Solution Manual For Contemporary Advertising, 16th Edition, William Arens, Michael Weigold,Chapter(1

SOLUTION MANUAL FOR CONTEMPORARY ADVERTISING, 16TH EDITION, WILLIAM ARENS, MICHAEL WEIGOLD, Chapter 1-18

CHAPTER ONE ADVERTISING AND IMC TODAY This chapter introduces students to several important themes and concepts, including advertising, integrated marketing communications (IMC), marketing, and relationship marketing. It also describes how advertising functions as a special kind of communication, one that is of great value in a company‘s marketing strategy.

Learning Objectives After studying this chapter, your students will be able to: LO1-1 Define integrated marketing communications.

LO1-2 Clarify what advertising is and how it differs from other forms of marketing communications.

LO1-3 Describe the human communication process and compare it with how advertising communicates.

LO1-4 Offer reasons why companies want relationships with their customers and show how IMC helps them to develop such relationships.

LO1-5 Define marketing and identify the four elements of marketing strategy.

LO1-6 Illustrate advertising‘s role in marketing strategy.

LO1-7 Identify important categories under promotion: the communication element of strategy What’s New? The opening vignette suggests that much of contemporary advertising is more concerned with collecting data on consumers than on simply communicating about brands. It also suggests that, given concerns about privacy, the industry is at a turning point in terms of government regulation. The vignette offers instructors a chance to explain to students how much data is shared online, why such data is valuable to companies, and what Congress and the E.U. are doing to give more power to consumers.

This chapter also includes an important ―My IMC Campaign‖ feature. Students can use the feature to work on a real IMC campaign throughout the semester. The box in this chapter provides students an overview of the campaign process and gives a list of all of the topics covered in the feature.

1-1 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Teaching Tips and Strategies Using the Chapter Opening Vignette in the Classroom The vignette provides many examples of information that companies and the government can gain access to. Ask students to supplement this list with their own research. Challenge students to discover how they can tweak Facebook, Google, and Snapchat settings to restrict what they share. Give students a chance to debate the tension between privacy and the data-driven business model of ―free‖ platforms like Facebook and Google.

Other Tips and Strategies A simple yet effective way I‘ve found to help students develop a more sophisticated perspective on ads is to ask them to identify and then describe their favorite ads. This activity helps to accomplish several important things. First, because it is an enjoyable and easy activity, it is a great icebreaker! Students quickly jump in with mentions of their favorite ads, usually with lots of laughing and merriment. As they observe their own reactions and those of others, students begin to recognize how much they enjoy advertising when it is done well. The activity also allows for follow–up questions, such as ―Why do you like that one?‖ and ―What makes that ad effective for you?‖– questions that encourage students to reflect a bit more deeply about how effective advertising works. At subsequent points in the semester you might refer back to this activity as you explore more deeply the issues surrounding advertising effectiveness.

I then ask if advertising influences everything we buy. Students will tend to debate both sides.

Some will maintain that advertising does not influence them in any way. I then write the following brands on the board (please adapt these to fit your style): ▫ Rolex Timex ▫ Baer Aspirin Rite Aid Aspirin ▫ Samsung TCL I ask the students to tell me which are high-end or low-end brands. I then go down the list, writing beside each brand ―high-end‖ or ―low-end.‖ This facilitates a discussion of how we know this information and who put the idea in our minds that Rolex is better than Timex (does that mean surgeons only use Rolexes in complex procedures?). This is a great way to transition into discussing the communication process between the company and the customer. You will also want to discuss different methods of advertising, such as social media, TV, radio, etc. It is also a good opportunity to discuss the consumer and the different media they use to learn about the company, product, or service.

Web Resources for Enhancing Your Lectures

1-2 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Advertising Lab

http://adverlab.blogspot.com

Advertising Age AdWeek

http://adage.com https://www.adweek.com

Pedagogical Features  My IMC Campaign 1: Overview Ad Lab 1–A: Advertising as a Literary Form Ethics, Diversity & Inclusion: Ethics in Advertising: An Overview Portfolio Review: Building Brand Value  People behind the Ads: Albert Lasker and Claude Hopkins: Advertising Legends Lecture Outline I.

II.

III.

Vignette: Privacy Privacy concerns and significant changes in privacy laws. Ask students to identify who is gathering information about them. More advanced: ask students to scrutinize the privacy and data sharing policies of their email provider or online bank.

LO1-1 One way to demonstrate how marketing communications work, and at the same time introduce some important concepts, is to tell a story about an ordinary person, perhaps someone similar to yourself. How did Sharon‘s story help introduce the modern practice of marketing communications?

What Is Advertising?

Many people simply refer to all commercial messages as ―advertising,‖ but in fact, the correct term for these tools is marketing communications. Advertising is just one of these tools.

Advertising is a paid, mediated form of communication from an identifiable source, designed to persuade the receiver to take some action, now or in the future.

A. Advertising is a type of communication, which is commonly defined as the process through which meaning or information is exchanged between individuals using some system of symbols, signs, or behavior. Advertising is a very structured form of applied communication, employing verbal and nonverbal elements that are composed to fill specific space and time formats determined by the sponsor.

B. Advertising is directed to groups of people, usually audiences, rather than individuals.

These people could be consumers, who buy products for their personal use, or 1-3

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

IV.

customers who buy products for consumption by others, such as loved ones or friends.

C. Most advertising is paid for by sponsors; but some sponsors don‘t have to pay for their ads. Many organizations‘ public service messages are carried at no charge because of their nonprofit status.

D. Most advertising is intended to be persuasive—to make audiences more favorably disposed toward a product, service, or idea. Advertising promotes tangible goods (e.g., oranges, oatmeal, and olive oil), publicize intangible services (e.g., bankers, beauticians, bike repair shops) and advocate a wide variety of ideas (concepts based on economics, politics, etc.). In this book the term product encompasses goods, services, and ideas.

E. Advertising identifies its sponsor (whereas public-relations activities often refrain from open sponsorship).

F. Advertising reaches us through a channel of communication referred to as a medium.

An advertising medium is any nonpersonal means used to present an ad to a large audience. Advertising media include radio, television, newspapers, websites, social media, search engines, video games, billboards, and so on. When you tell somebody how much you like a product, that‘s sometimes called word-of-mouth (WOM) advertising. Although WOM is a communication medium, it has not generally been considered an advertising medium. However, the popularity of social media, such as Facebook and Twitter, is forcing advertisers to reconsider this belief. In fact, social media is an ideal platform for advertisers to encourage digital WOM, such as when people share their favorite brands and ads or provide ratings of their experiences at restaurants and hotels.

G. Historically, advertisers used mass media (the plural of medium) to deliver their messages. Other types of media include: 1. Addressable media (direct mail).

2. Interactive media (Internet and kiosks).

3. Nontraditional media (shopping carts, blimps, and DVDs).

Communication: What Makes Advertising Unique First and foremost, advertising is communication—a special kind of communication.

McCann Worldgroup, the ad agency for MasterCard, claims that advertising is ―truth well told.‖ This means that ethical advertisers and the agencies they employ work together to discover the best methods possible to tell their story truthfully and creatively. To succeed, they must understand the advertising communication process, which derives from the basic human communication process.

A. The Human Communication Process The first scholars to study human communication formulated a model like the one in Exhibit 1-1.

1. The human communication process begins with: 1-4

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

a. b. c. d. e. f.

Source—party who formulates an idea, then Encodes—idea as a message Message—sends it via some channel to another party Receiver—the party who receives the message Decode—the message to understand it Feedback—a message that acknowledges or responds to the original message; affects the encoding of a new message. g. Noise—the distracting cacophony of many other messages being sent at the same time by other sources.

2. Exhibit 1-2 presents an interactive model of communication. The realization that much contemporary communication, especially in marketing, is better characterized as dialogue has led many scholars to revise the communication model to reflect interactivity. In this model, no single entity operates as a source or receiver. Instead, two entities serve both roles in an ongoing process. This model better represents marketers‘ understanding of their relationships with consumers today. Marketers no longer dominate the exchange of messages.

Rather, they are engaged in a conversation with consumers who send their own messages, both to the marketer and to other consumers.

B. Applying the Communication Process to Advertising The Stern model, a sophisticated communication model specific to advertising, views advertising as composed commercial text rather than informal speech. The Stern model reminds us that advertising, sources, messages, and receivers have multiple dimensions in advertising: 1. Source Dimensions: Sponsor, Author, Persona Who is the source of the communication? The sponsors (who are legally responsible for the communication); the authors (people outside the text of the message, such as a creative team or ad agency); and the persona (the source of the within-text message). Exhibit 1-3 shows that the path from sponsor to consumer can be long and circuitous.

2. Message Dimensions: Autobiography, Narrative, and Drama Advertising messages use one or a blend of three literary forms: a. Autobiographical messages (author tells own story). b. Narrative messages (third-person persona tells story about others to imagined audience). c. Dramatic messages (characters act out events as though in a play). d. The creators of ads must make important decisions about what kind of persona and which literary form to use to express the message. e. Key considerations are the emotions, attitudes, and motives that drive particular customers in their target audience.

3. Receiver Dimensions: Implied, Sponsorial, and Actual Consumers 1-5 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

V.

a. Implied consumers (who are addressed by the ad‘s persona) are not real. b. The sponsorial consumers are the gatekeepers who decide if the ad will run or not. c. The actual consumers (equivalent to the receiver in oral communication) are people in the real world who make up the ad‘s target audience. d. The sponsor‘s messages must compete with hundreds of competing commercial and noncommercial messages every day, referred to as noise. So the sender doesn‘t know how the message is received, or even if it‘s received, until a consumer acknowledges it.

4. Feedback and Interactivity Feedback verifies that the message was received. Feedback employs the same sender-message-receiver pattern, except that it is directed from the receiver back to the original source. Feedback can take many forms (e.g., redeemed coupons, website visits, phone inquiries, visits to the store, tweets, Facebook posts, increased sales, responses to a survey or e-mail inquiries). Low responses to an ad indicate a break in the communication process. Feedback offers companies the chance to nourish relationships with their customers.

IMC and Relationship Marketing Customers, not products, are the lifeblood of the business. This realization has created a trend away from simple transactional marketing to relationship marketing—creating, maintaining, and enhancing long-term relationships with customers and other stakeholders that result in exchanges of information and other things of mutual value. As Exhibit 1-4 shows, the shift from a transactional to a relationship focus has broad implications for the goals of marketing and the focus of advertising and IMC. Companies that commit to relationship marketing are generally trying to accomplish three things: (1) identify, satisfy, retain, and maximize the value of profitable customers; (2) manage the contacts between the customer and the company to ensure their effectiveness; and (3) develop a full view of the customer by compiling and acquiring useful data. Loyalty programs, such as Starbucks‘ Rewards Loyalty Program, offer a good example of relationship marketing initiatives that attempt to achieve these three objectives.

A. The Importance of Relationships 1. To succeed, companies must focus on managing loyalty among carefully chosen customers and stakeholders (employees, centers of influence, stockholders, the financial community, and the press).

2. This is important for a number of reasons: a. The cost of lost customers. The real profit lost is the lifetime customer value (LTCV) to a firm. b. The cost of acquiring new customers. c. The value of loyal customers.

1-6

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

3. A company‘s first market should always be its current customers. They have discovered the primary benefit of focusing on relationships: increased retention and optimized lifetime customer value.

B. Levels of Relationships 1. Kotler and Keller distinguish five levels of relationships that can be formed between a company and its various stakeholders, depending on their mutual needs. a. Basic transactional relationship. The company sells the product but does not follow up in any way (Target). b. Reactive relationship. The company (or salesperson) sells the product and encourages customers to call if they encounter any problems (Men‘s Wearhouse). c. Accountable relationship. The salesperson phones customers shortly after the sale to check whether the product meets expectations and asks for product improvement suggestions and any specific disappointments. This information helps the company continuously improve its offering (Acura dealers). d. Proactive relationship. The salesperson or company contacts customers from time to time with suggestions about improved product use or helpful new products (Verizon). e. Partnership. The company works continuously with customers (and other stakeholders) to discover ways to deliver better value (Nordstrom‘s Personal Shopper).

2. The more stakeholders there are, the more difficult it is to develop an extensive personal relationship with each.

3. Interactive customer relationships make it easy for companies and customers to communicate in digital media. In such relationships, companies like Mtn Dew, encourage consumers to ―feel like they‘re a part of your brand in a unique way.‖ 4. Guerrilla marketing tactics, like Domino‘s ―Paving for Pizza‖ campaign, involve unconventional marketing tactics.

5. Exhibit 1-5 compares relationship levels as a function of profit margin and number of customers.

6. The concept of integration is wholeness. Achieving this wholeness in communications creates synergy—the principal benefit of IMC—because each element of the communications mix reinforces the others for greater effect.

C. The Evolution of the IMC Concept 1. The IMC approach focuses on four related tactics: a. less emphasis on advertising relative to other promotional tools b. heavier reliance on targeted messages and on reaching smaller segments c. increased use of consumer data d. changed expectations for marketing communications suppliers 1-7 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

2. Nowak and Phelps noted that IMC is used by some to mean ―one voice‖ (i.e., ensuring all elements of the marketing mix converge on a single idea), by others to mean integrated communications (that advertising can and should achieve both action and awareness objectives simultaneously), and by still others to mean coordinated marketing communications (ensuring the various marketing mix elements such as advertising direct-response, sales promotions, and the like, work together).

3. IMC is best defined as ―the concept and process of strategically managing audience- focused, channel-centered, and results-driven brand communication programs over time.‖ 4. How the Customer Sees Marketing Communications a. Various communications or brand contacts, sponsored or not, create an integrated product in the consumer‘s mind. b. IMC gives companies a better opportunity to manage or influence those perceptions and create a superior relationship with those stakeholders.

5. The Four Sources of Brand Messages To influence customers‘ perceptions, marketers must understand one of the basic premises of IMC: that everything we do (and don‘t do) sends a message. There are 4 types of company/brand-related messages stakeholders receive: a. Planned messages: traditional promotional messages (advertising, sales promotion, personal selling, merchandising materials, publicity releases, event sponsorships); have the least impact because they are seen as self-serving. b. Product (inferred) messages: messages from the product, price, or distribution elements; includes packaging; have great impact. c. Service messages: employee interactions send messages to customers; have greater marketing impact than the planned messages. d. Unplanned messages: emanate from employee gossip, unsought news stories, comments by the trade or competitors, word-of-mouth rumors, or major disasters; company has no control over.

6. The Integration Triangle a. The integration triangle developed by Duncan and Moriarty is a simple illustration of how perceptions are created from the various brand message sources (see Exhibit 1-6). b. Planned messages are say messages—what companies say about themselves. c. Product and service messages are do messages because they represent what a company does. d. Unplanned messages are confirm messages because that‘s what others say and confirm (or not) about what the company says and does. e. Constructive integration occurs when a brand does what its maker says it will do and then others confirm that it delivers on its promises.

1-8 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VI.

D. The Dimensions of IMC 1. To maximize the synergy benefits of IMC an organization should first ensure consistent positioning, then facilitate purposeful interactivity between the company and its customers or other stakeholders, and finally, actively incorporate a socially responsible mission in its relationships with stakeholders.

2. IMC offers accountability by maximizing resources and linking communications activities directly to organizational goals and the resulting bottom line.

Marketing: Determining the Type of IMC Message to Use Every business performs a number of diverse activities, typically classified into three broad functional divisions: 1) Operations (production/manufacturing) 2) Finance/administration 3) Marketing A. What Is Marketing?

1. Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

2. Marketing is a process—a sequence of actions or methods—aimed at satisfying customer needs profitably.

3. This process includes developing products, pricing them strategically, making them available to customers through a distribution network, and promoting them through sales and advertising activities.

B. Advertising and the Marketing Process 1. Advertising is an important IMC tool that can help the organization achieve its marketing goals.

2. The marketing strategy will determine who the targets of advertising should be, where ads should appear, what media should be used, and what advertising should accomplish.

3. Exhibit 1-7 shows some of the ways advertising can be classified, based on these strategic marketing elements.

C. Identifying Target Markets and Target Audiences A firm‘s marketing activities are aimed at a particular segment of the population, its target market. Advertising is aimed at a particular group called the target audience.

There are two main types of target markets: consumers and businesses.

1. Consumer Markets a. Consumer advertising, usually sponsored by the producer (or manufacturer) of the product or service, are typically directed at consumers (people who buy the product for their own or someone else‘s personal use). b. Retail advertising is advertising sponsored by retail stores and businesses.

1-9 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

c. Consumer advertising can include public service announcements (PSAs) from organizations such as the American Cancer Society. d. Consumer behavior is the province of another specialty in marketing.

2. Industrial/Business Markets a. Companies use business advertising to reach people who buy or specify goods and services for business use. Also called business-to-business advertising (B2B). There are three types of business advertising: b. Trade advertising targets resellers (wholesalers, dealers, and retailers) to obtain a greater distribution of their products. c. Professional advertising is aimed at teachers, doctors, dentists, architects, engineers, lawyers and the like. Three objectives in professional advertising; to convince professional people to recommend or prescribe a specific product or service to their clients, to buy particular brands of equipment and supplies for use in their work, or to use the product personally. d. Agricultural (or farm) advertising promotes products and services used in agriculture to farmers and others employed in agribusiness.

D. Implementing Marketing Strategy After selecting a target market for its products, an advertiser designs a strategy to serve that market profitably. Marketing strategy is a mix of the 4Ps of marketing: product, price, place, and promotion.

1. Product: Features and Benefits a. Products have multiple features and solve a variety of problems. Advertising typically focuses on those features (product or brand components) or benefits (problems the brand can solve or ways the brand can provide desired rewards) of greatest relevance to the target audience. b. Advertising messages remind us why each brand is special. Compare a Prius with its hybrid engine to a BMW Z4 to a Ford F150.

2. Price: Strategies for Emphasizing Value a. Consumers view value as the ratio of a brand‘s quality to its price. b. Some products (Suave personal care brands, No-Ad lotions) are publicized using price advertising, in which an ad claims the product is equal in quality to higher priced brands. c. Image advertising, which creates a perception of a company or a personality for a brand, is rarely explicit about price. d. Sale advertising is used most often by retailers, dealers, and shops to call attention to a recent drop in the price of a brand or service.

3. Place: The Distribution Element a. Global marketers such as Coca-Cola, Toyota, and IBM may use global advertising in which messages are consistent in ads placed around the world.

1-10 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

b. Other firms may promote their products in foreign markets with international advertising, which may contain different messages and even be created locally in each geographic market. c. Companies that market in several regions of the U.S. and use the major mass media are called national advertisers, and their promotion is called national advertising. d. Some companies sell in only one part of the country or in two or three states; they use regional advertising. e. Businesses and retailers that sell within one small trading area typically use local advertising placed in local media or direct mail.

4. Promotion: The Communication Element a. Marketing communications (marcom) refers to all the planned messages created to support marketing objectives and strategies. In addition to advertising, major marketing communication tools include personal selling, sales promotion, public relations activities, and collateral materials. b. In personal selling, salespeople deal directly with customers either face-toface or via telemarketing, offering the flexibility possible only through human interaction. c. To promote their goods and services, companies use product advertising. d. To sell ideas, organizations use nonproduct advertising. e. Noncommercial advertising is used around the world by governments and nonprofit organizations to seek donations, volunteer support, or changes in consumer behavior. f. The objectives of awareness advertising, for example, are to create an image for the brand the next time they shop. g. A direct-mail ad, on the other hand, exemplifies action (or direct-response) advertising because it seeks an immediate, direct response from the reader. h. Sales promotion is a communication tool that offers special incentives to motivate people to act right away. i. Public relations (PR) is an umbrella process—much like marketing— responsible for managing the firm‘s relationships with its various publics.

These publics may include customers but are not limited to them. Public relations is also concerned with employees, stockholders, vendors and suppliers, government regulators, interest groups, and the press. So PR is much larger than just a tool of marketing communications. j. Marketers use a number of public relations activities because they are so good at creating awareness and credibility for the firm at a relatively low cost. k. Marketing public relations (MPR) include publicity, press agentry, sponsorships, special events, and a special kind of advertising called public

1-11 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VII.

relations advertising, which uses the structured, sponsored format of media advertising to accomplish public relations goals. l. Companies use a wide variety of promotional tools other than media advertising to communicate information about themselves and their brands.

These collateral materials include fliers, brochures, catalogs, posters, sales kits, product specification sheets, instruction booklets, and so on.

E. Additional Benefits of Integrating Marketing Communications In recent years, as new media have proliferated and the cost of competition has intensified, sophisticated marketers have searched for new ways to get more bang (and accountability) from their marketing communications buck.

The result has been a growing understanding on the part of corporate management that (1) the efficiencies of mass media advertising are not what they used to be; (2) consumers are more sophisticated, cynical, and distrusting than ever before; (3) tremendous gaps exist between what companies say in their advertising and what they actually do; and (4) in the long run, nourishing good customer relationships is far more important than making simple exchanges.

Chapter Summary A. Advertising, one type of marketing communications, is a paid, mediated form of communication from an identifiable source, designed to persuade the receiver to take some action, now or in the future.

B. Advertising is, first and foremost, communication. The basic human communication process begins when a source formulates an idea, encodes it as a message, and sends it via some channel or medium to a receiver.

C. Advertising is an important tool for companies that practice IMC (integrated marketing communication) and involves strategically managing and coordinating the sources of information consumers have about brands. Practiced well, IMC creates synergies among various channels of communications and is fundamentally important for guiding companies in building and establishing credible relationships.

Marketing‘s primary role is to attract revenue, so advertising is important. Marketers address two major types of audiences with advertising: consumers and businesses.

D. A firm‘s marketing mix—or strategy—establishes the type of advertising needed and the skills required to implement it. The marketing mix includes those elements over which the marketer has control: product, price, distribution, and communication.

E. The distribution strategy dictates the firm‘s use of local, regional, national, or international advertising and can use a mix of communication tools such as advertising, personal selling, sales promotion, public relations activities, and collateral materials.

F. To achieve consistency in all the organization‘s messages, sophisticated companies seek to integrate their marketing communications with all other corporate activities through a process called integrated marketing communications.

1-12

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Answers to Pedagogical Features   My IMC Campaign 1: Overview Welcome to My IMC Campaign, an important feature of this text. My IMC Campaign, should be useful in any of the following situations:  Your instructor has asked you and others in your class to work on part or all of an ad campaign, either individually or in groups.  You are doing an internship and want practical advice on how to help your company advertise.  You would like to apply the concepts and ideas that you are reading about in this book in the real world.

1. Let‘s begin with a definition. An IMC campaign involves the creation and placement of a series of strategic communications that are unified by an underlying theme or core message.

2. The My IMC Campaign topics are listed below. You may find it useful or necessary to jump around as you develop your own campaign.

1. Overview 2. Tools for Teamwork 3. Your Assignment 4. Understanding Your Client; Creating Local Advertising; Agency Review; Ways to Be a Better Client 5. Understanding What Consumers Look for in a Product 6. Segmenting the Audience 7. Research; Methods for Pretesting; Methods for Posttesting; Developing an Effective Questionnaire 8. Developing the Situation Analysis; The SWOT Analysis; Developing Advertising Objectives 9. Developing Media Objectives and Strategies 10. The Creative Brief 11. Product Facts for Creatives; Creating Great Headlines and Copy; Design Principles; Writing Effective Copy; Creating Effective Radio Commercials; Creating Effective TV Commercials 12. Producing Ads 13. The Pros and Cons of Magazine Advertising; The Pros and Cons of Newspaper Advertising; Planning and Evaluating Print Media 14. Planning and Buying TV and Radio; The Pros and Cons of Broadcast TV Advertising; The Pros and Cons of Cable TV Advertising; The Pros and Cons of Radio Advertising 15. Using Interactive Media 1-13 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

16. Using Social Media 17. Using Out-of-Home, Exhibitive, and Supplementary Media 18. Creating a Plans Book 19. Corporate Blogging; The Client Presentation Ad Lab 1–A: Advertising as a Literary Form 1. Can you identify which two literary forms appear in example 4? Does it have a persona and/or an implied consumer? If so, describe their use.

Example 4 combines autobiography and drama, because it is a fictionalized representation of Eminem, an actual person. The Eminem character in the ad is a persona, who represents the advertiser.

Ethics, Diversity, and Inclusion: Ethics in Advertising: An Overview Sample outline for discussing ethics: I. What is ―ethics?‖ A. Dictionary definition: moral philosophy B. Related words: conscience, principles, high standards, integrity, system, moral belief system, honesty, propriety, decency, various religious beliefs, the golden rule II. Ethics needed in societies where litigation is frequent.

III. Differentiating an ethical dilemma from an ethical lapse.

A. Definitions: 1. Ethical dilemma—a crisis due to unresolved interpretation of an ethical issue.

2. Ethical lapse—the behavior that overlooks or fails to apply an applicable ethic (and thereby may well be unlawful because laws are based on ethical judgments).

B. Guidelines: 1. In advertising, ―truthfulness‖ is typically the major issue.

2. Distinction must be made between ―having a right‖ and ―the right thing to do‖—e.g., should advertisers persuade someone from a low-income community to buy a $170 pair of sneakers?

3. Ethics takes over where laws end.

4. Advertising professionals largely find ethics synonymous with legality.

5. ―You can be ethical only when you have the option of being unethical,‖ according to Ivan L. Preston, University of Wisconsin professor.

Note: Because ethical issues are not always clear-cut, in-class discussions are encouraged to help students refine their understanding of ethics. The questions below are designed to serve as starting points.

This methodology allows the free flow of ideas, so students typically bring up other ethical dilemmas not described in the assigned ethical issue box. One way to overcome this variation is to review each chapter‘s Ethics, Diversity, and Inclusion box in advance.

1-14 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

A more subtle challenge is to understand when and how to use an ethical principle. A good way to begin is to first determine who‘s responsible for applying or defining the ethical issue. As we mention in the chapter, there are three levels of responsibility: the society (the group), the individual, and the accepted philosophy that describes the ethical concept and suggests its proper use. You may wish to review this section before initiating any discussion about ethics.

It is also important that each student be expected to defend his/her position with a well-thoughtout answer.

ETHICAL ISSUES 1. Would you mind bending your moral rules a little to sell a product with a misleading comparison or a visual distortion? What could justify such a decision? Where would you draw the line?

Answer Guidelines: a. If an ad is misleading, it has broken the law. (Chapter 2) b. Visual distortions are typically used to create attention and emphasis and may be illegal.

(See Chapters 2 and 10 for more details.)

• Does the distortion actually apply to the content or meaning of the ad or is it merely creative license or puffery?

• If distortion does affect the content, is it truthful?

• Does the distorted photo, illustration, or graphic chart mislead people?

• Is an image distorted to hide the fact that it was stolen from a copyrighted source? c. Justifications for ―bending‖ moral rules There is no justification for misleading people or for being untruthful.

Because puffery—claims that are empirically hard to prove (the brightest whites or the cleanest dishes)—is legal, advertisers may justify the use of visual and verbal distortions. d. Although puffed claims are legal, consumers may not feel that they are honest—the negative effects of a misinterpretation and a subsequent backlash should be considered in advance. e. Because the company‘s credibility is at stake, puffery could enhance—or tarnish—an entire line of products.

2. The next time you watch TV commercials, think ethics. Look for both good and bad examples of ethical presentations of the advertised products. What ethical issues might have been discussed before the ads were approved?

Answer Guidelines: When producing ads, two approaches generally take place that help eliminate ethics problems: a. The ethical issues are discussed—in an order much like the answers to question one above—by the managers and creatives involved in producing ads. b. Procedural steps employed to evaluate ethical issues may include:

1-15 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

• • •

Sending all materials for review by the advertiser‘s legal department or the agency‘s legal consultants.

Market testing (one-on-one interviews, focus groups, etc.) to reveal potential ethical problems.

Showing the proposed ads to organizations that are sworn to uphold ethical standards such as a professional group (Better Business Bureau, American Association of Advertising Agencies), a governmental agency (FDA, FCC, etc.), or other groups (a national or local church board, PTA, school board, etc.).

Portfolio Review: Building Brand Value Great ads speak to consumers in a way that helps them see value in a brand. Study the array of ads in this portfolio and consider how well each one illustrates the contemporary definition of advertising presented in this text. Next, select one ad from the portfolio and analyze the multiple dimensions of the communication process as they apply to that ad. Finally, select a different ad from the portfolio and determine which of the six functions of advertising are applicable to the ad.   People behind the Ads: Albert Lasker and Claude Hopkins: Advertising Legends  Lasker‘s persuasive talents were rooted in his gifts as both a leader and a visionary.

Impressing everyone he worked with, Lasker was quickly promoted through the agency ranks. He was still in his early twenties when he bought Lord & Thomas and began creating the first true ―modern‖ ad agency.  Hopkins believed advertising had one function: selling. Hopkins advocated finding a ―preemptive claim‖ for each brand, an attribute that could be used to distinguish the brand from its competitors.

Review Questions 1. What is IMC and how is it different from advertising?

IMC is both a concept and a process that draws on management skill at strategic planning.

IMC places greater emphasis on audiences, channels, and results as compared with traditional promotional approaches. Finally, IMC represents a broadened view of brand promotion.

2. In the marketing communication process, what are the various dimensions of the source, the message, and the receiver?

The communication process begins when one party, called the source (the sponsor), formulates an idea, encodes it as a message (the ad), and sends it via some channel (medium) to another party, called the receiver (the consumer or prospect). The Stern model proposes a more sophisticated communications model; it is derived from the traditional model, but it acknowledges that the source, the message, and the receiver all have multiple dimensions.

The source dimensions are the sponsor, author, and persona. The message dimensions are 1-16 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

autobiography, narrative, and drama. The receiver dimensions are implied, sponsorial, and actual consumers.

3. Why do many companies practice IMC and what benefits does it afford companies that practice it well?

Because IMC helps companies adopt a consumer-centric, rather than marketer-centric, perspective when they create brand messages. And in today‘s marketing environment, nothing is more important than understanding and effectively communicating with consumers. Another reason companies use an IMC perspective is that consumers learn about brands from far more sources than just advertising.

4. What kinds of relationships do brands have with consumers? a. Basic transactional relationship. The company sells the product but does not follow up in any way. b. Reactive relationship. The company (or salesperson) sells the product and encourages customers to call if they encounter any problems. c. Accountable relationship. The salesperson phones customers shortly after the sale to check whether the product meets expectations and asks for product improvement suggestions and any specific disappointments. This information helps the company continuously improve its offering. d. Proactive relationship. The salesperson or company contacts customers from time to time with suggestions about improved product use or helpful new products. e. Partnership. The company works continuously with customers (and other stakeholders) to discover ways to deliver better value.

5. What are the advantages of the interactive communications model over the traditional one? How has the growth of interactive communications improved the practice of IMC? The interactive model allows companies and consumers to build relationships. Consumers feel like they are part of the brand in a unique way. No single entity operates as a source or receiver. The model better represents marketers‘ understanding of their relationships with consumers today.

6. With whom else besides consumers do brands sometimes seek to develop relationships?

Companies must build loyalty with stakeholders including employees, centers of influence, stockholders, financial community, and the press.

7. What are the two broad categories of target markets?

The two broad categories of target markets are consumer markets and industrial/business markets.

8. In addition to consumer advertising, what specific form of business advertising would a pharmaceutical company likely employ?

Professional advertising is used to convince physicians to prescribe the pharmaceutical company‘s products to the physician‘s patients.

1-17 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

9. What are the four elements that compose a company‘s marketing strategy (or marketing mix) and how do they affect the type of advertising a company uses?

Product concept, pricing, place, and promotion are the four elements that compose a company‘s marketing strategy. The type of advertising used depends on the company‘s marketing strategy.

10. What is the purpose of awareness advertising?

The purpose of awareness advertising is to create an image for a product and to position it competitively with the goal of getting readers or viewers to select the brand the next time they shop.

11. What important activities does a company engage in under the heading of ―promotions‖?

Promotional activities include personal selling, advertising, sales promotion, public relations, and collateral materials.

The Advertising Experience 1. Brand Relationships This chapter has emphasized building relationships as an important objective for IMC. Think about your favorite brands. Do you feel as though you have a ―relationship‖ with any? What do the companies that support these brands do to ensure you are happy in the relationship?

And are you an advocate for any brand? How and when do you communicate to others your positive feelings or excitement about the brand?

2. Role of Advertising In Chapter 1, you learned about the standard definition of advertising and the various roles and forms that advertising can take. Browse through the following websites and discuss what type of advertising each uses and what the purpose of the advertising is: a. American Cancer Society: www.cancer.org b. Amazon: www.amazon.com c. Nike: www.nike.com d. Ford: www.ford.com e. McDonald‘s: www.mcdonalds.com f. MINI: www.MINIUSA.com g. United Parcel Service: www.ups.com 3. Literary Forms in Television Ads Watch three television ads and examine them for literary form. Do they take the form of autobiography, narrative, or drama? For each ad, discuss why you think its creator chose this particular form over another.

1-18 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

4. Dealing with Unwanted Brand Messages Reread the brief account of Sharon and her discovery of a new clothing store. How do you think Green Threads used IMC in its communications with consumers like Sharon? What kind of message would threaten the brand image of Green Threads? How might the retailer deal with such a message?

Answer Guidelines: Answers could refer to Green Threads‘ integrated approach through the use of pamphlets, employee-customer relations, higher pricing strategy, environmental emphasis, physical environment of the store (i.e. bike rack), public relations and charity efforts (donations), emails, and social media posts, which all worked to create a synergistic identity for Green Threads. Answers could also refer to the original advertisement creating awareness and comprehension of the stores‘ offerings and unique selling point and elements of her visit to the store contributing to her conviction that Green Threads was a brand she would be happy to support, all of which enhanced her desire to take action and purchase the clothing.

Unplanned messages pertaining to environmentally unfriendly practices, inhumane treatment of animals in the creation of the clothing, workplace maltreatment of employees, or sourcing of materials from foreign distributors could all threaten the image Green Threads has cultivated. Consultations with environmental public relations specialists, signing of a public commitment to improved business practices, and a public acknowledgment and apology with reassurances and a plan for more principled actions in the future could be effective methods through which Green Threads could manage such messages.

5. The Double-Edged Sword of Communication Feedback The feedback that many companies seek from customers has a flip side, consumer privacy concerns. This is explored in the chapter opening. How much privacy should consumers expect? When does a company go too far in obtaining information about its prospects and customers? What will it mean for digital marketers if legislation restricts their access to consumer information?

Answer Guidelines: Answers could discuss how some research has shown that social media users, particularly Facebook users, do not carry much of an expectation of privacy on these platforms—could this be true in all online spaces? Perhaps internet users expect privacy in certain online spaces including in banking, dating, or on sites relating to health-related information, but not as much on social media sites where users can carefully craft and present exactly what they wish to present to other users. A major discussion in online data privacy relates to whether users should have the opportunity to opt-in to data tracking on certain internet browsers, rather than the current default of consumers automatically being opted-in and being expected to know that they have the option to opt-out. Answers could discuss the ethics of tracking online footprints when discussing when a company has gone too far. For example, answers could discuss the ethics of the automatic opt-in option on web-browsers or the ethics of the 1-19 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

ad-tech industry and other large organizations having the capability to track a person throughout their day, completely unbeknownst to the consumer. More stringent regulation on access to consumer information could lead to less targeted or pertinent advertisements in online spaces, a return to more primary consumer research in advertising, or a greater reliance on the use of already collected data to make predictions regarding future consumption habits.

Connect Activities Title

What is Advertising and IMC? Progressive Insurance

Amazon and Consumer Information Privacy

Assignment Type

Topic

Learning AACSB Objective Accreditation Tagging 01-01; 01-03 Knowledge Application

Video Case Key Concepts of Integrated Marketing Communications; Define Advertising; Basic Elements of the Communication Process Video Case Ethical Considerations 01-01; 01-04 Ethics; in Advertising, Knowledge Promotion, and IMC Application Campaigns; The Role of Government Agencies in the Regulation of Advertising; Relationship Marketing

Bloom's Taxonomy Apply

Understand; Remember; Apply

What is Advertising and IMC? Progressive Insurance Activity Summary: In this activity, students view a humorous commercial featuring the famous Progressive Insurance spokesperson, Flo. It then asks them to differentiate advertising from marketing and integrated marketing communication and aids them in understanding advertising as a communication function.

Follow-Up Class Discussion: Walk through the definition of advertising as provided in Chapter 1 with your class as you watch the Progressive commercial. Engage students by having them identify who has paid for the commercial, have them describe what it means when we describe 1-20 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

this as a mediated form of communication, ask them to identify how the commercial works to persuade consumers to take action, and whether it persuades them to take action now or in the future. Additionally, provide students with the figure for the Stern model of the advertising communication process (Exhibit 1-3) and have them work in teams to identify another message from Progressive, working through the commercial to identify the sponsor, author, and persona; the literary form used; and who the receivers of the message are.

Amazon and Consumer Information Privacy Activity Summary: This activity asks students to view a commercial for Amazon‘s virtual assistant, Alexa, and asks them to consider the benefits of data to advertisers, as well as the ethical implications of such data collection. Additionally, students are asked to consider governmental legislation that seeks to protect consumers from invasive data mining.

Follow-Up Class Discussion: Have your students use their laptops or phones to access one of their social media platforms. Ask them to play around with the privacy settings and to look at, and consider, the information provided in their profiles. Ask students who are exploring the same social media (all students using Facebook in one group, all students using Instagram in one group, etc.) to compile a list of all of the information the social media platform has on them (address, phone number, political affiliation, purchase habits, etc.) on the board or on paper.

Discuss as a class which platforms collect the most information. Allow them to debate whether platforms should be able to collect this information on consumers. Have students discuss how advertisers could use this information. Do the benefits afforded to advertisers by this data outweigh the ethical concerns surrounding consumer data privacy?

1-21 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

CHAPTER TWO THE BIG PICTURE: THE FUNCTIONS OF ADVERTISING AND ITS EVOLUTION Advertising and IMC play important roles in the national and global economies, yet they evolved relatively recently in human history. Why did advertising develop, and why is it so important in modern life? To help answer these questions, this chapter introduces the principles of freemarket economics, the functions and effects of advertising in a free economy, the evolution of advertising as an economic tool, and advertising‘s overall impact on society. Students will gain an understanding of why the practice of advertising began, how it changed, why it will continue to evolve, and why it is an important part of a market economy.

Learning Objectives After studying this chapter, your students will be able to: LO2-1 Discuss the functions advertising performs in free markets.

LO2-2 Identify milestones in the history of advertising.

LO2-3 Discuss how the role of advertising has changed over time.

LO2-4 Offer evidence for the importance of branding, including descriptions of the benefits that strong brands offer companies.

LO2-5 Delineate the impact of advertising on society yesterday, today, and tomorrow.

What’s New? The chapter‘s title has changed to better represent the learning objectives. This chapter has long featured Coke as a way to illustrate the history of advertising. The opening vignette has been updated to the present. We have continued to emphasize the importance of branding early in the text and expanded on our earlier discussion. Students now learn how a brand vision is created, understand how companies develop and maintain a brand personality, and read vision statements from some of the world‘s most famous brands. The Ethics, Diversity & Inclusion box features Mary Wells Lawrence, an advertising legend and one of the earliest women to lead a major advertising agency. The My IMC Campaign box has been updated to ensure students learn about the latest tools for staying connected and working together.

Teaching Tips and Strategies Using the Chapter Opening Vignette in the Classroom I like to emphasize the youth of advertising as a profession, and ask students why that is so. The earliest ads for Coca Cola date back to the nineteenth century, which is likely to seem very ancient to students. Yet even the oldest Coke ads are just a bit over a century old. The professions of medicine, law, and finance date back thousands of years. Prompting students in 1-22 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

this fashion will likely lead them to consider the importance of several nineteenth and twentieth century developments for the creation of the modern ad industry. These include industrialization, literacy, urbanization, increases in the standard of living and wealth (especially in the U.S. and Europe), and the development of new mass media such as radio, television, and the internet.

Shaping the discussion in this way will lead students to a deeper appreciation of the role that advertising plays in modern life.

Today‘s students, believe it or not, were not even born when ―New Coke‖ was introduced. I always give a brief account of the New Coke fiasco as a way of differentiating the product (which consumers preferred in blind taste tests) from the brand (which consumers rejected hands down to the classic formula). For background on the discussion, see this site: www.cbsnews.com/news/30-years-ago-today-coca-cola-new-coke-failure. I find it also can be quite humbling to know that one of today‘s most effective and powerful marketers can still make a terrible mistake. If nothing else, the New Coke story helps students understand the difference between product attributes (such as blind taste or containers) and a brand.

Other Tips and Strategies This chapter will explain to students the evolution of advertising. It is important for students to understand that although advertising started in the 1700s, it did not really become an everyday occurrence until the 1800s in America. Many people that I have discussed this with believe it is because Americans were not as focused on consumption then as they are now.

A great way to start the class is to go to Ad Age Advertising Century: Timeline, available at https://adage.com/article/special-report-the-advertising-century/ad-age-advertising-centurytimeline/143661.

This site has an excellent pictorial timeline of how advertising started in America. I recommend going over the timeline with students. Students seem to really get interested in this information.

The timeline begins with the first ad created in America and brings the students up to date on modern ads. There is also a timeline in the student text.

I like to delve into the last century of advertising with students. As you know, in the 1900s ads were very wordy. Back then, people read a lot more than they do today. This is because radios and television sets had not yet become standard possessions. Newspapers and magazines were consumers‘ ways of catching up on the latest news. Advertisers used to make ads look like newspaper articles to help sell products or services.

One neat fact to share with students is that Coca-Cola helped to standardize the American Santa Claus in the 1930s through advertising. Before the standardization, I have been told that Santa was usually called St. Nicholas, and was plump in certain countries and skinny in others. Coke was trying to increase the market share of its product. They helped create the Santa we have 1-23 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

today (think Christmas Coke). The red and white colors were used to mirror the red and white Coke logo. That is the power of a well-known brand. One website to show students is www.coca-colacompany.com/stories/coke-lore-santa-claus, which explains the story of Santa in more detail.

This website has a wealth of information about how the famous ―Hillside singers‖ ad was developed: www.coca-colacompany.com/stories/coke-lore-hilltop-story.

I share with students how radio and television changed advertising forever. With the advent of radio came the live radio commercial. Now, instead of just reading about a product or service, people could hear celebrity spokespeople on the radio. Radio ads continue to this day. I recommend going over the advent of television and how consumers could, for the first time, actually hear and see a product or service on television. This really helped to change advertising, and the resulting television commercials have helped to sell billions of dollars of products through the years. Television advertising has had its ups and downs in the last couple of decades.

Remind students that the advent of television allowed many consumers, for the first time, to actually hear and see a product or service. This really helped to change advertising, and the resulting television commercials have helped to sell billions of dollars of products through the years. I also try to encourage students to see the challenge faced by people working in agencies as they struggled to discover effective ways to write and produce for new media. This point can be amplified by showing early commercials from the 1950s and contrasting them with more current examples (I contrast old Coca Cola ads with their newer versions).

Web Resources for Enhancing Your Lectures Coke Ads Ads of the World AdRants William Bernbach bio

https://www.coca-colacompany.com/history/advertising http://adsoftheworld.com http://www.adrants.com https://adage.com/article/special-report-the-advertisingcentury/william-bernbach/140180

Ad*Access: John W. Hartman Collection

https://repository.duke.edu/dc/adaccess

AdFlip: Historical print ad archive

http://www.adflip.com

1-24 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Pedagogical Features Portfolio Review: The Modern History of Advertising Ethics, Diversity & Inclusion: Mary Wells  My IMC Campaign 2: Tools for Teamwork Ad Lab 2–A: What Kills Bugs Dead?  People behind the Ads: William Bernbach: Advertising Legend Lecture Outline I.

II.

III.

Vignette: The Coca-Cola Story The Coca-Cola Company has approached advertising in many different ways since its beginning in the late nineteenth century. Both Coke‘s image and recipe have changed with the times, nearly breaking the company in the 1980s, and yet it remains the world‘s favorite carbonated beverage today.

The Functions of Advertising Exhibit 2-1 shows a chronology of the evolution of the Coca-Cola brand and company.

The functions and effects of branding as well as advertising discussed are listed in Exhibit 2-2.

A. Identifying products and differentiating them from others is one of the most basic functions of branding.

B. Communicate information about the product, its features, and its place of sale.

C. Induce customers to try new products and to suggest reuse. Example: Sending soda fountains free syrup.

D. Increase product use.

E. Stimulate the distribution of a product.

F. Build value, brand preference, and loyalty.

G. To lower the overall cost of sales.

The Evolution of Advertising A. Early Advertising 1. During the preindustrial age, several important events contributed to the eventual development of modern advertising.

2. The Chinese invented paper around 150 B.C. Europe had its first paper mill by 1275.

1-25 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

3. Around 1439, Johannes Gutenberg invented the movable-type printing press in Germany. The printing press is the most important development in the history of advertising because it changed the way people communicated, lived, and worked.

4. In 1472, the first ad in English appeared: a handbill tacked on church doors in London announcing a prayer book for sale.

5. 1700s: The world‘s population stood at about 600 million people, and some cities were big enough to support larger volumes of advertising.

6. Samuel Johnson, a famous English literary figure, observed in 1758 that advertisements were now so numerous that they were ―negligently perused,‖ and it had become necessary to gain attention ―by magnificence of promise.‖ This was the beginning of puffery in advertising.

7. In the colonies, the Boston Newsletter started carrying ads in 1704.

8. About 25 years later, Benjamin Franklin, the father of advertising art, made ads more readable by using large headlines and considerable white space. In fact, Franklin was the first American to use illustrations in ads.

B. The Industrial Age and the Birth of Ad Agencies 1. The industrial age began around the middle of the nineteenth century and lasted well into the twentieth.

2. Fresh mass markets then developed new, inexpensive brands.

3. Luxury and convenience goods called consumer packaged goods.

4. Ads appeared in publications called price currents that informed retailers about the sources of supply and shipping schedules for commodities.

5. The American profession of advertising began when Volney B. Palmer set up business in Philadelphia in 1841.

6. The manufacturers changed their focus from a production orientation to a marketing orientation.

7. In the 1920s, the era of salesmanship had arrived and its bible was Scientific Advertising, written by the legendary copywriter Claude Hopkins at Albert Lasker‘s agency, Lord & Thomas. Radio was born at about the same time and rapidly became a powerful new advertising medium.

8. Manufacturers followed this strategy of product differentiation vigorously, seeking to portray their brands as different from and better than the competition by offering consumers quality, variety, and convenience.

C. The Golden Age of Advertising 1. The postwar period from 1946 through the 1970s is sometimes referred to as advertising‘s ―Golden Age.‖ This is because the introduction of television helped make the advertising industry a focus of great attention, which led to both acclaim and criticism.

1-26 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

2. The prosperous late 1940s and early 1950s seemed to many to create a culture in which consumers tried to climb the social ladder by buying more and more modern products.

3. Development of USP (unique selling proposition)—features that differentiate it from competitive products.

4. Companies turned to a new mantra: market segmentation, a process by which marketers searched for unique groups of people whose needs could be addressed through more specialized products.

5. The image era of the 1960s was thus the natural culmination of the creative revolution. Advertising‘s emphasis shifted from product features to brand image or personality as advertisers sought to align their brands with particularly profitable market segments.

6. Positioning strategy proved to be an effective way to separate a particular brand from its competitors by associating that brand with a particular set of customer needs that ranked high on the consumer‘s priority list.

D. The Postindustrial Age 1. Beginning around 1980, the postindustrial age has been a period of cataclysmic change.

2. Acute energy shortages of the 1970s and 1980s introduced a new marketing term, demarketing.

3. To expand globally, big multinational companies and their advertising agencies went on a binge, buying other big companies and creating a new word in the financial lexicon: megamerger.

4. Two related economic factors characterized the marketing world of this period: (1) the aging of traditional products, with a corresponding growth in competition, and (2) the growing affluence and sophistication of the consuming public, led by the huge baby boomer generation.

5. Two developments from the early 2000s were little noticed then, but in time would shake up the marketing world. Larry Page and Sergey Brin, two Stanford grad students, developed AdWords, an advertising program for their search engine, Google, that eventually generated billions in profits. And Mark Zuckerberg dropped out of Harvard, headed west, and named his new social media company Facebook. By tapping into a strong consumer desire to connect with others, Zuckerberg created what may well be the greatest word-of-mouth marketing platform in history. The internet had created an electronic frontier— what Tom Cuniff, VP/creative director at Lord, Dentsu & Partners, calls ―the second creative revolution.‖ E. The Global Interactive Age: Looking at the 21st Century 1. As Exhibit 2-3 shows, the top 5 global marketers are based in many different countries.

1-27 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

IV.

2. In an effort to do a better job of relationship marketing, companies understand that they must be consistent in both what they say and what they do.

3. Companies must integrate all their marketing communications with everything else they do, too. That‘s what integrated marketing communications really means.

How Advertising Turns Products into Brands Scott M. Davis and Michael Dunn define the concept ―brand‖ as follows: Promises made to customers…based on multiple experiences over time…delivered with a consistently high level of quality and value…that are perceived to be unparalleled relative to the competition,…ultimately resulting in deep, trust-based relationships…, which in turn, garners great amounts of loyalty and profits over time.

1. A brand is a promise about a product. It allows consumers to have an expectation that a product will do something valuable or desirable, and that this will happen each time they buy or use the product. Because of this perception, consumers build trust-based relationships with a brand.

2. Brands aspire to create more than just a set of expectations. Great brands inspire loyalty, emotion, and admiration.

3. Brands are unique and consistently deliver desired benefits, allowing companies to charge more.

A. Why Do Companies Brand Their Products?

David Aaker argues that brands are company assets. As a result, smart companies allocate money in support of their brands. The financial worth of most modern consumer-focused companies is directly related to the strength of their brands.

1. Among the more specific benefits provided to a company by strong brands are these: a. They allow for premium pricing versus competitors. b. They afford protection against price wars. c. They make it more likely a new product will succeed. d. They afford leverage in negotiating with channel partners. e. They make companies more attractive to co-branding partners. f. They help companies more effectively deal with a brand crisis. g. They help companies recruit top talent. h. They garner consumer loyalty.

B. Creating a Brand Vision 1. A brand‘s vision, Aaker says is ―an articulated description of the aspirational image for the brand; what you want the brand to stand for in the eyes of customers and other relevant groups.‖ 2. The brand vision is created from consideration of the environment in which the brand competes: its customers, competitors, capabilities, challenges, and opportunities.

1-28 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

V.

3. Aaker recommends identifying all aspirational associations for the brand and grouping them into lists. The lists should include things like product attributes, consumer benefits, brand personality, etc. Done properly, such analysis can yield visions as powerful as those listed below: a. Amazon: To be Earth’s most customer-centric company where people can find and discover anything they want to buy online. b. Casper: Great sleep, made simple. c. Coca-Cola: To refresh the world in mind, body and spirit. To inspire moments of optimism and happiness through our brands and actions. To create value and make a difference. d. Google: Google’s mission is to organize the world’s information and make it universally accessible and useful. e. Ikea: Ikea’s vision is to create a better everyday life for the many people. f. Patagonia: Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis. g. Starbuck‘s: To inspire and nurture the human spirit—one person, one cup and one neighborhood at a time. h. Twitter: To give everyone the power to create and share ideas and information instantly, without barriers.

C. The Brand Personality 1. Many companies adopt a brand personality. Progressive Insurance uses the following vision: ―to reduce the human trauma and economic costs associated with car accidents.‖ 2. The brand personality is reflected in the Progressive spokesperson Flo. Why is Flo so effective? According to one observer, ―She‘s a tangible person and personality in an increasingly virtual world—as real as the shopkeeper you never have to deal with anymore, because you buy everything on Amazon.‖ 3. Not every brand personality is reflected as an actual person such as Flo. Google‘s personality is exemplified by the simplicity and elegance of its website and products. Shoppers think of Walmart for large selection and cheap prices. Target might have a smaller selection and be a bit more expensive, but it is also fun and has a sense of style.

The Broader Impact of Advertising on Society and Ethics A. Advertising has been a major factor in improving the standard of living in the United States and around the world.

B. Facebook, Google, magazines, radio and television networks and stations, and many websites all receive their primary income from advertising. This facilitates freedom of the press and promotes the availability of more complete information.

1-29 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VI.

C. The Red Cross, United Way, and other noncommercial organizations receive continuous financial support and volunteer assistance due in large part to the power of advertising.

D. Advertising practitioners formed groups to improve advertising effectiveness and promote professionalism and started vigilance committees to safeguard the integrity of the industry.

E. Advertising has had a pronounced effect on society as well as the economy. It has also fostered a host of social attitudes and laws that have dramatically affected advertising itself.

Chapter Summary A. Advertising has a number of functions and effects in a free economy. It identifies and differentiates products; communicates information about them; induces nonusers to try products and users to repurchase them; stimulates products‘ distribution; increases product use; builds value, brand preference, and loyalty; and lowers the overall cost of sales.

B. Advertising is a relatively recent development in human history.

C. The industrial age brought changing economies and increased competition and thus marked the emergence of advertising as an industry.

D. Among the most important marketing developments of the past 100 years has been the recognition of the power of brands.

E. As a social force, advertising has helped improve the standard of living in the United States and around the world.

F. Advertising has also been severely criticized over the years for its lack of honesty and ethics.

Answers to Pedological Features

Portfolio Review: The Modern History of Advertising If we look back at the ad campaigns of 30, 50, 70, and even 100 years ago, we get a fascinating indication of how life was lived back then, and we can also see how the development of modern advertising parallels the development of our own standard of living. Study the array of historical ads in this Portfolio Review and consider how well each relates to the seven functions and effects of advertising discussed in this chapter.

Ethics, Diversity & Inclusion: Mary Wells In 1969, the highest-paid person working in advertising was said to be Mary Wells. She continued in her role until 1990, when, at age 62, she stepped away from agency life. Mary Wells Lawrence is an advertising legend and was one of the earliest women to lead a major advertising agency.

1-30 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

 My IMC Campaign 2: Tools for Teamwork 1. Advertising agencies look for at least three qualities in the people they hire: talent, knowledge, and the ability to work well with others.

2. First, you will need to coordinate everything that you do.

3. Second, you will be sharing work.

4. Finally, everyone is accountable. Talk to your professor about whether he or she expects peer evaluations or some other means to assess differences in group member effort and performance.

Staying Connected E-mail, of course, remains an essential tool. You may have a university e-mail account, but these can be problematic because (1) your inbox space is limited, (2) spam filters in these accounts are often very aggressive (too much useful mail is moved to the spam folder), and (3) they lack many useful tools for organizing and labeling your mail.

Creating Documents Google docs (http://docs.google.com) is a free suite of simple yet powerful document creation tools that includes a word processor, a spreadsheet program, and a presentation creator.

Staying Organized Many people find that calendars and to-do lists are essential. Google has an excellent calendar program (www.google.com/calendar) that everyone in the team can edit.

Conducting Research For secondary research purposes it is great to have a program that allows you to copy and store documents, web pages, photos, charts, and other kinds of information. Services such as GoogleDrive or Dropbox afford such opportunities.

Working Well and Staying Accountable Learning to adapt to group projects is not easy for everyone. Knowing what to expect and developing the skills to work well with others is essential. For guidance, consider these thoughts from experts: MIT: http://hrweb.mit.edu/learning-development/learningtopics/teams/articles/basics Psychology Today: www.psychologytoday.com/us/blog/cutting-edgeleadership/201301/characteristics-good-workteam-members If you volunteer to be a team leader (or are appointed one), some helpful tips can be found here: Qualities of a great team leader: http://smallbusiness.chron.com/10-effective-qualities-teamleader-23281.html Roselind Torres on new leadership styles: www.ted.com/talks/roselinde_torres_what_it_takes_to_be_a_great_leader/discussion If you are doing peer evaluations in your class, your professor will likely have a form that you should use. These types of forms can be found throughout the web. Some examples include these: www.lapresenter.com/coopevalpacket.pdf www.northwestern.edu/searle/docs/History%20and%20Philosphy%20Self%20and%20Peer%20E vaulation.pdf 1-31 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

AD LAB 2–A: What Kills Bugs Dead?

1. Now that you know a little about slogans, create one for yourself personally or for your real or imagined company. Which qualities and characteristics do you want your slogan to highlight? Share your slogan with your classmates and gauge their reactions.

Answer Guidelines: The key is to make sure the students' slogans sound compelling. This exercise will also help students realize that these slogans are not as easy to create as they might have thought.

2. Business cards serve a higher purpose than simply providing information for a Rolodex.

They are mini-advertisements. Create a business card for yourself using your slogan.

Answer Guidelines: This is a fun exercise to have students turn in. It always amazes me what students come up with.

 People behind the Ads: William Bernbach: Advertising Legend  For most of the 1950s creativity carried little currency.  But by 1959 a creative revolution was brewing, led by the founder and creative leader of an upstart New York agency, Doyle Dane Bernbach.  Contradicting Hopkins‘s claim that advertising was a science, Bernbach wrote: ―I don‘t want academicians. I don‘t want scientists. I don‘t want people who do the right things. I want people who do inspiring things…Let us blaze new trails.‖  Bernbach developed copy that encouraged consumers to reject groupthink, the mass society, and the idea that everyone should be like everyone else.  Bernbach passed away in 1982 after a fabled career, but his legacy is intact. Harper’s Magazine, noting his passing, wrote that Bernbach had made ―a greater impact on American culture than any of the distinguished writers and artists‖ appearing in the magazine during its 133 years.

Review Questions 1. What are the four fundamental assumptions of free market economics?

(1) Self-interest; (2) complete information; (3) many sellers, many buyers; (4) absence of externalities (social costs).

2. What are the primary functions of advertising in a free economy?

The primary functions of advertising in a free economy are: (1) to identify products and their sources and to differentiate them from others; (2) to communicate information about the product, its features, and its location of sale; (3) to induce customers to try new products and to suggest reuse, (4) to stimulate the distribution of a product; (5) to increase product use; (6) to build value, brand preference, and loyalty; and (7) to lower the overall cost of sales.

3. What has had the greatest impact on the way advertising has evolved?

The printing press, invented by Johannes Gutenberg in the 1440s, was the most important invention of the Preindustrial Age. The printing press revolutionized not only the system of communication, but also the way 1-32 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

people lived and worked. In the Industrializing Age, the advent of industry was the most important invention, as it facilitated the mass production of products. This trend continued in the Industrial Age, which also saw the invention of broadcast media and greater sophistication in marketing techniques, including market segmentation. The most important things that happened in the Postindustrial Age is the realization of the limits of natural resources and the emergence of demarketing. The internet is the greatest innovation of the Global Interactive Age.

4. How does advertising lower the cost of sales?

Advertising can lower the cost of sales by increasing the volume of sales, which in turn lowers the costs of manufacturing and distribution.

5. How would you differentiate the advertising used in the industrializing age from the industrial age?

During the industrializing age, manufacturers were more concerned about getting products out to the general public. Wholesalers used to advertise to the public to let them know they had a product or service. In the industrial age, society started changing to more of a consumer-centered process. The increased availability of competing brands led to a greater focus on differentiation, letting consumers know how and why a product was different from its competitors.

6. What has been the most important influence on advertising in the postindustrial age?

The fact that consumers started realizing that our resources were not infinite.

7. What are three examples of companies or organizations that use a demarketing strategy?

Three examples of companies/organizations that use the demarketing strategy are states trying to curtail smoking, utilities trying to get consumers to use less energy, and cities trying to get consumers to limit the waste they bring to the curb each week for pickup.

8. What companies can you think of that are engaged in marketing warfare?

A classic example is Coke and Pepsi. They have been at each other‘s throats and as of this writing, it seems Pepsi is starting to edge ahead, especially with the purchase of Quaker Oats (which owns Gatorade). Today the biggest competitive advertising campaigns are those of wireless phone companies.

9. As a consumer, are you likely to save money buying at a store that does not advertise?

Explain.

This answer will vary. Sometimes a decision not to advertise is an indication of exclusivity. In such cases, shoppers will not likely save money but may still get value in the form of excellent service (think Nordstrom‘s).

But in other cases, a store that does not advertise might still save consumers money (think Dollar Stores). Often, stores that advertise the prices of the items they sell are generally trying to call attention to low prices.

Consumers will likely save money shopping at such outlets.

10. What effects do you believe advertising has had on society in general? Explain.

Advertising can help create trends and desires. For example: BMW introduced the Z3 convertible in a James Bond movie, which helped make that car a desired status symbol for many wealthy middle-aged men.

1-33 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

The Advertising Experience 1. Ad Action: Demarketing Identify a social problem at your school that has had an effect on you or your community.

Then create a print demarketing advertisement that addresses this problem. The ad should have a visual element as well as a slogan. What incentive have you created for your audience to change? Why do you think the incentive will resonate with people who see your ad?

2. Economic Perspectives of Advertising Visit the website that follows for readings on the economics of advertising. After studying them, do you believe advertising primarily promotes monopolies or does it foster many buyers and sellers? Support your argument with points from the article. a. ―Advertising,‖ The Library of Economics and Liberty: The Concise Encyclopedia of Economics—an interesting primer by Prof. George Bittlingmayer, University of Kansas: www.econlib.org/library/Enc/Advertising.html 3. Advertising History Visit the following websites to see what else you can learn about the early advertising efforts of companies here and abroad. Can you find some early ads for Kodak? Coca-Cola? Sunkist?

Who are some of the other major advertisers listed? What specific characteristics in art and copy styles do you notice that make these ads different from advertising today? a. The Emergence of Advertising in America section of the John W. Hartman Center for Sales, Advertising, and Marketing History at Duke University: http://scriptorium.lib.duke.edu/eaa b. Archives of the History of Advertising Trust: http://www.hatads.org.uk/ c. History Matters: http://historymatters.gmu.edu/mse/ads/amadv.html d. The Museum of Broadcast Communications (Chicago): http://www.museum.tv/ e. Nineteenth-century advertising in Harper’s Weekly magazine: http://advertising.harpweek.com f. USATVADS (a large—more than 1 million examples—pay-site collection of American television commercials): www.usatvads.net g. Advertising, marketing, and commercial imagery collections of the National Museum of American History at the Smithsonian: http://americanhistory.si.edu/collections/subjects/advertising 4. Volkswagen‘s advertising from the early 1960s was clearly quite different from that of its competitors—perhaps because of its decision to pair copywriters with art directors, a partnership that is now all but standard in the advertising industry. But did other automakers sit up and take notice? Find some examples of American auto advertising in the years since that could potentially have been influenced by DDB‘s VW work.

1-34 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

5. Some Coca-Cola investors want the company to spend more on advertising products in growing categories, such as sports drinks, and less on trying to revive consumer interest in full-calorie soft drinks. How would you respond to these shareholders?

Answer Guidelines: Coca-Cola is an entity that understands its brand and its target audience extremely well.

While consumer preferences may be dictating a slight trend toward partiality for lower calorie beverages, Coca-Cola still remains a giant in the soft drink market and works to maintain its ―classic‖ brand identity. With this longstanding, classic brand identity, CocaCola has fostered an extreme sense of brand loyalty among its consumers. Rather than attempting to obtain new customers for a new sports drink offering, Coca-Cola instead chooses to invest more funding and time toward its current users while also working to promote re-adoption of consumption habits by former consumers.

6. After stirring up consumers‘ emotions and shaking their faith in the company by introducing New Coke, company executives have been treading somewhat lightly for the last 20 years.

Do you think their efforts to conserve and protect the brand have stifled the creativity of Coca-Cola advertising? Why or why not?

Answer Guidelines: a. Yes: Coca-Cola, until 2018 with its launch of Orange Vanilla Coke, had not launched a new product in over a decade. This lack of product innovation could be attributed to a fear of another product failure. Additionally, several sources have commented on the lack of creativity and inaccurate understanding of millennial and Gen-Z audiences in the brand's most recent advertisements, including their, ―Because I Can,‖ campaign that features a diverse cast of spokespersons (primarily women) telling consumers to have a Diet Coke ―because they can.‖ Many women felt that it was an attempt to pander to a trend in female empowerment by telling women to do what they want, regardless of what others might say or think, simply because they can. These messages did not perform well with the intended target audience and, in fact, garnered more dislikes than likes on the brand‗s YouTube channel. Overall, attempts to stick to the ―classic‖ brand imagery of Coca-Cola may be leading the brand toward more misunderstandings of who their consumers are today. b. No: Coca-Cola has continued to highlight the classic elements of its brand identity while also striving to stay relevant to consumers today. Advertisements for Coca-Cola's newest product (their first new product in over a decade), Orange Vanilla Coke, utilize a 1970sera vibe. These ads serve as a prime example of Coca-Cola staying true to its classic brand identity while also showing an understanding of current trends, as the product was first promoted during the airing of a popular show with younger audiences, ―The Four: Battle for Stardom.‖ Advertisements for this new product garnered 985 million impressions for the brand, showing that even with nearly a decade since a new product launch, Coca-Cola was able to very successfully reach a younger audience. Additionally, 1-35 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Coca-Cola has made huge creative strides with efforts such as their ‖Share A Coke‖ campaign, inclusive messages during the SuperBowl such as ―The Wonder of Us,‖ and the promotion of products during some of the biggest events in the world (i.e., the 2018 FIFA World Cup), all highlighting Coke‘s creative capabilities to continue to innovate and reach younger audiences.

Connect Activities Title

Assignment Type

Topic

Functions of Advertising in a Free Economy Burger King and Branding

Matching

Functions of Advertising

02-01

Video Case

Marketing Communication’s Role in Developing a Brand History of Advertising

02-04

Reflective Thinking; Analytical Thinking

Remember; Evaluate

02-02

Analytical Thinking

Understand

Evolution of Advertising

Timeline

Learning Objective

AACSB Accreditation Tagging Analytical Thinking

Bloom’s Taxonomy Understand

Functions of Advertising in a Free Economy Activity Summary: This activity provides students with a case describing the promotional practices of a fictitious fast, but healthy, boxed lunch restaurant, Nutra Box. The activity asks students to match the activities performed by Nutra Box with the principles of a free market economy that those activities represent.

Follow-Up Class Discussion: Ask student groups to explore the advertising efforts of one of their favorite brands and match their advertising activities to the functions of advertising in a free market economy as described in the text.

Burger King and Branding

1-36 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Activity Summary: This activity has students view a video from the Burger King brand, which reiterates their identity as flame-grilled burger specialists. The questions that follow the video have students consider the functions and benefits of a strong brand.

Follow-Up Class Discussion: Ask groups of students to identify a brand that they feel has a strong brand identity. Challenge students to identify how they have branded themselves and what functions of branding are served by the brand‘s advertising efforts. Additionally, ask students to identify the advantages they feel strong branding has afforded to their chosen brand.

Evolution of Advertising Activity Summary: This activity asks students to identify the correct era of the various developments in the history of advertising.

Follow-Up Class Discussion: Group students into teams and ask them to identify a brand that was established more than 50 years ago. Ask them to outline the brand‘s history of advertising.

What media did they use in the beginning? What do they use now? Ask them to find advertisements that show the evolution of the brand over the years. What elements of a particular decade, as discussed in the text, can be seen in the brand‘s advertising?

CHAPTER THREE THE BIG PICTURE: ECONOMIC, ETHICAL, AND REGULATORY ASPECTS This chapter identifies and explains the economic, social, ethical, and legal issues advertisers must consider. The basic economic principles that guide advertising also have social and legal effects. These effects may lead governments to take corrective measures. Society determines what is offensive, excessive, and irresponsible; governments determine what is deceptive and unfair. To be law-abiding, ethical, socially responsible, and economically effective, advertisers must understand and address these issues.

Learning Objectives After studying this chapter, your students will be able to: LO3-1 Relate advertising activities to the workings of a free-market economy.

LO3-2 Identify and give examples of the two main types of social criticisms of advertising.

LO3-3 Explain the difference between social responsibility and ethics in advertising.

LO3-4 Describe how governments regulate advertising here and abroad.

LO3-5 Discuss regulatory issues that affect U.S. advertisers and commercial speech.

1-37 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

LO3-6 Classify ways that federal agencies regulate advertising to protect both consumers and competitors.

LO3-7 Define the roles state and local governments play in advertising regulation.

LO3-8 List the ways that private organizations help reduce fraudulent and deceptive advertising.

What’s New? The chapter is slightly retitled to include the word ―Ethical.‖ The opener is updated to include the latest information about Lance Armstrong, Michael Vick, and Tiger Woods and their difficulties following scandals. The ethical dilemmas that arise from advertising are placed squarely in the context of its economic functions. The four assumptions of market economics have been expanded and made more accessible to students. Nike‘s dominance of Adidas in the U.S. market and the success of Apple‘s iPhone are presented to show how advertising stimulates competition. Nike‘s attention-grabbing ad featuring Colin Kaepernick is presented to frame the discussion of advertising‘s effect on our values. The Kaepernick ad is then the focus of the EDI box later in the chapter. The discussion of cigarettes in the ―regulatory issues‖ section now includes additional information on e-cigarettes and the FDA. The privacy section is updated and a new section on ―protecting consumer data‖ has been added to acknowledge the costs of data breaches. The National Advertising Review Council changed its name to the Advertising SelfRegulatory Council (ASRC), a change acknowledged in the chapter. ASRC groups, including CARU, ERSP, and IBA, are introduced and described.

Teaching Tips and Strategies Using the Chapter Opening Vignette in the Classroom Students are very interested in the mishaps and scandals surrounding Michael Vick, Lance Armstrong, and Tiger Woods and enjoy offering perspectives on Nike and its relationship with its athletes. It might prove useful to ask students to argue from the perspective of some of the individuals and groups involved, i.e., from Vick‘s perspective, Nike‘s, from the perspective of animal welfare groups, etc. Be sure to ask students what is at stake for Nike in its efforts to navigate the controversy. They will likely focus on its image and sales, but there are other considerations. For example, how might have Nike‘s choices affected its ability to partner with other sports stars? Doubtless, Nike‘s decisions regarding Vick were scrutinized by other athletes who might consider sponsorship deals. As Kobe Bryant‘s travails demonstrated, accusations do not add up to facts in all situations.

You may wish to ask students how they believe these scandals will, and how they should, affect the personal ―brand‖ of these athletes and their futures as spokespersons.

1-38 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Students may have also heard about a scandal with branding implications for music star Chris Brown: www.fastcompany.com/blog/danielle-sacks/ad-verse-effect/breaking-brand-scandalwrigelys-drops-chris-brown Other Tips and Strategies All students have been influenced by advertising in one way or another. Ask students if they have ever bought a product/service they saw an ad for and were disappointed by the ad because it created an expectation that wasn‘t met. For instance, I had an ad with a coupon for Stanley Steemer (a carpet-cleaning company). The coupon conveyed they would clean the carpets of three rooms for a special price of $99. When the company arrived, they told me they could put a pet deodorizer in the cleaning solution for an extra charge, as well as a type of stain repellant.

I didn‘t think it would be that much of a difference. I ordered the stain repellant and pet deodorizer, and to my surprise the bill was well over $200. My neighbor had her carpets cleaned as well, and her bill approached $300 because she had a couple of furniture pieces treated as well. I asked the company representative how many people actually spend $99 for service. He replied, ―Most people need more than the minimum.‖ Was this deceptive advertising? I think so.

The Doan‘s Backache relief campaign is a discussion topic that helps illustrate what deceptive advertising is or isn‘t. For over 90 years Doan‘s was advertised as one of the better back-pain medicines on the market. The problem was that Novartis (the manufacturer of Doan‘s) had no scientific data indicating that Doan‘s was more efficient at treating back pain than the other pain medicines on the market. A doctor I know explained, ―Doan‘s has the same ingredients as ibuprofen.‖ The point: people who took ibuprofen would get results similar to those who took Doan‘s.

In 1996, the FTC took Novartis to court on grounds of deceptive advertising. Here are some of Doan‘s claims (I write these claims on the board to convey to the class what Doan‘s main message/deception was).   

―Doan‘s is made for back pain relief with an ingredient [other] pain relievers don‘t have.

Doan‘s makes back pain go away . . . The Back Specialist.‖ ―If nothing seems to help, try Doan‘s. It relieves back pain no matter where it hurts.

Doan‘s has an ingredient these pain relievers don‘t have.‖ ―Back pain is different. Why use these pain relievers? Doan‘s is just for back pain.‖

In 1998, the courts ruled in favor of the FTC, and had Novartis run corrective advertising to try to let the public know that Doan‘s is no more effective than other pain medicines on the market.

Holding a class discussion after explaining this issue will allow students to consider other

1-39 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

instances when they have seen deceptive advertising, and its implications for society and business. Ask the students if what Novartis did was ethical or unethical and why?

Source: ―Doan‘s Pills Must Run Corrective Advertising,‖ FTC Office of Public Affairs, May 27, 1999, available from http://www.ftc.gov/opa/1999/05/doans.htm.

Web Resources for Enhancing Your Lectures Background on Edward Boyd

http://www.nytimes.com/2007/05/06/business/06boyd.html

Subliminal persuasion

http://en.wikipedia.org/wiki/Subliminal_stimuli

Pedagogical Features Ad Lab 3–A: Unfair and Deceptive Practices in Advertising Ethics, Diversity & Inclusion: Colin Kaepernick and Nike  My IMC Campaign 3: Your Assignment

Ad Lab 3–B: The Importance of Good Legal Counsel in Advertising Ad Lab 3–C: Editorial or Advertising: It‘s Adversarial  People behind the Ads: Edward Boyd: Advertising Legend

Lecture Outline I.

II.

Vignette: Armstrong, Woods, and Vick Lance Armstrong and Tiger Woods achieved impressive measures of success in their professional sports. However, Armstrong‘s desire to win led him to pursue unfair advantages. Woods‘s personal indiscretions in his marriage were unrelated to his golf career, yet tarnished his longtime image as an accomplished, disciplined athlete. When news of these issues emerged, how should his sponsors have reacted? Knowing the right thing to do is not always easy. For example, between the time that Michael Vick was first accused of animal cruelty and his eventual plea, sponsor Nike was in a difficult situation.

How could the advertiser simultaneously protect its brand image, acknowledge public outrage over the charges against Vick, deal with the star quarterback who deserved a presumption of innocence, and do the right thing? For brands, the lesson is caution in aligning a product‘s image too closely with real and potentially flawed human beings.

The Many Controversies about Advertising 1-40

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

III.

A. By making bold claims about their brands, companies risk public criticism if their advertising offends or if their products don‘t measure up.

B. Advertising shares certain characteristics with journalism, education, and entertainment, but it shouldn‘t be judged by their standards.

C. From these economic and social controversies, questions arise concerning where to locate responsibility for advertising.

D. The underlying principle of free-market economics—that a society is best served by empowering people to make their own decisions and act as free agents.

E. This fundamentally utilitarian framework, derived from the idea that society should promote behaviors that foster the greatest good for the most people, offers a system of economic activity—capitalism—that has raised living standards better than any other economic system in history.

1. By using this framework for our discussion of advertising controversies, we have a basis for understanding how advertising may contribute to, or detract from, the basic goal of free enterprise: ―the most good for the most people.‖ Economics: How Advertising Functions in Free Markets A. Principles of Free-Market Economics In the United States and in some other countries of the world, a market economy determines what and how much is produced and consumed. Harvard economist N. Gregory Mankiw defines a market economy as one in which “Firms decide whom to hire and what to make. Households decide . . . what to buy with their incomes.

These firms and households interact in the marketplace, where prices and selfinterest guide their decisions.” Such an economy is characterized by four assumptions: 1. Self-interest. People and firms pursue their self-interested goals. In free economies, marketers must compete with other marketers for consumer business. This open competition between self-interested sellers marketing to self-interested buyers leads to greater product availability at more competitive prices.

2. Complete information. The assumption suggests that buyers know the prices offered by sellers, forcing marketers to keep prices low enough to create demand. Sellers can also more efficiently find consumers of their goods by providing information about what they sell. When information suggests a brand is more valuable than those with which it competes, its seller can charge more.

3. Many buyers and sellers. Having many sellers ensures that if one does not meet customer needs, another will capitalize on the situation by producing a better product or a less expensive version of an existing product. Similarly, a wide range of buyers ensures that sellers can find customers interested in unique products if they can be offered at a fair price.

1-41

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

4. Absence of externalities (social costs). Sometimes the sale or consumption of products may benefit or harm people who are not involved in the transaction. For example, in March 2009, India‘s Tata Group introduced the world‘s cheapest car, Nano, which retailed for just $2,000. This gave millions of poor Indians access to affordable transportation. But by increasing the number of people who drive automobiles, the Tata may increase health problems and accelerate climate change through increases in air pollution and carbon emissions. In such cases, governments may use taxation and/or regulation to compensate for or minimize harms from the externalities.

Note: These assumptions describe an ideal economy, not one that actually exists.

B. The Economic Impact of Advertising Advertising expenditures historically average between 1 and 2 percent of the U.S. GDP. As illustrated in Exhibit 3-1, worldwide there is a positive relationship between per capita spending on advertising and personal wealth. The moment a company begins to advertise, it sets off a chain reaction of economic events, as shown in Exhibit 3-1. Refer to Exhibit 3-2, an illustration of the economic effect of advertising being compared to an opening break shot in billiards.

C. Effect on the Value of Products 1. Advertising has given these brands (Coca-Cola, iPods) added value.

2. Some believe that a product‘s image, created in part by advertising and promotion, is an inherent feature of the product itself.

3. By simply making the product better known, advertising can make the product more desirable. In this way, advertising adds value to the brand.

4. Advertising also adds value to a brand by educating customers about new uses for a product.

5. In a free-market system, consumers can choose the qualities they want in products they buy.

6. In terms of our economic framework, by adding value to products, advertising helps both the consumer and the advertiser.

D. Effect on Prices 1. Some advertised products do cost more than unadvertised products, but the opposite is also true. Both the Federal Trade Commission and the Supreme Court have ruled that, by encouraging competition, advertising has the effect of keeping prices down.

2. Additional important points include: a. As a cost of doing business, advertising is paid for by the consumer. In most product categories, though, the amount spent on advertising is small compared with the total cost of the product.

1-42 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

b. Advertising is one element of any mass distribution system, a system that enables manufacturers to engage in mass production, which in turn lowers the unit cost of products. In this indirect way, advertising helps lower prices. c. In industries subject to government price regulation (agriculture, utilities), advertising has historically had no effect on prices. When the government deregulated many of these industries in an effort to restore free-market competition, advertising has affected price—usually downward, but not always. d. In retailing, price is a prominent element in many ads, so advertising tends to hold prices down. On the other hand, national manufacturers use advertising to stress features that make their brands better; in these cases advertising tends to result in higher prices for their brands.

E. Effect on Competition 1. Some observers believe advertising actually restricts competition because small companies or industry newcomers can‘t compete with the immense advertising budgets of large firms. Conversely, small firms often rely on advertising to inform consumers about their brands‘ unique benefits.

2. Intense competition can reduce the number of businesses in an industry. However, some of the firms eliminated by competition may be those that served customers least effectively.

3. High costs inhibit the entry of new competitors in industries that spend heavily on advertising. In some markets, original brands can benefit from this barrier.

However, the investments needed for plants, machinery, and labor is of far greater importance.

4. Advertising by big companies often has only a limited effect on small businesses because a single advertiser is rarely enough to dominate the whole country.

F. Effect on Consumer Demand 1. Many studies show that promotional activity affects aggregate consumption, but disagree as to the extent. Social and economic forces such as technological advances, the population‘s educational level, increases in population and income, and changes in lifestyle are more significant.

2. IMC can help get new products off the ground by giving more people more complete information, thereby stimulating primary demand—demand for the entire product class.

3. In declining markets, when the only information people want is price information, advertising can influence selective demand—demand for a particular brand. a. In growing markets, advertisers generally compete for a share of the growth. b. In mature, static, or declining markets, they compete for each other‘s share of the market, making ―conquest sales.‖ G. Effect on Consumer Choice 1-43 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

IV.

1. The best way for a manufacturer to beat the competition is to make a unique product.

2. The freedom to advertise encourages businesses to create new brands and improve old ones.

H. Effect on the Business Cycle 1. John Kenneth Galbraith, a perennial critic of advertising, concedes that by helping maintain the flow of consumer demand (encouraging more buyers), advertising helps sustain employment and economic growth.

2. Exhibit 3-3 shows the trend in U.S. Consumer Spending from 2008 through 2018.

3. Historically, in hard economic times, companies cut promotional expenditures.

That may help short-term profits, but studies prove that businesses that continue to advertise during a recession are better able to protect, and sometimes build, market share.

4. We conclude that when business cycles are up, advertising contributes to the increase. When business cycles are down, advertising may act as a stabilizing force by encouraging more buyers to buy.

I. The Abundance Principle: The Economic Impact of Advertising in Perspective 1. To the economy as a whole, the importance of advertising may best be demonstrated by the Abundance Principle: In an economy that produces more goods and services than can be consumed, advertising serves two important purposes: a. Keep consumers informed of their alternatives (complete information). b. Allow companies to compete more effectively for consumer dollars (selfinterest).

2. Advertising stimulates competition (many buyers and sellers) a. In countries where people have more income to spend after their physical needs are satisfied, advertising also stimulates innovation and new products.

No amount of advertising can achieve long-term acceptance of products that do not meet consumer approval. b. Advertising stimulates a healthy economy. It also results in consumers who are more informed, better educated, and more demanding.

The Social Impact of Advertising Many of the criticisms focus on the style of advertising, saying it‘s deceptive or manipulative. Collectively we might refer to these as short-term manipulative criticisms. Other criticisms focus on the social or environmental impact of advertising.

These are long-term macro criticisms. A short-term criticism is one that suggests that a particular ad has harmed a particular consumer at a specific point in time. Long-term criticisms are ones that deal with the broad impact of many ads on many people over long periods of time.

1-44 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

The social aspect of advertising typically involves the last two principles: complete information and absence of externalities. Some of the most important are deception and manipulation in advertising, the effect of advertising on our value system, commercial clutter, stereotypes, and offensiveness.

A. Deception in Advertising 1. The late professor Ivan Preston noted that the essence of a marketplace lies in the willingness of buyers and sellers to enter into commercial transactions. Anything that detracts from the satisfaction of the transaction produces a loss of activity that ultimately hurts both parties.

2. For advertising to be effective, it must have some credibility with consumers. So deception not only detracts from the complete information principle of free enterprise but also risks being self-defeating. Puffery refers to exaggerated, subjective claims that can‘t be proved true or false, such as ―America‘s favorite pasta,‖ ―Finger lickin‘ good,‖ or ―Taste the rainbow.‖ 3. Under current advertising law, the only product that can be considered deceptive are those that are factually false or convey a false impression and therefore have the potential to deceive or mislead reasonable people. Nonproduct facts are not about the brand but about the consumer or the social context in which the consumer uses the brand. An example is ―Pepsi. The choice of a new generation.‖ B. The Effect of Advertising on Our Value System 1. Professional critics argue that advertising: a. Degrades people‘s value systems by promoting a materialistic way of life. b. Destroys the essence of our citizen democracy, replacing it with selfish consumer democracy c. Manipulates people by playing on our emotions and promising greater status, social acceptance, and sex appeal. d. Is so powerful that consumers are helpless to defend themselves against it.

2. Argument exaggerates the power of advertising.

One study showed that only 17 percent of U.S. consumers see advertising as a source of information to help them decide what to buy.

3. Advertising is supported by marketers who want to sell their products, but nobody markets the opposite stance of why we don‘t need to or shouldn‘t buy a particular product at all. In this sense, consumers don‘t have complete information.

4. This is an important issue of externalities, because the aggregate activities of the nation‘s advertisers affect many people outside the immediate marketing transaction and create an unexpected cost to society.

C. The Proliferation of Advertising 1. One of the most common long-term complaints about advertising is that there‘s just too much of it.

1-45 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

a. The average person may be exposed to 500–1,000 commercial messages a day. b. In 2005, the amount of nonprogram time on network TV—which includes advertising, public service announcements, and program promotions—ranged from about 16 minutes per hour during prime time to nearly 21 minutes per hour in daytime, a day part that is particularly important to advertisers. c. Too much advertising creates an externality not only for customers (nuisance), but for also the advertisers themselves—the more commercials that hit the customers‘ brains, the less effective paid advertising is. d. Clutter is not so evident in other countries. In the European Union, for example, TV broadcasters can carry no more than 12 minutes of commercials per hour.

D. The Use of Stereotypes in Advertising 1. Advertising has long been criticized for insensitivity to minorities, women, immigrants, the disabled, and other groups. a. Latinos, African-Americans, Asians, Native Americans, and others are usually portrayed with sensitivity in ads, not only because of pressure from watchdog groups, but also because it‘s good business; these consumers represent sizable target markets. b. The image of women is also changing from their historic depiction as either homemakers or sex objects.

2. Problems still exist, especially in local and regional advertising and in certain product categories such as beer and sports promotions.

3. Research evidence suggests that many Americans value their ethnic identities, and prefer brands that speak to them. This in turn has led agencies to see the value of diversifying their own ranks to better understand and communicate with their client‘s consumers.

E. Offensiveness in Advertising 1. Offensiveness is a short-term argument style that also speaks to externalities.

2. Taste, of course, is highly subjective. People were outraged when the first ad for underarm deodorant appeared in a 1927 Ladies Home Journal; today no one questions such ads.

3. Even with the AIDS epidemic, many broadcast networks still do not air condom commercials during the day; instead, the ―Make a Difference‖ condom campaign was placed in prime time.

4. Taste is also geographic.

5. Where nudity is relevant to the product, people are less likely to regard it as obscene or offensive—except when the advertising targets kids. In Europe, nudity in commercials is commonplace.

1-46 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

V.

6. Some consumers get so offended by both advertising and TV programming that they boycott sponsors‘ products.

F. The Social Impact of Advertising in Perspective 1. Marketing professionals earnestly believe in the benefits that advertising brings to society: a. Encourages development. b. Speeds acceptance of new products and technologies. c. Fosters employment. d. Provides variety of information about choices. e. Keeps prices down (encourages mass production). f. Stimulates healthy competition. g. Promotes higher standard of living (subsidizes arts). h. Supports freedom of the press and the dissemination of information.

2. Critics of advertising might disagree with many of these points. The media, they say, pander to national advertisers to attract ad dollars. In the process, they modify their editorial content to suit their corporate benefactors and shirk their responsibility of presenting news in the public interest.

3. By being a rich information source (albeit not a complete one), advertising contributes to the existence of many buyers and sellers and, therefore, to the goals, of both consumers and marketers.

Social Responsibility and Advertising Ethics Being ethical means doing what is morally right in a given situation. Social responsibility means doing what society views as best for the welfare of people in general or for a specific community of people.

A. Advertisers‘ Social Responsibility 1. Advertising plays an important role in developed countries.

2. It influences the society‘s stability and growth.

3. In most countries, for example, the advertising industry is part of a large business community. Like any good neighbor, it has responsibilities: to keep its property clean, participate in civic events, support local enterprises, and improve the community.

4. The earliest ―green advertising‖ campaigns, for instance, exemplified a blatant effort by some advertisers to cash in on consumers‘ desire for a cleaner environment.

B. Ethics of Advertising For practical purposes, let‘s consider three levels of ethical responsibility and apply them to advertising (see Exhibit 3-4): 1. On one level, ethics comprise two interrelated components: the traditional actions taken by people in a society or community, which are customs, and the

1-47 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VI.

VII.

philosophical rules that society establishes to justify such past actions and decree future actions, which are principles. a. Every individual also faces a second set of ethical issues: the attitudes, feelings, and beliefs that add up to a personal value system.

2. This conflict at the first ethical level passes the responsibility for decision making to the second, individual level.

3. When the group or individuals cannot resolve an ethical dilemma, they must redefine the issue in dispute. Thus, the third level of ethics concerns singular ethical concepts such as good, bad, right, wrong, duty, integrity, and truth.

4. Consumer groups, governments, special interest groups, and even other advertisers now review, control, and modify advertising in order to create more complete information and reduce the impact of unwanted externalities.

Government Restraints on International Advertising Europe and the United States have very different perspectives on privacy protection, with Europeans generally favoring stricter controls.

Many countries prohibit puffery.

Many European countries also ban coupons, premiums, free tie-in offers, and the like.

With the rapid growth of China‘s economy and the growth of a prosperous middle class, the country has faced new challenges in regulating advertising.

In international advertising, the only way to navigate this morass of potential legal problems is to retain firms that specialize in advertising law.

Current Regulatory Issues Affecting U.S. Advertisers A. Freedom of Commercial Speech 1. The Supreme Court historically distinguishes between ―speech‖ and ―commercial speech‖ (speech that promotes a commercial transaction). a. The trend started in 1976 when the Supreme Court held in Virginia State Board of Pharmacy v. Virginia Citizens Council that ads enjoy protection under the First Amendment as commercial speech. b. The next year, the Court declared that bans by state bar associations on attorney advertising also violated the First Amendment. Now, a third of all lawyers advertise, and a few states even permit client testimonials. c. In 1980, the Court used Central Hudson Gas v. Public Service Commission to offer guidance about when commercial speech can be regulated. The fourpronged Central Hudson test includes the following parts: 1) Does the commercial speech at issue concern a lawful activity?

The ad in question must be for a legal product and must be free of misleading claims.

2) Will the restriction of commercial speech serve the asserted government interest substantially? The government must prove that the restriction on speech will go a long way toward solving an important problem.

1-48

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

3) Does the regulation directly advance the government interest asserted?

The government must establish conclusively that cessation of commercial speech would be effective in remedying the problem that the government is trying to address.

4) Is the restriction no more than necessary to further the interest asserted?

The government should show that there are no other means to accomplish the same end without restricting free speech. d. In 1982, the Supreme Court upheld an FTC order allowing physicians and dentists to advertise. e. In 2011, a Supreme Court ruling had important implications for commercial speech. The case Sorrell v. IMS Health Inc. concerned data mining. In this case, the Court invalidated a state law that made the practice illegal, at least for drug companies.

