports arena billboards, airplanes pulling advertising banners

Selection of Promotional Media The advertising medium used depends on the product being advertised To determine the type of promotional media to use advertisers need to address three basic 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?

Assignment Page 344 Reviewing Key Terms Thinking Critically # 1-6

Media Rates 19.2 After finishing this section you will know: How various media rates are set The costs of print media The standards for selecting promotional media

Media Costs Advertising uses a set format that is defined in terms of time or space Media costs vary greatly with the type of media and geographical location

Media Costs Standard Rate and Data Service- publishes rate cards for most major media according to general categories Audit Bureau of Circulation- print media publishers subscribe to ABC to have it verify their circulation figures Important because advertising rates for print media are based on circulation

Newspaper Rates Newspaper rates- classified into two categories Classified ad- grouped or classified into specific categories, such as help wanted, real estate, and auto sales

Newspaper Rates Display ad- involve creative illustration of the product being advertised A mix of art, photographs, headlines, copy, and logo of the product or business Generally larger than classified ads and cost is based on the amount of space used Quoting display ads- price per column inch- one column wide by one inch deep

Newspaper Rates Run of paper rate- allows the newspaper to choose where to run an ad in the paper Color ads run at a higher rate than those which run in black and white

Newspaper Rates Open rate- a.k.a. non-contract rate, the basic charge for a minimum amount of advertising space Open rate varies depending upon when the ad will appear in the paper Contract rate- business who advertise regularly get a rate discounted from the open rate

Newspaper Rate Bulk space contract- guarantees that a minimum number of column inches within a 12 month period Cost per thousand (CPM)- the media cost of exposing 1,000 readers to an ad Cost of the ad X 1,000/circulation = cost per thousand

Magazine Rates Magazine rates- based on circulation, quality of readership, and production technique

Magazine Rates In order to determine the cost of magazine ads, one needs to become familiar with the following terms: Bleed- half or full page ads are printed to the very edge of the page, leaving no white border Magazines generally charge between 15-20% more for bleeds

Magazine Rates Color rates- offered for color ads Full color- four color advertisements which cost the most Premium position- where ads are placed in the magazine on the back cover or inside the first page Frequency discounts- advertisers who run the same ad several times during the year The rate per issue decreases as the frequency increases

Magazine Rates Commission- a percentage of sales given by the magazine to the advertising agency for placing the ad for the advertiser—typical 15% Cash discount- offered for paying the bill earlier than its due date

Online Rates Online rates- based upon the type of format the customer desires Barter arrangements- each advertiser agrees to run banner ads for the other Lead to more traffic for each business’s Web sites

Radio Rates Radio rates- when purchasing radio time, businesses need to determine which type of advertising to use Network radio advertising- broadcast from a studio to all affiliated radio stations throughout the country Broadcast ads simultaneously to several markets

Radio Rates National spot ratio advertising- used by national firms to advertise on a local station-by-station basis Used to target select markets Local radio advertising- done by a local business for its target market Limited to a specific geographical area

Television Rates Television rates- vary with time of day Class AA time- during the hours of 8 and 11 p.m. Class A, B, C, D- lower based on diminishing viewer-ship

Cooperative Advertising Cooperative advertising- a cost-sharing arrangement whereby both a supplier and a local advertiser pay for advertising

Promotional Budget There are four common promotional budgeting methods: Percentage of anticipated sales- budget is decided on a percentage of past or anticipated sales All you can afford method- turns all monies to promotional activity only after all other company expenses are paid

Promotional Budget Following the competition- the competitor’s promotional expenditures are matched or spending is planned in proportion to market share Objective and task- the company determines goals, considers the necessary steps to meet goals, and determines the cost for these promotional activities

Assignment Page 350 Reviewing Key Terms # 1-5