2. The Tobacco Advertising Controversy a. While all 50 states permit adults to legally use tobacco products, smoking causes diseases that kill or disable more than half a million people annually and cost taxpayers billions of dollars every year in health costs—a major externality. b. To recover these costs, a majority of states‘ attorneys general sued the tobacco industry. In 1998, they reached a historic settlement. It imposed limits on brand-name promotion at events with young attendees, banned the use of cartoon characters (like Joe Camel) in cigarette ads, and created a fund of over $200 billion to be used by the various signatory states. c. For businesspeople who believe that commercial speech should be afforded protection under the First Amendment, the tobacco case is ominous. d. They warn that this limitation of freedom of commercial speech threatens every legal business in America, especially because restrictions on the freedom to advertise often give a huge, monopolistic advantage to those big brands that are already the category leaders.

3. The Issue of Advertising to Children a. Kids are not sophisticated consumers; their conceptions of self, time, and money are immature. b. While most children and parents are joint consumers, more children are becoming sole decision makers. c. To promote responsible children‘s advertising and to respond to public concerns, the Council of Better Business Bureaus established the Children’s Advertising Review Unit (CARU). CARU advises advertisers and agencies and also offers informational material for children, parents, and educators. d. The basic activity of CARU is the review and evaluation of child-directed advertising in all media.

1-49 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

e. Many countries are far more strict than the United States about advertising to children.

B. Consumer Privacy 1. With the increased use of wireless devices, mobile phones, and the Internet, all of which can be used for advertising, the issue of privacy rights is in the news.

2. Web advertisers store files called cookies on consumer hard drives that keep a log of Internet activities, allowing sites to track customers‘ web-surfing habits.

3. Because Internet users access online content on a variety of devices, including phones, tablets, smart TVs, etc., advertisers have turned to new technologies for tracking their behaviors, including methods for obtaining real-time location data from phones.

4. Internet companies argue that such tracking is not personal; it‘s typically performed anonymously and helps them customize content to match users‘ interests.

5. The Federal Trade Commission together with the Network Advertising Initiative have created a framework for self-regulation of online profiling.

6. The Fair Information Practice Principles consist of five core elements: a. Notice, which requires that the website clearly post its privacy policy. b. Choice, which relates to consumers‘ level of control over being profiled and how their information is used. c. Access, the ability for consumers to access information collected about them and make amendments to it. d. Security, which requires that network advertisers make reasonable efforts to protect the data they collect from loss, misuse, or improper access. e. Enforcement, a requirement that all industry members subject themselves to monitoring by an independent third party to ensure compliance with the Fair Information Practice Principles.

C. Protecting Consumer Data 1. Consumer privacy is not just about what reputable companies do with data. It is also about protecting data that companies collect about consumers from those who would steal it. Exhibit 3-5 illustrates the number of data breaches during the 21st century.

2. The challenge for industry and government is to keep pace with evolving technologies, both for protecting and compromising data, while credibly offering consumers assurance it is safe to store data online.

VIII. Government Regulation of Advertising in North America The U.S. government controls advertisers through laws, regulations, and judicial interpretations. The Canadian legal situation is considerably more complex than the United States‘ due to the separate (but often concurrent) jurisdictions of federal and

1-50 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

provincial governments, the broad powers of government regulators, the vast array of self-regulatory codes, and the complexity of a bilingual and bicultural society A. The U.S. Federal Trade Commission The Federal Trade Commission (FTC) is the major regulator of advertising for products sold in interstate commerce. It is the FTC‘s responsibility to maintain the existence of many sellers in the marketplace, strive to provide more complete information to consumers, and keep the marketing process as free of externalities as possible.

1. Defining Deception a. The FTC defines deceptive advertising as any ad that contains a misrepresentation, omission, or other practice that can mislead a significant number of reasonable consumers to their detriment. b. The FTC also looks at environmental claims such as biodegradable, degradable, photodegradable, and recyclable.

2. Defining Unfairness Unfair advertising occurs when a consumer is ―unjustifiably injured‖ or there is a ―violation of public policy‖ (such as government statutes). Unfair advertising is the result of a lack of complete information, and/or some other externality.

3. Comparative Advertising a. Advertisers use comparative advertising to claim superiority to competitors in some aspect. b. The FTC cracked down on the Arizona Auto Dealers Association for restricting truthful, nondeceptive, comparative price advertising among its members. c. The 1988 Trademark Law Revision Act closed a loophole in the Lanham Act, which governed comparison ads but did not mention misrepresenting another company‘s product. Under current law, any advertiser that misrepresents its own or another firm‘s goods, services, or activities is vulnerable to a civil action. d. In addition to being truthful, comparative ads must compare some objectivity measurable characteristic.

4. Investigating Suspected Violations a. The FTC looks for three kinds of information: substantiation, endorsements, and affirmative disclosures. b. If a suspected violator cites survey findings or scientific studies, the FTC may ask for substantiation. c. The FTC also scrutinizes ads that contain questionable endorsements or testimonials.

1-51 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

d. Advertisers must make affirmative disclosure of their product‘s limitations or deficiencies: for example, EPA mileage ratings for cars, pesticide warnings, and statements that saccharin may be hazardous to one‘s health.

5. Remedies for Unfair or Deceptive Advertising When the FTC determines that an ad is deceptive or unfair, it may take three courses of action: negotiate with the advertiser for a consent decree, issue a ceaseand-desist order, and/or require corrective advertising. a. A consent decree is a document the advertiser signs agreeing to stop the objectionable advertising without admitting any wrongdoing. b. If an advertiser won‘t sign a consent decree, the FTC may issue a cease-anddesist order prohibiting further use of the ad. c. The FTC may also require corrective advertising for some period of time to explain and correct offending ads. d. To help advertisers avoid such expense, the FTC will review advertising before it runs and give ―advance clearance‖ in an advisory opinion. It also publishes Industry Guides and Trade Regulation Rules, which gives advertisers, agencies, and the media ongoing information about FTC regulations.

B. The Food and Drug Administration (FDA) A division of the Department of Health and Human Services, the Food and Drug Administration (FDA) enforces the Federal Food, Drug, and Cosmetic Act and several other health laws.

1. The FDA strives to give consumers complete information by ensuring that products are labeled truthfully with the information people need to use them properly.

2. It regulates ―cents off‖ and other promotions on package labels and has jurisdiction over the use of words such as giant or family to describe package sizes.

3. The Nutritional Labeling and Education Act (NLEA) gives the FDA additional muscle by setting stringent legal definitions for terms such as fresh, light, low fat, and reduced calories.

C. The Federal Communications Commission (FCC) The seven-member Federal Communications Commission (FCC) is an independent federal agency with jurisdiction over the radio, television, telephone, satellite, internet, and cable TV industries.

1. Its control over broadcast advertising is actually indirect, stemming from its authority to license broadcasters (or take away their licenses).

2. The 1992 Cable Television Consumer Protection and Competition Act gave the FCC additional teeth. It placed new controls on the cable TV industry to

1-52 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

encourage a more service-oriented attitude and to improve the balance between rates and escalating ad revenues.

3. In addition to protecting consumer‘s interests, the FCC and other government entities can also attempt to regulate to promote the common good.

D. The Patent and Trademark Office and the Library of Congress 1. A basic role of government is to promote and protect the economic well-being (self-interest) of its citizens. One way the U.S. government does this is by promoting ―the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries‖—in other words, by registering and protecting their intellectual property.

2. Through the issuance of patents, the government provides incentives to invent, invest in, and disclose new technology worldwide.

3. A trademark is ―any word, name, symbol, or device or any combination thereof adopted and used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured or sold by others.

4. Patents and trademarks are registered with and protected by the U.S. Patent and Trademark Office, part of the Department of Commerce. Ownership of a trademark may be designated in advertising or on a label, package, or letterhead by the word Registered, the symbol ®, or the symbol™.

5. A copyright is a form of protection provided to the authors of ―original works of authorship,‖ including literary, dramatic, musical, artistic, and certain other ―intellectual works.‖ a. A copyright issued to an advertiser grants the exclusive right to print, publish, or reproduce the protected ad for the life of the copyright owner plus 50 years. b. Copyright is indicated by the word Copyright, the abbreviation Copr., or the symbol © followed by the year of first publication and the name of the advertiser or copyright owner.

E. State and Local Regulation 1. Regulation by State Governments a. State legislation governing advertising is often based on the truth-inadvertising model statute developed in 1911 by Printer’s Ink, for many years the major trade publication of the industry. The statute holds that any maker of an ad found to contain ―untrue, deceptive, or misleading‖ material is guilty of a misdemeanor. b. All states have ―little FTC‖ consumer protection acts that govern unfair and deceptive business practices. c. Different states have different regulations governing what can be advertised.

Some prohibit advertising for certain types of wine and liquor, and most restrict the use of federal and state flags in advertising.

1-53 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

IX.

2. Regulation by Local Governments Many cities and counties have consumer protection agencies to enforce laws regulating local advertising practices. The type of advertising, known as a continuous sale, violates the state‘s Business and Professions Code. It also advertises a false percentage off the regular price. Because the sale is never really over, the sale price becomes the regular price.

Nongovernment Regulation Nongovernmental organizations also issue advertising guidelines (see Exhibit 3-6).

A. The largest of the U.S. business-monitoring organizations is the Better Business Bureau (BBB), established in 1916.

1. The Code of Advertising of the Council of Better Business Bureaus (the BBB Code) has been called the most important self-regulation of advertising.

2. The BBB Code is only a few pages long, but it is supplemented by a monthly publication called Do’s and Don’ts in Advertising Copy, which provides information about advertising regulations and recent court and administrative rulings that affect advertising.

B. The Advertising Self-Regulatory Council (ASRC) was established in 1971 by the Council of Better Business Bureaus, the American Association of Advertising Agencies, the American Advertising Federation, and the Association of National Advertisers. ASRC is one of the most comprehensive and effective mechanisms for regulating American advertising.

1. ASRC Operating Arms a. The ASRC has several operating arms including the National Advertising Division (NAD) of the Council of Better Business Bureaus and the National Advertising Review Board (NARB). The NAD monitors advertising practices and reviews complaints from consumers, consumer groups, brand competitors, local BBBs, trade associations, and others.

2. The NAD–NARB Review Process a. When the NAD finds a valid complaint, it contacts the advertiser and requests that any claims be substantiated. If substantiation is inadequate, the NAD requests modification or discontinuance of the claims. b. If the NAD and an advertiser reach an impasse, either party can request a review by an NARB panel (consisting of three advertisers, one agency representative, and one layperson). The panel‘s decision is binding. c. If an advertiser refuses to comply with the panel‘s decision (which has never yet occurred), the NARB will refer the matter to an appropriate government body.

C. Regulation by the Media Many people think the media are more effective regulators than the government.

1. Internet 1-54

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

a. Key players in the self-regulation of internet advertising include the Interactive Advertising Bureau (IAB) and the American Association of Advertising Agencies (AAAA). b. The groups in 2009 issued guidelines for digital ads in the form of seven principles: education, transparency, consumer control, data security, material changes, sensitive data, and accountability.

2. Television a. The TV networks conduct the strictest review. b. Advertisers must submit commercials intended for a network or affiliated station to its broadcast standards department.

3. Radio a. The U.S. radio networks, unlike TV networks, supply only a small percentage of their affiliates‘ programming, so they have little or no say in what their affiliates advertise. b. Every radio station typically has its own unwritten guidelines.

4. Magazines a. National magazines monitor all advertising, especially by new advertisers and for new products. b. Many magazines will not accept advertising for certain types of products. c. Some magazines test every product before accepting the advertising.

5. Newspapers a. Newspapers also monitor and review advertising. Larger newspapers have clearance staffs who read every ad submitted; most smaller newspapers rely on the advertising manager, sales personnel, or proofreaders. b. Most papers have their own acceptability guidelines ranging from one page for small local papers to more than 50 pages for large dailies such as the Los Angeles Times. c. One problem advertisers face is that newspapers‘ codes are far from uniform.

D. Regulation by Consumer Groups The consumer movement gave rise to consumerism, social action dramatizing the rights of the buying public.

1. Consumer Information Networks a. Organizations such as the Consumer Federation of America (CFA), the National Council of Senior Citizens, the National Consumer League, and the National Stigma Clearinghouse exchange and disseminate information among members. b. These consumer information networks help develop state, regional, and local consumer organizations and work with national, regional, county, and municipal consumer groups.

2. Consumer Advocates 1-55 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

X.

a. Consumer advocate groups investigate advertising complaints received from the public and those that grow out of their own research. b. If a complaint is warranted, they ask the advertiser to halt the objectionable ad or practice. c. If the advertiser does not comply, they release publicity or criticism about the offense to the media and submit complaints with substantiating evidence to appropriate government agencies for further action.

E. Self-Regulation by Advertisers 1. Advertisers also regulate themselves.

2. Many advertisers try to promote their social responsibility by tying in with a local charity or educational organization.

3. Many industries maintain advertising codes that companies agree to follow. These codes also establish a basis for complaints.

F. Self-Regulation by Ad Agencies and Associations Most ad agencies monitor their own practices. Professional advertising associations also oversee members‘ activities to prevent problems that might trigger government intervention.

1. Advertising Agencies a. Although advertisers supply information about their products or services to their agencies, the agencies must research and verify product claims and comparative product data before using them in advertising. b. Agencies can be held legally liable for fraudulent or misleading advertising claims.

2. Advertising Associations a. The American Association of Advertising Agencies (AAAA), an association of the largest ad agencies throughout the United States, controls agency practices by denying membership to any agency judged unethical. b. The American Advertising Federation (AAF), which helped establish the FTC and its early vigilance committees, were the forerunners of the Better Business Bureau. The AAF Advertising Principles of American Business, adopted in 1984, define standards for truthful and responsible advertising (see Exhibit 3-7). c. The Association of National Advertisers (ANA) comprises 370 major manufacturing and service companies that are clients of member agencies of the AAAA. These companies, pledged to uphold the ANA code of ethics, work with the ANA through a joint Committee for Improvement of Advertising Content.

The Ethical and Legal Aspects of Advertising in Perspective There is no disputing that advertising has been and still is often misused.

1-56 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

XI.

Advertising apologists point out that of all the advertising reviewed by the Federal Trade Commission in a typical year, 97 percent is found to be satisfactory.

Advertisers and consumers need to work together to ensure that advertising is used intelligently, ethically, and responsibly for the benefit of all.

Chapter Summary A. As one of the most visible activities of business, advertising is both lauded and criticized for the role it plays in selling products and influencing society.

B. The economic impact of advertising can be likened to the opening shot in billiards— a chain reaction that affects the company as well as its competitors, customers, and the business community.

C. Although controversy surrounds some of these economic issues, few dispute the abundance principle: In an economy that produces more goods and services than can be consumed, advertising gives consumers more complete information about the choices available to them, encourages more sellers to compete effectively, and thereby serves the self-interest of both consumers and marketers.

D. Social criticisms of advertising may be short-term manipulative arguments or longterm macro arguments.

E. Critics say advertising is deceptive; it manipulates people into buying unneeded products, it makes our society too materialistic, and there’s just too much of it.

F. Proponents admit that advertising is sometimes misused. However, they point out that despite its problems, advertising offers many social benefits.

G. While advertising can be criticized for giving less than complete information and for creating some unwanted externalities, it also contributes to the free enterprise system by encouraging many buyers and sellers to participate in the process, thereby serving the self-interest of all.

H. Under growing pressure from consumers, special-interest groups, and government regulation, advertisers have developed higher standards of ethical conduct and social responsibility.

I. The federal and state courts are involved in several advertising issues, including First Amendment protection of commercial speech, and infringements on the right to privacy.

J. The Federal Trade Commission (FTC), the major federal regulator of advertising in the United States, is responsible for protecting consumers and competitors from deceptive and unfair business practices.

K. The Food and Drug Administration (FDA) monitors advertising for food and drugs and regulates product labels and packaging.

1-57 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

L. The Federal Communications Commission (FCC) has jurisdiction over the radio and TV industries, although deregulation has severely limited its control over advertising in these media.

M. The Patent and Trademark Office governs ownership of U.S. trademarks, trade names, house marks, and similar distinctive features of companies and brands.

N. The Library of Congress registers and protects copyrighted materials.

O. Nongovernment regulators include the Council of Better Business Bureaus and its National Advertising Division.

P. Other sources of regulation include the codes and policies of the print media and broadcast media.

Answers to Pedagogical Features Ad Lab 3–A: Unfair and Deceptive Practices in Advertising 1. Describe some examples of deception you have seen in advertising.

When judging whether a particular advertisement is deceptive, the ―reasonable person‖ rule should be applied; that is, would a reasonable person be misled by the advertisement?

Students may also try to evaluate whether suspected deception is intentional or unintentional.

For example, what if a store advertises a particular product on sale but runs out of the sale item? Is this bait-and-switch (intentionally under-stocking the item), or an honest mistake in estimating the likely sales? One way to tell is whether the salespeople try to substitute a higher-priced item or offer a rain check that allows the customer to buy the item at the sale price when it is back in stock. Some companies are more honest, stating, ―while supplies last‖ or ―limited supply.‖ 2. Who is affected by unfair or deceptive advertising practices, and what remedies are available to them?

Opponents of unfair advertising would argue that everyone is the victim of unfair advertising practices. We need to remember that advertisers are biased in favor of their products/services.

They would be crazy not to be. Consumers need to keep that in mind when buying a product/service. Buying a Mercedes doesn‘t necessarily mean we will have less car repairs and more sex appeal. Victims of deceptive advertising can sue for damages. Pizza Hut did this very thing when Papa John‘s created the tagline ―Best Ingredients.‖ Ethics, Diversity & Inclusion: Colin Kaepernick and Nike 1. What is your opinion of Colin Kaepernick‘s anthem protests? Has the athlete chosen an effective way to raise issues of race in the U.S.? Why or why not?

2. Consider the position you adopted in Question 1 and present arguments for the other side. In other words, if you defended Kaepernick‘s means of protesting, present the arguments of those who find them offensive and disrespectful. If you oppose Kaepernick‘s behaviors, 1-58 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

explain why so many have supported the athlete and called him courageous. You need not change your mind, but try to gain a better understanding of why the issue has aroused such passions.  My IMC Campaign 3: Your Assignment

You will be working on an advertising/IMC campaign, or part of one, this semester. Different classes have different projects, but it is likely that you will work on one or more of the following for a brand, service, or firm.

Campaign Audit Many classes begin by having teams audit the plans books from prior semesters. This accomplishes several things. First, it gives you an idea about what you will be doing all semester.

Second, it introduces you to the importance of seeing how research, strategy, planning, budgeting, and creative all flow together. If you don‘t have access to the work of other students, why not look over the work of the very best? Visit the Effie Award website www.effie.org/, where you can find great ads and a lot of background information about the campaigns.

Research Report You may be asked to conduct formative research for the brand. This may include secondary research, useful for gathering information for your IMC plan; qualitative primary research, in which you conduct a focus group or series of depth interviews; and quantitative research, in which you administer a survey. You‘ll find a lot of information in Chapter 7 about these activities. Your university likely has a web page devoted to secondary marketing research. A useful collection of market research resources can also be found here: http://blog.hubspot.com/marketing/market-research-tools-resources.

Marketing or IMC Plan Many classes require that you create a marketing or IMC plan. We‘ve included lots of information in this text to help. Be sure to read Chapter 8 carefully, as it is your guide to the art and science of planning. Then, to make things more concrete, use the appendices of the book to create an outline for your plan. Your instructor may have his or her own outline; if so, use that.

Media Plan A media plan shows the specific allocations of the budget to different media and promotional activities. It will also specify what vehicles will be used for the campaign, as well as when and how often the ads will run. You will most likely want to use a spreadsheet to show the calendar.

We have a sample media plan in Chapter 9.

The Creative Brief

1-59 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

The creative brief is a fairly short document that is used to inform and guide the people who create the ads. It contains information that has been distilled from some of the documents that we‘ve just reviewed, such as the IMC plan. There are as many different outlines for creative briefs as there are ad agencies, but in many instances the differences are superficial. Chapter 11 gives some suggestions for a creative brief and shows you the elements of message strategy. For examples of creative briefs, visit the following sites:  SmileyCat blog (for a brief written for a web campaign): www.smileycat.com/miaow/archives/000226.php  Hubspot blog: https://blog.hubspot.com/agency/ create-compelling-creative-brief The Plans Book If you are doing a plans book, it means you are doing almost everything we‘ve reviewed to this point. A typical plans book will include research findings, an IMC plan, a creative brief, media plans, and, in many cases, mock-ups of real ads. But it puts these things together in a seamless, integrated way, so that the reader has a clear understanding of the entire arc of a planned campaign. In many plans books there will also be a section on campaign evaluation (ways of assessing the campaign).

Ad Lab 3–B: Importance of Good Legal Counsel in Advertising The website www.adlawbyrequest.com offers a wide array of regularly updated resources, including downloadable contract forms, sample legal documents, and articles on the legal complexities of all types of advertising and marketing communications.

1. Go to adlawbyrequest.com and explore the website. Click on the ―In the Courts‖ in the topics listed on the right side of the page and read about current advertising-related legal cases. Pick one that interests you, read it, and then write a brief report including the title of the case, the names of the parties involved, the issues at stake, and a summary of the decision that was handed down if there has been a judgment.

2. Click ―Regulatory–United States‖ in the topics listed on the right side of the page.

Summarize one of the posts concerning the actions of a federal regulatory agency (such as the FTC, FCC, FDA, etc.). Then visit the website of the agency to find out more about its mission. In your opinion, how well does the action of the federal agency described in the post fit with its mission?

3. What ethical, social, or legal issues do you think will be addressed in the next 10 years relative to advertising and the Internet?

Ad Lab 3–C: Editorial or Advertising: It’s Adversarial 1. To what degree, if at all, should an advertiser exercise control over placement of its ads or content of the publication?

1-60 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Students‘ answers will vary, but they should demonstrate an awareness of the principles involved: the rights of publishers to accept or deny advertising, the rights of advertisers, and the role of the Constitution in all of the issues.

2. What effect, if any, could advertorials have on national problems such as age discrimination, racism, sexism, and teenage pregnancy? Be specific.

Given that most students have grown up with TV and other forms of mass media, they are aware of the effect advertising has had on fads, and they may even see mass media as a means of staying informed. If national problems were addressed in a positive way in commercials, it will in fact change the way the public views issues. The opposite is true, if they were not favorably addressed it would in fact further divide the public on these important issues.  People behind the Ads: Edward Boyd: Advertising Legend

     

Ed Boyd was hired to improve Pepsi‘s marketing efforts with black Americans.

Boyd was a 33-year-old executive at the National Urban League in New York City when he and a small group of black salesmen were hired by Pepsi CEO Walter S. Mack.

Mack wanted to increase sales to the country‘s 14 million African Americans.

In just a few short years, Boyd and his team produced results that exceeded Mack‘s expectations for increasing sales of Pepsi to blacks.

When Walter Mack retired at Pepsi in 1950, support for Boyd and his group gradually eroded.

Through his tireless and frequently underappreciated efforts to bring black consumers into the mainstream of American life, Boyd made history.

Review Questions 1. What role does advertising play in our economic system?

Students‘ answers will vary. Advertising accounts for 1 to 2 percent of the gross domestic product. The moment a company begins to advertise, it sets off a chain reaction of economic events (see Exhibit 3-2). Advertising affects the value of products, prices, competition, consumer demand, consumer choice, and the business cycle.

2. What are two types of social criticisms of advertising and what are specific examples that can illustrate them?

Short-term manipulative arguments and long-term macro arguments. Short-term manipulative arguments focus on the manipulative aspects of advertising. Long-term macro arguments focus on the negative social or environmental impacts of advertising.

3. What is puffery? Give some examples. Do you ever feel deceived by puffery in advertising?

Puffery is an exaggerated, subjective claim that can‘t be proven true or false such as ―the best,‖ ―premier,‖ or ―the only way to fly.‖ The degree of deception will vary according to each student‘s own personal value system.

1-61 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

4. Does advertising affect our value system? In what ways? Does it affect everyone equally or some more than others?

Students‘ answers will vary. Critics say that advertising promotes hedonistic values, materialism, and harmful habits. Critics believe that advertising encourages us to purchase things that we don‘t need, and manipulates us into buying things by playing on our emotions and promising greater status, social acceptance, and sex appeal, for example.

5. What is the difference between an advertiser‘s ethics and its social responsibility? What are ways in which advertisers can act that are both ethical and responsible, while still ensuring they provide the best products at competitive prices?

Ethics in advertising means doing what the advertiser and the advertiser‘s peers believe is morally right in a given situation. Social responsibility refers to doing what society views as best for the welfare of people in general or for a specific community of people.

6. How does government regulation of advertising in the United States differ from regulation in many foreign countries?

In the United States there are many laws that govern what advertising can and cannot do.

These laws are passed by legislatures, enforced by the executive branch, and interpreted by the judiciary branch. This system is repeated at the state and local levels. Governments often regulate advertising considerably more than either the United States or Canada. Europeans generally favor stricter controls on privacy protection, and many European countries also ban coupons, premiums, free tie-in offers, and the like. With the rapid growth of China‘s economy and the growth of a prosperous middle class, the country has faced new challenges in regulating advertising.

7. How does commercial speech differ from political speech? Do you think advertisers should have the same First Amendment rights as everyone else? Explain your response.

Students' answers will vary. As an integral part of our American heritage, political speech enjoys vast protection under the First Amendment to the U.S. Constitution. Commercial speech, on the other hand, enjoys only limited protection. Recent Supreme Court decisions have broadened those protections, since freedom of speech enhances the government interests of many buyers and sellers; but the issue is far from settled. In the effort to reduce externalities, there is heated controversy over issues like tobacco advertising, advertising to children, and consumer privacy.

8. What is the role of the FTC in advertising? Do you think this role should be expanded or restricted?

The FTC regulates all national advertising aimed at promoting products used in interstate commerce. Because these efforts call for highly subjective judgments, FTC regulatory actions against the advertising industry are often controversial. Until recently, the FTC was often criticized for overstepping its bounds. However, its powers were greatly reduced over the past decade, and recent chairpersons have channeled the agency‘s focus toward the most blatant cases of deception and unfairness. Citing recent examples of FTC actions may require some research unless a major case has been in the news. One possibility is TV ads for the 1-62 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

many ―miracle‖ weight-loss programs. Of all advertising reviewed by the FTC in a typical year, 97 percent is found satisfactory.

9. How has the pervasiveness of the Internet and digital advertising and retailing affected advertisers? What risks do consumers take buying things on the web?

Digital advertising has afforded advertisers numerous additional outlets for reaching consumers. Mobile advertising has seen exponential growth every year over the past decade, native advertising allows advertisers the opportunity to reach audiences through content they choose to consume, and new social media platforms are introduced very frequently allowing for new ways to reach consumers, particularly amongst young audiences. Additionally, online outlets allow for more targeted advertising through enhanced and faster data analytics, enabling advertisers to more easily reach those most likely to buy the products advertised.

However, along with these positives, it has now become more difficult for advertisers, particularly media planners, to determine which media vehicles would best serve them in reaching a particular audience. Audience‘s time spent with media is now more fragmented than ever, with many splitting time between multiple platforms simultaneously. Additionally, the potential for more stringent regulations of online advertising could be indicative of future troubles for advertisers in the online sphere. For consumers, information obtained through their purchases made online can be, and is, sold to companies such as Amazon in order for the organization to make more informed decisions on what products to promote to various customers and how it might be best to do so. Consumers risk a loss of privacy and personal information when making purchases online, and, subsequently, become the object of more targeted advertising in online spaces.

10. How well do advertisers regulate themselves? In what areas do you think advertisers have done well, and where should they clean up their act?

Most large advertisers and ad agencies monitor their own practices by gathering data to substantiate their claims. They maintain careful systems of advertising review to ensure that ads meet their own standards and industry, media, and legal requirements. Most advertisers also aim for a sense of social responsibility in their advertising. In addition, professional advertising associations oversee members‘ activities to prevent problems that might trigger government intervention. Advertising publications report issues and court actions to educate agencies and advertisers about possible legal infractions. The areas of concern may be on issues of social responsibility, e.g., ads for cigarettes, ads aimed at young children, nudity ads being irresponsible on the part of advertisers.

The Advertising Experience 1. Ad Action: ―I Know It When I See It‖ Where is the socially accepted line between ―erotic suggestiveness‖ and ―explicit sexuality‖ in advertising? Describe three hypothetical ads: one that is safely suggestive, one that is as 1-63 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

suggestive as acceptable (say, for a primetime network TV spot or national newsmagazine), and one that is just over the line of explicitness. Compare your responses with those of others in your study group. How and why do you think your answers differ? What roles might your age or social background play in these differences?

Discussion Guidelines: See pages material on ―The Social Impact of Advertising,‖ to help ground students‘ discussion in advertising ethics and principles.

2. Regulation of Advertising The FTC‘s Division of Advertising Practices protects consumers from deceptive and unsubstantiated advertising. Review what you have learned by exploring the policies and guides available on the division‘s website (https://www.ftc.gov/about-ftc/bureausoffices/bureau-consumer-protection/our-divisions/division-advertising-practices). Then answer the following questions: a. Give a general description of what the FTC considers to be deceptive and unfair advertising. b. Describe the requirements for substantiating advertising and the process advertisers and their agencies must undergo to do so. c. Choose another topic covered on the site and discuss its relevance and importance to the advertising industry.

Be sure to check out the following sites related to the regulation of the advertising industry: • Council of Better Business Bureaus‘ Advertising Division (NAD) https://bbbprograms.org/programs/nad/ • Consumers International www.consumersinternational.org Sample Answer: a. The Federal Trade Commission (FTC) considers as ―deceptive advertising‖ any piece of mass communication that holds within it (either expressed or implied) an omission, misrepresentation, or other practice that could mislead with detrimental consequences a majority of reasonable consumers. The Commission considers advertising to be ―unfair‖ if a consumer is unjustly injured or if a violation of public policy has occurred. Some advertising practices considered unfair include unsubstantiated and/or exploitative claims and an omission or outright lack of relevant information so as to mislead the reasonable consumer. b. According to the FTC, requirements for the substantiation of advertising are as follows: • Reasonable Basis Requirement—the advertiser and ad agency have a reasonable basis for any advertising claims before they are disseminated.

• Standards for Prior Substantiation—an express claim must have at least the advertised level of substantiation, while implied claims must assume that consumers expect a ―reasonable basis‖ for the claim.

1-64 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

c. The process for achieving such substantiation (if solicited or required by the FTC) is either: • Industry-wide—involves publicized inquiries, or ―rounds,‖ with identical or substantially similar demands to a number of firms within a targeted industry or to firms in different industries making the same type of claim.

• Case-by-case—involves sending specific requests to the individual company under investigation.

3. Responding to Critical Commentary Go to the following website that offers a critical commentary of advertising and marketing.

Using what you have learned in chapters 1, 2, and 3, analyze several of the examples of unethical ads. What are the criticisms such ads have provoked? Does the criticism involve long-term macro arguments or short-term manipulative arguments?

• Advertising and Society Review: Ethics and Advertising: http://muse.jhu.edu/article/221968 Answer Guidelines: Answers should refer to short-term manipulative arguments and long-term macro arguments.

4. Review Nike‘s campaign with Colin Kaepernick and try to lay out the arguments for and against the company‘s partnership with the former player. What do you think are the ethical issues surrounding the campaign? What are the social responsibility issues? Finally, what are the business issues? If the campaign results in a surge of shoe sales, does that mean it was the right thing to do? If it results in a sales decline, does that mean it was the wrong thing to do?

Answer Guidelines: Answers should demonstrate an understanding of the connection between an ethical response and a socially responsible one, as well as an understanding of what organizations and various publics Nike would be responsible to, or answer to, following a controversy such as this.

Answers should also demonstrate an understanding of how brands should respond to an event such as this based on their ethical and social responsibilities and the publics they are accountable to.

5. Some believe that Lance Armstrong has been ―rehabilitated,‖ in the sense that he‘s paid for his transgressions. What are the varying perspectives that you can identify about whether he should receive lucrative sponsorship dollars, given his behaviors? Can you identify potential sponsors that would make different decisions about paying Armstrong for his endorsement?

Answer Guidelines: Students should demonstrate a range of opinions on the issue. Some may conclude that brands could use Armstrong as a lesson on learning from mistakes and teaching others to ethically participate in sporting competitions and could therefore continue to receive sponsorship funding. Others may conclude that Armstrong‘s actions make him a poor role 1-65 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

model to other athletes and to children, and he should therefore no longer be sponsored or funded by the brand. Nike‘s competitors such as Adidas or Under Armour may have made different decisions on sponsoring Armstrong, in an attempt to take a stand and portray a more socially responsible image. Additionally, brands for products that are targeting young athletes might also have made a different decision as having Armstrong serve as an endorser of the product may have sent a socially irresponsible or unethical message to young consumers.

6. Benetton and Abercrombie & Fitch get free publicity when their advertising campaigns draw protests. At what point does controversy become a negative externality rather than a positive boost? What might be some signs that a campaign has gone too far?

Answer Guidelines: Answers could discuss similar controversies such as the Pepsi advertisement with Kendall Jenner, ―Live for Now,‖ which received such negative responses that the brand pulled the advertisement. Some may discuss that the point at which the backlash is so negative that the brand must pull the ad is when the attention is more negative than positive. Others may discuss that the advertisement is more negative than positive when it offends a sizable portion of the audience it was attempting to reach. Some signs that a campaign may have gone too far might include consumer groups speaking out against the campaign, hashtags being created in protest of the campaign, consumers boycotting the brand by refusing to purchase, dislikes on the content posted on social media (i.e. more dislikes on a video on YouTube than there are likes), or consumers or popular media mocking the campaign.

Connect Activities Title

Assignment Type

Topic

Learning Objective

Consequence s of Advertising Responsible and Ethical Advertising to Children

Matching

Economic Role of Advertising

03-01

Case Analysis

Regulation of Advertising

Matching

Ethical 03-02; 03-03 Considerations in Advertising, Promotions, and IMC Campaigns Rules and 03-06 Regulations that Affect Promotion

AACSB Accreditation Tagging Analytical Thinking

Bloom’s Taxonomy

Knowledge Application

Apply

Knowledge Application

Apply

Understan d

1-66 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Lance Armstrong

Video Case

Activities How Advertising 03-01; 03-02 Facilitates Exchanges; Ethical Considerations in Advertising, Promotions, and IMC Campaigns

Reflective Thinking; Analytical Thinking

Remember ; Analyze

Consequences of Advertising Activity Summary: This activity asks students to consider the impact of advertising on consumer demand, on prices, on the economy, etc. They are provided with a fictitious brand of earbuds, Whispers, and asked to trace the economic impact of Whisper‘s advertising inputs and outcomes.

Follow-Up Class Discussion: Ask students to identify a real brand together as a class. Identify advertisements from the brand as a group and discuss the potential economic impact of their advertising, both the broader economic impact and the impact of the specific decisions made by the brand in their marketing efforts.

Responsible and Ethical Advertising to Children Activity Summary: This activity asks students to consider the ethical considerations of an energy drink brand, SpikeT, advertising their products to children through an educational online learning tool.

Follow-Up Class Discussion: Separate students into 2 groups—one who is pro Spike T advertising on the platform and one who is against Spike T advertising on the platform to reach children. Engage students in a debate about the pros and cons of advertising a product such as this to children and ask them to debate the ethical considerations of advertising to children in general.

Regulation of Advertising

1-67 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Activity Summary: This activity asks students to identify the federal agencies that would be involved in regulating certain aspects of product development, production, and promotion as it relates to marketing and advertising.

Follow-Up Class Discussion: Ask students to discuss whether they believe the government should be more involved in the regulation of marketing and advertising, less involved, or if they feel there is currently an appropriate amount of regulation. Ask them to discuss what a world with more or less regulation might look like for advertisers—how might the various groups involved in the marketing and advertising of products respond to more stringent or less stringent regulation?

Lance Armstrong Activity Summary: This activity has students view a video of Lance Armstrong promoting Trek bikes and asks them to consider the impact his scandal could have on the Trek brand as well as the benefits of using a well-known athlete to act as a spokesperson for the brand.

Follow-Up Class Discussion: Ask student groups to identify another brand that they feel has utilized a controversial spokesperson. Ask them to consider the implications the use of this controversial spokesperson had on their perception of the brand, other consumer‘s perceptions of the brand, and brand stakeholder‘s perceptions of the brand. Additionally, ask students to consider how the use of unethical marketing practices such as deception, false and misleading comparisons, bait-and-switch offers, etc., might impact consumer perceptions of the brand.

1-68 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

CHAPTER FOUR THE SCOPE OF ADVERTISING: FROM LOCAL TO GLOBAL This chapter introduces the people and groups who sponsor, create, produce, and transmit advertisements here and abroad. Advertising people may serve in a variety of roles. This chapter discusses the basic tasks of both the client and the advertising agency, the roles of suppliers and the media, the ways agencies acquire clients and are compensated, and the overall relationship between the agency and the client.

Learning Objectives After studying this chapter, your students will be able to: LO4-1 Identify the various groups in the advertising business and explain their relationships with one another.

LO4-2 Describe what advertisers do and detail the organizational structures they use to manage advertising both here and abroad.

LO4-3 Classify the types of advertising agencies.

LO4-4 Account for the range of tasks people perform in an ad agency and an in-house advertising department.

LO4-5 Discuss how agencies attract new clients and how they make money.

LO4-6 Explain the stages in the agency-client relationship.

LO4-7 List the factors that affect the client/agency relationship.

LO4-8 Indicate how the suppliers and media help advertisers and agencies.

What’s New? The chapter updates the McDonald‘s vignette and more information about McDonald‘s global IMC campaigns are included. Ad Lab 4–B updates all statistics regarding the ad industry. The 4A‘s ―Enlightened Workplace Certification Program‖ is the subject of the chapter‘s Ethics, Diversity & Inclusion box, replacing the focus on account reviews from the 15th edition. Nancy Hill is no longer the CEO of the 4A‘s, so the People behind the Ads feature introduces students to Marla Kaplowitz, the current CEO. Teaching Tips and Strategies Using the Chapter Opening Vignette in the Classroom McDonald‘s is a relatively unique example of a company that is both a) one of the biggest and most successful companies in the world and b) one that is located right in your neighborhood.

This creates some pretty big advertising challenges, and the company has shown time and again that it is up to these challenges. When you focus on local advertising, you may wish to contact 1-69 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

the agency in your area that handles local franchise advertising and have them present to the class. It is a perfect time to introduce students to people inside an agency!

Other Tips and Strategies The goal of this chapter is to convey the role of advertising agencies, client/agency relationships, and local/national advertising. The popular show ―Mad Men,‖ which deals with a fictional agency from advertising‘s ―golden‖ years, offers some great opportunities for discussions. This is a great time to discuss with students the value of an internship. Many students in an introductory course are not sure what direction they want to go in, but encourage them to be proactive about seeking out internship opportunities.

Encourage students to find out more about the world of advertising by going to the many great sources on the Internet. In the Web Resources below, there are several great agency blogs that should help students get a better idea about what happens inside an agency.

Web Resources for Enhancing Your Lectures Small Agency Diary, Ad Age

https://adage.com/section/small-agency-diary/400

Agency Spy blogs, AdWeek

https://www.adweek.com/agencyspy

Digital agency: Amp Agency

http://ampagency.com

Full-service agency: CPB

http://www.cpbgroup.com

Media agency: Starcom Mediavest

https://www.starcomww.com

Advertiser site: McDonald‘s

http://www.mcdonalds.com

Pedagogical Features  My IMC Campaign 4–A: Understanding Your Client My IMC Campaign 4–B: Creating Local Advertising

Ad Lab 4–A: The Co-op Marriage Ad Lab 4–B: How Big Is the Agency Business?

Ethics, Diversity & Inclusion: Agency Culture and Inclusion My IMC Campaign 4–C: Agency Review

1-70 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

My IMC Campaign 4–D: Ways to be a Better Client  People behind the Ads: Maria Kaplowitz, CEO, American Association of Advertising

Agencies Lecture Outline I.

II.

III.

Vignette: McDonald‘s McDonald‘s deals with dozens of advertising agencies in its effort to promote its food services around the world.

The Advertising Industry A. The Organizations in Advertising 1. The advertising business has evolved into four distinct groups. The two main ones are the marketers (or advertisers) and the agencies.

2. The advertisers (or clients) are the companies—like McDonald‘s, Coca-Cola, or the local shoe store—that sponsor advertising for themselves and their products.

3. The second group, advertising agencies, helps the advertisers plan, create, and prepare ad campaigns and other promotional materials.

4. A third group, the suppliers, includes the photographers, illustrators, printers, digital service bureaus, color film separators, video production houses, web developers, and others who assist both advertisers and agencies in preparing advertising materials.

5. The fourth group, the media, sell time (on radio and TV) and space (in print, outdoor, or digital media) to carry the advertiser‘s message to the target audience.

B. The People in Advertising 1. The majority of people in advertising are actually employed by the advertisers.

2. Advertising is a very broad field that employs a wide variety of people in sales, research, management, accounting, computer science, and law, as well as specialists in the communication arts—artists, writers, photographers, musicians, performers, and cinematographers.

Advertisers (the Clients) A. Local Advertising: Where the Action Is 1. There are more than 19,000 American firms with 500 or more employees. But there are more than 5 million that employ fewer than 20, according to the Census Bureau.

2. Every year, advertisers spend billions of dollars in the United States. Almost half of that is spent on local advertising, ads placed by local businesses in a particular city or county targeting customers in their geographic area.

3. Local advertising is sometimes called retail advertising because retail stores account for so much of it, but retail advertising isn‘t always local.

1-71

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

4. Local advertising is critically important because most consumer sales are made (or lost) locally.

5. Types of Local Advertisers There are four main types: a. Dealers or local franchises of national companies. b. Stores that sell a variety of branded merchandise, usually on a nonexclusive basis. c. Specialty businesses and services. d. Governmental and nonprofit organizations. e. The advertising manager performs the administrative, planning, budgeting, and coordinating functions. f. The department head usually reports to a vice president or marketing manager, as shown in Exhibit 4-1.

6. Types of Local Advertising a. Product advertising promotes a specific product or service and stimulates short-term action while building awareness of the business.

1) Regular price-line advertising informs consumers about services or merchandise offered at regular prices.

2) To stimulate sales of particular merchandise or increase store traffic, local merchants occasionally use sale advertising, placing items on sale and offering two-for-one specials or other deals.

3) Local advertisers use clearance advertising (a special form of sale advertising) to make room for new product lines or new models and to get rid of slow-moving lines, floor samples, broken or distressed merchandise, or out-of-season items. b. Institutional advertising attempts to create a favorable long-term perception of the business as a whole, not just a particular product or service. Many types of businesses (stores, restaurants, banks, professional firms, hospitals) use institutional advertising to promote an idea about the company and build longterm goodwill. c. Advertisers use classified advertising in the newspaper for many reasons: to locate and recruit new employees, offer services (such as those of an employment agency or business opportunity broker), or sell or lease merchandise (such as cars, real estate, and office equipment).

7. Local Advertisers: Where IMC Began a. Integrated marketing communications (IMC)—joining together in a consistent manner everything that communicates with customers. b. Local advertisers and the local agencies that serve them are not stuck with the traditional national view that advertising means ―ads placed in the media.‖

1-72 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

c. By successfully combining personal selling with media advertising, direct marketing, sales promotion, and public relations, the local advertiser can be the consummate integrator of marketing communications.

8. Creating Local Advertising a. Many newspaper ads featured what professionals would call a schlock approach—heavy bold type, items crowded into ad space, loud headlines, and unsophisticated graphic design. b. Finding big ideas for local advertising can be extremely difficult. Some advertisers look to the merchandise for ideas, others look to the customer. An important goal for local advertisers is to achieve a consistent, distinctive look that makes their ads both appealing and identifiable. c. Local advertisers can turn to a number of sources for creative help, including reps from the local media, local ad agencies, freelancers and consultants, creative boutiques, syndicated art services, and the cooperative advertising programs of wholesalers, manufacturers, and trade associations.

9. Cooperative (Co-op) Advertising a. There are two key purposes for cooperative (co-op) advertising: to build the manufacturer‘s brand image and to help its distributors, dealers, or retailers make more sales. b. Whereas co-op spending favored newspapers years ago, budgets today are increasingly favoring digital, mobile, and social media. c. In vertical cooperative advertising, the manufacturer provides the complete ad and shares the cost of the advertising time or space. d. With horizontal cooperative advertising, firms in the same business (real estate agents, insurance agents, pharmacies, car dealers, or travel agents) or in the same part of town advertise jointly.

B. Regional and National Advertisers Regional advertisers operate in one part of the country—in one or several states— and market exclusively within that region. Examples include regional grocery and department store chains, governmental bodies (such as state lotteries), franchise groups (such as the Southern California Honda dealers), telephone companies (such as SBC), and statewide or multistate banks (like Bank of America).

National advertisers sell in several regions or throughout the country. These include consumer packaged-goods manufacturers (such as Procter & Gamble and Johnson & Johnson), national airlines (Delta, American), media and entertainment companies (Disney, Time Warner), electronics manufacturers (Apple, Hewlett-Packard), all the auto companies, and restaurant chains like McDonald‘s. (See Exhibit 4-2 to see the ten biggest brands as measured by total U.S. measured-media spending in 2017.)

These firms make up the membership of the Association of National Advertisers (ANA), and comprise the largest advertisers in the country.

1-73 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

1. How National and Local Advertisers Differ Basic principles remain the same for both national and local advertisers.

However, local advertisers have special challenges stemming from the day-to-day realities of running a small business. As a result, local and national advertisers differ in terms of focus, time orientation, and resources (see Exhibit 4-3). a. Focus 1) National companies are concerned about building their brands, so their advertising tends to focus on the competitive features of one brand over another, especially in conquest sales situations.

2) Local merchants or dealers often carry hundreds of different brands or numerous models of an exclusive brand, so they focus on attracting customers to a particular point—their place of business.

3) National advertisers plan strategically to launch, build, and sustain brands.

Local advertisers think tactically.

4) National advertisers‘ marketing executives rarely see retail customers; instead, they traditionally think in terms of large groups of people— segments, niches, target markets—with various geographic, demographic, or psychographic descriptions.

5) The local advertiser gets feedback every day—on the company‘s advertising, prices, product performance, employee service, store decor, and the new sign out front. The national marketer gets occasional feedback—from surveys and from customer complaint lines. b. Time Orientation 1) National advertisers think long-term. They develop five-year strategic plans and budget for annual advertising campaigns.

2) Local advertisers worry that this week‘s ad in the Pennysaver didn‘t pull (a term rarely used by national marketers) as well as last week‘s. c. Resources 1) National advertisers have more resources available—both money and people.

2) The national advertiser has an army of specialists dedicated to the successful marketing of its brands.

3) The local advertiser may have a small staff or just one person—the owner—to market the business. So the local entrepreneur has to know more about every facet of marketing communications.

2. How Large Companies Manage Their Advertising In large companies many people are involved in advertising. Most large advertisers tend to use some mix of two basic management structures: centralized and decentralized.

1-74 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

a. Centralized Organization Many embrace the centralized advertising department because it gives the greatest control and offers both efficiency and continuity across divisional boundaries. In centralized departments, an advertising manager typically reports to a marketing vice president. In addition, companies may organize the department in any of five ways: 1) By product or brand.

2) By subfunction of advertising (copy, art, print production, outdoor, media).

3) By end user (consumer advertising, trade advertising).

4) By media (radio, TV, newspapers, outdoor).

5) By geography (southwestern U.S. advertising, European advertising).

6) Marketing Services handles a wide variety of brands efficiently and effectively (see Exhibit 4-4). b. Decentralized Organization 1) As companies become larger, diversify their product lines, acquire subsidiaries, and establish divisions in different regions or countries, a centralized advertising department can become impractical.

2) In a decentralized system, the company sets up separate ad departments for different divisions, subsidiaries, regions, brands, or other groups.

3) Each division is its own marketing department; with the advertising manager reporting to the division head (see Exhibit 4-5).

4) A drawback, though, is that decentralized departments often concentrate on their own budgets, problems, and promotions rather than the good of the whole company.

C. Transnational Advertisers Companies advertising abroad typically face markets with different value systems, environments, and languages. As advertisers enter international markets, they may start by simply exporting their existing products.

1. Advertisers typically view such operations as foreign marketing divisions and use a decentralized international structure, in which the divisions are responsible for their own product lines, marketing operations, and profits, and create customized advertising for each market.

2. Every brand within a division has a brand manager who oversees a brand group and directs his or her own ad agency to create the brand‘s media advertising.

Brand managers work under a marketing manager, who reports to a category manager.

3. True multinational corporations strive for full, integrated participation in world markets.

1-75 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

IV.

4. Multinationals that use a standardized approach to marketing and advertising in all countries are global marketers, and they create global brands.

5. Companies must research extensively before attempting global advertising. A ―no‖ answer to any of the following questions means the attempt will probably fail: a. Has each country‘s market for the product developed in the same way? b. Are the targets similar in different nations? c. Do consumers share the same wants and needs?

6. According to J. Walter Thompson, the secret to success in global advertising is knowing how to tap into basic human emotions and uncover universal appeals that don‘t depend solely on language.

7. Every organization operates in a slightly different environment. This alters the search for an ideal structure into a search for a suitable structure.

The Advertising Agency A. The Role of the Advertising Agency The American Association of Advertising Agencies (AAAA) defines an advertising agency as an independent organization of creative people and businesspeople who specialize in developing and preparing marketing and advertising plans, advertisements, and other promotional tools. This definition offers clues as to why so many advertisers hire ad agencies: 1. An agency like Leo Burnett is independent. The agency isn‘t owned by the advertiser, the media, or the suppliers, so it can bring an outside, objective viewpoint to the advertiser‘s business—a state the advertiser can never attain.

2. Like all agencies, Leo Burnett employs a combination of businesspeople and creative people, including administrators, accountants, marketing executives, researchers, market and media analysts, writers, and artists.

3. The agency provides yet another service by researching, negotiating, arranging, and contracting for commercial space and time with the various print, electronic, and digital media. Because of its media expertise, Leo Burnett saves its clients time and money.

4. Just as a well-run business seeks professional help from attorneys, accountants, bankers, or management specialists, advertisers use agencies out of self-interest because the agencies can create more effective advertising and select more effective media than the advertisers can themselves.

5. A good agency serves its clients‘ needs because of its daily exposure to a broad spectrum of marketing situations and problems both here and abroad.

B. Types of Agencies 1. Local Agencies a. Every community of any size has reputable small ad agencies that offer expert assistance to local advertisers. A competent local agency can help: 1-76

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

1) Analyze local advertisers‘ business and the products or services being sold.

2) Evaluate markets for business, including channels of distribution.

3) Evaluate the advertiser‘s competitive position and offer strategic options.

4) Evaluate media alternatives and offer rational recommendations.

5) Devise an integrated communications plan and implement it with consistency and creativity.

6) Save the advertiser valuable time by taking over media interviewing, analysis, checking, billing, and bookkeeping.

7) Assist in other aspects of advertising and promotion by implementing sales contests, publicity, grand openings, and other activities. b. Local advertisers use ad agencies less extensively than national advertisers.

2. Regional and National Agencies a. Regional and national agencies typically participate in a regional trade group such as the Western States Advertising Agency Association (WSAAA). b. The Standard Directory of Advertising Agencies (the Red Book) lists these agencies geographically, so they‘re easy to find.

3. International Agencies a. The largest national agencies are also international agencies. b. They have offices or affiliates in major communication centers around the world and can help their clients market internationally or globally as the case may be.

4. Full-Service Agencies The modern full-service advertising agency supplies both advertising and nonadvertising services in all areas of communications and promotion.

Advertising services include planning, creating, and producing ads; performing research; and selecting media. Nonadvertising functions run the gamut from packaging to public relations to producing sales promotion materials, annual reports, and trade show exhibits. With the trend toward IMC, many of the largest agencies today are in the forefront of the emerging interactive media. Full-service agencies may specialize in certain kinds of clients. Most, though, can be classified as either general consumer agencies or business-to-business agencies. a. General Consumer Agencies A general consumer agency represents the widest variety of accounts, but it concentrates on consumer accounts—companies that make goods purchased chiefly by consumers (soaps, cereals, cars, pet foods, toiletries). Most of the ads are placed in consumer media (TV, radio, billboards, newspapers, and magazines) that pay a commission to the agency.

1-77 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

b. Business-to-Business Agencies 1) A business-to-business (or high-tech) agency represents clients who market products to other businesses.

2) High-tech advertising requires some technical knowledge and the ability to translate that knowledge into precise, as well as persuasive, communications.

3) Most business-to-business advertising is placed in trade magazines or other business publications.

4) Because commissions usually don‘t cover the cost of the agency‘s services, business agencies typically charge their clients service fees.

5. Specialized Service Agencies In the early 1990s, the trend toward specialization blossomed, giving impetus to many of the small agency-type groups called creative boutiques and other specialty businesses such as media-buying services and interactive agencies. a. Creative Boutiques 1) Some talented artists—such as graphic designers and copywriters— set up their own creative services, or creative boutiques.

2) Advertising effectiveness depends on originality in concept, design, and writing. b. Media-Buying Services 1) The largest media-buying service (or media agency) is Starcom Mediavest.

2) Media time and space are perishable.

3) Media-buying firms provide customers (both clients and agencies) with a detailed analysis of the media buy.

4) Once the media package is sold, the buying service orders spots, verifies performance, sees that stations ―make good‖ for any missed spots, and even pays the media bills.

5) Compensation methods vary. Some services charge a set fee; others get a percentage of what they save the client. c. Interactive Agencies 1) With the stunning growth of the Internet and the heightened interest in integrated marketing communications has come a new breed of specialist—the interactive agency.

2) Other specialists, such as direct-response and sales promotion agencies, are also growing in response to client demands for greater expertise and accountability. d. Other specialists can also provide greater expertise and accountability.

1) Direct-response agencies.

2) Sales promotion agencies.

1-78 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

C. What People in an Agency Do The American Association of Advertising Agencies (AAAA) is the national trade association of the advertising agency business and the industry‘s spokesperson with government, media, and the public. The AAAA Service Standards explain that an agency‘s purpose is to interpret to the public, or to desired segments of the public, information about a legally marketed product or service. The agency also works client‘s marketing staff to enhance the advertising‘s effect through package design, with the sales research and training, and production of sales literature and displays.

1. Account Management a. The account executives (AEs) at Leo Burnett are the liaisons between the agency and the client. b. Large agencies typically have many account executives, who report to management (or account) supervisors. They in turn report to the agency‘s director of account (or client) services.

2. Research and Account Planning a. Before creating any advertising, agencies research the uses and advantages of the product, analyze current and potential customers, and try to determine what will influence them to buy. After the ads are placed, agencies use more research to investigate how the campaign fared. b. Account planning is a hybrid discipline that uses research to bridge the gap between account management and creatives. c. By putting the consumer, rather than the advertiser, at the center of the process, account planning changes the task from simply creating an advertisement to nurturing a relationship between consumer and brand.

3. Creative Concepts a. Most ads rely heavily on copy, the words that make up the headline and message. The people who create these words, called copywriters, must condense all that can be said about a product into a few pertinent, succinct points. b. Ads also use nonverbal communication. That is the purview of the art directors, graphic designers, and production artists who determine how the verbal and visual symbols will fit together. The agency‘s copywriters and artists work as a creative team under a creative director.

4. Advertising Production: Print and Broadcast Once an ad is designed, written, and approved by the client, it is turned over to the print production manager or broadcast producers. a. For print ads, the production department buys type, photos, illustrations, and other components and works with printers, engravers, and other suppliers.

1-79 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

b. For a broadcast commercial, production people work from an approved script or storyboard. They use actors, camera operators, and production specialists (studios, directors, editors) to produce a commercial.

5. Media Planning and Buying a. Media planning is critical, because the only way advertisers can communicate is through some medium. b. With the fragmentation of audiences from the explosion of new media options, media planning and buying is no simple task. c. Tight budgets demand ingenious thinking, tough negotiating, and careful attention to details.

6. Traffic Management a. The agency traffic department coordinates all phases of production and makes sure everything is completed before client and/or media deadlines. b. Traffic is often the first stop for entry-level college graduates and an excellent place to learn about agency operations.

7. Additional Services a. The growth of IMC has caused some agencies to employ specialists who provide services besides advertising. b. Larger agencies may have a fully staffed sales promotion department to produce nonadvertising creative material. Or, depending on the nature and needs of their clients, they may employ public relations people and direct marketing specialists, web page designers, home economics experts, or package designers.

8. Agency Administration a. In small agencies, administrative functions may be handled by the firm‘s principals. b. Large agencies have accounting, human resources, data processing, purchasing, financial analysis, legal issues, and insurance.

D. How Agencies Are Structured 1. An ad agency organizes its functions, operations, and personnel according to the types of accounts it serves, its size, and its geographic scope.

2. In small agencies (annual billings of less than $20 million), each employee may wear many hats.

3. Exhibit 4-6 shows how a typical advertising agency is organized.

4. Medium and large agencies are usually structured in a departmental or group system.

5. In the departmental system, the agency organizes its various functions—account services, creative services, marketing services, and administration—into separate departments.

1-80 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

6. In the group system, the agency is divided into a number of ―little‖ agencies or groups. Each group may serve one large account or, in some cases, three or four smaller ones.

7. To deal with the economic pressures, many agencies have looked for ways to reorganize.

E. How Agencies Are Compensated To survive, agencies must make a profit. But recent trends in the business—mergers of superagencies, shifts in emphasis from advertising to sales promotion and direct marketing, increased production costs, and the fragmentation of media vehicles— have all cut into agency profits. Still, there are really only three ways for agencies to make money: media commissions, markups, and fees or retainers.

1. Media Commissions When ad agencies first came on the scene more than 100 years ago, they were really space brokers, or reps, for the newspapers. Because they saved the media much of the expense of sales and collections, the media allowed the agencies to retain a 15 percent media commission on the space or time they purchased on behalf of their clients.

2. Markups a. The agency pays the supplier‘s charge and then adds a markup to the client‘s bill, typically 17.65 percent of the invoice (which becomes 15 percent of the new total). b. Today many agencies find that the markup doesn‘t cover their costs of handling the work, so they‘re increasing their markups to 20 or 25 percent.

3. Fees Clients expect agencies to solve problems rather than just place ads, so fees are becoming more common. There are two pricing methods in the fee system. a. With the fee–commission combination, the agency charges a basic monthly fee for all its services to the client and retains any media commissions earned. b. In the straight-fee or retainer method, agencies charge for all their services, either by the hour or by the month, and credit any media commissions earned to the client. c. With a new type of agency compensation, the incentive system, the agency earns more if the campaign attains specific, agreed-upon goals.

F. The In-House Agency 1. Some companies set up a wholly owned in-house agency (or house agency) to save money and tighten control over their advertising. The in-house agency may do all the work of an independent full-service agency, including creative tasks, production, media placement, publicity, and sales promotion.

2. Advertisers with in-house agencies hope to save money by cutting overhead, keeping the media commission, and avoiding markups on outside purchases.

1-81 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

V.

3. Advertisers also expect more attention from their house agencies, which know the company‘s products and markets better and can focus all their resources to meet its deadlines.

4. The biggest problem for in-house agencies is loss of objectivity. In the shadow of internal politics, linear-thinking policymakers, and harangues from management, ads may become insipid contemplations of corporate navels rather than relevant messages to customers. In advertising, that‘s the kiss of death.

The Client–Agency Relationship Many factors affect the success of a company‘s advertising program, but one of the most important is the relationship between the advertiser and its agency.

A. How Agencies Get Clients New clients come from personal contact with top management, referrals from satisfied clients or advertising consultants, publicity on recent successful campaigns, trade advertising, direct-mail solicitation, or the agency‘s general reputation. The three most successful ways to develop new business are having clients who strongly champion the agency, having superior presentation skills, and cultivating a personal relationship with a network of top executives.

1. Referrals a. Most good agencies get clients by referral—from existing clients, friends, review consultants, or even other agencies. b. Independent agency review consultants often help arrange marriages between agencies and clients.

2. Presentations a. Some advertisers ask for or imply that they want a speculative presentation, meaning they want to see what the agency will do before they sign on. b. The presentation process also allows the agency and the advertiser to get to know each other before they agree to work together.

3. Networking and Community Relations a. Some agencies work pro bono (for free) for charities or nonprofit organizations such as the American Indian College Fund. b. Agencies may help local politicians (a controversial practice in some areas) or contribute to the arts, education, religion, or the community.

4. Soliciting and Advertising for New Business a. Lesser-known agencies must take a more aggressive approach. b. An agency may solicit new business by advertising, writing letters, making cold calls, or even posting a viral video on YouTube. An agency principal usually solicits new business, but staffers help prepare presentations.

1-82 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

B. Stages in the Client–Agency Relationship In the advertising business, the life cycle of the agency–client relationship passes through four distinct stages: prerelationship, development, maintenance, and termination.

1. The Prerelationship Stage a. The prerelationship stage occurs before an agency and client officially do business. b. Through the presentation process, the agency tries to give the best impression it can because it is selling and the client is buying (the My IMC Campaign 4– C titled ―Agency Review‖ offers guidelines for selecting an agency).

2. The Development Stage a. Once the agency is appointed, the development stage begins. During this honeymoon period, the agency and the client are at the peak of their optimism and eager to develop a mutually profitable relationship. b. The rules of the relationship are established. c. During the development stage, the first problems in the relationship also occur.

3. The Maintenance Stage a. The year-in, year-out, day-to-day working relationship is called the maintenance stage. When successful, it may go on for many years. b. Unfortunately, the average client–agency relationship is much shorter— usually five to six years 4. The Termination Stage a. At some point, an irreconcilable difference may occur, and the relationship reaches the termination stage. b. The way a termination is handled will affect both sides for a long time and is an important factor in whether the two ever get back together.

C. Factors Affecting the Client-Agency Relationship Many forces influence the client/agency relationship. Generally they can be grouped into the four Cs: chemistry, communication, conduct, and changes.

1. The most critical factor is the personal chemistry between the client‘s and the agency‘s staff.

2. Poor communication, a problem often cited by both agencies and advertisers, leads to misunderstandings about objectives, strategies, roles, and expectations— and to poor advertising. Constant, open communication and an explicit agreement on mutual contribution for mutual gain are key to a good relationship.

3. Dissatisfaction with agency conduct, or performance, is the most commonly cited reason for agency switches in every country.

4. Changes occur in every relationship. Unfortunately, some of them damage the agency–client partnership.

1-83 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VI.

VII.

The Suppliers in Advertising Spend a few weeks inside an ad agency, and you are likely to see many different vendors making presentations about the special services they can provide. These service providers are called suppliers. Although we can‘t mention them all, important suppliers include art studios and web design houses, printers, engravers, film and video production houses, and research companies.

A. Art Studios and Web Designers 1. Art studios design and produce artwork and illustrations for advertisements.

2. Web design houses employ specialists who understand the intricacies of webbased technologies and can design ads and Web pages that are both effective and cost efficient.

B. Printers and Related Specialists Ranging from small instant-print shops to large offset operations, printers employ or contract with highly trained specialists who prepare artwork for reproduction, operate digital scanning machines to make color separations and plates, operate presses and collating machines, and run binderies.

C. Film and Video Houses The large agencies normally work with independent production houses that specialize in film or video production or both.

D. Research Companies Most firms do not maintain a fully staffed research department. Instead, they use independent research companies or consultants.

The Media of Advertising The medium that carries the advertiser‘s message is the vital connection between the company that manufactures a product or offers a service and the customer who may wish to buy it. Although the plural term media commonly describes channels of mass communication such as television, radio, newspapers, and magazines, it also refers to other communications vehicles such as direct mail, out-of-home media (transit, billboards, etc.), specialized media (aerial/blimps, inflatables), specialty advertising items (imprinted coffee mugs, balloons), and new communication technologies such as digital media, interactive TV, and satellite networks. (Exhibit 4-7 shows the largest U.S. media companies.) We classify advertising media into seven major categories: print, electronic, digital interactive, social media, out-of-home, direct response, and other media.

A. Print Media 1. The term print media refers to any commercially published, printed medium— such as newspapers and magazines—that sells advertising space to a variety of advertisers.

2. Print media also include directories; school or church newspapers and yearbooks; and programs used at sporting events and theatrical performances.

1-84 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

B. Electronic Media 1. The electronic media of radio and television used to be called the broadcast media.

2. But with the advent of cable TV, many programs are now transmitted electronically through wires rather than broadcast through the air.

C. Digital Interactive Media 1. Digital interactive media allow the audience to participate actively and immediately.

2. Technology and competition for viewers have led to tremendous audience fragmentation.

D. Social Media 1. Social media is a term for sites where the prime motivation for audience consumption is audience-created content.

2. This content, from friends, family, business associates, acquaintances, celebrities, and others, is highly credible, immediate, and persuasive.

E. Out-of-Home Media 1. The major categories of out-of-home media are outdoor advertising and transit advertising.

2. Most outdoor advertising (billboard) companies are local firms, but most of their revenue comes from national advertisers such as liquor and airline companies.

3. Transit advertising (bus, taxi, and subway advertising) is an effective and inexpensive medium to reach the public while they‘re in the retail neighborhood.

F. Direct Response 1. The purpose of much IMC is to create an enduring, positive perception of a brand or company.

2. Direct-response advertising is designed to generate an immediate response.

3. When companies mail or e-mail their advertising directly to prospective customers without using one of the commercial media forms, it‘s called directmail advertising.

G. Other Media 1. Technology has spawned a host of new advertising media that can confound even the most knowledgeable media planner and buyer.

2. As progress continues, so will the proliferation of new media and the opportunities for those seeking careers (or fortunes) in the media.

H. Media Around the World Many U.S. advertising people get used to foreign styles of advertising faster than they get used to foreign media. Virtually every country has access to radio, television, newspapers, magazines, outdoor media, and direct mail. However, the legalities of different media forms vary from country to country. Generally, the media available to

1-85 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VIII.

the international advertiser can be categorized as either international or foreign media, depending on the audience they serve.

1. International Media a. International media—which serve several countries, usually without any change in content—have been limited to newspapers and magazines. b. Television is also a viable international medium. And we are beginning to see the emergence of commercial global media vehicles, such as CNN. 2. Foreign Media a. Advertisers use foreign media—the local media of each country—for large campaigns targeted to consumers or businesses within a single country. b. Because foreign media cater to their own national audience, advertisers must produce their ads in the language of each country.

Chapter Summary A. The advertising business comprises four main groups: advertisers (clients), agencies, suppliers, and media.

B. There are four main categories of advertisers based on their geographic activities: local, regional, national, and transnational.

C. There are three types of local advertising: product, institutional, and classified.

D. Local advertisers are the consummate integrators of marketing communications.

E. Regional advertisers operate in one or several states and market exclusively within that region. National advertisers operate in several regions or throughout the country and comprise the largest advertisers.

F. Local and national advertisers differ in focus, time orientation, and resources.

G. A large company’s advertising department may be centralized or decentralized.

H. Transnational advertisers face unique challenges. Their markets have a different value system, environment, and language with customers of different purchasing abilities, habits, and motivations.

I. Ad agencies are independent organizations of creative people and businesspeople who specialize in developing and preparing advertising plans, ads, and other promotional tools on behalf of their clients.

J. Like their clients, ad agencies may be local, regional, national, or international in scope. Agencies can be classified by the range of services they offer and the types of business they handle.

K. Agencies may be organized into departments of functional specialties or into groups that work as teams on various accounts.

L. Some advertisers develop in-house agencies to save money by keeping agency commissions for themselves.

M. Most agencies get clients through referrals, publicity on successful campaigns, advertising, personal solicitation, or networking.

1-86

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

N. The suppliers in advertising are all the people and organizations that assist in the business.

O. The media of advertising include the traditional mass media of print, electronic, and out-of-home as well as more specialized channels such as direct response, digital interactive media, social media, and specialty advertising.

P. Print media include magazines and newspapers as well as directories.

Q. In foreign markets, advertisers are faced with different media mixes, different legal constraints, and different economies of advertising.

Answers to Pedagogical Features  My IMC Campaign 4–A: Understanding Your Client

Below you will find some questions that might prove useful for getting to know your client better.

1. Provide a complete description of your product/service: What is its current position? What is the brand personality as you perceive it? Does it need changing? Are there seasonal trends for your product? Would you be willing to share annual sales trend information?

2. Do you have information on your company to share? Your mission statement? How would you describe the culture of your organization?

3. Do you have a definite target market in mind? Are you targeting consumers, groups, businesses or some combination?

4. Is the market local? Regional? National? International?

5. Would you be willing to share: Information on your competition? Information on your market? Information on market trends? Legal trends? Advertising that your competition has used? Previous advertising efforts you have undertaken?

6. What is the time period of this campaign? Do you have definite start and stop dates in mind?

7. What is the budget?

8. Do you have any specifications on the budget breakdown in terms of promotion versus advertising? Any other specifications?

9. What are your marketing objectives for this campaign?

10. Please list your advertising/communications objectives for this campaign (i.e., to increase knowledge, change attitudes, elicit a specific behavior).

11. Are there media that you would like us to be sure to consider?

12. Are there media that you would prefer we not recommend?

13. Do you have a current, active website? If so, what is its primary purpose? Who accesses it?

14. Do you have any specifications on creative executions? Are you looking to continue current efforts or to come up with something completely different?

15. Are there any current clients/consumers that we could contact?

16. Are there potential clients/customers that we could contact?

1-87 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

17. Who should we contact when we have questions? What is the best time to contact this person? How does he or she prefer to be contacted (e-mail, phone, fax)?  My IMC Campaign 4–B: Creating Local Advertising

Use these time-tested practices to guide your thinking about how local advertising can help.  Digital is local too.  Stand out from the competition.  Use a simple layout.  Use a dominant element.  Stress the benefits.  Make the headline count.  Watch your language.  Make the copy complete.  Make your visual powerful and eye-catching.  Specify branded merchandise.  Include related items.  Urge readers to buy now.  Don‘t forget the business name and address.  Don‘t be too clever.  Don‘t use unusual or difficult words.  Don‘t generalize.  Don‘t make excessive claims.  Plan ad size carefully.  Consider your target customers.  Use tie-ins with local or special news events.

Ad Lab 4–A: The Co-op Marriage 1. Look through today‘s edition of a daily paper in your city. Identify two ads that can qualify as co-op. Do the ads fit both the store‘s image and the manufacturer‘s image? Explain.

Answer Guidelines: a. The goal of this exercise is to identify and separate the layout and copy choices stipulated by the manufacturer from those made by the small business. b. As in any marriage, each partner has his or her own agenda that must be fulfilled to some degree with each event. If unfulfilled, dissatisfaction can end the process. c. Money talks—typically, manufacturers‘ resources put them in the driver‘s seat. Under the threat of non-reimbursement, they often specify what imagery and wording they will not accept, how much white space should surround the logo, its exact color (PMS ink or process color percentages), placement on the page, how many other logos can appear along with theirs, etc. These are some of the areas that will come up in discussion.

1-88 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

d. Advertisers are often the final deciders of the tone and look of the ads because they are the ones who place the ads in the media. They usually follow the regulations specified by the manufacturer closely in order to be eligible for the co-op dollars. However, their choices for the layout may be tacky; the headline may appear too small and the body copy may seem too big; the message may be very straightforward, boring, and based on a negative appeal.

2. A store may develop its own ad and drop in the manufacturer‘s logo or it may take an ad created by the manufacturer and simply add the store‘s location. Which are your two ads?

Answer Guidelines: a. See the second part of the answer to question 1. b. One way to tell the difference between an ad provided by the manufacturer or the wholesaler is to see if the spacing between blocks of texts and visuals has an even, overall consistency. Often local retailer-designed ads look clumsy and irregularly spaced.

Also, the visuals provided by manufacturers are often very professional and powerful in their appearance, whereas local retailers often ask amateur artists and photographers to create the visuals at a cut rate, resulting in weak ads. c. Another way to identify manufacturer-supplied ad layouts is that they leave an area of the ad blank for placing the local company‘s logo, pertinent information, address, and telephone number.

Ad Lab 4–B: How Big is the Agency Business?

1. Agencies need fewer people than businesses in many other industries: Nearly half of all firms employ fewer than 10 people. Small agencies can be satisfying workplaces. But what if you want to work for a big power player? Visit the websites of some of the top 10 U.S. agencies and jot down your impressions.

2. What are the advantages and disadvantages of working in advertising? Visit these agency blogs and news sites to find out about life inside an ad agency.  FCB Exchange: https://www.fcbexchange.com/  The Richards Group: https://richards.com/social/  Wieden+Kennedy: http://www.wk.com/news/  Wunderman Thompson (formerly JWT): https://www.jwt.com/en/news  Ocean Media: https://www.oceanmediainc.com/#!news  Sukle: http://sukle.com/blog/  Ogilvy: https://www.ogilvy.com/  Waggener Edstrom: https://www.we-worldwide.com/blog Ethics, Diversity & Inclusion: Eliminating Discrimination 1. How can agencies foster a workplace that does more than eliminate discrimination, but go beyond to foster ―cultures of inclusion, equity, creative dialogue and social transformation‖?

1-89 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Sample Answer: For the 4A‘s, the answer to that question is the Enlightened Workplace Certification Program. Agencies are provided with self-evaluation tools for ferreting out problems.

Members of each office, department, or team participate in a workshop that encourages conversations about race, gender, power, and influence. Then, benchmarks and standards for behaviors/actions are used to ensure individuals are supported and abuses are identified and investigated. Finally, organizations that meet the standards are recognized with a certification.

Another method through which agencies are attempting to promote diversity and inclusion is through the creation of specific diversity and inclusion groups housed within the agency.

These groups are comprised of employees of the agency who are devoted to improving diversity and who work to provide insight to others in the agency about the proper inclusion of underrepresented groups. They do so by referencing research on best practices in including underrepresented groups and through bringing in speakers who are experts on the inclusion of a particular group of people.  My IMC Campaign 4–C: Agency Review

To use this scale, an advertiser would rate each agency on a scale from 1 (strongly negative) to 10 (strongly positive). Use the ―Creative Abilities‖ qualities below for this chapter‘s AdForum exercise.

General Information __Size compatible with our needs. __Strength of management. __Financial stability. __Compatibility with other clients. __Range of services. __Cost of services; billing policies.

Marketing Information __Ability to offer marketing counsel. __Understanding of the markets we serve. __Experience dealing in our market. __Success record; case histories.

Creative Abilities __Well-thought-out creativity; relevance to strategy. __Art strength. __Copy strength. __Overall creative quality. __Effectiveness compared to work of competitors.

1-90 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Production __Faithfulness to creative concept and execution. __Diligence to schedules and budgets. __Ability to control outside services.

Media __Existence and soundness of media research. __Effective and efficient media strategy. __Ability to achieve objectives within budget. __Strength at negotiating and executing schedules.

Personality __Overall personality, philosophy, or position. __Compatibility with client staff and management. __Willingness to assign top people to account. __Ability to articulate rationale behind work.

References __Rating by current clients. __Rating by past clients. __Rating by media and financial sources.  My IMC Campaign 4–D: Ways to be a Better Client

Relationships  Cultivate honesty.  Be enthusiastic.  Be frank when you don‘t like the advertising.  Be human.  Be willing to admit you‘re unsure.  Allow the agency to feel responsible.  Care about being a client.

Management  Don‘t insulate your top managers from creative people.  Set objectives.  Switch people, not agencies.  Be sure the agency makes a profit on your account.

Production  Avoid nitpicking last-minute changes.  Be aware of the cost of changes (both time and money).

1-91 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

 Don‘t change concepts during the production stage.

Media  Understand the economics (and economies) of media.  Understand the importance of lead time.  Avoid interfering with the agency‘s media relationship.  Avoid media arrogance (―they need us‖).  Avoid insularity.  Suggest work sessions.  Keep the creative people involved in your business.

Research  Share information.  Involve the agency in research projects.

Creative  Learn the fine art of conducting the creative meeting.  Look for the big idea.  Insist on creative discipline.  Don‘t be afraid to ask for great advertising.  People behind the Ads: Marla Kaplowitz, CEO, American Association of Advertising

Agencies  Marla Kaplowitz took over from Nancy Hill in 2017 after an extensive search. Kaplowitz cut her teeth in many agency roles. Her start came at DMB&B and then Ammirati Puris Lintas.

Next, she joined Procter & Gamble‘s media agency Mediavest. Finally, in 2011 she accepted a position as CEO of MEC North America.  She also serves on the boards of the Trustworthy Accountability Group, the Ad Council, and the Digital Advertising Alliance.

Review Questions 1. What roles do the major organizations involved in the advertising business perform?

The advertising business comprises two main groups—advertisers and agencies. The advertisers (or clients) are the companies that advertise themselves and their products.

Assisting them are the agencies, which plan, create, and prepare advertising campaigns and materials for the advertisers. In addition to these two groups are the media, which sell time and space, and the suppliers who assist both advertisers and agencies in the preparation of advertising materials.

2. What are the differences between a local advertiser and a national advertiser?

Local and national advertisers differ in three major ways: focus, time, and resources (see Exhibit 4-3). The focus of a national and a local advertiser are very different. National companies are concerned about building their brands, so their advertising tends to focus on 1-92 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

3.

4.

5.

6.

the competitive features of one brand over another, especially in conquest sales situations.

Local merchants or dealers often carry hundreds of different brands. Their focus is on attracting customers to a particular point—their place of business. Due to differences in their focus and perspective, national and local advertisers also have a different time orientation.

National companies think long-term. Local advertisers have to think about advertising from week to week. Finally, national advertisers have more resources available—both money and people.

What services might a modern full-service advertising agency offer a large business-tobusiness advertiser?

A modern full-service advertising agency could supply both advertising and non-advertising services to a large business-to-business advertiser. Advertising services include planning, creating, and producing ads, performing research, and selecting media. Nonadvertising functions run the gamut from packaging to public relations to producing sales promotion material, annual reports, and trade-show exhibits.

What are the most important things an advertiser should consider when selecting an agency?

Clients can evaluate the quality of agency ideas in presentations, rely on the expertise of contacts when using referrals, even evaluate the ads that agencies use to promote themselves.

In the end, it boils down to an agency‘s work and the talent of its people.

How does an agency make money? What is the best way to compensate an agency? Explain your answer.

Traditionally, agencies have had only three ways to make money: commissions, markups, and fees or retainers—and usually some combination of the three. More recently, clients and agencies have begun using incentive systems whereby the agency receives more if their campaigns achieve certain measurable results. In an era of accountability, this seems a better way to compensate agencies, but not every situation will allow for it.

If you owned an ad agency, what would you do to attract new business? Be specific.

The students‘ answers may include: a. Personal contact with top management b. Referrals from satisfied clients c. Publicity on recent successful campaigns d. Trade advertising e. Direct-mail solicitation f. The agency‘s general reputation Ways to develop new business are: a. Having clients who strongly champion the agency (referrals) b. Having superior presentation skills c. Networking—cultivating a personal relationship (relationship management) with a network of top executives d. Soliciting and advertising for new business

1-93 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

7. What are the advantages and disadvantages of an in-house agency?

Advantages: Possibility of realizing savings; greater attention from advertising personnel; faster response; greater control over production process; greater understanding of company‘s products and markets.

Disadvantages: Possible loss of objectivity and creativity; inflexibility in staffing; difficulty of attracting and keeping the best creative talent; loss of independent agency experience; tendency to produce company-oriented rather than customer-oriented advertising, loss of media commissions in some cases.

8. What are the major influences on the client–agency relationship? What can clients and agencies do to maintain a good relationship?

The major influences of the client-agency relationship are: a. Chemistry: personality mix and quality of communication between agency staff and client personnel. b. Creativity: skill, talent, and expertise of agency. c. Competence: range and scope of agency services and ability to handle clients‘ needs. d. Courage: to remain independent and give the client what is needed rather than what may be wanted.

Perhaps the best way to improve understanding between clients and agencies would be to have staff members change places for a while. (e.g., A Foote, Cone & Belding account executive did just that with great success, filling in temporarily as marketing manager at Levi‘s Jeans for Women. It gave her a whole new perspective on her agency job and the daily challenges faced by her client).

9. What is meant by the term interactive media? Give some examples.

Interactive media refers to electronic channels of communication, such as the Internet, which allow the audience to participate actively and immediately. Student examples will vary.

10. If you were planning to advertise your brand of computers in Europe, would you likely use foreign or international media? Why? It would depend on the consumer or your target market. High-end, brand name products distributed in many countries do best in international media whose audiences are welleducated, upper income consumers. Products designed for lower-income consumers are best advertised in foreign media because they must be advertised in local languages and distributed within local areas.

The Advertising Experience 1. Advertising Agencies Ad agencies often specialize in a particular type of business or focus on a special market and/or consumer. Visit the websites for the following agencies:  9th Wonder: www.9thwonder.com  BBDO: www.bbdo.com 1-94 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

 Crispin Porter Bogusky: http://www.cpbgroup.com  Dept: www.deptagency.com/en-ie/  DDB Worldwide Communications Group Inc.: www.ddb.com  Fallon: www.fallon.com  Foote, Cone & Belding: www.fcb.com  JWT: www.jwt.com  Leo Burnett: www.leoburnett.com  McCann Worldgroup: www.mccann.com  Muse Communications: www.museusa.com  Ogilvy: www.ogilvy.com  RPA: www.rpa.com  Saatchi & Saatchi: www.saatchi.com  TBWA Chiat/Day: www.tbwachiat.com  Y+R: www.yr.com Answer the following questions for each. a. What is the focus of the agency‘s work (e.g., consumer, business-to-business, ethnic, general market)? b. What is the scope and size of the agency‘s business? Who makes up its clientele? c. What is the agency‘s mission statement or philosophy? How does that affect its client base? d. What is the agency‘s positioning (e.g., creative-driven, strategy [account]-driven, mediadriven)? e. What is your overall impression of the agency and its work?

Sample Answer: TBWA Chiat/Day a. The focus of the agency‘s work is consumer, handling many of packaged goods to the general market. However, the agency‘s work for Infiniti and Nissan also covers businessto-business (automotive fleet advertising) and ethnic marketing (Hispanic commercials). b. Mostly national, with worldwide projects; current clients include ABC, Absolut Vodka, Apple Computers, Energizer, Infiniti, Nissan, Sony PlayStation, Taco Bell, and The Weather Channel. c. TBWA Chiat/Day‘s philosophy centers on a drive to produce the best creative ads in the industry. The agency‘s focus is to make itself ―indispensable‖ to its clients, which has made the agency very successful. Today, the agency often picks the clients (not the other way around). Chiat‘s clients must relinquish a great deal of creative and strategic control to the agency. d. The agency is almost completely creative-driven. e. The overall impression of the agency is that it is a major player worldwide, and is respected for its creativity, both by clients and by the advertising community at large.

1-95 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

2. Agencies and Clients (Advertisers) The advertising industry is truly vast, and advertisers and their agencies focus on a wide range of businesses in a broad scope of markets. Visit the following websites and familiarize yourself further with the nature and scope of the advertising world.

Advertisers  Global—International Advertising Association (IAA): www.iaaglobal.org  National—Association of National Advertisers (ANA): www.ana.net Advertising Agencies  National (United States)—American Association of Advertising Agencies (AAAA): www.aaaa.org Advertising Practitioners  International—Institute of Practitioners in Advertising (IPA): www.ipa.co.uk  National—American Advertising Federation (AAF): www.aaf.org  Regional—Advertising Federation of Minnesota: www.adfed.org  Local—AdClub of Greater Boston: www.adclub.org Advertising Publications  National—Advertising Age: www.adage.com  Regional/local—AdWeek: www.adweek.com Answer the following questions for each site. a. What advertising group (advertiser, ad agency, practitioner, trade press) sponsors the site? Who is the intended audience? b. What is the size and scope of the organization? c. What is the organization‘s purpose? The site‘s purpose? d. What benefit does the organization provide individual members? The advertising community at large? e. How is this organization important to the advertising industry? Why? Sample Answer: Association of National Advertisers (ANA) a. Association of National Advertisers (ANA); individual ANA member companies and the overall advertising/marketing community. b. National, with over 7,300 brands represented among its members. c. The ANA mission is to ―act as a catalyst in bringing together industry leaders, advertising, marketing, and communication professionals and members of other trade associations to confront pressing issues and explore emerging ideas critical to our industry‖; the purpose of the site is to provide information about the organization, its conferences, as well as provide access to the ANA‘s newsletter and its library of industry information. d. Members receive a source of marketing information, professional training and development, customized problem-solving, legislative and regulatory protection, networking opportunities, executive recruitment assistance, and a host of other secondary 1-96 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

benefits; the advertising community benefits from the collective power of the largest advertisers in the world and from the ANA‘s lobby influence with major political, legislative, and industry forces. e. See second part of section d.

3. Developing a Brand Image After visiting at least three of the websites listed in Exercise 1, develop a mission statement for two hypothetical new advertising agencies. The first agency is small, has an irreverent edge, and is primarily dedicated to working on social justice issues. The second agency would like to represent luxury goods companies looking to add young professionals to their clientele.

4. How well do these brand sites engage consumers? What are the principles of engagement that emerge from your review? a. Scentos: https://scentos.com/ b. Mountain Dew: www.mountaindew.com/ c. Mercedes-Benz USA: www.mbusa.com/en/home d. Sandals Resorts: www.sandals.com/bahamas/ Sample Answer: Answers will vary but might indicate one or more of the following: whether the agency is local, regional/national, or international, whether it is full-service or specialized; and in which, if any, media the agency excels.

Connect Activities Title

Assignment Type

Topic

Learning Objective

Agencies: Types and Personnel Local and National Advertisers Agency and Advertiser Relationship

Matching

Participants in Advertising

AACSB Accreditation Tagging 04-01; 04-02; Analytical 04-03; 04-04 Thinking

Matching

Participants in Advertising

04-01; 04-02; 04-03

Analytical Thinking

Understand

04-06; 04-07; 04-08

Knowledge Application; Analytical Thinking

Understand; Apply; Evaluate;

Case Analysis The Role of Advertising Agencies; Ethical Considerations in Advertising,

Bloom’s Taxonomy Understand

1-97 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Local versus National versus Transnational Advertisers: McDonald’s

Video Case

Promotion, and IMC Campaigns; Participants in Advertising; Alternative Media Options Local, National, and Transnational Advertisers; The Role of Advertising Agencies; Pros and Cons of Global versus Localized Marketing and Advertising

04-02

Knowledge Application; Reflective Thinking

Remember; Understand

Agencies: Types and Personnel Activity Summary: This activity provides students with a scenario of happenings involving an advertising agency. Students are then asked to identify the type of agency that would likely be involved in this type of scenario as well as the agency personnel that would be responsible or involved in the scenario.

Follow-Up Class Discussion: Ask students to discuss, based on the responsibilities discussed in the text and this exercise, what type of ad agency they envision themselves working in and what role they believe they would be most suited for in an ad agency.

Local and National Advertisers Activity Summary: This activity asks students to identify the commonalities as well as differences in how local and national advertisers operate and what they are concerned with in their advertising efforts.

Follow-Up Class Discussion: Ask students to identify a local advertiser and a national advertiser. Then have them outline how their concerns and approaches differ, perhaps providing examples of this as observed through their actual advertising.

1-98 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Agency and Advertiser Relationship Activity Summary: This activity provides students with information on a fictitious small candy company, Coco‘s Chocolate Shoppe. It asks students to consider stages in the client-agency relationship as discussed in Chapter 4.

Follow-Up Class Discussion: Ask students what considerations would be most important to them if they were the owner of Coco‘s Chocolate Shoppe and were attempting to identify an advertising agency to work with to promote their brand.

Local versus National versus Transnational Advertisers: McDonald’s Activity Summary: This activity asks students to view a commercial for McDonald‘s that aired in Australia in order to identify the differences in focus for transnational advertisers as compared with national and local advertisers.

Follow-Up Class Discussion: Have students identify a few other international commercials from McDonald‘s. Ask them to describe what aspects of a transnational advertiser they observe in promotions from the McDonald‘s brand. Additionally, have students discuss what considerations McDonald‘s likely contemplated when developing their advertisements for an international audience.

CHAPTER FIVE MARKETING AND CONSUMER BEHAVIOR: THE FOUNDATIONS OF IMC This chapter underlines the importance of the marketing process in business and defines the role of advertising and other marketing communications tools in presenting the company and its products to the market. The successful advertising practitioner must understand the relationship between marketing activities and the way consumers behave. Ideally, it is this relationship that shapes the creation of effective advertising.

Learning Objectives After studying this chapter, your students will be able to: LO5-1 Define marketing and explain the relationship between consumer needs and product utility.

1-99 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

LO5-2 Identify the key participants in the marketing process.

LO5-3 Explain why consumer behavior is the key to IMC strategy.

LO5-4 Outline the psychological processes in consumer behavior.

LO5-5 Describe the fundamental motives behind consumer purchases.

LO5-6 Elaborate on the interpersonal influences on consumer behavior.

LO5-7 Explain the nonpersonal influences on consumer behavior.

What’s New? Examples are updated throughout the chapter. The discussion of the role of habit in psychological processes has been expanded and made more accessible to students. The revised Ethics, Diversity & Inclusion box assesses the halting progress in agency diversity.

Teaching Tips and Strategies Using the Chapter Opening Vignette in the Classroom It is beneficial to begin by showing the commercial and then asking students a few questions to open up discussion. How did this advertisement introduce this new type of computer/computing?

How did it want consumers to think about personal computing? What was it trying to get viewers to think about MacIntosh? The ad can then be contrasted with a current Apple commercial. A good one to show is ―Behind the Mac: Make Something Wonderful‖ and discuss with students how the 1984 ad differs from how Apple commercials want us to think about personal computing and the brand today. While technology has obviously changed, are there any similarities in the goals of the commercials? In how the commercial presents the product and the brand? How does Apple want consumers to think and feel about the product in the new commercial versus the 1984 ad?

Other Tips and Strategies This chapter delves into consumer behavior and how advertisers use it to influence purchasing habits.

Students can get a first-hand feel for the importance of culture by showing them examples of international ads and asking them how the ads are functioning to sell a brand. It can be difficult to figure out which motives are being addressed if the ad is developed based on culture-specific understanding.

1-100 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

It is easy enough to find advertisers trying to take advantage of reference groups. Students are generally well aware of celebrities and the products they endorse, including LeBron James (Nike), Kiera Knightly (Chanel), and so on. Product mentions can even be found in music; in fact, rap artists are known for seeding their songs with brand references. Interestingly, these are often plugs for the artists‘ own brands (Jay-Z owns the Roc-A-Wear clothing line and the Armadale vodka brand and Puffy‘s brands include Sean John and Dirty Denim).

If you are familiar with David Brook‘s entertaining and insightful book, Bobo’s in Paradise, it provides some nice observations into social class in America. Brook‘s primary contention is that traditional ideas of bourgeois and bohemian lifestyles have melded in the 1990s, leaving the new ―bobo.‖ Bobos want money and a life dedicated to self-expression, leading to some interesting consumption patterns. Bobos believe it is fine to spend a lot of money on something, so long as it is practical. Starbucks attracts bobos by the thousands, since they are happy to spend $3 on a cup of coffee (need some caffeine to start the day). Spending money on an exorbitant living room is out (too ostentatious) but a family spending big bucks on a huge, stainless steel kitchen range is fine, even if it is never used. Similarly, the bobo avoids the snobbish implications of a Rolls Royce (too impractical) but may drop $100,000 on a Hummer (you never know when you might need an all-terrain, combat-ready vehicle!).

One of the questions that Maslow‘s hierarchy of needs does not answer is ―what makes someone buy something?‖ I ask the class this very question. The answers vary wildly, no differently from the responses you would have gotten if you had asked students, ―Why are you getting a degree?‖ Answers would range from ―My parents wanted me to‖ to ―I want to make more money‖ to ―My friends are here.‖ The problem that advertisers face becomes evident: they have to figure out what the majority of people want and then sell them on that benefit.

There is an old maxim in sales: ―Features tell and benefits sell.‖ If you look at effective advertising, you will usually see this. For instance, if Mercedes is advertising heated seats, they are more likely to push the idea that the seats are always warm (the feature). Yet, the benefit is what sells the seats: when it is cold and you walk out to your car, your seats won‘t be cold like the rest of your car. Do you see the benefits? I recommend going over the different feature and benefit statements for the ads in this book with students. This will help students understand that all advertising is trying to create a position in the mind, using feature and benefit statements.

Dial used a theme in its antibacterial soap advertising campaign, suggesting that most Americans didn‘t know that there were bacteria everywhere. Dial created a campaign telling consumers that germs are everywhere, and that you can get rid of them by using Dial antibacterial soap. A new category of soap was created by a simple advertising campaign with bacteria in mind. Now there are many different products with antibacterial protection. This is good advertising and marketing working together, but according to the FTC, companies advertising ―antibacterial‖ or 1-101 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

―antimicrobial‖ products must avoid implying that their products promote human health or stop the spread of disease.

A new product or service might be phenomenal, but the challenge is to get consumers to understand the new product/service and to help avoid product or service failure. That is where advertising comes in.

When I have discussions with students regarding this, they tend to be very surprised. Many times students believe that advertising is about coming up with the jingle or the phrase that helps the advertised product stand apart from others. That is a function of advertising, yet only a very small one.

Web Resources for Enhancing Your Lectures Science Daily: Consumer Behavior http://www.sciencedaily.com/news/mind_brain/consum News er_behavior Harvard Business School: Marketing

https://hbswk.hbs.edu/Pages/browse.aspx?HBSTopic= Marketing

Sensation and Perception Tutorials

http://psych.hanover.edu/KRANTZ/sen_tut.html

Pedagogical Features Ad Lab 5–A: The Context of Choice: How a Product‘s Perceived Value Varies by the Products It Is Compared With  My IMC Campaign 5: Understanding What Consumers Look for in a Product

Ethics, Diversity & Inclusion: Diversity in the World of Advertising Ad Lab 5–B: Applying Consumer Behavior Principles to Ad Making  People behind the Ads: Jon Steel: Advertising Legend

1-102 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Lecture Outline I.

II.

Vignette: Steve Jobs and 1984 Steve Jobs had brilliance, focus, passion, a thirst for excellence, and a belief in the power of ideas. These qualities sometimes infuriated those he worked with. They also made him a visionary with the power to share his vision with the masses. And they helped him save one of the greatest ads of all time.

Marketing: Creating Satisfying Exchanges by Creating Utility All marketers are challenged about how to best present their products, services, and ideas effectively. To do this, they must comprehend the important relationship between the product and its market. This is the task of marketing.

A. The Relationship of Marketing to IMC Marketing is used by management to plan and execute the conception, pricing, promotion, and distribution of its products. The ultimate purpose of marketing is to create exchanges that satisfy the perceived needs, wants, and objectives of individuals and organizations.

B. Customer Needs and Product Utility 1. Companies use marketing research to discover the needs and wants that exist in the marketplace. The goal is to use this information for product shaping and development—designing products, through manufacturing, repackaging, or IMC, to satisfy more fully the customers‘ needs and wants.

2. This definition of marketing shows that one of the important elements is the special relationship between a customer‘s needs and a product‘s need-satisfying potential.

3. Utility is the product‘s ability to satisfy both functional needs and symbolic (or psychological) wants.

C. Exchanges, Perception, and Satisfaction Recall that the purpose of marketing is ―to create exchanges that satisfy the perceived needs, wants, and objectives of individuals and organizations.‖ Three important ideas are expressed in this definition: exchanges, perception, and satisfaction.

1. Exchanges: The Purpose of Marketing and IMC a. Any transaction in which one person or organization trades something of value with someone else is an exchange. b. IMC communicates product features and benefits, price options, and locations where the product can be purchased. In the case of direct marketing, IMC may even close the sale.

2. Perception Is Everything a. Sometimes the people who are about to engage in a business exchange feel apprehensive. They may worry that the exchange is not equal, even when it is truly fair. This is where perception comes in.

1-103

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

III.

b. If the seller can provide the information and inspiration the buyer seeks, the two may recognize the potential for a perceived equal-value exchange.

Without this perception though, an exchange is unlikely. c. Once marketers develop a deep understanding of their customers, they can be more effective in adjusting or altering their customers‘ perception of the product (awareness, attitude, interest) and their customers‘ belief in the product‘s ability (value) to satisfy their perceived wants or needs (utility).

3. Satisfaction: The Goal of the Customer a. Even after an exchange occurs, satisfaction remains an issue. Satisfaction must occur every time customers use the product, or people won‘t think they got an equal-value exchange. b. IMC reinforces satisfaction by reminding customers why they bought the product, helping them defend the purchase against skeptical friends, and enabling them to persuade others to buy it.

The Key Participants in the Marketing Process People‘s needs and wants change regularly, and marketers constantly promote a variety of products for customer attention and interest. Marketing exchanges depend on three types of participants: customers, markets (groups of customers), and marketers.

A. Customers Customers are the people or organizations who consume products and services. They fall into three general categories 1. Current customers have already bought something from a business or brand; in fact, they may buy regularly.

2. Prospective customers are people about to make an exchange or considering it.

3. Centers of influence are those people or groups whose ideas and actions others respect.

B. Markets The second participant in the marketing process is the market, which is a group of current customers, prospective customers, and noncustomers who share a common interest, need, or desire; who have the money to spend to satisfy needs or solve problems; and who have the authority to buy. Companies design messages for four broad classifications of markets: 1. Consumer markets comprise people who buy goods and services for their own use.

2. Business markets are made up of organizations that buy services, natural resources, and component products that they resell, use to conduct their business, or use to manufacture another product. The two most important business markets are reseller markets and industrial markets. a. Reseller markets buy products for the purpose of reselling them.

1-104 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

IV.

V.

b. Industrial markets include millions of firms that buy products used to produce other goods and services.

3. Government markets buy products for municipal, state, federal, and other government activities.

4. Transitional (or global) markets include any of the other three markets located in foreign countries.

B. Marketers The third participant in the marketing process, marketers, includes every person or organization that has products, services, or ideas to sell.

Consumer Behavior: The Key to IMC Strategy A. The Importance of Knowing the Consumer Marketers spend a lot of money to keep individuals and groups of individuals (markets) interested in their products. To succeed, they need to understand what makes potential customers behave the way they do.

1. This involves the study of consumer behavior: the mental and emotional processes and the physical activities of people who purchase and use goods and services to satisfy needs and wants.

2. The behavior of organizational buyers (the people who purchase products and services for use in business and government) is also important.

B. The Consumer Decision Process: An Overview 1. The moment someone recognizes a need that might be satisfied by a purchase, he or she begins the consumer decision process. Exhibit 5-1 presents the basic steps of this process.

2. It involves a sequence of activities: problem recognition (which may occur as a result of seeing an ad), information search, evaluation and selection, store choice and purchase, and finally postpurchase behavior.

3. The three personal processes govern the way we discern raw sensory information (stimuli) and translate it into feelings, thoughts, beliefs, and actions. The personal processes are perception, learning and persuasion, and motivation.

4. Our mental processes and behavior are affected by two sets of influences.

Interpersonal influences include family, society, and culture. Nonpersonal influences—factors often outside the consumer‘s control—include time, place, and environment.

5. Taking that final step requires evaluation of alternatives, in which we choose brands, sizes, styles, and colors.

6. If we do decide to buy, our postpurchase evaluation will affect whether or not we buy again.

Psychological Processes in Consumer Behavior The first task in promoting any new product is to create awareness (perception) that the product exists. The second is to provide enough compelling information (learning and 1-105

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

persuasion) about the product for prospective customers to make an informed decision.

Finally, you want your advertising to stimulate customers‘ desire (motivation) to satisfy their needs and wants by trying the product.

A. The Consumer Perception Process The term perception refers to the information we receive through our five senses.

There are several key elements to the consumer perception process, as shown in Exhibit 5-2. A stimulus is something (light, sound, a scent) we can receive through our senses.

1. Physiological Screens a. Before a stimulus can be perceived, it must first penetrate a set of physiological screens, the subconscious filters that shield us from unwanted messages. b. The physiological screens comprise the five senses: sight, hearing, touch, taste, and smell.

2. Cognition a. The third key element in perception is cognition: comprehending the stimulus. b. Each consumer uses psychological screens to evaluate, filter, and personalize information according to subjective emotional standards. c. These screens evaluate data based on innate factors, such as the consumer‘s personality and instinctive human needs, and learned factors, such as selfconcept, interests, attitudes, beliefs, past experiences, and lifestyle.

B. Learning and Persuasion: How Consumers Process Information Learning is a relatively permanent change in thought process or behavior. Learning produces our habits and skills.

1. Mental Files a. Information in memory is not stored randomly, but rather in mental files. b. Memory is a limited resource, and one susceptible to some well-known biases. c. When we search through memory, our mental files make it easier to retrieve words by their first letter. We then confuse this ease of retrieval with the frequency of occurrence. This ―availability‖ heuristic is just one example of how the structure of our cognitive system influences what we recall and how we decide.

2. Theories of Learning a. Classical conditioning is the theory of learning associated with the Russian psychologist Pavlov. Pavlov knew that dogs salivate when they are presented with food. Pavlov called food an unconditioned stimulus and salivation an unconditioned (naturally occurring) response for the dogs. When he began sounding a bell just before giving his dogs food, he found that after many 1-106 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

occasions the dogs would salivate just from the sound of the bell. The bell was now a conditioned stimulus. b. The American psychologist B. F. Skinner developed another theory of learned association, which he labeled operant conditioning. Operant conditioning involves an organism receiving reinforcement for a behavior. Both positive reinforcement (a reward such as food) or negative reinforcement (removing a noxious stimulus such as a loud noise) increase the likelihood of a reinforced behavior. c. Bandura‘s social cognitive theory provides a richer, cognitive perspective on how people learn. It suggests that consumers pay attention to the rewards and costs experienced by others in response to the things they do. d. Persuasion occurs when the change in belief, attitude, or behavioral intention is caused by promotion communication (such as advertising or personal selling).

3. A Theory of Persuasion: The Elaboration Likelihood Model a. The fact that learning can happen through a relatively thoughtful way (cognition) or a relatively simple way (conditioning) has direct implications for how marketers should try to persuade consumers to try or use a product.

This is because, according to theorists, there are two different routes to persuasion: the central and peripheral routes. b. The two routes are part of the Elaboration Likelihood Model in Exhibit 5-3. c. In the central route to persuasion, consumers have a higher level of involvement with the product or the message, so they are motivated to pay attention to the central, product-related information, such as product attributes and benefits or demonstrations of positive functional or psychological consequences. d. The peripheral route to persuasion is very different. People who are not in the market for a product typically have low involvement with the product message. They have little or no reason to pay attention to it or to comprehend the central information of the ad. e. When a product has a distinct advantage, the company‘s goal should be to encourage central route processing by increasing consumers‘ involvement with the message. This is where we see a lot of comparative advertising. f. One key to learning and persuasion is repetition. Repeat messages penetrate consumer screens by rekindling memories of information from prior messages.

1-107 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

4. Learning Produces Attitudes and Interest a. An attitude is our acquired mental position regarding some idea or object. It is the positive or negative evaluations, feelings, or action tendencies that we learn and cling to. b. For mature brands in categories with familiar, frequently purchased products, brand interest is even more critical for motivating action. Brand interest is an individual‘s openness or curiosity about a brand.

5. Learning Leads to Habits and Brand Loyalty a. Attitude is the mental side and habit the behavioral side of the same coin. b. Habit is the acquired behavior pattern that becomes nearly or completely involuntary—is the natural extension of learning. c. Most consumer behavior is habitual for three reasons: It‘s safe, simple, and essential. d. First, regardless of how we learned to make our purchase decision (through either central or peripheral route processing), if we discover a quality product, brand, or service, we feel safe repurchasing it through habit. e. Second, habit is simple. To consider alternatives we must evaluate, compare, and then decide. This is difficult, time-consuming, and risky. f. Finally, because habit is both safe and easy, we rely on it for daily living. So it‘s really essential to use habit in our lives. g. The major objective of all brand marketers is to produce brand loyalty, a direct result of the habit of repurchasing and the reinforcement of continuous advertising. h. Brand loyalty is the consumer‘s conscious or unconscious decision, expressed through intention or behavior, to repurchase a brand continually. It occurs because the consumer perceives that the brand offers the right product features, image, quality, or relationship at the right price. In the quest for brand loyalty, companies have three aims related to habits: 1) Breaking habits. Get consumers to unlearn an existing purchase habit and try something new.

2) Acquiring habits. Teach consumers to repurchase their brand or repatronize their establishment.

3) Reinforcing habits. Remind current customers of the value of their original purchase and to encourage them to continue purchasing. i. Developing brand loyalty is difficult due to consumers‘ sophistication and to the legions of habit-breaking, demarketing activities of competitive advertisers.

6. Learning Defines Needs and Wants Learning is both immediate and long-term. The moment we file information, some learning takes place. This leads to the next personal process, motivation.

1-108 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VI.

C. The Consumer Motivation Process 1. Motivation refers to the underlying forces (or motives) that contribute to our actions. These motives stem from the conscious or unconscious goal of satisfying needs and wants. a. Needs are the basic, often-instinctive, human forces that motivate us to do something. b. Wants are ―needs‖ we learn during our lifetime.

2. Motivation research offers some insights into the underlying reasons for unexpected consumer behavior.

3. To better understand what motivates people, Abraham Maslow developed the classic model shown in Exhibit 5-4 called the hierarchy of needs.

4. Modern researchers have translated Maslow‘s theory about needs and motives into more strategic concepts for use by marketers and advertisers. Rossiter and Percy, for example, identify eight fundamental purchase and usage motives (see Exhibit 5-5). They refer to the first five as negatively originated (informational) motives and the last three as positively originated (transformational) motives.

5. Negatively Originated (Informational) Motives a. The most common energizers of consumer behavior are negatively originated motives, such as problem removal or problem avoidance. b. These negative motives are also called informational motives because the consumer actually seeks information to reduce the mental state. c. These could also be called ―relief‖ motives because they relieve the negative state.

6. Positively Originated (Transformational) Motives a. With the positively originated motives a positive bonus is promised rather than the removal or reduction of some negative situation. b. The three positively originated motives—sensory gratification, intellectual stimulation, and social approval—are also called transformational motives because the consumer expects to be transformed in a sensory, intellectual, or social sense. c. These could also be called ―reward‖ motives because the transformation is a rewarding state.

Interpersonal Influences on Consumer Behavior Important interpersonal influences affect—sometimes even dominate—these processes.

They also serve as guidelines for consumer behavior. These influences can best be categorized as the family, the society, and the cultural environment of the consumer.

A. Family Influence From an early age, family communication affects our socialization as consumers— our attitudes toward many products and our purchasing habits. This influence is usually strong and long lasting.

1-109

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VII.

B. Societal Influence When we affiliate with a particular societal division, or identify with some reference group, or value the opinions of certain opinion leaders, it affects our views on life, our perceptual screens, and eventually the products we buy.

1. Societal Divisions: The Group We Belong To a. Sociologists traditionally divided society into social classes: upper, uppermiddle, lower-middle, and so on. b. U.S. society, especially, is extremely fluid and mobile—physically, socially, and economically. c. To deal with these often bewildering changes, marketers seek new ways to classify societal divisions and new strategies for advertising to them. d. Exhibit 5-6 outlines some of the classifications marketers use to describe society today: for example, Upper Crust, Brite Lites Li‘l City, Young Influentials, and Urban Achievers.

2. Reference Groups: The People We Relate To a. We may even pattern our behavior after members of some groups we affiliate with. This is the significance of reference groups—people we try to emulate or whose approval concerns us. b. Reference groups can be personal (family, friends, coworkers) or impersonal (political parties, religious denominations, professional associations).

3. Opinion Leaders: The People We Trust a. An opinion leader is a person or organization whose beliefs or attitudes are respected by people who share an interest in some specific activity. b. When choosing an opinion leader as a spokesperson for a company or product, advertisers must understand the company‘s target market thoroughly.

C. Cultural and Subcultural Influence 1. Culture refers to the whole set of meanings, beliefs, attitudes, and ways of doing things that are shared by some homogeneous social group and are typically handed down from generation to generation.

2. A subculture is a segment within a culture that shares a set of meanings, values, or activities that differ in certain respects from those of the overall culture.

Nonpersonal Influences on Consumer Behavior The most important nonpersonal influences are time, place, and environment.

A. Time 1. The old saw ―timing is everything‖ certainly applies to marketing.

2. The consumer‘s particular need may be a function of time.

B. Place 1. Once consumers decide to purchase a certain product, they will still hesitate if they don‘t know where to buy it or if it isn‘t available in a convenient or preferred location.

1-110

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VIII.

IX.

2. Marketers carefully weigh consumer demand when planning distribution strategy, and they devote much of their promotional activities to communicating the convenience of location.

C. Environment Many environments—ecological, social, political, technical, economic, household, and point-of-sale location, to mention a few—can affect the purchase decision.

1. The state of technological development affects economic and social conditions— and the prospects for advertisers of certain products and services.

2. Some governments exert far greater control over their citizens and businesses than the U.S. government does.

The Purchase Decision and Postpurchase Evaluation A. Consumers evaluate selection alternatives (called the evoked set).

B. To do this, they establish evaluative criteria, the standards they use to judge the features and benefits of alternative products. Not all brands make it to the evoked set.

C. A key feature of the postpurchase evaluation is cognitive dissonance.

The theory of cognitive dissonance (also called postpurchase dissonance) holds that people strive to justify their behavior by reducing the dissonance, or inconsistency, between their cognition (their perceptions or beliefs) and reality.

Chapter Summary A. Marketing is the process companies use to make a profit by satisfying their customers‘ needs.

B. Advertising is concerned with the promotion aspect of the marketing process.

C. There are three categories of participants in the marketing process: customers, markets, and marketers.

D. Successful advertising people understand the complexity of consumer behavior, which is governed by three personal processes: perception, learning and persuasion, and motivation.

E. Once prospects are motivated to satisfy their needs and wants, the purchase process begins.

F. The result of the postpurchase evaluation will greatly affect the customer‘s attitude toward future purchases.

Answers to Pedagogical Features Ad Lab 5–A: The Context of Choice 1. Type up the first version of the Economist ads that Ariely used above and give it to your friends. Ask them to choose their preferred options. For those friends who select option 3, point out that they were likely influenced by the ―print-only‖ option. Do you think they will agree? Can you explain the decoy effect to them in a way that will help them understand the importance of context?

1-111 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

2. Visit a retail store that sells small appliances such as coffee makers or microwaves. See if you can spot ―decoys‖ on the shelves, that is, models that no one would buy but that might steer shoppers towards pricier models.  My IMC Campaign 5: Understanding what Consumers Look for in a Product The following guides can help you determine where your client‘s brand belongs in the FCB grid: Involvement 1. Is the decision to buy or use the product an important or an unimportant one?

2. Does the consumer stand to lose a great deal or very little if he or she chooses the wrong brand?

3. Does the decision require a great deal of consideration or very little?

Think versus Feel Think 1. The decision is based on objective criteria.

2. The decision is based primarily on factual information.

Feel 1. The decision is based on a feeling.

2. The decision is closely related to the consumer‘s personality.

3. The decision is based on the senses (taste, touch, etc.).

Ethics, Diversity & Inclusion: Diversity in the World of Advertising 1. What values are in conflict between the commission and agencies? Who, in your opinion, has the moral high ground?

Answer Guidelines: Ad Agencies have a generally poor record of diversifying their ranks. From the perspective of the Commission, this lack of commitment to hiring minorities is particularly troubling because the advertising industry creates so many of the cultural messages in society. From the perspective of the agencies, who is hired and what criteria should matter in making such a decision is a responsibility best left in their hands. As private businesses, they have a right to avoid unnecessary intrusion from government. In addition, they and they alone bear the risks that that hiring unwisely might bring.

2. The New York Commission threatened to embarrass agency executives by issuing subpoenas during the industry‘s high profile Advertising Week. Was this an acceptable way to advance the agenda of diversity in your view? Do the ends justify the means, at least in this case?

Answer Guidelines: a.

Yes: The ad industry had shown over decades that it was still out of step with minority hiring. Barring significant pressure from government, there was little likelihood that ad agencies would broaden their hiring criteria to include more minorities. If the agency heads were doing the right thing, they could have appeared before the commission and testified about their efforts.

b.

No: Government is on shaky ground when it forces businesses to hire certain people. By subpoenaing agency heads, the Commission was showing that it was not interested in negotiating a settlement, but rather in forcing its views on the agency business. The just goals of equality and opportunity do not supersede 1-112

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

equally important goals such as personal liberty and freedom. Moreover, there is very little that is truly democratic about an appointed commission in a single U.S. city forcing compliance in a national industry.

Ad Lab 5–B: Applying Consumer Behavior Principles to Ad Making Choose an ad from a popular magazine and explain how the visuals, the words, and the overall design of the ad accomplish the following tasks. Provide specific details to support your answers.

1. Penetrate consumer perceptual screens.

Answer Guidelines: Screens need to be penetrated via a peripheral or central pathway route of persuasion by stimulating:

a. Physiological Screens  sight  hearing  taste  smell  touch b. Psychological Screens  innate factors  personality  instincts  learning 2. Stimulate consumer learning.

Answer Guidelines: a. The interplay of symbols (photos, words, and the logo). Do they create a crossassociation? b. Visual layout. Does it enhance or detract from readability? c. Text. Does it reinforce the big idea?

3. Use the consumer‘s existing beliefs.

Answer Guidelines: Do the words and pictures coincide with your beliefs?

4. Tap consumer wants and needs to affect motivation.

Answer Guidelines: Hierarchy of needs  physiological  safety  social  esteem  self-actualization 1-113 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

 People behind the Ads: Jon Steel: Advertising Legend  Jon Steel has been named ―West Coast Executive of the Year,‖ ―Agency Innovator,‖ one of the ―100 smartest people in the Bay Area,‖ and a member of the Advertising Federation Hall of Achievement for executives under 40.  Steel traces the origins of the planner role to the kind of advertising created by industry legend William Bernbach.  Steel believes that great planners share some obvious characteristics such as intellect,  curiosity, facility with both left- and right-brain thinking, and well-honed written and oral communication skills.

Review Questions 1. What is marketing, and what is the role IMC plays in the marketing process?

Marketing is the business process management uses to plan and execute the conception, pricing, promotion, and distribution of its products. Advertising is just one of the numerous tools used in the promotion, or communication aspect of marketing. But how advertising is done, and where it is run, depends largely on the other aspects of the marketing mix and for whom the advertising is intended to reach.

2. How does product utility relate to IMC? An important element in our definition of marketing is the special relationship between a customer‘s needs and a product‘s need-satisfying potential, known as the product‘s utility. Utility is the product‘s ability to satisfy both functional needs and symbolic (or psychological) wants. Advertising communicates the product‘s functional or psychic utility.

3. Why is the perceived equal-value exchange an important campaign issue?

An exchange is any business transaction where one person sells something of value to another person. For such an exchange to take place, an individual must perceive that the product‘s utility is equal to or greater in value than its cost. Thus, the significance of the perceived equal-value is that without this perception, the likelihood of an exchange is very remote. Advertising is an important contributor to this process because it can increase the perceived value of the advertised product.

4. What‘s the difference between a customer and a market? What are the different types of markets?

Customers are the people or organizations who consume products and services. A market is a group of potential customers who share a common interest, need, or desire, who can use the offered good or service to some advantage, and who can afford or are willing to pay the purchase price. The different types of markets are:

a. Consumer markets, which include people who buy goods and services for their own personal use. b. Business markets, which are composed of organizations that buy natural resources, component products, and services that they either resell (reseller markets) or use in making another product (industrial markets). c. Government markets buy products for the successful coordination of municipal, state, federal, and other governmental activities. d. Regional or National markets include any of the other three markets that are regional or national in scope.

1-114 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

e. Transnational (or global) markets include any of the other three markets that are located in foreign countries.

5. What does the term consumer behavior refer to, and why is it important to marketers?

Consumer behavior is the mental and emotional processes and the physical activities of people who purchase and use goods and services to satisfy particular needs and wants. Advertisers spend a lot of money to keep individuals and groups of individuals (markets) interested in their products. To succeed, they need to understand what makes potential customers behave the way they do.

This is important because a key goal for advertisers is to get enough relevant data to develop an accurate profile of a set of buyers in order to establish a common ground for conducting communications. Creative advertising people are then expected to develop patterns of words and images (symbols) for ads, using the data from consumer behavior studies as a guide.

6. Which consumer behavior process presents the greatest challenge to marketers?

The perception problem is the first and greatest problem advertisers face. Perception—our personalized way of sensing and comprehending the stimuli to which we are exposed—is, in fact, our reality. When exposed to more than 1,500 advertising messages daily, we learn to be selective. This screening process typically works against many advertisers, disallowing their advertising messages to reach our reality. That‘s why some advertisers spend millions of dollars on national advertising, sales promotion, and point-of-purchase displays, only to discover later that consumers have little or no memory of their product or promotion. Of those ads that do reach them, consumers may not be able to fully absorb the entire message without further exposure from other elements of an integrated marketing communications program.

7. What is the difference between the central route and the peripheral route to persuasion?

Which route is used depends on the consumer‘s level of involvement with the product or message. a.

b.

In the central route to persuasion, consumers have a higher level of involvement with the product or message. Therefore, they are motivated to pay more attention to the central, product-related information, such as product attributes and benefits, or demonstrations of positive functional or psychological consequences.

The peripheral route to persuasion is very different. People who are not in the market for a product typically have low involvement with the product message. They have little reason to pay attention to it or to comprehend the central information of the ad. However, these consumers might attend to some peripheral aspects, like pictures in the ad, or actors in the commercial, for their entertainment value. Whatever they think or feel about these peripheral, nonproduct aspects might integrate into a positive attitude toward the ad.

8. What is the significance of negatively originated motives and positively originated motives for IMC planners?

Before creating messages, advertisers must carefully consider the goals that lead to consumer motivations. The purchase of a certain product might represent a negatively originated motive to some, and a positively originated motive to others. This suggests two distinct product markets that advertisers must understand and that may call for completely different advertising strategies.

9. What are some of the environmental influences on consumer behavior in international markets?

As a nonpersonal influence on consumer behavior, the all-encompassing nature of ―environment‖ makes it more difficult to control than those of ―time‖ or ―place.‖ A country‘s technological development affects its economic and social conditions. Some governments exert control over their citizens and businesses, determining which products companies may advertise and sell, which media they may use, or what their ads may say. Religion can similarly govern a region‘s or nation‘s buying habits.

There are strategies that can mitigate the influences stemming from the environment. In countries where people earn little, demand for expensive products is low. So the creative strategy of an automobile advertiser might be 1-115 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

to adapt by targeting the small group of wealthy, upper-class consumers. In a country with a large middle class, the same advertiser would be better off mass-marketing the car and positioning it as a middle-class product.

Note: Consumer behavior includes the activities, actions, and influence of people who purchase and use goods and services to satisfy their personal or household needs and wants.

10. How does the theory of cognitive dissonance relate to IMC? The theory of cognitive dissonance states that people strive to justify their behavior by reducing the degree to which their impressions or beliefs are inconsistent with reality. When a consumer makes a purchase of an expensive diamond necklace, for example, the exchange requires a loss of cash, an obvious component of financial security and happiness. The loss stimulates an emotional reaction characterized by a mild flush of anxiety that‘s followed by a mental review of the entire purchase. The anxiety is reduced when the purchaser reads an advertisement reassuring him that diamonds are a good investment that can ―return a greater cash value‖ at a later time.

Some advertisers have attacked a market leader with attempts to create cognitive dissonance for competitive reasons. Market leaders (and political incumbents), on the other hand, must try to reduce dissonance by placing advertisements positioning themselves or their product as the ―wise choice.‖

The Advertising Experience 1. Cognitive Dissonance Describe an incident of cognitive dissonance that you (or someone you interview) felt after a significant purchase. Discuss the feelings generated by this purchase and what happened to those feelings. For example, perhaps the purchaser felt better over time as the quality and value of the product became evident. Finally, discuss what the company could have done to make the buyer feel better during the period of cognitive dissonance.

2. Consumer Behavior Understanding consumer behavior is essential to the contemporary advertiser. Browse the websites listed below, keeping in mind what you have learned about culture/subculture, social class, reference groups, family/household, and opinion leaders. Identify and describe the major social influences that enable each organization to be successful in reaching its consumers.  Beech-Nut: www.beechnut.com  Ben & Jerry‘s: www.benjerry.com  CNN: www.cnn.com  Motorola: www.motorola.com  Music Television (MTV): www.mtv.com  Oprah: www.oprah.com  PetSmart: www.petsmart.com  Facebook: www.facebook.com  See‘s Candies: www.sees.com  Google: www.google.com  Xbox: www.xbox.com 1-116 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

3. Motivation and Interpersonal Influences Review the websites in Exercise 2 in terms of Maslow‘s hierarchy of needs. Find three instances of appeals to each of the five basic needs. Next, discuss what kind of people might seek to satisfy each of these needs with the particular products. Finally, consider opinion leaders whose testimonies could be added to each site. How could these leaders strengthen the appeal of the site for the consumers who have unsatisfied needs?

4. Write narratives for two hypothetical customers (like Chris and his purchase decision in the section ―The Purchase Decision and Postpurchase Evaluation‖): one deciding between an Apple Watch and a Fitbit and one choosing between Chick-fil-A and McDonald‘s. Use Exhibit 5-1 for guidance.

Answer Guidelines: Student narratives should include interpersonal influences, nonpersonal influences, personal processes, and steps in the decision process. The narratives should also address how advertising affects the consumer decisionmaking processes (by stimulating attention, creating influence, presenting goals, promising product benefits, and reinforcing purchase decisions.)

5. Analyze Apple‘s advertising strategies using theories of learning and the Elaboration Likelihood Model (see Exhibit 5-3). Which routes to persuasion does the company use?

What is your evidence? How does Apple help consumers to learn about its products?

Discussion Guidelines: Students could be asked to share an advertisement for Apple that utilizes elements of one of the theories of learning and an advertisement for Apple that attempts to persuade audiences utilizing either central or peripheral route cues to persuasion. Students could discuss whether the products advertised would be considered highinvolvement or low-involvement products or purchases, what would motivate people to buy the product(s) promoted in the various advertisements, and what elements of the advertisement are indicative of this attempt at persuasion. Students could also discuss how consumer responses to the ad might differ based on if the consumer was in the market for the product advertised versus if they were not.

Connect Activities Title

Assignment Type

Topic

Learning Objective

Perceptual and Psychological Processes Elaboration Likelihood Model (ELM)

Case Analysis

How Consumers Process Marketing Communications How Consumers Process Marketing

05-04

Matching

05-04

AACSB Accreditation Tagging Knowledge Application

Bloom’s Taxonomy

Analytical Thinking

Understan d

Apply

1-117 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Psychological Processes in Consumer Behavior Miller Lite: Purchase and Usage Motives Apple 1984

Case Analysis

Video Case

Video Case

Communications How Consumers Process Marketing Communications The Role of Consumer Behavior Influences on Consumer Behavior

05-04

Knowledge Application

Apply

05-04; 05-05; 05-06; 05-07

Knowledge Application; Analytical Thinking Reflective Thinking; Analytical Thinking

Apply; Analyze

05-01; 05-07

Remember ; Apply; Analyze

Perceptual and Psychological Processes Activity Summary: This activity asks students to consider the psychological screens that marketers must penetrate to reach their target audience. This particular case is for a chewable daily vitamin for children and adults.

Follow-Up Class Discussion: Ask students to name a brand that they do not identify with or do not necessarily like. Ask them to identify the screens that make the product unappealing to them.

Subsequently, have them name one of their favorite brands. Ask them to identify the screens that make the product appealing to them.

Elaboration Likelihood Model (ELM) Activity Summary: This activity asks students to place products, information about an advertisement, information on how much consumers will elaborate on the message, and decisions about what brand attitudes are influenced by into either the peripheral or central routes to persuasion.

Follow-Up Class Discussion: Challenge student groups to brainstorm five products in which advertisements should cater to the peripheral route of persuasion and five products in which advertisements should cater to the central route of persuasion. Have students discuss elements of the advertisements that would differ based on which route advertisers were attempting to appeal to.

1-118 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Psychological Processes in Consumer Behavior Activity Summary: This activity introduces students to a fictitious tablet called Thinline, which is slated to compete with Apple‘s iPad. The exercise asks students questions revolving around consumer‘s decision-making motivators to buy the Thinline tablet.

Follow-Up Class Discussion: Discuss with students about what motivates them to buy a particular tech product (phone, laptop, tablet, etc.). Additionally, students could discuss what screeners are involved in their decision-making process.

Miller Lite: Purchase and Usage Motives Activity Summary: This activity asks students to watch a commercial from the popular beer brand, Miller Lite. Students are then asked to answer questions relating to purchase and usage motivations, as discussed in Chapter 5.

Follow-Up Class Discussion: Discuss the aims of brand loyalty with students. Ask them to identify a brand that they feel they are loyal to. Have them identify which of Rossiter and Percy‘s eight fundamental purchase and usage motivators likely attracts them to this particular brand.

Which need in the hierarchy of needs does this brand fulfill for them?

Apple 1984 Activity Summary: This activity has students view the classic Apple commercial ―1984‖ and then asks them to consider the psychological processes of consumers that Apple was attempting to engage.

Follow-Up Class Discussion: Ask students to discuss how other brands have utilized metaphor to help educate consumers about products. Have students discuss their thoughts on why they believe the ―1984‖ ad was as successful as it was.

CHAPTER SIX MARKET SEGMENTATION AND THE MARKETING MIX: DETERMINANTS OF ADVERTISING STRATEGY

1-119 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

This chapter describes how marketers use behavioral characteristics to cluster prospective customers into market segments. Because no product or service pleases everybody, marketers need to select specific target markets that offer the greatest sales potential. Thus, they can finetune their mix of product-related elements (the four Ps), including IMC, to match the needs or wants of the target market.

Learning Objectives After studying this chapter, your students should be able to: LO6-1 Define market segmentation and describe its purposes.

LO6-2 Explain the target marketing process.

LO6-3 Show how IMC is used with the product element in marketing.

LO6-4 Illustrate how IMC is used with the price element in marketing.

LO6-5 Review how IMC is used with the place element in marketing.

LO6-6 Discuss how IMC is used with the communication element in marketing.

What’s New? We‘ve retained the spectacular ―The man your man could smell like‖ campaign for Old Spice and referenced its lessons more often throughout the chapter. Ad Lab 6–B focuses on a new brand, Amazon, currently the most highly valued company in the world. Exhibit 6-12 shows that differentiation often fails to translate into brand success, at least when the differentiations leave consumers unimpressed.

Demographics discussion in the chapter contains significantly more material on Millennials and Hispanics.

Teaching Tips and Strategies This chapter helps educate students on the benefits of marketing segmentation and the marketing mix in advertising. This chapter helps to answer the question ―who should we target and why?‖ Using the Chapter Opening Vignette in the Classroom Proctor & Gamble, which had seen its Old Spice men‘s body wash lose market share to Unilever‘s Axe, took a risk with an ad campaign that promoted a men‘s grooming product by targeting women. Unilever‘s ―the man your man could smell like‖ campaign became a hit with the public—and helped Old Spice regain market share over Axe. Consider showing students early Old Spice commercials, the new Old Spice commercials, and Axe commercials. Compare and discuss how they use market segmentation.

Other Tips and Strategies

1-120 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Some ads seem to make little sense until you understand the market segment an advertiser is trying to reach. For example, Hardee‘s decision to sell hamburgers by showing Paris Hilton washing a car in a skimpy swimsuit may seem odd. Some students may even find the concept offensive. But Hardee‘s had an audience in mind that was not put off by the ads: young, male, frequent fast-food eaters. The types of messages that will resonate with these consumers is unlikely to be effective with other segments. Consider asking your students to contemplate a completely different market segment for Hardee‘s, such as seniors, young women aged 18–25, or homemakers with children. How would the marketing objectives change? The advertising? The product itself? This exercise can help students better realize the implications of target market selection.

This chapter delves into consumer behavior and how advertisers use it to influence purchasing habits. I suggest using the lecture to convey the importance of perception in advertising.

A new product or service might be phenomenal, but the challenge is to get consumers to understand the new product/service and to help avoid product or service failure. That is where advertising comes in.

When I have discussions with students regarding this, they tend to be very surprised. Many times, students believe that advertising is about coming up with the jingle or the phrase that helps the advertised product stand apart from others. That is a function of advertising, yet only a very small one.

In relating advertising to marketing I also try to make two important points: advertising does not always lead to marketing success and marketing success can occur without the benefit of advertising. Great products for illustrating the first point include: New Coke, the Edsel, Pringles potato chips, the paper dress (courtesy of Scott Paper in the 1960s, Cambridge 100 cigarettes, etc.). To illustrate the second truism, I point to the Snugli, which became a successful product via an article in the Whole Earth Catalog, and illegal narcotics, which, naturally, do not benefit from traditional advertising.

Web Resources for Enhancing Your Lectures Nielsen Zubi Advertising Scion Website

http://www.nielsen.com http://www.zubiad.com http://www.scion.com

Pedagogical Features Ethics, Diversity & Inclusion: The Youngest Target Market

1-121 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Ad Lab 6–A: Market Segmentation: A Dog of a Job Ad Lab 6–B: Understanding the Product Element: Amazon  My IMC Campaign 6: Segmenting the Audience

Ad Lab 6–C: Starbucks and the Place Element Ad Lab 6–D: China Airlines and the Promotion Element  People behind the Ads: Tere and Joe Zubi, Zubi Advertising

Lecture Outline I.

II.

Vignette: Old Spice and Axe Old Spice first became a consumer staple as a men‘s after-shave lotion. As a younger product, Axe had credibility in positioning itself as a sexy alternative. While Old Spice ads over the years have tended to be safe and conventional, Axe has used provocative spots suggesting the simple application of Axe makes men irresistible to beautiful women.

Market Segmentation The process of market segmentation involves two steps: identifying groups of people (or organizations) with certain shared needs and aggregating (combining) these groups into larger market segments according to their interest in the brand‘s utility. In this chapter, we look first at how marketers identify and categorize consumer markets and second at the techniques they use to segment business markets. Then we discuss various IMC strategies companies use to match their products with markets and create profitable exchanges.

A. Segmenting the Consumer Market The concept of shared characteristics is critical to market segmentation. Marketers group these shared characteristics into categories (behavioristic, demographic, and psychographic) to identify and segment consumer markets (see Exhibit 6-1). Most marketers have two goals: first, to identify people who are likely to be interested in a brand‘s benefits; and second, to develop a mix of effective messages that can help these consumers understand the benefits.

1. Behavioristic Segmentation A straightforward way to segment markets is to group consumers by buying behavior. This is called behavioristic segmentation. Behavioral segments are determined by many variables, but the most important are user status, usage rate, purchase occasion, and benefits sought.

1-122

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

a. User-Status Variables Many markets can be segmented by the user status of prospective customers.

Researchers Stephan and Tannenholz have identified six categories of consumers based on user status.

1) Sole users choose one brand exclusively.

2) Semi-sole users typically use brand A, but have an alternate selection if it is not available or if the alternate is promoted with a discount.

3) Discount users are the semi-sole users of competing brand B. They don‘t buy brand A at full price but will consider buying it at a discount.

4) Aware non-triers use competitive products in the category but haven‘t taken a liking to Brand A. 5) Trial/rejectors responded to Brand A‘s IMC messages but didn‘t like the product.

6) Repertoire users perceive two or more brands to have superior attributes and will buy at full price. b. Usage-Rate Variables 1) In volume segmentation, marketers measure people‘s usage rates to define consumers as light, medium, or heavy users of products (see Exhibit 6-2).

2) One well-known rule of thumb suggests that 20 percent of all users consume 80 percent of the product. Marketers want to define that 20 percent and aim their advertising at them. c. Purchase-Occasion Variables 1) Buyers can also be distinguished by when they buy or use a product or service—the purchase occasion.

2) A marketer who discovers common purchase occasions for a group has a potential target segment and can better determine when to run specials and how to promote certain product categories. d. Benefits-Sought Variable 1) Marketers frequently segment according to the benefits being sought.

Consumers seek various benefits in the products they buy—high quality, low price, status, sex appeal, good taste, health consciousness.

2) Benefit segmentation is the prime objective of many consumer attitude studies and the basis for many successful ad campaigns.

2. Geographic Segmentation One simple way to define markets is by using geographic segmentation.

When marketers analyze geographic data, they study sales by region, county size, city size, zip code, and types of stores (see Exhibit 6-3).

3. Demographic Segmentation

1-123 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

a. Demographic segmentation is a way to define population groups by their statistical characteristics: sex, age, ethnicity, education, occupation, income, and other quantifiable factors. b. Demographics are often combined with geographic segmentation to select target markets for advertising. This is called geodemographic segmentation. c. As Exhibit 6-4 reveals, the numbers of Americans with Hispanic ancestry are expected to grow at a rate much faster than that of the overall population well into this century. The rate of advertising spending on Hispanic media reflects these demographic changes. d. As people mature and their incomes change, and so do their interests in various product categories (see Exhibit 6-5). e. Geographic and demographic data provide information about markets but little about the psychology of individuals. Rarely can demographic criteria alone predict purchase behavior. That‘s why marketers use psychographics.

B. Psychographic Segmentation With psychographics, marketers group people by their values, attitudes, personality, and lifestyle.

Perhaps the best-known psychographic classification system is VALS, a product of SRI Consulting Business Intelligence (SRIC-BI). VALS assigns consumers to one of eight groups based on two dimensions: primary motivation and resources.

According to SRIC-BI, individuals are primarily motivated by one of three things: ideals (or basic principles), achievement (tangible markers of success or accomplishment), or self-expression (a desire for experiences or to take risks).

An interesting aspect of Roper‘s research was the discovery of the top 10 values shared by people around the world (see Exhibit 6-7).

Another psychographic segmentation scheme is MindBase (see Exhibit 6-8).

Malcolm Gladwell, in his book, The Tipping Point, argues that certain types of people are involved in creating what he calls social epidemics, typified by the almost overnight increase in the popularity of a product, fashion, or idea. Gladwell proposes that epidemics most often follow the actions of three types of people: Connectors, Mavens, and Salesmen.

The influence of his analysis is already incorporated in several segmentation tools, including BehaviorGraphics.

1. Limitations of Consumer Segmentation Methods a. Advocates psychographic systems claim they help address the factors that motivate consumers. b. However, because the markets for many products comprise such a broad cross section of consumers, psychographics may in fact offer little real value— especially since it oversimplifies consumer personalities.

1-124 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

c. VALS is also criticized for being complicated and lacking the proper theoretical underpinnings.

C. Segmenting Business and Government Markets: Understanding Organizational Buying Behavior Business (or industrial) markets include manufacturers, government agencies, wholesalers, retailers, banks, and institutions that buy goods and services to help them operate. These products may include raw materials, electronic components, mechanical parts, office equipment, vehicles, or services used in conducting business.

Many business marketers sell to resellers, such as retail businesses that resell to consumer.

Identifying target markets of prospective business customers is just as challenging as identifying consumer markets. Many of the criteria used to identify consumer markets can also be used for business markets—for example, geography and behavior (purchase occasion, benefits sought, user status, and usage rate).

1. Business Purchasing Procedure a. When businesspeople evaluate new products, they use a process far more complex than the consumer purchase process described in Chapter 5. b. Large firms have purchasing departments that act as professional buyers. c. Purchase decisions often depend on factors besides price or quality, among them product demonstrations, delivery time, terms of sale, and dependability of supply. d. Before choosing a target market, business marketers should consider how the purchase decision process works in various segments.

2. Industrial Classification System a. Industrial customers need different products, depending on their business. b. The U.S. Census Bureau classifies all U.S. businesses—collects and publishes industry statistics on them—using the North American Industry Classification System (NAICS) codes. c. NAICS organizes all the industries into 20 broad sectors such as mining, manufacturing, wholesale trade, and information. d. These are then subdivided into four hierarchical levels of classification, including subsectors, industry groups, industries, and finally distinct U.S. industries. (See Exhibit 6-9 for a breakdown of NAICS codes in the information and wireless telecommunications industry.)

3. Market Concentration a. In the United States, for example, the industrial market is heavily concentrated in the Midwest, the South, and California. Market concentration reduces the number of geographic targets for an advertiser. b. Business marketers deal with fewer buyers than consumer marketers.

D. Aggregating Market Segments 1-125 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

III.

After marketers identify broad product-based markets with shared characteristics (behavioristic, geographic, demographic, or psychographic), they can proceed to the second segmentation step. This involves (1) selecting groups that have a mutual interest in the product‘s utility and (2) reorganizing and aggregating (combining) them into larger market segments based on their potential for sales and profit.

First, management needs to know the market potential for jeans and casual pants in various market areas; that is, it needs to discover the primary demand trend of the total U.S. market for pants. To do this it uses a variety of marketing research techniques (discussed in Chapter 7).

It then measures and analyzes household groups in each major retail area by demographic, lifestyle, and purchasing characteristics; sorts them into 66 geodemographic segments; and refers to them with terms such as those in Exhibit 63: Upper Crust, Movers & Shakers, Bedrock America, Pools & Patios, and the like.

1. Selecting Groups Interested in Product Utility.

Part of the challenge of market segmentation is estimating the profits the company might realize if it (1) aims at the whole market or (2) caters only to specific market segments.

2. Combining Groups to Build Target Market Segments.

The company needs to find groups that are relatively homogeneous (similar) and offer good potential for profit.

The Target Marketing Process Once the market segmentation process is complete, a company can proceed to the target marketing process.

A. Target Market Selection The first step in target marketing is to assess which of the newly created segments offers the greatest profit potential and which can be most successfully penetrated. The company designates one or more segments as a target market—that group of segments the company wishes to appeal to, design products for, and aim its marketing activities toward.

B. The Marketing Mix: A Strategy for Matching Products to Markets 1. Once a company defines its target market, it knows exactly where to focus its attention and resources.

2. As we discussed in Chapter 5, a product offers a number of utilities, perceived by the consumer as a bundle of values. With this in mind, marketers and advertisers generally try to shape their basic product into a total product concept: the consumer‘s perception of a product as a bundle of utilitarian and symbolic values that satisfy functional, social, psychological, and other wants and needs.

1-126 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

IV.

3. Companies have many strategic options they can employ to enhance the product/service concept and effect marketing exchanges (make sales). Marketers categorize these options under four headings: (1) product, (2) price, (3) distribution, and (4) communication.

4. The way the marketer mixes and blends these different elements creates the company‘s marketing strategy—often called the marketing mix.

5. For convenience, marketing educator E. Jerome McCarthy developed a mnemonic device to help recall these four functions: product, price, place, and promotion— or the four Ps (4Ps).

6. The 4Ps are a simple way to remember the basic elements of the marketing mix.

But within each element, a company can employ numerous marketing activities to fine-tune its product concept and improve sales.

IMC and the Product Element In developing a marketing mix, marketers generally start with the product element.

A. Product Life Cycles 1. Marketers theorize that just as humans pass through stages in life from infancy to death (products and product categories) also pass through a product life cycle (see Exhibit 6-10). A product‘s position in life influences the kind of advertising used. The product life cycle has four major stages: introduction, growth, maturity, and decline.

2. By using market segmentation, though, the company may try to identify those prospects who are known as early adopters—willing to try new things—and begin promoting the new category directly to them.

3. The idea is to stimulate primary demand—consumer demand for the whole product cat e gory, not just the company‘s own brand.

4. During the introductory (pioneering) phase of any new product category, the company incurs considerable costs for educating customers, building widespread dealer distribution, and encouraging demand.

5. When mobile telephones were introduced in the late 1980s, advertisers had to first create enough consumer demand to pull the product through the channels of distribution (called a pull strategy).

6. Sales promotion efforts aimed at the retail trade (called a push strategy) encouraged distributors and dealers to stock, display, and advertise the new products (see Chapter 10).

7. When sales volume begins to rise rapidly, the product enters the growth stage.

This period is characterized by rapid market expansion as more and more customers, stimulated by mass advertising and word of mouth, make their first, second, and third purchases.

1-127 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

8. In the maturity stage, the marketplace becomes saturated with competing products and the number of new customers dwindles, so industry sales reach a plateau.

9. Companies increase their promotional efforts but emphasize selective demand to impress customers with the subtle advantages of their particular brand.

10. If they‘re not revitalized, products will finally enter the decline stage because of obsolescence, new technology, or changing consumer tastes.

B. Product Classifications 1. The way a company classifies its product is important in defining both the product concept and the marketing mix. As Exhibit 6-11 shows, there are many ways to classify tangible goods: by markets, by the purchasing habits of buyers, by the consumption rate or degree of tangibility, or by physical attributes.

2. A service is a bundle of intangible benefits that satisfy some need or want, are temporary in nature, and usually derive from completion of a task. Thus we have task utility.

3. The railroad relies on the use of specialized equipment—vehicles able to pull huge loads over a unique track. This makes it an equipment-based service.

4. In contrast, an ad agency, like a law firm or a bank, is a people-based service; it relies on the creative talents and marketing skills of individuals.

C. Product Positioning Once an advertising person understands a product‘s stage in the life cycle, how it‘s classified, and how it‘s currently perceived by the marketplace, the first strategic decision can be made: how to position the product. The basic goal of a positioning strategy is to own a word that ranks the product in the prospect‘s mind.

D. Product Differentiation 1. Product differentiation involves explaining how a brand offers something unique and desirable to a market segment.

2. So it‘s not surprising that most ―new‖ products fail to impress consumers (see Exhibit 6-12).

3. Differences between products may be perceptible, imperceptible (hidden), or induced. a. Perceptible differences are readily apparent to the consumer. b. Hidden differences are not so readily apparent. c. For many product classes, such as aspirin, salt, gasoline, packaged foods, liquor, and financial services, advertising can create induced differences.

1-128 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

E. Product Branding The fundamental differentiating device for all products is the brand—that combination of name, words, symbols, or design that identifies the product and its source and distinguishes it from competing products.

A company might use a family brand and market different products under the same umbrella name.

Because it is so expensive for manufacturers to market national brands (also called manufacturer‘s brands), some companies use a private-labeling strategy. Private labels, typically sold at lower prices in large retail chain stores, include such familiar names as Kenmore, Craftsman, Cragmont, Kroger, and Party Pride.

Imagine the value of owning a brand name such as Coca-Cola, Nike, Porsche, or Levi‘s (see Exhibit 6-13). Some companies pay a substantial fee for the right to use another company‘s brand name. Thus, we have licensed brands such as Sunkist vitamins, Coca-Cola clothing, Porsche sunglasses, and Mickey Mouse watches.

1. The Role of Branding a. Brands are built on differences in images, meanings, and associations. b. The goal is brand loyalty—because it serves both the consumer and the marketer. c. For the marketer, it builds brand equity, the totality of what consumers, distributors, dealers—even competitors—feel and think about the brand over an extended period of time. In short, it‘s the value of the brand‘s capital.

F. Product Packaging The product‘s package is a component of the product element and is also an exhibitive medium that plays a vital role in retail shelf competition. The four considerations in package design are identification; containment, protection, and convenience; consumer appeal; and economy. These functions may even become copy points— copywriting themes—in the product‘s advertising.

1. Identification a. Packages should offer high visibility and legibility to penetrate shoppers‘ physiological screens. b. To penetrate consumers‘ psychological screens, the package design must reflect the tone, image, and personality of the product concept.

2. Containment, Protection, and Convenience a. Retailers want packages that are easy to stack and display; they also want a full range of sizes to fit their customers‘ needs. b. Consumers want packages that are easy to carry, open, and store, so these are important design considerations.

3. Consumer Appeal a. Consumer appeal in packaging is the result of many factors: size, color, material, and shape.

1-129 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

V.

VI.

b. In this age of environmental awareness, green marketing is an important issue for companies and consumers alike.

4. Economy Investments in identification, protection, convenience, and consumer appeal add to basic production costs, but this increase may be more than offset by increased customer appeal. These benefits may make a considerable difference to the consumer and affect both the product concept and IMC messages.

IMC and the Price Element The price element of the marketing mix influences consumer perceptions of the brand dramatically.

A. Key Factors Influencing Price 1. Market Demand a. If the supply of a product is stable but the desire (demand) for it increases, the price tends to rise. If demand drops below available supply, the price tends to fall. This may affect IMC messages in a major way (see Exhibit 6-14). b. As product experience and information spread, the risks associated with new products diminish, which increases consumers‘ willingness to purchase at a higher price.

2. Production and Distribution Costs The price of goods depends to some extent on the costs of production and distribution.

3. Competition In many product categories, consumers are less concerned with a product‘s actual price than with its perceived price relative to competitors.

4. Corporate Objectives and Strategies a. A company‘s objectives also influence price. b. Price also depends on the company‘s marketing strategy, and image advertising may be used to justify a higher price. c. As products enter the maturity stages of their life cycles, corporate objectives tend to aim at increasing, or at least maintaining, market share.

5. Variable Influences Economic conditions, consumer income and tastes, government regulations, marketing costs, and other factors also influence prices and thus advertising.

Marketing management must consider all these to determine an appropriate pricing strategy and then create advertising that justifies the product‘s price.

IMC and the Distribution (Place) Element Before the first ad can be created, the distribution element, or place, must be decided.

Companies use two basic methods of distribution: direct or indirect.

1-130 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

A. Direct Distribution 1. When companies sell directly to end users or consumers, they use direct distribution.

2. An interesting method of direct distribution is network marketing (also called multilevel marketing), in which individuals act as independent distributors for a manufacturer or private-label marketer.

3. These companies brag about the fact that they do no media advertising.

B. Indirect Distribution Most companies market their products through a distribution channel that includes a network of resellers. A reseller (or middleman) is a business firm that operates between the producer and the consumer or industrial purchaser. A distribution channel includes all the firms and individuals that take title, or assist in taking title, to the product as it moves from the producer to the consumer.

Many industrial companies market their products through reps or distributors to original equipment manufacturers (OEMs).

Consumer goods manufacturers traditionally use one of three distribution strategies: intensive, selective, or exclusive.

1. Intensive Distribution a. Soft drinks, candy, Timex watches, and other convenience goods are available at every possible location because of intensive distribution. b. Ads in trade magazines push the product into the retail ―pipeline,‖ and in mass media they stimulate consumers to pull the products through the pipeline.

2. Selective Distribution a. By limiting the number of outlets through selective distribution, manufacturers can cut their distribution and promotion costs. b. The manufacturer may share part of the retailer‘s advertising costs through a cooperative (co-op) advertising program, as we discussed in Chapter 4.

3. Exclusive Distribution Under an exclusive distribution agreement, selected wholesalers or retailers are granted exclusive rights to distribute a particular product.

D. Vertical Marketing Systems: The Growth of Franchising 1. To be efficient, members of a distribution channel need to cooperate closely. This need gave rise to the development of vertical marketing system (VMS), a centrally programmed and managed distribution system that serves a group of stores or other businesses.

2. There are many types of vertical marketing systems. For the last quarter century, the greatest growth has been in franchising—such as Chick-fil-A or Mailboxes, Etc.—in which retail dealers (or franchisees) pay a fee to operate under the guidelines and direction of the parent company or manufacturer (the franchisor).

1-131 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VII.

IMC and the Communication (Promotion) Element The communication element includes all marketing-related communications between the seller and the buyer. A variety of marketing communications tools comprise the communications mix. These tools can be grouped into personal and nonpersonal communication activities.

Personal communication includes all person-to-person contact with customers.

Nonpersonal communication activities—which use some medium as an intermediary for communicating—include advertising, direct marketing, certain public relations activities, collateral materials, and sales promotion. Today, successful marketing managers blend all these elements into an integrated marketing communications program.

A. Personal Selling Personal selling is very important in business-to-business marketing. It establishes a face-to-face situation in which the marketer can learn firsthand about customer wants and needs, and customers find it harder to say no.

B. Advertising 1. Advertising is sometimes called mass or nonpersonal selling. Its usual purpose is to inform, persuade, and remind customers about particular products and services.

2. The following factors are particularly important for advertising success: a. High primary demand trend. b. Chance for significant product differentiation. c. Hidden qualities highly important to consumers. d. Opportunity to use strong emotional appeals. e. Substantial budgets to support advertising.

C. Direct Marketing 1. Direct marketing is like taking the store to the customer.

2. Many companies such as Levi Strauss use telemarketing (a direct marketing technique) to increase productivity through person-to-person phone contact.

D. Public Relations Many firms supplement (or replace) their advertising with various public relations activities such as publicity (news releases, feature stories) and special events (open houses, factory tours, VIP parties, grand openings) to inform various audiences about the company and its products and to build corporate trustworthiness and image.

E. Collateral Materials Collateral materials are the many accessory items companies produce to integrate and supplement their advertising or PR activities. These include booklets, catalogs, brochures, films, sales kits, promotional products, and annual reports.

F. Sales Promotion 1. Some promotions are linked mainly to the communications function of the marketing mix (displays, events, trade shows), while others are linked more to the 1-132

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

IX.

product element (free samples, premiums) or the price element (coupons, volume discounts, end-of-month sales).

2. And some complement the distribution element (trade deals, sales contests). Sales promotion (often referred to simply as promotion) is used primarily as a tactical adaptation to some external situation such as competitive pressure, changing seasons, declining sales, or new product introductions.

Chapter Summary A. Market segmentation is the process of identifying groups of people with certain shared characteristics within a broad product market and aggregating these groups into larger market segments according to their mutual interest in the product‘s utility.

B. Business markets are often segmented in the same way as consumer markets.

C. In the target marketing process, companies designate specific segments to target and develop their mix of marketing activities.

D. Every company can add, subtract, or modify four major elements in its marketing program to achieve a desired marketing mix.

E. The product element includes the way the product is designed and classified, positioned, branded, and packaged.

F. To satisfy the variety of consumer tastes and achieve competitive advantages, marketers build differences into their products.

G. Price refers to what and how a customer pays for a product.

H. Distribution refers to how the product is placed at the disposal of the customer: where the product is distributed, how it is bought, and how it is sold.

I. Communications refers to all marketing-related communications between the seller and the buyer.

Answers to Pedagogical Features Ethics, Diversity & Inclusion: The Youngest Target Market 1. Is it ever ethically justified to market to a child under 3? Why or why not?

2. Do you agree with Susan Linn that parents are not able to determine how best to respond to marketing efforts for their children?

3. From an ethical perspective, who are the stakeholders in this situation, and what values or conception of what is right are important to consider? Are the concerns about very young children more important than those of others?

Ad Lab 6–A: Market Segmentation: A Dog of a Job 1. Come up with a market segment that you think would be fun to work with. What five products could you market?

Answer Guidelines: The goal is to have a little fun with market segmentation. To get ideas, suggest that students visit a store with a large magazine rack. As magazines are highly specialized, they offer a myriad of stories and ads clearly aimed 1-133 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

at individual market segments (e.g., magazines for motorcyclists, muscle builders, home repair, etc.). A magazine aimed at job hunters and small business owners (such as Inc.) targets a market that comprises many segments (all types of home businesses, franchise opportunities, etc.).

2. Come up with your own trends for dogs (or cats if you prefer). Suggest five new business ideas that can capitalize on people‘s love for their animal companions.

Ad Lab 6–B: Understanding the Product Element: Amazon Amazon has become one of the world‘s most successful companies by changing the way people think about the company‘s product. Name another company that has done this successfully. How did it do so? Try to think of a company that has not been successful at evolving its product. What factors hindered its success?  My IMC Campaign 6: Segmenting the Audience

1. What is the target market for your product? The answer to this question is rarely simple; thus your choices again will require the application of strategic thinking. To make the decision you will need to gather as much information from your client and from secondary sources as you can, focusing on the product‘s market, users, and the competition.

2. To evaluate opportunities in a market, you will need to segment.

1-134 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Defining the Target Market Your Client’s Customers

The Competition’s Customers Nonusers

Nonusers

Demographics Age Gender Ethnicity/race Location/region Social class Income Education Behaviors Product usage (light, medium, heavy) Brand loyalty (loyal, switchers) Psychographics Principle-oriented Status-oriented Action-oriented Benefits Sought Low price Quality Ad Lab 6–C: Starbucks and the Place Element Take the product that you used in Ad Lab 6–B and compare the distribution principles used by Starbucks with your product. In addition, think about the factors that should be considered when placing your product or service in other venues. How does it compare with Starbucks?

Ad Lab 6–D: China Airlines and the Promotion Element When constructing the marketing mix for your chosen product or service (refer to Ad Labs 6–B and 6–C), consider these last two elements: price and promotion. What should your product‘s price be and why? How do most brands in your product's category advertise? How can you break the mold with your promotions, the way China Airlines did?

1-135 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

 People behind the Ads: Tere and Joe Zubi, Zubi Advertising





Coral Gables, near Miami, is home to one of the largest independent Hispanic agencies in America, Zubi Advertising. Zubi is short for Zubizarreta, and the agency was founded by Tere Zubi, after she and her husband fled Cuba for a better life in the United States.

A commitment to learning is still a part of Zubi Advertising today.

Review Questions 1. How does the concept of shared characteristics relate to the market segmentation process?

Market segmentation is a two-step strategy of identifying groups of people (or organizations) with certain shared needs and characteristics within the broad markets for consumer or business products, and aggregating (combining) these groups into larger market segments according to their mutual interest in the product‘s utility.

The concept of shared characteristics is critical to market segmentation. Marketers can locate and define groups of consumers with similar needs and wants, create messages for them, and know how and where to send their messages.

2. How could you use VALS to develop the marketing strategy for a product of your choice?

The VALS system breaks consumers into eight groups based on their resources and self-orientation. Each group exhibits distinctive behavior, decision-making patterns, and product/media usage traits. After choosing a product, the students could use the VALS classification system on p. 179 to develop their marketing strategy.

3. How does the segmentation of business markets differ from that of consumer markets?

Business (or industrial) markets may be segmented by the industries to which they belong (SIC codes), by their purchasing system, or by geographic concentration.

4. What is the most important factor to consider when determining the elements of the marketing mix?

Determining the product, price, place, and promotion elements comes after determining who populates the target market.

5. What is the difference between a product and a product concept?

A product generally offers a number of utilities perceived by the consumer as a bundle of values. With these elements in mind, marketers and advertisers generally try to order them into a total product concept that helps guide the marketing and communications of the product to consumers. This product concept is presented to consumers who then form their own perception of the product as a bundle of utilitarian and symbolic values that satisfy functional, social, psychological, economic, and other wants and needs.

6. What are some examples of product positioning not discussed in this chapter?

Some possibilities are: 7-Up positioned as the Uncola; Hardee‘s Thickburger positioned against ―wimpy kids‘ burgers‖; Pork positioned as ―the other white meat‖; and Coke maintains a number-one position as ―The Real Thing.‖

7. What effect does the product life cycle have on the advertising a company uses?

Advertising for a product depends to a great extent on where the product is in the life cycle. a.

Introductory stage—the product concept may be very new to consumers; thus, advertising may concentrate more on stimulating primary demand for the whole product class.

b.

Growth stage—rapid expansion in demand and growth of the market with a growth in the competition; advertising emphasis will shift from emphasizing primary demand to influencing selective demand for individual brands in order to take over the number one position.

c.

Maturity stage—the market is saturated with competitors; selective demand advertising is used to maintain a profitable market position.

1-136 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

d.

Decline stage—the majority of consumers needing the product now own all they need or are turning to a newer technology to provide the same utility more efficiently. Advertising may be increased to improve market position as competitors start to fall out of the market, but, eventually, all advertising will be discontinued, as consumers no longer seek the product.

8. What factors influence the price of a product?

Numerous factors exert an influence on pricing: market demand, production and distribution costs, competition, corporate objectives and strategies, economic conditions, government regulations, and others.

9. How do the basic methods of distribution affect advertising?

Two fundamental methods of distributing products to the market: a.

Direct distribution—The company sells directly to the customer without using middlemen. This requires a direct communication link between the manufacturer and the consumer; hence, the use of direct mail advertising and direct response marketing strategies.

b.

Indirect distribution—The company sells through a channel of middlemen (wholesalers who, in turn, sell to retailers who sell the product to consumers). The marketing communications burden is shared by all members in the channel.

10. What product characteristics encourage heavy advertising? Little advertising? Why? Recognizing that a product concept is a bundle of values, the product characteristics encouraging heavy advertising are: 

High primary demand trend



Significant product differentiation from competitors



Hidden qualities highly important to customers



Opportunity to use strong emotional appeals



Substantial budget available to support advertising

Products that lack these characteristics might not warrant heavy advertising.

The Advertising Experience 1. Product Life Cycles Many well-established American brands may seem to be in the decline stage of their product cycle, but they continue to be sold. Choose one of these and describe a plan for revitalizing the product, especially in terms of the 4Ps. Answer Guidelines: Students‘ answers will vary but should reference Product, Price, Place, and Promotion.

2. World of Marketing Part I: Marketing. You have already learned the importance of marketing to the study and application of advertising. Visit the sites below to get a better feel of the scope of the marketing world and the importance of a good marketing strategy. Be sure to answer the questions below for each site:  American Marketing Association (AMA): www.ama.org  Business Marketing Association (BMA): www.marketing.org 1-137 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

 B to B: www.btobonline.com  AdWeek Brand Marketing: www.adweek.com/brand-marketing/  Sale & Marketing Management: www.salesandmarketing.com a. What group sponsors the site? Who is the intended audience? b. What is the site‘s purpose? Does it succeed? Why? c. What is the size and scope of the organization? What is the organization‘s purpose? d. Who makes up the organization‘s membership? Its constituency?

Sample Answer: American Marketing Association (AMA) a. The American Marketing Association (AMA); Managers, Researchers, Educators, Students, Employers, Advertisers, Special Interest Groups, Global Electronic Members, and @ama Site Subscribers b. The site‘s purpose is to provide key information about the AMA—its publications, resources, conferences, chapters, classifieds, and membership information. Yes, because the site is meant to be a warehouse of information about the AMA. c. The organization is quite large (45,000) and is worldwide; the organization‘s purpose is to promote education; to assist in personal and professional career development among marketing professionals; and to advance the science and ethical practice of marketing disciplines. d. Marketing professionals in both business and education; all levels of marketing practitioners, educators and students.

Part II: Marketing Mix. Visit the Mountain Dew‘s site (www.mountaindew.com) and answer the following questions about one of its products: a. Identify the product, price, place, and promotion (if there are multiple products, choose one.) b. Identify the stage in the product life cycle. c. What is the product‘s positioning? d. What are the key elements of the product‘s differentiation?

Sample Answer: Mountain Dew LiveWire a.

Product: The product is an orange variation of the popular Mountain Dew drink. A major perceptible difference of this product from a traditional Mountain Dew is its easily recognizable bright orange coloring.

The packaging for this product is extremely vibrant, youthful, and appealing yet still maintains some of the same elements as the original flavor of Mountain Dew (i.e. a colorful bottle cap, the iconic Mountain Dew logo, and bright colors).

Price: The price of a 12-pack of Mountain Dew LiveWire appears to be in line with similar flavor variations from competitors—$4.99—at popular retailer Target. Six packs of the drink (in 20 oz. bottle) are available at Dollar General in a promotion for 3 for $8 (about $2.70 per six pack, or about 45 cents per 20 oz. bottle).

Place: The Mountain Dew website features a product locator tool that shows the location of specific products in stores near you. While consumers typically purchase Mountain Dew through indirect distribution channels (i.e. purchasing it from Target or Walmart), a direct distribution option allows consumers to buy directly from the Mountain Dew website. Mountain Dew practices intensive distribution

1-138 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

as the product, including this LiveWire variant, is available nearly anywhere (grocery stores, gas stations, pharmacies, etc.).

Promotion: Mountain Dew has utilized advertising to promote LiveWire including television commercials and print advertisements. The Mountain Dew brand has an active social media presence where they also promote their various products. They also utilize sales promotion tactics such as sales (buy 3 for $8) and promote the product as being available ―for a limited time‖ and limit the distribution of the product. b.

Product life cycle: The LiveWire flavor was introduced in 2003 as a limited-edition product and was put on store shelves permanently after its great success from 2003 to 2005. Today, the product appears to be in the Maturity phase of the product life cycle and perhaps slipping into decline. With more competitors entering the market coupled with consumer preferences for healthier beverage alternatives, it appears to be a brand and product that is fighting for market share. Mountain Dew LiveWire may even be lost in the mix of other Mountain Dew products available as the brand boasts over 5 flavors of Mountain Dew.

c.

Positioning: Mountain Dew could position LiveWire as the ―orange soda energy drink‖, something that no other competitor offers.

d.

Product differentiation: Mountain Dew should work to differentiate LiveWire as a beverage with a unique orange flavor unlike any other orange flavored soda and with more caffeine than any other drink like it.

Additionally, the brand could highlight the nostalgic flavor and element of the LiveWire variant as it is now more of a ―classic‖ in the Mountain Dew mix of flavor varieties.

3. Marketing Segmentation and Target Marketing Segmenting markets and generating sound demographic, geographic, psychographic, and behavioristic profiles are critical to formulating advertising strategy. An abundance of market segmentation data are available on the Internet from both the government and private sector.

Peruse the following sample of online resources for target market information.  Claritas: www.claritas.com  Forrester Research: www.forrester.com  Target Marketing: www.targetonline.com  U.S. Census Bureau American FactFinder: http://factfinder.census.gov Now choose a company with a website and use these online resources to answer the following questions. Be sure to cite any online resources you used in addition to the above. a. What type of segmentation approach did they take (single-market, multiple-market, aggregate market)? b. Develop a demographic profile, including age, income, education, and gender for the target market. c. Describe the general geographic skew for the company‘s market. d. What consumption patterns are evident in the company‘s consumers?

4. The Old Spice campaign revitalized a brand whose image may have grown stale in the minds of consumers. Identify another brand whose image, in your opinion, needs revamping.

Explain why the image is dated. Propose a new brand identity and suggest a way that an advertisement might help the brand acquire that identity.

1-139 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

5. Another important way that the Old Spice campaign succeeded was it identified an unusual target audience. The ads were directed at consumers who buy the product (women) rather than those who use it (men). Identify another brand whose buyers are different from its users. Which group does the brand target in its advertising and why?

Connect Activities Title

Assignment Type

Topic

Learning Objective

AACSB Accreditation Tagging Analytical Thinking

Bloom’s Taxonomy

Segmentatio n Categories

Matching

06-01

Toyota Prius Market Segmentatio n Strategy

Case Analysis

Product Life Cycle

Worksheet

The Role of Target Marketing, Market Segmentation, and Positioning in an Integrated Marketing Communications Program The Role of Target Marketing, Market Segmentation, and Positioning in an Integrated Marketing Communications Program The Role of Target Marketing, Market Segmentation, and Positioning in an Integrated Marketing

06-01; 06-03

Analytical Thinking; Knowledge Application

Analyze; Apply; Remember

06-03

Analytical Thinking

Analyze

Analyze

1-140 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Old Spice

Video Case

Communications Program The Role of 06-01; 06-06 Target Marketing, Market Segmentation, and Positioning in an Integrated Marketing Communications Program

Reflective Thinking; Analytical Thinking

Remember ; Analyze

Segmentation Categories Activity Summary: This activity provides students with a consumer characteristic, such as ―Consumers who live in New England,‖ and then asks students to identify the segmentation category for this description as well as the category type (i.e. region, purchase occasion, occupation, etc.).

Follow-Up Class Discussion: Have students take the VALS segmentation quiz in-class. Discuss their results as a group and have them discuss how advertisers can use this information to better reach consumers.

Toyota Prius Market Segmentation Strategy Activity Summary: This activity describes Toyota Prius‘ introduction of a new all-wheel drive (AWD) model that is targeted toward 18- to 25-year-olds, specifically digitally connected Hispanics and East Asians. The activity asks students to identify important considerations in the market segmentation process.

Follow-Up Class Discussion: Ask students who might be in the market for a new car within the next three years to come to the front of the room. Then ask students who might be interested in an environmentally friendly car to stay at the front of the room. Ask students who would be interested in an all-wheel drive vehicle that is also eco-friendly to remain at the front of the room. Finally, ask any remaining students if they would be interested in purchasing a Toyota Prius to remain at the front of the room. This might signify a member or members of the Toyota Prius target market.

1-141 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Product Life Cycle Activity Summary: This activity provides students with a product characteristic such as ―Sony makes a 3-D TV that allows consumers to watch TV in a new way. There are a few models out,‖ and asks students to identify the product‘s stage in the product life cycle and the promotional strategies that a brand in that stage might be employing.

Follow-Up Class Discussion: Ask student groups to brainstorm four brands that they believe fit into each stage of the product life cycle. Ask them to discuss why they would categorize them into these stages.

Old Spice Activity Summary: This activity asks students to watch the popular ―The Man Your Man Could Smell Like‖ commercial from Old Spice and consider the segmentation strategy utilized by the brand.

Follow-Up Class Discussion: Ask students to brainstorm other brands where the purchaser and the user are not the same. How does their advertising reflect that the purchaser is different from the user?

CHAPTER SEVEN RESEARCH: GATHERING INFORMATION FOR IMC PLANNING This chapter examines how advertisers gather intelligence about the marketplace and how they apply their findings to marketing and advertising decision making.

Learning Objectives After studying this chapter, your students will be able to: LO7-1 Elaborate on the purposes of IMC research.

LO7-2 Explain the basic steps in the research process.

LO7-3 Distinguish qualitative and quantitative research.

LO7-4 Describe the differences between pretesting and posttesting of campaign messages.

LO7-5 List the important considerations in effective IMC research What’s New? 1-142 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

All statistics for companies and research expenditures have been updated. The use of exploratory research in storytelling is explained and linked to the Budweiser opening vignette. New Google research tools, including Think Insights and Google Keyword, are introduced. The new Ethics, Diversity & Inclusion box discusses how strides are being made to ensure the ethnic diversity of samples used in marketing research.

Teaching Tips and Strategies After reading this chapter students should be able to understand what makes an effective ad. I use the instructors‘ video (which accompanies the text) and play several of the commercials. I ask students the following questions: ▫ What are they trying to sell? ▫ Is the ad effective? Why or why not?

My favorite way to introduce students to research is to confront a popular but mistaken idea: that research is unnecessary because people are not difficult to understand. To do so, I make use of a great article: Stephen J. Hoch, ―Who Do We Know: Predicting the Interests and Opinions of the American Consumer,‖ Journal of Consumer Research 15, no. 3 (December 1988): 315–324.

Hoch asked marketing experts to guess the responses of ordinary Americans to a set of consumer-related opinion items, such as ―advertised brands are better buys than generics.‖ I have students do the same thing, and ask them to count themselves as correct if their guess is within 10 percentage points (plus or minus) of the true answer. Students should guess the responses for both male and female consumers. I‘ve been doing this for 15 years, and the results inevitably demonstrate how difficult it is to predict the opinions of consumers. I conclude by telling the students that their errors do not mean they are ill-suited for a marketing career—after all, Hoch‘s marketing experts flunked the same test—but rather show how difficult it is to predict consumer attitudes and beliefs. I then point out that research, while it does not guarantee success, can improve our understanding of consumers considerably. I find that personal experience with this lesson can really help students see the value of research.

Normally, students will disagree whether ads are good or bad. Advertisers and ad agencies constantly research and tweak the message and purpose of their ads. As you know, the advertisers do this through research. But if research were infallible, every ad would have impact and help sell a product or service. There are, however, several programs and established steps that reduce the likelihood of a failed advertising campaign.

Advertisers are constantly trying to gauge consumer sentiment about ads through the use of focus groups and surveys. One of the problems with surveys is that it is hard to make sure we ask the question that we think we are asking. We also need to make sure that the answers customers give are their true answers, not ones they think they are being forced into.

1-143 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

A good example of research gone bad comes from the field of market research: the New Coke debacle. In the 1980s, Coca-Cola reformulated its soft drink, but the new recipe didn‘t satisfy customers. I like to use this example because it shows students that even though marketing research indicates that something is true (e.g., ―Consumers want a new Coke‖), sometimes the research is inaccurate or incomplete. I encourage students to keep this in mind. The downsides of research are that we might not want to believe what it is really telling us; that sometimes it is off base; and, frankly, that sometimes we just ignore it.

Web Resources for Enhancing Your Lectures Pathfinder International: A Guide for Designing and Conducting Indepth Interviews

https://www.pathfinder.org/publications/guidedesigning-conducting-depth-interviews-evaluationinput

Basics of conducting focus groups

https://managementhelp.org/businessresearch/focusgroups.htm

Survey design software

http://www.surveysystem.com/sdesign.htm

Wikipedia: marketing research

http://en.wikipedia.org/wiki/Marketing_research

Marketing Research Primer

http://www.quickmba.com/marketing/research

Gallup Organization

http://www.gallup.com

Pedagogical Features  My IMC Campaign 7–A: Research  My IMC Campaign 7–B: Methods for Pretesting  My IMC Campaign 7–C: Methods for Posttesting

Ethics, Diversity & Inclusion: Diversity of Marketing Research  My IMC Campaign 7–D: Developing an Effective Questionnaire  People behind the Ads: George Gallup, Advertising Legend

Lecture Outline I.

Vignette: Budweiser‘s ―Lost Dog‖ Ad

1-144 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

II.

In the high-profile (and expensive) TV commercial venue known as the Super Bowl, Budweiser ran an ad in which the brand‘s familiar Clydesdale horses came to the aid of a lost dog. The ad focuses more on creating a positive emotional response in the viewer than promoting the product. Yet data indicates that sales of Budweiser products increased following the Super Bowl. The ad‘s approach reflected research on the connection between consumers‘ emotional responses and their feelings for a brand—which demonstrates the importance of research in advertising.

The Need for Research in Marketing and IMC Advertising is expensive. Research provides the information that drives marketing decision making.

A. What Is Marketing Research?

1. To help managers make marketing decisions, companies develop systematic procedures for gathering, recording, and analyzing new information. This is called marketing research (it should not be confused with market research, which is information gathered about a particular market or market segment).

2. It helps identify consumer needs and market segments; it provides the information necessary for developing new products and devising marketing strategies; and it enables managers to assess the effectiveness of promotional activities. Marketing research is also useful in financial planning, economic forecasting, and quality control.

3. Exhibit 7-1 lists the top 10 research companies by worldwide revenues.

4. Research is used to gather a lot of different types of information. It may be easiest to think of all these in terms of the three Rs of marketing: recruiting new customers, retaining current customers, and regaining lost customers. a. To recruit new customers, researchers study different market segments and create product attribute models to match buyers with the right products and services. b. To retain existing customers, a marketer may use customer satisfaction studies. Likewise, databases of customer transactions may identify reasons for customer satisfaction or dissatisfaction. c. Information gained for the first two Rs helps the third, regaining lost customers.

B. What Is IMC Research?

1. Before developing any campaign, a company needs to know how people perceive its products, how they view the competition, what brand or company image would be most credible, and what messages offer the greatest appeal. To get this information, companies use IMC research.

1-145 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

III.

2. While marketing research provides the information necessary to make marketing decisions, IMC research uncovers the information needed for making IMC decisions. By definition, it is the systematic gathering and analysis of information to help develop or evaluate message strategies, individual promotions, and whole campaigns.

Applying Research to Advertising Decision Making IMC research serves various purposes, most of which can be grouped into four categories: strategy research, creative concept research, pretesting, and posttesting.

1. IMC strategy research. Used to help define the product concept or to assist in the selection of target markets, messages, or media vehicles.

2. Creative concept research. Measures the target audience‘s acceptance of different creative ideas at the concept stage.

3. Message pretesting. Used to diagnose possible communication problems before a campaign begins.

4. Message posttesting. Enables marketers to evaluate a campaign after it runs.

As Exhibit 7-2 shows, marketers use the different categories of research at different stages of campaign development. The techniques they use at each stage also vary considerably.

A. Message Strategy Research Companies develop a message strategy by blending elements of the creative mix.

These include the product concept, the target audience, the communication media, and the creative message. To seek information about any or all of these various elements, companies use IMC strategy research.

1. Product Concept a. Try to establish a unique product concept for their brand—that bundle of values we discussed in Chapter 6 that encompasses both utilitarian and symbolic benefits to the consumer. b. IMC works differently for different product categories and, often, even for different brands within a category. c. According to Y&R‘s theory, a brand must first develop differentiation—it must offer something unique and different—to survive. d. Second, it must be perceived by the target market as relevant to their needs and wants. e. Finally, it needs to build stature through esteem and knowledge. Once all these steps are accomplished, a brand achieves leadership status.

2. Target Audience Selection a. The second element of the creative mix is the target audience.

1-146 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

b. So the marketer will often decide to employ the dominance concept— researching which markets (geographic or otherwise) are most important to product sales and targeting those where it can focus its resources to achieve promotional dominance.

3. Media Selection To develop media strategies, select media vehicles, and evaluate their results, agencies use a subset of IMC research called media research.

4. Message Element Selection a. The final component of IMC strategy is the message element. b. Companies hope to find promising messages by studying consumers‘ likes and dislikes in relation to brands and products. c. The agency used concept testing to determine which message element options might prove most successful.

B. Developing Creative Concepts Once it develops an IMC strategy, the company (or its agency) will begin developing creative concepts. Here again, research is helpful in determining which concepts to use.

C. Pretesting and Posttesting IMC is one of the largest costs in a company‘s marketing budget. Companies want to know what they are getting for their money—and whether their messages are working.

1. The Purpose of Testing a. To increase the likelihood of preparing the most effective messages, companies use pretesting. Pretesting is somewhat controversial among creatives because they believe that it leads to bland, safe copy. But large clients insist on it, and pretesting is becoming common even in digital campaigns. b. Posttesting (also called tracking) provides the marketer with useful guidelines for future advertising.

2. Testing Helps Marketers Make Important Decisions Companies use pretesting to help make decisions about a number of variables.

It may be helpful to think of these as the five Ms: merchandise, markets, motives, messages, and media. a. Merchandise For purposes of alliteration, we refer to the product concept here as merchandise. b. Markets Companies may pretest a strategy or particular commercials with different markets. c. Motives 1-147 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

IV.

Consumers‘ motives are outside a company‘s control, but the messages they create to appeal to those motives are not. d. Messages 1) Pretesting helps identify outstanding, as well as underperforming, messages. It helps determine what (from the customer‘s point of view) a message says and how well it says it.

2) Pretesting is not foolproof. The only way to know for sure if a message is effective is through posttesting. e. Media 1) The broad media categories of print, electronic, digital interactive, direct mail, and out-of-home are referred to as media classes.

2) Media subclasses refer to newspapers or magazines, radio or TV, and so on.

3) The specific media vehicle is the particular publication or program.

4) Media units are the size or length of an ad: half-page or full-page ads, 15or 30-second spots, 60-second commercials, and so forth (see Exhibit 7-3). f. Testing in Digital Media 1) Google‘s Keyword Planner allows advertisers to view how many people are searching the web for a word or phrase at a given time. Google tools can be used to test the effectiveness of mobile ads in Google‘s mobile iOS. Google Analytics is a well-known tool for tracking visits to a website.

2) Facebook also encourages advertisers to test campaigns before committing large resources to running ads and provides valuable help on how to do so.

3) Twitter offers sophisticated tools for determining whether social media activity on the platform has resulted in a sale. g. Overall Results Marketers want to measure overall results to evaluate how well they accomplished their objectives. Posttesting is most helpful here to determine whether and how to continue, what to change, and how much to spend in the future.

Steps in the Research Process There are five basic steps in the research process (see Exhibit 7-4): 1. Situation analysis and problem definition.

2. Informal (exploratory) research.

3. Construction of research objectives.

4. Primary research.

5. Interpretation and reporting of findings.

A. Step 1: Analyzing the Situation and Defining the Problem

1-148 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

1. The first step in the marketing research process is to analyze the situation and define the problem.

2. Often the marketing department also maintains a marketing information system (MIS)—a sophisticated set of procedures designed to generate a continuous, orderly flow of information for use in making marketing decisions.

B. Step 2: Conducting Informal (Exploratory) Research The second step in the process is to use informal (or exploratory or formative) research to learn more about the market, the competition, and the business environment, and to better define the problem.

There are two types of research data: primary and secondary. Information collected by the company or agency about a specific problem is called primary data; acquiring it is typically expensive and time-consuming. So during the exploratory stage, researchers frequently use secondary data—information previously collected or published, usually for some other purpose.

1. Assembling Internal Secondary Data A well-developed marketing information system can help researchers analyze sales data, review past tracking studies, and examine previous marketing research data.

2. Gathering External Secondary Data Most large companies subscribe to any of a number of syndicated research reports about their particular industry. In the United States, frequently used sources of secondary data include: a. Library reference materials b. Government publications c. Trade associate publications d. Research organizations and their publications or syndicated information e. Consumer/business publications f. Computer database services g. Internet search engines h. Google research tools D. Step 3: Establishing Research Objectives 1. The company must first establish specific research objectives.

2. A concise written statement of the research problem and objectives should be formulated at the beginning of any research project.

3. The statement of the problem is specific and measurable, the decision point is clear, and the questions are related and relevant. The research results should provide the information management needs to decide on a new positioning strategy for the company. The positioning strategy facilitates the development of marketing and advertising plans that will set the company‘s course for years to come.

1-149 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

E. Step 4: Conducting Primary Research 1. When a company wants to collect its own data about a specific problem or issue, it uses primary research. There are two types of primary research: qualitative and quantitative. a. To get a general impression of the market, the consumer, or the product, marketers typically start with qualitative research. b. To get hard numbers about specific marketing situations, they may perform a survey or use some other form of quantitative research.

2. Sophisticated agencies use a balance of both qualitative and quantitative methods, understanding the limits of each and how they work together (see Exhibit 7-5).

F. Step 5: Interpreting and Reporting the Findings 1. The final step in the research process involves interpreting and reporting the data.

Research is very costly (see Exhibit 7-6), and its main purpose is to help solve problems.

2. The researcher should make recommendations for management action, and the report should be discussed in a formal presentation to allow for questions and to highlight important points.

V. Understanding Qualitative and Quantitative Research Approaches 1. Methods of Qualitative Research a. To get people to share their motives, beliefs, and perceptions, researchers use qualitative research that encourages consumers to openly discuss their thoughts and feelings in response to questions from an interviewer. Some marketers refer to this as motivation research. b. The methods used in qualitative research are usually either projective or intensive techniques.

1) Projective Techniques Advertisers use projective techniques to unearth people‘s underlying or subconscious feelings, attitudes, interests, opinions, needs, and motives.

2) Intensive Techniques Intensive techniques, such as in-depth interviews, also require great care to administer properly. In the in-depth interview, carefully planned but loosely structured questions help the interviewer probe respondents‘ deeper feelings.

One of the most common intensive research techniques is the focus group, in which the company invites six or more people typical of the target market to a group session to discuss the product, the service, or the marketing situation.

3. Basic Methods of Quantitative Research

1-150 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VI.

Companies use quantitative research to gain reliable, hard statistics about specific market conditions or situations. Three basic research methods can be used to collect quantitative data: observation, experiment, and survey. a. Observation 1) In the observation method, researchers monitor consumer activities, typically in their native environments, such as a store, a park, or the workplace.

2) An important tool for assessing user experiences with new websites and other digital content is called user experience testing (UX).

3) Technology has greatly improved the observation method. One example is the Universal Product Code (UPC) label. b. Experiment 1) To measure cause-and-effect relationships, researchers use the experimental method.

2) Marketers go to a test market, and introduce the product in that area alone or test a new ad campaign or promotion before a national rollout. c. Survey 1) A common method of gathering primary research data is the survey, in which the researcher gains information on attitudes, opinions, or motivations by questioning current or prospective customers (political polls are a common type of survey).

2) Surveys can be conducted by personal interview, telephone, mail, or on the Internet. Each has distinct advantages and disadvantages (see Exhibit 7-7).

Message Testing before and after a Campaign A. Pretesting Methods 1. Through direct questioning, researchers can elicit a full range of responses from people and thereby infer how well advertising messages convey key copy points.

2. In central location tests, respondents are shown test commercials, usually in shopping centers, and questions are asked before and after exposure.

3. In clutter tests, test commercials are shown with noncompeting control commercials to determine their effectiveness, measure comprehension and attitude shifts, and detect weaknesses.

B. The Challenge of Pretesting 1. Pretesting helps distinguish strong messages from weak ones.

2. Researchers encounter problems when asking people to rank messages.

Respondents often rate the ones that make the best first impression as the highest in all categories (the halo effect). Also, questions about the respondent‘s buying behavior may be invalid; behavior intent may not become behavior fact.

C. Posttesting Methods 1-151

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VII.

1. Posttesting can be more costly and time-consuming than pretesting, but it can test a campaign under actual market conditions.

2. As in pretesting, marketers use both quantitative and qualitative methods in posttesting. Most posttesting techniques fall into five broad categories: aided recall, unaided recall, attitude tests, inquiry tests, and sales tests.

3. Some use attitude tests to measure a campaign‘s effectiveness in creating a favorable image for a company, its brand, or its products.

D. The Challenge of Posttesting 1. Recall tests reveal the effectiveness of message components, such as size, color, or themes. But they measure what respondents noticed, not whether they actually buy the product.

2. For measuring sales effectiveness, attitude tests are often better than recall tests.

3. By using inquiry tests—in which consumers respond to an offer for information or free samples—researchers can test a message‘s attention-getting value, readability, and understandability. These tests also permit fairly good control of the variables that motivate reader action, particularly if a split-run test is used.

4. Sales response may not be immediate, and sales tests, particularly field studies, are often costly and time-consuming.

Important Issues in IMC Research When marketers conduct primary research, there is always one legitimate concern—the accuracy of the findings.

A. Considerations in Conducting Primary Quantitative Research When conducting primary research, marketers must consider certain issues carefully, especially whether the research is valid and reliable.

1. Validity and Reliability a. For a test to have validity, results must be free of bias and reflect the true status of the market. b. Moreover, if you repeated the test with five more people, you might get an entirely different response. So your test also lacks reliability. For a test to be reliable, it must be repeatable—it must produce approximately the same result each time it is administered (see Exhibit 7-8). c. Validity and reliability depend on several key elements: the sampling methods, the survey questionnaire design, and the data tabulation and analysis methods.

2. Sampling Methods a. When a company wants to know what consumers think, it can‘t ask everybody. But its research must reflect the universe (the entire target population) of prospective customers. b. Researchers select from that population a sample that they expect will represent the population‘s characteristics.

1-152

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VII.

c. Defining sample units—the individuals, families, or companies being surveyed—is very important. d. The greatest accuracy is gained from random probability samples because everyone in the universe has an equal chance of being selected. e. Researchers use nonprobability samples extensively because they‘re easier than probability samples, as well as less expensive and time-consuming.

3. How Questionnaires Are Designed a. The four most common types of questions are open-ended, dichotomous, multiple-choice, and scale. b. In Exhibit 7-10, for example, more choices can be added to the multiplechoice format.

4. Data Tabulation and Analysis a. Collected data must be validated, edited, coded, and tabulated. b. Many researchers want cross-tabulations (for example, product use by age group or education).

B. Collecting Primary Data in International Markets 1. Research overseas is often more expensive than domestic research.

2. Marketers must determine whether their messages will work in foreign markets.

3. Marketers need more than just facts about a country‘s culture. They need to understand and appreciate the nuances of its cultural traits and habits, a difficult task for people who don‘t live there or speak the language.

4. Conducting original research abroad can be fraught with problems. The researcher must use the local language, and translating questionnaires can be tricky. Second, many cultures view strangers suspiciously and don‘t wish to talk about their personal lives.

5. Two goals for international research are flexibility and standardization, and both are necessary for the best results. Flexibility means using the best approach in each market. Standardization is important so that information from different countries can be compared.

6. Nearly three-quarters of market research firms use the internet to conduct some form of market research.

Chapter Summary A. Marketing research is the systematic procedure used to gather, record, and analyze new information to help managers make decisions about marketing goods and services.

B. IMC research, a subset of marketing research, is used to gather and analyze information for developing or evaluating advertising.

C. Businesses use testing to make sure their dollars are spent wisely. Pretesting helps detect and eliminate weaknesses before a campaign runs.

1-153 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

D. The research process involves several steps: analyzing the situation and defining the problem, conducting informal (exploratory) research by analyzing internal data and collecting external secondary data, setting research objectives, conducting primary research using qualitative or quantitative methods, and, finally, interpreting and reporting the findings.

E. Marketers use qualitative research to get a general impression of the market.

F. Techniques used in pretesting include central location tests, clutter tests, and direct questioning.

G. The validity and reliability of quantitative surveys depend on the sampling methods used and the design of the survey questionnaire.

H. In international markets, research is often more expensive and less reliable than in the United States.

Answers to Pedagogical Features  My IMC Campaign 7–A: Research

Research is a complicated aspect of preparing a campaign, and without at least one course in advertising research you may find it tough going. However, without research you will find it difficult to make some of the tough creative and strategic decisions that lie ahead.

Even without an extensive research background, you can do some secondary and qualitative research that can result in better choices for your campaign.

Secondary Research Secondary research involves obtaining information from existing sources, including your client. Be sure to obtain all that you can, with the understanding that information shared by your client is valuable and that most clients will insist on strict confidentiality.

Breaking a confidentiality agreement is a very serious transgression and should not happen under any circumstances, whether deliberately or through neglect.

Qualitative Research You can also plan some qualitative research studies. Two of the most common are focus groups and observational research. In a focus group, you bring together a collection of carefully chosen participants (users of your brand, users of competing brands, etc.) and lead a group discussion that has the potential to offer strategic insights.

Qualitative Research: Focus Groups For a tutorial on using focus groups, see www.cse.lehigh.edu/~glennb/mm/FocusGroups.htm.

Tips for using focus groups can be found at www.groupsplus.com/pages/mn091498.htm.

Observational Research 1-154 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Observational research techniques involve monitoring the consumer in his or her native environment (the mall, a restaurant, a skateboard park, etc.). The goal is to see how the consumer behaves in a natural setting. Careful attention is ordinarily paid to language, dress, interactions, symbols, and style.

See the observational research tutorial at http://writing.colostate.edu/guides/research/observe/index.cfm. Tips for observational research can be found at www.quirks.com/articles/a1997/19971208.aspx?searchID=625728.

Quantitative Research Your project may also involve administering a survey. Google Forms, introduced in the My IMC Campaign from Chapter 2, may be useful for creating an online survey that is easy and inexpensive to administer. The hard part is writing a good survey instrument and then choosing data analysis techniques that will provide you and your client with useful information. Some web tutorials are listed below: Surveys Writing good questions: www.accesswave.ca/~infopoll/tips.htm Response options: https://explorable.com/survey-response-scales Create an online survey using Google forms: https://www.google.com/forms/about/ Data Analysis Using Excel Tutorial modules to help visualize data in excel: www.ncsu.edu/labwrite/res/gt/gtmenu.html  My IMC Campaign 7–B: Methods for Pretesting

Companies rarely trust intuition alone when evaluating their creative work. You can use some of these methods to test your creative ideas with a small sample drawn from your target audience.

Doing so will give you added ammunition for persuading your client that you‘ve developed a strong strategy for his or her brand.

Print Advertising  Direct questioning. Asks specific questions about ads. Often used to test alternative ads in early stages of development.  Focus group. A moderated but freewheeling discussion and interview conducted with six or more people.  Order-of-merit test. Respondents see two or more ads and arrange them in rank order.  Paired comparison method. Respondents compare each ad in a group.  Portfolio test. One group sees a portfolio of test ads interspersed among other ads and editorial matter. Another group sees the portfolio without the test ads.

1-155 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

  

Mock magazine. Test ads are ―stripped into‖ a magazine, which is left with respondents for a specified time. (Also used as a posttesting technique.)

Perceptual meaning study. Respondents see in timed exposures.

Direct-mail test. Two or more alternative ads are mailed to different prospects on a mailing list to test which ad generates the largest volume of orders.

Broadcast Advertising  Central location projection test. Respondents see test commercial films in a central location such as a shopping center.  Trailer test. Respondents see TV commercials in trailers at shopping centers and receive coupons for the advertised products; a matched sample of consumers just gets the coupons. Researchers measure the difference in coupon redemption.  Theater test. Electronic equipment enables respondents to indicate what they like and dislike as they view TV commercials in a theater setting.  Live telecast test. Test commercials are shown on closed-circuit or cable TV. Respondents are interviewed by phone, or sales audits are conducted at stores in the viewing areas.  Sales experiment. Alternative commercials run in two or more market areas.

Physiological Testing  Pupilometric device. Dilation of the subject‘s pupils is measured, presumably to indicate the subject‘s level of interest.  Eye movement camera. The route the subject‘s eyes traveled is superimposed over an ad to show the areas that attracted and held attention.  Galvanometer. Measures subject‘s sweat gland activity with a mild electrical current; presumably the more tension an ad creates, the more effective it is likely to be.  Voice pitch analysis. A consumer‘s response is taped, and a computer is used to measure changes in voice pitch caused by emotional responses.  Brain pattern analysis. A scanner monitors the reaction of the subject‘s brain.  My IMC Campaign 7–B: Methods for Posttesting

Posttesting involves assessing the impact of a campaign after it has run. It is good practice for you to propose HOW the client might posttest your campaign. This is material that you can incorporate in your campaigns book. Be sure to reference your objectives when you propose a posttesting technique.  Aided recall (recognition–readership). To jog their memories, respondents are shown certain messages and then asked whether their previous exposure was through reading, viewing, or listening.  Unaided recall. Respondents are asked, without prompting, whether they saw or heard promotional messages.

1-156 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

 



Attitude tests. Direct questions, semantic differential tests, or unstructured questions measure changes in respondents‘ attitudes after a campaign.

Inquiry tests. Additional product information, product samples, or premiums are given to readers or viewers messages generating the most responses are presumed to be the most effective.

Sales tests. Measures of past sales compare campaign efforts with sales. Controlled experiments test different media in different markets. Consumer purchase tests measure retail sales from a given campaign. Store inventory audits measure retailers‘ stocks before and after a campaign.

Ethics, Diversity & Inclusion: Diversity of Marketing Research 1. Why might consumer understanding improve if marketing researchers come from more diverse backgrounds?

More diverse market researchers would certainly translate to better understanding of consumers because researchers would be more capable of understanding social norms, cultural norms, and vernacular of the various consumer groups marketers are attempting to reach. Consumers are also more apt to relate to someone similar to them, which could lead to more open and honest answers in market research situations. Additionally, market researchers from diverse backgrounds could better inform marketing practices by bringing in their own experiences, again leading to a better understanding of the diverse groups marketers are often attempting to reach.

2. Is it possible for marketing researchers to understand people from backgrounds different from their own? What experiences might make this more likely?

It is possible, and crucial, that market researchers understand people from different backgrounds. This understanding can be achieved through purposefully seeking out, engaging with, and listening to people from various backgrounds, engaging employees of an organization involved in a particular employee resource group dedicated to diversity, or engaging and partnering with a diversity and inclusion group within one‘s agency to better learn about the diverse group. Marketers should also express a genuine interest in listening to and learning from the group, striving for authenticity and attempting to engage members of the group whenever possible in their research and work. Marketers should also examine their own biases, preconceived notions, and views of the world or other group that could impact their understanding of, and communication with, members of the diverse group.  My IMC Campaign 7–D: Developing an Effective Questionnaire.

Here are some tips for writing items that can help you make better decisions:  List specific research objectives. Don‘t spend money collecting irrelevant data.  Write short questionnaires. Don‘t tax the respondent‘s patience; you may get careless or flip answers.

1-157 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

        

State questions clearly so there is no chance for misunderstanding. Avoid generalities and ambiguities.

Write a rough draft first; then polish it.

Use a short opening statement. Include the interviewer‘s name, the name of the organization, and the purpose of the questionnaire.

Put the respondent at ease by opening with one or two inoffensive, easily answered questions.

Structure questions so they flow logically. Ask general questions before more detailed ones.

Avoid questions that suggest an answer or could be considered leading. They bias the results.

Include a few questions that cross-check earlier answers. This helps ensure validity.

Put the demographic questions (age, income, education) and any other personal questions at the end of the questionnaire.

Pretest the questionnaire with 20 to 30 people to be sure they interpret the questions correctly and that it covers all the information sought.

 People behind the Ads: George Gallup

     



While teaching college, Gallup developed a lifelong passion for understanding public opinion.

In 1932 Young & Rubicam, one of New York‘s top agencies, lured Gallup to New York to become head of its research and marketing departments.

Gallup was one of the first to measure the effects of TV commercials.

In 1948 Gallup, like a lot of pollsters, proclaimed that President Harry Truman would go down in defeat to challenger Thomas Dewey.

It is never easy or enjoyable to be wrong. But his mistake led Gallup to focus even more attention on improving sampling techniques.

Eventually, both the public and industry would embrace Gallup‘s methods. Today, no major advertiser or agency would launch a campaign without extensive use of social science methods to carefully test and calibrate the campaign.

These methodologies, and many others described in this chapter, have been influenced by Gallup‘s insights.

Review Questions 1. How does research help advertisers meet the challenge of the three Rs of marketing?

The three Rs of marketing are recruiting new customers, retaining current customers, and regaining lost customers. Research helps identify new, current, and lost customers for the company to target with its advertising activities.

2. Give an example that demonstrates the difference between marketing research and market research.

1-158 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

3.

4.

5.

6.

7.

8.

Marketing research is a systematic procedure for gathering, recording, and analyzing new information in order to help managers make marketing decisions. Market research is gathering information about a particular market or market segment. The difference is the scope of the information gathered.

An example of marketing research would be answering the question: Do customers prefer liquid, bar, or powdered soap? An example of market research would be answering a narrower question about a particular market or market segment: Do adolescents prefer to use Dial soap?

Which kind of research data is more expensive to collect, primary or secondary? Why? Primary data is more expensive to collect because this data has to be acquired from scratch.

Secondary data is available through many different published outlets.

How might you use observational research to understand a consumer behavior?

Answers to this question will vary based on students‘ experience.

How could the halo effect bias a pretest for a soft-drink ad?

If consumers were first impressed by the ad, it can make a real difference in the way they answer questions in the pretest. In other words, a positive first impression could bias subsequent answers.

When might research offer validity but not reliability?

The true test of reliability is when an experiment can be repeated, garnering the same results.

A test group may respond positively to a particular question; while this may be valid, if subsequent responses do not match the initial test group‘s reactions, the test is not reliable.

How would you design a controlled experiment to test the advertising for a chain of men‘s clothing stores?

Responses will vary. I like to use Likert Scales because they are easier, in my opinion, to validate. I would then find the variables that I was trying to test and implement them in the scales.

How could research help in the development of an advertising strategy for an international advertiser? Give an example.

The book has some excellent examples on the above page numbers. The key is standardization. Ninety-nine percent of international sales is knowing your market. As the book explains, Mattel was having trouble selling Barbie; when Takara (a Japanese company) took the manufacturing license in Japan, they reduced Barbie‘s breast size and leg length.

More than 2 million dolls were sold after this adjustment.

The Advertising Experience 1. Marketing Research Organizations and Publications

1-159 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Many advertisers choose to perform their own research. When collecting research data by themselves, they can use a number of advertising- and marketing-specific research sources available on the web. Visit the research organizations‘ and publications‘ websites and answer the questions that follow: ▪ Advertising Research Foundation (ARF): www.thearf.org ▪ American Marketing Association: www.ama.org ▪ Journal of Advertising Research: www.journalofadvertisingresearch.com ▪ Marketing Research Association (MRA): www.insightassociation.org/issuespolicies/glossary/marketing-research-association-mra a. What research group sponsors the site? Who is/are the intended audience(s)? b. What is the site‘s purpose? Does it succeed? Why? c. What range of services is offered? d. What is the organization‘s purpose?

Sample Answer: Journal of Advertising Research a. Sponsors and audience(s): The Journal of Advertising Research is sponsored by the Advertising Research Foundation and the World Advertising Research Center. The primary audiences for the site are academics as well as practitioners at all levels of advertising practice. b. Purpose: The site/journal are intended to share findings in advertising and marketing research, provide practical applications for the research, and discuss new technologies, methodologies, and avenues of solution to academics and practitioners. It succeeds by being a premier source of research and information on advertising and marketing to a number of universities and agencies. c. Services: The journal provides a space for dialogue between practitioners and academics to grow knowledge about current research in marketing and advertising research, and to provide translation of that knowledge to interested readers for application in the practice of advertising and marketing. d. Purpose: The mission of the organization is to, ―...act as the research and development vehicle for professionals in all areas of marketing including media, research, advertising and communications (http://www.journalofadvertisingresearch.com/content/about-jar, para. 1).‖ 2. Market Research Companies Marketers and advertisers depend heavily on timely and accurate research in preparation for advertising planning. Many market research companies are available to serve nearly every marketing and advertising research need. Visit the following syndicated and independent research companies‘ websites and answer the questions that follow.

▪ Nielsen: www.acnielsen.com ▪ Burke: www.burke.com ▪ Dun & Bradstreet: www.dnb.com 1-160 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

▪ The Gallup Organization: www.gallup.com ▪ GfK NOP: www.gfkamerica.com ▪ International Data Corporation (IDC): www.idc.com ▪ Ipsos Connect: https://ipsos.com/en-us ▪ J. D. Power and Associates: www.jdpower.com ▪ Kantar: www.kantar.com ▪ Qualtrics Online Sample: www.qualtrics.com/online-sample/ a. What types of research does the company specialize in? b. What industries/companies would be best suited to utilize the company‘s resources? c. What specific services, products, or publications does the company offer? d. Are the information services offered by the company primary or secondary data? e. How useful is the company for conducting advertising and marketing research? Why? Sample Answer: Dun & Bradstreet a. Dun & Bradstreet specializes in providing information on businesses, including credit information and market performance. b. The company‘s services are most appropriate for organizations, both large and small, that are interested in information on their own performance in the marketplace, as well as information on their top competitors. Specifically, the company specializes in providing commercial, consumer, and industry-specific information. c. Dun & Bradstreet offers the following services: ▪ Marketing Solutions Reports ▪ Marketing and Sales Applications ▪ Website Traffic Management ▪ Internet Research Services ▪ Access to Research Databases ▪ Partnerships with Data Management Solution Organizations ▪ Advanced Analytics ▪ Information delivery Services ▪ Customized research d. The information services offered by the company are primarily secondary data analysis. e. Dun & Bradstreet is extremely useful to advertisers and marketers because it provides data, analytics, and expertise to 90 percent of Fortune 500 companies of all sizes around the world. Dun & Bradstreet works with companies in Financial Services, Insurance, High Tech, Telecom, Manufacturing, and others, aiming to make data meaningful to these various companies.

3. Market Research for Politics Silver-maned Armand Le Mouche, state senator for your district for 30 years, passed away recently, and his appointed replacement, Millard Frumpe, lacks a solid political base. Sally Daily, a self-made millionaire and the owner of a string of bakeries, would like to challenge 1-161 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Millard, but she wants to get some research done first. She firmly believes that advertising research helped her get to where she is. What research would Sally need in order to find out if her campaign is feasible or not, and, if it is, how she could win.

Answer Guidelines: Students should draw on the steps in the research process and discuss the potential of information provided from pretesting and posttesting to predict campaign success, as discussed in the chapter.

4. What were the research challenges that Budweiser faced in creating a great Superbowl ad?

What research techniques did the agency use, and what kinds did it choose not to use? Why do you think that it made the decisions it did, and do you agree with them?

Answer Guidelines: Students should draw upon research techniques discussed in the chapter and offer informed arguments to support their opinions.

5. Do an ―emotion‖ experiment with the Budweiser spot by identifying the emotions that you feel for each scene in the ad. Make an ―emotion map‖ that can be tagged to each key scene.

Compare the emotion map you generate with that of a classmate.

Connect Activities AACSB Accreditation Tagging Knowledge Application

Bloom’s Taxonomy

07-02

Analytical Thinking

Apply

07-01; 07-02; 07-03

Analytical Thinking; Knowledge Application

Apply; Remember

Title

Assignment Type

Topic

Learning Objective

Part One: Steps in Research Process Part Two: Steps in Research Process Dunkin' Donuts: Market Research for the Launch of Bakery Sandwiches

Ranking

Common Research Methods

07-02

Matching

Common Research Methods

Video Case

Methods Used in Assessing Promotional Program Effectiveness; Common Research Methods

Apply

1-162 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Understanding Research Accuracy

Case Analysis

Budweiser: Wind Never Felt Better

Video Case

Steps in Marketing Research Process; Common Research Methods Common Research Methods; Proper Effectiveness Research

07-02; 07-03; 07-04; 07-05

Reflective Thinking

Remember

07-03; 07-04

Knowledge Application; Analytical Thinking

Remember; Understand; Apply

Part One: Steps in Research Process & Part Two: Steps in Research Process Activity Summary: These activities ask students to place the steps in the research process into the correct order.

Follow-Up Class Discussion: Ask students to identify what kind of information they would be seeking or providing in each stage of the research process.

Dunkin' Donuts: Market Research for the Launch of Bakery Sandwiches Activity Summary: This activity has students view a video from Dunkin' Donuts outlining the rollout of their breakfast sandwiches. Through the questions, students are asked to demonstrate their understanding of the processes involved in market research and how data can inform marketing and advertising efforts.

Follow-Up Class Discussion: After viewing the Dunkin' Donuts video, ask students to describe how they might have conducted the research for the rollout of this new product line differently or to describe what research questions they would have asked before launching the product. Ask them what sources they would have consulted to attempt to answer their questions.

Understanding Research Accuracy

1-163 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Activity Summary: This case describes the attempts by a Chinese car manufacturer to enter into the U.S. market. Students are asked to assess the quality of the research (reliability, validity, pretesting) conducted by the car manufacturer.

Follow-Up Class Discussion: Ask students to develop their own examples of reliability and validity in research.

Budweiser: Wind Never Felt Better Activity Summary: This activity asks students to watch a commercial from Budweiser and determine how they use research to inform their creative strategy.

Follow-Up Class Discussion: Ask students why they think the combination of an unlikely pairing (dogs and beer) was successful. What types of research would have Budweiser conducted to determine if this type of message would be effective with their target audience?

CHAPTER EIGHT MARKETING AND IMC PLANNING This chapter describes the process of marketing and IMC planning. Marketers need to understand the various ways plans are created. They must also know how to analyze situations; set realistic, attainable objectives; develop strategies to achieve them; and establish budgets for marketing communications.

Learning Objectives After studying this chapter, your students will be able to: LO8-1 Explain strategic planning using a marketing plan.

LO8-2 Detail the tactical or ―bottom-up‖ approach favored by smaller businesses.

LO8-3 Differentiate the IMC planning process from the tactical.

LO8-4 Describe the important components of an IMC plan.

LO8-5 Explain how IMC budgets are determined.

What’s New? The opening vignette featuring Mountain Dew has been thoroughly revised and updated for this edition. The section on a marketing plan‘s mission statement has been expanded and now includes mission statements from several global brands. The discussion of how brands select target markets is illustrated through the example of the Jaguar I-Pace. Ernest Martin‘s seven 1-164 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

approaches to developing a positioning strategy are now more broadly defined and supplemented with examples. Our text‘s ―eighth‖ strategy is associated with the Blue Ocean strategy developed

by W. Chan Kim and Renee Mauborgne. Marketing tactics are now illustrated through the clever GoPro campaign to encourage brand users to post their videos. The use of mobile payment systems in tracking user behavior is described under planning. The Portfolio Review is updated with new, fresh executions by Ikea, Adidas, and Faber Castel.

Teaching Tips and Strategies Using the Opening Vignette in the Classroom Advertising for Mountain Dew is some of the most brilliant and effective around. The proof can be found in the success of the brand in expanding its market share and revenues in the face of declining sales of carbonated soft drinks. A big part of that success has been advertising that has refocused the brand‘s personality. What was once marketed heavily as a ―country‖ drink now reaches the fast growing segments of urban youth. Consider showing students some of the information from the websites listed below under ―Web Resources for Enhancing Your Lectures‖ so you can demonstrate just how far this brand has evolved.

Students will learn the three different types of marketing planning models: (1) top-down, (2) bottom-up, and (3) integrated marketing communications (IMC). The top-down approach is the standard way of creating a marketing plan (see Exhibit 8-1). I like to take the students through this approach because it is still the most commonly used method.

This section of the course is an excellent time to invite in a local advertiser or agency representative who is able to discuss the creation of a marketing plan. Nothing brings the elements of a marketing plan to life as well as a real-life example. A professional can also help students see the connection between the plan and subsequent marketing activities. If your background includes experience in creating a marketing plan you can describe your own efforts.

When I was in television advertising sales, the first thing I would do with a client was complete a situation analysis. I would find out who their competitors were and what type of advertising media the business was currently using along with the current advertising media the competitor was using. I was amazed how many small-business owners didn‘t really know who their customers were.

1-165 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

For example, I had a customer that sold lawn mowers and other hardware. He used his co-op money to advertise on television, among other media. The owner originally told me that his target market was men over 50. I found out later through the situation analysis that this could not be possibly true. In fact, his average customer was about 30 years old. Why is this important?

When creating a marketing plan, it is essential to know who you are selling to. No matter how much money there is to spend on advertising, it won‘t be effective unless its target is correctly identified.

The owner was mistaken because he was not a hands-on owner (he let others run the shop). He had been selling farm equipment for twenty years, and what he did not realize (or at least convey to me) was that most of his business had changed from farm equipment to the residential market.

The next step in creating his advertising plan was to figure out his objective, which was to increase sales. I find that when creating an advertising campaign for customers, it is often very important to clarify expectations. Some of the small businesses I dealt with had not advertised in years. When they went on TV, I learned to make sure to discuss with them the expected sales increase and what would really happen at first. As you know, advertising takes a little while to produce its full effect. This conversation ensured that our expectations were on the same page.

This helped me build a win-win relationship between a client and myself.

This chapter has a great story about how Mountain Dew was started and was later purchased by powerhouse PepsiCo. Students will be interested in the Mountain Dew story. After all, their age group is part of the target market for Mountain Dew. One very important aspect of the Mountain Dew story worth noting is the brand‘s success in year-to-year growth in a flat product category.

This is especially noteworthy because the brand is supported by a marketing budget that is far smaller than those of the soft-drink industry leaders. You might ask students to offer ideas about how the lessons of the Mountain Dew campaign could be used to increase sales of other small soft-drink brands, such as Dr. Pepper and RC Cola. Because Mountain Dew is so successful at owning the extreme sports image, students will find it challenging to develop an appeal for these other brands that is not simply a ―me-too‖ approach.

Finally, you might wish to have students describe brands with which they believe they have basic transactional, reactive, accountable, proactive, and partnership relationships. For each, ask students to explain the aspects of the relationship that are satisfying and those that are dissatisfying. A follow-up might include a question about whether students have ever switched brands on the basis of an unsatisfactory relationship with an existing brand or a more satisfying relationship with a new brand.

Web Resources for Enhancing Your Lectures

1-166 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Mountain Dew

http://www.mountaindew.com

AdCracker: advertising strategy

https://www.adcracker.com/strategic/Strategic_Adv ertising_Communications.htm

Cooperative Grocer: Building an Advertising Strategy

https://www.grocer.coop/articles/buildingadvertising-strategy

Cooperative Grocer Magazine Archives https://www.grocer.coop/articles Reference for Business: Advertising Budget

http://www.referenceforbusiness.com/small/ABo/Advertising-Budget.html

Developing an advertising plan: Wisconsin Tourism Department

http://industry.travelwisconsin.com/uploads/mediali brary/05/05faeb73-3760-488b-9705b1d5b126245ewisconsinstrategicplanning_updated_web.pdf

AdCracker: advertising plan

https://www.adcracker.com/plan/Advertising_Plan. htm

Pedagogical Features  My IMC Campaign 8-A: Developing the Situation Analysis

Ad Lab 8–A: The Strategies of Marketing Warfare Ethics, Diversity & Inclusion: Subliminal Persuasion  My IMC Campaign 8-B: Developing IMC Objectives

Portfolio Review: Strategic Use of the Creative Mix Ad Lab 8–B: The Economic Effect of Advertising on Sales  My IMC Campaign 8-C: Ways to Set IMC Budgets  People behind the Ads: Samantha Avivi, Brand Strategist at Jim Stengel Company

Lecture Outline I.

Vignette: The Mountain Dew Story

1-167 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

II.

Invented by two brothers in Knoxville, Tennessee, Mountain Dew was originally designed as a mixer for hard liquor. Nevertheless, people liked drinking it so much that it became an alternative soft drink, promoted with the slogan ―Ya-hoo Mountain Dew.‖ PepsiCo bought the company in 1964 and later repositioned and relaunched the brand as a high-energy, youth-oriented, flavored soft drink. Since that time, the brand has done nothing but grow. Supported by advertising that promotes the ―Dew-x-perience,‖ it briefly passed Diet Coke to become the number three soft drink in the United State after Classic Coke and Pepsi. In late 2018, Kevin Hart launched Mountain Dew‘s latest campaign, ―Give your head a MTN DEW KICKSTART‖. Its success also demonstrates the importance of good strategic marketing and advertising planning.

Strategic Planning: The Marketing Plan Exhibit 8-1 illustrates the traditional top-down marketing plan. A marketing plan is a written guide for the present and future marketing activities of an organization. Marketing plans generally do a number of important things, including (1) clarifying the organization‘s mission; (2) assessing the brand‘s current marketing situation and identifying factors, both within the company and in the environment, that may help or hinder achieving marketing objectives; (3) presenting clear, measurable, time-delineated marketing objectives; (4) describing strategies that will be used to achieve marketing objectives with specific target markets; (5) describing tactics or action programs for implementing the marketing strategy; (6) explaining how the effectiveness of the marketing efforts will be evaluated; and (7) proposing a budget for marketing activities (see the Marketing Plan Outline in Appendix A).

A. The Mission Statement The mission statement is a short description of the organization‘s purpose and philosophy. It is intended to be both aspirational and inspirational.

B. The Situation Analysis 1. The second part of the marketing plan is the situation analysis, a detailed description of the brand‘s current marketing situation.

2. Planners draw attention to the most important aspects of a brand‘s situation through a SWOT analysis. The SWOT analysis draws on the facts contained in the situation analysis to point out strengths, weaknesses, opportunities, and threats for the brand.

3. Strengths and weaknesses represent company capabilities, while opportunities and threats represent environmental factors.

C. The Marketing Objectives Marketing objectives, the third part of the marketing plan, are clear, quantifiable, realistic marketing goals that are to be accomplished within a defined time period.

Marketing objectives generally fall into one of two broad categories: sales-target objectives and communication objectives.

1-168 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Sales-target objectives include goals related to increasing or maintaining sales volume and market share.

Communication objectives are outcomes that can reasonably be associated with promotional activities, such as increases in brand recognition or awareness, increased comprehension of a brand‘s attributes or benefits, more positive attitudes about a brand or a more favorable image of the brand or its typical user, and stronger intentions to try or buy a brand.

1. A Traditional Model for Setting Objectives: DAGMAR a. The DAGMAR approach emphasizes communication objectives because Colley believed that the proper way to evaluate a campaign is to determine how well it communicates information, within a given budget, to the target audience. b. Planners who follow DAGMAR formulate objectives related to one of four outcomes: awareness (knowing the brand exists), comprehension (knowing about the brand‘s benefits or attributes), conviction (a favorable attitude toward the brand), and action (purchasing and using the brand).

D. The Marketing Strategy The marketing strategy describes how a company will meet its marketing objectives.

Marketing strategy typically involves three steps: (1) defining the particular target markets; (2) determining the strategic position; and (3) developing an appropriate marketing mix for each target market.

1. Selecting the Target Market The first step in strategy development is to define and select the target market, using the processes of market segmentation and research discussed in Chapters 6 and 7.

2. Positioning the Product Positioning refers to the place a brand occupies in the minds of customers relative to other brands it competes with. Professor Ernest Martin proposes seven distinct approaches to developing a positioning strategy: 1) Product attribute—setting the brand apart by stressing a particular product feature important to consumers.

2) Price/quality—positioning on the basis of price or quality.

3) Use/application—positioning on the basis of how a product is used (e.g., Arm & Hammer).

4) Product class—positioning the brand against other products that, while not the same, offer the same class of benefits.

5) Product user—positioning against the particular group that uses the product.

1-169 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

6) Product competitor—positioning against competitors (e.g., Avis/Hertz), using the strength of the competitor‘s position to help define the subject brand.

7) Cultural symbol —positioning apart from competitors through the creation or use of some recognized symbol or icon 8) We add an eighth approach: by category—positioning by defining or redefining the business category. A simple way for a company to get the number one position is to invent a new product category.

3. Determining the Marketing Mix The next step in developing the marketing strategy is to determine a cost-effective marketing mix for each target market the company pursues. As discussed in Chapter 6, the mix blends the various marketing elements the company controls: product, price, discrimination, and communications.

Companies have a wide variety of marketing strategy options. They might increase distribution, initiate new uses for a product, change a product line, develop entirely new markets, or start discount pricing.

4. Marketing Tactics A company‘s objectives indicate where it wants to go; the strategy indicates the intended route; and the tactics determine the specific short-term actions to be taken, internally and externally, by whom, and when. Advertising campaigns live in the world of marketing tactics.

III. Tactical Planning: Small Company ―Bottom-Up‖ Marketing In a small company, everybody is both player and coach, and the day-to-day details seem to come first, leaving little or no time for formal planning. However, there is a solution to this dilemma: bottom-up marketing (see Exhibit 8-2).

The tactic is a specific action for helping to accomplish a strategy. The artful combination of tactic and strategy creates a position in the consumer‘s mind.

IV. The IMC Approach to Marketing and Campaign Planning Integrated marketing communications suggests a new approach to planning marketing and communications activities. It differs from the traditional processes by mixing marketing and communications planning together rather than separating them.

As depicted in Exhibit 8-3 (starting at the bottom), IMC activities begin with the customer and work back to the brand. All corporate marketing functions are dedicated to building and maintaining brand equity through a united focus on stakeholder loyalty.

This ever-expanding database of customer behavior can be the basis for planning future marketing and communications activities, especially if the database contains information on customer demographics, psychographics, purchase data, and brand or product category attitudes (see Exhibit 8-4).

A. The Importance of IMC of the Study of Advertising

1-170 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

V.

The IMC approach helps broaden the company‘s perspective, so that message tactics come from a consideration of broader marketing strategies, rather than the other way around.

The IMC Plan The IMC plan is a natural outgrowth of the marketing plan and is prepared in much the same way.

A. Reviewing the Marketing Plan The brand manager first reviews the marketing plan to understand where the company is going, how it intends to get there, and the role of IMC in the marketing mix.

B. Setting Objectives 1. Understanding What Campaigns Can Do Before a company can persuade customers to buy, it must inform, persuade, or remind its intended audience about the company, product, service, or issue.

2. The IMC Pyramid: A Guide to Setting Communications Objectives a. The pyramid in Exhibit 8-5 shows some of the tasks IMC can perform. b. Your first communication objective therefore is to create awareness—to acquaint people with the company, product, service, and brand. c. The next task might be to develop comprehension—to communicate enough information about the product so that some percentage of the aware group recognizes the product‘s purpose, image, or position, and perhaps some of its features. d. Next, you need to communicate enough information to develop conviction— to persuade a certain number of people to actually believe in the product‘s value. e. Once convinced, some people may be moved to desire the product. f. Finally, some percentage of those who desire the product will take action. g. The pyramid works in three dimensions: time, dollars, and people.

3. Different Ways Consumers Learn About Brands a. The IMC pyramid represents the learn–feel–do model of effects. b. As the IMC model shows, many marketers have databases about where their customers live, what they buy, and what they like and dislike. c. By starting with the customer and then integrating all aspects of their marketing communications—package and store design, personal selling, advertising, public relations activities, special events, and sales promotions— companies hope to accelerate the communications process, make it more efficient, and achieve lasting loyalty from good prospects, not just prospects (see Exhibit 8-6).

C. IMC Strategy and the Creative Mix

1-171 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VI.

The IMC objective declares what the marketer wants to achieve with respect to consumer awareness, attitude, and preference; the advertising (or creative) strategy describes how to get there. IMC strategy blends the elements of the creative mix: target audience, product concept, communications media, and advertising message.

1. The Target Audience: Everyone Who Should Know a. The target audience, the specific people the IMC will reach, is typically larger than the target market. Marketers need to know who the end user is, who makes the purchase, and who influences the purchasing decision. b. The dominant brands are purchased most by both heavy and light users (see Exhibit 8-7).

2. The Product Concept: A ―Bundle of Values‖ a. The ―bundle of values‖ the marketer presents to the consumer is the product concept. b. Some years ago, Richard Vaughn at Foote, Cone & Belding noted that different kinds of products typically evoke different levels of consumer involvement (either high or low) and different types of involvement, either cognitive (think) or affective (feel). c. More recently, academics Kim and Lord recognized that people can be both cognitively and affectively involved at the same time. So they developed the Kim–Lord grid, shown in Exhibit 8-8.

3. The Communications Media: The Message Delivery System As an element of creative strategy, the communications media are all the vehicles that might transmit the marketer‘s message.

4. The IMC Message: What the Campaigns Communicate a. What the company plans to say and how it plans to say it, both verbally and nonverbally, make up the IMC message. b. The combination of copy, art, and production elements forms the message, and there are infinite ways to combine these elements.

D. The Secret to Successful Planning The key to successful planning is information, but the genius of business is interpreting what the information means.

IMC Budgeting Approaches Money is the motor that drives every marketing and IMC plan. The marketing department has the tough job of convincing top management that communication spending makes good business sense, even during adverse economic conditions.

A. IMC: An Investment in Future Sales IMC—as one element of the marketing mix—is an investment in a product or brand.

While IMC is often used to stimulate immediate sales, its greatest power is in its cumulative, long-range, reinforcement effect. IMC is a current expense for accounting purposes, it is also a long-term capital investment.

1-172

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

1. The Relationship of IMC to Sales and Profits Many variables (both internal and external) influence the effectiveness of a company‘s marketing and advertising efforts. Economists have long studied the relationship between the amount a company spends on advertising—traditionally one of the most important IMC elements—and subsequent increases or decreases in sales or profitability. a. Substantial research does support the following principles: 1) In consumer goods marketing, increases in market share are closely related to increases in the marketing budget. And market share is a prime indicator of profitability.

2) Sales normally increase with additional advertising. At some point, however, the rate of return plateaus and then declines.

3) Sales response to advertising may build over time, but the durability of advertising is brief, so a consistent investment is important.

4) Advertising expenditures below certain minimum levels have no effect on sales.

5) Some sales will occur even if there is no advertising.

6) Culture and competition impose saturation limits above which no amount of advertising can increase sales. b. IMC should be viewed as a long-term investment in future profits.

2. The Variable Environments of Business The brand manager must consider the company‘s economic, political, social, and legal situation.

B. Developing an IMC Budget Companies use a number of methods to determine how much to spend on IMC, including the percentage of sales, percentage of profit, unit of sale, competitive parity, share of market, and objective/task methods.

1. Percentage of Sales Method The percentage of sales method is one of the most popular techniques for setting promotional budgets. It may be based on a percentage of last year‘s sales, anticipated sales for next year, or a combination of the two (see Exhibit 8-9).

2. Share of Market/Share of Voice Method a. The share of market/share of voice method is an attempt to link promotional dollars with sales objectives. b. The share of market/share of voice method is commonly used for new product introductions. c. To see how this method works, look at the three leading American car producers: GM, Ford, and DaimlerChrysler.

1-173 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VII.

d. An IMC focus helps to remind us that advertising is just one component of IMC, and for some marketers, not the most important one. The top national packaged-goods marketers spend 25 to 30 percent of their marketing budgets on consumer and trade promotion rather than consumer advertising.

3. Strategic Budgeting: Objective/Task Method a. The objective/task method, also known as the budget buildup method, is used by many large national marketers in the United States. It treats IMC as a marketing tool for generating sales. b. The task method has three steps: defining objectives, determining strategy, and estimating cost. c. The task method forces companies to think in terms of accomplishing goals.

Its effectiveness is most apparent when campaign results can be readily measured. The task method is adaptable to changing market conditions and can be easily revised.

4. Additional Methods a. In the empirical research method, a company runs a series of tests in different markets with different budgets to determine the best level of advertising expenditure. b. Computers can generate quantitative mathematical models for budgeting and allocating ad dollars.

C. The Bottom Line 1. Unfortunately, all these methods rely on one of two fallacies.

2. The first is that IMC is a result of sales.

3. The second fallacy is that IMC creates sales. In certain circumstances (where direct response messages are used), advertising closes the sale.

4. A campaign‘s real role is to reinforce current customers, locate new prospects, position the product competitively, build brand equity, and stimulate demand. It may even stimulate inquiries and product trial and, on the local level, build retail traffic.

Chapter Summary A. The marketing plan may be the most important document a company possesses.

B. There are three types of marketing planning models: top-down, bottom-up, and integrated marketing communications planning.

C. The top-down marketing plan contains four principal sections: situation analysis, marketing objectives, marketing strategy, and tactics (action programs).

D. The first step in developing a marketing strategy is to select the target market. The second step is to determine the product‘s positioning. The third step is to construct a cost-effective marketing mix for each target market the company pursues.

E. One way for small companies to construct the marketing and IMC plan is to work from the bottom up, taking an ingenious tactic and building a strategy around it.

1-174

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

F. Integrated marketing communications can help build long-term relationships with customers.

G. IMC is a natural outgrowth of the marketing plan, and the IMC plan is prepared in much the same way as the top-down marketing plan.

H. IMC objectives may be expressed in terms of moving prospective customers up through the IMC pyramid (awareness, comprehension, conviction, desire, action).

I. The IMC (or creative) strategy is determined by the marketers use of the creative mix.

J. Several methods are used to allocate advertising funds. The most popular are the percentage of sales approach and the objective/task method. The share of market/share of voice method is often used in markets with similar products.

Answers to Pedagogical Features  My IMC Campaign 8–A: Developing the Situational Analysis

In previous chapters you‘ve honed your understanding of the consumer, segmented the audience, and conducted research. It is time to pull all of this information together and create an assessment of your client‘s current situation. Marketers call such an assessment a situation analysis. Use the list below to organize your analysis.

The Industry  Companies in industry: Dollar sales, strengths.  Growth patterns within industry: Primary demand curve, per capita consumption, growth potential.  History of industry: Technological advances, trends.  Characteristics of industry: Distribution patterns, industry control, promotional activity, geographic characteristics, profit patterns.

The Company  The company story: History, size, growth, profitability, scope of business, competence, reputation, strengths, weaknesses.

The Product or Service  The product story: Development, quality, design, description, packaging, price structure, uses, reputation, strengths, weaknesses.  Product sales features: Exclusive, nonexclusive differentiating qualities, competitive position.  Product research: Technological breakthroughs, improvements planned.

Sale History  Sales and sales costs: By product, model, sales districts.  Profit history.

Share of Market  Sales history industrywide: Share of market in dollars and units.  Market potential: Industry trends, company trends, demand trends.

1-175 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

The Market  Who and where is the market: How was market segmented, how can it be segmented, what are consumer needs, attitudes, and characteristics? How, why, when, where do consumers buy?  Past IMC appeals: Successful or unsuccessful.  Who are our customers: Past and future? What characteristics do they have in common? What do they like about our product? What don‘t they like?

Distribution  History and evaluation: How and where product is distributed, current trend.  Company’s relationship: With the distribution channel and its attitudes toward product/company.  Past policies: Trade advertising, deals, co-op programs.  Status: Trade literature, dealer promotions, point-of-purchase displays.

Pricing Policies  Price history: Trends, relationship to needs of buyers, competitive price situation.  Past price objectives: Management attitudes, buyer attitudes, channel attitudes.

Competition  Who is the competition: Primary, secondary, share of market, products, services, goals, attitudes. What is competition‘s growth history and size?  Strengths and competition: Sales features, product quality, size. Weaknesses of competition.  Marketing activities of competition: Advertising, promotion, distribution, sales force. Estimated budget.

Promotion  Successes and failures: Past promotion policy, sales force, advertising, publicity.  Promotion expenditures: History, budget emphasis, relation to competition, trend.  IMC programs: Review of strategies, themes, campaigns.  Sales force: Size, scope, ability, cost/sale.

Ad Lab 8–A: The Strategies of Marketing Warfare 1. Think of a successful product and explain its success in terms of marketing warfare.

Discussion Guidelines: Market Position Strategy (per 100 companies) 1 Defensive strategy (adopts competitors‘ features) 2–3 Offensive strategy (attacks to capture market share) 4–7 Flanking strategy (controls uncontested niche areas) 7–99 Guerrilla strategy (controls small areas until contested)

1-176 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Students may want to localize their example. Local radio stations, banks, auto dealers, grocery stores, and department stores might provide interesting opportunities for discussion.

Sample Answer: On the national level, Compaq computer is an example of a company that successfully waged guerrilla warfare and flanking warfare throughout the 1980s by specializing in the small, portable, IBM-compatible computer niche market. Today, it has reached a size where it competes for market share against the leaders using the offensive strategy of marketing warfare.

2. Select a product and explain how marketing warfare strategy might be used to gain greater success.

Sample Answer: A small used-car dealer could run testimonials featuring only 18-year-olds (praising the good service they received) along with a special discount on car insurance from a certain insurance company. This would probably be considered a flanking tactic if the niche market of young, first-time car buyers came in droves and continued to do so as long as promotions were run.

It would be seen as a guerrilla strategy if another dealer—particularly a major dealer— advertised to the same market segment, and the used-car dealer retargeted its ads to reach single parents.

Ethics, Diversity & Inclusion: Subliminal Persuasion 1. What are the ethical concerns that subliminal advertising would create? Who are the stakeholders (people or groups that would be affected by this practice)?

Answer Guidelines: Students could discuss the ability and power of subliminal advertising to shift consumer‘s moods; to shift their purchase behaviors, their brand preferences, their use in playing to consumer‘s weaknesses; or a discussion of whether or not it is acceptable for advertisers to engage with consumers in a way in which they‘re unaware. Students could discuss consumers, vulnerable publics (i.e. children, the elderly, addicts), clients or the brand‘s themselves, or governmental agencies as stakeholders potentially impacted by this practice.

2. How does subliminal advertising relate to the free-market principle of complete information we discussed earlier?

Answer Guidelines: Students could discuss how having complete information about a product they‘re buying allows them to make better decisions. The use of subliminal advertising would inhibit their ability to make the best product decision for them. Additionally, the more information consumers have about a product, the more likely it is that they will be satisfied with the product after purchase. If incomplete information is provided through the trickery of subliminal advertising, it could diminish consumer‘s post-purchase evaluations of their satisfaction with the product.

1-177 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

 My IMC Campaign 8–B: Developing IMC Objectives

For the next big sets of decisions you will make, both media and creative, it will be essential that you specify what advertising and other promotions should do. Use the checklist below to focus your thinking on your objectives.

Does the message aim at immediate sales? If so, objectives might be: __Perform the complete selling function. __Close sales to prospects already partly sold. __Announce a special reason for buying now (price, premium, and so forth). __Remind people to buy. __Tie in with special buying event. __Stimulate impulse sales.

Does the message aim at near-term sales? If so, objectives might be: __Create awareness. __Enhance brand image. __Implant information or attitude. __Combat or offset competitive claims. __Correct false impressions, misinformation. __Build familiarity and easy recognition.

Does the message aim at near-term sales? If so, objectives might be: __Create awareness. __Enhance brand image. __Implant information or attitude. __Combat or offset competitive claims. __Correct false impressions, misinformation. __Build familiarity and easy recognition.

Does the message aim at building a ―long-range consumer franchise‖? If so, objectives might be: __Build confidence in company and brand. __Build customer demand. __Select preferred distributors and dealers. __Secure universal distribution. __Establish a ―reputation platform‖ for launching new brands or product lines. __Establish brand recognition and acceptance.

Does the message aim at helping to increase sales? If so, objectives would be: __Hold present customers.

1-178 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

__Convert other users to advertiser‘s brand. __Cause people to specify advertiser‘s brand. __Convert nonusers to users. __Make steady customers out of occasional ones. __Suggest new uses. __Persuade customers to buy larger sizes or multiple units. __Remind users to buy. __Encourage greater frequency or quantity of use.

Does the message aim at some specific step that leads to a sale? If so, objectives might be: __Persuade prospect to write for descriptive literature, return a coupon, enter a contest. __Persuade prospect to visit a showroom, ask for a demonstration. __Induce sampling (trial offer).

How important are supplementary benefits of message? Objectives would be: __Help salespeople open new accounts. __Help salespeople get larger orders from wholesalers and retailers. __Help salespeople get preferred display space. __Give salespeople an entrée. __Build morale of sales force. __Impress the trade.

Should the message impart information needed to consummate sales and build customer satisfaction? If so, objectives may be to use: __―Where to buy it‖ messages. __―How to use it‖ messages. __New models, features, package. __New prices. __Special terms, trade-in offers, and so forth. __New policies (such as guarantees).

Should message build confidence and goodwill for the corporation? Targets may include: __Customers and potential customers. __The trade (distributors, dealers, retail people). __Employees and potential employees. __The financial community. __The public at large.

What kind of images does the company wish to build? __Product quality, dependability.

1-179 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

__Service. __Family resemblance of diversified products. __Corporate citizenship. __Growth, progressiveness, technical leadership.

Portfolio Review: Strategic Use of the Creative Mix During the marketing and advertising planning process, companies need to carefully consider who their target markets are and then who should be the targets of their advertising. They also need to consider the other elements of advertising strategy. This brings up a lot of questions: What product concept are we trying to communicate; what various media will be used to communicate the message; and what should the nature of our advertising message be? Once these things are decided, the creative team can begin its work.

The ads in this portfolio demonstrate some good creative thinking, but more important, some outstanding strategic thinking. See if you can determine which element or elements of the creative mix are emphasized in each ad.

Ad Lab 8–B: The Economic Effect of Advertising on Sales 1. When would an advertising expenditure curve have a negative slope?

The advertising expenditure curve will grow until the market response slows to the point where advertising costs match the return on sales.

Rationale: Initially, the ratio between ―advertising expenditures‖ and ―units sold‖ is a positive, upward line with sales returns outstripping the cost of advertising. However, once the audience is saturated (exposed to the ads too frequently), sales figures begin to slow and the line begins to slope at a shallower angle. However, sales will still be better than advertising costs—to some degree—until the line reaches a point where it no longer rises (horizontal axis). Thus, the advertising expenditure curve will grow until the market response slows to the point where advertising costs match the return on sales. As sales returns diminish further, the curve will drop into a negative slope.

2. Economists suggest that the quantity sold depends on the number of dollars the company spends on advertising. Is that a safe assumption? Discuss.

No. There are internal and external factors that affect sales: a. There is a point where markets become unwilling to respond to advertising. b. Ad budgets cannot last indefinitely. c. There are minimal levels below which advertising expenditures have no effect on sales. d. Culture and competitors can impose limits on advertising.

1-180 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

However, it is true that there is normally a positive relationship between the quantity sold and the advertising dollars spent (there are too few advertising dollars available to maintain broad or complete coverage for any length of time). The relationship depends on a perceived need in the marketplace for the product. If people do not perceive the need-satisfying qualities of the product, all the advertising in the world will not generate sales. (The Edsel case was a classic example of vast advertising with little to show for it.)  My IMC Campaign 8-C: Ways to Set IMC Budgets

How much should you recommend that your client spend on promotions? Here is a list of ways companies set their marketing budgets.  Percentage of sales. Budget is determined by allocating a percentage of last year’s sales, anticipated sales for next year, or a combination of the two. The percentage is usually based on an industry average, company experience, or an arbitrary figure.  Percentage of profit. Percentage is applied to profit, either past years’ or anticipated.  Unit of sale. Also called the case-rate method. A specific dollar amount is set for each box, case, barrel, or carton produced. Used primarily in assessing members of horizontal coops or trade associations.  Competitive parity. Also called the self-defense method. Allocates dollars according to the amounts spent by major competitors.  Share of market/share of voice. Allocates dollars by maintaining a percentage share of total industry spending comparable to or somewhat ahead of desired share of market.

Often used for new product introductions.  Objective/task. Also referred to as the budget buildup method, this method has three steps: defining objectives, determining strategy, and estimating the cost to execute that strategy.  Empirical research. Companies determine the most efficient level by running experimental tests in different markets with different budgets.  Quantitative mathematical models. Computer-based programs developed by major advertisers and agencies rely on input of sophisticated data, history, and assumptions.  All available funds. Go-for-broke technique generally used by small firms with limited capital, trying to introduce new products or services.  People behind the Ads: Samantha Avivi, Brand Strategist at Jim Stengel Company





After earning an advertising degree from the University of Florida, Sam spent two years learning her craft at her dad’s agency before joining Young & Rubicam, where she handled accounts with Advil and Fisher Price.

Next came stints with DMB&B and BBDO before her biggest client, Procter & Gamble, convinced Sam to jump ship and become an assistant brand manager for Luvs.

1-181

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.



Next came a stint as Global Marketing Director at Kimberly-Clark, before joining marketing consultancy Jim Stengel Company, where she works as a brand strategist.

Review Questions 1. What is a marketing plan and why is it a company‘s most important document?

The marketing plan is the one document in a company that tells where its revenue is going to come from. The plan assembles all the pertinent facts about the organization, the markets it serves and its products, services, customers, and competition. It forces all departments (product development, production, selling, advertising, credit, transportation) to focus on the customer. Finally, it sets goals and objectives for specified periods of time and lays out the precise strategies and tactics to achieve them.

2. What examples illustrate the difference between need-satisfying objectives and sales-target objectives?

Need-satisfying objectives shift management‘s view from a producer of products to a satisfier of target market needs.

Sales-target objectives are specific, quantitative, realistic marketing goals to be achieved within a specified time period.

Example: An oil company‘s need-satisfying objective might be to satisfy its customers‘ needs for a variety of sources of energy. Its sales-target objective might be to increase the sales of its subsidiary company‘s solar heating devices by 50% over the next two years.

3. What are the three types of marketing plans? How do they differ?

Companies employ three types of marketing planning models today: a. Top-down—The traditional top-down marketing plan is the most common planning format. The top-down plan has four main elements: situation analysis, marketing objectives, marketing strategy, and marketing tactics (or action programs). (Exhibit 8-1) b. Bottom-up—Small companies use bottom-up marketing, which enables entrepreneurs to find unique tactics to exploit. Once a tactic is discovered, the advertiser can build a strategy around it, focusing all elements of the marketing mix on it. The tactic becomes the nail, and the strategy is the hammer that drives it home. (Exhibit 8-2) c. Integrated Marketing Communications—IMC is the process of building and reinforcing mutually profitable relationships with employees, customers, other stakeholders, and the general public through a communication program using a variety of media. IMC planning perceives all the actions of a company as communications (e.g., salespeople‘s attitudes, management‘s human resource policies, advertising, the look of the letterhead). The focus on the customer‘s role is dominant, and it makes companies go beyond marketingoriented to being market-driven.

4. What basic elements should be included in a top-down marketing plan?

The basic elements of a top-down marketing plan are: 1. Situation Analysis 2. Marketing Objectives 1-182 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

a. Need-satisfying objectives b. Sales-target objectives 3. Marketing Strategy a. Selecting target markets b. Determining the marketing mix (the 4Ps) 4. Marketing Tactics (Action Programs) 5. How can small companies use bottom-up marketing to become big companies?

Trout and Ries think the best way for a company to develop a competitive advantage is to focus on an ingenious tactic first and then develop that tactic into a strategy. Bottom-up marketing is reversing the normal planning process (i.e., top-down planning), and it can be used in a small company that wants to become a big company. By planning from the bottom up, entrepreneurs can find unique tactics to exploit. The tactic is a competitive mental angle that is creative enough to produce results (i.e., growth, financial success). Once a tactic is discovered, the advertiser can build a strategy around it, focusing all elements of the marketing mix on it. Managers of small companies actually have an advantage. Surrounded by the details of the business, they are more likely to discover a good tactic that can be developed into a powerful strategy.

6. What are the elements of an advertising plan and an IMC strategy?

Students should note the advertising plan elements outlined in Appendix B. For IMC strategy, students should discuss the elements of the creative mix: target audience, product concept, communications media, and advertising message.

7. What types of involvement do consumers bring to the purchase decision?

Consumers bring different levels of involvement (high or low) and different types of involvement, either cognitive (thinking), or affective (feeling), to the purchase decision.

8. What is the best method of allocating advertising funds for real estate development? Why? Most real estate developers use the unit-of-sale method—allocating a certain amount per house to advertising—which is simply a variation on the percentage-of-sales method. This enables the developer and the banker to anticipate what will be spent to promote the project before it is built. However, this method is only as good as the developer‘s ability to know how much per unit needs to be spent to sell the project. To determine that, a variation of the task method might be most useful.

9. What types of companies tend to use the percentage of sales method? Why? Retailers, who need to control the level of expenditure to maintain profitability. In addition, new businesspeople and companies that don‘t have a lot of experience in advertising, or for whom advertising may not be a major marketing activity. Often these firms miss out on opportunities because of their narrow view.

10. How could a packaged-foods manufacturer use the share of market/share of voice method to determine its advertising budget?

A packaged foods manufacturer could measure the dollars spent on advertising by competitors, determine a reasonable market share to achieve over some period of time, and 1-183 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

then set a budget of a percentage of industry advertising that is somewhat ahead of the shareof-market objective.

The Advertising Experience 1. The Importance of Planning Why is planning so important for the success of brand messages? How did planning help Mountain Dew to evolve not only its ads and other promotional activities, but its core identity?

Discussion Guidelines: Planning is crucial to the success of brand messages. Planning aids in identifying the core business problem that marketing, advertising, and other communication functions must seek to solve through strategy and good planning. Additionally, planning allows for improved implementation of marketing messages, aids in ensuring that the campaign messages maintain continuity, and allows for the most efficient implementation of budget allocation.

Good planning by Mountain Dew allowed them to establish a really strong conception of their brand identity, an exceptional understanding of who their consumers were and where and how it would be best to reach them, which allowed them to create messages that would be most appealing to their consumers while staying ―on brand.‖ Planning then informed the placement of their messaging so that it reached the exact consumers they were attempting to reach when and where they were most likely to be receptive to the message.

2. Strategic IMC Planning You have explored various means of planning advertising strategy—top-down, bottom-up, and IMC. Browse through the websites of the following marketers, then answer the questions regarding the various means of planning IMC strategy: • American Automobile Association (AAA): www.aaa.com • Bristol-Myers Squibb: www.bms.com • ProFlowers: www.proflowers.com • Hudson Moving & Storage: www.moving-storage.com • Metro Goldwyn Mayer/UA: www.mgm.com • General Electric: www.ge.com • Hewlett-Packard: www.hp.com • Intel: www.intel.com • Kellogg‘s: www.kelloggs.com • Walt Disney: www.disney.com a. What is the size and scope of the company and its business? What is the company‘s purpose? b. Identify the target audience, product concept, communications media, and advertising message for each.

1-184 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

c. What is the company‘s position within the industry? What is the type of communication used? Target market? d. Where does the company‘s product(s) fall within the Kim-Lord Grid?

Sample Answer: Hewlett-Packard a. Hewlett-Packard is a large, international company that designs, manufactures, and services electronic products and systems for measurement, computing, and communication used by people in industry, business, engineering, science, medicine, and education. b. Target audience: The HP website is vast and varied. The site includes information for employees, current and potential customers, and potential investors on three continents and in 50 countries by providing: • In-depth information for the company‘s printing, digital imaging, computers, storage, Networking, and software products.

• Customer service and technical support.

• Online shopping.

• Online publications/journals.

• Press releases and philanthropic information.

• Current company financials.

• Corporate mission, goals, policies, and information.

Product concept: The company‘s more than 25,000 products include computers and peripheral products, electronic test and measurement instruments and systems, networking products, medical electronic equipment, instruments, and systems for chemical analysis, handheld calculators, and electronic components. The basic purpose behind these products is to accelerate the advancement of knowledge and improve the effectiveness of people and organizations.

Communications media/messages: The website details all the necessary company and product information. It also has advertising banners, which provide an image while pointing to the site.

Advertising message: Their messaging currently tends to emphasize the small size but great computing power of their products, whether it be laptops, tablets, or printers. They stress that their products are small business and small workspace friendly, utilizing imagery and copy that communicate the message of compact, but efficient and powerful. c. Position: The company is positioned as the age-old technology leader within its industries providing high quality, state-of-the-art, reliable products.

Communications used: • The HP website and its advertising banners are the company‘s primary online media.

These interactive media, coupled with other collateral items—including brochures, P.O.P. displays/kiosks, and a myriad of in-store merchandising vehicles—work to provide all the essential information about the company and its products.

1-185 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

•

HP also uses national television spots and magazine advertisements to enhance awareness and improve the image of the company and its products.

• Local/regional newspaper advertising and extensive sales promotion (both consumer and trade premiums) for the company‘s products provide price incentives and push sales.

• Finally, the company‘s direct-marketing presence works to establish its consumer database, identify qualified leads (―hand-raisers‖), build owner loyalty, and communicate new product information.

Target markets: • Current and potential consumers of the company‘s products.

• Industry technicians, practitioners, and executives.

• Retail and wholesale channel partners.

• Current and future investors.

• HP employees. d. Most, if not all of the company‘s products, fall in Quadrant I of the Kim-Lord Grid, because they are very high in cognitive involvement but low in affective involvement.

3. Websites and IMC IMC can involve many different elements, and a website can be an integral part of a company‘s marketing efforts. Discuss how the three following companies might make a website part of an overall IMC effort: a. The Green Threads clothing retailer described in Chapter 1. b. A medium-sized candy maker with some brands that are nearly 100 years old. c. A small company that publishes books, CDs, and DVDs for a motivational speaker who has just had her first big break with an appearance on the Dr. Phil Show.

4. Mountain Dew has ―owned‖ an association with extreme sports and youth since the early 1990s, and this strategy continues to be successful for the brand. What cultural or societal trends must the brand monitor in order to know how to communicate with its audience? Does its image also limit growth possibilities and if so, in what ways? How might it circumvent these limits?

Answer Guidelines: Mountain Dew must continue to monitor the leisure pursuits of their target market—young, aggressive trendsetters. Perhaps their image limits the extension of their brand as a product for relaxation (the opposite of its users extreme activities), but perhaps Mountain Dew could suggest that it is equally appropriately consumed before, during, or after aggressive activities.

1-186 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

5. The University of Florida‘s Online graduate program in communications wants to determine its marketing budget for the coming year. UF has 20 percent of the market in online graduate education with overall revenues of $1 million for the current year. It expects revenues next year will be $1.5 million and wants to achieve 25 percent of the market by revenue. It‘s primary challenger is Acme University, which spends $2 million each year on marketing and has 25 percent of the market. Total spending on education marketing for all programs is $8 million. How much should UF spend on marketing using the following approaches? (Be sure to reference Exhibit 8-9 in this chapter.)  The percentage of current sales using industry averages.  Percentage of future sales using industry averages.  Share of voice (against Acme).

Answer Guidelines: Students should explain why their suggestions for allocating advertising funds are well reasoned.

Connect Activities Title

Assignment Type

Topic

Learning Objective

Marketing Planning Mountain Dew

Worksheet

Marketing Planning Creative Strategy Development; The Budgeting Process for Integrated Marketing Communications

08-01; 08-02

Video Case

08-01; 08-05

AACSB Accreditation Tagging Analytical Thinking Knowledge Application; Analytical Thinking

Bloom’s Taxonomy Analyze Apply; Understan d

Marketing Planning Activity Summary: This activity provides students with an organizational activity and students must identify which part of the marketing plan this activity describes and provide an example of how this activity would translate into the marketing plan.

1-187 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Follow-Up Class Discussion: Ask students to map out the sections of a marketing plan for a brand of their choosing and what information they would provide about that brand in each section.

Mountain Dew Activity Summary: This activity asks students to watch a commercial for the Mountain Dew brand, a brand known for their clear understanding of their target audience. It asks students to consider Mountain Dew‘s positioning strategy and IMC budgeting methods.

Follow-Up Class Discussion: Ask students to identify other brands that they feel know their target market extremely well. How does this translate into their marketing efforts? How do these brands position themselves?

CHAPTER NINE PLANNING MEDIA STRATEGY: DISSEMINATING THE MESSAGE This chapter shows how communications media help advertisers achieve marketing and advertising objectives. To get their messages to the right people in the right place at the right time, media planners follow the same procedures as marketing and advertising planners: setting objectives, formulating strategies, and devising tactics. To make sound decisions, media planners must possess marketing savvy, analytical skill, and creativity.

Learning Objectives After studying this chapter, your students will be able to: LO9-1 Define media planning and indicate why it is important in advertising and IMC. LO9-2 Explain the role of media in the marketing framework.

LO9-3 Describe how planners define media objectives.

LO9-4 Discuss how reach, frequency, and continuity are optimized in media planning.

LO9-5 Outline how media planners create a media strategy.

LO9-6 List the tactics that can be used to implement a media strategy.

LO9-7 Explain how computer technologies change media planning.

What’s New? The chapter is thoroughly revised in collaboration with Jordan Alpert, assistant professor in the Department of Advertising at the University of Florida. A former postdoctoral fellow in cancer prevention and control in the Department of Health Behavior and Policy at Virginia 1-188 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Commonwealth University School of Medicine, Jordan has nine years of industry experience, including stops as marketing communications manager at About.com, senior account executive at IMC2, account executive at Sharpe Partners, junior account executive at TMP Worldwide, and assistant media planner at Universal McCann.

The chapter updates include new information about the HIV.gov campaign and shows how media planning helps in this important cause. The text has been substantially revised throughout.

Ad Lab 9–A gives students the chance to apply what they‘ve learned to a fictitious but realistic media buy. The Ethics, Diversity & Inclusion box discusses groups often ignored in media plans, including LGBT consumers. Information on programmatic buying is expanded. The PBTA individual for the chapter is now Tria Cingcuangco, Director, Strategy & Planning at PowerPhyl Media.

Teaching Tips and Strategies Using the Chapter Opening Vignette in the Classroom The HIV.gov website is an example of public education and information provided by the government. The concept is different in some ways from advertising soda or luxury cars, but there are many similarities—particularly the need to plan a communication strategy that persuades people to take action. Students can discuss the various ―market segments,‖ messages, and the best channels to reach specific segments for this noncommercial IMC endeavor.

Other Tips and Strategies Many of my clients used to believe that advertising was about the number of spots they bought (frequency). If they could purchase 500 cable TV spots in a week, they thought that was better than the 30 or 40 spots they could get on network television. What many local advertisers fail to realize is that advertising efficiency isn‘t only about the number of spots (frequency), but also the reach and cost per thousand (CPM). This discussion will focus on the differences between cable and network television buys.

Cable television, unlike network television, is subsidized by monthly fees. Therefore, cable companies can afford to charge less for advertising than network television can. It looks cheaper at first glance. Cable usually will give an advertiser from ten to fifteen channels on which to run 500 spots. The problem with that option is that the ad‘s frequency is reduced, so it may not reach all of the advertiser‘s target market.

Remember that frequency is the number of times an ad is viewed. My sales manager used to explain to me that ―a frequency of four is minimum; we are shooting for a seven.‖ This means that a commercial needs to be seen at least four times to get a good return on investment (ROI).

Seven is a better number, and this is the target many national advertisers shoot for.

1-189 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Another disadvantage of cable is that its reach is more limited than that of network television.

For example, in our viewing area, it was quite common for cable to have only a couple of thousand households viewing at any given time. On the other hand, on network television we would have many thousands viewing in our DMA (designated marketing area). The reach of network television is simply much greater.

Fragmentation used to really hurt network television and cable systems. Recent mergers have reduced the number of systems on which advertising is carried, greatly simplifying the advertisers‘ job by consolidating the viewing audience. I have watched what used to be three to four cable systems in a state now merge into one or two. This has extended cable‘s reach.

Web Resources for Enhancing Your Lectures Media Planning & Buying Calculators

http://www.srds.com/frontMatter/sup_serv/calculator/in dex.html

Kantar: SRDS Media Planning Platform

https://next.srds.com

Nielsen

http://www.nielsen.com

Pedagogical Features Ad Lab 9–A: Buying Traditional Local Media Ethics, Diversity & Inclusion: Diversity in Media Planning  My IMC Campaign 9: Developing Media Objectives and Strategies

Ad Lab 9–B: Media Selection: A Quick List of Advantages  People behind the Ads: Tria Chingcuangco, Director, Strategy & Planning at PowerPhyl

Media Lecture Outline I. Vignette: HIV.gov The HIV.gov website is just one communication channel used by the federal government to reach various population segments in its efforts to save lives and stop the spread of this deadly disease. The government created a detailed communication plan that outlines various messages, audiences, and strategies to ensure maximum outreach.

1-190 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

II.

Media Planning: Integrating Science with Creativity in Advertising Traditionally the purpose of media planning is to conceive, analyze, and select channels of communication that will direct advertising messages to the right people in the right place at the right time. As the media landscape evolves, consumers have more control than ever about when, where, and how they view content. Consumers are often content creators.

Media planning requires that agencies should carefully consider and clearly articulate the following: 1. Where should we advertise?

2. Which media vehicles should we use and why?

3. When during the year should we amplify our advertising? When is it in our interests to cut back on advertising?

4. How often should we run the advertising?

5. What are the opportunities are there to integrate advertising with other communication opportunities?

Some of the decisions require data and analysis, aided by sophisticated software programs. Understanding and interpreting what numbers really mean, then designing and implementing a creative marketing plan, demand intelligence and creativity.

A. The Challenge As the complexity of the field increases, media decisions become more critical and clients more demanding. They want accountability, information, particularly about media options, and they want creative buys, such as those afforded by HIV.gov.

1. Increasing Media Options Increase Audience Fragmentation a. With the spread of digital technologies and the natural maturation of the marketplace, many more vehicles are available, and each offers a dizzying array of possibilities for connecting with audiences. b. TV is now fragmented into network, syndicated, spot, local, and OnDemand, as well as cable. c. Specialized magazines now aim at every possible population and business segment. Even national magazines publish editions for particular regions or demographic groups. d. Exhibit 9-1 shows how spending across major categories of media has changed in the United States. It shows the percent of ad dollars allocated across media categories in the United States in 2016 and predicted for 2021.

The exhibit illustrates a trend that will continue into the future: the growth of spending on digital media at the expense of traditional media. e. Nontraditional media—from DVD and movie advertising to interactive kiosks and even shopping carts—also expand the menu of choices. f. Companies and agencies need to think in terms of message handling, being as responsible for receiving messages as for sending them.

1-191

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

g. Mark Goldstein, the president of integrated marketing at Fallon in Minneapolis at the time, said, ―Media is no longer planned and bought; instead it‘s created, aggregated, and partnered.‖ 2. Increasing Costs The cost of exposing 1,000 people to each of the major media (called cost per thousand) rose faster than inflation. Rising costs make media planning more challenging than ever, especially for advertisers with small budgets.

3. Increasing Complexity in Media Buying and Selling a. As the process of buying media has become more complex, so has the process of selling media. The world of media has converged as traditional media companies expand and acquire digital media companies. b. Many print and broadcast media companies developed ―value-added‖ programs to provide extra benefits. c. Besides selling space or time at rate-card prices or below, these companies now offer reprints, merchandising services, special sections, event sponsorships, and mailing lists. To get a bigger share of the advertiser‘s budget, larger media companies are bundling the various stations, publications, or properties they own and offering them in integrated combos as further incentives. d. Value-added packages often employ communications vehicles outside traditional media planning, such as public relations activities, sales promotion, and direct marketing. e. The good media specialist today is actually a real advertising generalist. And with many of the biggest client changes happening in media-only agency reviews, it‘s apparent that the media professionals have finally come into their own.

4. Increasing Competition a. The final element making media planning more challenging today is the competitive environment, which in just a few years completely changed the structure of the advertising business. b. To respond to the competitive pressure, ad agencies started unbundling their own media departments, setting them up as separate media specialist subsidiaries. c. The rise of digital media has allowed companies, both big and small, to have greater control over their media spending. It is no longer necessary to partner with a media agency to purchase media placements because technology companies like Google and Facebook provide easy-to-use tools for selecting audiences and delivering advertisements. Marketers can test different ads and determine which creative elements and placements deliver the best results.

B. The Role of Media in the Marketing Framework 1-192 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

1. Marketing Objectives and Strategy a. Exhibit 9-2 shows how objectives and strategies result from the marketing situation (or SWOT) analysis, which defines the company‘s strengths and weaknesses and uncovers any marketplace opportunities and threats. b. Marketing strategies lay out the steps for meeting these objectives by blending the four elements of the marketing mix, i.e., product, price, place, promotion. c. Advertising is just one of the many strategic tools a company may use to achieve its marketing objectives. d. Although the 4Ps of marketing (product, place, price, promotion) is a valuable concept, University of North Carolina at Chapel Hill professor Bob Lauterborn suggests modernizing the 4Ps to the 4Cs: 1) Consumer: Instead of focusing on a product, marketers should consider the consumer‘s wants and needs. Marketers should ask themselves questions like ―What problem is the consumer experiencing?‖ and ―What is frustrating the consumer?‖ to provide a helpful solution.

2) Cost: Lauterborn says that ―price is almost irrelevant.‖ He suggests marketers consider the cost of time to drive to the store, the price of shipping, and other factors that result in a cost to the consumer in order to satisfy the want or need.

3) Convenience: Consumers can purchase almost anything online with ease, but marketers should consider the most cost-effective and convenient method of how consumers can attain the product. Convenience has become a major factor in the way consumers shop for things like groceries and clothes.

4) Communication: Social media has placed even more importance on communication. In addition to advertisements, consumers are learning about brands through friends they follow on social media, influencers, and consumers writing online reviews.

2. Advertising Objectives and Strategy a. The objectives and strategies of an advertising plan unfold from the marketing plan. b. To achieve these objectives, companies devise advertising strategies that employ the elements of the creative mix: the product concept, target audience, advertising message, and communication media. c. The media department‘s job is to make sure the advertising message gets to the correct target audience in an effective manner.

C. The Media-Planning Framework 1. Development of a media plan involves the same process as marketing and advertising planning.

1-193 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

III.

2. First, review the marketing and advertising objectives and strategies and set relevant, measurable objectives that are both realistic and achievable by the media.

3. Next, try to devise an ingenious strategy for achieving these objectives.

4. Finally, develop the specific tactical details of media scheduling and selection.

Defining Media Objectives Exhibit 9-3 shows general media objectives for a hypothetical new food product.

Media objectives have two major components: audience objectives and message distribution objectives.

A. Audience Objectives 1. Audience objectives define the specific types of people the advertiser wants to reach.

2. The target audience may consist of people in a specific income, educational, occupational, or social group.

3. Simmons Market Research Bureau (SMRB) and Mediamark Research, Inc. (MRI), describe media audiences based on purchase tendencies (see Exhibit 9-4).

4. Planners can then select media vehicles—particular magazines or shows— according to how well they ―deliver‖ or expose the message to the media audience that most closely resembles the desired target consumer.

5. Advertisers using the IMC planning model start by segmenting their target audiences according to brand-purchasing behavior (for example, loyal users, brand switchers, new prospects) and then ranking them by profit to the brand.

B. Message-Distribution Objectives Distribution objectives define where, when, and how often advertising should appear. To answer these questions, a media planner must understand a number of terms, including message weight, reach, frequency, and continuity.

1. Audience Size and Message Weight a. The basic way to express audience size is simply to count the number of people in a medium‘s audience. This is what media research firms like Nielsen and Arbitron do for the broadcast media, typically using a statistical sample to project the total audience size. b. For print media, firms like the Audit Bureau of Circulations actually count and verify the number of subscribers (the circulation) and then multiply by the estimated number of readers per copy (RPC) to determine the total audience. c. Media planners often define media objectives by the schedule‘s message weight, the total size of the audience for a set of ads or an entire campaign, because it gives some indication of the scope of the campaign in a given market. There are two ways to express message weight: gross impressions and gross rating points.

1-194

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

d. An advertising impression is a possible exposure of the advertising message to one audience member. It is sometimes referred to as an opportunity to see (OTS). By multiplying a medium‘s total audience size by the number of times an advertising message is used during the period, planners arrive at the gross impressions, or potential exposures, possible in that medium. Then, by summing the gross impressions for each medium used, they know the total gross impressions for the schedule (see Exhibit 9-5). e. The rating is simply the percentage of homes (or individuals) exposed to an advertising medium. f. When we hear that a particular TV show garnered a 20 rating, it means 20 percent of the households with TV sets (expressed as television households or TVHH) were tuned in to that show. g. By adding the ratings of several media vehicles (as we did for gross impressions) we can determine the message weight of a given advertising schedule, only now it‘s expressed as gross rating points (GRPs) (see Exhibit 9-6). h. Through the use of computer models and certain assumptions based on experience, sophisticated planners can detect the relative impact of ad-related variables on sales and determine the return on investment (ROI) from each. i. This fact necessitated the development of other media objectives, namely reach, frequency, and continuity.

Reach a. Reach refers to the number of different people or households exposed at least once to an ad or campaign during a given period of time, usually four weeks. b. Reach should not be confused with the number of people who will actually be exposed to and consume the advertising, though. It is just the number of people who are exposed to the medium and therefore have an opportunity to see the ad or commercial. c. Exhibit 9-7 is a statistical table that shows how unduplicated reach builds as additional media are added.

Frequency a. Frequency measures the intensity of a media schedule, based on repeated exposures to the medium or the program. b. Frequency is important because repetition is the key to memory. c. Frequency is calculated as the average number of times individuals or homes are exposed to the medium. d. Calculate frequency: Average frequency = Total exposures ÷ Audience reach e. Calculate gross rating points: Reach × Frequency = GRP Continuity

1-195 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

IV.

a. Media planners refer to the duration of an advertising message or campaign over a given period of time as continuity. b. Few companies spread their marketing efforts evenly throughout the year.

They typically heavy up before prime selling seasons and slow down during the off-season. c. Likewise, to save money, a media planner for a new product might decide that after a heavy introduction period, a campaign needs to maintain continuity for an additional time but on fewer stations. While frequency is important to create memory, continuity is important to sustain it.

C. Optimizing Reach, Frequency, and Continuity: The Art of Media Planning As Exhibit 9-8 shows, the objectives of reach, frequency, and continuity have inverse relationships to each other.

1. Effective Reach a. One of the problems with reach is that, by themselves, the numbers don‘t take into account the quality of the exposure. b. Media people use the term effective reach to describe the quality of exposure.

It measures the number or percentage of the audience who receive enough exposures to truly receive the message.

2. Effective Frequency a. Similar to the concept of effective reach is effective frequency, defined as the average number of times a person must see or hear a message before it becomes effective. b. Cannon and Riordan point out that conventional media planning is based on media vehicle exposure (the number of people in a medium‘s audience), but effectiveness should relate to advertising message exposure. c. Cannon and Riordan would replace effective frequency with optimal frequency. Most studies of the advertising response curve indicate that incremental response to advertising actually diminishes, rather than builds, with repeated exposures (see Exhibit 9-9). The optimal frequency concept moves the focus of media planning from exposure effectiveness to effective exposures per dollar. d. For fast-moving consumer products, researcher Erwin Ephron suggests the concept of recency planning, based on ―the sensible idea that most advertising works by influencing the brand choice of consumers who are ready to buy.‖ Developing a Media Strategy: The Media Mix The media strategy describes how the advertiser will achieve the stated media objectives: which media will be used, where, how often, and when. Just as marketers determine marketing strategy by blending elements of the marketing mix, media planners can develop media strategies by blending the elements of the media mix.

1-196

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

A. Elements of the Media Mix: The Five Ms Many factors go into developing an effective media strategy. For simplicity and ease of memory, we have sorted them into five categories and given them the alliterative moniker of the five Ms (5Ms): markets, money, media, mechanics, and methodology.

1. Markets refer to the various targets of a media plan: trade and consumer audiences; global, national, or regional audiences; ethnic and socioeconomic groups; or other stakeholders.

2. Using intuition, marketing savvy, and analytical skill, the media planner determines the second element, money—how much to budget and where to allocate it.

3. From the IMC perspective, media include all communications vehicles available to a marketer. This includes radio, TV, newspapers, magazines, out-of-home, digital and direct mail, plus sales promotion, direct marketing, public relations activities and publicity, special events, sponsorships, brochures, and even shopping bags (see Exhibit 9-10).

4. The media planner also has to deal with the complex mechanics of advertising media and messages.

5. The methodology element refers to the overall strategy of selecting and scheduling media vehicles to achieve the desired message weight, reach, frequency, and continuity objectives. It offers the opportunity for creativity in planning, negotiating, and buying.

B. Factors That Influence Media Strategy Decisions Media decisions are greatly influenced by a variety of factors over which the media planner has little or no control. These include the scope of the media plan, sales potential of different markets, competitive strategies and budget considerations, availability of different media vehicles, nature of the medium, mood of the message, message size and length, and buyer purchase patterns.

1. Scope of the Media Plan The location and makeup of the target audience strongly influence the breadth of the media plan, thereby affecting decisions regarding the market, the money, and the media elements. a. Domestic Markets 1) A media planner normally limits advertising to areas where the product is available.

2) If a store serves only one town, or if a city has been chosen to test market a new product, then the advertiser will use a local plan.

3) A regional plan may cover several adjoining metropolitan areas, an entire state or province, or several neighboring states.

4) Advertisers who want to reach several regions or an entire country use a national plan.

1-197 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

b. International Markets 1) Foreign media can be a challenge for U.S. advertisers.

2) Most marketers develop an international media plan by formulating individual national plans first.

3) Because of the media variations from country to country, most international and global advertisers entrust national media plans to incountry foreign media specialists or the local foreign branches of global media agencies such as MindShare, OMD Worldwide, Mediaedge:cia, or Carat, rather than risk faulty centralized media planning.

2. Sales Potential of Different Markets The market and money elements of the media mix also depend on the sales potential of each area. Planners can determine an area‘s sales potential in several ways. a. The Brand Development Index 1) The Brand Development Index (BDI) indicates the sales potential of a particular brand in a specific market area. Formula: BDI = (percent of brand‘s total U.S. sales in the area) ’ (percent of total U.S. population in the area) × 100 2) An index number of 100 means the brand‘s performance balances with the size of the area‘s population. A BDI index number below 100 indicates poor potential for the brand. b. The Category Development Index 1) To determine the potential of the whole product category, media planners use the category development index (CDI), which works on the same concept as the BDI and is calculated in much the same way: CDI = (percent of the product category‘s total U.S. sales in the area) ’ (percent of total U.S. population in the area) × 100 2) The combination of BDI and CDI can help the planner determine a media strategy for the market (see Exhibit 9-11).

3. Competitive Strategies and Budget Considerations a. Advertisers always consider what competitors are doing, particularly those that have larger advertising budgets. This affects the media, mechanics, and methodology elements of the media mix. b. The media planner should analyze the company‘s share of voice in the marketplace.

4. Media Availability and Economics: The Global Marketer‘s Headache a. Every country has communications media, but they are not always available for commercial use (especially radio and television) and coverage may be limited.

1-198 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

b. Lower literacy rates and education levels in some countries restrict the coverage of print media. c. There‘s the problem of spillover media, local media that many consumers in a neighboring country inadvertently receive. d. Spillover media pose a threat for the multinational advertiser because they expose readers to multiple ad campaigns.

5. Nature of the Medium and Mood of the Message a. An important influence on the media element of the mix is how well a medium works with the style or mood of the particular message. b. Each circumstance affects the media selection as well as the methodology of the media mix. c. Once consumers understand reason-why messages, pulsing advertising exposures at irregular intervals is often sufficient. d. As educator, philosopher, and scholar Marshall McLuhan famously claimed, ―the medium is the message.‖ The very medium that an advertiser chooses can have as much or more of an impact on an audience as the communication, e.g. local jeweler advertising on TV presents perception that they are successful.

6. Message Size, Length, and Position Considerations a. The particular characteristics of different media, over which the media planner has no control, affect the mechanics element of the media mix. b. Color and larger units of space or time cost dearly in terms of reach and frequency (see Exhibit 9-12). c. The planner has to consider the nature of the advertising message; some simply require more time and space to explain. d. The position of an ad is another consideration. e. The position of search engine results on Google or Bing can dictate whether an organic or paid search result is ever seen.

7. Buyer Purchase Patterns Finally, the customer‘s product purchasing behavior affects every element of the media mix. Products with short purchase cycles (convenience foods and paper towels) require more constant levels of advertising than products purchased infrequently (refrigerators and furniture).

C. Stating the Media Strategy A written rationale for the media strategy is an integral part of any media plan.

1. Generally, the strategy statement starts with a brief definition of target audiences (the market element) and the priorities for weighting them.

2. It explains the nature of the message and indicate which media types will be used and why (the media element).

3. It outlines specific reach and frequency goals and how they are to be achieved (the methodology element).

1-199 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

V.

4. It provides a budget for each medium (the money element) including the cost of production and any collateral materials.

5. Finally, it states the intended size of message units, any position or timing considerations (the mechanics element), and the effect of budget restrictions.

Media Tactics: Selecting and Scheduling Media Vehicles Once the general media strategy is determined, the media planner can select and schedule particular media vehicles.

A. Criteria for Selecting Individual Media Vehicles In evaluating specific media vehicles, the planner considers several factors: overall campaign objectives and strategies, and the primary and secondary target markets and audiences; size and characteristics of each medium‘s audience; attention, exposure, and motivational value of each medium; and cost efficiency.

1. Overall Campaign Objectives and Strategy a. The media planner‘s first job is to review the nature of the product or service, the intended objectives and strategies, and the primary and secondary target markets and audiences. b. The content and editorial policy of the media vehicle and its compatibility with the product are important considerations. c. Advertising is most effective when it positions a product as part of the solution that consumers seek. d. Advertising in digital media changes the planning process substantially when it is accomplished through programmatic advertising. Programmatic ad buys are done largely via computer programs that match content sites (such as CNN.com or MTV.com) to advertisers via an advertising exchange (see Exhibit 9-13).

2. Characteristics of Media Audiences a. An audience is the total number of people or households exposed to a medium. The planner needs to know how closely the medium‘s audience matches the profile of the target market and how interested such people are in the publication or program. b. The content of a medium usually determines the type of people in the audience. Each type or programming attracts a different audience.

3. Exposure, Attention, and Motivational Value of Media Vehicles The media planner has to select media that will not only achieve the desired exposure to the target audience, but also attract attention and motivate people to act. a. Exposure To understand the concept of exposure value, think of how many people an ad ―sees‖ rather than the other way around. Five factors that affect the probability of ad exposure are: 1-200

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

1) The senses used to perceive messages from the medium.

2) How much and what kind of attention the medium requires.

3) Whether the medium is an information source or a diversion.

4) Whether the medium or program aims at general or specialized audiences.

5) The placement of an ad in the vehicle (within or between broadcast programs; adjacent to editorial material or other print ads). b. Attention Degree of attention is another consideration. Exposure value relates only to the medium; attention value concerns the advertising message and copy as well as the medium. Six factors are known to increase attention value: 1) Audience involvement with editorial content or program material.

2) Specialization of audience interest or identification.

3) Number of competitive advertisers (the fewer the better).

4) Audience familiarity with the advertiser‘s campaign 5) Quality of advertising reproduction.

6) Timeliness of advertising exposure. c. Motivation These same factors affect a medium‘s motivation value, but in different ways. Media planners analyze these values by assigning numerical ratings to their judgments of a medium‘s strengths and weaknesses.

5. Cost Efficiency of Media Vehicles Finally, media planners analyze the cost efficiency of each medium. a. A common term used in media planning and buying is cost per thousand (CPM) (M is the Roman numeral for 1,000). b. Media planners are most interested in cost efficiency—the cost of exposing the message to the target audience rather than to the total circulation. c. The media planner must evaluate each medium‘s advantages and disadvantages, using all the criteria to determine: 1.) How much of each medium‘s audience matches the target audience, also described as composition.

2.) How each medium satisfies the campaign‘s objectives and strategy.

3.) How well each medium offers attention, exposure, and motivation. d. To evaluate some of these issues in broadcast, the media planner may want to calculate the cost per point (CPP) of different programs.

B. Economics of Foreign Media The main purpose of media advertising is to communicate with customers more efficiently than through personal selling.

1. In some developing countries, though, it‘s actually cheaper to send people out with baskets of samples.

1-201 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

2. In many foreign markets, outdoor advertising enjoys far greater coverage than in the United States because it costs less to have people paint the signs and there is also less government restriction.

3. Cost inhibits the growth of broadcast media in some foreign markets, but most countries now sell advertising time to help foot the bills.

C. The Synergy of Mixed Media A combination of media is called a mixed-media approach. There are reasons for using mixed media are: 1. To reach people unavailable through only one medium.

2. To provide repeat exposure in a less-expensive secondary medium after attaining optimum reach in the first.

3. To use the intrinsic value of an additional medium to extend creative effectiveness of the ad campaign 4. To deliver coupons in print media when the primary vehicle is broadcast.

5. To produce synergy, where the total effect appears to be greater than the sum of the parts.

D. Methods for Scheduling Media After selecting the appropriate media vehicles, the media planner decides how many space or time units to buy of each vehicle and schedules them for release over a period of time when consumers are most apt to buy the product.

1. Continuous, Flighting, and Pulsing Schedules To build continuity in a campaign, planners use three principal scheduling tactics: continuous, flighting, and pulsing (see Exhibit 9-14). a. In a continuous schedule, advertising runs steadily and varies little over the campaign period. b. Flighting alternates periods of advertising with periods of no advertising. c. The third alternative, pulsing, mixes continuous and flighting strategies.

2. Additional Scheduling Patterns a. For high-ticket items that require careful consideration, bursting—running the same commercial every half hour on the same network in prime time—can be effective. b. A variation is road blocking, buying airtime on all major networks simultaneously. c. Digital Equipment used a scheduling tactic called blinking to stretch its slim ad budget. To reach business executives, it flooded the airwaves on Sundays (on both cable and network TV channels) to make it virtually impossible to miss the ads.

1-202 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VI.

d. Once the scheduling criteria are determined, the media planner creates a flowchart of the plan. The flowchart is a graphic presentation of the total campaign to let the creative department, media department, account services, and the client see the pattern of media events that will occur throughout the campaign, usually over one year (see Exhibit 9-15).

E. Artificial Intelligence in Media Selection and Scheduling While programmatic advertising is largely found in digital media buys, some believe it will become a bigger part of the way traditional media are bought and sold as well.

Exhibit 9-15 shows how quickly a variety of complicated processes take place during programmatic advertising.

1. Established in 1968, Telmar was the first company to provide media planning systems on a syndicated basis. Today, it is the world‘s leading supplier of media planning software and support services.

2. Telmar‘s software suite is designed to help media planners, buyers, research analysts, and sellers work more efficiently and make better judgments in the evaluation or sales process.

3. Similarly, Bionic provides a wide range of information systems for the advertising industry.

4. Despite the benefits of programmatic advertising, there are some disadvantages.

The technology can be expensive. The automation of programmatic advertising can also lead to poorly and inappropriately placed ads. It also opens up the potential for fraud.

Chapter Summary A. As with all IMC functions, changes in technology have dramatically changed the practice of media planning. Media planning directs the advertising message to the right people at the right time.

B. Media plans follow from earlier decisions that have been made about marketing strategies and advertising objectives and strategies.

C. The media function involves two basic processes: planning media strategy and selecting media vehicles.

D. Planners who follow an IMC model start by segmenting their audiences according to brand purchasing behavior and then ranking these segments by profit to the brand.

E. To create the appropriate media strategy, the planner develops the best blend of the five Ms: markets, money, media, mechanics, and methodology.

F. After the media strategy is developed, the planner selects specific media vehicles.

G. Once media vehicles are selected, the media planner decides on scheduling—how many of each medium’s space or time units to buy over what period of time.

H. Media planning is changing as a result of artificial intelligence, sophisticated computer programs and networks, and the growth of digital media.

1-203

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Answers to Pedagogical Features Ad Lab 9–A: Buying Traditional Local Media 1. After working through the exercise, which vehicle, or which combination of vehicles, would you recommend? Why? Sample Answer: I would recommend utilizing the local newspaper, TV station WGBC, and TV station WCAB. The newspaper is extremely cost-effective as it reaches 1/10 of the total target audience and is cost-efficient at $1,000. The TV stations also both have an impressive reach at a semi-affordable cost. I would not choose to utilize radio given the client is a boot brand.

While radio is the most cost-efficient option, in a product category such as shoes, visuals would be extremely important, thus I‘ve chosen media platforms with visual capabilities. If the client required that I run two ads per day, I would then consider radio, again because of its cost efficiency.

2. Given the client you are working with, what day part should your client focus on with its ads? What day of the week? When do consumers make a decision about buying a boot? How could you find out?

Sample Answer: Given the client, I would likely attempt to place the television commercials during prime time on the local television stations. Anecdotally, consumers have more free time in the evenings to consider shopping for things such as boots. I would seek to confirm or deny this by assessing research on buying trends in the boot industry. I would likely place the commercials on Thursdays or Fridays as consumers prepare for the weekend and as many consumers likely receive their paychecks on Fridays, freeing them up to use their discretionary funding on shopping for shoes. I would look to secondary sources on purchase trends in the shoe industry.

3. What information that was not provided might you want to know to be sure you made the right decision?

More in-depth information on the target audience for the campaign would be important to know to make a more informed decision about these buys. What kinds of boots do they need?

Where do they currently buy? How much are they looking to spend? Do they need a promotional deal to drive them into the store? Additionally, it would be important to understand exactly what types of boots they are attempting to promote. Does the store solely sell winter boots? Boots for those working in manual labor? Or solely high-fashion boots for men and women? It would also be important to know about the competition in the local area.

Where do they fall in consumer's evoked sets when considering boot stores in the area?

Where do the competitors promote themselves? What‘s their position in the market currently?

Ethics, Diversity & Inclusion: Diversity in Media Planning 1-204 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

1. In your experience, how has working with diverse groups, either in school or in the workplace, contributed to positive outcomes?

Working with diverse groups generally provides more holistic ideas, plans, and solutions in completing group work. Diversity introduces different viewpoints and different ways of thinking into groups. It also aids in keeping group biases and preconceived notions about a particular group of people in check. Different types of personalities and workstyles also contribute to group efficiency and productivity. It also appears that in more diverse groups, members are more likely to reexamine facts and points that are brought up to the team, and there is increased scrutiny of team deliverables, leading to a more polished final product.

2. What are some of the ethical challenges that come with the ability to target consumers based on their gender, race, and other demographics?

One of the main challenges is reaching the various genders, races, and demographic groups we‘re trying to reach in a way that is effective in appealing to that group but is not offensive to them. Advertising practitioners have been known to get minority representation wrong, which is a problem that could be resolved by including that group in the development of messages developed for that group. Targeting consumers based on gender, race, and other demographics also opens advertisers up to greater scrutiny to know about issues related to gender, race, and certain demographics. It is also important that brands come across as authentic in their motives to reach diverse groups, not simply seeking to sell products to them, but seeking to understand who they are and their product and brand preferences.

3. Provide an example of a brand that has showcased diversity in its advertising. How has this change altered your opinion of the brand?

Tommy Hilfiger is a brand that has been striving toward increased diversity in their advertising over the past few years. They include models of various racial backgrounds, genders, and abilities to promote their brand. Tommy Hilfiger previously had a reputation for being unidimensional in their reputation and targeting of consumer segments. Their recent inclusion may make consumers recognize them as a more forward-thinking, culturally inclusive, socially aware, and socially responsible brand.  My IMC Campaign 9: Developing Media Objectives and Strategies

Developing Media Objectives The first place to start in developing media objectives is with the marketing objectives themselves. You should view media objectives as the goals that become the building blocks of the media plan and that ultimately help clients meet their marketing goals.

Here are some examples of marketing objectives, translated into media objectives: Marketing Objectives ▪ Increase awareness among target audience by 23 percent.

▪ Steal 2 percent share of sales from competitors.

▪ Build customer database of 5,000 individuals.

1-205 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Media Objectives ▪ Generate mass awareness among target audience.

▪ Differentiate brand from competitors.

▪ Generate leads/requests for more information.

Developing Media Strategies Media strategies are born out of the media objectives and describe a specific plan of action for achieving stated objectives. The strategy seeks to accomplish two things: setting the foundation for media ideas that help you meet the objective or goal and providing a position of advantage over your client‘s competitors.

The media strategy itself is built on key plan parameters on which the entire communications team has had input: ▪ Target audience ▪ Seasonality ▪ Geography ▪ Overall communication goals ▪ Budget ▪ Creative ▪ Competitive analysis So how do media objectives translate into strategies? Let‘s look at the three we detailed earlier: Media Objectives ▪ Generate mass awareness among target audience.

▪ Differentiate brand from competitors.

▪ Generate leads/requests for more information.

Media Strategies ▪ Use mass media (broadcast) to build reach against M18–34.

▪ Secure high-profile sponsorship with category exclusivity.

▪ Use interactive media to elicit registration.

Ad Lab 9–B: Media Selection: A Quick List of Advantages 1. If you wanted a set of complementary media to cover all the creative advantages, which mix would you select?

Answer Guidelines:

1-206 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

After examining the advantages information in Ad Lab 9–B, students will probably choose the mediums listed on the left column in the chart below. In the chart RL 9–1 (located on the Contemporary Advertising website), under ―creative considerations,‖ three of the media are similar (TV, direct mail, and magazines). The RL 9–1 chart breaks the categories out in greater detail, clearly portraying television as the dominant leader. The chart below suggests the two patterns students will most likely choose: Ad Lab 9–B items RL 9–1 items (no ranking given) (ranked from strong to medium) 1. Television 1. Spot TV, network TV, cable TV 2. Magazines 2. Direct mail 3. Direct mail 3. Consumer magazines, business & farm publications 4. Outdoor 4. Sunday supplements and daily and weekly newspapers Example: General Motors devotes about one-third of its ad budget to network, spot, and cable TV advertising. Television certainly allows the viewer to see GM‘s cars in action. GM also puts about a quarter of its budget into magazines, with their high-quality reproduction and room for a more extensive message. Another quarter of the budget goes to newspaper ads, which reach the great majority of the population, promote seasonal sales, and support local dealerships.

2. What creative advantages can you add to the list?

Sample Answer: Newspaper advantages—the ability to relate advertising to the news of the day; currency; believability; reader involvement.  People behind the Ads: Tria Chingcuangco, Director, Strategy & Planning at PowerPhyl

Media  Tria earned a Bachelor of Arts degree in art history with a minor in philosophy from the University at Buffalo.  After nearly a decade, as a director at Tangible Media, Tria oversaw national and local media campaigns encompassing digital media (display, social, search engine marketing, video, and mobile), traditional media (TV, radio, outdoor, print, and experiential) as well as leading new business initiatives.  She previously worked at Allscope Media and Universal McCann.  As Director of Strategy and Planning at PowerPhyl Media Solutions, Tria leads planning teams for a wide range of clients.

Review Questions 1. What major factors contribute to the increased complexity of media planning?

1-207 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

2.

3.

4.

5.

6.

The major factors contributing to the increased complexity of media planning include more media to choose from; each medium offering a greater number of choices; a burgeoning number of nontraditional media; increased fragmentation of the audience; increasing costs of most media; and changes in the way media are bought and sold.

What must media planners consider before they begin?

The media planner must consider the marketing objectives and strategy, the advertising objectives, and the target audience.

What secondary research sources are available to planners?

Media planners use a variety of secondary sources that provide information to help them make better decisions on the job; the syndicated research companies such as Gfk MRI is an option. Gfk MRI produces reports that can be used to determine a brand or product‘s target audience—those who are most likely to buy. The reports provide demographic profiles of heavy and light users of various products and brands. They also specify which kinds of TV programs or magazines these heavy and light users are exposed to, enabling the planner to choose those media vehicles with the most potential for reaching the target audience. Gfk MRI also gathers psychographic information on these consumers; these data are used to differentiate among people who may be in the same demographic group but who possess different psychological characteristics and personality traits. Broadcast Advertisers Reports (BAR), Leading National Advertisers (LNA), and Media Records report advertisers‘ expenditures by brand, media type, market, and time period. Media planners use these sources to find clues to the strategy of the brand‘s competitors; for example, the size of their budgets, the media they are using, the impact of region and season on their sales, and possible new product tests and introductions.

How does the IMC approach differ from the top-down media planning approach?

Advertisers using the IMC planning model start by segmenting their target audiences according to brand-purchasing behavior (e.g., loyal users, brand switchers, new prospects), and then ranking them by profit to the brand. Communications objectives are then stated in terms of reinforcing or modifying customer purchasing behavior or creating a perceptual change about the brand over time.

What is the ―right‖ reach and frequency for a given message?

The term reach refers to the total number of different people or households exposed at least once to an ad or campaign during a given period of time, usually four weeks. Frequency refers to the number of times the same person or household is exposed to a message—a radio spot, for example—in a specified time span. Repetition is the key to memory. Many people think effective frequency means three or more opportunities-to-see (OTS) over a four-week period, but in fact no magic number works for every commercial and every product.

How are GRPs and CPMs calculated?

1-208 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

A GRP (gross rating point) is the total audience delivery of a media schedule. GRPs are computed by multiplying reach (expressed as a percentage of the population) by the average frequency. CPM (cost per thousand) is a measure of the cost efficiency of using a particular medium. It is calculated by dividing the cost of the ad by the number of thousands of people in the audience (number of readers, viewers, or listeners).

7. What are the 5Ms of the media mix, and how are they determined?

The 5Ms of the media mix are: a. Markets: refers to the various possible targets of a media plan, e.g., trade and consumer audiences; global, national, or regional audiences; or certain ethnic or socioeconomic groups. b. Money: how much to budget and where to allocate funds—how much for print, media, how much in TV, how much to each geographic area. c. Media: all communications vehicles available to a marketer, including broad media classes and subclasses such as radio, TV, newspaper, magazines, outdoor, direct mail, as well as various supplemental media and ancillary activities such as sales promotion, direct marketing, public relations and publicity, special events, and collateral materials. d. Mechanics: electronic commercials come in a variety of time units; and print ads are created in a variety of sizes and styles. IMC planners may also deal with the mechanics of nontraditional media: everything from shopping bags to multimedia kiosks to the Internet. e. Methodology: overall strategy of selecting and scheduling media vehicles to achieve the desired reach, frequency, and continuity objectives.

8. What major factors influence the choice of individual media vehicles?

Overall campaign objectives and strategy; characteristics of media audiences; exposure, attention, and motivational value; and cost efficiency.

9. Why might an advertiser use a mixed-media approach?

There are numerous reasons for using mixed-media: a. To reach people who are unavailable through only one medium b. To provide repeat exposure in a less expensive secondary medium after attaining optimum reach in the first c. To use the intrinsic value of an additional medium to extend the creative effectiveness of the ad campaign (such as music on radio along with long copy in print) d. To deliver coupons in print media when the primary vehicle is broadcast media e. To produce synergy, where the total effect is greater than the sum of its parts 10. What are the principal methods used to schedule media?

1-209 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Advertising is scheduled so that consumers are exposed to it at the point when they are ready to buy. Scheduling approaches differ because consumer purchasing patterns differ. Products that are purchased on a regular basis with little fluctuation in demand are usually advertised with continuity, where the advertising runs continuously with little variation. Flighting, an intermittent scheduling pattern that alternates periods of advertising with no advertising at all, is used for products and services that experience large fluctuations in demand throughout the year. Advertisers of products and services that are purchased throughout the year but are bought more heavily in certain seasons may use pulsing, which mixes continuity and flighting strategies. The advertiser maintains a low level of advertising all year, but it uses periodic pulses of heavier advertising during peak selling periods.

The Advertising Experience 1. Diversity in Media Planning As a planner working on behalf of a large toy company, it is your job to buy media space for the launch of the Kitchi Kiss doll, which all advertising research shows will be a tremendous profit maker for the company. The product is expected to have greatest appeal to girls aged 5-11. How can you ensure that the diversity considerations outlined in this chapter's Ethics, Diversity & Inclusion box can be incorporated in your media plan?

2. Media Buying Services There are three sides to the media business: planning, buying, and selling. Media planning and media buying are often in-house functions at an advertising agency, while sellers are those who represent the various media to clients, agencies, and media buying services.

Visit the websites for the media companies listed below, consider the impact and importance of each to advertisers and their agencies, and answer the questions that follow.

▪ The Davis Group: www.thedavisgrouptx.com ▪ Initiative Media: www.initiative.com ▪ Wavemaker: www.wavemakerglobal.com ▪ Media Solutions: www.mediasol.com ▪ Worldata: www.worldata.com ▪ Zenith: www.zenithmedia.com a. Who is the intended audience(s) of the site? b. What is the site‘s purpose? Does it succeed? Why or why not? c. What is the company‘s purpose? d. Does the company specialize in any particular segment (consumer, business-to-business, agriculture, automotive)?

Sample Answer: Zenith

1-210 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

a. The intended audience of the site is twofold: (1) advertising, marketing, and media professionals looking for an index to the Web‘s wealth of advertising/marketing/media information; and (2) those agency, client, and media professionals interested in the services of Zenith. b. The site‘s purpose, as the target audience profile suggests, is also twofold: (1) provide an index to the Web‘s marketing communication information (including direct links to over 4,000 resources); and (2) provide information on the company‘s mission/purpose, range of services, and management/financial information. It succeeds by providing one of the most comprehensive indexes to the Web and by detailing Zenith‘s range of services, clients, and corporate information. c. Zenith is positioned as the ―world‘s preeminent‖ media services agency, providing media planning, buying, evaluation, and coordination for agencies and clients around the globe. d. As a global agency for both Saatchi & Saatchi and Bates Worldwide, Zenith handles media in a variety of categories in both consumer and trade communications.

3. Media Organizations The world of media is vast and constantly changing. Many media giants own properties in several media categories, and they are major forces in the world of advertising. Visit the websites of the following media companies and answer the questions below.

▪ Valassis: www.valassis.com ▪ Cox Enterprises: www.coxenterprises.com ▪ Gannett: www.gannett.com ▪ Hearst Corporation: www.hearst.com ▪ McGraw-Hill: www.mheducation.com ▪ Time Warner: www.warnermediagroup.com ▪ Tribune Company: www.tribune.com ▪ Viacom: www.viacom.com a. Who is the intended audience of the site? b. What is the size and scope of the organization? c. What is the organization‘s purpose? What is the site‘s purpose? d. How important is this organization to the advertising industry? Why? Sample Answer: Valassis a. Valassis is a site intended for advertisers in need of media and marketing services globally. They are known for their production of print and digital advertising, market analytics, and are a large source for coupon distribution and processing. b. Valassis works with over 60,000 companies and brands in many industries worldwide. In 2018, Valassis delivered 319,000 campaigns, reached 117 million households with mail for one of their major clients, and delivered 113.5 billion coupons for a major client.

1-211 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

c. The purpose of Valassis is to provide marketing technology, consumer analytics, and to reach consumers through print and digital advertising efforts. The site is intended to showcase Valassis‘ capabilities and insight action from clients interested in their services. d. Valassis would be an extremely important asset to the advertising industry as they could provide advertisers with information on the consumers they are attempting to reach, print and digital advertising services, and data analytics on the efficacy of those print and digital advertisements.

4. Reread the HIV.gov chapter opening vignette. Next, answer the following questions. Be sure to justify your answers to both questions. a. What media options are not being used that perhaps should be? b. What target audiences that are not being targeted should be?

Be sure to justify your answers to both questions.

Answer Guidelines: Students should discuss media options other than those referenced in the communication channel table on pg. 285 of the text. These are primarily social media and digital sources so they will ideally discuss more traditional media opportunities. For target audiences, students should discuss groups other than those described in the text, which include persons living with HIV/AIDS, infectious disease specialists, primary care providers who treat people with HIV, personnel at health centers and clinics who treat people with HIV, and medical students. These other groups could include governmental agencies concerned with policymaking regarding HIV prevention, partners and family members of those living with HIV/AIDS, those in the criminal justice system who may encounter those impacted by HIV/AIDS, or health care educators.

5. Imagine you were a media planner and a client suggested using Snapchat to help provide information about preventing the spread of HIV to teens. How would you evaluate that request? What are the pros and cons of using Snapchat as an advertising medium for this target audience? Do some research to justify your recommendations.

Answer Guidelines: Students should discuss the presence of teens on Snapchat and how they use Snapchat, the history/presence of similar health initiatives on Snapchat, the reach of Snapchat for the target audience identified, what brands have been successful in promoting themselves on Snapchat, and how they have been successful. Students should also discuss considerations of when it might be best to advertise this information to teens, how often they should run the advertising on Snapchat, and how they could utilize Snapchat in combination with the other media already being utilized for the campaign.

Connect Activities

1-212 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Title

Assignment Type

KLM Planning Media Strategy Media Challenges

Video Case

Defining Media Objectives

Case Analysis

Media Tactics

Matching

Matching

Topic

Learning Objective

Factors That 09-05 Influence Media Strategy Factors That 09-01 Influence Media Strategy Media 09-03; 09-04; Objectives; 09-05; 09-06 Advertising Schedules Advertising 09-06 Schedules

AACSB Accreditation Tagging Knowledge Application

Bloom’s Taxonomy

Analytical Thinking

Analyze

Analytical Thinking

Analyze; Remember

Reflective Thinking

Remember

Apply

KLM Planning Media Strategy Activity Summary: Students view a video about a Dutch airline, KLM, and assess how media planners worked to differentiate the brand through a variety of media platforms.

Follow-Up Class Discussion: Discuss with students what they feel were likely the most important considerations for the media planners implementing the KLM campaign.

Media Challenges Activity Summary: In this exercise, students are asked to identify the changes in media planning and the associated challenges that media planners face today.

Follow-Up Class Discussion: Ask students to discuss how the internet, social media, television streaming services, internet radio, and digital interactive media have changed the landscape for media planners and how they have made it easier to reach consumers, yet more difficult to make decisions about where to place ads.

Defining Media Objectives

1-213 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Activity Summary: This activity describes a fictitious chip brand and asks students to examine how an agency assisted this brand in meeting its media objectives.

Follow-Up Class Discussion: Ask students to identify which scheduling pattern they would have selected for the brand and to identify what they feel the objective was for the brand discussed in the case.

Media Tactics Activity Summary: This case describes Timeout Clothing, an apparel brand for teen boys and girls. The activity asks students to match the various tactics to Timeout‘s advertising decisions Follow-Up Class Discussion: Ask students to discuss what scheduling tactic they feel would be most appropriate for a brand like Timeout if they were using each of the following: social media, television, radio, and magazines.

CHAPTER TEN CREATIVE STRATEGY AND THE CREATIVE PROCESS This chapter shows how IMC strategies are translated into creative briefs and message strategies that guide the creative process. The chapter examines the characteristics of great campaigns, styles of thinking, the nature of creativity and its importance in advertising, and the role of the agency creative team. We discuss how research serves as the foundation for creative development and planning, and we review common problems and pitfalls faced by members of the creative team.

Learning Objectives After studying this chapter, your students will be able to: LO10-1 Explain the attributes of great creative.

LO10-2 Describe how creative strategy is developed and used.

LO10-3 Show how creativity enhances advertising.

LO10-4 Demonstrate the role that agency talent plays in the creative process.

What’s New? The chapter expands on the information versus transformational distinction and shows how the former concept is fundamental in search ads. Target and the retailer‘s great ads remain the focus of the chapter, but added attention is given to the brand‘s product concept and media choices.

The chapter‘s definition of creativity is expanded through insights from Lee Odden, David Meerman Scott, Seth Godin, and Daniel Pink. The Ethics, Diversity & Inclusion box, which still 1-214 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

focuses on the use of sex in ads, now explicitly references the #metoo movement and its impact on responsible messages.

Teaching Tips and Strategies Using the Chapter Opening Vignette in the Classroom Target‘s advertising proves that retail ads don‘t have to be boring. Using bold colors, stark contrasts, geometric designs, and delightful word-plays, the retailer has been extremely successful in finding a niche between big discounters and more upscale shopping brands. Visit the website (www.target.com) to show that the style and attitude of the campaign is a part of Target‘s online presence. You‘ll also find their latest weekly insert there. You can find TV ads posted in Target‘s YouTube channel (www.youtube.com/user/Target).

1-215 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Other Tips and Strategies This chapter introduces students to the creative process. Students are amazed when I explain to them that a 30-second commercial may take days to shoot.

The first and most important step I take when a client is ready to create local advertising is to contact the creative team. The creative team meets with the client and together they try to create advertisements that meet the philosophy of the business. On paper, that is.

A problem at this stage is getting the creative team to create the message the client is trying to deliver. Many times I had to intervene in a polite way when the creative ideas were veering off course.

Creative people get awards for great advertising, yet that does not mean the advertising was effective. I was always striving for effective ads that would bring the client more sales or awareness. Our creative department was interested in developing beautiful ads that had the latest flair. Do you see the problem? I am not advocating that creative ads do not sell; they do. My problem with local advertising was that sometimes our producers and clients would get so involved in the process of creating the ad that they would lose sight of the message.

The Portfolio Review shows award-winning ads. Have students decide whether each ad is informational or transformational. Then, most importantly, do the students believe the ad is effective? Why or why not?

Web Resources for Enhancing Your Lectures Vitro Taylor Guitars AdWeek's The Creative 100 JUST Creative Blog: 192 Creative, Smart & Clever Advertisements Adforum

http://www.vitroagency.com http://www.taylorguitars.com http://www.adweek.com/category/the-creative-100 http://justcreativedesign.com/2008/07/30/192-of-the-bestsmart-clever-creative-advertisements http://www.adforum.com

Pedagogical Features Ad Lab 10–A: The Psychological Impact of Color  My IMC Campaign: The Creative Brief

Ethics, Diversity & Inclusion: Does Sex Appeal?

1-216 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Ad Lab 10–B: Applying the Creative Pyramid Ad Lab 10–C: The Creative Gymnasium Portfolio Review: The Creative Director‘s Greatest Ads  People behind the Ads: Tim Piper, Writer/Director for PiRo, Former Associate Creative

Director, Ogilvy & Mather, Toronto Lecture Outline I.

Vignette: Target Target owns red and that has helped the retailer stay in the black. This vignette demonstrates why retail ads and creative genius need not be opposites.

A. Creative Strategy and the Creative Process Creativity is vitally important for all elements of IMC. The creative spark begins with a team made up of an art director and a copywriter.

1. The copywriter develops the verbal message, the copy (words) spoken by the imaginary persona.

2. The art director is responsible for the nonverbal aspect of the message, the design, which determines the visual look and intuitive feel.

3. Together, they work under the supervision of a creative director (typically, a former copywriter or art director), who is ultimately responsible for the creative product—the form the final message takes.

4. As a group, these people are generally referred to as creatives.

II. What Makes for Great Creative?

Great ads have certain commonalities. We can group most of these characteristics into two dimensions: audience impact and strategic relevance.

A. The Impact Dimension A great ad makes an impact on its intended audience. It resonates. It has the boom factor.

Most ads, whether they‘re informational or transformational, have little impact. Why? Because they lack a ―big idea‖ or they fail in the execution.

B. The Relevance Dimension The second dimension of great advertising is strategic relevance.

Behind every creative team‘s choice of tone, words, and ideas lies an advertising strategy. When the ad is completed, it must be relevant to the strategy, or it will fail— even if it resonates with the audience. It may be great entertainment, but not great advertising. Great advertising has a strategic mission to fill.

1-217 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

1. Negatively originated motives, such as problem avoidance or problem removal, provide the foundation for many great ads. Ads can achieve relevance by being highly informational, that is, by offering relief from some problem (e.g., one gym‘s advertising headline reads, ―Need to lose 30 pounds?‖).

2. Other motives are positively originated as consumers seek sensory gratification, intellectual stimulation, or social approval. Here, ads achieve greatness by being transformational, using positive reinforcement to offer a reward (Microsoft‘s headlines for Office read, ―I want to make it great,‖ followed by reasons, such as ―for a VIP presentation at work‖ or ―so I can get an A at school‖).

III. Developing and Implementing the Creative Strategy Creative strategy consists of four elements: the target audience, the product concept, the communications media, and the message.

1. Target audience? Primary market—that‘s who the company sells to. While this group as a whole may not spend as much as the primary market, they act as centers of influence (or key influentials). This group is a secondary target audience.

2. Product concept? In other words, it is a mass merchandizer that appeals to those with a sense of style.

3. With respect to communications media, Target spends nearly three out of four ad dollars on ads that run on television and in newspapers.

4. IMC message? In its simplest terms, message strategy is determined by what a company wants to say and how it wants to say it.

The agency and client team must understand and agree to these four elements of the IMC strategy—target, product, media, and message—before any creative work begins.

When the strategy-development task is completed, the account people prepare a creative brief to communicate the strategy to the creative department.

A. Writing the Creative Brief (Copy Platform) The creative brief is the creative team‘s guide for writing and producing the campaign. In some agencies it may be referred to as a copy platform, a work plan, or a copy (or creative) strategy document. Regardless of the name, it is a simple written statement of the most important issues to consider in the development of the campaign: the who, why, what, where, and when.

1. Who? Who is the prospect in terms of behavioristic, geographic, demographic, and/or psychographic qualities? What is the typical prospect‘s personality?

2. Why? Does the consumer have specific wants or needs the ad should appeal to?

Marketers use two broad categories of appeals. Rational appeals are directed at the consumer‘s practical, functional need for the product or service; emotional appeals target the consumer‘s psychological, social, or symbolic needs. For a sampling of specific appeals within these categories, see Exhibit 10-1.

1-218 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

3. What? What features of the product will satisfy the consumer‘s needs? What is the ―proof‖ the company offers to support the product claim? How is the product positioned? What personality or image (of the product or the company) can be or has been created?

4. Where and when will these messages be communicated? Through what media?

What time of year? In what parts of the country?

5. Finally, what style, approach, or tone will the campaign use? And, generally, what will the copy say?

6. Procter & Gamble and Leo Burnett use a simple creative brief with three parts: a. An objective statement. A specific, concise description of what the campaign is supposed to accomplish or what problem it is supposed to solve. The objective statement also includes the name of the brand and a brief, specific description of the target consumer. b. A support statement. A brief description of the evidence that backs up the product promise. c. A tone or brand character statement. A brief statement of either the advertising‘s tone or the long-term character of the brand. Tone statements are short-term emotional descriptions of the advertising strategy. Brand character statements are long-term descriptions of the enduring values of the brand— things that give the product brand equity.

7. The delivery of the creative brief to the creative department concludes the process of developing an IMC strategy. It also marks the beginning of the next step: the campaign creative process, in which the creative team develops a message strategy and begins the search for the big idea.

B. Elements of Message Strategy The message strategy (or rationale) is a simple description and explanation of an ad campaign‘s overall creative approach—what the advertising says, how it says it, and why. The creative team develops the message strategy. The message strategy has three components: 1. Verbal. Guidelines for what the messages should say, considerations that affect the choice of words, and the relationship of the copy approach to the medium (or media) that will carry the message.

2. Nonverbal. Overall nature of the campaign‘s graphics, any visuals that must be used, and the relationship of the graphics to the media in which the message will appear.

3. Technical. Preferred execution approach and mechanical outcome, including budget and scheduling limitations (often governed by the media involved); also any mandatories—specific requirements such as addresses, logos, and slogans.

1-219 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

IV.

How Creativity Enhances IMC A. What Is Creativity?

To create means to originate or conceive a thing or idea that did not exist before.

Typically, creativity involves combining two or more previously unconnected objects or ideas into something new.

B. The Role of Creativity in IMC Campaigns While creativity is important to a campaign‘s basic mission of informing, persuading, and reminding, it is vital to achieving the boom factor.

1. Creativity Helps Messages Inform a. Good creative work makes a campaign more vivid, and many researchers believe vividness attracts attention, maintains interest, and stimulates thinking. b. Writers and artists must arrange visual and verbal message components according to a genre of social meaning so that readers or viewers can easily interpret the message using commonly accepted symbols.

2. Creativity Helps Messages Persuade a. A creative story or persona can establish a unique identity for the product in the collective mindset, a key factor in helping a product beat the competition. b. To be persuasive, the verbal message must be reinforced by the creative use of nonverbal message elements. c. Research suggests that, in print media, info graphics (colorful explanatory charts, tables, and the like) can raise the perception of quality.

3. Creativity Helps IMC Remind We are entertained daily by creative ads—for soft drinks, snacks, and cereals— whose primary mission is simply to remind us to indulge again.

4. Creativity Puts the ―Boom‖ in Campaigns The boom factor may come from many sources. But it always requires the application of creativity.

C. Understanding Creative Thinking Some people exhibit more of it than others do, but creativity lives within all of us.

1. Styles of Thinking The German sociologist Max Weber determined that people think in two ways: an objective, rational, fact-based manner and a qualitative, intuitive, value-based manner.

Roger von Oech defined this dichotomy as hard and soft thinking: a. Hard thinking refers to concepts like logic, reason, precision, consistency, work, reality, analysis, and specificity. On the hard side, things are right or wrong, black or white. b. Soft thinking refers to less tangible concepts: metaphor, dream, humor, ambiguity, play, fantasy, hunch. On the soft side, there may be many right answers and many shades of gray.

1-220

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

V.

2. Fact-Based versus Value-Based Thinking a. People whose preferred style of thinking is fact-based tend to fragment concepts and analyze situations to discover the one best solution. Although fact-based people can be creative, they tend to be linear thinkers and prefer to have facts and figures—hard data—they can analyze and control. b. In contrast, value-based thinkers make decisions based on intuition, values, and ethical judgments. They are better able to embrace change, conflict, and paradox.

3. How Styles of Thinking Affect Creativity a. The creative team must understand the campaign‘s target audience. b. In some market segments (high-tech, for example) customers may tend toward one style of thinking over another—and that could dictate which approach to use.

The Creative Process The creative process is the step-by-step procedure used to discover original ideas and reorganize existing concepts in new ways.

Von Oech describes four distinct, imaginary, roles (Explorer, Artist, Judge, and Warrior) that every art director and copywriter has to adopt at some point in the creative process: 1. The Explorer searches for new information, paying attention to unusual patterns.

2. The Artist experiments and plays with a variety of approaches, looking for an original idea.

3. The Judge evaluates the results of experimentation and decides which approach is most practical.

4. The Warrior overcomes excuses, idea killers, setbacks, and obstacles to bring a creative concept to realization.

A. The Explorer Role: Gathering Information Copywriters and art directors thrive on the challenge of creating advertising messages—the encoding process. First, they need the raw materials for ideas: facts, experiences, history, knowledge, and feelings.

Taking on the role of the Explorer, the creatives examine the information they have.

1. Develop an Insight Outlook a. It‘s important that when creatives play the Explorer role, they get off the beaten path to look in new and uncommon places for information—to discover new ideas and to identify unusual patterns. b. Von Oech suggests adopting an ―insight outlook‖ (a positive belief that good information is available and that you have the skills to find and use it).

2. Know the Objective a. The creatives typically start working on the message strategy during the Explorer stage because it helps them define what they‘re looking for.

1-221 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

b. Many also keep a tickler (or swipe) file of ads they like that might give them direction.

3. Brainstorm a. One technique is brainstorming, a process in which two or more people get together to generate new ideas. b. A brainstorming session is often a source of sudden inspiration. c. To succeed, it must follow a couple of rules: all ideas are above criticism (no idea is ―wrong‖), and all ideas are written down for later review. d. The goal is to record any inspiration that comes to mind, a process that psychologists call free association, allowing each new idea an opportunity to stimulate another. e. The Explorer‘s job is to find new information. To be effective Explorers, they must exercise flexibility, courage, and openness.

B. The Artist‘s Role: Developing and Implementing the Big Idea The Artist must actually accomplish two major tasks: searching for the big idea and then implementing it.

1. Task 1: Develop the Big Idea Creating a mental picture of the message also called visualization or conceptualization, is important. It‘s where the search for the big idea—that flash of insight—takes place. The big idea is a bold, creative initiative that builds on strategy, joins the product benefit with consumer desire in a fresh and involving way, brings the subject to life, and makes the reader or the audience stop, look, and listen.

The difference between a strategy and a big idea is that the strategy describes the direction the message should take. A big idea gives it life. a. Transforming a Concept: Do Something To It At this point in the creative process, a good Artist may employ a variety of strategies for transforming things. Von Oech suggests several techniques for manipulating ideas: 1) Adapt. Change contexts.

2) Imagine. Ask what if?

3) Reverse. Look at it backward.

4) Connect. Join two unrelated ideas together.

5) Compare. Use one idea to describe another.

6) Eliminate. Subtract something.

7) Parody. Fool around; have some fun. b. Blocks to Creativity 1) There are many causes: information overload, mental or physical fatigue, stress, fear, insecurity. Often, though, the problem is simply the style of thinking being used.

1-222 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

2) Von Oech recommends some techniques to stimulate integrative thinking: look for the second right answer, seek cross-fertilization, slay a sacred cow, imagine how others would do it, laugh at it, and reverse your viewpoint.

3) Creative blocking may occur when people in the agency start ―thinking like the client,‖ especially if the client is a fact-based thinker.

4) Creative fatigue sometimes happens when an agency has served an account for a long time and all the fresh ideas have been worked and reworked. c. Incubating a Concept: Do Nothing to It When the brain is overloaded with information about a problem, creatives sometimes find it‘s best to just walk away from it for a while, do something else, and let the unconscious mind mull it over.

2. Task 2: Implement the Big Idea a. Once the creatives latch onto the big idea, they have to implement it. b. Art direction refers to the act or process of managing the visual presentation of the message, the term art actually refers to the whole presentation—visual, verbal, and aural. c. If copy is the verbal language of a message, art is the body language. d. In advertising, balance, proportion, and movement are guides for uniting words, images, type, sounds, and colors into a single communication so they relate to and enhance each other.

3. The Creative Pyramid: A Guide to Formulating Copy and Art The creative pyramid is a model that can help the creative team convert the advertising strategy and the big idea into the actual physical ad or commercial. It uses a simple five-step structure (see Exhibit 10-2).

For a frequently purchased product, the marketer simply has to remind people of the solution close to the purchase occasion. In either case, the company must first get the prospect‘s attention. The second step is to stimulate interest—in either the message or the product itself. Next, it‘s important, especially for new products, to build credibility for the product claims. Then the campaign can focus on generating desire and finally on stimulating action. These five elements should be addressed in just about every marketing appeal. a. Attention 1) A product message is a stimulus. It must break through consumers‘ physiological screens to create the kind of attention that leads to perception.

2) Attention, therefore, is the first objective of any campaign and the fundamental building block in the creative pyramid.

1-223 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

3) In print media, they may include dynamic visuals, unusual layout, vibrant color or dominant ad size.

4) In electronic media, they may include special sound effects, music, animation, or unusual visual techniques. b. Interest 1) The second step in the creative pyramid, interest, carries the prospective customer—now paying attention—to the heart of the message.

2) To maintain audience interest, the tone and language should be compatible with the target market‘s attitude. The tone and language should be compatible with the target market‘s attitude.

3) There are many effective ways to stimulate interest: a dramatic situation, a story, cartoons, charts. In radio, copywriters use sound effects or catchy dialogue. c. Credibility 1) The third step in the creative pyramid is to establish credibility for claims about the product or service.

2) Comparison ads can build credibility, but they must be relevant to customers‘ needs—and fair.

3) Marketers often show independent test results to substantiate product claims. To work, such ―proofs‖ must be valid, not just statistical manipulation. d. Desire 1) In the desire step, the writer encourages prospects to picture themselves enjoying the benefits of the product or service.

2) The desire step hints at the possibilities and lets the consumer‘s mind take over. e. Action 1) The final step up the creative pyramid is action. The purpose is to motivate people to do something—send in a coupon, visit a website, visit the store—or at least to agree with the advertiser.

2) This block of the pyramid reaches the smallest audience but those with the most to gain from the product‘s utility.

3) The call to action may be explicit—―Call for more information‖—or implicit—―Fly the friendly skies.‖ C. The Judge Role: Decision Time The next role in the creative process is the Judge. This is when the creatives evaluate the value of their big idea and decide whether to implement, modify, or discard it.

1. The Judge‘s role is delicate. a. The creatives must be self-critical enough to ensure that when it‘s time to play Warrior they have an idea worth fighting for.

1-224 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

b. They need to avoid stifling the imagination of their internal Artist. c. In an effort to create world-class campaigns Michael Conrad, formerly the worldwide chief creative officer for Leo Burnett and currently the dean of the new Cannes Lions Academy, developed the rating scale shown in Exhibit 103. d. Robert Smith, an Indiana University scholar, drew on psychological research in creativity to create a set of questions any creative judge can ask about his or her ideas: 1) Is the ad ―out of the ordinary‖?

2) Does it depart from stereotypical thinking?

3) Is it unique?

4) Does the ad contain ideas that move from one subject to another?

5) Does it contain different ideas?

6) Does it shift from one idea to another?

7) Does the ad contain numerous details?

8) Does it extend basic ideas and make them more intricate?

9) Does it contain more details than expected?

10) Does the ad connect objects that are usually unrelated?

11) Does it contain unusual connections?

12) Does it bring unusual items together?

13) Is the ad visually or verbally distinctive?

14) Does it make ideas come to life graphically or verbally?

15) Is it artistic in its production?

D. The Warrior Role: Overcoming Setbacks and Obstacles In the final step of the creative process, the Warrior wins territory for big new ideas in a world resistant to change. The Warrior carries the concept into action. This means getting the big idea approved, produced, and placed in the media.

1. Part of the Warrior‘s task may be to help the account managers present the campaign to the client. So how can the artist, or the account manager representing him or her, increase the odds of getting creative idea approval? a. Reach out early. Test your idea with key decision makers. This often helps the Warrior anticipate questions that will come up later during a formal presentation. Testing has other benefits, including obtaining buy-in, showing you want input, and making your idea better. b. Be prepared. Presentations involve questions and answers. Not knowing how to answer a question can damage the Warrior‘s credibility. Harvard Business School‘s Michael Norton says, ―When you watch someone stumble through an answer, you make an inference that they don‘t know what they‘re talking about.‖ Expect people will attack your idea. Rather than avoiding criticisms,

1-225 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

develop thoughtful, detailed, and honest responses to tactics like personal attacks, sowing confusion, or raising fears or anxieties about your idea. c. Who are you talking to? Just as great ads have a target audience in mind, so should great pitches. Michael Norton says, ―You absolutely want to tailor the specifics of your presentation to your audience.‖ How will your idea solve their problems? Make them look good? Address their concerns? Offer them rewards or benefits? d. Simple trumps complicated. With respect to your idea, you know more than your audience, and sharing everything you know is rarely achievable or desirable. Many poorly prepared presentations go long, leaving the big idea underdeveloped. So focus on the essentials. Share data judiciously. Don‘t be distracted from the essential points you are trying to get across. e. Responding with confidence. Warriors face questions that are posed in a variety of ways: Some may seem friendly, others hostile, still others off-point.

Whichever way questions are posed, the Warrior‘s job is to ―come off as a statesman,‖ according to John Kotter, Chief Innovation Officer at Kotter International. ―Treat [your questioner] like a reasonable person with a reasonable question.‖ What if the question is so off-point that there is no way to answer it without distracting from your key message? Michael Norton suggests you ―dodge,‖ by which he means offering a response that touches on the question but quickly segues back to the idea you are trying to advance.

2. When the client approves the campaign, the creative‘s role as a Warrior is only half over. Now the campaign has to be executed.

VI. Chapter Summary A. In the marketing communications process, the creative team is responsible for conceiving and designing advertising messages.

B. Great campaigns are characterized by two dimensions: audience impact and strategic relevance. To truly resonate, messages need the boom factor—that element of surprise that instantly attracts the audience’s attention, gets them involved, and stirs their imagination.

C. The second dimension of great campaigns, strategic relevance, is behind the visuals and the text of every message. In fact, strategy is the key to great creative work.

D. Typically written by the account management team, the creative strategy includes four elements: the target audience, the product concept, the communications media, and the message.

E. Copy is the verbal and art the nonverbal (visual) presentation of the message strategy.

F. To create means to originate, and creativity involves combining two or more previously unconnected elements, objects, or ideas to make something new.

1-226 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

G. Scholars believe certain styles of thinking are more conducive to creativity than others.

H. Scholars believe certain styles of thinking are more conducive to creativity than others. The two basic thinking styles are fact-based and value-based.

I. People who prefer the fact-based style tend to be linear thinkers, analytical, and rational. Value-based thinkers tend to be less structured, more intuitive, and more willing to use their imagination.

J. In one model of the creative process, the creative person must play four roles along the way to acceptance of a new idea: the Explorer, Artist, Judge, and Warrior.

K. The Explorer searches for new information, paying attention to unusual patterns.

The Artist experiments with a variety of approaches looking for the big idea, and determines how to implement it.

L. During the creative process, it’s better to use a value-based style of thinking.

M. During the Judge and Warrior phases, a fact-based style is more effective.

N. One of the worst blocks to creativity is getting stuck in the wrong mindset, the wrong style of thinking, for the task at hand. However, there are numerous techniques for escaping these mental blocks.

Answers to Pedagogical Features Ad Lab 10–A: The Psychological Impact of Color Explain the moods or feelings that are stimulated by two color ads or packages illustrated in this text.

Discussion Guidelines: Check if there is a predominate color—it may be as obvious as a continuous tone spread across the background of the ad. It may be in little areas scattered all around in the ad‘s layout. If neutral tones (which are relatively colorless) predominate the ad, ask yourself if the neutral tends to be ―warm‖ (faintly red or beige) or cool (hint of blue or green). If two colors occur in equal volumes and intensities, making it difficult to choose one as the dominant color, ask what color would result if they were mixed (a brown or dark gray is often the result).

Once you have determined the dominant color, evaluate how it affects the mood or feelings of the audience using the color descriptions in this Ad Lab.  My IMC Campaign: The Creative Brief

Every agency has a slightly different twist on a creative brief. In this chapter, we outline the components of most briefs this way:  Who (the prospect).  Why (specific wants or needs the ad should appeal to).  What (are the product features that can satisfy consumer needs?).

1-227 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

 Where and when (will the messages be transmitted?).  Style, approach, tone.

We also describe the creative brief that Leo Burnett uses for P&G. It is even simpler:  An objective statement (what are you trying to do?).  A support statement (the evidence that backs up the promised benefit).  A tone or brand character statement (emotional descriptions of the advertising strategy).

Are you interested in creativity? Visit one of the best agency resources on the web, Ogilvy.com, for lots of information about effective creative, including the agency‘s take on creative briefs, summarized here: 1. What are the communications objectives?

2. What should consumers do differently? Why? 3. How will messages affect consumer beliefs and actions?

4. How are our competitors advertising? How can we make our ads different?

5. Who is the target audience and what is their shared need that the brand can fulfill?

6. Demographics of the audience, but even more importantly, shared attitudes.

7. The brand  How does the brand address the shared need?  How should the brand experience (as defined by both planned and unplanned messages) be defined?  What is the proposition (or benefit)?  What evidence gives people a reason to believe the proposition?  What is the personality of the brand?  How can the mood or tone of the ads be matched to the personality of the brand?

The Ogilvy site is filled with a lot more useful information, including suggestions for maximizing the likelihood that the brief will spark a big idea. Check it out.

Ethics, Diversity & Inclusion: Does Sex Appeal?

1. How would you explain the ―redeeming value‖ of sexual appeals in advertising?

Answer Guidelines: a. Basic issue: ―choice enhancement‖ versus consumer protection. b. Personal choices: For some people, sexual appeals have no ―redeeming value.‖ Some fear that children will be exposed to inappropriate messages. Before approving an ad that uses a sexual appeal, some feminists might first look to see if the woman is portrayed as being in control. Most students, particularly those in their teens and early twenties, are not offended by sexual appeals in advertising, and they may consider it the norm. Many people believe that ―sex‖ sells. c. It is important to note that the Miller Light ad has helped to increase awareness of its brand.

1-228 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

d. Legal distinctions:  Obscene material is illegal.  Indecent material is not illegal in many jurisdictions, but in some localities, it can result in fines.

2. If sex in ads is considered okay by audiences that are directly targeted, what responsibility does the advertiser have for any effect on indirect targets, such as children? How can advertisers protect themselves from this problem?

Advertisers must carefully examine all ad campaigns before launch because consumer activist groups attack campaigns they believe will have a negative impact on society. The cost to an agency and advertiser for an ad campaign which has to be withdrawn is extremely high and the negative publicity may be even more damaging. As we discussed earlier, Calvin Klein, whose ads typically feature nudity, discontinued an entire campaign because some experts called it child pornography.

Advertisers can protect themselves from this problem by hiring consultants before launching a campaign to ensure the ads are not offensive.

Ad Lab 10–B: Applying the Creative Pyramid 1. Find an ad that exhibits the five elements of the creative pyramid. (A print ad will be the easiest to find and talk about, but radio or TV commercials also feature the five elements.

Beware: The desire step may be hard to find.)

Discussion Guidelines: The goal of this exercise is to help students fully appreciate the logic and understanding that the advertising pyramid brings to the marketing communications process.

The art of building advertisements requires a structure. The creative pyramid provides that structure—one that parallels the way consumers learn about and adopt products. Thus, the creative pyramid is a guide for mentally walking the consumer through the adoption process.

It brings the consumer‘s mental files together with the product‘s utility.

Each step of the pyramid prepares the consumer for the next step. The idea is to: a. Attract the consumer‘s attention away from ongoing daily tasks and draw them into the ad (attention and interest steps). b. Counter their objections with information (credibility step) and get them to have an open mind about the product. c. Help them to visualize a goal (desire step) and to accept the goal (requirements for establishing motivation). d. Tell them to take action (action step) in order to give direction to their motivation.

One interesting challenge with this exercise is that creative directors and art directors are always searching for a unique ―look‖ to give their ad some zing—and to do so, they bend the creative pyramid and ad formats. To help you discuss any variations, here are some details about the standard features in an ad relative to the creative pyramid: a. Attention step 1-229 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.



b.

c.

d.

e.

Attract attention: Establish the starting point for decoding the verbal and nonverbal elements of the message.

(The normal reading pattern in Western culture is from the upper-left corner to the lower-right corner. Print ad layouts usually follow this pattern. The attention step usually appears in the upper half of a print ad, but it may occasionally be in the lower half. Western ads feel and look better to audiences when this pattern in followed. In Asian and Middle Eastern markets, the pattern is often reversed.)  Present the big idea—highest quality takes place when visual and verbal message elements work together synergistically to drive home the fundamental premise of the big idea.

Interest step  Carries the audience‘s focus from the attention step area into the body of the ad (typically features significant, supplementary facts or an answer to a question asked in the attention step).  Must maintain audience interest (uses catchy sounds or visuals in broadcast and middle-sized type in print).  Prepares the viewer‘s mind for the more dense material to come.

Credibility step  This section must reinforce the claims made in the attention step and interest step.  Facts and figures are often the key to reinforcing an assertion or promise and this is the best section for presenting them. Moreover, this is the point where the audience is ready to hear the details.

Desire step  The objective of this section is to get a consumer visualizing him or herself receiving the benefits, induced or actual, of the product‘s utility. This section must be suggestive: 1) Use phrases like ―imagine yourself . . . (being healthier, happier, the first on your block, the center of attention).‖ 2) Indirectly portraying or implying the reward . . . (for a better tomorrow, and everyone will smile again, for your loved ones).

Action step  This step works for consumers whose objections have been answered by the credibility step and are able to see that the goal suggested by the desire step can be theirs.  A command is often used (―buy it now‖; ―call today‖).  Describe what the consumer should do (go to your local mini-mart today, get up out of your chair and call now, fill out the card and mail it today).  Combine the action step with the desire step (call today and enjoy comfort tomorrow).

1-230 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

2. Why do so many good ads lack one or more of the five elements listed here? How do they overcome the omission?

Discussion Guidelines: Essentially, creatives have personal feelings about formats: a. Some learned by following their instincts, and they have not studied formats. b. Some are aware of formats, but they may use them only as a guide for what not to do, or they may refuse to follow them entirely. c. Some creatives are aware of formats and use them willingly, but they may prefer to be very subtle about how they apply them. d. Nevertheless, there are times when the nature of the audience or the big idea forces creatives to bend the creative pyramid a bit.

The desire step is one of the most difficult to write—and that may be why some copywriters omit it. They overcome the omission by compensating with one of the other areas of the pyramid. However, the five elements should be artistically handled in some way in every ad or commercial.

AD LAB 10–C: The Creative Gymnasium 1. Attempt to solve the exercises. Explain your choices. a. The Explorer. Do you see any patterns or objects in the image? b. The Judge and the Warrior. As a creative person, what verdict would your Judge give to ads that feature creative gymnastics? How would your Warrior present ads like this to a client for approval? c. The Artist.

Warm-Up Techniques: Answers will vary widely. Follow example formats (1012 microphones = 1 megaphone) Mental Muscle Stretcher: Answer provided in the Ad Lab. 2. Create a metaphor for each of these paired concepts: a. Boxing + Water b. Magnet + Library c. Rainbow + Clock Answer Guidelines: A metaphor is a figure of speech comparing one object to another by speaking of it as if it were that object. a. Water + Money: liquid assets, cash flow, pooling assets. b. Boxing + Water: cascade of punches, flowing footwork, boiling mad, punch drunk. c. Rainbow + Clock: colorful time-teller, kaleidoscope timekeeper, multihued ticker.

Portfolio Review: The Creative Director‘s Greatest Ads The creative director always wants to produce the most effective advertising possible in order to give the client the greatest bang for the buck. That means first conceiving a brilliant idea that will 1-231 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

both resonate with the particular target audience and relate to the client‘s marketing and advertising strategy. Then the idea must be executed in a masterful way.

Study all the award-winning ads in this portfolio and consider how well they measure up to this definition of greatness. To do this, start by analyzing whether the ad is informational or transformational. Then evaluate and describe the ―boom‖ factor each one uses. Next, see if you can determine from the ad what the company‘s advertising strategy was and discuss how relevant the ad is to that strategy. Finally, evaluate how well the creative director‘s staff executed the concept.  People behind the Ads: Tim Piper, Writer/Director for PiRo, Former Associate Creative

Director, Ogilvy & Mather, Toronto  Tim Piper is currently at work at PiRo, an agency that he co-founded.  He is the former associate creative director for Ogilvy & Mather, Toronto.  Piper served as copywriter and art director for Evolution, winner of the 2007 Cannes Grand Prix, the industry‘s most prestigious award.  Evolution is the commercial for Dove that helped drive home the ―Real Beauty‖ campaign big idea.  The campaign resonated with women in a powerful way and started thousands of discussions about beauty and the expectations foisted on girls.  Piper did not disappoint, as he helped create Evolution‘s successor, Onslaught. Onslaught begins with a close-up on the freckled face of a young girl, looking innocently at the camera.  Piper‘s career began as a graphic designer, working freelance, in the small town of Adelaide, Australia.

Review Questions 1. Select an ad from an earlier chapter in the book. What do you believe is the sponsor‘s advertising and message strategy? What is the ad‘s boom factor?

Advertising theory consists of:  Target audience—comprised of resellers, consumers, and centers of influence.  Product concept—unique selling qualities.  Media—type of media used (print, electronic, out-of-home, etc.).  Message strategy is a simple description and explanation of an ad campaign‘s overall creative approach, what the advertising says, how it says it, and why. Message strategy consists of three components: verbal, nonverbal, and technical.  An ad‘s boom factor, the punchline, is that precise moment when the joke culminates in a clever play on words or turn of meaning or when the viewer or reader gets that ―aha‖ feeling.

1-232 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

2. Choose an ordinary product and create a strategic brief for it, focusing on the target audience of students at your school.

Sample Answer: Reusable coffee tumbler  Who? The prospects are 18–22-year-old students in the Gainesville, Florida, area who are on the go, often grabbing tea or coffee using their dorm room coffee maker or using their cup to grab a refill of coffee or tea at Starbucks before heading to their job or class. They often use their tumbler for water refills during class as well.  Why? They care about the environment, want to be perceived as eco-friendly by their classmates, would never be caught carrying a plastic water bottle, and want a tumbler in a variety of colors and sizes. The ad should utilize rational appeals about the eco-friendly aspects of the tumbler, perhaps how many bottles are saved during a day‘s use of the tumbler.  What? Reusable, eco-friendly, stylish, transportable, and easily cleaned for a variety of uses are the features that will satisfy consumer wants and needs. The product is made of a material that makes it easy to be cleaned with or without soap to go from coffee to water to tea without having a leftover aftertaste. The tumbler has a lifetime money back guarantee for its reuse. This is a tumbler students will be able to use all throughout college and beyond. The tumbler comes in 18 color varieties and features a handle on the side and top of the tumbler, making it easy to transport.  Where and when? The ads for these tumblers will be posted on social media, specifically Instagram and Facebook in Gainesville, Florida, as well as the surrounding metropolitan Orlando area. The advertisements will be posted during the month of November, leading up to Christmas but will be more heavily posted during the Thanksgiving holiday week.

Students will want to add this tumbler to their Christmas lists.  What style, approach, or tone? The style of the ad will be respectful of this age groups‘ desire for eco-friendly products, treating them as environmentally consciousness, socially aware, and intelligent consumers. The advertisements should suggest that the brand understands these environmentally conscious wants and needs and can meet them while also providing a stylish and portable product.

3. What are the elements of message strategy and how does it differ from advertising (or creative) strategy?  The advertising strategy focuses on the description and explanation of the rationale and overall approach to what the advertising will say, how it says it, and why. It is summed up in the creative brief.  The message strategy focuses on the wording, imagery, and mechanical elements of the actual advertising (see the answer to question 1 for additional details).

4. In what ways have you exercised your personal creativity in the last week?

The fundamental of creativity is origination—creating something that was not there before.

The creative process would be involved in some degree.

1-233 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

5. What qualities characterizes the two main styles of thinking? Think of an occasion when you usually employ one of these. Now think of a time you typically use the other. Why do the styles fit these occasions?

Max Weber (the German sociologist) determined that people think in two ways:  Fact-based—objective, rational, linear, and data-oriented. A fact-based style of thinking would likely be employed when making a decision such as what college to attend. An agency promoting that college could highlight the low cost of attendance, the price per credit hour, that the programs offered can get students to graduation within three years, that the college boasts a high job placement percentage for students directly after graduation, and that students leave the university with very few loans.  Value-based—qualitative, intuitive, holistic, and emotionally oriented. A value-based approach for that same college promotion might focus on how students can flourish as individuals at the university. It could highlight the extracurricular activities available to students, the assets of the town or location of the university that students would enjoy, and how graduates develop and find their passions within the university.

6. What are the four roles of the creative process? Have you played these roles in preparing a term paper? How?  The Explorer: research.  The Artist: outline, writing.  The Judge: editing.  The Warrior: negotiating with instructor for a better grade 7. What is the difference between a strategy statement and a big idea?

An advertising strategy is a statement of direction consisting of four elements: the target audience, the product concept, the communication media, and the advertising message. This is usually presented as a multiple page brief.

The big idea is a bold, creative initiative (often expressed by a catchy phrase) that builds on the strategy, joins the product benefit with consumer desire in a fresh involving way, brings the subject to life, and makes the reader or the audience stop, look, and listen.

8. Select five creative ads from a magazine. What techniques of the Artist can you recognize in those ads?

Some of the Artist's techniques include:  Creates visualizations (the big idea).  Transforms concepts using concept-manipulating techniques: adapt, imagine, reverse, connect, compare, eliminate, and parody.

9. In those same ads, can you identify each step of the creative pyramid?

Steps: attention, interest, credibility, desire, and action.

10. Consider a real situation in which you wish to be persuasive. How can you use tactics of the Warrior to advance your idea?

Imagine that you wish to go on a trip with your friends over your university‘s spring break.

However, you realize that you have extremely limited funding in your bank account and 1-234 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

know that your parents may not be thrilled about the idea of you driving their car the 10 hours to your spring break destination. Using the tactics of a warrior, you might begin testing your idea out with your parents during Thanksgiving break, telling them that some of your friends are considering a trip for the break, not noting that anything is a definite plan and not yet asking to borrow their car. Over Christmas break, you have more concrete plans to present to your parents—you know exactly who is going, exactly how long your travels will take, exactly where you would stay, and how much money you would need for the trip. You consider that the target audience for your presentation are your parents, so you highlight the safety of the town which you are traveling to, the wholesome attributes of the friends you are traveling with, and your flawless driving record. Your parents raise questions about the cost.

You respond with confidence that you are willing to contribute any earnings from your oncampus job to the trip and have been saving it for the past 2 months and will simply be supplementing your own funds with your parent‘s financial assistance.

The Advertising Experience 1. Impact of Color Different colors create subtle differences in the impression an image makes. Find a black and white print advertisement. Recreate it in color three times, each time using different color combinations. Ask different audiences (such as your classmates, your friends, or your family) for their impressions of each color scheme. Write an analysis of the results for each, explaining how the colors enhance or diminish the ads‘ message.

2. Effective Creative Strategy and Execution Apply the creative process and the various means of deriving and judging ―good‖ advertising to the following websites, noting the quality of the creative and the strategic intent behind the work. Be sure to answer the questions below.  adidas: www.adidas.com  Energizer: www.energizer.com  Xbox: www.xbox.com  Harley-Davidson: www.harley-davidson.com  AT&T: www.att.com  SeaWorld: www.seaworld.com  Taco Bell: www.tacobell.com a. Who is the intended audience of the site? b. What is it that makes the site‘s creative good or bad? Why? c. Identify the ―who, why, what, when, where, style, approach, and tone‖ of the communication. d. Write an objective statement, support statement, and brand character statement for each.

1-235 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Sample Answer: Energizer a. The intended audience of this site is consumers. b. The creative for the site is very good because it is highly unusual graphically friendly with animation well-integrated with the advertising campaign and branding effort user friendly and easy to navigate full of extras (merchandising items, downloadables, etc.) c. Identify:  Who—battery consumers, largely in the U.S. (no real geographic skew), who are interested in a battery with a long life. Demographic information such as age, income, gender, and education are not as relevant as consumption, which is quite heavy.  Why—the communication is targeted to the consumer‘s rationale to purchase a battery that is superior and has a long life.  What—high-technology batteries with long life.  When—24 hours a day, 7 days a week.  Where—via the Internet on a global basis.  Style and approach—the copy has a colloquial style with a rational approach expressing the product‘s superior technology.  Tone—the communication has an edgy, upbeat tone. d. Write:  Objective statement—To communicate that Energizer batteries are the most technologically advanced, longest-lasting batteries on the planet.  Support statement—The batteries have high-drain superiority, plus unsurpassed performance in all other devices.  Brand character statement—Energizer Advanced Formula batteries are the simple, efficient, powerful choice throughout the world.

3. Account Planning Account planners help to ensure the research process has reaped the proper information for the creatives. The importance of account planning, namely the gathering of research and the formulation of strategy for the creative team, cannot be understated. The Account Planning Group (APG) is an organization that brings together 700 account planners and communications strategists. Browse through the documents held on the APG website (www.apg.org.uk) and answer the questions that follow. a. Who is the intended audience of the site? b. What is account planning? Why is it important? c. What is the primary document that the account planning function generates? What are the main elements in the document? d. Choose an essay or article on any of the APG sites and discuss at length, explaining the relevance of the topic to account planning and the advertising business.

Sample Answer: a. The sites are intended for account planners and advertising agency professionals.

1-236 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

b. Account planning is the practice of thinking from the point of view of the consumer. It is the planner‘s role to be the consumer‘s advocate in the creative process. Account planning is important because it helps bridge the gap between the client, the creative, and the consumer. The planner‘s main tasks center on using consumer research to ensure that a piece of creative work is strategically sound. In general, the planner is responsible for:  Working with the account manager on strategy development  Supervising any primary research in formulating strategy  Preparing the creative brief  Briefing the creatives and checking their work for strategic relevance  Conducting any pre- or post-research of the creative product c. The planner is responsible for the generation of the creative brief, which includes the following general elements:  Advertising assignment/task  Advertising objective(s)  Target Audience (with demographic, geographic, psychographic, and behavioristic profiles)  Accepted consumer belief about the product or category  Key selling idea (or core strategic thought, single-minded proposition, unique selling premise)  Substantiation/support  Desired brand image  Tone and manner  Mandatories  Desired consumer response to the advertising d. Answers will vary on a case-by-case basis.

4. How Strategy Dictates Execution Target‘s value-based advertising tends to take a humorous and unexpected approach to communicating its message to the reader. But Target also uses ―hard-sell‖ ads in newspaper inserts? Why? Answer Guidelines: Target‘s creative and quirky commercials help brand the ―expect more‖ part of the equation.

The newspaper inserts offer consumers proof of the ―pay less‖ side. In addition, ads that help brand Target on television reach more upscale consumers than the value-conscious shoppers who scan inserts for savings and coupons.

1-237 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Connect Activities Title

Assignment Type

How Creativity Enhances Advertising The Creative Process

Case Analysis

Adidas: Analyzing the Marketing Environment Target Advertising

Click and Drag

Topic

Learning AACSB Objective Accreditation Tagging Advertising Creativity 10-01; 10-03; Knowledge 10-04 Application Advertising Creativity

Video Case Creative Strategy Development

Video Case The Creative Process

Bloom's Taxonomy Apply

10-04

Knowledge Application

Apply

10-01; 10-02

Knowledge Application; Reflective Thinking Knowledge Application; Reflective Thinking

Remember; Apply

10-04

Remember; Apply

How Creativity Enhances Advertising Activity Summary: This activity asks students to read a case about the development of an ad campaign for a candy bar called ―Rocky Top.‖ Students are then asked to respond to questions relating to value versus fact-based thinking, the boom factor in advertising, and the imaginary roles that art directors and copywriters adopt during various points in the creative process.

Follow-Up Class Discussion: Have students identify an advertisement they think has an interesting boom factor and identify what creative elements contribute to the ad‘s boom factor.

The Creative Process Activity Summary: This activity asks students to consider the roles creatives play at various points in the creative process, and then place the parts of the creative process in order.

Follow-Up Class Discussion: Place your students in pairs and ask them to imagine they were a copywriter or creative director working on a campaign for your university, promoting the school to prospective students in the state. Ask them to consider their own personalities and discuss which roles they would likely adopt in the various stages of the creative process. Then, have them outline what they would do in each phase of the creative process in their imaginary roles.

1-238 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Adidas: Analyzing the Marketing Environment Activity Summary: This activity has students watch a video from Adidas about the introduction of their Boost tennis shoes, highlighting the research and strategizing done to inform the creative introduction of these shoes. Students are then tasked with answering questions relating to the problem Adidas‘ advertising must solve, who the primary and secondary target markets were for Adidas, their use of transformational or informational advertising, and a potential tone statement for Adidas‘ ads.

Follow-Up Class Discussion: Ask your students to identify three advertisements that use an informational approach and three that utilize a transformational approach in their advertising.

Ask them to identify the similarities seen among those using an informational approach and similarities between those using an informational approach.

Target Advertising Activity Summary: This activity asks students to view a commercial for Target promoting their toy selection during the holiday season. Students are then tasked with answering questions regarding the creative pyramid, the development of the big creative idea in the ad, and the use of brainstorming to generate creative ideas.

Follow-Up Class Discussion: Engage students in a brainstorming session. Have them randomly draw a target audience from a number of selections, ask them to pick a random household product, and give them the objective of raising awareness for this ―new‖ product among their target audience members. Have them brainstorm as many creative ideas as possible for advertising this product, and then they can present their favorite idea to the class.

CHAPTER ELEVEN CREATIVE EXECUTION: ART AND COPY This chapter presents the role of art and copy—the nonverbal and verbal elements of message strategy—in print, radio, television, and on the web. Artists and copywriters include a variety of specialists who follow specific procedures for conceptualizing, designing, writing, and producing IMC messages. To be successful, creatives must be conversant with the copywriting and

1-239 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

commercial art terms and formats used in the business. They must also develop an aesthetic sensitivity so they can recognize, create, evaluate, or recommend quality work.

Learning Objectives After studying this chapter, your students will be able to: LO11-1 Describe the tools and principles important for effective design in print layouts.

LO11-2 Explain how to create great copy in print.

LO11-3 Identify the important aspects of writing for radio and TV. LO11-4 Review ways to develop great spots in radio and TV. LO11-5 Suggest ways to write effectively for digital media.

LO11-6 List the challenges involved in creating messages for international markets.

What’s New? Information on production has been added by consolidating material from the now deleted Chapter 12, ―Print, Electronic, and Digital Media Production.‖ Tips for writing great copy from Demian Farnworth at Copyblogger are included in the My IMC Campaign. The discussion of typography from the deleted chapter can now be found in this chapter. The Ethics, Diversity & Inclusion box addresses the need for copywriters to be sensitive to the power of words to hurt people, even when the intent of the ad is humor. On a more inspiring note, Procter & Gamble‘s ―Like a Girl‖ campaign is applauded for reframing hurtful words into words of empowerment for women. The material on major categories of production techniques (Live Action, Animation, and Special Effects) has been eliminated as these categories are too restrictive in the age of digital production. The section on writing copy for digital media has been updated and revised. The focus of the People behind the Ads box, Alex Bogusky, returned to the advertising industry in 2018.

Teaching Tips and Strategies In this chapter, students are introduced to how ads are created.

Using the Chapter Opening Vignette in the Classroom If you have internet access in the classroom, show students the ―Dumb Ways to Die‖ spot (https://youtu.be/IJNR2EpS0jw). If not, ask your students to watch it at home. The ad nicely demonstrates how creativity and a big idea come together. The point to illustrate the creative aspects of advertising deployed on a very serious subject. Ask students to identify and discuss the creative elements of the spot (copy, art, music, etc.). Then ask them if they believe it would be effective in changing people‘s behaviors. Can creativity sometimes get in the way of a message? This is a good entry point for discussion of the creative work in advertising.

Other Tips and Strategies

1-240 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

In television, storyboard scripts are used to design commercials. Some DVDs have ―special features‖ that show storyboards and the scene concurrently. I have a couple of movies that I show the class to demonstrate the phenomenon. By watching the storyboard and the scene the students get a good idea of why storyboards are so important in setting up a commercial. A useful DVD for this concept is the special edition of the movie Suicide Kings (Artisan Home Entertainment, 1998). There is also an example of a storyboard for a 30-second Ford commercial in the text.

Increased computing power and more sophisticated software programs now allow graphic designers to create more effective ads for print. At my university we have Photoshop and Picture It. I like to divide students into groups and have them use different programs to create an ad (usually for the advertising campaign that I have them create).

Students are amazed at how easy it is to add effects such as darkness or stars to pictures. They also have fun adding text to pictures. I have had students create animated images. Students enjoy being creative while simultaneously learning the benefits that software brings to creative departments.

Web Resources for Enhancing Your Lectures Copyblogger: Copywriting 101

http://www.copyblogger.com/copywriting-101

Copywriting.com

http://www.copywriting.com

Art Direction and the Web

http://www.alistapart.com/articles/artdirweb

Ad Layout and Design Strategies

https://www.lifewire.com/ad-layout-and-designstrategies-1077222

Adgoodness

http://www.frederiksamuel.com/blog

Pedagogical Features  My IMC Campaign 11–A: Product Facts for Creatives

Ad Lab 11–A: The Role of the Artist  My IMC Campaign 11–B: Creating Great Headlines and Copy  My IMC Campaign 11–C: Design Principles

Ad Lab 11–B: The Characteristics of Type

1-241 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Portfolio Review: The Art Director‘s Guide to Layout Styles Ethics, Diversity & Inclusion: Respect, Dignity, and Tolerance  My IMC Campaign 11–D: Writing Effective Copy  My IMC Campaign 11–E: Creating Effective Radio Commercials  My IMC Campaign 11–F: Creating Effective TV Commercials

Ad Lab 11–C: Creative Ways to Sell on Radio  People behind the Ads: Alex Bogusky, Co-founder and Chief Creative Engineer, Crispin

Porter Bogusky Lecture Outline I.

II.

Vignette: Dumb Ways to Die Australia‘s Metro Trains network rolls out a child-like cartoon PSA series to encourage safe behavior and reduce accidents.

Designing Print Layouts Design refers to how the art director and graphic artist (or graphic designer) choose and structure the artistic elements of an ad. A designer establishes a style—the manner in which a thought or image is expressed—by choosing artistic elements and uniquely blending them.

A. The Use of Layouts A layout is an overall orderly arrangement of all the format elements of an ad: visual(s), headline, subheads, body copy, slogan, seal, logo, and signature. The layout serves several purposes: 1. It gives a client something tangible to correct, change, question, and approve.

2. The layout helps the creative team develop the message‘s psychological elements: the nonverbal and symbolic components.

3. Once the best design is chosen, the layout serves as a blueprint. It shows the size and placement of each element in the ad.

B. Design and Production: The Creative and Approval Process The design process is both a creative and an approval process. In the creative phase, the designer uses thumbnails, roughs, dummies, and comprehensives—in other words, nonfinal art—to establish the message‘s look and feel. Then in the prepress phase, the artist prepares a mechanical: the final artwork with the actual type in place along with all the visuals the printer or the media will need to reproduce the ad.

1-242

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

1. Thumbnail Sketches The thumbnail sketch (or thumbnail) is a small, rough, rapidly produced drawing that the artist uses to visualize layout approaches without wasting time on details.

2. Rough Layout In a rough, the artist draws to the actual size of the ad or website.

3. Comprehensive The comprehensive layout (or comp) is a highly refined facsimile of the finished ad. At this stage, all the visuals should be final.

4. Dummy A dummy presents the handheld look and feel of brochures, multipage materials, or point-of purchase displays.

5. The Use of Computers in Publishing a. Preparing print or digital materials for commercial purposes using a computer and publishing software is called desktop publishing. b. Most print and web ads are created today using desktop publishing because it offers extraordinary benefits over traditional methods. It speeds the development and design of publications.

1) Design elements in digital media can be saved and reused through style sheets, or on websites through the use of cascading style sheets.

2) It significantly lowers the cost of publishing, in part because a single person can do much of the work that used to be required by a team.

3) It allows for rapid and inexpensive changes to the layout of the ad.

6. Approval The work of the copywriter and art director is always subject to approval. The larger the agency and the larger the client, the more formidable this process becomes (see Exhibit 11-1).

C. Creating Effective Layouts: Tools and Formats 1. Small Windows- and Mac-based systems are ideal for computer design, and sophisticated graphics software is now available for page layouts (InDesign), painting and drawing (Adobe Illustrator), image manipulation (Adobe Photoshop), and web design (Adobe Dreamweaver and Flash).

2. Studies also show virtually no relationship between how much the marketer spends and how well the ad is recalled. But the quality of the message‘s appearance is important.

3. Traditionally, the ads that score the highest recall employ a standard, poster-style format (also called a picture-window layout and Ayer No. 1 in the trade) with a single, dominant visual that occupies 60 to 70 percent of the ad‘s total area 4. Research also shows that readership drops considerably if ads have more than 50 words. So to attract a large number of readers, copy blocks should be kept to less than 20 percent of the ad.

1-243 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

5. If selling is the objective, then informative body copy becomes important. And long copy works when it‘s appropriate—when the advertiser is more interested in quality of readership than quantity.

6. Advertising author Roy Paul Nelson points out that the principles of design are to the layout artist what the rules of grammar are to the writer. The basic rules include the following: a. The design must be in balance. b. The space within the ad should be broken up into pleasing proportions. c. A directional pattern should be evident so the reader knows in what sequence to read. d. Some force should hold the ad together and give it unity. e. One element, or one part of the ad, should have enough emphasis to dominate all others.

D. The Use of Typography in Print 1. Typography and Copy Casting Typography is the art of selecting and setting type. Advertising artists know the five major type groups, the artistic variations within type families, and the structure of type. The most important considerations in selecting type are readability, appropriateness, harmony or appearance, and emphasis.

E. The Use of Visuals in Print The artists who paint, sketch, and draw in advertising are called illustrators. The artists who produce pictures with a camera are photographers. Together they are responsible for the visuals, or pictures, we see in IMC. 1. Purpose of the Visual Since the visual carries so much responsibility for an ad‘s success, it should be designed with several goals in mind. Some of the most obvious follow: a. Capture the reader‘s attention. b. Clarify claims made by the copy. c. Identify the subject. d. Show the product actually being used. e. Qualify readers by stopping legitimate prospects. f. Help convince the reader of the truth of copy claims. g. Arouse the reader‘s interest in the headline. h. Emphasize the product‘s unique features. i. Create a favorable impression of product or advertiser. j. Provide continuity for the campaign by using a unified visual technique in each ad.

2. Determining the Chief Focus for Visuals

1-244 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

III.

Selecting the focus for advertising visuals is a major step in the creative process.

It often determines how well the big idea is executed. Print advertising uses many standard subjects for ad visuals, including: a. The package containing the product. b. The product alone. c. The product in use. d. How to use the product. e. Product features. f. Comparison of products. g. User benefit. h. Humor. i. Testimonial. j. Negative appeal.

3. Selecting the Visual The kind of picture used is often determined during the visualization process. Art directors deal with several basic issues: a. If the art director determines that a visual is required, how many should there be: one, two, or more? b. Should the visual be black-and-white or color? These may be budgetary decisions. c. The art director must then decide the subject of the picture. d. Should it be one of the standard subjects listed earlier? Or something else? e. How relevant is that subject to the advertiser‘s creative strategy? f. The art director has to know what technical and/or budgetary issues must be considered.

Writing Great Print Copy In print, the key layout elements are the visual(s), headlines, subheads, body copy, slogans, seals, logos, and signatures. As Exhibit 11-2 shows, copywriters can correlate the visual, headline, and subhead to the attention step of the creative pyramid. The interest step typically corresponds to the subhead and the first paragraph of body copy.

Body copy handles credibility and desire, and the action step takes place with the logo, slogan, and signature block.

A. Headlines The headline contains the largest type on the page—the words that will be read first and are situated to draw the most attention.

1. Role of Headlines a. Effective headlines attract attention, engage the audience, explain the visual, lead the audience into the body of the ad, introduce the brand, and present the selling message.

1-245 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

b. Another goal is to engage the reader fast, and give reason to read the rest of the ad. c. Another goal of a headline is to engage the reader—fast—and give a reason to read the rest of the ad. d. Many experts believe that headlines with 10 words or more gain greater readership. But one researcher’s effort to confirm this failed to find an impact of headline length, at least for ad recall. e. The headline is the most important thing a company says to the prospect. f. Headlines present the complete selling idea. g. Headlines should offer a benefit that is compelling and easy to grasp. h. Headlines should present product news. They should be employed whenever honestly applicable. Examples include free, now, amazing, suddenly, announcing, introducing, it’s here, improved, at last, revolutionary, just arrived, new, and important development.

2. Types of Headlines a. Copywriters use many variations of headlines depending on the strategy. b. Headlines may be classified by the type of information they carry: benefit, news/information, provocative, question, and command. c. Benefit headlines promise the audience that experiencing the utility of the product or service will be rewarding. d. The news/information headline announces news or promises information. e. Copywriters use provocative headlines to provoke the reader‘s curiosity—to stimulate questions and thoughts. f. A question headlines asks a question, encouraging readers to search for the answer in the body of the ad. g. A command headline orders the reader to do something, so it might seem negative. But readers pay attention to such headlines.

B. Headlines in Digital Ads 1. When headlines are used in search-related ads, such as the sponsored ads that appear next to Google’s search results, several additional considerations come into play, largely driven by the primary purpose of the headline: the click.

2. WordStream, an online advertising company, offers a number of suggestions for effective PPC headlines (pay-per-click). These are a sampling: (1) Include keywords specific to the advertiser’s offering, (2) solve the prospect’s problem, and (3) limit characters to 25.

3. Hootsuite analyzed thousands of Facebook display ads looking for the right combination of elements found in the ones that are most effective. It concluded that the ideal Facebook ad headline is short (in some cases just five words), features a testimonial, offers a benefit that is verifiable, presents a numbered list (“4 traits to look for when hiring”), and solves a problem (“How to . . .”).

1-246 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

C. Subheads 1. The subhead is an additional smaller headline that can appear above the headline or below it.

2. Subheads generally appear in boldface (heavier) or italic (slanted) type or a different color.

D. Body Copy The advertiser tells the complete sales story in the body copy, or text. The body copy comprises the interest, credibility, desire, and often even the action steps.

1. Body Copy Styles Experienced copywriters look for the technique and style with the greatest sales appeal for the idea being presented. Common copy styles include straight sell, institutional, narrative, dialogue/monologue, picture caption, and device. a. In straight-sell copy, writers immediately explain or develop the headline and visual in a straightforward, factual presentation. b. Advertisers use institutional copy to promote a philosophy or extol the merits of an organization rather than product features. c. Copywriters use narrative copy to tell a story. d. By using dialogue/monologue copy, the copywriter can add the believability that narrative copy sometimes lacks. e. A photo with picture-caption copy is especially useful for products that have a number of different uses or come in a variety of styles or designs. f. Device copy uses figures of speech (such as puns, alliteration, assonance, and rhymes) as well as humor and exaggeration.

2. Formatting Body Copy The keys to good body copy are simplicity, order, credibility, and clarity. Four basic format elements are used to construct long copy ads: the lead-in paragraph, interior paragraphs, trial close, and close. a. The lead-in paragraph is a bridge between the headline and the sales ideas presented in the text. Like a subhead, the lead-in paragraph is part of the interest step. b. The interior paragraphs develop credibility by providing proof for claims and promises and they should build desire by using imaginative language. c. Interspersed in the interior paragraphs should be suggestions to act. The trial close gives them the opportunity to make the buying decision early. d. The close is the action step. A good close asks consumers to do something and tells them how. A direct close seeks immediate response in the form of a purchase, a store or website visit, or a request for further information.

E. Slogans 1. Many slogans (also called themelines or taglines) begin as successful headlines.

1-247 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

2. Slogans have two basic purposes: to provide continuity to a series of ads in a campaign and to reduce an advertising message strategy to a brief, repeatable, and memorable positioning statement.

F. Seals, Logos, and Signatures 1. A seal is awarded only when a product meets standards established by a particular organization, such as the Organic Crop Improvement Association, the Good Housekeeping Institute, Underwriters Laboratories, or Parents Institute. Because these organizations are recognized authorities, their seals provide an independent, valued endorsement for the advertiser‘s product.

2. Logotypes (logos) and signature cuts (sig cuts are special designs of the advertiser‘s company or product name.

IV. Writing Great Radio and TV Copy For audio and video media, the fundamental elements—the five steps of the creative pyramid— remain the primary guides, but the copywriting formats differ. Radio and television writers prepare scripts and storyboards.

A. Writing Radio Copy 1. A script resembles a two-column list. On the left side, speakers‘ names are arranged vertically, along with descriptions of any sound effects and music. The right column contains the dialogue, called the audio.

2. The following are good rules of thumb: 1) 10 seconds: 20–25 words 2) 20 seconds: 40–45 words 3) 30 seconds: 60–70 words 4) 60 seconds: 130–150 words 3. Radio writing has to be clearer than any other kind of copywriting.

B. Writing Television Copy 1. A TV script is created in a two-column format with the left side titled ―Video‖ and the right side ―Audio.‖ 2. The video column describes what the viewer will see: camera angles, action, scenery, and special effects.

3. The audio column describes what is heard: dialog, sound effects, and music.

V. Generating Effective Ideas for Radio and TV Commercials A. Developing the Artistic Concept for Commercials Creating the concept for a radio or TV commercial is similar to creating the concepts for print ads.

1. The first step is to determine the big idea.

2. Then the art director and copywriter must decide what commercial format to use.

3. The next step is to write a script containing the necessary copy or dialogue plus a basic description of any music, sound effect, and/or camera views.

1-248 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

4. Using the TV script, the art director creates a series of storyboard roughs to present the artistic approach, the action sequences, and the style of the commercial.

5. As the concept evolves, the creative team defines the characters‘ personalities in a detailed, written casting brief.

B. Formats for Radio and TV Commercials Similar to print advertising, the format for a broadcast ad serves as a template for arranging message elements into a pattern.

Hank Seiden, the former chair of Ketchum Advertising, developed the Execution Spectrum: 24 basic formats that range from frivolous to serious (see Exhibit 11-3).

Here we consider eight common commercial formats that can be used in either radio or television: straight announcement, presenter, testimonial, demonstration, musical, slice of life, lifestyle, and animation.

1. Straight Announcement a. The oldest and simplest type of radio or TV commercial is the straight announcement. One person, usually a radio or TV announcer, delivers the sales message. b. In radio, a straight announcement can also be designed as an integrated commercial—that is, it can be woven into a show or tailored to a given program. c. For TV, an announcer may deliver the sales message on camera or off screen, as a voice-over, while a demonstration, slide, or film shows on screen. d. Straight announcements are commonly used on late-night TV programs, by local advertisers, and by nonprofit or political organizations.

2. Presenter a. The presenter commercial uses one person or character to present the product and carry the sales message. b. A radio personality may ad lib an ad message live in his or her own style.

3. Testimonial The true testimonial—where a satisfied user tells how effective the product is— can be highly credible in both TV and radio advertising.

4. Demonstration Television is well suited for visual demonstration. And a demonstration convinces an audience better and faster than a spoken message.

5. Musical a. The musical commercials, or jingles, we hear on radio and TV are among the best—and worst—ad messages produced. b. The message may be sung, or written with a donut in the middle (a hole for spoken copy); or orchestras may play symphonic or popular arrangements.

1-249 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VI.

c. Many producers use a consistent musical theme for background color or to close the commercial. This is called a musical logo. d. After many repetitions of the advertiser‘s theme, the listener begins to associate the musical logo with the product. To achieve this, the jingle should have a hook—that part of the song that sticks in your memory. e. Advertisers have three sources of music. They can buy the right to use a tune from the copyright owner, which is usually expensive. They can use a melody in the public domain, which is free. Or they can hire a composer to write an original song.

6. Slice of Life (Problem–Solution) a. Commercials that dramatize real-life situations are called slice of life. The drama always concludes with a successful use of the product. b. The key to effective slice-of-life commercials is simplicity. Often a mnemonic device can dramatize the product benefit and trigger instant recall.

7. Lifestyle To present the user rather than the product, advertisers may use the lifestyle technique.

8. Animation Cartoons, puppet characters, and demonstrations with computer-generated graphics are very effective animation techniques for communicating difficult messages and reaching specialized markets, such as children.

C. Basic Mechanics of Storyboard Development 1. Storyboard Design a. Once the basic script is completed, the art director must turn the video portion of the script into real images. This is done with a storyboard, a sheet preprinted with a series of 8 to 20 blank windows (frames) in the shape of TV screens. Below each frame is room to place the text of the commercial, including the sound effects and camera views as abbreviated in Exhibit 11-4.

The storyboard works much like a cartoon strip. b. Through a process similar to laying out a print ad (thumbnail, rough, comp) the artist carefully designs how each scene should appear, arranging actors, scenery, props, lighting, and camera angles to maximize impact, beauty, and mood.

2. Animatic: The Video Comp a. To supplement the storyboard or pretest a concept, a commercial may be taped in rough form using the writers and artists as actors. b. Or an animatic may be shot—a film strip of the sketches in the storyboard accompanied by the audio portion of the commercial synchronized on tape.

Writing Effectively for Digital Media

1-250 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VII.

VII

A. According to research by Burson-Marsteller, a large New York public relations firm, there are 11 million heavy online users in the United States, and their opinions affect the buying decisions of 155 million consumers both online and off. Burson-Marsteller refers to these opinion leaders as e-fluentials.

B. People don‘t really read digital content, they scan it, so the information presented must be at once concise and comprehensive.

C. Websites should always offer interactivity—a way for the reader to respond, either through e-mail or Internet response forms.

Creating Ads for International Markets In international markets, the most important consideration for copywriters and creative directors is language.

Marketers must address their unique situations. Moreover, they have to weigh the economics of various promotional strategies.

A. Translating Copy 1. Regardless of strategy, translation is a basic issue.

2. Advertisers must follow some basic rules when using translators: a. The translator must be an effective copywriter. b. The translator must understand the product. c. Translators should translate into their native tongue. d. Give the translator easily translatable English copy.

3. There is no greater insult to a national market than the misuse of its language.

4. English is rapidly becoming the universal language for corporate campaigns directed to international businesspeople, and some firms print their instructional literature and brochures in English as well.

B. Art Direction for International Markets 1. Philosophers often refer to the arts as a kind of international language whose nonverbal elements translate freely regardless of culture.

2. An icon, a visual image representing some idea or thing, can have a meaning that cuts across national boundaries and reflects the tastes and attitudes of a group of cultures.

3. On a more personal level, a culture‘s icons can express social roles.

C. Legal Restraints on International Marketers All advertising creativity, including what the ads say, show, or do, is at the mercy of foreign governments and cultures.

Chapter Summary A. The nonverbal aspect of a message carries half the burden of communicating the big idea.

B. Design refers to how the art director and graphic artist conceptually choose and structure the artistic elements that make up a message’s appearance or set its tone.

1-251 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

C. As copy goes through the editing process, copywriters must be prepared for an inevitable (and sometimes lengthy) succession of edits and reedits from agency and client managers and legal departments.

D. Typography affects an ad’s appearance, design, and legibility.

E. Several steps are used to develop a design: thumbnail sketch, rough layout, and comprehensive layout.

F. The computer has dramatically affected graphic design.

G. In print, the visual has a great deal of responsibility for a message’s success.

H. The two basic devices for illustrating a message are photos and drawings.

I. The key format elements for writing print are headlines, subheads, body copy, slogans, seals, logos, and signatures.

J. The creative pyramid and the format elements come together in creating effective print messages.

K. In electronic media, copy is normally spoken dialogue that is prepared using a script; it is referred to as the audio portion of the commercial.

L. Radio commercials must be intrusive to catch and hold the attention of people who are usually doing something else.

M. Television copywriters use scripts and storyboards to communicate the verbal and nonverbal ideas of a commercial.

N. In radio and TV, art plays an important role.

O. Common formats for radio and TV commercials include straight announcement, presenter, testimonial, demonstration, musical, slice of life, lifestyle, and animation.

P. Writing for websites and social media requires understanding how consumers find and respond to information online.

Q. When creating campaigns for international markets, advertisers must consider the variations in language and the legal restrictions imposed by foreign governments or cultures.

Answers to Pedagogical Features  My IMC Campaign 11A: Product Facts for Creatives

Art directors and copywriters must have a thorough understanding of the brand to create advertising that resonates. Make sure your creatives have the information that will help them write copy that sizzles and create layouts that stop consumers dead in their tracks.



Proprietary information o Product‘s trade name. o Trademark. o Product symbol. o Other copyrighted or patented information.

1-252

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.















History o When was the product created or invented? o Who introduced it? o Has it had other names? o Have there been product changes? o Is there any ―romance‖ to it?

Research o Are research results available? o What research about the product does the supplier have? o Which research will be most useful for each medium?

Life cycle o What is the product‘s life or use span? o What stage is it in now and what style of copy should be used for that stage? o What stages are competitors in?

Market position o What is the product‘s share of the total market? o Does its market share suggest a positioning strategy? o What position does the company wish to occupy?

Competitive information o Who are the product‘s competitors? o Does the product have any advantages over them? o Does it have any disadvantages? o Are they all about the same? o Do rival products present problems that this one solves?

Product image o How do people view the product? o What do they like about it? o What do they dislike about it? o Is it a luxury? o Is it a necessity? o Is it a habit? o Is it self-indulgent? o Do people have to have it but wish they didn‘t?

Customer use o How is the product used? o Are there other possible uses? o How frequently is it bought? o What type of person uses the product? o Why is the product bought? o Personal use.

1-253

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.











o Gift. o Work. o What type of person uses the product most (heavy user)? o How much does the heavy user buy? o Where do the best customers live?

Performance o What does the product do? o What might it be expected to do that it does not? o How does it work? o How is it made or produced? o What‘s in it?  Raw materials.  Special ingredients.  Preservatives.  Chemicals.  Nutrients.

What are its physical characteristics? o Smell. o Appearance. o Color. o Texture. o Taste. o Others.

Effectiveness o Is there proof the product has been tested and works well? o Do any government or other regulations need to be mentioned or observed? o How does it work compared to its competitors?

Manufacturing o How is the product made? o How long does it take? o How many steps are in the process? o How many people are involved in making it? o Are any special machines used? o Where is it made?

Distribution o How widely is the product distributed? o Are there exclusive sellers? o Is there a ready supply or a limited amount? o Is it available for a short season? o What channels of distribution must be reached?

1-254

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.



Packaging o Unit size or sizes offered. o Package shape. o Package design. o Styling. o Color. o Special protection for product. o A carrier for product. o Package label.

Ad Lab 11–A: The Role of the Artist 1. Select an ad in the Chapter 10 Portfolio Review. Explain which advertising artists were probably involved in its creation and what the responsibility of each artist was.

The five types of artists who could be involved in the creation of an ad are: a. The art director, who is responsible for the visual presentation of the ad, along with a copywriter, for developing the initial concept of the ad. They may do the initial sketches, or layouts, of what the ad might look like. Their primary responsibility is to supervise the ad’s progress to completion. b. The web designer, who is the precision specialist preoccupied with the shape and form of things, arranging the various graphic elements (type, illustrations, photos, white space, etc.) in the most attractive and effective way possible. c. The illustrator, who is the artist who paints or draws images seen in the ad. d. The photographer, who is the artist who uses a camera to create illustrative images. e. The production (or paste-up) artist, who is responsible for assembling the various elements of an ad and mechanically putting them together the way the art director or designer has indicated.

2. Which ad in the Chapter 10 Portfolio Review do you think needed the fewest artists? How many?

Assumption: All the spots require the input of a creative director.

Sample Answer: The copy-heavy layout likely involved the fewest artists. A copywriter, illustrator, art director, creative director, and production artist were likely involved in the development of this advertisement.  My IMC Campaign 11B: Creating Great Headlines and Copy

George Felton, in his book Advertising Concept and Copy, offers the following suggestions for aspiring copywriters: Headlines ―Achieve synergy, not redundancy.‖ The headlines and artwork should work together to create an idea, but not be completely redundant.

1-255 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

―Let the consumer do some of the work.‖ Avoid ads that insult the audience‘s intelligence (a philosophy articulated by William Bernbach. See People behind the Ads in Chapter 2.)  ―Combine overstatement and understatement.‖ If the visual is BIG, make the headline small. And vice versa.  ―Emphasize one idea per ad.‖ If you have several ideas, show how they are linked to make them one.

Copy Demian Farnworth at Copyblogger offers the following ways to write ―damn good copy‖: 1. Plain copy: Make it simple, short, and to the point. This works well in search advertising.

Example: ―College scholarships that you likely qualify for.‖ 2. Storytelling copy: Use the elements of a story (opening, conflict, dialog, and solution).

Example: Arielle wanted to feel better about how she looked and felt, and with her wedding just months away, she was ready for change (opening). For years she had been yo-yo dieting (conflict). Then a friend told her how she could lose weight with Weight Watchers (dialog). All it took was the easy Weight Watchers plan for tracking food, activity, and water intake (solution).

3. Conversational copy: Write as though you are speaking with your prospect. Example: ―Today I want to share the three lessons that really helped me connect to my kids.‖ 4. Imagine copy: Invite the prospect to dream or imagine that a problem is removed or a transformation is possible. ―Imagine looking at that swimsuit you love and finding out about an easy, inexpensive way you can wear it next summer with confidence.‖ 5. Long copy: Farnworth notes, ―The more you tell, the more you sell.‖ This is especially useful when the benefit is not simple or easily communicated.

6. Killer poet copy: Combining style with selling. The best example may be this copy from ad legend David Ogilvy: ―At 60 miles an hour the loudest noise in this new Rolls-Royce comes from the electric clock.‖ 7. Direct-from-CEO copy: Let the boss sell by communicating directly with prospects or users. Example: Pete Coors appeared in a commercial for Coor‘s Light. With snowcovered mountains behind him, Coors looked directly at the camera and said, ―Some brewers look out their windows and see smokestacks. Some don‘t.‖ 8. Frank copy: Admit the elements of the product that aren‘t easy, simple, convenient, or perfect. This honesty earns credibility and also helps the consumer see him- or herself as unique. Examples: The admired campaign by luxury gym brand Equinox with the tagline ―Commit to something‖ or Patagonia‘s ―Don‘t buy this jacket.‖ 9. Superlative copy: Outrageous claim? That‘s what you‘re going for. Examples: Patagonia‘s ―The President Stole Your Land,‖ Mountain Dew‘s ―Dew or die,‖ and Monster Energy‘s ―Unleash the Beast.‖ 

1-256 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

10. Rejection copy: Who doesn‘t want to be part of an exclusive club? Farnworth cites American Express‘s Black Card and the Beautiful People dating site as examples of ―not everyone is good enough.‖  My IMC Campaign 11C: Design Principles

Make sure your layout follows these rules of thumb for creating attractive, informative ads.

Balance The optical center is the reference point that determines the layout‘s balance. The optical center is about one-eighth of a page above the physical center of the page. Balance is achieved through the arrangement of elements on the page—the left side of the optical center versus the right, above the optical center versus below. ___Formal balance. Perfect symmetry is the key to formal balance: matched elements on either side of a line dissecting the ad have equal optical weight. This technique strikes a dignified, stable, conservative image. ___Informal balance. A visually balanced ad has elements of different size, shape, color intensity, or darkness at different distances from the optical center. Like a teeter-totter, an object of greater optical weight near the center can be balanced by an object of less weight farther from the center. Many ads use informal balance to make the ad more interesting, imaginative, and exciting.

Movement Movement is the principle of design that causes the audience to read the material in the desired sequence. It can be achieved through a variety of techniques. ___People or animals can be positioned so that their eyes direct the reader‘s eyes to the next important element. ___Devices such as pointing fingers, boxes, lines, or arrows (or moving the actors or the camera or changing scenes) direct attention from element to element. ___Design can take advantage of readers‘ natural tendency to start at the top left corner of the page and proceed in a Z motion to the lower right. ___Comic-strip sequence and pictures with captions force the reader to start at the beginning and follow the sequence in order to grasp the message. ___Use of white space and color emphasizes a body of type or an illustration. Eyes will go from a dark element to a light one, or from color to noncolor. ___Size itself attracts attention because readers are drawn to the biggest and most dominant element on the page, then to smaller elements Proportion ___Elements should be accorded space based on their importance to the entire ad. Attentiongetting elements are usually given more space. Avoid the monotony of giving equal amounts of space to each element.

White Space (Isolation) 1-257 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

___White space is the part of the ad not occupied by other elements (note that white space may be some color other than white). White space helps focus attention on an isolated element—it makes the copy appear to be in a spotlight. White space is an important contributor to the ad‘s overall image.

Contrast ___An effective way of drawing attention to a particular element is to use contrast in color, size, or style; for example, a reverse ad (white letters against a dark background) or a black-and-white ad with a red border.

Clarity and Simplicity ___Any elements that can be eliminated without damaging the overall effect should be cut.

Too many type styles; type that is too small; too many reverses, illustrations, or boxed items; and unnecessary copy make for an overly complex layout and an ad that is hard to read.

Unity ___Unity means that an ad‘s many different elements must relate to one another in such a way that the ad gives a singular, harmonious impression. Balance, movement, proportion, contrast, and color may all contribute to unity of design. Many other techniques can be used: type styles from the same family, borders around ads to hold elements together, overlapping one picture or element on another, judicious use of white space, graphic tools such as boxes, arrows, or tints.

Continuity ___Continuity is the relationship of one ad to the rest of the campaign. This is achieved by using the same design format, style, and tone; the same spokesperson; or the same graphic element, logo, cartoon character, or catchy slogan.

Ad Lab 11–B: The Characteristics of Type Readability General factors that contribute to readability include the type‘s style, boldness, and size; the length of the line; and the spacing between words, lines, and paragraphs. An extra space between lines (called leading, pronounced ―ledding‖) gives a more ―airy‖ feeling to the copy.  Kerning Appropriateness Harmony/Appearance Emphasis Classes of Type  Display type  Text type Type Groups  Serif  Sans serif 1-258 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

 Square serif type  Cursive or script type  Ornamental type Type Families  Type family  Font  Measuring Type Use the various figures and terms in this Ad Lab to answer the following: 1. Find examples of each of the five type groups listed above in ads that appear in magazines or online. How well do these typefaces complement the designs of the ads?

2. Identify an ad that, in your opinion, uses an inappropriate typeface. How would you improve it?

Portfolio Review: The Art Director‘s Guide to Layout Styles Art directors use many different types of layouts. Creating an ad for the fictitious Imperial Cruise Lines, Tom Michael, the president and creative director of Market Design (Encinitas, CA), first prepared several thumbnail sketches using a variety of different layout styles and headlines to see which ideas would work best.

Note how the copy in each ad is indicated by lines of recurring gibberish. The computer programs art directors use frequently offer an option to represent layout text with such incoherent ramblings, referred to in the business as ―greek.‖ 1. Study the different layouts and discuss the advantages and disadvantages of each. Which approach would you recommend for Imperial Cruise Lines? Why? What additional layout or copy ideas can you come up with?

Ethics, Diversity & Inclusion: Respect, Dignity, and Tolerance 1. Some would argue that many people are too sensitive and take themselves too seriously when they object to ads such as the examples shown above. How would you respond to this criticism?

Answer Guidelines: Answers should discuss the power and potential influence of imagery, copy, and representations of certain groups on that group‘s acceptance and treatment in society.

Answers could also discuss consumer preferences for brands that are socially aware and the payoff being socially aware offers to brands. This could also be an opportunity for students to explore the ethical guidelines or code of conduct the advertising practice holds its practitioners to (see www.aaf.org/_pdf/aaf%20website%20content/513_ethics/iae_principles_practices.pdf).

2. What things can you do to gain a better understanding of people who are different from yourself? Why is such understanding important if you hope to work in advertising or IMC? 1-259 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Answer Guidelines: Answers could discuss the importance of including persons from diverse backgrounds in message testing of advertisements, hiring diverse employees at the advertising agency, listening to diverse voices and admitting when one is unaware of cultural norms and not pretending to understand groups which they are not a part of. Additionally, it is important for advertisers to consistently vet their messages for potentially offensive content and to ensure that people are appropriately represented. As discussed in question 1 above, consumers are more socially aware than ever and are cognizant of brands that make the effort to appropriately represent the consumers they are trying to reach. It is important that advertisers and marketers really understand consumer segments and social norms as they attempt to represent and reach a variety of audiences.  My IMC Campaign 11–D: Writing Effective Copy

               

Get to the main point—fast.

Emphasize one major idea simply and clearly.

Be single-minded. Don’t try to do too much. If you chase more than one rabbit at a time, you’ll catch none.

Position the product clearly.

Keep the brand name up front and reinforce it.

Write with the consumer’s ultimate benefit in mind.

Write short sentences. Use easy, familiar words and themes people understand.

Don’t waste words. Say what you have to say—nothing more, nothing less. Don’t pad, but don’t skimp.

Avoid bragging and boasting. Write from the reader’s point of view, not your own.

Avoid “we,” “us,” and “our.”

Avoid clichés. They’re crutches; learn to get along without them. Bright, surprising words and phrases perk up readers and keep them reading.

Write with flair. Drum up excitement. Make sure your own enthusiasm comes through in the copy.

Use vivid language. Use lots of verbs and adverbs.

Stick to the present tense, active voice. It’s crisper. Avoid the past tense and passive voice. Exceptions should be deliberate, for special effect.

Use personal pronouns. Remember, you’re talking to just one person, so talk as you would to a friend. Use “you” and “your” whenever appropriate.

Use contractions. They’re fast, personal, natural. People talk in contractions (listen to yourself).

Don’t overpunctuate. It kills copy flow. Excessive commas are the chief culprits. Don’t give readers any excuse to jump ship.

1-260 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

 

Read the copy aloud. Hear how it sounds; catch errors. The written word is considerably different from the spoken word so listen to it.

Rewrite and write tight. Edit mercilessly. Tell the whole story and no more. When you’re finished, stop.

 My IMC Campaign 11–E: Creating Effective Radio Commercials

Writing for radio takes a sharp ear, empathy for the listener, and the ability to create pictures inside the consumer‘s head. These tips will help you create great radio spots.  Make the big idea crystal clear. Concentrate on one main selling point. Radio is a good medium for building brand awareness, but not for making long lists of copy points or complex arguments.  Mention the advertiser’s name early and often. If the product or company name is tricky, consider spelling it out.  Take time to set the scene and establish the premise. A 30-second commercial that nobody remembers is a waste of money. Fight for 60-second spots.  Use familiar sound effects. Ice tinkling in a glass, birds chirping, or a door shutting can create a visual image. Music also works if its meaning is clear.  Paint pictures with your words. Use descriptive language to make the ad more memorable.  Make every word count. Use active voice and more verbs than adjectives. Be conversational. Use pronounceable words and short sentences.  Be outrageous. The best comic commercials begin with a totally absurd premise from which all developments follow logically. But remember, if you can’t write humor really well, go for drama.  Ask for the order. Try to get listeners to take action.  Remember that radio is a local medium. Adjust your commercials to the language of your listeners and the time of day they’ll run.  Presentation counts a lot. Even the best scripts look boring on paper. Acting, timing, vocal quirks, and sound effects bring them to life.  My IMC Campaign 11–F: Creating Effective TV Commercials

 



Begin at the finish. Concentrate on the final impression the commercial will make.

Create an attention-getting opening. An opening that is visually surprising or full of action, drama, humor, or human interest sets the context and allows a smooth transition to the rest of the commercial.

Use a situation that grows naturally out of the sales story. Avoid distracting gimmicks.

Make it easy for viewers to identify with the characters.

1-261 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

  

   

Characters are the living symbol of the product. They should be appealing, believable, nondistracting, and most of all, relevant.

Keep it simple. The sequence of ideas should be easy to follow. Keep the number of elements in the commercial to a bare minimum.

Write concise audio copy. The video should carry most of the weight. Fewer than two words per second is effective for demonstrations. For a 60-second commercial, 101 to 110 words is most effective; more than 170 words is too talky.

Make demonstrations dramatic but believable. They should always be true to life and avoid the appearance of camera tricks.

Let the words interpret the picture and prepare viewers for the next scene. Use conversational language; avoid “ad talk,” hype, and puffery.

Run scenes five or six seconds on average. Rarely should a scene run less than three seconds. Offer a variety of movement-filled scenes without “jumping.”

Keep the look of the video fresh and new.

Ad Lab 11–C: Creative Ways to Sell on Radio 1. Select three familiar radio commercials and discuss which creative techniques they use.

Sample Answer: Yellow pages advertising ―If you can‘t find it in the Pacific Bell Yellow pages it probably doesn‘t exist.‖ Pacific Bell conducts zany, improvised-sounding interviews with shy, tongue-tied customers (customer interview, improvisation). By using the same format and interviewer‘s voice-over in their TV commercials, Pacific Bell is able to achieve ―imagery transfer,‖ in their radio ads.

2. Select a familiar radio commercial and discuss how a different creative technique would increase its effectiveness.

Sample Answer: Motel 6 ad Tom Bodett‘s voice (voice power), the violin playing, and the slogan, ―we‘ll leave the light on for you,‖ (sound picture/demographics/product song) are the signature elements of the campaign. A new campaign could keep the same signature elements but have Tom chat in his comfortable, country style with a down-home customer and spouse (customer interview).  People Behind the Ads: Alex Bogusky, Co-founder and Chief Creative Engineer, Crispin

Porter Bogusky  Alex Bogusky started at what was then called Crispin and Porter Advertising in 1989 as an art director.  He became creative director of the agency five years later, was named a partner in 1997, and became cochair in January 2008.  In 2002, Alex was inducted into the American Advertising Federation‘s Hall of Achievement.

1-262 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

 

To the shock of many, Bogusky walked away from it all in 2010, to pursue other interests.

Then, in 2018, he returned to the creative helm of Crispin.

Bogusky has recently left his position with CP+B and started his own consulting firm.

The Advertising Experience 1. Big Stan‘s Tri-State Mattress Outlet usually advertises by sponsoring monster truck shows or demolition derbies. However, Big Stan wants to expand his business and has decided to try radio advertising. Using the script format found in the section ―Writing Radio Copy,‖ create the kind of radio ad that would please Big Stan and his potential customers.

2. Creative Boutiques One of the growing trends in advertising is the increased use of creative boutiques. Many of these smaller shops have won clients previously handled by large, full-service advertising agencies. Peruse the small sampling of creative boutiques below and answer the questions that follow.  Brolik: http://brolik.com/  Crispin Porter Bogusky: www.cpbgroup.com  The Idea Boutique: www.theideaboutique.com  Love & War: www.loveandwar.com a. What is the focus of the company‘s work (consumer, business-to-business, ethnic, general market)? b. What is the scope and size of the company‘s business? c. What services does the company offer? d. What is your overall impression of the company and its work? Why? Sample Answer: Lightstream Design, www.lightstreamns.com a. The focus of the company‘s work is improving the hybrid between traditional advertising and graphic design. The idea is that with design and advertising strategy all under one roof the creative effort is better and the client can profit from that synergy. The agency‘s work does not stay within one category or type of business so that they can remain ―objective‖ in the creative. b. The company is a small, regional boutique in Beverly, Massachusetts. c. The company is truly an integrated shop, with the following services provided to clients through partnership agreements:  Brand planning, analysis, and consultation  Creative development for broadcast, print, and collateral  Photography studio (on site)  Corporate identity development and management  Website development and production  Packaging design/development  Exhibit and display design (P-O-S & P-O-P) 1-263 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

 Media planning/buying  Public Relations  Research d. The company is a very strong player for such a small boutique. The most important thing about Lightstream is the integrated thinking behind the company‘s philosophy, mission, and work. It is not the largest firm around, but a clear focus on campaign synergy and brand equity can attract even the largest advertisers.

3. Creative Resources As you when reading this chapter, a lot goes into writing good copy or scripts and developing effective visuals. Because of the Internet, many new resources are available to creative teams when developing concepts.

Copywriters often rely on different sources to aid them in developing their copy. Visit the following websites and explain how each relates to copywriters and their task of developing effective copy.  Copy Chef: www.copychef.com  The Slot: www.theslot.com  Writers Guild of America: www.wga.org Like copywriters, art directors require many resources while developing their art. Familiarize yourself further with art direction by browsing the following websites. Be sure to discuss the importance of each to art directors.  American Institute of Graphic Arts: www.aiga.org  The One Club: www.oneclub.org  Creativity Cafe: www.creativity.net  Graphic Design & Publishing Center: www.graphic-design.com  PhotoDisc: www.photodisc.com  Photographer‘s Index: www.photographersindex.com  GoCreate: www.gocreate.com Sample Answer: Writer‘s Guild of America Writer‘s block: It happens to every copywriter at some point in time. Often, an idea is generated (breaking the block) from the most obscure source. That is why a resource such as the WGA and its website are so valuable to the copywriter. The organization provides research and training, as well as many tips and devices for beating writer‘s block and writing better copy. It is an indispensable tool for the copywriter.

Sample Answer: Art Directors Club, New York One of the most important things for an art director to have is fresh ideas. It is this proliferation of ideas—often stemming from brainstorming—that helps spark terrific creativity. The purpose of the Art Director‘s Club is twofold: 1) to network and share ideas among peers; and 2) to reward outstanding creativity. This type of organization not only

1-264 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

allows the creative sharing of ideas and acknowledgement of great creativity among their peers, it also provides an invaluable resource for developing their own talents.

4. How does the ―Dumb Ways to Die‖ campaign use metaphor to change behaviors around trains? How, and why, does the campaign suggest that there is something even worse than death for those who might be tempted to take risks around trains?

Answer Guidelines: Students should note the creative use of cartoon imagery as metaphor. They should also discuss the role of appearing ―dumb‖ to peers.

Connect Activities Title

Assignment Type

Ad Creation Process

Click and Drag

Identify the Types of Headlines Creating TV Commercials

Click and Drag

Dumb Ways to Die

Topic

Creative Strategy Development

Learning AACSB Objective Accreditation Tagging 11-01; 11-03; Analytical 11-04 Thinking

The Use of Appeals in 11-02 the Development of an Advertising Message Case The Use of Appeals in 11-04 Analysis the Development of an Advertising Message Video Case The Creative Process; 11-02; 11-03; The Online 11-04 Advertising Process

Bloom's Taxonomy Analyze

Analytical Thinking

Analyze

Analytical Thinking

Remember; Analyze

Analytical Thinking; Reflective Thinking

Remember; Evaluate

Ad Creation Process Activity Summary: This activity asks students to correctly order the first, second, and third stages of the ad creation process and identify what creative elements are produced at these stages.

Follow-Up Class Discussion: Have the class select and agree upon a brand they are interested in. Split the class into thirds and designate one group as the first stage of ad development, one as the second stage, and one as the third. Have the class work as a relay race for the steps in the creative process. The group in the first stage development group will create rough thumbnails for a 15-second commercial. Give them a 3 to 5 minute time limit, or however long your class time allows. Then, have the second stage development group create a more developed storyboard for 1-265 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

the commercial based on the thumbnails drawn by the first group. Have the third stage development group serve as actors, acting out the final commercial for the class.

Identify the Types of Headlines Activity Summary: This activity provides students with example headlines and asks them to identify what type of headline is being used.

Follow-Up Class Discussion: Pair students up and have them randomly select a type of headline: news/information, provocative, question, command, and benefit. Then ask student pairs to find a print advertisement together online that utilizes this type of headline. Have them share their chosen headline in class and ask the rest of the class to determine which type of headline it is.

Creating TV Commercials Activity Summary: This activity provides students with a fictitious case about an advertising agency that seeks to create a commercial for rechargeable batteries targeted toward 15–24-yearold consumers. Follow-up questions ask students to consider the various types of commercials and what might be most effective for a product such as rechargeable batteries.

Follow-Up Class Discussion: Pair students up and have them randomly select a type of television commercial: straight announcement, presenter, testimonial, demonstration, musical, slice of life, lifestyle, and animation. Task student pairs with finding a commercial that fits the type of commercial they selected.

Dumb Ways to Die Activity Summary: This activity has students watch a video from Metro Trains called Dumb Ways to Die and then asks students to answer questions about the type of commercial exhibited.

Follow-Up Class Discussion: Ask students to identify their favorite commercial from perhaps an assignment or discussion earlier in the semester. Ask them to analyze what type of commercial message it would be considered: straight announcement, presenter, testimonial, demonstration, musical, slice of life, lifestyle, or animation.

1-266 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

CHAPTER TWELVE ADVERTISING IN PRINT MEDIA This chapter examines how print advertising enhances the advertiser‘s media mix. Newspapers and magazines, with their unique qualities, can complement broadcast, direct mail, and other media. By using print wisely, advertisers can significantly increase the reach and impact of their campaigns and still stay within their budget.

Learning Objectives After studying this chapter, your students will be able to: LO12-1 Explain the advantages and disadvantages of magazine advertising.

LO12-2 Discuss the various ways to analyze a magazine‘s circulation.

LO12-3 Analyze how rates are determined for print media.

LO12-4 List the advantages and disadvantages of newspaper advertising.

LO12-5 Show how newspapers are categorized.

LO12-6 Define the major types of newspaper advertising.

LO12-7 Detail how newspaper space is purchased.

LO12-8 Describe how print ads are produced.

What’s New? The opener of this chapter, which was Chapter 13 in the last edition, is updated. Sadly, the story for newspapers has not improved. Native advertising is introduced as a concept in the ―Using Magazines in the Creative Mix‖ section and is the feature of Ad Lab 12–B. The Portfolio Review is completely updated with new, fresh ads. The Ethics, Diversity & Inclusion box is updated to focus more specifically on elderly consumers and to reflect current legislation on sweepstakes.

The auditing firm for print is now named the Alliance for Audited Media, a change noted in the chapter.

Teaching Tips and Strategies This chapter will familiarize students with the different forms of print media. These are terms the student will need to know if they are going to work in the advertising industry.

Using the Chapter Opening Vignette in the Classroom Since the birth of the Internet, newspapers have seen a steady decline in advertising revenue – with many long-time papers closing up shop for good. Ask students how many have read a physical newspaper in the past week and how many have read on online version of a print newspaper. How do students feel about the decline of one of the first major areas of advertising?

What is gained and what is lost when advertising migrates from print media to online and mobile media? Can newspapers develop a viable ad revenue model?

1-267 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Other Tips and Strategies Most advertising professors will want to have a frank discussion about the virtual collapse of print advertising revenue and circulation. The numbers, as of 2010, are nothing short of disastrous for many newspaper and magazine titles. Ask students why they don‘t read a newspaper (trust me, they don‘t). And ask what print media can do, if anything, to regain them as readers.

Web Resources for Enhancing Your Lectures Ebony

http://www.ebony.com

Nationwide Newspapers Advertising

http://www.nationwideadvertising.com

Newsmedia Alliance

http://www.newsmediaalliance.org

Pedagogical Features  My IMC Campaign 12–A: The Pros and Cons of Magazine Advertising

Ad Lab 12–A: Magazines and the Creative Mix Ad Lab 12–B: Native Advertising Portfolio Review: Outstanding Magazine Ads  People behind the Ads: Nancy Berger Cardone, VP/Publisher and CRO at Marie Claire  My IMC Campaign 12–B: The Pros and Cons of Newspaper Advertising

Ad Lab 12–C: Newspapers and the Creative Mix Ethics, Diversity & Inclusion: What‘s at Stake with Sweepstakes?  My IMC Campaign 12–C: Planning and Evaluating Print Media

Lecture Outline I.

Vignette: Whither newspapers?

The newspaper industry has been in decline for years due to the migration of advertising to new digital media. One of the economic benefits of advertising is that it keeps businesses running. Can the newspaper industry survive while losing ad revenue?

1-268

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

II.

III.

The Role of the Print Media Buyer Exhibit 12-1 illustrates the combined spending on newspaper and magazine advertising.

This percentage has been shrinking throughout the 2000s because of ad spending shifting to digital media.

A. The person in charge of negotiating and contracting with the media is called a media buyer.

B. Success as a print media buyer requires a broad understanding of all available print media and the terminology used in the field.

C. Buyers need to know how magazines and newspapers are categorized, the advertising possibilities each form offers, and the pros and cons of using various types of vehicles.

D. Second, buyers need to know how to buy magazine and newspaper space. They must understand how to analyze circulation, read rate cards, get reliable information, and calculate and negotiate the most efficient media buys.

E. Finally, media buyers require creativity for developing ingenious, sophisticated ways to integrate the advertiser‘s print media efforts into the whole creative mix.

Using Magazines in the Creative Mix The Pros and Cons of Magazine Advertising 1. Magazines offer a host of features: flexible design options, prestige, authority, believability, and long shelf life. People can read a magazine ad at their leisure; pore over the details of a photograph; and carefully study information in the copy.

This makes magazines an ideal medium for high-involvement think and feel products.

2. Magazines also have a number of drawbacks. They are expensive (on a cost-perthousand basis), especially for color ads. And since they typically come out only monthly, or weekly at best, it‘s difficult to build up reach and frequency quickly.

B. Special Possibilities with Magazines Media buyers need to be aware of the many creative possibilities magazines offer advertisers through various technical or mechanical features. These include bleed pages, cover positions, inserts and gatefolds, and special sizes, such as junior pages and island halves.

1. When the dark or colored background of the ad extends to the edge of the page, it is said to bleed off the page.

2. If a company plans to advertise in a particular magazine consistently, it may seek a highly desirable cover position. a. Few publishers sell ads on the front cover, commonly called the first cover. b. They do sell the inside front, inside back, and outside back covers (the second, third, and fourth covers, respectively), usually through multiple-insertion contracts at a substantial premium.

1-269 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

3. A junior unit is a large ad (60% of the page) placed in the middle of a page and surrounded with editorial matter.

4. Similar to junior units are island halves, surrounded by even more editorial matter.

5. The island sometimes costs more than a regular half-page, but because it dominates the page, many advertisers consider it worth the extra charge. Exhibit 12-2 shows how space combinations can be used to create impact.

6. Sometimes, rather than buying a standard page, an advertiser uses an insert.

7. A gatefold is an insert whose paper is so wide that the extreme left and right sides have to be folded into the center to match the size of the other pages.

8. Some advertisers create their own custom magazines.

9. Native advertising is defined by the Native Advertising Institute as ―paid advertising where the ad matches the form, feel and function of the content of the media on which it appears.‖ In essence, native ads are sponsored content that does not look like advertising.

C. How Magazines Are Categorized In the jargon of the trade, magazines are called books, and media buyers commonly categorize them by content, geography, and size.

1. Content a. Consumer magazines, purchased for entertainment, information, or both, are edited for consumers who buy products for their own personal consumption. b. Farm publications are directed to farmers and their families or to companies that manufacture or sell agricultural equipment, supplies, and services. c. Business magazines, by far the largest category, target business readers.

2. Geography a. Most major U.S. cities have a local city magazine. b. Regional publications are targeted to a specific area of the country, such as the West or the South. c. National magazines range from those with enormous circulations to small, lesser-known national magazines.

Exhibit 12-3 shows the nine major geographic breakdowns of regional editions of U.S. News.

3. Size It doesn‘t take a genius to figure out that magazines come in different shapes and sizes, but it might take one to figure out how to get one ad to run in different-size magazines and still look the same.

The most common magazine sizes follow: a. Large—9 1/2‖ × 11 1/3‖, 4 columns × 170 lines ad space b. Flat—7‖ × 10‖, 3 columns × 140 lines ad space c. Standard—6‖ × 8 1/2‖, 2 columns × 119 lines ad space 1-270 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

IV.

d. Digest—4 1/2‖ × 6 1/2‖, 2 columns × 91 lines ad space Buying Magazine Space When analyzing a magazine, media buyers consider readership, cost, mechanical requirements, and ad closing dates (deadlines). Information about these statistics is included in a magazine‘s rate card.

A. Understanding Magazine Circulation The first step in analyzing a publication‘s potential effectiveness is to assess its audience.

1. Guaranteed versus Delivered Circulation A magazine‘s rates are based on its circulation. a. The rate base is the circulation figure on which the publisher bases its rates; the guaranteed circulation is the number of copies the publisher expects to circulate. If the publisher does not reach its delivered figure, it must provide a refund. b. As many as 30 percent of consumer magazines audited by the Alliance for Audited Media (AAM) each year don‘t meet the circulation levels they guarantee to advertisers. c. Publishers pay thousands of dollars each year for a circulation audit—a thorough analysis of the circulation procedures, outlets of distribution, readers, and other factors—by companies such as AAM. d. Directories such as those published by Standard Rate & Data Service (SRDS) feature the logo of the auditing company in each listing for an audited magazine.

2. Primary and Secondary Readership a. This primary circulation represents the number of people who buy the publication, either by subscription or at the newsstand. b. Secondary (or pass-along) readership, which is an estimate determined by market research of how many people read a single issue of a publication, is very important to magazines. Some have more than six readers per copy.

3. Vertical and Horizontal Publications a. A vertical publication covers a specific industry in all its aspects. b. Horizontal publications deal with a particular job function across a variety of industries.

4. Subscription and Vendor Sales a. Media buyers want to know the ratio between subscriptions and newsstand sales because newsstand sales. b. Today, subscriptions account for the majority of magazine sales. c. From the advertiser‘s point of view, newsstand sales are impressive because they indicate that the purchaser really wants the magazine and is not merely subscribing out of habit.

1-271

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

5. Paid and Controlled Circulation a. A paid basis means the recipient must pay the subscription price to receive the magazine. Bloomberg Businessweek is a paid-circulation business magazine. b. In controlled circulation, the publisher mails the magazine free to individuals who the publisher thinks can influence the purchase of advertised products.

6. Merchandising Services: Added Value Magazines, and newspapers too, often provide liberal added-value services to their regular advertisers, such as: a. Special free promotions to stores. b. Marketing service to help readers find local outlet. c. Response cards that allow readers to request brochures and catalogs. d. Help handling sales force, broker, wholesaler, and retailer meetings. e. Advance editions for the trade. f. Research into brand preferences, consumer attitudes, and market conditions.

New added-value options might include using magazines‘ custom publishing, editorial, and production knowledge, along with their databases, to help clients develop videos, books, and websites that create added value for the brand.

B. Reading Rate Cards Magazine rate cards follow a standard format.

Three dates affect magazine purchases: 1) The cover date is the date printed on the cover.

2) The on-sale date is the date the magazine is actually issued.

3) And the closing date is the date all ad material must be in the publisher‘s hands for a specific issue.

1. Rates You compute the cost per thousand (CPM) by dividing the full-page rate by the number of thousands of subscribers: Page rate/(Circulation rate/1,000) = CPM 2. Discounts a. Frequency discounts are based on the number of ad insertions, usually within a year; volume discounts are based on the total amount of space bought during a specific period. b. Most magazines also offer cash discounts (usually 2 percent) to advertisers who pay right away, and some offer discounts on the purchase of four or more consecutive pages in a single issue.

3. Premium Rates a. Magazines charge extra for special features. b. Color rates are normally 25 to 60 percent more than black and white rates.

Some publications, such as Money, even offer metallic inks and special colors. c. A bleed adds up to 20 percent to regular rates.

1-272 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

V.

d. Geographic editions target geographic markets; demographic editions reach readers who share a demographic trait, such as age, income level, or professional status.

C. Software for Buying Print Media One of the most important tasks in advertising is placement of ads in various media.

Thanks to technology, print media buyers now have a variety of software programs available to assist them.

Using Newspapers in the Creative Mix A. Who Uses Newspapers?

1. Newspapers are now the third-largest medium (after television and magazines) in terms of advertising volume, receiving 13.7 percent of the dollars spent by advertisers in the United States.

2. Consider these important facts: a. The total circulation of newspapers (digital and print combined) is 31 million each weekday and 34 million on Sundays. b. Advertising revenue for the U.S. newspaper industry is about $16.5 billion as of 2018, down from a high of nearly $50 billion in 2006. c. About 23% of Americans questioned said they read a print newspaper the previous day (the survey was administered in 2012), a drop of 18 points over a 10-year period. d. The median age of a person reading a daily newspaper as of 2017 is 58.

Newspaper website visitors are younger, with a median age of 41. e. Newspaper readers, according to Nielsen, are more likely to be college graduates and have six-figure incomes than are nonreaders. This is especially true of digital editions.

3. As Exhibit 12-4 shows, a diverse group of brands is represented among top national advertisers in newspapers.

B. The Pros and Cons of Newspaper Advertising 1. Print ads in general and newspapers in particular provide a unique, flexible medium for advertisers to express their creativity—especially with businesses that rely on local customers.

2. Newspapers offer advertisers many advantages. One of the most important is timeliness; an ad can appear very quickly, sometimes in just one day.

C. How Newspapers Are Categorized 1. Frequency of Delivery a. A daily newspaper is published as either a morning or evening edition at least five times a week, Monday through Friday. b. With their emphasis on local news and advertising, weekly newspapers characteristically serve small urban or suburban residential areas and farm communities.

1-273

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

c. A weekly newspaper‘s cost per thousand is usually higher than a daily paper‘s, but a weekly has a longer life and often has more readers per copy.

2. Physical Size a. The standard-size newspaper is about 22 inches deep and 13 inches wide and is divided into six columns. b. The tabloid newspaper is generally about 14 inches deep and 11 inches wide. c. The industry introduced the standard advertising unit (SAU) system, which standardized the newspaper column width, page sizes, and ad sizes. d. A SAU column inch is 21/16 inches wide by 1 inch deep. e. There are now 56 standard ad sizes for standard papers and 32 for tabloids.

3. Type of Audience a. Some dailies and weeklies serve special-interest audiences, a fact not lost on advertisers. b. Some serve specific ethnic markets. c. Others serve foreign-language groups. In the U.S., newspapers are printed in 43 languages other than English. d. Specialized newspapers also serve business and financial audiences.

4. Other Types of Newspapers a. Sunday newspapers generally combine standard news coverage with special functions like these: 1) Increased volume of classified ads.

2) Greater advertising and news volumes.

3) In-depth coverage of business, sports, real estate, literature and the arts, entertainment, and travel.

4) Review and analysis of the week‘s events.

5) Expanded editorial and opinion sections. b. Most Sunday newspapers also feature a Sunday supplement magazine. c. The independent shopping guide, or free community newspaper, offers advertisers local saturation. Sometimes called pennysavers, these shoppers offer free distribution and extensive advertising pages targeted at essentially the same audience as weekly newspapers—urban and suburban community readers. d. North Americans also read national newspapers, including the Globe and Mail in Canada, USA Today, and the Christian Science Monitor.

D. Types of Newspaper Advertising The major classifications of newspaper advertising are display, classified, public notices, and preprinted inserts.

1. Display Advertising a. Display advertising includes copy, illustrations or photos, headlines, coupons, and other visual components.

1-274 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VI.

b. One common variation of the display ad, the reading notice, looks like editorial matter and sometimes costs more than normal display advertising. To prevent readers from mistaking it for editorial matter, the word advertisement appears at the top. c. Retailers often run newspaper ads through cooperative (or co-op) programs sponsored by the manufacturers whose products they sell.

2. Classified Advertising a. Classified ads provide a community marketplace for goods, services, and opportunities of every type, from real estate and new-car sales to employment and business opportunities. b. Some newspapers accept classified display ads, which run in the classified section of the newspaper but feature larger type and/or photos, art borders, abundant white space, and sometimes even color.

3. Public Notices For a nominal fee, newspapers carry legal public notices of changes in business and personal relationships, public governmental reports, notices by private citizens and organizations, and financial reports.

4. Preprinted Inserts Like magazines, newspapers carry preprinted inserts. The advertiser prints the inserts and delivers them to the newspaper plant for insertion into a specific edition.

Buying Newspaper Space To get the most from the advertising budget, the media buyer must know the characteristics of a newspaper‘s readership: the median age, sex, occupation, income, educational level, and buying habits of the typical reader.

A. Understanding Readership and Circulation Readership information is available from most newspapers and is often verified by the Alliance for Audited Media in the U.S. Most large papers also provide extensive data on print and digital subscribers.

1. Rate Cards Like the magazine rate card, the newspaper rate card lists advertising rates, mechanical and copy requirements, deadlines, and other information.

2. Local versus National Rates a. Many newspapers charge local and national advertisers different rates. The national rate averages 75 percent higher. b. Many national advertisers reject this rate and take their business elsewhere.

Led by the New York Times, many papers are charging more for subscriptions to remain in business.

1-275 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

3. Flat Rates and Discount Rates a. Many national papers charge flat rates, which means they allow no discounts; a few newspapers offer a single flat rate to both national and local advertisers. b. Newspapers that offer volume discounts have an open rate (their highest rate for a one-time insertion) and contract rates, whereby local advertisers can obtain discounts of up to 70 percent by signing a contract for frequent or bulk space purchases. c. Bulk discounts offer advertisers decreasing rates (calculated by multiplying the number of inches by the cost per inch) as they use more inches. d. Advertisers earn frequency discounts by running a given ad repeatedly in a specific time period. e. Similarly, advertisers can sometimes get earned rates, a discount applied retroactively as the volume of advertising increases through the year.

4. Short Rate An advertiser who contracts to buy a specific amount of space during a one-year period at a discount and then fails to fulfill the promise is charged a short rate, which is the difference between the contracted rate and the earned rate for the actual inches run.

5. Combination Rates Combination rates are often available for placing a given ad in: a. Morning and evening editions of the same newspaper b. Two or more newspapers owned by the same publisher c. In some cases, two or more newspapers affiliated in a syndicate or newspaper group.

6. Run of Paper versus Preferred Position a. Run-of-paper (ROP) advertising rates entitle a newspaper to place an ad on any newspaper or in any position it desires. b. An advertiser can ensure a choice position for an ad by paying a higher preferred-position rate. c. There are also preferred positions on a given page. The preferred position near the top of a page or the top of a column next to reading matter is called full position. d. Slightly less desirable is placement next to reading matter (NR), which generally costs 10 to 20 percent more than ROP rates.

7. Color Advertising Color Advertising is available in many newspapers on an ROP basis.

8. Split Runs Many newspapers (and magazines) offer split runs so that advertisers can test the pulling power of different ads.

1-276 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VII.

B. Co-ops and Networks 1. As an aid to national advertisers, the NAB created the Newspaper Co-op Network (NCN). Salespeople from participating newspapers helped national advertisers line up retailers for dealer-listing ads. The advertiser would produce the ad and include a blank space for each paper to insert local retailers‘ names. The system also helped manufacturers manage local advertising tie-ins to national campaigns and themes.

2. In 1992, the Newspaper Advertising Bureau merged with the American Newspaper Publishers Association and five other marketing associations to form the Newspaper Association of America. More recently the group has reorganized under a new name, the News Media Alliance (NMA), which continues to simplify national newspaper ad buys.

3. In 1994, the group launched a one-order, one-bill system for national advertising, or national advertising, allowing advertisers to make multimarket newspaper buys by placing one order and paying one bill, instead of having to contact—and pay— each paper individually.

C. Insertion Orders and Tearsheets 1. When advertisers place an ad, they submit an insertion order to the newspaper stating the date(s) on which the ad is to run, its size, the desired position, the rate, and the type of artwork accompanying the order.

2. If an advertiser fails to pay the agency, the agency still must pay the publication.

To avoid this liability, many agencies now place a disclaimer on their insertion orders stating that they are acting solely as an agent for a disclosed principal (legal terminology meaning the agency is just a representative for the advertiser and is therefore not liable for the payment).

3. When a newspaper creates ad copy and art, it gives the advertiser a proof copy to check. In contrast, most national advertising arrives at the newspaper camera ready, either in the form of a photo print or an electronic file via e-mail.

4. Most tearsheets for national advertisers are handled through a private central office, the Advertising Checking Bureau.

Producing Ads for Print In advertising, production refers to the steps between a draft of an ad to the finished version that is shown to consumers. The print production process consists of four major phases: preproduction, production, prepress, and printing and distribution. For a simple model of this process, see Exhibit 12-5.

A. The Preproduction Phase: Planning the Project The first step, preproduction, begins when the creative department submits the approved creative concepts—rough or comprehensive layout and copy—to the production department. The production department's first task is to consider the

1-277 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

general nature of the job and answer several questions pertinent to managing it efficiently. For example:  What equipment will be needed?  How will we get it? (Will we have to lease another machine?)  What materials are necessary? (If this is a packaging job, what material will we be printing on: tin, paper, cardboard?)  What human resources are needed? (Do we need to hire any freelancers?)  Will there be any special expenses associated with the job? (Do we need to do location photography, for example?)  How many production artists will be needed? (Is the deadline so near that we‘ll have to call up the reserves?)

Working backward from publication closing dates (deadlines), the traffic and production managers decide when each step of the work must be completed.

1. Planning the Job The purpose of the preproduction phase is to plan the job thoroughly, which usually entails making a number of strategic choices before launching into full production. a. Letters and fliers, for example, commonly use writing paper. Bond writing paper is the most durable and most frequently used. For brochures, there are many types of text papers, such as news stock, antique finish, machine finish, English finish, and coated. b. Cover papers, available in many finishes and textures, are used on soft book covers, direct-mail pieces, and brochure covers, so they‘re thicker, tougher, and more durable. c. The art elements must be properly positioned in the artwork (whether mechanical or computer generated) because the printer needs to have layers of art that can be reproduced individually. The total image is then constructed as each layer is printed over the previous one. Because the printer must photograph each layer to make separate plates, this kind of artwork is called camera-ready art.

B. The Production Phase: Creating the Artwork The production phase involves completing ancillary functions such as illustrations or photography, setting up the artwork and typesetting, and then melding all these components into a final form for the printer.

1. Creating the Visual a. When reviewing the layout with the art director, the decision will be made whether to use illustration or photography and how to get just the pictures the creatives envision.

1-278 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VIII.

b. In many cases, to save money, the art director or producer will choose to use stock photography for a reasonable licensing fee. The fee will typically be based on the intended usage and the length of time the usage will continue. c. Most expensive is commissioning an illustrator to draw an original picture or hiring a photographer to go on location to shoot a specific visual.

2. Printing in Color a. Designs that don‘t need full color are printed in blended inks rather than process colors. b. A PANTONE color, one of a spectrum of colors that makes up the PANTONE Matching System (PMS), is a single ink premixed according to a formula and given a specific color number. The PANTONE swatch book features more than 100 colors in solid and screened blocks printed on different paper finishes.

3. Four-Color Separations a. Four separate halftone negatives are needed to make a set of four-color plates: one each for cyan, yellow, magenta, and black. Each of the resulting negatives appears in black and white, and the set is called the color separation. b. Sophisticated electronic scanning systems—such as the workstations from Silicon Graphics, Hell ScriptMaster, Scitex, and Crosfield—can produce fourcolor separations and screens in one process, along with enlargements or reductions.

C. The Duplication and Distribution Phase: Printing, Binding, and Shipping The last phase of the traditional print production process involves the actual printing, proofing, and finishing steps of drying, cutting, binding, and shipping.

1. The Press Run Once the paper, plates, and ink are readied, the press is started and stopped a few times to adjust the image‘s alignment on the paper. In multicolored printing, proper alignment of all the colors is critical.

2. Finishing a. Once all the pieces are printed, the ink must dry (unless heat-set or cold-set inks were used). Then the excess paper (or other material) is cut away using huge cutting machines. b. Depending on the nature of the job, the pieces may be delivered to special subcontractors who emboss or die-cut or perform other special techniques to enhance the final printed piece. c. The final stop may be the bindery for two- and three-hole drilling, wire stapling, and folding.

Chapter Summary A. The printed page—in magazines and newspapers—provides a unique, flexible medium for advertising creativity.

1-279

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

B. In selecting magazines for advertising, the media buyer must consider a publication‘s circulation, its readership, its cost, and mechanical requirements.

C. Magazine rate cards follow a standard format so advertisers can readily compare advertising costs.

D. Magazines offer distinct advantages. They are the most selective of all mass media and are flexible in both readership and advertising.

E. The newspaper is a mass medium that almost everybody reads.

F. The newspaper‘s rate card lists prices, deadlines, mechanical requirements, and other pertinent information.

G. Specialists are involved in the production of print ads. Among the important jobs are production manager and art director.

H. Print is a worldwide medium; every country has newspapers and magazines.

I. Newspapers and magazines are making alliances with cable, regional telephone, and online computer companies to enter the interactive information market.

J. The print production process consists of four phases: preproduction, production, prepress, and printing and distribution.

Answers to Pedagogical Features  My IMC Campaign 12-A: The Pros and Cons of Magazine Advertising

The Pros  Flexibility in readership and advertising. Magazines cover the full range of prospects; they have a wide choice of regional and national coverage and a variety of lengths, approaches, and editorial tones.  Color gives readers visual pleasure, and color reproduction is best in slick magazines.

Color enhances image and identifies the package. In short, it sells.  Authority and believability enhance the commercial message. TV, radio, and newspapers offer lots of information but lack the depth needed for readers to gain knowledge or meaning; magazines often offer all three.  Permanence, or long shelf life, gives the reader time to appraise ads in detail, allowing a more complete education/sales message and the opportunity to communicate the total corporate personality.  Prestige for products advertised in upscale or specialty magazines such as Architectural Digest, Connoisseur, and Town and Country.  Audience selectivity is more efficient in magazines than any other medium except direct mail. The predictable, specialized editorial environment selects the audience and enables advertisers to pinpoint their sales campaigns. Examples: golfers (Golf Digest), businesspeople (Bloomberg Businessweek), 20-something males (Details), or teenage girls (Seventeen).  Cost efficiency because wasted circulation is minimized. Print networks give advertisers reduced prices for advertising in two or more network publications.

1-280 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

  

Selling power of magazines is proven, and results are usually measurable.

Reader loyalty that sometimes borders on fanaticism.

Extensive pass-along readership. Circulation, which is the number of issues printed, is usually much lower than readership because subscribers share their magazines with others.  Merchandising assistance. Advertisers can generate reprints and merchandising materials that help them get more mileage out of their ad campaigns.

The Cons  Lack of immediacy that advertisers can get with newspapers or radio.  Shallow geographic coverage. They don‘t offer the national reach of broadcast media.  Inability to deliver mass audiences at a low price. Magazines are very costly for reaching broad masses of people.  Inability to deliver high frequency. Magazines are the poorest performer among major media for building frequency. The reason: weekly or monthly publication schedules.  Long lead time for ad insertion, sometimes two to three months. The world, and the advertiser‘s competitive situation, can change a lot in that period of time.  Heavy advertising competition. The largest-circulation magazines have 52 percent advertising to 48 percent editorial content.  High cost per thousand. Average black-and-white cost per thousand (CPM) in national consumer magazines is high; some trade publications with highly selective audiences have a CPM over $50 for a black-and-white page.  Declining circulations, especially in single-copy sales, is an industry-wide trend that limits an advertiser‘s reach.

Ad Lab 12-A: Magazines and the Creative Mix 1. Is a magazine the best way to advertise this special? Can a magazine be used along with other media? Which type of magazine would be best?

Answer Guidelines: a. Yes: Magazines would be best for representing the restaurant‘s elegant ambiance because it could print the ad in color using photos. A city magazine (e.g., San Diego Magazine, The New Yorker), which is read by people living within the city and tourists looking for things to do around the town, would be a good type of magazine in which to advertise because the clientele is local. b. No: Newspapers would be best because they could have the ad printed and distributed by the next day. Magazines would take 30–60 days. In addition, coupons for such a special would look inappropriate to magazine audiences, but they would not appear inappropriate to newspaper readers.

1-281 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

2. How can magazine advertising help you build the restaurant‘s image? What qualities of magazine advertising make it attractive for this opportunity?

Answer Guidelines: See ―Checklist: The Pros and Cons of Magazine Advertising‖ concerning color, permanence, prestige, and audience selectivity.

3. Look at Exhibit 12-2 and identify a layout for our magazine ad that would be ideal for this advertiser. Describe your ad and explain your choice of layout.

Answer Guidelines: Student answers will vary but should show a good understanding of the different types of layouts and how space combinations can be used to create impact.

Ad Lab 12–B: Native Advertising Among the most important developments in recent years is native advertising. Native advertising is defined by the Native Advertising Institute as ―paid advertising where the ad matches the form, feel and function of the content of the media on which it appears.‖ In essence, native ads are sponsored content that does not look like advertising.

Identify some story themes that could be used to create native magazine ads for the following products:  Detergent  Organic foods  Hybrid cars Portfolio Review: Outstanding Magazine Ads Magazines provide creatives with an unlimited palette of colorful opportunities for their imagination. Offering permanence, color, unmatched reproduction quality, and excellent credibility, magazines are a powerful weapon in the advertiser‘s arsenal. In this portfolio, we‘ve selected some outstanding examples of magazine advertising.

See if you can look past the beauty of these ads and determine the underlying strategy that guided the artists‘ thinking. Who is the target audience? Is that different from the target market?

What are they trying to say about the advertiser? How is the advertiser positioned? Once you‘ve determined the strategy, which magazines would you place these ads in?  People behind the Ads: Nancy Berger Cardone, VP/Publisher and CRO at Marie Claire

 

Advertising Age named Nancy Berger Cardone Publisher of the Year and placed her on the Magazine A-List.

Nancy’s real secret is a talent for great ideas every bit as developed and sophisticated as that of a top agency creative director.

1-282 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.



Nancy has driven ad growth by showing the value of Marie Claire to brands that often don’t target the magazine’s readers, such as Ruth’s Chris Steak Houses.

 My IMC Campaign 12-B: The Pros and Cons of Newspaper Advertising

The Pros  Mass medium penetrating every segment of society. Most consumers read the newspaper.  Local medium with broad reach. Covers a specific geographic area that comprises both a market and a community of people sharing common concerns and interest.  Comprehensive in scope, covering an extraordinary variety of topics and interests.  Geographic selectivity is possible with zoned editions for specific neighborhoods or communities.  Timeliness. Papers primarily cover today’s news and are read in one day.  Credibility. Studies show that newspaper ads rank highest in believability. TV commercials are a distant second.  Selective attention from the relatively small number of active prospects who, on any given day, are interested in what the advertiser is trying to tell them or sell them.  Creative flexibility. An ad’s physical size and shape can be varied to give the degree of dominance or repetition that suits the advertiser’s purpose. The advertiser can use black and white, color, Sunday magazines, or custom inserts.  An active medium rather than a passive one. Readers turn the pages, clip and save, write in the margins, and sort through the contents.  A permanent record, in contrast to the ephemeral nature of radio and TV.  Reasonable cost.

The Cons  Declining circulation, especially among young and diverse audiences. Many consumers get their news elsewhere.  Lack of selectivity of specific socioeconomic groups. Most newspapers reach broad, diverse groups of readers, which may not match the advertiser’s objectives.  Short life span. Unless readers clip and save the ad or coupon, it may be lost forever.  Low production quality. Coarse newsprint generally produces a less impressive image than the slick, smooth paper stock of magazines. Weekly papers are sometimes still printed in black and white.  Clutter. Each ad competes with editorial content and with all the other ads on the same page or spread.  Lack of control over where the ad will appear unless the advertiser pays extra for a preferred position.

1-283 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Ad Lab 12–C: Newspapers and the Creative Mix Study My IMC Campaign 12–B, ―The Pros and Cons of Newspaper Advertising,‖ and see if you can apply that information to the following situation: You‘re the product manager for a major brand of bar soap and you wish to go nationwide with an ad featuring a coupon.

1. Which newspaper would be best? a. A weekly. b. A daily.

Answer Guidelines: a. Weekly—may be the best for companies with limited ad budgets. b. Daily—the best method—if the budget allows. Purchasing space in specific sections and on days when the market is more likely to respond allows for more efficient targeting of the market.

2. If you use a daily, in what section of the paper would you want your ad to appear?

The food or home section, where coupons are available.

3. If you decided on the Sunday supplement, which of the following would you choose and why? a. Parade magazine. b. Color coupon insert.

Answer Guidelines: a. Parade magazine contains soft editorial and stories—its readers would likely be in the wrong frame of mind to read a soap ad and cut out a coupon. b. A coupon insert because people who use coupons will usually go through the inserts to clip the coupons they are interested in.

Ethics, Diversity & Inclusion: What‘s at Stake with Sweepstakes?

1. Are sweepstakes companies really at fault for misleading their consumers? Why or why not?

Answer Guidelines: a. Yes: Because sweepstakes companies are behind the design of the offers, they are at fault. They should make their disclaimers larger and more prominent so that it is easier to see what is at risk. b. No: Consumers should be more skeptical about anything that sounds too good to be true.

Sweepstakes companies are not breaking any laws, since the companies do provide the required disclaimers. Consumers should take a more active role and read all the fine print so that they understand what is really at stake.

2. Do you believe it is ethical for sweepstakes to ―disguise‖ their promotions for the purpose of advertising?

For more on ethics in advertising refer to Chapter 2.

Answer Guidelines:

1-284 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

a. Yes: It is ethical because sweepstakes companies should have a right to some creative license. As long as the proper disclaimers are included somewhere in the piece, it is legal and ethical. b. No: It is not ethical because ―disguising‖ the promotions for the purpose of advertising borders on ―deceptive advertising,‖ which is defined as any ad that contains a misrepresentation, omission, or other practice that can mislead a significant number of reasonable consumers to their detriment.

3. Are lotteries more ethical than sweepstakes? Why or why not?

Answer Guidelines: a. Yes: Lotteries appear to be more upfront about one‘s chances of winning. Sweepstakes, while not requiring a purchase to play, appear to be more tricky, as the language and promotions utilized are not very direct and have been shown to confuse consumers, as was discussed in the Ethics, Diversity, & Inclusion section of Chapter 12. When people pay to play the lottery, they are aware they are paying to play and aware of what they could win and typically of their odds of winning; on the other hand, there isn‘t as much transparency in the promotion of sweepstakes. b. No:Lotteries incentivize “paying to play” as they often advertise the exorbitant amounts of money one can win, urging consumers to buy just one more ticket, even though their odds of winning are very low. Additionally, consumers see promotions for lotteries in grocery stores, gas stations, on television, in magazines, on billboards, etc. Sweepstakes, however, tend to be promoted less often in these major outlets. They also usually do not cost the consumers anything to participate.  My IMC Campaign 12-C: Planning and Evaluating Print Media

At this point in your project you should have decided whether or not to use print (magazine and newspaper) as a communication vehicle. The next step is deciding which of the thousands of options makes the most sense for your client‘s brand.

The beauty of media planning and buying is that you have a blank slate from which to build your plan. As you start to build your plan, however, you need to consider what you are working toward.

By answering a set of simple questions, you can build the foundation of your recommendation.

You should approach planning print media in the same way you would approach planning the brand strategy:  Who do you want to reach?  Why use print?  What are the brand objectives?  Where do you want to place your advertising to best achieve your objectives?  How should you execute your plan?

When you have answered these questions, it is time to analyze and evaluate your opportunities and develop your plan.

1-285 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.



  

However, not all brands want or need such niche vehicles, and lucky for those brands there are more mass-oriented publications too: Targeted Mass Books Golf People Field and Stream TV Guide Baby Talk Parade Ski National Enquirer Martha Stewart Living Reader’s Digest Some of you will be focusing on large national advertisers and can utilize nearly all types of print options.

As you can see, common sense plays a major role in planning print campaigns, especially for large advertisers.

While we detail a number of tools in this chapter, for the large majority of projects access to these tools will be limited.

Review Questions 1. If you worked in the advertising department of a premium-priced furniture manufacturer, would you recommend magazine advertising? Why or why not? a. Yes: Magazines are printed in color, give the reader visual pleasure, and can enhance the image of the furniture. Magazines will do a better job of selling the furniture. b. No: Newspapers are a better choice because they cost relatively less. In addition, magazines lack immediacy, so for special sales or promotions, newspapers are a better choice.

2. If you were the advertising manager for a magazine aimed at senior citizens, what advantages would you cite to potential advertisers?

Audience selectivity is more efficient in magazines than any other medium except direct mail. A magazine aimed at senior citizens would target this particular group and would enable an advertiser to reach its specific target audience for considerably less money than direct mail.

3. What is the advantage of magazine advertising to businesses that sell to other businesses?

Farm, trade, industrial, and professional publications offer high selectivity, specialized editorials, and an involved readership, all of which create high efficiency for the business advertiser.

4. What is the importance of the Alliance for Audited Media?

The Alliance for Audited Media gives credible audited information to advertisers and agencies about the circulation of magazines and newspapers that sell advertising space. Many agencies will place advertising only with a magazine whose circulation is audited. They calculate potential responses using the verified circulation, and their clients expect the results to be as promised.

1-286 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

5. Why do retailers advertise so heavily in local newspapers?

Retailers rely heavily on newspaper advertising because it provides timeliness and a costefficient way to reach a mass local market, or targeted segments of that market. In addition, many manufacturers sponsor co-op advertising programs to help retailers pay for ads for their products.

6. How can advertisers improve the selectivity of their newspaper ads?

Improved selectivity can be achieved through geographic segmentation (placing ads in special geographic editions of larger papers or using small local papers), through placement in specific sections of the paper (sports, entertainment, food, etc.), and by using specialinterest newspapers (Hispanic, business, religious, etc.).

7. What factors should advertisers consider in deciding among several local papers (including dailies and weeklies)?

Important factors include the proportion of the target audience delivered by the particular publication, timeliness of the message, geographic reach, cost effectiveness, production capabilities, and special services offered to advertisers by the paper (design help, etc.).

8. Should national advertisers be charged a higher rate than local advertisers? Support your position.

Students‘ answers will vary. Most newspapers charge local and national advertisers different rates. The national rate averages 75 percent higher than local rates. Newspapers attribute higher costs to the added costs of serving national clients (long-distance telephone, etc.)

9. Should agencies be liable for their clients‘ advertising bills? Why or why not?

No. Although the agency gets paid for creating advertising, the benefits of advertising such as increased business and an improved business image accrue to the client and not to the agency—thus, the magazine‘s features are of little value to the agency, and they should not carry any liability.

10. How could a local newspaper use an online database service or the Internet to help itself or its advertisers?

Newspapers have access to more information than they can print. Thus, newspapers are turning to electronic publishing as another medium for keeping competitive (publish news as it happens, not just the next day) and as a vehicle to increase revenue (fees from advertisers and monthly on-line service charge to users).

The Advertising Experience 1. Using Print Advertising As a maker of soy-based products, you are very excited about your new chocolate soy-milk drink. As long as they don‘t know it contains soy, children actually prefer its taste to that of milk. The product, now named Swoosh and represented by a toothy cartoon surfer, is all set for a print campaign. Choose a geographic area similar to the ones shown in Exhibit 12-3,

1-287 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

examine the leading regional magazines and newspapers, and decide how to allocate funds for advertising. Explain why you chose newspapers, magazines, or both.

2. Print Media Organizations Visit the following print industry websites and familiarize yourself further with the size and scope of the print media world. Be sure to answer the questions for each site.  American Society of Newspaper Editors (ASNE): www.asne.org  International News Media Association (INMA): www.inma.org  National Newspaper Association (NNA): www.nnaweb.org  National Newspaper Publishers Association (NNPA): www.nnpa.org  News Media Alliance (NMA): www.newsmediaalliance.org a. What is the purpose of the organization that sponsors this site? b. Who is(are) the intended audience(s) of this site? c. Who makes up the organization‘s membership? Its constituency? d. How important do you feel this organization is to the advertising industry? Why? Sample Answer: International Newspaper Marketing Association (INMA) a. The purpose of the International Newspaper Marketing Association (INMA) is to serve as the newspaper industry‘s premier marketing ideas association. It provides members with information and ideas to encourage a better understanding of the newspaper company‘s role in society and how marketing principles can enhance that role. b. The intended audience of the site is composed of advertisers, marketers, their agencies, and individual newspapers or newspaper networks. c. The organization‘s membership consists mainly of marketing executives representing daily newspapers around the world. Other members include executives from weekly newspapers, vendors, websites, academics, students, press associations, and more.

Currently, the INMA has more than 1,000 members in 70 countries. d. The INMA is a valuable resource for the advertising and newspaper industries. It provides advertisers with a wealth of information, research tools, and extensive directories. Dedicated to fostering ideas and nurturing intellectual vitality, the INMA is essentially a public forum for advertisers on a global scale.

3. Print Media Tools Were it not for the products and services offered by the following companies, planning and buying print vehicles could be an overwhelming task for media professionals. From audit reports to media kits, agencies and media houses are aided every day by companies who specialize in easing the lives of media planners and buyers. Visit the following syndicated and independent media companies‘ websites and answer the questions that follow:  Advertising Checking Bureau: www.acbcoop.com  Advertising Media Internet Center (AMIC): www.amic.com  Alliance for Audited Media: https://auditedmedia.com/ 1-288 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

      a. b. c. d.

BPS Worldwide (BPA): www.bpaww.com MediaCentral: www.mediacentral.net MediaFinder: www.mediafinder.com Vividata: http://vividata.ca Nielsen Scarborough: www.nielsen.com/us/en/solutions/capabilities/scarborough-local/ Kantar (SRDS) Media Planning Platform: http://next.srds.com Who is the intended audience of the site?

What is the size and scope of the company?

What type(s) of print media information does the company specialize in?

How useful do you believe the company or organization is for obtaining print media information? Why? Sample Answer: Kantar (SRDS) Media Planning Platform a. The intended audience for the site primarily consists of media planners/buyers and media reps with a secondary audience of account executives and clients. b. The company is an international organization serving the target audience with listings and information for a myriad of magazine, newspaper, directory, television, radio, out-ofhome, and Internet media options. c. Print media information provided by SRDS includes rate cards, production information and timing, media kits, contact information, and research data. d. The company‘s usefulness to the media and advertising industries is exemplified by the fact that it has been the guidebook for media information over the past 80 years.

Connect Activities Title

Assignment Type

Topic

Learning AACSB Bloom's Objective Accreditation Taxonomy Tagging 12-08 Knowledge Remember; Application Apply

Producing a Print Ad

Case Analysis

Factors Involved in Creating Print Ads

Print Production Process

Click and Drag

Factors Involved in Creating Print Ads

12-08

Knowledge Application

Remember

Coke Magazine Ads

Case Analysis

Newspapers and Magazines as Advertising Media

12-01

Remember; Apply

Using Magazines in the Media Mix

Click and Drag

Newspapers and Magazines as Advertising Media

12-01

Knowledge Application; Analytical Thinking Knowledge Application

Apply

1-289 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Buying Magazine Space

Case Analysis

Newspapers and Magazines as Advertising Media

12-02

Knowledge Application

Apply

Producing a Print Ad Activity Summary: This activity provides students with a case for a fictitious allergy medication, Allergon, for which print magazine advertisements are being produced. Students are tasked with answering questions relating to phases of the print production process and managing the costs of projects.

Follow-Up Class Discussion: Ask students to discuss what they feel the biggest time and budget busters would be in the print production process.

Print Production Process Activity Summary: This exercise asks students to place the phases of the print production process in order and to order the activities that occur in each phase of the process.

Follow-Up Class Discussion: Ask students to discuss the time commitment they believe is involved in each phase of the print production process and what barriers could contribute to delays in the process.

Coke Magazine Ads Activity Summary: This activity asks students to engage with two magazine ads from Coca Cola and answer questions relating to the pros and cons of magazine advertising and the types of advertising opportunities available in magazines.

Follow-Up Class Discussion: Bring a variety of magazines into class. Task students with identifying the various special opportunity layouts available in magazines: junior units, island halves, gatefold, etc.

Using Magazines in the Media Mix Activity Summary: This activity asks students to determine the pros and cons of magazines such as their prestige, lead time, frequency, etc.

1-290 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Follow-Up Class Discussion: Ask students to discuss why it is important for media planners and buyers to be cognizant of the pros and cons of magazines.

Buying Magazine Space Activity Summary: This activity provides students with a case about a media buyer making decisions about buying for a clothing brand in a magazine that caters to young women. Questions following the case ask about circulation of the magazine and the pros and cons of advertising in a specific magazine over its competition.

Follow-Up Class Discussion: Have students discuss whether they feel the pros of advertising in magazines outweigh the cons, and discuss whether they feel magazines are still a good advertising medium for their generation.

CHAPTER THIRTEEN USING ELECTRONIC MEDIA: TELEVISION AND RADIO This chapter presents the important factors advertisers need to evaluate when considering the use of radio and television in the creative mix. Each medium has its own characteristics, advantages, and drawbacks. Advertisers must be able to compare their merits and understand the most costeffective ways to buy advertising time.

Learning Objectives After studying this chapter, your students will be able to: LO13-1 Discuss the advantages and drawbacks of broadcast and cable TV in advertising media.

LO13-2 Explain the challenge to traditional TV arising from streaming video.

LO13-3 Give an overview of TV audience trends.

LO13-4 Describe the key events in the TV commercial production process.

LO13-5 Review the important measures of TV viewership.

LO13-6 Discuss the main factors to consider when buying television time.

LO13-7 Analyze the pros and cons of using radio in the creative mix.

LO13-8 Indicate how radio ads are bought.

LO13-9 Summarize how audio and video spots are produced.

What’s New? A new opening vignette describes how M&M‘s has developed a strong brand through the creative use of television spots. The chapter highlights the many transformations affecting TV 1-291 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

and radio, especially from digital media and streaming services. The recent decline of cable is noted. The My IMC Campaign 13–A includes streaming video as an option for TV and podcasts as an option for radio. The section on DTV has been replaced by a focus on streaming video. The Ethics, Diversity & Inclusion box that focuses on children and teens as an audience for TV spots has been completely rewritten. Ad Lab 13–A continues a focus on ratings but has also been completely updated to reflect the current issues in measuring audiences in the digital age.

Product placement is now discussed in this chapter, where it logically belongs. Ad Lab 13–C, which focuses on measuring radio, has been updated to reflect audiences across audio options.

Content from the deleted Chapter 12 on production of radio and TV is now in the final section of the chapter.

Teaching Tips and Strategies This chapter will help students realize the importance of producing ads for different media. I like to use websites that describe the different processes and finished products.

Using the Chapter Opening Vignette in the Classroom Discuss how brands have continued to utilize traditional television in the IMC mix, despite or due to the rise of streaming television platforms. The opening vignette showed how M&M‘s creation of personified and anthropomorphized M&M‘s characters helped shape the brand‘s identity and save it from slumping sales. Discuss how M&M‘s creation of the various brand personalities work to pull them out of the sales slump. Ask students what their perceptions of the M&M‘s brand are. How do they feel the M&M‘s branding and humorous commercials set the brand apart in a very crowded market?

Other Tips and Strategies Students love seeing how commercials are made. You can find many examples for free on YouTube. You can find a longer film on the making of the beautiful Sony Bravia ad (the ―bouncing balls‖ spot), which was filmed in San Francisco here: https://youtu.be/o1bEOtpqYpA. YouTube has several interesting videos on production, including setting up a print file in Adobe Illustrator for production (https://youtu.be/zCSkk2vpZW0), printing, including silkscreen (https://youtu.be/_KqaIOuQy6I), digital color printing (https://youtu.be/qp-mVhjFu_o), and offset printing (https://youtu.be/XUlBueqStg4). You‘ll also find information on film and video production (https://youtu.be/FtH943gpx5k).

Exhibits 13-12 and 13-13 show examples of the radio and video production processes that you might find useful for illustrating what goes into creating the final products. Discuss how this process compares and differs from print media. Bring in examples and have students suggest examples. I find that teaching this chapter hands-on (after going through the concepts) helps students to get a better feel for what is involved in producing ads for all media.

1-292 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Web Resources for Enhancing Your Lectures Making a Gwen Stefani commercial John Posey Making a radio commercial Prius ad

https://youtu.be/OQG4M1KLZ7Y

M&M's Commercials Compilation Candy Ads

https://www.youtube.com/watch?v=BBLvKRRWqRE

http://www.johnposey.com https://www.youtube.com/watch?v=ennwKIL3xiw https://youtu.be/kQsNs8SWCkU

Pedagogical Features  My IMC Campaign 13–A: Planning and Buying TV and Radio  My IMC Campaign 13–B: The Pros and Cons of Broadcast TV Advertising  My IMC Campaign 13–C: The Pros and Cons of Cable TV Advertising

Ethics, Diversity & Inclusion: Should Kids Ever Be a Target Audience?

Ad Lab 13–A: Where Do These Infamous TV Ratings Come From?

Ad Lab 13–B: Getting ―You‘re Out‖ on TV  My IMC Campaign 13–D: The Pros and Cons of Radio Advertising

Ad Lab 13–C: The Challenge of Measuring Audio Audiences  People behind the Ads: Felix Arvid Ulf Kjelberg (PewDiePie), Youtube Influencer

Lecture Outline I.

Vignette: M&Ms

1-293 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

The M&M‘s brand had experienced decades of success, beginning as an easily transportable treat targeted toward and sold exclusively to soldiers in World War II. In the early 90s, the brand saw slipping sales as it realized it had no way to differentiate itself from other candy options in the crowded marketplace. With the creation of the M&M‘s 6 unique brand advocates, M&M‘s was able to turn its slumping sales around, and the brand advocates that are still utilized today provide M&M‘s with countless humorous antics and easily recognizable characters to differentiate their brand. Ask students to consider what benefits advertising on traditional television provide to advertisers and how can it help them to bring their brand personalities to life.

II.

Broadcast and Cable Television and Streaming Video In 1950, U.S. advertisers spent $171 million, or just 3 percent of total U.S. advertising volume, on the new medium of television. In 2018, advertisers spent nearly $68 billion on cable and broadcast TV. Exhibit 13-1 lists the top network television advertisers in the United States and their annual expenditures.

Until recently, television was available to advertisers in two principal forms: broadcast and cable TV. Broadcast TV reaches its audience by transmitting electromagnetic waves through the air across some geographic territory. Cable TV reaches its audience through wires, which may be strung from telephone poles or laid underground. Today, a third option, growing much faster than broadcast or cable, called streaming video, offers advertisers new ways to connect to audiences. Streaming video involves accessing either free or paid content via an internet connection.

A. Broadcast TV 1. Until the advent of the Internet, broadcast television grew faster than any other advertising medium in history.

2. The United States now has 1,761 commercial TV stations. About 656 of these are VHF (very high frequency, channels 2 through 13); the rest are UHF (ultrahigh frequency, channels 14 and above).

3. Stations in the United States operate as independents unless they are affiliated with a network (ABC, NBC, CBS, Fox, CW). Both network affiliates and independent stations may subscribe to nationally syndicated programs as well as originate their own programming.

4. Increasing competition from cable and other viewing options is taking viewers from national network programs. To compensate, some networks invest in cable TV systems or create their own.

B. Cable TV 1. The origins of cable date to the 1940s. Initially, cable was developed to provide TV to areas with poor reception such as rural and mountainous regions.

2. In the last three decades, cable‘s growth has been extraordinary. In 1975, only 13 percent of TV households in the United States had cable. By 2010, cable reached almost 90 percent of all homes.

1-294 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

3. Cable has been in retreat, as consumers find less expensive and more responsive ways to consume content. In fact, by 2018 only 78 percent of homes subscribed to cable.

4. Most channels are privately owned and commercially operated. These include local network affiliates and independents, cable networks, superstations, local cable system channels, and community access channels.

5. The cable fees represent about one-third of cable TV revenues; advertising makes up the remainder.

6. There are now more than 900 cable networks in the United States. Exhibit 13-2 lists the most popular ones. There are also a handful of superstations, local overthe-air TV stations whose signals are delivered via satellite to cable systems across the country and that carry some national advertising.

C. Streaming Video 1. George Owen Squier developed a method for transmitting music over electrical wires, a method he labeled ―Wired Radio,‖ called Muzak.

2. By the early 2000s several developments changed the game for streaming technology. These included greater bandwidth in home internet connections, more powerful computers, and increasingly sophisticated software algorithms for compressing video and audio content.

3. The year 2005 was a particularly important one for streaming. YouTube, founded by three young PayPal employees 4. That same year, Netflix, already anticipating the end of DVD rentals, began working on a streaming system called Netflix Box. Two years later, that technology was already obsolete and the company introduced internet video on demand.

5. As of 2017, 59 percent of all adults reported that cable or satellite subscription was the primary way they watch TV, while only 9 percent reported using a digital antenna. The remainder, 28 percent, indicated they use an online streaming service as the primary way they watch.

6. Streaming video is a disruptive force for the traditional players in TV. a. Much streaming video is ad-free (Netflix, HBO, some Hulu subscriptions) because subscribers pay for it. b. Streaming has replaced cable and broadcast as must-watch TV, with the result that millions are canceling their cable subscriptions. c. One of the most appealing aspects of streaming video is video-on-demand, where consumers can watch what they want, when they want, where they want.

D. TV Audience Trends

1-295 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

1. As a way to reach a mass audience, no other medium today has the unique creative abilities of television: the combination of sight, sound, and motion; the opportunity to demonstrate the product; the potential to use special effects; the chance to develop the empathy of the viewer; and the believability of seeing it happen right before your eyes.

2. Over half of viewers believe TV is the most authoritative advertising source, compared to only 15.4 percent for newspapers, 10.8 percent for magazines, 8.6 percent for radio, and 4.4 percent for the Internet.

3. Television was also rated as the most influential, persuasive, and exciting medium.

4. As a result of this audience fragmentation, advertising on broadcast networks has become less cost-effective.

5. One reason is that cable‘s upscale audience buys proportionately more goods and services than noncable subscribers (see Exhibit 13-3).

6. This is also why media buyers and planners are growing in importance as advertisers search for the elusive audience and fight for their share of that audience in an overcrowded media environment.

E. The Use of Television in IMC 1. For many years it was strictly a mass medium, used to great advantage by the manufacturers of mass consumption goods: toiletries and cosmetics, food, appliances, and cars (see Exhibit 13-4).

2. Moreover, through its unique ability to deliver a creative big idea, television can impart brand meaning (the symbolism or personality of the brand) to either attract people to the brand or reinforce their current relationship with it.

F. Types of Advertising When buying cable TV, an advertiser can buy ads over the full schedule of a channel because cable networks typically aim their overall programming to relatively specific audiences.

Advertisers can buy time on TV in several ways. They include sponsoring an entire network program, participating in a network program, purchasing spot announcements from a network affiliate, purchasing spots from syndicators, and purchasing spots from cable companies.

1. Network Advertising a. Historically, major U.S. advertisers purchased airtime from one of the national broadcast networks: ABC, CBS, NBC, or Fox. b. An advertiser who underwrites the cost of a program is engaging in sponsorship. c. Most network TV advertising is sold on a participation basis, with several advertisers buying 30- or 60- second segments within a program.

1-296 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

d. As shown in Exhibit 13-5, advertisers need a big budget to appear on the most popular programs. e. For this reason, most advertisers decide to buy spot announcements.

2. Spot Announcements a. National spot announcements run in clusters between programs. b. They are less expensive than participations and more flexible than network advertising because they can be concentrated in specific regions of the country. c. Spots may run 10, 15, 30, or 60 seconds and be sold nationally or locally. d. For the broadcast stations, the national rep system, in which individuals act as sales and service representatives for a number of stations, alleviates this problem through the use of electronic data interchange (EDI). e. Spot advertising is available only at network station breaks and when network advertisers purchase less than a full lineup, so spot ads may get lost in the clutter—which is why they tend to have fewer viewers and a smaller piece of the ad spending pie.

3. Syndication a. As audiences‘ fragment, syndicated programs become an increasingly popular adjunct or alternative to network advertising. b. Syndication is the sale of programs on a station-by-station, market-by-market basis. c. It also gives advertisers access to inventory (commercial time) for their spots that they might not get on network programs—often at better prices. d. Syndication has become the largest source of programming in the United States (see Exhibit 13-6). e. Television syndication comes in three forms: off-network, first-run, and barter: 1) In off-network syndication, former popular network programs (reruns) are sold to individual stations for rebroadcast. Examples include Seinfeld and Friends.

2) First-run syndication involves original shows, like Oprah, Inside Edition, and Extra, which are produced specifically for the syndication market.

3) One of the fastest-growing trends in television is barter syndication (also called advertiser-supported syndication). These are first-run programs offered free or for a reduced rate, but with some of the ad space (usually 50%) presold to national advertisers. f. Advertisers like it because they can affiliate with popular programs and maximize their use of broadcast TV, gaining back much of the audience they used to reach through the networks (see Exhibit 13-7).

1-297 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

4. Direct-Response Television a. Perot made advertising history by catapulting the program-length advertisement (PLA), or infomercial, into the limelight. b. Infomercials aren‘t new, but their respectability is. In Colorado, long-form ads were used as a negotiating tool in a labor dispute. And now even networks air some of these ads, which were once relegated to independents and cable channels. The reasons for this sudden growth are simple: 1) Consumers pay attention and can respond immediately.

2) Brand managers may be able to gain a competitive advantage by going where the competition is not.

3) PLAs can fulfill some message objectives, like product demonstration and brand differentiation, far better than 30-second commercials.

4) Results are both measurable and accountable.

5) The ad campaign can pay for itself while supporting the retail trade.

6) PLAs combine the power of advertising, direct response, and sales promotion.

5. Local TV advertising a. Local businesses and retailers, often in cooperation with nationally known manufacturers, now spend over $16 billion annually on local broadcast and cable TV. b. Most local stations sell spot announcements, but some local advertisers develop and sponsor local programs or buy the rights to a syndicated series. c. The companies that measure the program audiences of TV and radio stations for advertisers and broadcasters are called rating services. These firms attempt to pick a representative sample of the market and furnish data on the number and characteristics of the viewers or listeners. d. In the United States, Nielsen Media Research is the major rating service for television. Its flagship service, the Nielsen Television Index (NTI), uses a national sample of 5,100 households equipped with people meters to develop audience estimates for all national TV programming sources: 7 broadcast networks, 47 cable networks, 3 Spanish-language networks, and more than 200 syndicators. e. Digital video recorders (DVRs) have helped change the face of TV ratings measurement. With DVRs, programming companies have been pushing to include measures of shows that are not watched live, which program ratings do not take into account. f. In 2007 the commercial rating was rolled out, with the new designation of C3 for the commercial rating plus the addition of any commercial viewing up to three days after airing. This new measurement replaces a 65-year-old standard of measurement.

1-298 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

6. Product Placement Another way to reach movie and television audiences is to pay a fee to have the product written into the movie or program. Such product placement is common.

Notice the number of identifiable products in the next movie or TV program you see.

Controversy surrounds some product placement categories.

G. Defining Television Markets 1. The Nielsen station index uses the term designated market areas (DMAs) for geographic areas (cities, counties) in which the local TV stations attract the most viewing.

2. For example, the DMA for Columbus, Georgia (see Exhibit 13-8), is the 17 counties in which the local area TV stations are the most watched.

H. Audience Measures 1. Rating services and media planners use many terms to define a station‘s audience, penetration, and efficiency. TV households (TVHH) refers to the number of households that own television sets.

2. The percentage of homes in a given area that have one or more TV sets turned on at any particular time is expressed as households using TV (HUT). If there are 1,000 TV sets in the survey area and 500 are turned on, HUT is 50 percent.

3. The program rating refers to the percentage of TV households in an area that are tuned in to a specific program. The rating is computed as follows: Rating = TVHH tuned to specific program/Total TVHH in area 4. The percentage of homes with sets in use (HUT) tuned to a specific program is called the audience share. A program with only 500 viewers can have a 50 share if only 1,000 sets are turned on. Ratings, in contrast, measure the audience as a percentage of all TVHH in the area, whether the TV sets are on or off.

5. The total number of homes reached by some portion of a program is called total audience.

6. This figure is normally broken down to determine audience composition (the distribution of the audience into demographic categories).

I. Gross Rating Points 1. In television, gross rating points (GRPs) are the total rating points a particular media schedule achieves over a specific period.

Reach (average rating) × Frequency = Gross rating points 2. GRPs allow advertisers to draw conclusions about the different markets available for a client‘s ads by providing a comparable measure of advertising weight.

However, GRPs do not reflect a market‘s size. Ratings depend on the time of day a program runs.

1-299 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

III.

3. To better determine the relative value of television advertising markets, other measures are used, such as cost per rating point (CPP) and cost per thousand (CPM), which were described in Chapter 9.

Buying Television Time The process of buying TV time can be lengthy and, depending on the number of stations in the buy, quite involved. Advertisers or media buyers must 1) Determine which programs are available at what cost.

2) Analyze various programs for efficiency.

3) Negotiate price with station reps.

4) Determine what reach and frequency they are achieving.

5) Sign broadcast contracts.

6) Review affidavits of performance to be sure the commercials ran as agreed.

These procedures are so complex that most large advertisers use ad agencies or mediabuying services. Local advertisers typically rely on station reps to determine the best buys for the money.

A. Requesting Avails 1. To find out which programs are available, media buyers contact stations‘ sales reps—local station salespeople, national media rep organizations that sell for one station in each market, or network reps.

2. The media buyer gives the rep information about the advertiser‘s media objective and target audiences and asks the rep to supply a list of avails (available time slots) along with prices and estimated ratings.

B. Selecting Programs for Buys 1. The media buyer selects the most efficient programs in relation to the target audience using the cost per rating point (CPP) and cost per thousand (CPM) for each program.

CPP = Cost ÷ Rating CPM = Cost ÷ 1,000 people 2. The real important figure is the cost of reaching 1,000 prospects in the target market.

C. Negotiating Prices and Contracts TV stations and cable companies publish rate cards to sell their airtime. However, since TV audiences are estimated at best, television reps will always negotiate prices.

1. The buyer has numerous ways to negotiate lower rates: work out a package deal, accept run-of-schedule positioning (the station chooses when to run the commercials), or take advantage of preemption rates.

2. A preemption rate is lower because the advertiser agrees to be ―bumped‖ (preempted) if another advertiser pays the higher, nonpreemption rate.

1-300 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

IV.

3. After the spots run, the station returns a signed and notarized affidavit of performance to the advertiser or agency, specifying when the spots aired and what makegoods are available.

4. Makegoods refer to free advertising time an advertiser receives to compensate for spots the station missed or ran incorrectly or because the program‘s ratings were substantially lower than guaranteed.

D. Electronic Media Buying Software 1. With the Internet, today‘s broadcast media buyers don‘t ever have to leave the office but can, right from their desktops, pore over SRDS and Simmons research data to create and even buy media schedules with electronic avails.

2. With software like Arbitron‘s SmartPlus media-buying suite, media planners and buyers can analyze plan and report from one application.

3. Nielsen‘s PAL software is a national media planning system.

4. Nielsen‘s Clear Decisions and Reach and Frequency help media planners generate schedule results with minimal effort, identify insights from a suite of reports, and even create presentation-ready charts and graphs from one screen.

E. Considerations in Buying TV Time 1. Advertisers must decide when to air commercials and during which programs.

2. Programs continue to run or are canceled depending on their ratings (percentage of the population watching).

3. Ratings depend on the time of day a program runs.

4. Television time is divided into dayparts as follows: a. Daytime: 9 a.m.–4 p.m. (EST) b. Early fringe: 4–5:30 p.m. (EST) c. Early news: 5 or 5:30–7:30 p.m. (EST) d. Prime access: 7:30–8 p.m. (EST) e. Prime: 8–11 p.m. (EST) f. Late news: 11–11:30 p.m. (EST) g. Late fringe: 11:30 p.m.–1 a.m. (EST).

5. Viewing is highest during prime time (8 to 11 p.m. Eastern Standard Time; 7 to 10 p.m. Central Standard Time).

6. To reach the greatest percentage of the advertiser‘s target audience with optimal frequency, the media planner determines a daypart mix based on TV usage levels reported by the rating services.

Radio Radio is a personal, one-on-one medium; people listen alone. And radio is mobile.

Contemporary radio exists in three primary forms. The oldest, terrestrial or broadcast radio, transmits over the electromagnetic broadcast spectrum (with frequencies between 300 and 3,000 kHz for AM and 30–300 MHz for FM) and can be received by anyone with an inexpensive tuner. Satellite radio is broadcast from space satellites that remain in 1-301

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

orbit over North America (Sirius XM) or other parts of the world, including Africa, Eurasia, and Japan. Finally, radio content can be accessed via the internet through streaming radio.

A competitor to radio, one that is posing an increasing challenge to the radio business model: podcasts. Podcasts are internet-only shows that listeners stream on demand.

Originally developed as part of Apple‘s ecosystem, podcasts are now played on many devices and are important vehicles for many advertisers.

A. Who Uses Radio?

1. In an average week, 93 percent of the U.S. population listens to radio; in an average day, about 72 percent.

2. As Exhibit 13-9 shows, broadcast radio remains the most popular way of accessing radio content, although alternatives are becoming more popular.

3. Radio is also cost-effective. In the last decade, the CPM for radio advertising has risen less than for any other major medium and substantially less than the consumer price index.

B. The Use of Radio in IMC 1. While television tends to be a passive medium that people simply watch, radio actively involves people.

2. With radio, national companies can tie in to a local market and target the specific demographic group they want to reach.

3. Most important, radio enables advertisers to maintain strategic consistency and stretch their media dollars through imagery transfer.

C. Radio Programming and Audiences 1. Radio stations plan their programming carefully to reach specific markets and to capture as many listeners as possible. The larger the audience, the more a station can charge for commercial time. Therefore, extensive planning and research go into radio programming and program changes.

2. Stations can use tried-and-true formats, subscribe to network or syndicated programming, or devise unique approaches.

3. When buying radio time, advertisers usually buy the station‘s format, not its programs. Most stations adopt one of the dozen or so standard programming formats: contemporary hit radio (CHR-TOP 40), adult contemporary, country, rock, easy listening, news/talk, adult standards, classical, religious, and so on, as shown in Exhibit 13-10.

4. Major trend in radio today is the resurgence of radio networks, which offer services and programs that complement a station‘s local programming.

5. There are now over 20 national radio networks, including the multiple ―mininetworks‖ of ABC, CBS, Westwood One, and Unistar, and numerous syndicators offer programs from live rock concerts to public-affairs discussions.

1-302 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

V.

6. The largest national radio advertisers are major retailers, entertainment conglomerates, and telecommunications companies (see Exhibit 13-11).

Buying Radio Time Advertisers need a basic knowledge of the medium to buy radio time effectively: the types of radio advertising available for commercial use, a basic understanding of radio terminology, and the steps involved in preparing a radio schedule.

A. Types of Radio Advertising An advertiser may purchase network, spot, or local radio time.

1. Networks a. Advertisers may use one of the national networks to carry their messages to the entire national market simultaneously via stations that subscribe to the networks‘ programs. b. Networks provide simple administration and low effective net costs per station. c. Disadvantages include lack of flexibility in choosing affiliated stations, limited number of stations on network roster, long lead-time required for booking.

2. Spot Radio a. Spot radio affords national advertisers greater flexibility in their choice of markets, stations, airtime, and copy. b. They can put commercials on the air quickly—some stations require as little as 20 minutes‘ lead time, and advertisers can build local acceptance by using local personalities.

3. Local Radio Local time denotes radio spots purchased by local advertiser or agency.

Radio advertising can be either live or taped. Most radio stations use recorded shows with live news in between. Likewise, nearly all radio commercials are prerecorded to reduce costs and maintain broadcast quality.

B. Radio Terminology For the most part, the terminology used for radio is the same as for other media, but some terms are particular to radio. The most common of these are the concepts of dayparts, average quarter-hour audiences, and cumes (cumulative audiences).

1. Dayparts a. The radio day is divided into five dayparts: 1) 6 a.m.–10 a.m. Morning drive 2) 10 a.m.–3 p.m. Daytime 3) 3 p.m.–7 p.m. Afternoon (or evening) drive 4) 7 p.m.–midnight Nighttime 5) Midnight–6 a.m. All night

1-303 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

b. Rating services measure audiences for only the first four dayparts because allnight listening is very limited and not highly competitive. c. Heaviest listening generally occurs during drive times (6–10 a.m. and 3–7 p.m.) during the week (Monday through Friday), when many listeners are commuting to or from work or school. d. For the lowest rate, an advertiser orders spots on a run-of-station (ROS) basis, similar to ROP in newspaper advertising. However, this leaves total control of spot placement up to the station. e. So most stations offer a total audience plan (TAP) package rate, which guarantees a certain percentage of spots in the better dayparts if the advertiser buys a total package of time.

2. Average Quarter-Hour Audience a. Average quarter-hour audience (AQH persons) identifies the average number of people listening to a specific station for at least five minutes during a 15-minute period of any given daypart. b. The average quarter-hour rating expresses the AQH persons as a percentage of the population.

(AQH persons ÷ Population) × 100 = AQH rating c. The same idea can be expressed in terms of average-quarter-hour share: the station‘s audience (AQH persons) expressed as a percentage of the total radio listening audience in the area.

AQH persons of a station ÷ AQH persons of all stations × 100 = AQH share d. The gross rating points of a radio schedule are the sum of all ratings points delivered by that schedule, or the gross impressions expressed as a percentage of the population being measured.

AQH rating × Number of spots = GRPs Gross Impressions ÷ Population × 100 = GRPs 3. Cume Estimates a. The cume persons is the total number of different people who listen to a radio station for at least five minutes in a quarter-hour within a reported daypart (also called unduplicated audience). b. The cume rating is the cume persons expressed as a percentage of the population being measured.

(Reach potential × 100) ÷ Population = Cume rating (%) 4. Satellite Radio a. Satellite radio began its steady growth beginning with competition between first-out-of-the-block XM and Sirius.

1-304 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VI.

b. In order to receive satellite radio, an audience member must pay a monthly subscription fee and invest in a receiver capable of receiving one of the two networks‘ signals. c. How significant is satellite radio as an alternative to terrestrial radio? With millions of subscribers, the short answer is very. Sirius has been successful in leveraging exclusive talent, programming, and commercial-free music to attract subscribers. d. It is also partnering with Google to extend its AdWords program to bidding on radio ads on non-commercial free channels. e. The disruptive technology of satellite may face challenges from even newer, possibly more nimble competitors available on mobile networks, such as Pandora, Apple Music, and Spotify.

C. The Seven Steps in Preparing a Radio Schedule 1. Identify stations with greatest concentration (cume) of advertiser‘s target audience by demographics.

2. Identify stations whose format typically offers highest concentration of potential buyers.

3. Determine which time periods (dayparts) on those stations offer the most (average quarter hour) potential buyers.

4. Using the stations‘ rate card, construct a schedule with strong mix of best time periods.

5. Assess the proposed buy in terms of reach and frequency.

6. Determine the cost for each 1,000-target people the station delivers. The key word is target; the media buyer isn‘t interested in the station‘s total audience.

7. Negotiate and place the buy.

Producing Audio and Video Spots A. Producing Radio and Podcast Spots Radio commercials, called spots, are relatively quick, simple, and easy to produce. In fact, many stations provide production services free to local advertisers.

The disadvantages of live commercials are that announcers may be inconsistent in their delivery, and sound effects are limited. Uniform delivery requires a recorded commercial. The process of producing a recorded commercial includes preproduction, production, and postproduction (or finishing) phases (see Exhibit 1312).

1. Preproduction a. In the preproduction phase, the advertiser and agency perform a variety of tasks that allow production to run smoothly, on time, and within budget.

1-305 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

b. The agency assigns a radio producer from its staff or hires a freelancer. Based on the script, the producer selects a studio and a director, determines what talent will be needed, estimates costs, and prepares a budget for the advertiser‘s approval. c. To get the finest sound reproduction, most ad agencies use independent recording studios. The best audio studios have experienced sound directors and technicians, close ties to well-known talent, and the latest recording equipment. d. Once the talent is hired and music prepared, the director supervises rehearsals until everything is ready for recording.

2. Production: Cutting the Spot All the elements to be used in the commercial—voices, music, sound effects— come together and are recorded at a session. a. The Sound Studio 1) The session is recorded in a studio, which has sound-dampening surfaces, microphones, a window to a control room, and wall plugs for connecting equipment and instruments to the control room.

2) Studio engineers carefully select, disperse, and aim the appropriate microphones to capture the full spectrum of sounds. b. The Control Room 1) The agency producer, director, and sound engineer (and often the client and account executive) sit in the control room, where they can monitor all the sounds generated in the sound studio.

2) The director and sound engineer work at an audio console (also called a board), the central ―switchboard‖ for controlling the sounds and channeling them to the appropriate recording devices.

3. Postproduction: Finishing the Spot a. After the commercial is recorded a number of times, a selection is made from the best takes. b. The sound engineer usually records music, sound effects, and vocals separately and then mixes and sweetens them during the postproduction (or finishing) phase. c. High-end digital audio equipment can cost a lot of money, but free or low-cost digital audio programs are available for anyone who wants to make professional-sounding audio.

B. Producing Video Spots 1. The Role of the Commercial Producer Video production is, as you might expect, considerably more complex than radio production. People who work in production require months or years of training.

But all advertising students can benefit from an understanding of basic video 1-306 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

production concepts to understand how commercials are made, why production is so expensive, and what methods they can use to cut costs without sacrificing quality or effectiveness.

As with radio, the process of producing a TV commercial always involves three stages, as shown in Exhibit 13-13. a. Preproduction: all the work prior to the actual day of filming. b. Production: the actual day (or days) the commercial is filmed. c. Postproduction (or finishing): all the work done after shooting to edit and finish the commercial.

Each step has a dramatic effect on cost and quality.

2. The Preproduction Phase Good planning before production can save advertisers a lot of money. That‘s the purpose of the preproduction phase. The first thing the producer must do, therefore, is study the script and storyboard and analyze the production techniques that will be called for in the commercial.

Three major production techniques are used: live action, animation, and special effects.

If a commercial calls for live action, the producer must consider whether the action will be staged indoors in a studio, outside on a studio lot, or on location away from the studio. Will it be taped or filmed? All these factors have a bearing on what equipment and personnel are required, where costumes are obtained, what permissions may be required, what talent can be used, and, of course, what the commercial costs. a. Planning Production 1) The commercial is a group effort; the team includes a writer, art director, producer, director, and sometimes a musical composer and choreographer.

The agency producer, who is responsible for completing the job on schedule and within budget, usually sends copies of the storyboard to three studios for competitive bids.

2) When the studio is chosen, the producer and casting director select the cast and hire the announcer. Next, the set is built, and the crew and cast rehearse under the director‘s supervision.

3) During the preproduction period, meetings are necessary between the director, the agency producer, the account representative, the writer, the art director, the commercial director, possibly the advertiser, and anyone else important to the production. This is where they iron out any lastminute problems and make final decisions about the scenes, the actors, and the announcer. They should review everything—music, sets, action, lighting, camera angles.

1-307 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VIII.

4) The soundtrack may be recorded before, during, or after actual production.

Recording sound in advance ensures that the commercial will be neither too long nor too short; it also helps when the subject has to move or dance to a specific music theme or rhythm.

3. Production: The Shoot a. Procedures for recording and controlling TV sound effects are similar to those used in radio. Microphones record sound onto tape, then the sound engineer manipulates the sound for effect and records it to film, videotape, or a playback system synchronized with film. b. Cinematographers and directors collaborate on creating proper lighting.

Experienced cinematographers (motion picture photographers) can guess the range and intensity of light by briefly studying its source. c. However, they use light meters to determine how to set the camera‘s lens aperture, the opening that controls the amount of light that reaches the film or digital media. d. Lighting helps establish a visual mood. e. Heavy-duty studio video cameras mounted on a stand with wheels can carry a number of accessories. One of the most important is the lens-mounted teleprompter, which allows the camera to see a spokesperson through the back of a two-way mirror while he or she reads moving text reflected off the front. f. For scenes requiring large amounts of space, scenery, and the full effect of outdoor lighting, the studio lot offers the best control. The lot is outside acreage shielded from stray, off-site sounds. g. Although it adds realism, location shooting is often a technical and logistical nightmare. h. Whether at the studio or on location, most scenes require several takes for the talent (actors) to get them right.

4. Postproduction In the postproduction phase, the film editor, sound mixer, and director put the commercial together. The director and editor use computerized video and sound editing equipment for the assembly of the final product. They will select and edit scenes into their respective order, removing all the unneeded footage. Next, they add off-camera special effects, like supers, and incorporate any necessary music or voiceovers.

Chapter Summary A. As a means of reaching the masses, no other medium today has the unique creative ability of television. Broadcast TV grew faster than any previous advertising medium because of the unique advantages it offered advertisers: mass coverage at efficient cost, impact, prestige, and social dominance.

1-308 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

B. Television is a powerful creative tool, but the medium still has many drawbacks, including high cost, limited selectivity, brevity, clutter, and susceptibility to zipping and zapping.

C. Broadcast TV dominance is being challenged by new electronic media, particularly cable and streaming video. Cable offers the visual and aural appeal of TV at much lower cost and with greater flexibility.

D. Cable audiences are highly fragmented, which helps advertisers target specific markets but is a drawback for those wanting to reach a mass audience. Younger audiences are abandoning both broadcast and cable TV for on-demand streaming video from companies like YouTube and Netflix.

E. TV advertising can be done at the national, regional, or local level and can take the form of program sponsorships, segment sponsorships, and spots of varying lengths, including program-length infomercials.

F. Media buyers select the most efficient advertising for their target audience. Media buyers must have a firm grasp of certain important terms: designated market areas (DMAs), TV households (TVHH), households using TV (HUT), program rating, share of audience, gross rating points, and cost per thousand.

G. Radio offers excellent reach and frequency to selective audiences at a very efficient price. Its drawbacks are the limitations of sound, segmented audiences, and its short-lived and half-heard commercials. Its competitors are new technologies like satellite radio, streaming radio, and podcasts.

H. Radio stations are normally classified by the programming they offer and may be AM or FM. They use network or syndicated programs and follow popular formats.

I. Advertisers purchase radio time in one of three forms: local, spot, or network.

Buying radio time requires a basic understanding of radio terminology. The most common terms are dayparts, average quarter-hour, and cumulative audiences.

J. Radio spots are among the quickest and least expensive ads to produce. A producer manages: 1) The production process through the preproduction, production, and postproduction stages.

2) Contracts with a recording studio, selects talent, and collects music and sound effects for the recording session.

At the session, the talent works in a studio, while the director and sound engineer work in the control room at a console, monitoring and modulating the sound as it’s recorded.

K. In the postproduction phase, the director and sound engineer select the best takes, splice them together, mix in sound effects and music, and then edit the sound until the master tape is completed.

1-309 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

L. Television production involves the same three stages.

1) In preproduction, the producer determines which production technique is most suitable for the script. The studio is chosen, the cast selected, and rehearsals held. As much work as possible is done during preproduction to reduce the shooting time required.

2) The production phase is when the commercial is actually shot, in a studio, on a lot, or on location.

3) In the postproduction stage, the commercial is actually put together on either film or digital.

Answers to Pedagogical Features  My IMC Campaign 13–A: Planning and Buying TV and Radio Media planners use syndicated and proprietary research tools to plan and buy TV and radio ads.

These tools help identify the larger concentrations (composition) of a target audience in specific programming and the cost associated with those audiences. The currency for both media is a rating point, which represents 1 percent of the target audience. Both TV and radio, therefore, are bought based on demographics. So when certain prime-time shows have a rating of 14 for A25– 49, it means that a particular program reaches 14 percent of all adults between the ages of 25 and 49. A buyer‘s cost per point (CPP) is her way of determining a vehicle‘s (program‘s) efficiency in delivering her target audience. Ratings points are additive, so two spots on shows with 14 targeted rating points means that the advertiser has purchased 28 gross rating points, or GRPs. You won‘t have access to the types of tools that help you plan and optimize broadcast TV or radio media plans, so your focus should be on the merits of each of these media in achieving your marketing and advertising objectives and how they match your overall media strategies.

(Refer back to My IMC Campaign 9 for a refresher on building media strategies.)

Streaming Video Streaming video may be an option for your campaign because buying ads or placing videos on YouTube, now owned by Google, is very feasible, even if you are working for a small client. YouTube provides lessons in creating, placing, monetizing, and evaluating video spots in free tutorials you can see here. Brand messages on YouTube can either be in the content that people want to watch or appear just before, after, or embedded within the content.

And YouTube is not the only game in town. Other streaming services that include ads are Hulu, Spotify, Pandora, Google Play Music, and DirectTV Now. Television 1-310 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

About 115 million homes in America have at least one TV set. However, TV-land is becoming a fragmented marketplace. While the average viewer watches only 15 channels on a regular basis, those channels may not be the same 15 channels as the ones his neighbor watches, making the media planner‘s job that much more difficult in building mass audiences.

Besides large audiences, the other core benefit of TV is that it builds awareness relatively quickly. If you are launching a new product or trying to gain a high level of awareness in a relatively short period of time, TV is your medium. While TV will take up a large portion of your budget, its dynamic nature and its ability to include sight, sound, and motion in the advertisement make it great for telling stories.

Last, TV is still the best medium to generate excitement around a brand, whether that is with internal constituents (employees) or external audiences. As stated in Chapter 9, the medium is the message, and no medium, to date, gives people the same perception of legitimacy as a well-produced TV advertisement.

Radio Why do advertisers use radio? One reason is that radio is much more efficient than TV; CPPs are sometimes one-tenth those of TV. Radio also is much less expensive to produce; in fact, typically all you need is copy and talent, making the lead time to go live with radio as short as one to two weeks. It also happens to be more promotional in nature—stations typically have a loyal audience following, and advertisers can usually be a part of any local station events and get the station personalities to endorse the brand. Testimonials, and especially personality testimonials, can be very valuable to advertisers that are looking to build legitimacy in themselves or their product.

So while you think about what your TV and radio ads will do for your brand(s), it is important to reflect on what part of the objectives and strategies each will fulfill and how they might work in concert with each other. Think of starting a new advertising campaign with TV messages and the support of radio. The TV will generate awareness and legitimacy immediately, and the radio will allow you to get out of the higher-cost media quickly while allowing for long-term continuity of messaging at a more efficient rate.

Podcasts

1-311 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Advertisers can purchase time in a podcast either by purchasing directly from the podcaster or via increasingly common podcast networks (see here). Singlegrain, a digital marketing consultancy, writes that there are over 500,000 active podcast shows. It suggests the two biggest benefits to advertisers are that podcasts engage their listeners and that listeners rate podcast hosts as high in credibility. To this we would add that podcasts attract audiences based on lifestyles, interests, values, and goals. In other words, podcast audiences offer unique segmentation opportunities.  My IMC Campaign 13–B: The Pros and Cons of Broadcast TV Advertising

The Pros Contemporary broadcast television offers advertisers many advantages over competing media.  Mass coverage. A full 98 percent of all U.S. homes have a TV (most have more than one), and viewing time for the average household increased from about five hours a day in 1960 to more than eight hours in 2004.  Relatively low cost. Despite the often huge initial outlays for commercial production and advertising time, TV‘s equally huge audiences bring the cost per exposure down to $2 to $10 per thousand viewers.  Some selectivity. Television audiences vary a great deal depending on the time of day, day of the week, and nature of the programming. Advertising messages can be presented when potential customers are watching, and advertisers can reach select geographic audiences by buying local and regional markets.  Impact. Television offers a kind of immediacy that other forms of advertising cannot achieve, displaying and demonstrating the product with sound, motion, and full color right before the customer‘s eyes.  Creativity. The various facets of the TV commercial—sight, sound, motion, and color—permit infinite original and imaginative appeals.  Prestige. Because the public considers TV the most authoritative and influential medium, it offers advertisers a prestigious image. Hallmark, Xerox, Coca-Cola, and IBM increase their prestige by regularly sponsoring cultural programs on network TV.  Social dominance. In North America, most people under age 35 grew up with TV as a window to their social environment. They continue to be stirred by TV screenings of the Olympics, space travel, assassinations, wars, and political scandals around the world.

The Cons Sometimes broadcast TV just doesn‘t ―fit‖ the creative mix because of cost, lack of audience selectivity, inherent brevity, or the clutter of competitive messages.  High production cost. One of broadcast TV‘s greatest handicaps is the high cost of producing quality commercials. Depending on the creative approach, the cost of filming a national commercial today may run from $200,000 to more than $1 million.

1-312 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.











High airtime cost. The average cost of a prime-time network commercial ranges from $200,000 to $400,000. A single 30-second commercial for a top-rated show in prime time may cost more than $500,000, and in special attractions like the Super Bowl more than $2 million. The cost of wide coverage, even at low rates, prices small and mediumsize advertisers out of the market.

Limited selectivity. Broadcast TV is not cost-effective for advertisers seeking a very specific, small audience. And it is losing some of its selectivity because of changing audience trends. More women are working outside the home or watching cable TV, hurting advertisers on network soap operas.

Brevity. Studies show that most TV viewers can‘t remember the product or company in the most recent TV ad they watched—even if it was within the last five minutes. Recall improves with the length of the commercial; people remember 60-second spots better than 30-second spots.

Clutter. TV advertising is usually surrounded by station breaks, credits, and public service announcements, as well as six or seven other spots. All these messages compete for attention, so viewers become annoyed and confused and often misidentify the product.

Zipping and zapping. DVR users who skip through commercials when replaying recorded programs are zipping; remote-control users who change channels at the beginning of a commercial break are zapping.

 My IMC Campaign 13–C: The Pros and Cons of Cable TV Advertising

The Pros  Selectivity. Cable offers specialized programming aimed at particular types of viewers.

Narrowcasting allows advertisers to choose programming with the viewer demographics that best match their target customers.  Audience demographics. Cable subscribers are younger, better educated, and more affluent; have higher-level jobs; live in larger households; and are more likely to try new products and buy more high-ticket items, such as cars, appliances, and high-tech equipment.  Low cost. Many small companies get TV‘s immediacy and impact without the enormous expenditures of broadcast TV. Cable advertising can sometimes cost as little as radio. Many national advertisers find sponsorship attractive because an entire cable series can cost less to produce than a single broadcast TV commercial.  Testability. Cable is a good place to experiment, testing both new products and various advertising approaches: ad frequency, copy impact, and different media mixes.

The Cons  Limited reach. About 23 percent of households don‘t have cable. This was cable‘s main weakness in the past, but it is less so today.

1-313 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.



 

Fragmentation. With more than 50 channels at their disposal, cable viewers do not watch any one channel in enormous numbers. To reach the majority of the cable audience in a particular market, ads must run on many stations.

Quality. Cable, particularly local cable, sometimes has poorer production quality and less desirable programming than broadcast TV. Zipping and zapping. Cable TV has some of the same drawbacks as broadcast TV, such as zipping and zapping.

Ethics, Diversity & Inclusion: Should Kids Ever Be a Target Audience?

1. Should advertising directed to kids be banned entirely? Why or why not?

Answer Guidelines: Answers could discuss the legalities relating to advertising directed at children. It could discuss the proliferation of media options available to and directed toward children. It could discuss the parental role in regulating content consumed by children. It could discuss the pros of teaching children to be advertising literate at a young age, teaching them to decipher ad content from entertainment content, and making smart choices as a consumer.

2. If ads to kids are not banned outright, what might responsible advertising look like?

Answer Guidelines: Answers could discuss matching products advertised with the appropriate age demographics for the show they are being advertised on (i.e., programmatic advertising helping advertisers make more age-relevant ad-buying decisions so younger consumers are not presented with products that are not age appropriate). Answers could also discuss how consumers are more supportive of brands being more socially responsible so brands that make an effort to more responsibly advertise to children could receive consumer support. Answers could also discuss advertisers making conscious decisions about not only where the ads are placed or during what programs, but when advertising to children begins—advertisers should consider when children might be able to process a message as an advertisement and make a more responsible buying decision before choosing to advertise to them.

Ad Lab 13–A: Where Do These Infamous TV Ratings Come From?

1. What are the advantages and disadvantages of the various measurement methods?

Advantages: Measurement through DVRs provide advertisers and television programmers with more accurate information on what exactly consumers are watching and when. This provides these groups with vital information on where and when they should be expending their efforts and where and when might be a waste of resources. Supermarket scanners allow advertisers to better understand consumer buying habits and reach consumers with product information that will be most relevant to them, making a subsequent purchase more likely.

Random sampling, similar to DVRs, allows advertisers to observe what the ―average‖ American family is watching, providing a glimpse into the viewing habits of American

1-314 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

consumers, again allowing them to be able to more accurately reach their intended target audience members.

Disadvantages: DVRs may not be able to provide information on what audiences are watching on streaming services—only on live television. Supermarket scanners could provide inaccurate data that is not necessarily representative of a ―typical‖ purchase for a consumer but represents a purchase made solely to try a product or because they received a coupon or promotion to try it. Random sampling only takes into account a sample of the American population, not the viewing habits of everyone in a particular area. Additionally, with the popularity of streaming services, particularly with young audiences, and young audience‘s aversion to being monitored, random sampling by Nielsen could begin to skew older as those may be the homes most likely to not utilize streaming services and those most likely to be willing to have their viewing habits observed.

2. Which method do you consider the best? Why? Student answers will vary but should back up their choice with a solid rationale.

Ad Lab 13–B: Getting ―You‘re Out‖ on TV Chart 1 indicates the best programs for Memphis, Tennessee, and relevant planning data your assistant has gathered according to your preferences. Due to time constraints, the chart is incomplete, but enough data are available for you to finish the chart.

Chart 1 shows the marketing figures for a single city, but now you decide to determine which of the three major cities in Tennessee will serve ―You‘re Out‖ baseball mitts the best. Your assistant didn‘t quite finish Chart 2, but with the help of Chart 1 you can complete the needed calculations.

1. Using the formulas in the text as a guide, complete Chart 1.

Chart 1: Best Programs for Memphis, TN Program

Rating

Cost

Spots

GRP

KC Undercover (early evening daily, rerun, 30/70 adults to kids)

15

$34,000

32

480.00

Saturday morning cartoons (kids ages 2–12)

10

34,000

30

300.0

Major League Baseball game (weekends, mostly adults)

7.8

34,000

29

226.20

After-school special (kids ages 7–13, afternoon, daily)

7.6

34,000

27

205.0

1-315 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

2. Assuming your budget is $68,000, use Chart 1 to decide which programs would be most effective for reaching children. Explain your selection.

Using solely GRPs as a deciding factor, KC Undercover and Saturday morning cartoons would be the most effective. These shows have higher ratings with those in the groups we are trying to reach and are within our budget.  My IMC Campaign 13–D: The Pros and Cons of Radio Advertising

The Pros The principal advantages of radio are high reach and frequency, selectivity, and cost efficiency.  Reach and frequency. Radio offers an excellent combination of reach and frequency.

The average adult listens more than three hours a day, radio builds a large audience quickly, and a normal advertising schedule easily allows repeated impact on the listener.  Selectivity. Specialized radio formats, with prescribed audiences and coverage areas, enable advertisers to select the market they want to reach: a specific sex, age group, ethnic or religious background, income group, employment category, educational level, or special interest.  Cost efficiency. Radio offers its reach, frequency, and selectivity at one of the lowest costs per thousand, and radio production is inexpensive. National spots can be produced for about one-tenth the cost of a TV commercial. And local stations often produce local spots for free.  Other advantages. Radio also offers timeliness, immediacy, local relevance, and creative flexibility.

The Cons In spite of these advantages, radio has limitations: it‘s an aural medium only, its audience is highly segmented, the advertiser‘s commercials are short-lived and often only half-heard and each ad must compete with the clutter of other advertising.  Limitations of sound. Radio is heard but not seen, a drawback if the product must be seen to be understood. Some agencies think radio restricts their creative options.  Segmented audiences. If a large number of radio stations compete for the same audience, advertisers that want to blanket the market have to buy at multiple stations, which may not be cost-effective.  Short-lived and half-heard commercials. Radio commercials are fleeting. They can‘t be kept like a newspaper or a magazine ad. Radio must compete with other activities for attention, and it doesn‘t always succeed.  Clutter. Stations with the greatest appeal for advertisers have more commercials.

Advertisers must produce a commercial that stands out from the rest.

Ad Lab 13–C: The Challenge of Measuring Audio Audiences 1. What are the advantages and disadvantages of radio versus podcast advertising?

1-316 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Advantages: Both radio and podcast advertising are fairly cost-effective when compared with advertising on other platforms. Traditional radio advertising provides a timeliness that podcast advertising may not. If a podcast only comes out once a week, there is a more extended delay in placing the ad and having it heard by consumers. Advertising on podcasts tends to reach a younger audience than traditional radio, which can be considered an advantage or disadvantage, depending on the target market. For advertisers, radio allows much more commercial time than podcasts. Podcasts have fewer commercial breaks than traditional radio so they do not allow advertisers as much time as traditional radio to place commercials.

Disadvantages: Podcasts have more of a pull and are viewed as more authoritative with younger audiences than traditional radio. Podcasts allow for sponsorship and tend to have sponsorships for brands that are more relevant to younger audiences. Radio does not allow for as much listener selectivity as podcasts do. Podcasts are like the streaming of radio, allowing consumers to listen to exactly what they want, when they want—something which traditional radio does not allow for.

2. When might an advertiser buy time on a radio station that does not measure its audience?

A public service announcement or a promotion for a health-related initiative might not merit the need for audience measurement. As no outcomes are being measured (i.e., purchase behavior or redemption of a coupon), this information might not be necessary for advertisers to have. Additionally, audience measurement may not be necessary when utilizing certain types of stations that know their audience extremely well. For example, a public talk radio station already knows who their listeners are and may be able to provide advertisers with a good idea of who their audience is ahead of placing the advertisement.  People behind the Ads: Felix Arvid Ulf Kjelberg (PewDiePie), Youtube Influencer

 

PewDiePie is a 29-year-old Swede and is the most popular star on Youtube. with about 75 million followers.

For comparison, For comparison, consider that the highest-rated program on network television, Bull, was watched by an average of about 14 million people each week. In preproduction, the producer determines which production technique is most suitable for the script. The studio is chosen, the cast selected, and rehearsals held. As much work as possible is done during preproduction to reduce the shooting time required. In preproduction, the producer determines which production technique is most suitable for the script. The studio is chosen, the cast selected, and rehearsals held. As much work as possible is done during preproduction to reduce the shooting time required. About the same number listen to PBS’s Morning Edition, the highest-rated radio program. America’s most popular magazine (aside from AARP and Costco publications, which are sent to members) is Better Homes and Gardens, which circulates just under 8 million copies a

1-317 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

  

  

month. And the newspaper highest in circulation, USA Today, distributes about 4 million copies a day.

What does PewDiePie do that attracts a larger audience than the most popular titles in U.S. television, radio, newspapers, and magazines combined?

In recent years, the young star has begun to arouse considerable controversy.

And PewDiePie is not alone in courting controversy. Another streaming celeb named Logan Paul generated significant criticism after visiting a Japanese forest known as a place where people commit suicide.

These events call attention to the disruptions created by new media, contrasting standards of “mass” media versus “new” media, and the future of both advertising and content.

The reason sites such as YouTube are attractive in the first place is they are a sandbox for anyone.

But YouTube was forced to act after advertisers demanded their ads not be associated with racist or controversial channels.

Review Questions 1. What are the advantages of broadcast TV advertising for a product like milk?

Television advertising still has a very high reach. Almost all homes in the U.S. have a television and access to broadcast channels. Television can also work to build awareness or remind consumers about something in a very short period of time. As a product where excitement or conversations about the product are no longer as frequent, television can serve as a platform to generate excitement about a ―stale‖ product through the use of creativity and the authority of the medium.

2. What steps can advertisers take to overcome zipping and zapping?

One way to avoid zipping and zapping is placing commercial breaks more so within the content, rather than nearing the end of the program. Another method might be making commercial breaks more frequent, but shorter when they do occur. Another potential method might be connecting the commercials to the content of the program, to the extent possible.

3. Why has advertising on network TV become less desirable in recent years?

More audiences now select programs on cable television or through streaming services. This is because of the disadvantages of network advertising, including long lead times, very high costs, brands having to adhere to network norms, other inconvenient restrictions, and a lack of flexibility.

4. In what ways is cable TV‘s selectivity a strength? A drawback?

Cable television allows for selectivity of content or specialized programming that is geared toward very specific audiences. This is a positive as it allows advertisers to reach exactly who they wish to reach at a specified time. However, as audience fragmentation continues to grow and audiences have more viewing options than ever before, the audience on cable television, while specific, may be much smaller than other platforms.

1-318 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

5. What are the various ways to buy broadcast television time?

Advertisers can sponsor a network program, participate in a network program, purchase a spot announcement from network affiliates, purchase spots from syndicators, and purchase spots from cable companies.

6. How can TV be best used in an integrated marketing communications program?

Because of narrowcasting, television can be utilized to reach very niche audiences with very specific products. Additionally, it is becoming a more viable option for local advertisers with the growth of local cable TV. Television is also particularly good for awareness advertising, image advertising, and brand reinforcement messages as it has the visual and sound capabilities that no other medium offers. Television is good to utilize to first connect with consumers and generate that awareness or brand image and then advertisers can follow-up that initial contact with other more personal means of communication.

7. How can radio be best used in an IMC program?

Radio is good at making connections with consumers and establishing immediate, intimate relationships with them. Advertisers can connect particularly well with local audiences or tie in local events to the content presented in the program. Radio can be utilized in conjunction with television commercials because of radio‘s allowance for imagery transfer, which causes audiences to replay the commercial in their head when they hear it on the radio.

8. What is the format of the radio station you listen to most? How would you describe the demographics of its target audience?

Sample Answer: I listen to the local rock and pop stations in my hometown on my drive to and from school each day. The stations very much have a local focus and are often advertising local events and initiatives. The pop station tends to reach out to a younger, high-school/college-aged, primarily female audience, with female DJs and commercials advertising local formal wear shops and female physicians. The rock station tends to reach out to a college-aged/middleaged, primarily male audience, with more male DJs and advertisements for local sports leagues and local bars.

9. What is the difference between average quarter-hour and cume audiences? Which is better?

Average quarter-hour is the number of people listening for at least 5 minutes during a 15minute period while cume audiences is the total number of different people listening to the radio for 5 minutes in a 15-minute period. Cume audiences would likely be a number more relevant to advertisers as it is unique audience members. When listening to the radio, people often scan or switch back and forth between content very often so this would inflate the average quarter-hour number. While cume audience numbers might be lower, they are a more accurate figure of unique audience members listening to the program.

10. What is the significance of dayparts in radio and TV advertising? What are the best dayparts for each?

Dayparts are how TV and radio stations break-up the day based on viewership or listenership. This is important for media planners and buyers to consider as it lets them know 1-319 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

when to buy time based on who they are trying to reach. The best dayparts for television are prime access/prime from about 7:30 PM–11 PM. The best dayparts for radio include the morning drive (6 AM–10 AM) and the afternoon/evening drive (3 PM–7 PM).

The Advertising Experience 1. Radio Advertising As the owner of Dream Flower Florists, you want to increase your share of local business by advertising on the radio. After researching local stations, choose one whose format suits your target audience. Decide what kind of buys you will make and when they will be aired.

Answer Guidelines: The owner may choose to purchase local radio time that would be aired during the morning drive time hours (6 AM–10 AM), encouraging listeners to get their daily orders in during their lunch hours, before 1:00 PM for delivery that day. The owner might also purchase more affordable local spots during 10 AM–3 PM (during the lunch hour), encouraging listeners to place a flower order for the following day on their lunch break. The owner might also decide to place ads more heavily on Friday afternoons, encouraging brides and grooms-to-be to set up a wedding consultation over the weekend.

2. TV Organizations The size of the television industry and the advertising dollars that are spent within it are extraordinary. Many TV-related organizations were formed to help serve the industry.

Discover a little more about the nature and scope of the television industry as you peruse the following websites. Be sure to answer the questions that follow.

• Broadcast Education Association (BEA): www.beaweb.org • Cable/Telecommunications Association for Marketing (CTAM): www.ctam.com • NCTA: www.ncta.com/ • National Association of Broadcasters (NAB): www.nab.org a. Who is the intended audience(s) of the site? b. What is the site‘s purpose? Does it succeed? Why? c. What is the organization‘s purpose? d. What benefit does the organization provide individual members/subscribers? The overall advertising and television and cable communities?

Sample Answer: Broadcast Education Association a. Who: This site is for students, educators, and practitioners in broadcast to connect with one another and learn about the work being done by others in the industry. b. The site‘s purpose: The goal of the site is to showcase current academic work being conducted in the broadcast industry and inform broadcast curriculum, research, and practice.

1-320 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

c. The organization‘s purpose: The organization seeks to inform students, educators, and practitioners about the work being conducted in broadcast to inform their learning, teaching and practice in broadcast. d. Benefits: For individual members, it provides access to journals, conferences, contact information of other members, job postings, and an e-newsletter. The organization also provides access to research that can inform advertising and television practices.

3. Broadcast Media Tools Broadcast advertising reports and audience studies are critical to the development and implementation of effective media strategy. As with print media, advertisers have a set of ―staple‖ companies and reports they regularly use to help plan and implement their broadcast media buys. Visit the following syndicated and independent broadcast media companies‘ websites and answer the questions that follow: • Nielsen Media Research: www.nielsenmedia.com • Numeris: http://en.numeris.ca/ • Radio Advertising Bureau (RAB): www.rab.com • Television Bureau of Advertising: www.tvb.org • TV RunDown: www.tvrundown.com a. What type(s) of broadcast media information does the company specialize in and what specific services, products, or publications does the company offer? b. What industries/companies would be best suited to utilize the company‘s media resources? c. Does the company represent syndicated or independent research? d. How useful do you feel the company is for gathering broadcast media information? Why? Sample Answer: Nielsen Media Research a. Nielsen provides audience data relating to television, podcast, social media, and streaming consumption. Nielsen provides data on audio measurement, local TV measurement, national out-of-home TV measurement, digital ad ratings, information on audience segments, and more. b. It seems that nearly any advertiser on television, podcasts, radio, etc. would benefit from utilizing Nielsen‘s services. However, they might be best suited toward advertisers for products such as consumer packaged goods or generally B2C advertising campaigns. c. Nielsen was traditionally more focused on syndicated research, but it appears that they also conduct independent research as well. d. Nielsen data is extremely beneficial to broadcasters and advertisers. They provide detailed audience analytics about who is watching, listening, engaging and when. They also provide information on what products consumers are buying or sales of a product or service.

1-321 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

4. If Hyundai asked its agency to come up with a corresponding radio complement to its Assurance TV campaign, what would its agency want to keep in mind when converting this concept to an audio-only format?

Answer Guidelines: Hyundai would need to consider if the audience for their television campaign is the same as it is on the radio station they plan to utilize. It would also need to consider how the imagery portrayed in the advertisement could be conveyed through sound or how to maximize imagery transfer from the commercial. Hyundai would also need to consider the objective to be achieved through the use of radio. As the text discusses, television and radio achieve different things. Television is great for generating awareness and establishing credibility and prestige for the brand. Radio can support efforts on television by reminding listeners of the message established on television and provides the brand with a more affordable and sustainable platform to disseminate their message.

5. Given the audience for Hyundai‘s Assurance campaign—middle-class America—in what daypart do you think its TV commercial would be most effectively broadcast?

Answer Guidelines: The morning drive time would likely be the most effective daypart for Hyundai‘s commercial, considering a middle-class audience. Many in the middle-class still work a traditional 9 to 5 schedule, making the morning drive time a good time to communicate with them.

Connect Activities Title

Assignment Type

Topic

Learning Objective

AACSB Bloom's Accreditation Taxonomy Tagging 13-04; 13-05; Analytical Analyze 13-06; 13-07; Thinking 13-08 13-07 Reflective Remember Thinking

Buying Television Time

Case Analysis

Television and Radio as Advertising Media

Pros and Cons of Radio

Click and Drag

Television and Radio as Advertising Media

M&M‘s Use of TV in IMC

Video Case Advantages and 13-03; 13-04; Knowledge Disadvantages to 13-06 Application; Television and Radio; Reflective Television and Radio Thinking as Advertising Mediums

Remember; Apply

Buying Television Time 1-322 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Activity Summary: This activity provides students with a case involving an auto parts dealer who is considering an advertising campaign that utilizes television commercials. Students are asked to answer questions relating to designated market areas (DMAs), the campaign‘s daypart mix, cost-per-rating-point (CPP) for the campaign, and to make a decision regarding the most cost-effective scheduling for the campaign.

Follow-Up Class Discussion: Have students pair up and explore the DMA designations for your state. This information can usually be found from sources such as Nielsen or other online sources. For an up-to-date overview of Nielsen DMA classifications, see http://bl.ocks.org/simzou/6459889. Or allow your students to explore and look for sources independently.

Pros and Cons of Radio Activity Summary: This activity asks students to consider the pros and cons of radio and consider its strategic use in IMC efforts.

Follow-Up Class Discussion: Ask students to discuss the perceived efficacy of utilizing radio to reach their generation, their parents‘ generation, and their grandparents‘ generation. Has the proliferation of online radio helped radio transition to a more popular medium to reach young audiences? How so? Ask students to discuss the types of advertisements they hear on the radio, either traditionally or online.

M&M’s Use of TV in IMC Activity Summary: This activity asks students to watch the commercial from M&M‘s discussed in the opening vignette and throughout the chapter featuring actor Danny Devito. Students are then tasked with answering questions relating to the decisions made when M&M‘s created and disseminated that commercial.

Follow-Up Class Discussion: Ask students to identify a commercial that they enjoy. Have them identify the ―big idea‖ of the commercial and describe how it works to create brand meaning.

How does the commercial convey the personality of the brand?

CHAPTER FOURTEEN USING DIGITAL INTERACTIVE MEDIA 1-323 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

This chapter explores the important factors advertisers weigh when considering digital interactive media. This medium has its own distinct characteristics, unique advantages, and drawbacks. Advertisers must be able to compare the merits of this medium and understand the most cost-effective ways to use them in their media mix.

Learning Objectives After studying this chapter, your students will be able to: LO14-1 Discuss the various opportunities and challenges presented by digital interactive media.

LO14-2 Describe the evolution of interactive media.

LO14-3 Explain how the internet audience is measured.

LO14-4 Describe how programmatic advertising works.

LO14-5 Define the various kinds of digital advertising.

LO14-6 Debate the pros and cons of the internet as an advertising medium.

What’s New? Our opener focuses on the new giant in digital advertising—Amazon—and shows how it is using strategies from legacy and digital companies to thrive. Spending on digital media now exceeds that on TV, which is noted. In general, ―internet‖ companies are now referred to as digital media.

The latest Pew Internet & American Project Life Study‘s findings are included throughout the chapter. The disruptive potential of 5G technology is discussed. The section on ―Measuring the Digital Audience‖ has been completely rewritten and updated, with highlights on privacy and data security. The emergence of Comscore as a challenger to Nielsen in measuring digital audiences is explained. A significantly revised Ethics, Diversity & Inclusion box updates data privacy issues to the present. Most of the Portfolio Review ads are new. The ―Other Interactive Media‖ section introduces voice-controlled devices like the Amazon Echo as an advertising medium.

Teaching Tips and Strategies Using the Chapter Opening Vignette in the Classroom Ask students how many people click on website banner ads. Do they think this method of advertising is effective? Discuss the ―Banner Contest for Psychopaths‖ campaign. How did TBWA/Paris pump some life into a banner ad? What other elements came into play to drive the campaign‘s success?

1-324 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Other Tips and Strategies Research suggests that the internet is the medium of choice for students in your classroom (at least those of traditional age). Ask students about their internet use, their favorite websites, their online habits, and their online shopping behaviors. In the past few years I‘ve encountered more than my share of students who are already exploiting opportunities to develop lucrative and successful internet businesses. You might ask one or more of these students to address the class about how they got started, what they have learned, and what they have planned for the future.

Search advertising, as practiced by Google, now accounts for more than half of all revenue in the web advertising world. This chapter in the book has been significantly revised from the previous edition to acknowledge these new realities. Students often underestimate or fail to appreciate the impact of search as an advertising medium. You might demonstrate a search on a general topic, perhaps ―advertising,‖ demonstrating the parts of the results page dedicated to the ―organic‖ results versus the paid placements.

An important trend in the internet world is the ―melding‖ of old and new media. Show the New York Times site (www.nytimes.com) and the websites for ABC (https://abc.go.com) and NBC (www.nbc.com), where popular shows can now be streamed. The ABC streams carry a single sponsor and present viewers the chance to click on the ads to learn more about the products.

Perhaps the most important thing about the new digital world is the empowering of consumers and the need for companies to adjust to the new two-way dialog that the internet provides. Savvy consumers often seem a step ahead of online advertisers. For a humorous example, see this New York Times story: www.nytimes.com/2005/01/24/technology/web-surfers-crack-gms-mysteryad.html). Brands can no longer count on controlling the message. See, for example, another New York Times article, which describes ―brand blogs‖: www.nytimes.com/2005/10/24/technology/brand-blogs-capture-the-attention-of-somecompanies.html. Companies that adapt will thrive while those that do not will find it increasingly difficult to reach their intended audiences.

Web Resources for Enhancing Your Lectures Google and Privacy

http://news.yahoo.com/video/google-privacy-002726910.html

Case Study adidas Viral Campaign AdSense Tutorial

https://youtu.be/4HL5jemlEVY

Google Ads

https://ads.google.com/home/campaigns/video-ads

https://youtu.be/fdxQ6m32_Sk

1-325 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Pedagogical Features AD LAB 14–A: Internet Ratings: A Call for Standards Ethics, Diversity & Inclusion: Who‘s Watching You? Portfolio Review: Digital Advertising  My IMC Campaign 14–A: Using Interactive Media  People behind the Ads: Brian Green, Senior Director, Property and Advertiser Solutions, Yahoo!

Lecture Outline I.

II.

III.

Vignette: Amazon Amazon is a powerhouse company, leveraging the retailing power of Walmart and search, technology, and online capabilities of Google. With these capabilities, Amazon is also a powerhouse in the realm of advertising. In fact, Amazon‘s advertising division is its fastest growing profit center. Amazon is leveraging digital interactive media and ad technology such as SEO to become the preferred retailer of young audiences.

Digital Interactive Media To understand the dramatic effect this is having on marketing and advertising, imagine for a moment what life was like before radio and TV. As we saw in Chapter 13, technology keeps on going and going and going. It‘s already given us the 4K TV, tablets, smartphones, the internet, YouTube, surround sound—and the software to make it all simple enough for virtually anybody to use.

The internet has also changed the way people communicate, eliminating the need for an overseas airmail stamp if you want to communicate with your brother in Berlin. The Internet is truly revolutionary in its effect on our daily lives, and it‘s a revolution for marketers, too.

In just 15 years as a commercial medium, the internet has become a mass forum for advertising as well as other communications (see Exhibit 14-1).

Digital Interactive as a Medium The internet is a global network of computers that communicate through protocols, which are common rules for linking and sharing information. ARPAnet was important because its structure, a distributed network, was a revolutionary system. Traditionally, media content has been delivered through centralized networks, in which a hub, such as a TV station, a newspaper publisher, or a cable company, distributes content to many receivers (see Exhibit 14-2).

1-326

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

There are at least three other important distinctions between the internet and traditional media: 1) The first is the cost of time and/or space. In traditional media, time (on TV or radio) and space (in print) are precious, limited, and costly resources. In contrast, space on digital media is vast and relatively inexpensive. Websites or servers can store as much information as a company wishes to share.

2) The second distinction between traditional media and online media is the consumption of content. Network schedules a show on a day and at a time each week and, if you enjoy it, that day and time is when you watch. But digital media can deliver content any time, so consumers can watch when they want. As ―appointment‖ viewership numbers decrease and digital media use increases, more content creators will use a strategy that allows for on-demand viewing.

3) A third distinction is the relationship between those who create content and those who consume it. Traditional media historically created content for audiences to consume. But digital media are interactive, blurring the line between content providers and consumers. The digital audience consumes, interacts with, and creates content.

A. A Brief History of the Internet 1. In the early 1980s, the National Science Foundation expanded what had been ARPAnet by supporting a fast data network that linked information centers across the United States.

2. The 1990s the numbers of people using the internet doubled annually. The 1990‘s also introduced people to a particular part of the internet known as the World Wide Web (WWW). The web, as its name implies, was a distributed network of content providers and users, communicating through a protocol known as HTML, or Hypertext Markup Language. HTML allowed for the relatively easy creation of displays, called web pages, that link to all kinds of content, including other web pages or sites (and, later, photographs, movies, databases, sound files, and such).

Viewing web pages was made easy by the development of web browsers, software that interpreted HTML (and later other code that permitted greater interactivity, such as JavaScript, PhP, and Flash).

3. The introduction of high-speed broadband access made it easy to watch videos, listen to audio programming, and download large files.

B. The Digital Audience In the past several years, we have seen a steady migration of people who used to spend time in front of the TV moving over to the computer. Exhibit 14-3 indicates which websites were most popular in 2018.

1-327 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

1. Who Uses the Internet a. In 2011, more than 273 million people in the United States accessed the internet each month. Worldwide, the active internet audience is estimated at 2.3 billion, with many more occasional users (see Exhibit 14-4). b. Historically, the majority of people who surfed the internet were welleducated, upscale, white males who used the internet for business or scientific purposes. c. Yet, recent surveys of internet demographics suggest the reach of the medium is much more diverse—and in some ways—closely resembles the U.S. population (see Exhibit 14-5). d. The Pew Internet & American Project Life Study suggests that one of the biggest changes in the past five years is the number of people who access the internet using a phone rather than a computer. Among young adults, nearly 26 percent do not have broadband at home but instead use their phone to connect. The number for all Americans is 20 percent. e. In 2018, about two-thirds of adult Americans had home broadband, although this percentage is in decline. Mobile phone speeds are getting faster and the phone is a popular ―screen‖ for accessing content. The trend is only likely to accelerate with the coming introduction of 5G (―fifth generation‖) phone service, which began rolling out in 2019.

IV. Measuring the Digital Audience People gain access using different devices (phones, tablets, computers) and across a variety of content (websites, streaming content, e-mail, social media, and multiple content sources simultaneously).

Companies are drawn to digital media because digital activity generates data, and lots of it. It is not an exaggeration to say that companies can now learn more about customers and prospective customers than at any other time in history.

Privacy is an important issue when considering what reputable companies do with audience data, but the ramifications go far beyond that.

As shown in Exhibit 14-6, anyone shopping or sharing data on the web was at serious risk of having his or her personal data, including social security and credit card numbers, seriously compromised.

A. Media Planning Tools 1. As with all other media, there are companies that specialize in delivering audited measurement of potential reach to help media planners choose the right vehicles based on their target audience.

2. Two main companies help in the media planning process on the internet: Nielsen and Comscore.

1-328 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

3. These companies have a suite of tools that help define target market size, behavior, and composition relative to each major website on the internet. They also provide views into how other advertisers are using the internet, thereby giving competitive insights into industry and category best practices.

4. Nielsen‘s Digital Ad Ratings offer what the company calls ―a comprehensive, next-day view of an ad‘s computer and mobile audience in a way that is comparable to Nielsen TV ratings.‖ 5. Nielsen randomly recruits individuals to download and utilize a desktop meter so all internet activity on that computer is then tabulated, measured, and recorded.

6. Media planners utilize these numbers to identify the highest concentration, or composition, of the target they are trying to reach.

7. In 2018 the company introduced a more comprehensive measurement tool, Nielsen Total Audience. The tool is designed to measure traditional viewing metrics (reach, frequency, GRPs) across digital and traditional video platforms in all 210 local markets. Previously this capability had only been possible on a national scale. A sample snapshot of adult viewing patterns can be seen in Exhibit 14-7.

8. Nielsen‘s biggest competitor in both traditional and online audience measurement is Comscore.

9. Both Nielsen and Comscore face challenges in creating a standard for measuring digital audiences.

10. No matter who is measuring, they face the challenge of tracking new groups with the names cord-cutters (people who end their cable subscriptions), cord-shavers (people who cut back on the cable services they use, including premium tiers, digital recording devices, or internet service), and cord-nevers (people who have never subscribed to cable).

11. Another group of interest to advertisers is people who access what is called OTT inventory. OTT, or “over-the-top,” inventory is video content accessed via the internet rather than through cable or broadcast. Think Netflix, Hulu, and Amazon Prime, as well as others. OTT is contrasted with what is now called linear TV. B. Behavioral Targeting 1. Behavioral targeting is the ability to track people‘s behavior on the internet in order to display unique, targeted content.

2. Visitors to sites often don‘t realize that they‘ve acquired small code files, saved on their devices or in their browsers, that are known as cookies. Cookies track whether the user has ever visited a specific site that is part of an ad network, a large collection of advertisers and content providers, or internet publisher.

1-329 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

3. Ad networks employ the services of third-party ad servers. Third-party ad servers deliver ads from one central source, or server, across multiple web domains, allowing advertisers the ability to manage the rotation and distribution of their advertisements.

C. Seeking Standardization 1. The most simple measurement, yet an area of great controversy, is the advertising impression.

2. A second measurement, unique to the internet, is the click-through rate, or click rate. A click occurs when a visitor moves the mouse‘s pointer to a web link and clicks on the mouse button to get to another page.

V. Buying Time and Space on the Internet Media planners are personal audience venues. Digital media spending is the fastestgrowing segment both in the U.S. and worldwide. Exhibit 14-8 lists the top 10 digital display advertisers ranked by spending. The best marketers are testing extensively. That means being willing to lose money for a while, which is, of course, not exciting to most advertisers or agencies.

A. Pricing Methods 1. Advertising space on the internet can be purchased in several different ways, as we will discuss later in the chapter. The most common means is the banner ad, typically billed on a cost-per-thousand basis determined by the number of ads displayed.

2. The real marketing power of the internet, however, is the ability to specifically target an audience in a way that is virtually impossible in traditional media.

3. In the past decade, display advertisers have increasingly turned to programmatic advertising as a way to purchase digital space. In programmatic advertising, many of the human tasks of buying and selling ads are replaced by computer algorithms.

4. In a typical programmatic ad buy, an advertiser places a bid on the audience she or he wishes to reach. The bid is informed by many strategic considerations, including the value of the audience, the ROI ad spends, and other factors. Bids from all advertisers are analyzed by computers in real time, and prime space goes to the highest bidders. This specific kind of programmatic advertising is also known as real-time bidding.

5. In programmatic advertising, advertisers are really buying audiences rather than publishers.

6. Bidding is also essential to the keyword purchase, available on major search engines. Some publishers charge their clients according to click-throughs—that is, when a user actually clicks on a display ad to visit the advertiser‘s landing page.

7. For advertisers involved in e-commerce, some publishers offer an affiliate marketing program whereby they charge a percentage of the transaction cost.

1-330 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

B. Types of Internet Advertising Digital media are in a constant state of evolution. Therefore, advertisers have new and interesting ways to reach target audiences that extend beyond the more standard ad placements (see Exhibit 14-9).

The internet is truly unique as a medium in its ability to lead directly to sales so we will approach the section in that way, but beware of pigeonholing the internet as a direct marketing medium.

1. Websites, Microsites, and Landing Pages a. The technical definition of a website is a collection of web pages, images, videos, or data assets that is hosted on one or more web servers, usually accessible via the internet. b. A microsite is used as a supplement to a website. c. For advertisers, microsites are typically singular in focus and deliver on the current advertising message. d. Any web page can be a landing page—the term used to describe direct links to deeper areas of the website that advertising drives consumers to beyond the homepage. e. Advertisers use landing pages to streamline the selling or informationgathering process, as studies have found that people‘s attention spans are limited online.

C. Search Engine Marketing Most people looking to find information on the web now use a search engine. Search engines are websites that allow people to type a word or phrase into a text box and then quickly receive a listing of information on a search-results page.

In the late 1990s, several companies competed to be the leading brand for searches.

The clear winner is Google, which has an astounding 92 percent share of search worldwide as of November 2018 AdWords.

Their search engine, using a process they eventually named Pagerank, analyzed the links and relationships of internet sites to create rankings.

1. AdWords a. When you search on Google, you’ll notice that the first listings are often labeled “Sponsored Links.” Sponsored links are paid listings. b. Google‘s search results page is thus composed of two distinct areas: organic search results, which are unaffected by sponsorship and sponsored links, and sponsored links. Google‘s sponsored links have three important characteristics. First, advertisers do not pay just for being seen, a common practice with banner ads. Instead, advertisers pay Google only when a search engine user clicks on the link and visits the sponsor‘s site.

1-331 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

c. The amount that an advertiser owes for each click-through is not actually set

by Google. Instead, it is determined in an auction, where companies can bid for keywords used in search, such as the term marketing. d. Google benefits from the targeted nature of search. When people are hunting for a term like marketing, they often find that the sponsored links are as useful as the search results. e. Google estimates that almost 15 percent of searches result in click-throughs to sponsors, an astonishingly high conversion rate in comparison with other media, interactive or traditional.

2. AdSense a. Google‘s other major ad program is AdSense. Websites that use AdSense set aside a portion of pages for Google text ads. b. Large websites, such as those listed in Exhibit 14-3, generally don‘t use programs such as AdSense, preferring to sell ad space themselves. c. That means marketers have to provide information that is useful and relevant.

They have to keep updating it to get repeat visits—and a little entertainment with a few freebies tossed in doesn‘t hurt.

3. Internet Display Ads a. The basic form of web advertising is the ad banner. A banner is a little billboard that spreads across the top or bottom of the web page. b. Banner ads served to someone on the basis of their online behaviors are known as retargeting ads.

The group most responsible for standards in internet and other digital ad formats is the Interactive Advertising Bureau (IAB), an association of digital publishers. c. Full motion, animation, and user interaction are now commonplace through the broad adoption of rich-media advertising. d. Rich mail incorporates graphics, video, and audio in an e-mail message.

When you open up a rich e-mail, your e-mail client automatically calls up your internet connection and launches an HTML page in your e-mail window. e. Preroll is now a fast-growing advertising segment. f. With more bandwidth comes the consumption of more video entertainment online, and companies such as Broadband Enterprises and YuMe Networks are trying to capitalize on this by aggregating much of this content and placing 5-second to 30-second video advertisements as a third-party ad server.

4. Sponsorships and Added-Value Packages a. A form of advertising on the internet that is growing in popularity is the sponsorship of web pages. b. Corporations sponsor entire sections of a publisher‘s web page or sponsor single events for a limited period of time, usually calculated in months 1-332 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VI.

c. Other forms of sponsorships have included web serials, sites devoted to women‘s issues, contests, and giveaways.

5. Classified Ads A growing area for internet advertisers, and an excellent opportunity for local advertisers, is the plethora of classified ad websites, like Craigslist. Many of these offer free classified advertising opportunities because they are typically supported by ad banners of other advertisers. It‘s also been the most expensive medium on a cost-per-exposure basis.

6. E-Mail Advertising a. According to Forbes’s ―Ad Effectiveness Study,‖ 74 percent of marketers send e-mail advertising to customers who have asked for it. Marketers have always known that direct-mail advertising (discussed in Chapter 17) is the most effective medium for generating inquiries and leads and for closing a sale. b. It‘s important to differentiate responsible e-mail advertising from spam, which is just electronic junk mail. Spam generally refers to unsolicited, mass e-mail advertising for a product or service that is sent by an unknown entity to a purchased mailing list or newsgroup. c. Wary marketers are focusing their e-mail efforts on customer retention and relationship management (CRM) rather than on prospecting. d. One of the keys to viral marketing success is to present an offer with real perceived value—one that people will want to share with one another.

D. Problems with Digital as an Advertising Medium 1. Digital media have their drawbacks. They are not a mass medium in the traditional sense, and it may never offer mass media efficiency.

2. Some have even wondered if advertising agencies have an important role to play in the digital age. Companies such as Facebook and Google provide marketers with an extensive toolset for creating, researching, monitoring, and measuring ad effectiveness. agencies argue that mastering digital requires expertise, judgment, and an understanding of audiences that people from other backgrounds may lack.

3. Digital media are still so new that it is unclear whether anyone has the right rules for success. Privacy failures and security breaches have demonstrated that in a rush to enjoy the benefits of digital marketing, many companies have failed to consider the costs. Security (e.g., for credit card purchases online) has become a major concern (and failure) for many prominent marketers.

4. The final drawback is also one of the internet‘s greatest appeals: It is the most democratic of media—anybody can get on it and do or say just about anything.

Other Interactive Media In addition to the internet, advertisers now also use other new media vehicles, such as interactive TV and mobile advertising.

1-333

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VII.

A. Interactive Media 1. Interactive TVs are not a technology of the future, but of the present. Most people take for granted technologies such as digital video recorders (DVRs, sometimes also called personal video recorders) and interactive remote controls.

2. Amazon demonstrated that Apple is not the only tech company to create an entire new category of devices with its Amazon Echo device.

3. Google, Apple, and Facebook quickly followed with their own devices, labeled Google Home, Apple HomePod, and Facebook Portal. The battle is on for the voice assistant of the American household.

4. There is no question anymore that interactivity has influenced TV content and ad pricing. For example, some of the highest advertising rates are for sports and live shows. People do not timeshift these types of programs to the extent they do other content.

B. Mobile Advertising 1. When mobile advertising was first introduced, the carriers controlled a lot of the inventory as they limited the amount of traffic that went outside their deck.

2. The deck refers to the content and experience that the carrier made available to their users when they loaded a web browser on their phones.

3. Mobile ad spending is the fastest-growing area of digital advertising and surged past desktop digital advertising in 2018. The most common form of mobile advertising, banner advertising (also called WAP, Wireless Access Protocol, Banner), is very similar to online banner advertising. Banner advertising is standardized by the Mobile Marketing Association (MMA), which, much like the Interactive Advertising Bureau (IAB) for online banner advertising, has issued guidelines and standards for mobile web advertising.

4. The other form of advertising, and the one that represents the largest inventory, is sponsored SMS (Short Message System).

5. QR codes, mobile coupons, and video present other opportunities, as the prevalence of smartphones allows people to easily use these technologies.

Chapter Summary A. Digital interactive media, which include online database services, the World Wide Web, interactive television, and mobile advertising, represent a revolution in the making.

B. The commercialization of the internet really began with the commercial online services that offered a large subscriber base to potential advertisers.

C. Similarly, search engines made sites on the World Wide Web available to PC users with just the click of a mouse.

D. Web users tend to be upscale, college-educated men and women. This group is rapidly broadening, which will make the web even more attractive to many mainline advertisers.

1-334

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

E. The most common types of online advertising are search, display, and classifieds.

F. Most internet advertising is sold by CPM. Some, though, is sold by click-through or results.

G. Mobile advertising is a burgeoning medium that presents advertisers the opportunity to reach on-the-go consumers.

H. Interactive media are gaining a bigger foothold in homes with the popularity of Amazon‘s Echo devices.

Answers to Pedagogical Features AD LAB 14–A: Internet Ratings: A Call for Standards 1. What are some of the problems of internet audience measurement?

The internet audience is huge. In addition, the task of accurately measuring it is, no doubt, an enormous endeavor. Because the internet is still a relatively new medium, marketers lack the standardization needed to acquire valid and reliable measurements. This problem has a substantial impact on business because the controversy over definitions significantly affects what publishers count and what the agencies count and are willing to pay for.

2. Do you think these problems can be fixed? How? Answer Guidelines: a. Yes: As the internet grows in popularity and technology evolves, marketers will find a way to measure internet audiences with the same certainty as they can with other media. b. No: Internet audiences are too big to ever be accurately measured.

Ethics, Diversity & Inclusion: Who‘s Watching You? 1. Why would companies want to track everyone‘s online behavior?

Students‘ answers will vary. Students should discuss the importance of market research to any IMC program and how website traffic provides useful, detailed information for marketers.

2. Think of the last five websites you were on. What did you look at? How do you think that advertisers could use that information to better target you?

Students‘ answers will vary. Students should note that advertisers will learn the types of products, services, and information that interests them, and from this data can make assumptions about gender, income, location, and other factors to develop a consumer profile.

3. Has the online media industry taken tracking too far? Do you think it is okay, or not okay, to watch people‘s behavior online?

Students‘ answers will vary. Students may support tracking for the value it offers to advertisers or express concerns about privacy. Students should note the potential for some middle ground on the subject.

1-335 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Portfolio Review: Digital Advertising As the fastest-growing medium in history, digital advertising offers incredible opportunities for a wide range of people in both business and advertising, despite a number of unknown factors of the medium. For advertisers, there is a whole new world of potential customers out there, waiting to be engaged. But for advertising’s historically television-oriented creatives, just learning the new rules of creative is challenging, especially with the medium’s ever-changing technologies. Of course, this is exactly the same challenge that took place when TV was first introduced some 70 years ago.

In this portfolio, study the ads and evaluate how each site capitalizes on the truly interactive nature of the medium or how it could better incorporate interactivity with the audience. Try to determine how each one fits into the company’s overall strategy and how the site either complements or perhaps replaces a more traditional media approach. Could the company benefit by incorporating additional features into the website? What features would you suggest?  My IMC Campaign 14–A: Using Interactive Media A. Every medium offers unique creative options that media planners can incorporate into each campaign to help break through the clutter.

B. For every new campaign, advertisers need to think about how each element of their online presence communicates the company’s message.

C. Here is a list of avenues you should explore, but not limit yourself to, as you think about building your online campaigns:  Website, microsites, and landing pages  Search engine marketing  Display ads  Rich media  E-mail D. As you embark on the online portion of your campaign, think of the online platform as a blank canvas for you to meet your objectives.

E. To understand what sites your audience regularly uses, look to free services like Qauntcast and/or Google AdPlanner as a means of identifying sites where you will want to advertise.

F. Last, think about ways to connect with loyalists of your brand in ways outside of push communications.

G. Online media can be fun, but they can also be daunting because the virtual sky is the limit.  People behind the Ads: Brian Green, Senior Director, Property and Advertiser Solutions, Yahoo!

1-336 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

  

For just under 20 years, Yahoo! has been a staple in the lives of numerous online surfers.

On nearly all Yahoo! pages you’ll find an advertisement, and with all of those users turning pages, the resulting amount of ad inventory is staggering.

Brian Green has been in the digital advertising industry since early 2000.

Review Questions 1. How did the internet evolve to its present status as an advertising medium?

As search engines emerged for the use of the cyberspace traveler, marketers quickly recognized the advertising potential of these and other high-traffic internet sites. In the late 1990s, several companies competed to be the biggest name in searches and Google succeeded, later coming out with Adwords and AdSense.

2. Which companies on the internet receive the greatest amount of advertising revenue? Why? The five digital leaders represented in the acronym FAANG (Facebook, Amazon, Apple, Netflix, and Google) reported record profit in 2018. These digital experts have been able to become the powerful tech companies that they are through media convergence and managing their reputations despite consumer concerns about data privacy. In addition, they all have a strong grasp on understanding and utilizing big data to best reach consumers.

3. What are the different ways of advertising online? a. Websites, Microsites, and Landing Pages: The website itself can be considered an ad. However, it is more like an alternative ―storefront‖ where customers can find out about the company, its products, services, and what it stands for. Microsites are singular in focus and deliver a specific message. Landing pages are direct links to deeper areas of the website to which advertising drives consumers. b. Search Engine Marketing: Websites that allow people to type a word or phrase into a text box and then quickly receive a listing of information on a search-results page. c. Buttons: Small versions of the banner, which often look like an icon and usually provide a link to an advertiser‘s home page. d. Banners: Little billboards that spread across the top or bottom of the web page. e. Rich Media: Rich Mail incorporates graphics, video, and audio in an e-mail message.

When you open up a rich e-mail, your e-mail client automatically calls up your internet connection and launches an HTML page in your e-mail window. f. Sponsorships and Added-Value Packages: Entire sections of a publisher‘s website or single event that are sponsored by corporations. It becomes an added-value package when the sponsor‘s brand is integrated with the publisher‘s content, banners, or buttons on the page. g. Classified Ads: Free classified advertising opportunities that are typically supported by other advertisers‘ banners on the site. h. E-Mail Advertising: An electronic form of direct-mail advertising in which companies or brands send recipients e-mail that advertises their product or service 4. What are cookies, and what are they used for?

1-337 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

5.

6.

7.

8.

9.

Cookies are small pieces of information that get stored in a web browser when certain websites are loaded. Cookies can keep track of whether a certain user has ever visited a specific site. This allows the website to give users different information depending on whether or not they are repeat visitors. Cookies also indicate each user‘s frequency of visits, the time of the last visit, and the domain from which they are surfing. In addition, cookies let marketers make an educated guess about the users‘ ISP, whether they are visiting from work or home, their telephone area code, and their NAIC code.

What are the different ways web publishers charge for advertising?

Internet advertising can be purchased in several ways. The most common methods are the ones used for banner ads, which are typically billed on a cost-per-thousand basis determined by the number of page requests. Ads may be purchased in a search engine‘s information categories and subcategories, such as finance, news, travel, or games. Advertisers may also buy specific words that bring up their ads when a user‘s search request contains these words.

Some publishers charge their clients according to click-throughs.

How would you describe the advantages the internet offers advertisers over traditional media?

Advantages of internet advertising:  Truly interactive medium  Enormous audience  Immediate response from consumers  Highly selective targeting unmatched by any other medium  Proximity to purchase  Affluent market  In-depth information resource for a company and/or its products  Rapidly growing industry that provides tremendous profit opportunities for savvy direct marketers.  Business-to-business user market reached when television and radio cannot because the customer is at work while viewing the internet ad  Advertorials incorporated into web publications serve as effective tools for advertisers  Virtual storefront How does audience measurement on the web differ from that for traditional media?

Internet audience measurement information lacks the standardization needed to be able to compare its advertising effectiveness to other media.

What is the importance of interactive media to small advertisers?

Media planners should not think of these new vehicles in mass-media terms. Interactive media are used in personal venues; that means a one-on-one approach is necessary. This makes interactive media a perfect vehicle for small advertisers who are trying to go up against ―the big guys‖ and want to establish relationships one customer at a time.

What do best practices suggest that advertisers first do before engaging in social media?

1-338 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Advertisers should first consider how social media can be utilized to achieve campaign objectives and how it can be used to communicate the brand‘s message. They should consider why they want to utilize social media—who will they reach? How will users interact with them on social media? What are ways in which they can engage their audience in order to generate conversation?

The Advertising Experience 1.

Internet Advertising Advertising banners on the internet are akin to outdoor billboards and fill the web with advertising messages, corporate signage, and hyperlinks. Companies like DoubleClick (www.doubleclick.com) are flourishing as they introduce new and better ways of managing web advertising—helping advertisers feel more confident about the ad programs they place.

Visit the following advertising-related sites on the internet and discover more about this fastchanging segment of the advertising industry. Then answer the questions that follow.  DoubleClick: www.doubleclick.com  ClickZ: www.clickz.com  iMedia Connection: www.imediaconnection.com  Banner Report: www.bannerreport.com  mediapost: www.mediapost.com a. What group sponsors the site, and what is the organization‘s purpose? b. What is the size and scope of the organization? c. Who is the intended audience(s) of the website? d. What services does the organization offer web advertisers?

Sample Answer: ClickZ a. Contentive Ltd. is the parent organization of ClickZ and is owned by Blenheim Chalcot. ClickZ is a digital marketing community that aims to help marketers and business leaders make decisions regarding digital technologies. b. ClickZ has been around since 1997 and is a fairly large organization. They provide podcasts, articles, webinars, event coverage, and reports to inform marketers about digital marketing technologies. c. The intended audience are senior marketers and other business personnel interested in staying current on all things digital marketing. d. This is mostly a community for discussing digital technologies. They offer webinars to teach marketers about these new technologies, articles about the newest technologies, forums for conversations, reports on tech performance, and podcasts about digital technologies.

2. Designing a Banner Ad

1-339 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

X-Scream magazine, which is dedicated to extreme sports of all kinds, would like to dedicate some of its advertising budget to banner ads. Taking into account the target market this magazine would have, find three websites its consumers might visit, and design a banner ad that would motivate them to learn more about (and subscribe to) the magazine.

Answer Guidelines: Its target market might be young men ages 15–24 who are skateboarders, bikers, or surfers, perhaps in the southeast or along the Pacific coast where there is a warmer climate conducive to skating, biking, or surfing year round. The banner ad should have an interactive element where users can design their ideal board by choosing colors and stickers to place on the board. It should also include a link and call-to-action directing viewers to where they can subscribe to the magazine.

3. Visit Dove‘s special website, www.dove.com/us/en/stories/campaigns.html, and watch some of their ads. The brand promotes the idea of "real beauty," suggesting that beauty comes in many forms, shapes, sizes, and colors. What do you think of the ads? What do you think are the advantages of placing them on the web?

Answer Guidelines: The ads play to consumer preferences to see models who reflect women closer to the ―average‖ rather than the traditional model who reflected unattainable or unrealistic beauty standards. Since these advertisements are a push-back against the fashion and beauty industry‘s ―norm,‖ they are advertisements that are certainly conducive to a conversation.

Several of the videos feature hashtags where viewers can join in on the online conversation and contribute their thoughts. Additionally, women are almost as much internet users as men and the ads are certainly targeted toward women, particularly young to middle-aged women, who are those most likely to utilize the internet, making the web a good platform for these types of ads.

4. In 2006 Dove asked visitors to its website to open a free account and create a Dove ad. The company provided tools that allowed visitors to construct the ad easily at the site. The best ad was then featured in the 2007 Academy Awards program. What communications objectives do you think were behind this effort? What metrics do you think Dove used to gauge the success of this web initiative?

Answer Guidelines: This is a form of crowdsourcing likely with the communications objective or goal of gaining awareness for the brand through interactivity on social media, on their own site, and at the Academy Awards program. Dove likely looked at the number of submissions made, monitored the conversation about their initiative on social media, and measured visits and clicks to their site.

5. At present, a relatively small number of items are ordered on Amazon‘s Echo compared to its website. Will that change in the future? Make a case for why or why not.

1-340 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Answer Guidelines: a. Yes: This technology allows for easy ordering, re-ordering, makes suggestions of similar products consumers might be interested in, and delivers products right to a consumer‘s door. It is the definition of efficiency. Additionally, sales of the Echo have continued to grow as Amazon has reduced the price, making them more attainable for consumers.

Because of this, sales through the use of the Echo will also likely continue to grow. b. No: Consumers have a large amount of distrust for technology in the home. We now see commercials for computers where you can turn off the camera function and phones where you can buy a cover to hide the camera as consumers are more concerned than ever about tech companies entering their homes. Additionally, the Echo makes it almost too easy for consumers to make the purchase, perhaps leading to overspending and consumers feeling like they don‘t have complete control over the purchase. These issues of data privacy/security and desire for consumer choice will likely lead to a further decline of the use of the Echo in consumer‘s homes.

6. Assume that you are an interactive media designer working on the Kitchen View project, and you have been assigned the task of developing a banner ad to promote the website. What information would be essential to present? How might this be accomplished given the inherent limitations of display ads?

Answer Guidelines: Outline what the Kitchen View project is and direct consumers to where they can learn more about the project. Display ads have a very limited amount of space and if the project is quite involved, it would be hard to describe in just a few words or an image. However, if done creatively, the banner ad could serve as a good call-to-action to direct consumers to a website where they could learn more about the project.

Connect Activities Title

Assignment Type

Advertising on the Web

Case Analysis

Google Shopping Insights

Topic

The Role of the Internet and Social Media in an IMC Program Video Case The Role of the Internet and Social Media in an IMC Program

Learning AACSB Objective Accreditation Tagging 14-05 Knowledge Application

Bloom's Taxonomy

14-03; 14-04; Knowledge 14-05 Application; Reflective Thinking

Remember; Apply

Apply

1-341 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Amazon Echo

Video Case The Online Advertising Process

14-03; 14-04; Knowledge 14-05; 14-06 Application; Reflective Thinking

Remember; Apply

Advertising on the Web Activity Summary: This activity provides students with a case about Maria, a business owner who sells Mexican arts and crafts through her website. Students are tasked with answering questions relating to Maria‘s use of her small ad budget online, particularly using Google AdWords and AdSense.

Follow-Up Class Discussion: Have student pair up and draw random words from a selection of topics provided, such as: hotels, car rental, hiking boots, amusement parks, etc. Have student pairs Google these terms and describe to the class the sponsored links that they find. Discuss how this is beneficial to and used by advertisers.

Google Shopping Insights Activity Summary: This activity asks students to watch a video about Google Shopping Insights, a program from Google that provides advertisers with information about consumer buying trends. Students are then tasked with answering questions relating to how advertisers can utilize this information to advertise in digital spaces.

Follow-Up Class Discussion: Have students explore the Google Shopping Insights site. Ask them to discuss how this information could be useful to advertisers and whether there are advertisers who might benefit from this type of information more so than others.

Amazon Echo Activity Summary: This activity asks students to watch a video about Amazon‘s introduction of the Amazon Echo virtual assistant in India through the use of pre-roll ads on YouTube. Students are then tasked with answering questions relating to advertising in digital spaces.

Follow-Up Class Discussion: Ask students to discuss Amazon‘s introduction of the Echo in this way. Would this same strategy have been effective in introducing this product in the U.S.? Why or why not?

1-342 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

CHAPTER FIFTEEN SOCIAL MEDIA This chapter explores how social media are changing the way that advertisers think about engaging with their audiences. Advertisers must understand how to effectively employ social strategies that enhance the relationships they have with their current customers and potential customers.

Learning Objectives After studying this chapter, your students will be able to: LO15-1 Discuss how social media differs from traditional media.

LO15-2 Explain the various ways that social media can be used.

LO15-3 Discuss how social media have changed consumer‘s behavior.

LO15-4 Explain how to manage social media on behalf of a brand.

LO15-5 Define the different applications of social media.

What’s New? The new opener focuses on the online gaming craze Fortnite and demonstrates the social nature of online gaming. The remainder of the chapter is significantly revised to reflect the dramatic changes in the use of social media that have occurred over the past few years. The Ethics, Diversity & Inclusion box highlights the impact of social media on bullying, especially of teenagers, and raises questions about the role that social media platforms should play in protecting users. The ways social media have transformed business, especially local businesses, is highlighted. The People behind the Ads feature on Mark Zuckerberg is updated to reflect the recent travails of Facebook.

Teaching Tips and Strategies In this chapter, students will be exposed to how social media is changing advertisers‘ perspectives.

Using the Chapter Opening Vignette in the Classroom Ask your students to describe the brands/organizations they follow and interact with on social media. Which ones are effective in utilizing social media to interact with consumers? What do they do that other brands do not? Ask them to consider other instances when brands have utilized social media to engage with consumers effectively. What made it memorable to them?

Web Resources for Enhancing Your Lectures Hootsuite https://hootsuite.com Social Media Professors

https://www.facebook.com/groups/socialmediaprofessors 1-343

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Community Group Sprout Social

https://sproutsocial.com

MediaPost

https://www.mediapost.com

Mashable

https://mashable.com

eMarketer

https://www.emarketer.com

Pedagogical Features Ethics, Diversity & Inclusion: Cyberbullying   My IMC Campaign: Using Social Media  People behind the Ads: Mark Zuckerberg, Founder and CEO, Facebook Lecture Outline I.

II.

Vignette: Fortnite Tim Sweeney, the creator of Fortnite, used an unexpected strategy to gain revenues; he gave Fortnite away for free. How then does a game like Fortnite make money? Because of advertising, of course. Brands are willing to pay big to be a part of the cultural phenomena that is Fortnite and engage a young, primarily male audience in ways brands never before thought imaginable. Fortnite presents an exceptional exemplar of social media and the opportunities available to brands through utilizing platforms such as this.

What Is Social Media and How Is It Different?

Social media allow people to ―meet‖ virtually to discuss and share their interests with each other. Merriam-Webster defines social media as ―forms of electronic communication through which users create online communities to share information, ideas, personal messages, and other content."

Throughout Chapter 15 we consider social media as platforms in which content is created, shared, and consumed by users. When social media companies such as Facebook and Twitter were founded, only a small number of people were interested. Early adopters tended to be young and highly educated. Those days, however, are long gone. As of 2018, 68 percent of Americans use Facebook and 35 percent use Instagram. Snap is used by 27 percent and Twitter by 24 percent.

Harnessing social media content is becoming big business. A host of tools collect all of this information using keywords.

1-344 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

III.

Companies like Nielsen‘s BuzzMetrics or J.D.Power‘s Umbria Communications help marketers aggregate the information being posted about their brands or products to understand what people think and feel about them. Practicing IMC in social media remains an evolving challenge because in social media, people will interact with each product or brand differently, and the brand promise must really shine through.

A. Our Social Media Personas 1. As noted in Chapter 14 how the web gave rise to the consumer as content creator.

Social media platforms are the catalyst for this behavior change. Their value proposition is primarily centered on ease of use.

2. Social media make it easier to maintain more friendships, to find people with similar interests, and to share information with friends. Used in conjunction with search engines, social media also make it easier to find content. Exhibit 15-1 illustrates the seven user types and how they engage with social media as identified by Forrester.

3. Social media resist easy classification because they are as much technology as they are media and can take on many different forms, including magazines, forums, weblogs, social blogs, microblogs, wikis, podcasts, photographs or pictures, games, videos, ratings, and social bookmarking.

4. The essence of social media is the interaction. In other words, it is user content that attracts audiences.

The Rise of Social Media and Influencer Marketing Using social media strategically starts with understanding what people use it for. Many believe that a desire to feel connected to others is what drives social media use. Fostering connections and building relationships with customers can be the catalyst for creating influencers, who will share their brand experiences with friends and family.

The potency of influencers has led to a rise in what is sometimes called influencer marketing. Influencer marketing is the strategic collaboration between brands and people who are highly credible with important audiences in brand promotion.

Social media are open environments, and some companies find that to be a scary proposition. Engagement requires that brands relinquish control over the message, which cuts against lessons many marketers were taught.

A. Adoption of Social Media 1. The inherent nature of social media—the fact that they are social—thereby connecting and relating people to one another, helps explain their monumental rise in popularity.

2. Another attraction of social media for advertisers is the ability to target. As can be seen in Exhibit 15-3, while social media was primarily of interest to younger audiences in the mid-2000s, today a majority of people from all age groups, except those 65 and over, use social media.

1-345 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

3. While Facebook is the king of the mountain (Exhibit 15-4 shows that Facebook owns a whopping 36% percent market share), it is by no means the only social site people use, and it was not the first social site either. If you were asked to identify the first social media site that reached 50 million users, what would you guess? Alumni-focused social site Classmates.com reached 50 million users in the late 1990s. And it wasn‘t until 2002–2004 that social media really took off when companies like Friendster, LinkedIn, MySpace, and a small college-oriented social network named Facebook experienced their monumental growth.

4. Another trend visible in Exhibit 15-4 is the new players in the social media space.

Instagram, Tumblr, and Reddit were no-shows back in 2012, while they are top ten and growing in 2018.

B. Social Trends 1. What‘s trending is a term used by tweeters to describe what people are talking, or tweeting, about on Twitter.

2. The advent of Facebook Connect and Twitter‘s open application protocol interface (API) means that any site, tool, application, or the like can feed and extract information from the social network sites in accordance with how the user has granted permissions.

C. Who Uses Social Media 1. The reality is that social media technologies are integral to our lives. The simple act of sharing, connecting, and keeping up with friends, family, and acquaintances thus far has made social networking one of the most popular ways people use digital media.

2. Trending is a term used by tweeters to describe what people are talking, or tweeting, about on Twitter. And as we mentioned earlier, because social media platforms are open, in some cases what‘s being tweeted isn‘t actually happening on Twitter but in a third-party tool, application, or website. Facebook Connect and Twitter‘s open application protocol interface (API) mean that any site, tool, or application can feed and extract information from the social network sites in accordance with how the user has granted permissions.

D. Types of Social Media Social media include any web- or mobile-based technology that is used for interactive communication between groups, communities, companies, and individuals. Here are some of the most common types of social media.

1. Forums Forums are typically sections of sites that connect individuals around a specific topic.

2. Weblogs (Blogs) a. A blog is a reverse chronological journaling site.

1-346 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

IV.

b. Content management systems (CMSs) are web-publishing tools that allow for nontechnical users to post content easily. c. Blogs can also be multimedia in nature whereby the post is a photo or a video, like Flickr and YouTube.

3. Microblogs A microblog, according to PC Magazine, is a blog that contains brief entries about the daily activities of an individual or company. The most popular microblog on the web today is Twitter.

4. Wikis A wiki is a user-collaborated content site, typically text in nature. Wikis allow the community to create, edit, or delete content.

5. Social Bookmarking a. A once-popular form of sharing content on the web, social bookmarking has recently declined in popularity. However, out of this form of social media came a very important categorization tool—tagging. b. Tagging is the act of self-classification with key words that make content easier to search for and therefore find. Tags are now used in every form of social media as a way to organize the information. An example of a social bookmarking sites is reddit.com.

6. Social Networking The darling of social media, social networking is the term used to describe those websites where people congregate based on some shared interest. Exhibit 15-6 shows the top social network sites based on unique visitors.

7. The Data Explosion a. In Chapter 14 we wrote of the tracking mechanisms that allow marketers to measure usage and patterns of behavior. Couple that information with the data flowing into and out of these social platforms and you have more data being produced in two days than that from the beginning of recorded history through 2003. b. Companies like Turn, a media technology company, are building software as a service (SaaS) for marketers to truly harness the power of these data. This information gives marketers a greater understanding of how their audience interacts with, shares, likes, dislikes, and feels about their brand. This unprecedented feedback mechanism is the advertiser‘s holy grail; however, most advertisers haven‘t had the wherewithal to truly take advantage of this opportunity.

Managing Social Media One of the biggest differences between social media and traditional media is that social media consist of 20 percent planning and 80 percent execution and management,

1-347 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

V.

whereas traditional media are the exact opposite: 80 percent planning and 20 percent execution and management.

This means that social media are more labor- and resource-intensive. Another way of saying this is to note that social media use tends to be tactical, rapid, and responsive rather than strategic and deliberate.

A. Owned Media and Fragmentation 1. In the early days of social media, brands paid very little for a presence. Rather, most brands spent time and effort in owned properties.

2. Listening tools, which we will discuss later in the chapter, also are very beneficial in understanding what’s going on in the blogosphere (the aggregation of all blogs online).

3. Text analytics—the measurement and analysis of text-based user-generated content (UGC)—is a burgeoning field in the social space, giving rise to unprecedented insights from the mere words and syntax we use when expressing our opinion about a product, brand, or service on the internet.

Building Social Authority A. Transparency and Authenticity 1. The tenets that social media has encouraged such as openness, transparency, and authenticity has caused marketers to rethink their traditional promotional messages.

2. Many companies aren‘t built to be as open and connected as social media platforms demand.

B. Two-Way Brand Communication 1. Understanding the perspective of the target audience has helped brands create better products, services, and communications.

2. Now it can happen within seconds by typing a few key words into a social listening tool and poof, you have information not only about the brand, but about the competition, the category, and the industry.

3. It has also been known that word of mouth (WOM)—for example, a friend‘s recommendation—is the most effective form of communication in persuading a future sale.

4. Social media platforms are tools that amplify WOM and make it measurable. A brand can now know how often an asset (link, photo, video, promotion) has been shared and to how many people it reached.

5. The brand needs to define how authentic and transparent it is going to be, and typically what this two-way communication really offers is an opportunity for the brand to be helpful in its own way (authentic) and not just push promotional offers, but rather give the customer greater opportunity to explore behind the scenes with the product or service (transparent).

1-348

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

C. Customer Service in Social Media 1. Being helpful is a very powerful mechanism for a company to engender trust and loyalty within a customer base. This was evidenced by Zappos.com, Comcast, and many other brands that utilize social media as an extension to their customer service efforts.

2. Companies like DirecTV provide forums for their customers to self-support. They will even bring in top volunteer commenters to be ―beta customers‖ on new products and services, asking for their valued feedback. This keeps the customers happy, and the beta customer now feels obligated to help others and to maintain goodwill within the forum of frustrated and irate customers.

3. As the best-selling author and creator of @comcastcares, Frank Eliason, says, social media mark the end of business as usual.

D. How Social Media Have Transformed Business There are countless ways to describe how social media are changing the business environment. The flurry of engagement created by social media is not useful for branding alone. It has real consequences for revenues from e-commerce. Here are some demonstrations of how social media platforms continue to push the boundaries of what is standard practice:  Financial and credit brands invest heavily in Facebook ads to target millennials.  Local businesses, able to capitalize on current events and local concerns, frequently have an advantage over big brands in social media.  Comcast has at least 11 full-time employees dedicated to customer service via social media sites.  Dell attributes well over $6.5 million in revenue directly from Twitter.  JetBlue website visitors who also visited Twitter were 35 percent more likely to complete a booking than visitors who did not visit Twitter.  36 percent of social media users post brand-related content.  85 percent of small- to medium-sized firms use Twitter to provide customer service.  25 percent of U.S. marketers run video ads on Instagram.  75 percent of companies now use Twitter as a marketing channel.  41 percent of the class of 2011 used social media sites in their job search.  Over 5 million businesses rely on Facebook advertising, up from 3 million as recently as 2016.  The average user spends almost 50 minutes a day on Facebook‘s channels (Facebook, Instagram, Messenger).  Twitter advertising options include promoted tweets that cost up to $2 an engagement and promoted trends that run to $200,000 a day.

1-349 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VI.

Application of Social Media Social media are not one-size-fits-all marketing tools. So much is predicated on the type of company, the audience, and objectives for using the medium. We‘ll cover some of the more common uses of social media.

A. Common Uses of Social Media 1. Blogs a. One of the easiest and best ways to get started in social media is to be a practitioner. b. Blogs are simple, reverse chronological order web pages that are typically commentary or opinionated in nature.

2. Brand Monitoring and Social Listening Tools, such as Nielsen‘s BuzzMetrics, allow brands to aggregate all of the commentary, positive, negative or otherwise, into a user-friendly dashboard with robust analytics and trend analysis of how conversations are growing and sentiment is changing over time.

3. Remarketing a. It used to be standard for brands to give their web audience the ability to sign up for newsletters right from their website. b. There are efficiencies to this replacing e-mail as the main form of remarketing, mostly around scale—it is much easier to follow or friend a brand than to fill in a lead form. c. Also, the message is distributed in multimedia formats where a customer wants to interact with the brand or company, and not necessarily in his or her inbox. d. A brand can create a channel on You-Tube.com or Vimeo.com, have a Twitter page and Facebook page, and can even have a LinkedIn group or Slideshare.net or Flickr channel—all of which allow the brand to distribute communications to its own network.

4. Marketing Research Online Communities (MROCs) a. If you had a marketing research online community (MROC) you could ask your loyal customer advocates what they think of the idea or the communications or all of it. b. Communispace and Passenger recruit and manage these small communities on behalf of the brands giving them valuable feedback prior to spending large sums of media dollars only to find that the new product would ultimately flop.

5. Customer Service What a brand can do with 140 characters (or 280 as of late 2017) of text! For Comcast and Zappos.com, they can build brand loyalty that is unmatched in their category.

1-350 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

6. Social Ads Advertising in social media requires a strategy and set of objectives in the same way that advertising in other media does. A firm should have a clear sense of who they want to reach and what they hope to accomplish.

7. Facebook Facebook remains the 900-pound gorilla in social media. The site has global reach (not including China, which limits social media access to nonapproved sites) and can be accessed by almost a third of the entire internet audience. Almost 700 million people use the site every day.

Companies that wish to advertise on Facebook can take advantage of several opportunities. a. A boosted post gives a company the chance to make a post more prominent in user’s News Feeds. b. Ads called click to website operate much as Google search ads do, bring users to the firm’s site outside of Facebook. c. Page like ads are intended to grow the fans of a company or brand. d. Mobile app installs ask users to install apps on their smart phones or other devices.

8. Twitter a. Twitter offers a smaller menu of choices for advertising, beginning with promoted tweets help to raise the prominence of a tweet to the top of follower‘s feeds. b. Another option for Twitter advertisements is the promoted account. These appear in a user‘s ―Who to Follow‖ tab and are a better choice for increasing followers. Twitter suggests that the promoted accounts are most useful for driving purchases, leads, downloads, and signups; for increasing brand awareness and WOM sharing; and for driving web traffic. c. A third Twitter opportunity is promoted trends. These are an expensive option; Twitter charges companies $200,000 a day to purchase a promoted trend. In exchange, companies get their hashtag near the list of trending topics on Twitter, which can be seen by all users. d. The performance of ad campaigns on Twitter is a bit more difficult to assess as the company shares less information with advertisers than does Facebook.

However, industry estimates suggest that CTRs on Twitter campaigns are consistent with those in Facebook.

9. Other Social Media Advertising is now a part of almost every popular social media platform, including Instagram, Snapchat, and Pinterest. These companies have built loyal, active audiences that are immensely attractive to advertisers. Social media

1-351 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

VII.

organizations have not been shy about asking brands to pay large sums of money for their audiences either.

10. Crowdsourcing This can save companies lots of money that they can use in other ways. It is quite possible that the person who had the winning design sits in another country where $800 goes a long way. This is the power of crowdsourcing.

11. Entertainment Social media platforms aren‘t always about being serious; some brands utilize social media to breathe life into their company culture, like Zappos.com, or bring entertainment in unique ways to their fan base.

12. Games and Gamification a. There has been an appeal for games, whether through a console like Xbox and PlayStation or on the PC, for quite some time now. b. And their leveling and badging system has been adopted for other more utilitarian applications like Foursquare, creating a whole new way of engaging consumers called gamification.

13. Reviews and Opinions a. Reviews are where everyday people can let the world know what they think of certain products or services. b. That type of information is invaluable to the consumer and a product killer to brands.

Chapter Summary A. Social media are unlike any other media to date. They can’t be measured simply by time and place.

B. They have also quickly changed social media users’ behavior in the number of people they stay in touch with and how they communicate with them.

C. Social media have changed how companies communicate with their customers as well.

D. Social media platforms are a component of almost every website on both the wired and mobile Internet.

E. From research, to remarketing, to crowdsourcing and entertainment, social media provide brands different ways of connecting with their audience to better understand them, provide products that meet their needs, and create a feedback loop that is unprecedented in the history of advertising and IMC.

Answers to Pedagogical Features Ethics, Diversity & Inclusion: Cyberbullying 1. Is it ethical for parents to let children have private social media accounts? At what age?

1-352 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

2. Imagine a parent allows her/his child to have a social media account but secretly monitors it without letting the child know. Is the parent‘s behavior ethical?

3. What responsibility, if any, do social media brands have for ensuring the safety of their users? Do advertisers who practice IMC on social sites have a role to play as well?  My IMC Campaign: Using Social Media A. Unlike any other media choice, social media platforms aren‘t necessarily about placing ads in the areas that have the highest concentration of a company‘s target audience.

B. Social media are about engagement. However, engagement is a tricky word because it is typically defined differently for each brand.

C. As you have read throughout this chapter, the use of social media is now a very important part of integrated marketing communications. Basically, social media‘s function is to make brands remember that their target audiences are actually just people, and that they need to treat them like that.

D. The great thing about social media is that they allow you to be very creative.

E. Approach the use of social media for your campaign as a way to connect with your loyalists, and perhaps provide them with the tools to share your brand.  People behind the Ads: Mark Zuckerberg Founder and CEO, Facebook  Mark Zuckerberg is the founder of every college student’s (and increasingly their parents’) favorite web destination, Facebook.  Zuckerberg was born in Dobbs Ferry, a suburb of New York. Like many of his generation, he grew up with computers and became a self-taught programmer.  Once on campus Zuckerberg got his first taste of both fame and controversy.  But Zuckerberg wasn’t finished, and his first incarnation of Facebook was birthed in February 2004.  Zuckerberg now had to decide whether to stay in school or build a company.  But with success came new challenges. Although Facebook’s trajectory was remarkable, its size was still tiny in comparison to MySpace, then America’s most popular social networking site. In 2006 MySpace membership hovered around 100 million.  In addition, Facebook’s success was getting attention, and big companies were making offers.  Bold? Even audacious? Absolutely. But once again, it appears Zuckerberg made the right choice. In October 2007 Microsoft announced it would take a $240 million stake in Facebook.  This decision built on Facebook’s alliance with Microsoft as its exclusive ad-serving partner.

The implication of Microsoft’s investment is that Zuckerberg’s company was then worth approximately $15 billion.

1-353 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

  

  

How has the company achieved such phenomenal success? Admirers say that Zuckerberg has turned the site into more than a social network.

What of the future? Time magazine asked Zuckerberg in 2007 about his grand plans, including plans for advertising.

Zuckerberg’s leadership paid off when on May 18, 2012, the company set records at its initial public offering (IPO) for volume traded, and Facebook generated over $14 billion in cash.

The recent past has presented trials for Facebook, as the company has faced scrutiny over its privacy practices.

In early 2019, there were even some calls for Zuckerberg’s resignation.

The future? Facebook is investing heavily in virtual reality.

Review Questions 1. What are ways that social media are different than traditional media?

Social media allow brands to be much more personal and express the personality of the brand. They allow for direct communication with consumers that traditional media do not offer. They are very cost effective and allow advertisers to more easily test various iterations of messages. Social media allow brands to immediately respond to crises or consumer questions or comments. Social media have a stickiness where consumers are choosing to come back to it every day or multiple times a day.

2. What are the ways in which social media have changed consumer behavior?

Consumers now expect brands to be extremely responsive and answer their questions/concerns, forcing brands to be more involved, transparent, and open with consumers. It has transformed consumers from simply content consumers to also being content creators for brands. Social media provides consumers with a voice so it has made them more apt to speak out about a brand they liked or speak freely about a negative experience with a brand. Social media has also increased consumer‘s brand loyalty to those brands that use social media effectively as they‘re able to more freely and quickly communicate with brands.

3. What are the different ways consumers engage within social media?

Consumers engage with brands, organizations, celebrities, politicians, and advertisements on social media. Consumers also engage with other consumers, teaming up to defend a wellliked brand or to gang up on a brand that has used social media ineffectively. Consumers also act as salespersons and advertisers themselves, serving as influencers for brands and specific products they like and use often.

4. What are examples of social media ads and what are they used for?

Blogs allow brands to develop, show their personality, and communicate with consumers on a more interpersonal level. Pay for boosted posts or promoted tweets on Facebook and Twitter is good for brands who wish to promote something that‘s timely and of relevance to 1-354 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

current happenings for the brand. Brands can also create advertisements through YouTube and can manage their own brand personalities on personalized Facebook and Twitter pages, which serve as advertisements for the brands.

5. Why is transparency so important for companies?

Social media has taken word-of-mouth and amplified it, making word-of-mouth communication between consumers measurable. Because of this, brands are forced to be honest and more transparent, as the likelihood of other consumers finding out about a lie or a mishap is much more likely and will amplify that lie or mistake much more quickly than advertising through traditional media. A brand’s use of social media can quickly sway wordof-mouth communication about a brand, so it remains vital for brands to monitor social media and engage with consumers in a responsibly transparent way.

6. What are the different types of social media?

While most typically think of social networking sites when the term social media is discussed, there are in fact many different types of social media. These include forums, microblogs, Wikis, social bookmarking, and social networking sites.

7. How would you describe the advantage of deploying a social media campaign?

First, social media campaigns are very cost-effective when compared to the costs of other traditional advertising media. Social media is also such a major part of consumer’s lives that brands who use it well are rewarded with a certain sense of brand authority. They gain consumer trust and engagement as long as the brand is open, transparent, and honest.

Social media is also a fantastic outlet for facilitating customer service. Employees of the company or organization can respond to consumers immediately and keep small issues from becoming bigger problems. This also aids in facilitating a positive interpersonal relationship between the brand and consumers.

The Advertising Experience 1. Using Social Media As the communications director of a new start-up, you are very excited to tell the world that your company is the next best thing to sliced bread. To be successful, your company needs to reach a lot of people, very quickly. What are some of the tactics that you would use to spread the word through social media?

2. Social Media Organizations Visit the following social media industry websites and familiarize yourself with the size of the social media world. Be sure to answer the questions for each site.  Review Trackers: https://www.reviewtrackers.com/social-media-marketing/  Influencer Marketing Hub: https://influencermarketinghub.com  International Network for Social Network Analysis: www.isna.corg 1-355 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

 Hootsuite: https://signup.hootsuite.com a. What is the purpose of the organization that sponsors this site? b. Who is (are) the intended audience(s) of this site? c. Who makes up the organization‘s membership? Its constituency? d. How important do you feel this organization is to the advertising industry? Why? Sample Answer: Review Trackers a. The Review Trackers tool allows brands to monitor their online reputation, particularly as it relates to customer reviews of their service or products. This allows brands to manage their online reputations more easily and quickly and strive for the openness and transparency that consumers desire. b. The intended audience for the site are brands, particularly brands in the service industry, such as food or car oil changes or furniture delivery. c. Some of their clients include Ashley Home Furniture, Midas, U.S. Bank, Benihana, and Hwy 55 Burgers Shakes & Fries, among others in service industries. d. Students may likely feel that this organization could be very important in the advertising industry. As the chapter discussed, building trust and transparency/authenticity, managing two-way brand communication, and managing the word-of-mouth aspect of social media remains vital to properly manage an organization‘s reputation. This type of tool would just make it easier for big brands to do so.

3. Social media not only allows fans and users to participate in campaigns, they often encourage it. Create a video for your favorite brand and post it. track to see if your video is acknowledged by the company, how often it is shared, etc.

4. Identify a passion (exercise, photography, novels, sports) and consider who might be an influencer in that sphere. What brands might form an influencer marketing relationship with this person?

Connect Activities Title

M&M‘s Instant Story Race

Social Media versus Traditional

Assignment Type

Topic

Video Case The Role of the Internet and Social Media in an IMC Program Click and Advantages and Drag Disadvantages of Social Media

Learning AACSB Bloom's Objective Accreditation Taxonomy Tagging 15-01; 15-02; Knowledge Remember 15-05 Application; Reflective Thinking 15-01 Reflective Remember Thinking

1-356 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Media Social Media Tools

Click and Drag

Advantages and Disadvantages of Social Media

15-02

Reflective Thinking

Remember

M&M’s Instant Story Race Activity Summary: This activity asks students to watch a video about M&M‘s efforts to engage fans on Instagram through a competition that involved using the Instagram app and playing a game as one of its infamous M&M‘s characters. Students are tasked with answering questions relating to trending and crowdsourcing on social media, the use of promoted tweets and posts, and time allocation for social media management.

Follow-Up Class Discussion: Ask students to utilize their phones or laptops to look at what Tweets are promoted on their own Twitter feeds or what posts are promoted on their Facebook pages. Ask them to discuss the accuracy of those posts in reaching them as a consumer. Do the items promoted interest them at all? For students without their own social media pages, ask students to explore brand‘s social media pages and find an example of how the brand used crowdsourcing.

Social Media versus Traditional Media Activity Summary: This activity provides students with informational clues about various types of social media and asks students to match the platform with the clue provided.

Follow-Up Class Discussion: Ask students to discuss the various social media platforms that they use. Further, ask them to describe the type of products/brands that would most benefit from advertising in a given platform (i.e., do fast food brands perform better on Twitter versus Facebook and why?). Are different social media more conducive to different types of branded content?

Social Media Tools Activity Summary: This activity asks students to differentiate between various social media tools such as forums, blogs, wikis, RSS, etc.

1-357 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Follow-Up Class Discussion: Have students ask three people who are not in the class to provide examples of social media. Discuss with the class whether any of the people they talked to described any other types of social media other than social networking sites. Ask students how they feel brands can best utilize forms of social media other than social networking sites to effectively communicate with consumers and convey brand messages.

CHAPTER SIXTEEN USING OUT-OF-HOME, EXHIBITIVE, AND SUPPLEMENTARY MEDIA This chapter presents the factors advertisers consider when evaluating various out-of-home, exhibitive, and supplementary media. Many advertisers use these media to either complement or replace print and electronic media, so it‘s important to understand how advertisers buy these media and the advantages and disadvantages of each.

Learning Objectives After studying this chapter, your students will be able to: LO16-1 Discuss the pros and cons of out-of-home advertising.

LO16-2 Describe the types of standard out-of-home advertising structures.

LO16-3 Explain how to measure exposure to out-of-home media.

LO16-4 Detail the various options available in transit advertising.

LO16-5 Identify the influences on the cost of transit and other out-of-home media.

LO16-6 Discuss the importance of exhibitive media in a company‘s marketing mix.

LO16-7 Explain the issues advertisers face when considering a change in packaging.

LO16-8 Identify several types of supplementary media.

What’s New? The new opener highlights Corona‘s creative and socially responsible campaign for World Ocean Day. OOH statistics and uses are updated throughout. The Portfolio Review is updated with new, creative executions. Geotargeting and geofencing are introduced and their uses are explained.

Teaching Tips and Strategies Using the Chapter Opening Vignette in the Classroom

1-358 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

OOH is often the ―neglected‖ medium. And when it is used, advertisers often forget about the relationship objectives so central to IMC. James Ready and its agency saw the potential of billboards for relationship building. Ask students their thoughts on the strategy. You might ask about the importance of billboard placement for the campaign, about timing of the messages, and about what other media might be used to supplement the campaign. Technology is also changing the nature of out-of-home advertising. A useful New York Times article on some of these technologies can be found here: www.nytimes.com/2006/12/18/business/worldbusiness/18junk.html?ex=1174104000&en=93c63 43e5c26ecaf&ei=5070.

Other Tips and Strategies Students will be introduced to the final component of advertising: billboards, transit ads, and ads in supplementary media. When I was selling television airtime, I used to envy the billboard salespeople. In my opinion, they have one of the easiest jobs because, most of the time, customers come to them instead of the other way around!

A couple of decades ago, you could be driving down the interstate and see a billboard every couple of seconds. The government passed laws that prohibited new billboards from being erected just anywhere along the road. In my opinion, this increased the value of the existing billboards on the highway. It comes down to supply and demand, as we have seen many times.

For instance, if ten people want a house and there is only one seller, what is going to happen to the price of that house?

One of the best things about billboard advertising is that driver and passengers cannot selectively block it out, as they do with Internet ads (by using pop-up killer software or by avoiding adsupported sites), television ads (by flipping the channel), or radio ads (by flipping stations).

Even with the high price of gasoline, highway traffic has not diminished, so I think we will continue to see the billboard advertising industry staying healthy. This chapter does a great job of explaining how billboard rates are set.

Be sure to show the students the Portfolio Review. They get a kick out of the creative genius.

Web Resources for Enhancing your Lectures Wikipedia: Billboards

http://en.wikipedia.org/wiki/Billboard

Guerrilla Mobile Billboards Billboards of the Past EMC Outdoor: Out-of-home experts

http://www.guerrillabillboards.com http://www.billboardsofthepast.com http://www.emcoutdoor.com/?gclid=CNre3ff0nJYCFQOj FQodNA2R5w

1-359 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Pedagogical Features Ad Lab 16–A: How to Use Color and Type in Out-of-Home Advertising Portfolio Review: Out-of-Home Advertising Ethics, Diversity & Inclusion: Does Spillover Need Mopping Up?  My IMC Campaign 16: Using Out-of-Home, Exhibitive, and Supplementary Media  People behind the Ads: Cliff Marks, CineMedia Lecture Outline I.

II.

III.

Vignette: Corona Beer With imagination, billboards can achieve excellent local reach, frequency, and continuity on a limited budget. A campaign from Corona for World Ocean‘s Day proved that when they created an unforgettable image: actor Chris Hemsworth surfing a large wave—a wave made out of plastic taken from ocean waters to highlight the excessive amount of garbage found in ocean waters. This imaginative use of billboards complements Corona‘s IMC strategy to connect the brand with environmental efforts, particularly ocean clean-up efforts. This demonstrates the ability of innovative and creative brands to effectively utilize out-of-home efforts to complement their overall IMC strategy.

Using Out-of-Home (OOH) Media Ads that reach prospects outside their homes—like outdoor advertising, bus and taxicab advertising, subway posters, and terminal advertising—are part of the broad category of out-of-home advertising (OOH) (see Exhibit 16-1).

While not considered OOH because they are not (bought or measured), the most common are on-premise signs, which promote goods and services, or identify a place of business, on the property where the sign is located.

Next, we‘ll discuss a category we call exhibitive media, which includes product packaging and trade shows and exhibits.

Finally, we‘ll examine some of the media that advertisers typically consider supplementary to their other advertising activities—things like promotional products (specialty advertising), directories—as well as some of the emerging media that are beginning to gain advertiser interest.

Out-of-Home Advertising As a national and global medium, outdoor advertising has achieved great success.

Today, around the globe, marketers use OOH for the same reasons: to communicate a succinct message or image in the local language to a mass audience quickly and frequently at the lowest cost per thousand of any major medium.

1-360

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Growth in OOH has been steady compared to other traditional media. This growth is expected to continue as advertisers seek alternatives to the declining audiences and ad clutter of other mass media.

There‘s still one medium that can carry their message 24 hours a day, seven days a week, without interruption. It‘s never turned off, zipped, zapped, put aside, or left unopened.

That‘s OOH. For that reason, some experts refer to billboards as the last mass medium.

Conventional billboards, terminal signs, and stadium ads are going digital. As we show later, this increases the creative possibilities for the medium. And, as can be seen in Exhibit 16-2.

A. Standardization in OOH 1. Standardized outdoor advertising uses scientifically located structures to deliver an advertiser‘s message to markets around the world.

B. Types of OOH Advertising There are six major kinds of out-of-home media: billboards, street furniture (bus shelters, store displays, urban furniture, kiosks), transit (buses, subway and rail, airports, truckside, taxi display, and wrapped vehicles), broadcast using place-based TVs (stores, schools, bars), radio (drive time, in-office, in-store), and alternative (elevators, stadiums, airborne, shopping malls).

Standardized structures come in three basic forms: bulletins, poster panels, and junior posters. For extra impact, some companies may use the nonstandard spectacular.

1. Bulletins a. Where traffic is heavy and visibility is good, advertisers find that large bulletin structures work best, especially for long-term use. b. Bulletins measure 14 by 48 feet, plus any extensions, and may carry either painted or printed messages. c. Painted displays are normally lighted and are repainted several times each year (color is very important for readability. Some bulletins are threedimensional or embellished by extensions (or cutouts) that stretch beyond the frames of the structure. Variations include cutout letters, backlighting, moving messages, and electronic time and temperature units called jump clocks.

2. Poster Panels a. The poster panel (or standard bulletin) is less costly per unit and is the basic outdoor advertising structure. A poster consists of a steel structure created with a standardized size and border. Its message is first printed at a lithography or screen plant on large sheets of vinyl, then mounted by hand on the panel. b. Some local advertisers get high-quality outdoor advertising at reduced cost by using stock posters. These ready-made posters are available in any quantity and often feature the work of first-class artists and lithographers.

3. Junior Posters 1-361 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Junior posters (or junior panels), these offer a 5- by 11-foot printing area on a panel surface 6 feet high by 12 feet wide. They are typically concentrated in urban areas, where they can reach pedestrian as well as vehicular traffic.

4. Spectaculars Times Square in New York is well known for its spectaculars—giant electronic signs that incorporate movement, color, and flashy graphics to grab attention in high-traffic areas. Spectaculars are very expensive to produce and are found primarily in the world‘s largest cities.

C. Buying OOH Advertising The basic unit of sale for billboards, or posters, is 100 gross rating points daily, or a 100 showing. One rating point equals 1 percent of a particular market‘s population.

Buying 100 gross rating points does not mean the message will appear on 100 posters; it means the message will appear on as many panels as needed to provide a daily exposure theoretically equal to the market‘s total population. Actually, a showing of 100 gross rating points achieves a daily reach of about 88.1 percent of the adults in a market over a 30-day period.

A showing has historically been measured by a rudimentary equation that takes the number of people who pass by an out-of-home display as its measure of reach. This measurement is called Daily Estimated Circulation, or DEC. In 2009, the Outdoor Advertising Association of America (OAAA), now the Out of Home Advertising Association of America, and the Traffic Audit Bureau developed a new method of measuring out-of-home‘s true reach and frequency. The new rating system is called Eyes on Impressions (EOI). The net effect is twofold: (1) that outof-home is now the only ad medium that tracks viewers of ads, rather than just the potential to see ads and (2) that the frequency of out of home has been drastically reduced over a monthly period where the reach difference is negligible.

1. Location, Location, Location a. As in real estate, location is everything in outdoor advertising. Advertisers that want more saturation can increase the number of posters or purchase better locations to achieve 200 or 300 GRPs per day. Exhibit 16-3 shows billboard locations in Los Angeles, California. b. Rates vary considerably from market to market due to variations in property rentals, labor costs, and market size. As a rule of thumb, a standard billboard offers the lowest cost per thousand of any major mass medium.

2. Technology in Outdoor Advertising a. OOH companies use global positioning systems (GPSs) to give the exact location of particular boards using satellite technology. Media buyers, equipped with sophisticated software, can then integrate this information with demographic market characteristics and traffic counts to determine the best locations for their boards.

1-362 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

b. The newest entry into OOH advertising is location-based advertising.

Location-based advertising, at the broadest level, is targeting audiences within well-defined geographical boundaries with messages that are highly relevant in those areas. c. Geofencing takes this notion one step further by taking advantage of technologies such as smartphones that can be identified and communicated with via Bluetooth or other localized transmitting devices. Social media companies use geofencing to serve ads when consumers are close to advertisers.

D. Regulation of Outdoor Advertising The Highway Beautification Act of 1965 controls outdoor advertising on U.S. interstate highways and other federally subsidized highways.

Each state also regulates, administers, and enforces outdoor advertising permit programs through its department of transportation. Some states (Maine, Vermont, Hawaii, and Alaska) prohibit billboards altogether.

E. Transit Advertising Transit advertising is a category of out-of-home media that includes bus and taxicab advertising as well as posters on transit shelters, terminals, and subways.

Although transit is not considered a major medium by most advertising practitioners, standardization, better research, more statistical data, and measured circulation have made transit advertising more attractive to national advertisers.

Transit advertising is a cost-effective way for marketers to reach a large audience of people.

Transit advertising is equally popular with local advertisers.

1. Types of Transit Advertising Transit advertising targets the millions of people who use commercial transportation (buses, subways, elevated trains, commuter trains, trolleys, and airlines), plus pedestrians and car passengers, with a variety of formats: transit shelters; station, platform, and terminal posters; inside cards and outside posters on buses; and taxi exteriors. a. Transit Shelters 1) Transit shelter advertising is a relatively new out-of-home form enjoying great success.

2) It is extremely inexpensive and available in many communities that restrict billboard advertising in business or residential areas.

3) In fact, shelter advertising is sometimes the only form of outdoor advertising permitted. b. Terminal Posters 1) In many bus, subway, and commuter train stations, space is sold for one-, two-, and three sheet terminal posters.

1-363 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

IV.

2) Major train and airline terminals offer such special advertising forms as floor displays, island showcases, illuminated cards, dioramas (3-D scenes), and clocks with special lighting and moving messages. c. Inside and Outside Cards and Posters 1) The inside card is placed above the seats and luggage area in a wall rack.

2) Inside car-end posters (in bulkhead positions) are usually larger than inside cards, but sizes vary.

3) Outside posters are printed on high-grade cardboard and varnished for weather resistance.

4) Advertisers may also buy space on taxicab exteriors, generally for periods of 30 days, to display internally illuminated, two-sided posters positioned on the roofs.

2. Buying Transit Advertising The unit of purchase is a showing also known as a run or service. A full showing (or No. 100 showing) means that one card will appear in each vehicle in the system. Space may also be purchased as a half (No. 50) or quarter (No. 25) showing.

Rates are usually quoted for 30-day showings, with discounts for 3-, 6-, 9-, and 12-month contracts. a. Special Inside Buys 1) In some cities, advertisers can gain complete domination by buying the basic bus—all the inside space on a group of buses.

2) For an extra charge, pads of business reply cards or coupons (called takeones) can be affixed to interior ads for passengers to request more detailed information, send in application blanks, or receive some other benefit. b. Special Outside buys 1) Some transit companies offer bus-o-rama signs, jumbo full-color transparencies backlighted by fluorescent tubes and running the length of the bus.

2) A single advertiser may also buy a total bus—all the exterior space, including the front, rear, sides, and top.

3) New York subways have been running brand trains, which include all the subway cars in a particular corridor.

4) Each of the nine monorail trains and seven stations has a corporate sponsor, and many feature elaborate immersive advertising themes.

Exhibitive Media These exhibitive media include product packaging and trade-show booths and exhibits.

A. Product Packaging

1-364 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Because upward of 70 percent of all buying decisions are made at the point of purchase, packages play a major role in both advertising and selling. It is more than just another planned message; packaging influences the product message as well.

Packaging encompasses the physical appearance of the container and includes design, color, shape, labeling, and materials. Packaging serves marketers in four major ways: protection, preservation, information, and promotion.

Consumers have their own desires with respect to packaging (see Exhibit 16-4), so packaging design can be as important as advertising in building a product‘s brand image. Packaging establishes or reinforces the brand‘s personality at the point of sale.

Buying packaging includes two major phases: concept and production. The conceptual process involves input from five major groups: consumers, manufacturers, marketing intermediaries, consumer advocacy groups, and government agencies. The conflicting concerns of these groups strongly influence the nature and the cost of packaging (see Exhibit 16-5).

1. Environmental Issues in Packaging a. As manufacturers continue to produce environmentally safe packaging, the marketer‘s cost of materials rises. And what some consumers expect from green packaging is not necessarily what manufacturers traditionally offer or what marketing intermediaries prefer to use. b. With the public‘s growing concern for the environment, especially in international markets, recyclable tin-coated steel and aluminum packages are enjoying a resurgence in popularity.

2. Government Impact on Packaging The Food and Drug Administration (FDA), for example, and the Nutrition Labeling and Education Act of 1990 (which went into effect in 1994) imposed stricter labeling requirements for nutrition and health products.

3. Package Manufacturing a. Packages may come in many forms: wrappers, cartons, boxes, crates, cans, bottles, jars, tubes, barrels, drums, and pallets. b. The second phase of packaging, the production process, may require the use of many packaging specialists: experts in package engineering (box designers, packaging materials consultants, and specialists in equipment configuration); graphic artists (designers, production/computer artists, illustrators, and photographers); label producers (printers and label manufacturers); die-cutters for custom packages; and package warehousing companies (wholesalers of prefabricated packages and package manufacturers). c. Generally, the package‘s design should be kept simple for three reasons: Typical packaging materials (such as corrugated cardboard) cannot support high-resolution printing, intricate folding and die-cutting can be very expensive, and packaging that requires exact folding and fitting often creates 1-365 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

excessive assembly costs and leads to structural challenges that most costeffective packaging materials cannot support.

4. Knowing When a Package Should Change There are many reasons to change a package: product alteration or improvement, substitution in packaging materials, competitive pressure, environmental concerns, changes in legislation, or the need to increase brand recognition.

B. Trade-Show Booths and Exhibits Every major industry sponsors annual trade shows—exhibitions where manufacturers, dealers, and buyers get together for demonstrations and discussion.

The construction of trade-show booths and exhibits has become a major factor in sales promotion plans. When establishing an exhibit booth program, managers should consider planning, budgeting, promotion, people, and productivity.

1. Planning Planning pivots on four major areas: the budget, the image of the company or brand, the frequency of the shows, and the flexibility of booth configuration 2. Budgeting a. Trade shows are expensive, and costs have increased substantially in the last decade. b. With staffers‘ travel, living, and salary expenses added to booth costs and preshow promotion, the cost per visitor reached rises to more than $195.

3. Promotion a. To build traffic for a trade-show booth or exhibit, marketers send out personal invitations, conduct direct-mail campaigns, place ads in trade publications, issue news releases, and perform telemarketing. b. The pie chart in Exhibit 16-5 portrays how customers typically learn about the trade shows they attend.

4. People a. The company‘s representatives staffing the booth personify the kind of service the customer can expect to receive. b. The primary goal of a trade-show booth is to meet with qualified prospects face-to-face.

5. Productivity a. A company‘s trade-show effort may be wasted if prospects‘ names are not collected and organized properly. b. Each lead should be evaluated as to the prospect‘s readiness to receive another contact (A = now, B = 2 weeks, C = 6 months, D = never).

V. Supplementary Media Many promotional media are difficult to classify because they are tailored to individual needs. Such supplementary media include specialty advertising, directories and Yellow Pages, and a variety of emerging alternative media vehicles.

1-366 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

A. Specialty Advertising The Promotional Products Association International (PPAI) defines an advertising specialty as a promotional product, usually imprinted with an advertiser‘s name, message, or logo, that is distributed free as part of a marketing communication program.

Premiums, which are also promotional products; they are typically more valuable and usually bear no advertising message.

1. Business-to-Business Specialties a. In the business-to-business arena, companies use more structured specialty promotions to improve their goodwill standing over competitors. b. The dollar amount spent on each promotional item may be less important than the sponsorship itself. c. Marketers should realize that the value and nature of gifts may raise ethical issues.

B. Emerging Opportunities for OOH As traditional advertising media become more expensive and audiences become more fragmented, many advertisers seek new ways to reach their customers.

1. Cinema Advertising Advertising in movie theaters (cinema advertising) is a growing but controversial practice.

2. New Locations Consumers now regularly encounter advertising on ATM screens, at gas station pumps, in the offices of physicians and dentists, at the supermarket, or in retail and even restaurant spaces.

3. Augmented Reality Advertising a. The popular smartphone is now an augmented-reality device in a number of campaigns. b. Both Google and Facebook are at the fore of augmented reality technology.

Google introduced Google Glass in 2013. The product faced backlash over privacy concerns and was withdrawn, but was reintroduced in 2017. The device is essentially a pair of glasses that allow for interactive experiences with virtual entities in a native environment.

4. Target and Retarget Advertising Combine digital OOH with geofencing technology and suddenly OOH offers advertisers the chance to build frequency by serving outdoor travelers‘ ads in sequence.

5. Programmatic Advertising in OOH The introduction of digital OOH means the same use of computers and bidding to purchase audiences on the internet can be used to purchase them OOH. Bidders

1-367 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

can customize their buys to leverage different audiences, dayparts, weather conditions, or any of the many circumstances that might be relevant.

6. Mobile Billboards The mobile billboard is a cross between traditional billboards and transit advertising. Today in some large cities, specially designed flatbed trucks carry long billboards up and down busy thoroughfares. Local routes for mobile ads are also available on delivery trucks in major cities around the U.S. 7. Display Panels Display panels display text and graphic messages much like the big screens in sports stadiums. The signs transmit commercial messages to retail stores, where shoppers see them. The stores pay nothing for the signs and receive 25 percent of the advertising revenue VI. Chapter Summary A. Media that reach prospects outside their homes are called out-of-home media.

B. The standardized outdoor advertising industry consists of about 3,000 local and regional plant operators.

C. Transit advertising includes transit shelters; station, platform, and terminal posters; inside cards and outside posters on buses; and taxi exteriors.

D. Exhibitive media include product packaging and trade-show booths and exhibits.

E. Supplementary media include specialty advertising and emerging media like movie theaters, product placements, and ATMs. Answers to Pedagogical Features Ad Lab 16–A: How to Use Color and Type in Out-of-Home Advertising 1. Which billboard ads in this chapter use color the most effectively? Explain.

Answer Guidelines: The proper combination and use of color and text to maximize billboard readability is vital to a billboard‘s success. The Bolthouse Farms billboards featured in AdLab 16–A are great examples of the effective use of color. The bright white background with darker green text provides a good contrast of hues, which make the billboards quite easy to read, even from a distance.

2. What billboard ads have you seen that don‘t use color effectively? How can they be improved?

Answer Guidelines: Billboards need to be read and understood in seconds. The proper use of color helps the eye distinguish type, a subject from its background, and differentiate fine details. In addition, color carries an emotional message, e.g., blue = sad, purple = royalty, and more. (See Ad Lab 10–A, ―The Psychological Impact of Color.‖) The improper use of color can kill the emotional feel of the billboard.

1-368 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Portfolio Review: Out-of-Home Advertising As the oldest medium on earth, outdoor advertising benefits from its inherent nature as a ―sign‖ as well as the modern features of graphic design and technology. In fact, thanks to technology, advertisers can do things in outdoor today they couldn‘t have dreamed of just a few years ago.

Plus, no other medium is this big—commanding attention from motorists and pedestrians 24 hours a day, seven days a week at a fraction of the cost of other media. However, outdoor is limited in what it can say. For normal outdoor structures on the highway, seven words is the rule of thumb. That places an additional burden on the nonverbal (artistic) aspects of the ad, and this definitely challenges the creative muscle of every advertiser‘s ad agency.

Study the ads in this portfolio to see how big, strategic ideas get translated into outstanding outdoor or transit advertising. Then consider why the advertiser chose this particular medium.

Was outdoor or transit the right choice for this advertiser? Why? Or why not? Could the same concept be used in other media? How? Ethics, Diversity & Inclusion: Does Spillover Need Mopping Up? 1. Do you believe the goal of protecting children justifies banning advertising for legal products? Which products specifically?

Sample Answer: Yes. If images and language can be upsetting to adults, their impact on children is more intense. Children do not have a time-honed framework for evaluating and categorizing information that is often considered ―adult.‖ Children need protection from certain information and images until their minds are ready to deal realistically and practically with what is shown.

2. Should ads in spillover media be censored for sexually explicit content? If so, who should the censors be, and what specifically should they prohibit?

We are a nation governed by laws. In addition, the law judges some segments of the population (children, the mentally ill, and convicts) to have fewer freedoms than other segments. It‘s understood that to grow, people will make mistakes. Thus, children are allowed to make mistakes without being judged as harshly. Similarly, they are denied certain freedoms until they are prepared to handle them. Elected officials and their representatives (e.g., police officers) enforce laws that may censor some activities. Thus, government is the proper censor, and there is ample legal precedent for denying children access to material that is intended for adults.

3. What alternatives might be available to fight teenage smoking, drinking, and sexual promiscuity besides banning advertising for legal adult products?

Although having a proper home life is the greatest factor in curtailing self-destructive behavior, education about the risks involved in smoking, drinking, and sexual promiscuity can also help. Part of that education is better control of what children experience, which includes advertising.

1-369 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

 My IMC Campaign 16: Using Out-of-Home, Exhibitive, and Supplementary Media A. Go to Google.com and do an image search for the keyword phrase ―creative outdoor advertising‖ and you will most likely see some of the most outrageous and ingenious advertisements in the world.

B. Planning for OOH can be challenging and fun. Marshall McLuhan, the author of Understanding Media: The Extensions of Man, coined the phrase ―the medium is the message,‖ meaning that the medium embeds itself in the message, creating a relationship by which the medium influences how the message is interpreted.

C. The major limitations to OOH center on the fact that because you are dealing with physical real estate your exposure is limited to the geographical location of that real estate.

D. As you come up with your IMC campaigns, think of how you might be able to represent the message in a clever way in OOH. But also remember that to build your plan you will have to incorporate these factors:  What types of OOH make the most sense for my brand? If the medium is the message, what does it say to my consumer if I am advertising on billboards versus bus shelters versus inside bars?  In which cities will I be advertising?  How does this fit with the other media that I am choosing?  Am I getting enough reach, or is OOH going to be my main reach driver?

E. Another thing to think about is how the digital revolution is affecting OOH advertising.

F. If you are planning to have a TV spot for your campaign, don‘t forget to leverage all the different ways that you can syndicate that spot. The 30-second spot has been set free from the lonely confines of the TV set.

G. Last, don‘t limit yourself to traditional ways of thinking. Media can be derived from a number of things.  People behind the Ads: Cliff Marks, CineMedia  The man behind the “premovie” showings is Clifford (“Cliff”) Marks, president of sales and marketing at National CineMedia (NCM).  Using agreements with large theater chains such as the Regal Entertainment Group, Marks and his company introduced The 2wenty, a digitally transmitted entertainment and advertising pre-feature program. The 2wenty featured both traditional (30-second) and longer-format ads that placed a premium on entertainment value.  The successor to the 2wenty is FirstLook. FirstLook takes pre-movie advertising to an even higher level, providing advertisers with bundled offerings of on-screen and lobby marketing products that provide multiple ways to interact with theater goers. Using digital transmission, NCM can target advertising and content to specific auditoriums and lobby areas.

1-370 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.





Before creating these innovative cinema programs, Marks served as president of sales and marketing with Regal Entertainment Group’s media subsidiary, Regal CineMedia Corporation.

Before joining NCM Marks was a 14-year veteran of ESPN/ABC Sports, where as senior vice president he oversaw its $2 billion sales organization. Working with top national advertisers such as Anheuser Busch, Circuit City, MCI, Toyota, AT&T, Pizza Hut, Taco Bell, and KFC, Marks was instrumental in developing vertically integrated advertising packages for clients across multiple platforms including ABC Sports programming, ESPN, ESPN2, ESPN Classic, ESPNews, ESPN. com, ESPN Magazine, ESPN radio, and ESPNZone restaurants.

Review Questions 1. Why is OOH advertising sometimes referred to as the last mass medium?

Outdoor advertising is the one medium that carries a message 24 hours a day, seven days a week without interruption. It‘s never turned off, zipped, zapped, put aside, or left unopened.

In addition, it‘s big. For that reason, some experts now refer to billboards as the last mass medium.

2. Which advertising objectives are OOH media most suitable for?

Outdoor media are most suitable for reach, frequency, and impact of a simple, dogmatic message at low cost.

3. Is OOH an effective advertising medium for a local political candidate? Why? OOH advertising can prove extremely beneficial to national and local politicians. Often, local politicians have smaller budgets. Billboards are a cost-efficient way for them to affordably get their message out in the local community, especially when compared to more expensive media outlets such as television. Billboards and other forms of OOH media also help draw attention from the press, particularly if they are innovative and creative, providing politicians with earned media opportunities. Additionally, the ability to include website URLs and QR codes on billboards to drive traffic to politicians‘ websites makes them an attractive platform for fundraising efforts typically undertaken by local politicians.

4. How do gross rating points for outdoor media differ from GRPs for electronic media?

The major difference is that billboard GRPs reflect a daily message weight, whereas in TV, the GRPs reflect coverage for the entire period the commercials run.

Another difference is that billboard GRPs are based on an area‘s population while TV GRPs are based on TV households in an area.

5. What are the principal categories of transit advertising?

Transit advertising is a category of out-of-home media that includes bus and taxicab advertising, as well as posters on transit shelters, terminals, and subways.

6. What is a brand train and what advantages does it offer over less expensive forms of transit advertising?

1-371 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

A brand train is an advertiser‘s purchase of all of the cars that run in a particular corridor.

Clothing designer Donna Karan‘s DKNY line, for example, bought a 10-car brand train that ran under Lexington Avenue on Manhattan‘s East Side. It stopped right under Bloomingdale‘s, where DKNY had opened its ―supershop.‖ Advertisers like it because it gives them exclusivity.

7. Which are the exhibitive media and why are they called that?

The exhibitive media include product packaging and trade-show booths and exhibits. They are called exhibitive media because they are designed to display or show off the product—to bring customers eyeball to eyeball with the product—often at the point of sale or close to it.

8. What is the principal benefit of trade shows and exhibitions?

Every major industry sponsors annual trade shows—exhibitions where manufacturers, dealers, and buyers get together for demonstrations and discussion. Trade shows are also very important for global marketers, because they may be the only place where an advertiser can meet the company‘s major international prospects at one time.

9. How does specialty advertising differ from premiums? How could a local computer store use these media, and which would be better for the store to use?

Specialty advertising is a promotional product usually imprinted with an advertiser‘s name, message, or logo, which is distributed free as part of a marketing communications program.

Premiums are also promotional products but they are typically more valuable and usually bear no advertising message; recipients must buy a product, send in a coupon, witness a demonstration, or perform some other action advantageous to the advertiser.

A specialty advertising product is always given free as a goodwill item. Some recipients may keep a specialty item for years, so it serves as a continuous, friendly reminder of the advertiser‘s business. Because the cost of goodwill items is high, perhaps offering a premium of a package of blank CD-RWs with the purchase of a computer would be the best media choice for the local computer store.

The Advertising Experience 1. Using Billboard Advertising Upshaw Books, the largest independent bookstore in the area, wants to advertise on billboards along the main commuter route. Create a series of three standard billboards that would grab commuters‘ attention and motivate them to visit the store.

2. Outdoor Advertising As you have learned in this chapter, out-of-home advertising and communication has been a mainstay in consumers‘ lives for quite some time. The outdoor advertising industry certainly makes up the largest portion of such advertising.

1-372 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Although often overlooked in advertising and media decision-making, outdoor can have a powerful effect as a supplemental medium to broader print and/or broadcast campaigns. To find out more about this side of the advertising business, visit five of the Websites for the outdoor advertising organizations listed below and answer the questions that follow.  Burkhart Advertising: www.burkhartadv.com  Outfront Media: www.outfrontmedia.com  Clear Channel Outdoor: www.clearchanneloutdoor.com  Kinetic: www.kineticww.com  Lamar Outdoor Advertising: www.lamar.com  Out of Home Advertising Association of America, Inc. (OAAA): www.oaaa.org  SignCraft magazine: www.signcraft.com  SignIndustry.com: www.signindustry.com  Wilkins Media Company: www.wilkinsmedia.com a. What organization sponsors the site? Who is (are) the intended audience(s)? b. What is the purpose of the site? Does it succeed? Why? c. What services (if any) does the organization provide advertisers? d. How important do you feel this organization is to outdoor advertising today and in the future? Why? Sample Answer: Wilkins Media Company a. The Wilkins Media Company site is intended for current and potential clients. The site is also a great resource for anyone interested in learning about the out-of-home industry. b. The Wilkins Media Company site‘s purpose is to detail the operation of the network, including rates, planning/buying services and information, as well as network and company news. The site also houses in-depth descriptions and examples of the various types of out-of-home media, including the elements of good outdoor creative and the requirements/processes required for out-of-home media production. c. The company provides advertisers with out-of-home media planning, buying, production, and placement services for national and local advertisers, alike. The services can be summarized as follows: ▫ Proposals ▫ Negotiations ▫ Contracts ▫ Production ▫ Traffic ▫ Consolidated Billing d. The Wilkins Media Company, and companies like it, are very important to the out-ofhome industry and advertiser. Wilkins not only assists with the myriad details of planning, producing, and placing outdoor media, but also furthers the industry with its educational and consultative efforts.

1-373 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

3. Specialty Advertising Promotional specialty items are, perhaps, one of the oldest forms of media. Though consumers do not always think of these items as ―advertising,‖ they most certainly are— being clearly composed, nonpersonal communications by an identified sponsor. Many organizations and firms are involved in specialty advertising, and the industry is still growing today. Peruse some of the websites below and learn more about the products, processes, and promotional power of specialty ad items. Then answer the questions that follow.  BCG Creations: www.bcgcreations.com  Wearables: www.wearables.com  Cowan Imaging Group: www.cowan.ca  Image Pointe : www.imagepointe.com  PromoMart: www.promomart.com  Promotional Products Association International (PPAI): www.ppai.org  PromosOnline: www.promosonline.com  S-N-T Graphics: www.sntgraphics.com a. What is the focus of the organization sponsoring the site? b. Who is the intended audience of the site? c. What services (if any) does the organization offer? d. What is your overall impression of the organization and its work? Explain.

Sample Answer: Image Pointe a. The focus of Image Pointe‘s business is solely on advertising specialties, from T-shirts and screen printing to engraved specialty ad items. b. As a somewhat small, Midwestern firm, the intended audience of the site is current and potential customers. The ―no-frills‖ site‘s main purpose is to showcase the firm‘s various products and services, provide detailed information via catalogues on these items, and supply the necessary pricing and ordering information. c. The company offers a range of specialty advertising services, including both screen printing/embroidery and imprinting/engraving. In general, the company provides: ▫ Specialized garments (hats, t-shirts, etc.) ▫ Promotional items (e.g., mugs, pens, key chains) ▫ Industry-specific items (e.g. for schools, hospitals, or agriculture) d. For a mid-sized company, Image Pointe is doing quite well. Its products meet the needs of a broad market of specialty-item consumers. Overall, the company is smart to post the website and engage in online commerce.

4. Some companies are known for their beautiful packaging. Apple comes to mind. Identify three other brands that enhance the value of their brands by using exceptionally designed packages.

Answer Guidelines:

1-374 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Answers could discuss the factors designers consider when judging the attractiveness of packaging. The three considerations discussed in the text include the package‘s stand-out appeal, how it communicates verbally and nonverbally, and the prestige or image desired.

Answers could also discuss what aspects of the packaging might be attractive to the consumers the brand is attempting to reach with the product.

5. If, at the time of the launch of the Corona campaign featured at the start of the chapter, it had decided that a transit medium would have better suited the advertiser's objectives, how would the campaign have been adjusted to meet the needs of this new format?

Answer Guidelines: Answers could discuss the various buying and design opportunities available in transit advertising. Answers could also discuss the considerations for utilizing transit advertising discussed in My IMC Campaign 16 including: what types of transit make sense for the brand, what cities the Corona campaign would be being advertised in (would it be London as discussed in the opening vignette or other cities with fewer transit opportunities?), how transit fits with the other media being used, and the potential for transit to get the desired reach.

Connect Activities Title

Assignment Type

Topic

The Use of Outof-Home Advertising in IMC Transit and Other Out-ofHome Advertising Concepts

Case Analysis

Outdoor Advertising

Click and Drag

Outdoor Advertising

Learning AACSB Bloom's Objective Accreditation Taxonomy Tagging 16-02; 16-03; Knowledge Remember; 16-04 Application; Apply; Analytical Analyze Thinking 16-05 Reflective Remember Thinking

The Use of Out-of-Home Advertising in IMC Activity Summary: This activity provides students with a case about a store that sells beach items such as surfboards, sunglasses, and other gear in a Florida beach town. The shop wishes to utilize out-of-home media to attract tourists. Students are tasked with answering questions relating to buying decisions of various out-of-home media including calculating CPM, the

1-375 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

various types of size opportunities available for OOH media, the use of GPS for tracking billboard location/showings, and legislation surrounding OOH advertising.

Follow-Up Class Discussion: Ask students to discuss what out-of-home decisions they would have made for the Surf City shop and how these decisions would support Surf City‘s awareness objectives.

Transit and Other Out-of-Home Advertising Concepts Activity Summary: This activity provides students with descriptions of transit and other out-ofhome advertising buying options and tasks them with matching the description to the type of OOH opportunity described.

Follow-Up Class Discussion: Task students with finding an interesting example of transit advertising. Ask them to describe what they feel the campaign‘s objective was. What type of transit ad was it? Can they find other IMC efforts from the same campaign? How do they feel the use of this transit ad complemented other IMC efforts and helped the brand reach its objective?

CHAPTER SEVENTEEN RELATIONSHIP BUILDING: DIRECT MARKETING, PERSONAL SELLING, AND SALES PROMOTION This chapter emphasizes the importance of relationships in today‘s high-tech, overcommunicated world and to demonstrate how marketing communications can be integrated with advertising to manage an organization‘s relations with its stakeholders. Relationship marketing and IMC are two of the most important trends in marketing today. Direct marketing, personal selling, and sales promotion play different but often overlapping roles in IMC programs. Each offers many opportunities but also has limitations.

Learning Objectives After studying this chapter, your students will be able to: LO17-1 Define direct marketing and explain its role in IMC. LO17-2 Distinguish personal selling from other forms of IMC. LO17-3 List the activities that constitute sales promotion, including push and pull tactics, and explain their roles in IMC. What’s New? 1-376 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

A new People behind the Ads features an interview with Disney executive Dayana Falcon. The opener, which has long focused on Geico, now features the sponsorship opportunities available at Disney theme parks. The Ethics, Diversity & Inclusion box focuses on advertising issues related to marketing to elderly Americans.

Teaching Tips and Strategies In this chapter, students will be exposed to how IMC is changing advertisers‘ perspectives.

Using the Chapter Opening Vignette in the Classroom Nearly every major event, sports team, attraction, and anything else you can think of are sponsored by big brands. Some marketing experts even suggest that sponsorship is one of the fastest growing forms of marketing in the United States. Learn how sponsorship impacts or infiltrates nearly every facet and corner of Disney World. Ask students to think about their favorite sports team, video gaming event, concert, or event. Who are the major sponsors? How is their branded content incorporated into the experience of the event?

1-377 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Other Tips and Strategies Ask students to describe direct marketing, sales promotion, and personal selling campaigns that have been effective with them, that is, that have induced a purchase or a repurchase, or have created brand loyalty. For personal selling experiences, you might suggest buying a car, ordering a high school ring, or shopping for makeup and clothes. In thinking about these instances, students may actually reflect on negative as well as positive experiences!

For direct marketing, ask students to think about ―junk mail.‖ Do they receive a lot of it? Ask students to think about why they get so much and about how companies get their names and addresses in the first place. Many will be surprised to know that their university probably sells lists of students to direct marketers.

With respect to sales promotion, ask students to consider Ben & Jerry‘s annual free cone day.

Usually the day corresponds with long lines of customers looking for free ice cream outside of each Ben & Jerry‘s store. You might ask students how such a promotion might create interest in and awareness of the brand beyond the audience of people standing in line.

Web Resources for Enhancing Your Lectures Wikipedia: Direct marketing Data Marketing & Analytics (DMA) Personal Selling Tutorial Sales Promotion Tutorial

http://en.wikipedia.org/wiki/Direct_marketing https://thedma.org https://www.knowthis.com/personal-selling/selling-intro https://www.knowthis.com/sales-promotion/salespromotion-intro

Lecture Notes on Sales Promotion http://www.udel.edu/alex/chapt20.html from former U Delaware professor Alex Brown Pedagogical Features Ethics, Diversity & Inclusion: Marketing to Seniors  My IMC Campaign 17–A: Developing a Plans Book Ad Lab 17–A: Developing Effective Direct-Mail Packages Ad Lab 17–B: Applying Push–Pull Strategies to Sales Promotion  People behind the Ads: Dayana Falcon, Sales Marketing Manager, Disney Advertising 1-378 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Lecture Outline II.

III.

Vignette: Disney How is sponsorship utilized by one of the biggest branded attractions in the world— Disney World? From Babybel Cheese‘s sponsorship of Toy Story Land to countries sponsoring their nation in Disney‘s EPCOT, sponsorship fuels Disney World. In a society obsessed with digital and social media marketing, some might feel that sponsorship is not as profitable or effective as other forms of advertising. However, this is not the case, and the story of Disney provides a perfect example of the efficacy of sponsorship.

Understanding Direct Marketing There is a lot of confusion surrounding the term direct marketing, even among the experts.

The Direct Marketing Association (DMA) defines direct marketing as ―an interactive process of addressable communication that uses one or more advertising media to effect, at any location, a measurable sale, lead, retail purchase or charitable donation, with this activity analyzed on a database for the development of ongoing mutually beneficial relationships between marketers and customers, prospects or donors.‖ From this definition a virtually synonymous term has emerged: database marketing.

A good database enables marketers to target, segment, and grade customers.

First and foremost, direct marketing is a system of marketing and it is interactive, meaning buyers and sellers exchange information with each other directly.

A second shared part of the definition is the concept of one or more advertising media.

Part of the confusion with the name is its similarity to direct mail. But direct mail just one of the many media that direct marketers use.

The third key point of the direct marketing definition is a measurable response. In fact, the kind of advertising direct marketers use is called direct-response (or action) advertising.

Finally, the definition notes that the response can be at any location. In other words, direct marketing is not restricted to mail order or catalog sales.

A. The Role of Direct Marketing in IMC GEICO, for instance, uses TV advertising as one of its linkage media—media that help prospects and customers link up with a company—to inform prospects how to inquire about its products.

1. The Evolution of Direct Marketing a. Direct marketing is the oldest marketing method, and today it is growing incredibly fast, propelled by the major social and technological changes. b. The expanding use of credit cards has revolutionized the way consumers buy goods and services.

1-379 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

c. Working with direct-response specialists, marketers are fueling this growth by pouring money into direct marketing campaigns. Exhibit 17-1 shows the largest direct-response agencies in the United States. d. Globally, certain challenges in foreign markets have limited the growth of direct marketing efforts. Foreign markets have a wide variety of laws and regulations, and some focus to a much greater extent (compared with the U.S.) on privacy.

2. The Impact of Databases on Direct Marketing a. Computer technology enables marketers to compile and analyze important customer information in unprecedented ways. b. From this information, Pitney Bowes created a customer lifetime value (LTV) model based on historical and potential share of business. c. Computing and ranking the lifetime value of all of its 1.2 million customers showed that more than two-thirds of the customer base value resided in fewer than 10 percent of the customers. d. This analysis enabled Pitney Bowes to develop a distinct direct marketing strategy for both its best and its worst customers. It began a sophisticated loyalty program for its best customers and a retention program for its problem accounts. e. The database is the key to direct marketing success, especially in an IMC program. f. The database also lets the company measure the efficiency of its directresponse advertising efforts to see, for instance, which radio or TV commercials, or which mailing lists, perform the best. g. Data management is the process of gathering, consolidating, updating, and enhancing the information about customers and prospects that resides in the database. h. Most important, the database gives marketers data access, enabling them to manipulate, analyze, and rank all the information to make better marketing decisions. i. In the same vein, direct marketing experts Stone and Jacobs use an RFM formula (recency, frequency, monetary) to identify the best customers—the ones most likely to buy again (see Exhibit 17-2). j. Three types of data are typically available for purchase: demographics, lifestyle (leisure interests), and behavioristics (purchase habits). k. With a database, companies can choose the prospects they can serve most effectively and profitably—the purpose of all marketing. l. By responding, the prospect self-selects, giving the marketer permission to begin a relationship.

1-380 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

m. The direct marketing database, then, becomes the company‘s primary tool to initiate, build, cultivate, and measure the effectiveness of its loyalty efforts. n. Direct marketing offers accountability. Marketers can count the responses and determine the cost per response. They can also judge the effectiveness of the medium they‘re using and test different creative executions. o. Direct marketing offers convenience to time-sensitive consumers, and it offers precision and flexibility to cost-sensitive marketers. p. Finally, unlike the public mass media, direct-response media can be more private.

3. Drawbacks to Direct Marketing a. Direct marketing efforts often have to stand on their own without the content support of the media that advertising enjoys. b. Direct marketing also suffers from clutter. c. Using IMC theory, they integrate all their marketing communications and focus on building the relationship value of their brands.

B. Types of Direct Marketing Activities All direct marketers face two basic strategy decisions: the extent to which they will use direct sales and the extent to which they will use direct-response advertising.

1. Direct Sales In a direct-sales strategy, marketers‘ representatives sell to customers directly, either at home or at work, rather than through a retail establishment or some other intermediary. Direct sales feature personal (face-to-face) selling or telemarketing. a. Personal Direct Selling 1) Professors Robert Peterson and Thomas Wotruba define direct selling as face-to-face selling away from a fixed retail location.

2) Personal selling takes two main forms: person-to-person and group sales.

3) In some network marketing organizations, such as Amway, Nikken, and Shaklee, the direct salespeople are both distributors (sellers) and end users.

4) The Peterson–Wotruba definition of direct selling could also apply to business-to-business marketing, since it typically occurs ―away from a fixed retail location.‖ However, the common term for this is simply personal selling. b. Telemarketing 1) Telemarketing includes selling and prospecting by telephone, answering phone inquiries, and providing sales-related services to callers.

2) Telemarketing costs a lot less money than personal selling.

1-381 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

3) Telemarketing is the major source of income for some companies and organizations, such as nonprofit and charitable causes, political candidates, and home-study courses, however, telemarketing has been in decline in recent years. This is in part a shift in consumers from landlines to mobile phones.

4) People have come to accept the idea of shopping by phone.

5) As an IMC medium, telemarketing is the next best thing to a face-to-face, personal sales call.

6) When combined with other direct-response media, telemarketing becomes even more effective.

2. Direct-Response Advertising Advertising that asks the reader, viewer, or listener to provide feedback to the source is called direct-response advertising. a. Direct Mail: The Addressable Medium All forms of advertising sent directly to prospects through a government, private, or electronic mail delivery service are called direct-mail (action) advertising. b. Types of Direct Mail 1) Direct mail comes in a variety of formats, from handwritten postcards to dimensional mailings like ShipShapes.

2) Sales letters, the most common direct-mail format, are often mailed with brochures, price lists, or reply cards and envelopes.

3) Postcards are used to announce sales, offer discounts, or generate customer traffic.

4) To encourage response, some advertisers use business reply mail so the recipient can respond without paying postage.

5) Folders and brochures are usually printed in multiple colors with photos or other illustrations on good paper stock that reproduces printed images well.

6) Broadsides are larger than folders and are sometimes used as window displays or wall posters in stores. They fold to a compact size to fit in a mailbag.

7) Self-mailers are any form of direct mail that can travel without an envelope.

8) Statement stuffers are ads enclosed in monthly customer statements from department stores, banks, oil companies, and the like.

9) House organs are publications produced by associations or business organizations—for example, stockholder reports, newsletters, consumer magazines, and dealer publications.

1-382 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

c. Using Direct Mail in the Media Mix 1) Direct mail is an efficient, effective, and economical medium for sales and business promotion.

2) Direct mail has two main drawbacks: cost and the ―junk mail‖ image, both of which are almost inescapable. No other medium (except personal selling and consumer targeting on the internet) has such a high cost per thousand. d. Buying Direct Mail 1) Direct mail has three basic costs: list acquisition, creative production, and distribution.

2) Direct-mail advertisers use three types of lists: house, mail-response, and compiled.

3) The company‘s relational database of current, recent, and long-past customers as well as future prospects comprises the house list for directmail programs.

4) Mail-response lists are the house lists of other direct-mail advertisers, and they can be rented with a wide variety of demographic breakdowns.

5) Compiled lists, which are lists purchased from list vendors, typically offer the lowest response rate, so experts suggest using numerous sources, merging them on the computer with mail-response and house lists, and then purging them of duplicate names.

6) Some list owners pay a list broker a commission (usually 20%) to handle the rental details.

7) Lists can be brokered or exchanged with list houses or other noncompetitive companies. And they can be tailored to reflect customer location (zip code); demographics such as age, income, and credit card ownership; or psychographic characteristics such as personality and lifestyle.

8) The Direct Mail.com list contains detailed records that include hundreds of classifications (see Exhibit 17-3).

9) So mailing lists must be continually updated (cleaned) to be sure they‘re current and correct. Marketers can also test the validity and accuracy of a given list.

10) They rent or buy every nth name and send a mailer to that person. If the results are favorable, they purchase additional names, usually in lots of 1,000.

11) Remaining production and handling tasks can be done by a local letter shop (or mailing house), or the company can do them internally.

1-383 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

III.

e. Catalogs 1) Catalogs are reference books that list, describe, and picture the products by a manufacturer, wholesaler, or retailer.

2) Catalogs remain big business. As of 2017, it estimates suggest catalogs return roughly $3 for every $1 spent. The top 10 catalog companies did over $92.2 billion in business in 2005. f. Direct-Response Print Advertising Newspaper ads and inserts featuring coupons or listing toll-free phone numbers can be very effective at stimulating customer responses. Today, the same is true with magazines. g. Direct-Response Broadcast Advertising 1) Direct marketers‘ use of TV and radio has increased dramatically in recent years.

2) As Exhibit 17-4 shows, more people are watching infomercials and buying the advertised products. In fact, one survey found that 60 percent of infomercial purchasers preferred this type of shopping to buying items in a store. h. Direct-Response Digital Advertising 1) Direct-response advertising represents the vast majority of online advertising efforts.

2) Using e-mail to distribute marketing messages remains popular because of its low cost and effectiveness.

3) Online direct response includes display, or banner, ads and search ads.

Social media sites are increasingly featuring ads that allow an immediate response.

4) Mobile is another popular direct-response medium. Mobile includes SMS (short message service or text ads), MMS (multimedia message service, or text plus images, audio, or video), mobile applications (better known as apps), QR (or quick-response) bar codes, and mobile banner ads.

Understanding Personal Selling For our purposes we define personal selling as the interpersonal communication process by which a seller ascertains and then satisfies the needs of a buyer, to the mutual, longterm benefit of both parties.

In an IMC program, the objective of personal selling is to build a relationship, a partnership, that will provide long-term benefits to both buyer and seller (a win–win situation).

The major part is problem solving.

A. Types of Personal Selling 1. Everyone sells, at one time or another.

2. As a business process and a profession, though, personal selling is something else.

1-384

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

3. Because marketing messages are designed to support and reinforce a company‘s sales efforts, marketers (whether in the company or at an agency) have to understand the selling environment their companies or clients deal in.

B. Advantages of Personal Selling 1. Nothing is as persuasive as personal communication.

2. A skilled salesperson can observe a prospect‘s body language and read between the lines to detect what‘s troubling the customer.

3. The rep can ask questions and provide answers.

4. One of the major jobs of personal selling is to gain distribution for new products—a task no other communication tool can do as well.

C. Drawbacks of Personal Selling 1. Personal selling is labor intensive, making it the most costly way to communicate with prospects.

2. This is why one important role of IMC is to reduce the cost of sales by communicating as much relevant information as possible about the company and its products to prospects and customers before the salesperson even calls.

3. Another drawback is the poor reputation of personal selling with many people.

D. The Role of Personal Selling in IMC Salespeople are the company‘s communicators. They are the human medium. In fact, to the customer who doesn‘t know anybody else at the company, the salesperson doesn‘t just represent the firm; he or she is the firm.

1. Gathering Information a. Sales reps often serve as the eyes and ears of the company. b. Generally, information gathering by the sales force relates to three areas: prospecting; determining customer wants, needs, and abilities; and monitoring the competition.

2. Providing Information a. Salespeople also impart information. b. In fact, the stereotype (both negative and positive) of a good salesperson is someone who is a good talker, articulate and persuasive. c. Personal selling incorporates all three legs of the IMC triangle, the ―say → do → confirm,‖ because what the rep says and does will either confirm or contradict the company‘s other messages.

3. Fulfilling Orders a. An important part of personal selling is following up after the sale, making sure the goods or services are delivered in a timely fashion, and seeing to it that the customer is completely satisfied. b. This is a combination of the ―do‖ and ―confirm‖ steps, and it‘s critical to continued relationship building.

1-385 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

IV.

c. Every employee, including those in the warehouse, needs to understand the impact of unplanned product messages.

4. Building Relationships a. A company‘s sales staff should be the ultimate relationship marketers. b. Salespeople build relationships by paying attention to three simple things: keeping commitments, servicing their accounts, and solving problems.

Understanding Sales Promotion Sales promotion is a direct inducement that offers extra incentives anywhere along the marketing route to enhance or accelerate the product‘s movement from producer to consumer. Within this definition, there are three important elements to consider. Sales promotion: 1) May be used anywhere in the marketing channel: from manufacturer to wholesaler, wholesaler to dealer, dealer to customer, or manufacturer to customer.

2) Normally involves a direct inducement (such as money, prizes, extra products, gifts, or specialized information) that provides an incentive to buy now or buy more, visit a store, request literature, display a product, or take some other action.

3) Is designed to change the timing of a purchase or to shift inventory to others in the channel.

A. The Role of Sales Promotion in IMC 1. Effective sales promotion accomplishes a number of things. First of all, it adds tangible, immediate added value to the brand. This is why we refer to sales promotion as the value-added tool.

2. Second, by adding immediate value, sales promotion maximizes sales volume. A short-term price cut or rebate, for instance, may be very effective at boosting sales.

3. While advertising helps develop and reinforce a quality, differentiated brand reputation, and build long-term market value, sales promotion helps build market volume.

4. When all brands appear to be equal, sales promotion can be more effective than advertising in motivating customers to try a new brand or to select one brand over another.

5. Another drawback of sales promotion is its high cost.

6. Overly aggressive sales promotion or advertising can draw competitors into a price war, which leads to reduced sales and profits for everyone.

B. Sales Promotion Strategies and Tactics Push strategies are primarily designed to secure the cooperation of retailers, gain shelf space, and protect the product against competitors.

Trade promotions—sales promotions aimed at members of the distribution channel—are one of the principal tactics marketers use to push products through the distribution pipeline and gain shelf space.

1-386

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Marketers may also use trade advertising (advertising in publications read by members of the trade) as a push tactic.

Pull strategies, on the other hand, are designed to attract customers and increase demand for the product (see Exhibit 17-5).

Consumer advertising and consumer sales promotions are examples of pull strategies because they are designed to induce consumers to seek out or ask for the product, in effect pulling the product through the pipeline.

1. Giving Brands a Push with Trade Promotions Trade concentration—more products going through fewer retailers—gives greater control to the retailers and less to the manufacturers. a. Allowances and Trade Deals 1) In response to the glut of new products, some retailers charge manufacturers slotting allowances—fees ranging from $15,000 to $40,000 for the privilege of obtaining shelf or floor space for a new product.

2) Manufacturers make trade deals with retailers by offering short-term discounts or other dollar inducements.

3) With forward buying, a retailer stocks up on a product when it is on discount and buys smaller amounts when it sells at list price.

4) Diverting means using the promotional discount to purchase large quantities of an item in one region, then shipping portions of the buy to areas where the discount isn‘t offered.

5) Retailers often charge manufacturers display allowances—fees assessed in exchange for featuring an item prominently on end caps or displays.

6) When introducing a new product, manufacturers sometimes offer retailers a buyback allowance for the old product that hasn‘t sold.

7) Manufacturers often offer advertising allowances as either a percentage of gross purchases or a flat fee. b. Co-op Advertising and Advertising Materials 1) With cooperative (co-op) advertising, national manufacturers reimburse dealers for advertising the manufacturer‘s products or logo.

2) Unlike advertising allowances, co-op programs typically require the dealer to submit invoices and proof of the advertising (tearsheets from the newspaper or affidavits of performance from radio or TV stations). c. Other Push Strategies 1) Retail salespeople are often encouraged to push the sale of particular products. One inducement is called push money (PM), or spiffs.

2) Most major manufacturers hold company conventions and dealer meetings to introduce new products, announce sales promotion programs, or show new advertising campaigns.

1-387 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

2. Using Consumer Promotions to Pull Brands Through Common consumer sales promotions include point-of-purchase materials, coupons, electronic coupons and convenience cards, cents-off promotions, refunds, rebates, premiums, sampling, combination offers, contests, and sweepstakes. A successful IMC campaign may integrate several of these techniques along with media advertising, product publicity, and direct marketing. a. Point-of-Purchase (P-O-P) Materials 1) Walk into any store and notice the number of display materials and advertising-like devices that are designed to build traffic, exhibit and advertise the product, and promote impulse buying. Collectively, these are all referred to as point-of-purchase (P-O-P) materials.

2) P-O-P works best when used with other forms of IMC. 3) In one poll, 56 percent of mass-merchandise shoppers and 62 percent of grocery shoppers said they noticed P-O-P materials.

4) P-O-P materials may also include window displays, counter displays, floor and wall racks to hold the merchandise, streamers, and posters.

5) The trend toward self-service retailing has increased the importance of PO-P materials.

6) The proliferation of P-O-P displays has led retailers to be more discriminating in what they actually use.

7) The emphasis on P-O-P has led to a variety of new approaches, including ads on shopping carts, ―talking‖ antacid boxes, beverage jingles activated when in-store refrigerator doors are opened, and interactive computers for selecting everything from shoe styles to floor coverings. b. Coupons 1) A coupon is a certificate with a stated value presented to the retail store for a price reduction on a specified item.

2) Most reach consumers through colorful preprinted newspaper ads called freestanding inserts (FSIs). c. Digital Coupons and Convenience Cards 1) High-tech digital coupons work like paper coupons in that they entitle the shopper to a discount, but their method of distribution is entirely different.

2) Interactive touch-screen videos at the point of purchase generate instantprint discounts, rebates, and offers to try new brands. Digital coupons are common in the nation‘s supermarkets.

3) Multipoints is an interactive system that lets customers collect points for visiting stores or watching commercials on TV.

1-388 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

d. Cents-Off Promotions, Refunds, and Rebates 1) Cents-off promotions are short-term reductions in price of a product in the form of cents-off packages, one-cent sales, free offers, or box-top refunds.

2) Some companies offer refunds in the form of cash or coupons that can be applied to future purchases of the product. To obtain the refund, the consumer must supply proof of purchase, such as three box tops.

3) Rebates are larger cash refunds on items from cars to household appliances. e. Premiums 1) A premium is an item offered free or at a bargain price to encourage the consumer to buy an advertised product.

2) Premiums affect purchase behavior the same way as rebates but tend to be more effective at getting consumers to buy a product they don‘t really need (see Exhibit 17-6).

3) A premium should have strong appeal and value and should be useful or unusual. It may be included in the product‘s package (in-pack premium), on the package (on-pack premium), mailed free or for a nominal sum on receipt of proof of purchase (box top or label), or given with the product at the time of purchase.

4) A self-liquidating premium is when the consumer pays enough that the seller breaks even but doesn‘t make a profit. A variation is the continuity premium, given weekly to customers who frequent the same store. f. Sampling 1) Sampling is the most costly of all sales promotions.

2) In polybagging, samples are delivered in plastic bags with the daily newspaper or a monthly magazine.

3) In-store sampling is very popular. Most in-store sampling programs are tied to a coupon campaign. g. Combination Offers Food and drug marketers use combination offers, such as a razor and a package of blades or a toothbrush with a tube of toothpaste, at a reduced price for the two. h. Contests and Sweepstakes 1) A contest offers prizes based on entrants‘ skill.

2) A sweepstakes offers prizes based on a chance drawing of entrants‘ names.

3) A game has the chance element of a sweepstakes but is conducted over a longer time (like local bingo-type games designed to build store traffic).

1-389 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

V.

4) Contests and sweepstakes encourage consumption of the product by creating consumer involvement.

5) Contests and sweepstakes must be promoted and advertised to be successful, and this can be expensive. And sales promotions need dealer support.

Chapter Summary A. The key to building brand equity in the 21st century is to develop interdependent, mutually satisfying relationships with customers and other stakeholders.

B. As part of this process, it is important to understand how to integrate the various tools of marketing communications.

C. In direct marketing, the marketer builds and maintains a database of customers and prospects and uses anything from personal contact to mass media to communicate with them directly in the effort to generate a response, a transaction, or a visit to a retail location.

D. The database is the key to direct marketing success, especially in an IMC program.

E. Direct marketing is a rapidly growing industry, but it still suffers from problems of cost, clutter, and image.

F. Direct marketers use a variety of activities, from direct sales (personal selling and telemarketing) to direct-response advertising.

G. Direct mail has historically been the most expensive major medium on a cost-perexposure basis, it has also been effective in terms of tangible results.

H. One of the great features of direct mail is that it can increase the effectiveness of ads in other media.

I. The two most important things that affect direct-mail success are the mailing list and the creativity used.

J. Personal selling is actually the ultimate interactive medium.

K. There are many types of personal selling: retail, business-to-business, and direct selling.

L. The greatest strength of personal selling is its personal nature.

M. Like all communications tools, personal selling also has some drawbacks.

N. Salespeople provide four communications functions: information gathering, information providing, order fulfillment, and relationship building.

O. Sales promotion complements advertising and personal selling by stimulating sales.

P. Marketers must balance sales promotion with advertising. Advertising creates market value for a brand; promotion creates market volume.

Q. Manufacturers use many sales promotion techniques with dealers: slotting allowances, trade deals, display allowances, buyback allowances, advertising

1-390 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

allowances, co-op advertising and advertising materials, dealer premiums and contests, push money, and company conventions and dealer meetings.

Answers to Pedagogical Features Ethics, Diversity & Inclusion: Marketing to Seniors Ethical marketing begins with ethical norms. The AMA states that its member marketers should be guided by these principles: (1) do no harm, (2) foster trust in the marketing system, and (3) embrace ethical values, such as truthfulness, products that offer value, and honoring promises.

Consider the following about marketing to seniors: (1) use relatable language (seniors just want to know what problem your product will solve); (2) don‘t assume seniors are helpless; (3) understand that seniors look for benefits, not products; (4) make things easy for them (no fine print, make it clear); (5) use multi-channel marketing (including catalogs); (6) give them something familiar; (7) personalize their experience; and (8) make sure your message is received. My IMC Campaign 17: Developing a Plans Book A plans book, quite simply, is the representation of all the hard work you have put it to develop the ideas for your project.

Don‘t let the word book fool you—what we are talking about here is a binder or a set of binders that houses information relevant to your client‘s problem.

Here is the information that should be represented in your plans book:  Objectives  Challenges  SWOT analysis  Target audience analysis  Communications strategy  Creative and media brief(s)  Creative concepts  Media strategy and plan  Evaluation or success metrics Ad Lab 17–A: Developing Effective Direct-Mail Packages 1. Locate a direct-mail package that has the four components common to most mailings and list how the elements of the creative pyramid are integrated throughout the components.

Common direct-mail package Creative Pyramid elements components 1. Mailing envelope Attention 2. Sales letter Attention, interest, credibility 3. Brochure Attention, interest, credibility 4. Response device (reply card, envelope, or Action 1-391 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

coupon) 2. Review the copywriting in your direct mail package and identify how many of the techniques mentioned in this Ad Lab are used or could be improved.

Answer Guidelines: Students‘ answers will vary.

The package may or may not have all four components itemized above, so adding any missing component would be an improvement. Sometimes direct-mail packages have too many components, so remove the extras in order to eliminate redundancy. Extra components rarely add anything but clutter; however, if removing components seems to detract from the package, then let it stay, and see if another component could go.

The creativity and clarity of the message is critical areas. Does the design of the package‘s components reinforce the message? If not, figure out which components are the weakest and make them more compatible with the best components Ad Lab 17–B: Applying Push–Pull Strategies to Sales Promotion If you were working for McGraw-Hill Education (the publisher of this textbook), how would you suggest using push or pull strategies to increase the sales of the company‘s textbooks? Which strategy do you think would be more effective?

Answer Guidelines: Student suggestions of push and pull strategies will vary.

The most effective strategy in this case would be a pull strategy. Although students are the ones who purchase the textbook, their purchase is a result of the professor‘s decision to require that textbook. Using a pull strategy that would offer incentives for the professor and his or her students is the most effective way to pull the product through the pipeline. Pushing the product into the distribution pipeline is not effective because the distributor (the bookstore) has no part in the decision to purchase the book.  People behind the Ads: Dayana Falcon, Sales Marketing Manager, Disney Advertising  Dayana is a Sales Marketing Manager for the Disney Advertising Sales team, a division 

within the Direct to Consumer and International segment.

Her responsibilities consist of bringing the go-to-market strategy to life for Disney Advertising Sales. This ranges from thought leadership to strategic positioning of Disney in the advertising industry, client relations at industry tentpole events, creation of best-in-class collateral to support the sales team, and exploration of revenue strategies.

Review Questions 1. Who are a company‘s best prospects for additional sales and profits? Why? Loyal customers.

Lester Wunderman, the founder of Wunderman Cato Johnson (one of the largest directresponse agencies in the world), says that 90 percent of a manufacturer‘s profit comes from 1-392 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

2.

3.

4.

5.

6.

7.

8.

repeat purchases; only 10 percent comes from trial or sporadic purchasers. The longer a customer stays with a company, the more willing they are to pay premium prices or make referrals; they need less hand-holding; and they increase their annual buying.

How should a large insurance company view integrated marketing communications?

Insurance companies work contractually with customers—each contract serves to establish a relationship. Moreover, because relationships are important to insurance companies, relationship marketing is also important because it fosters long-term relationships and customer loyalty. Because IMC manages relationship marketing, insurance companies would do well to view IMC favorably.

What are the basic strategic and tactical decisions that direct marketers face?

All direct marketers face two basic strategy decisions: the extent to which they will use direct sales and the extent to which they will use direct-response advertising.

How can an advertiser use a newspaper for direct-response advertising?

Direct response advertising asks the reader, viewer, or listener to provide feedback straight to the sender. While newspapers are not the most common medium used for direct response advertising, newspaper ads and inserts, featuring coupons or listing toll-free phone numbers, can be very effective at stimulating customer responses.

What distinct communications functions do salespeople provide?

Salespeople provide four distinct communications functions:  Information gathering  Information providing  Order fulfillment  Relationship building What are the three things salespeople must do to build relationships?

Salespeople build relationships by paying attention to three simple things:  Keeping commitments  Servicing their accounts  Solving problems What are the main purposes of sales promotion?

Sales promotion is a direct inducement that offers extra incentives anywhere along the marketing route to enhance or accelerate the product‘s movement from producer to consumer. The main purpose of sales promotion is to speed up the selling process, either by changing the timing of purchase, or shifting inventory to others in the channel.

Why is trade promotion controversial?

It is not known whether trade deals actually increase profits or simply sell products that would have been sold later anyway.

However, it is known that trade deals can: • Threaten brand loyalty • Create a trap for marketers who rely on discounts too heavily • Tempt retailers to abuse trade deals through forward buying and diverting 1-393

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

•

Mislead managers into transferring too much money to trade deals and not leaving enough money for consumer promotion or advertising 9. What are the most common pull strategies? Which would you use if you wanted to launch a new soft drink?

Commonly used pull strategies (customer sales promotions) include: sampling, cents-off promotions, refunds/rebates, coupons, electric coupons, combination offers, premiums, contests, and sweepstakes.

Include a discussion on techniques useful for getting people to try a product, the pull strategy.

10. Why is there a trend away from push strategies and toward pull strategies?

No media—especially TV—reaches such broad audiences they could in the past. The result is a fragmentation of the audience. This situation has fueled the trend away from push strategies. Now, other methods of reaching a mass audience (pull tactics such as coupons, sweepstakes, etc.) must be used to attract the audience‘s attention.

11. How could you use direct mail in an integrated marketing communications program? Give an example.

Aristotle.net used a ShipShape of two quarters to reinforce its ―Internet access for just 50 cents an hour‖ tagline. The message on the back of the mailer directed the consumer to take action on a limited offer by calling a toll-free number or visiting a website. The mailing was interesting, relevant to the advertising message, and penetrated recipients‘ perceptual screens so that it didn‘t go directly from the mailbox to the garbage. Conversant Marketing also used a clean mailing list to ensure the campaign‘s success.

12. What factors have the greatest influence on the success of a direct-mail campaign?

The two most important things that affect direct-mail success are the mailing list and the creativity used.

The Advertising Experience 1. Push and Pull Techniques Advertisers commonly use both push and pull techniques. Explore the situation of a company of your choice, identifying its pull techniques and tracking down its push techniques. (Push techniques might be more difficult to find.) Trade publications are a good place to look.

Create a report detailing the overall strategy of the company and discuss why you think one area might be emphasized over another.

2. Direct Marketing and Direct Response Direct marketing is not only vast, it‘s ever changing in all its facets—direct sales, direct mail, and direct response. Likewise, direct marketing agencies tend to differ from traditional advertising agencies in strategy, organization, and clientele. Take a look at some of the websites below and answer the questions that follow for each site.

PART I—Direct Marketing Organizations 1-394 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

       a. b. c.

Canadian Marketing Association (CMA): www.the-cma.org Direct Marketing Association (DMA): www.thedma.org Direct Marketing News: www.dmnews.com Give to Get Marketing: www.givetogetmarketing.com Los Angeles Digital Marketing Association: www.ladma.org Direct Marketing Association of Northern California: www.dmanc.org/ Federation of European Direct Marketing: www.fedma.org What group sponsors the site? Who is (are) the intended audience(s)?

What are the size, scope, and purpose of the organization?

What benefits does the organization provide to individual members or subscribers? To the overall advertising and direct marketing communities? d. How important do you believe this organization is to the direct marketing industry?

Why? Sample Answer: Direct Marketing Association a. The Direct Marketing Association (DMA) as well as the Association of National Advertisers (ANA) sponsor the site. The intended audience for the site consists of DMA and ANA members and other marketing communication professionals, as well as consumers seeking information on direct marketing. b. The DMA/ANA is a trade association of businesses and practitioners who advertise their products and services directly to consumers by mail, telephone, magazine, Internet, radio, or television. They also provide data analytics and insights for members and B2B datadriven marketing solutions. c. The benefits of DMA membership include the opportunity to network with peers and potential clients, learn the latest direct-marketing techniques, use the DMA‘s extensive research centers, as well as to gain influence and power through industry activism. The DMA provides many benefits to the overall advertising and direct-marketing communities, including  Direct-marketing library and resources of case studies and research reports.  ANA Podcast Network.  ―Ask the expert‖ consultations with marketing experts.  Publications, books, and blogs.  Data analytics tools.  Information on laws and regulations affecting promotion and marketing activities.  Careers available in the industry. d. This organization is very important to the direct-marketing industry, and much like the AAAA does for advertising agencies, this organization provides a central force for information, education, resources, and control of the direct marketing industry.

PART II—Direct Marketing Firms Select five of the following direct-marketing firms, visit their websites, and answer the questions that follow.

1-395 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

    a. b.

Acxiom Digital: www.acxiom.com GEICO: www.geico.com Harte-Hanks: www.hartehanks.com Wunderman: www.wunderman.com Who is the intended audience of the site?

How does the agency position itself (i.e., creative-driven, strategy- (account) driven, media-driven, etc.)? c. What is your overall impression of the agency and its work? Why? Sample Answer: Harte-Hanks a. The audience for the site consists of direct marketing professionals, current/potential clients, current/potential employees, and current/potential investors. b. The organization is largely media-driven, focusing on the various types of directmarketing activities it undertakes, including telemarketing, social media, mobile and device development, database management, direct mail, direct sales, and directresponse advertising. c. The organization is very broad in its capabilities, and it seems to have a wealth of experience in its areas of concentration. This success is largely due to its size, resources, and focus on providing strategic solutions that help clients increase sales and develop stronger relationships with their customers.

3. Direct Mail Despite its junk-mail image, direct mail requires a great deal of creativity. Jones Educational Services, which provides GMAT, GRE, and MCAT preparation, has agreed that a direct-mail campaign may be the best way to increase its market share. Create a campaign designed to attract top high school recruits. Browse the direct mail-related websites below for ideas.  Direct Marketing Association: www.thedma.org  U.S. Postal Service: www.usps.com Answer Guidelines: Students should be able to identify their audience, explain why direct mail is an effective medium to reach these potential consumers, justify why their product could be efficiently marketed via direct mail, and demonstrate how they use long copy and repeated calls to action (hallmarks of direct advertising) to generate consumer interest in their product.

Students should describe not only the content but also the format, address list, production, handling, and distribution of their direct-mail campaign.

4. Sales Promotion Sales promotion vehicles are key elements in integrated marketing communications campaigns. Browse the websites of the following support organizations for the sales promotion field and answer the questions for each site.

Sales Promotion Organizations 1-396 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

  a. b. c. d.

Promotional Product Association International (PPAI): www.ppai.org Creative Magazine: www.creativemag.com What group sponsors the site? Who is (are) the intended audience(s)?

What is the organization‘s purpose?

Who makes up the organization‘s membership? Its constituency?

What benefit does the organization provide individual members/subscribers? The overall advertising and sales promotion communities?

Sample Answer: Promotional Product Association International a. Promotional Product Association International (PPAI) is the site‘s sponsor; the intended audience of the site is current and potential members, as well as promotion industry practitioners and firms. b. PPAI‘s purpose is to lead the growing promotional products industry while helping both suppliers and distributors prosper in an evolving business environment, all the while providing professional education and networking and preserving professional integrity. c. The organization‘s membership is comprised of promotional firms, their employees, and their marketing partners that supply and/or distribute in the industry. d. The benefits of PPAI membership center on networking, training, discounts, conventions, and publications. This organization provides the overall advertising and promotions industries with a voice, and it nurtures the education and prosperity of the promotional products business.

Sales Promotion Agencies Promotional companies, like their direct marketing counterparts, differ somewhat from traditional advertising firms. Visit the websites for the following sales promotion companies, and answer the questions below for each.  AdSolution: www.adsolution.com  BIC Graphic: www.bicgraphic.com  InterPromo, Inc.: www.interpromo.com  Valpak Coupons: www.valpak.com a. What is the focus of the company‘s work (i.e., consumer or trade)? b. What are the scope and size of the company‘s business? c. What promotional services does the company offer? d. What is your overall impression of the company and its work? Why? Sample Answer: AdSolution a. The focus of the company‘s work is largely consumer, with most products tailored to corporate merchandising. b. It‘s a smaller, regional company whose presence on the web generates international business. c. The company specializes in developing wearable and specialty items for special events, corporate merchandising, gifts, promotions, and direct marketing efforts.

1-397 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

d. For a regional firm, this company seems to be using guerrilla-marketing techniques effectively as it expands its business to the web.

5. Other insurance companies rely more heavily on a sales force to gain customers than does GEICO. Given what you know about direct-response advertising and personal selling, what are the pros and cons of each approach?

Answer Guidelines: Personal selling is the most effective persuasion component of the marketing mix. However the expense of personal selling is high. GEICO‘s benefit is offering insurance of comparable quality to big insurers like Allstate at a lower cost. One way GEICO can do that is to rely on a smaller sales force.

6. How does GEICO use advertising to both get an immediate response from prospects and build brand equity? Who else do you think does this well?

Answer Guidelines: GEICO is able to accomplish both objectives for several reasons. First, the ads have a directresponse focus because each aim to direct the consumer to the Internet or a toll-free number for a quote. However the ads also emphasize ―saving money with GEICO‖ and use great creative as a way of building a brand image. Finally, the different campaigns target different audiences as a way of ensuring that the ads will be effective with individuals whose needs differ.

Connect Activities Title

Assignment Type

Types of Direct Marketing Activities Data is a Dog‘s Best Friend

Case Analysis

Sales Promotion Strategies and Tactics

Topic

Direct-Response Advertising

Learning AACSB Objective Accreditation Tagging 17-01 Knowledge Application

Video Case Direct-Response Advertising

17-01

Click and Drag

17-03

Direct-Response Advertising

Knowledge Application; Reflective Thinking Analytical Thinking

Bloom's Taxonomy Apply

Remember

Understand

Types of Direct Marketing Activities

1-398 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Activity Summary: This activity provides students with a case about Centel, a personal computer brand who has not been as effective as desired in its retail strategy and decides to pursue a direct marketing approach to sell its computers to consumers. Students are tasked with answering questions relating to direct mail, direct-response broadcast advertising, interactive TV, and customer lifetime value.

Follow-Up Class Discussion: Ask students to discuss the direct marketing tactics they would pursue if they were consulting with Centel. What outlets present the best opportunities for a tech brand?

Data is a Dog’s Best Friend Activity Summary: This activity asks students to watch a video from Puppo, a dog food brand, which implemented a very unique campaign to inform consumers that they offer personalized dog food/nutritious food specific to the type of dog owned. Students are tasked with answering questions relating to the use of database marketing, direct-mail campaigns, and direct-response digital advertising.

Follow-Up Class Discussion: After watching the Puppo ad, ask students to discuss their ideas for how other brands can utilize database marketing to facilitate direct marketing efforts as Puppo did. Additionally, ask students to discuss whether direct-mail still has a place in an increasingly digital world or whether direct marketing efforts such as Puppo‘s will take the place of direct-mail and other types of more traditional advertising. What types of brands can best use direct-mail campaigns?

Sales Promotion Strategies and Tactics Activity Summary: This activity provides students with examples of various sales promotion strategies and asks them to match the example with the type of activity a marketer would be engaging in if using this strategy and who the audience of that type of strategy would be.

Follow-Up Class Discussion: Task students or student pairs with finding interesting examples of how brands have utilized various sales promotions strategies and tactics. What made them innovative, creative, or effective?

CHAPTER EIGHTEEN RELATIONSHIP BUILDING: 1-399 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

PUBLIC RELATIONS, SPONSORSHIP, AND CORPORATE ADVERTISING This chapter explains the role of public relations, sponsorships, and corporate advertising in relationship marketing and integrated marketing communications. By integrating public relations, event sponsorships, and institutional advertising with its general advertising activities, a company can improve the overall effectiveness of its marketing efforts.

Learning Objectives After studying this chapter, your students will be able to: LO18-1 Define public relations and distinguish it from advertising.

LO18-2 List the functions performed by public relations professionals.

LO18-3 Identify the tools public relations practitioners use.

LO18-4 Explain the growing interest in sponsorships and describe when sponsorships should be included in an IMC plan.

LO18-5 Define corporate advertising and list the activities that are included under this concept.

What’s New? The Netflix vignette focused on Reed Hasting‘s proactive response to a potential crisis is updated to show the success of the streaming giant.

Teaching Tips and Strategies Students will become more familiar with the role of advertising compared to that of PR throughout this chapter.

Using the Chapter Opening Vignette in the Classroom Netflix has grown to become a powerful player in the home delivery of film and TV content— and now the company even produces its own popular and critically acclaimed programs. But the company faltered badly when it raised the price of subscriptions and moved to split the company into separate mail and streaming services. Existing customers were angry and voiced their frustration to the company and on social media.

Students can discuss why Netflix opted to make the changes from a business perspective and how they could have handled the situation differently. Students can also talk about how a PR problem can impact a company‘s brand. The Netflix story is a cautionary tale for businesses: Don‘t ignore the role—and the power—of customers.

Other Tips and Strategies How did Johnson & Johnson walk away from the Tylenol tragedy with a brand still intact and trusted? It used public relations and advertising to its advantage in a time of crisis. I remember 1-400 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

the company CEO informing the public that it would not bring Tylenol back until it was again a safe and trusted brand. It did just that, and Johnson & Johnson not only won accolades from the business community but also regained customer confidence.

Tylenol is still a trusted brand by hospitals, consumers, and the community. This contrasts so terribly with what happened to Firestone and Ford. Firestone and Ford lost market share because of accidents that resulted from tire blowouts. Instead of taking a united front, the companies squabbled and blamed each other for the problems. This was the exact opposite of Tylenol‘s approach.

Consumers started hearing reports that Ford had asked for tires that did not meet the specifications of a big vehicle. Firestone swore that the problem was the Ford Explorer design, and, of course, Ford countered that Firestone‘s tires were faulty. During this turbulent time, both companies suffered, although some now argue they are bouncing back.

A good discussion to have with your class is to compare how Ford and Firestone‘s approach differed from Johnson & Johnson‘s approach. What could they have done better? It is important to remind students that money was an issue. If Firestone had recalled all the tires, what would the cost have been? Ford wanted Firestone to recall all of the tires, but Firestone wanted to recall only a certain lot. At the end of the debate, did anyone win? Firestone lost market share, Ford lost market share, and the public lost trust in both companies. This discussion might convince your students that, even with all of the scandals going on today, consumers still want companies and their executives to take responsibility for their actions. Taking responsibility might help consumers trust the brand again, thus reversing the market share declines of the last few years.

Students might also benefit from a discussion of sponsorship, especially the relative value of different sponsorship opportunities. Forbes recently calculated the value of different popular sponsorships. Ask students to make their own rankings of the following sponsorships before you show them the Forbes data: The World's Most Valuable Sports Brands Rank Event Brand Value ($ mil) 1

NFL Super Bowl

425

2

Olympic Games (Summer)

230

3

FIFA World Cup

147

4

MLB World Series

140

5

UEFA Champions League

132

6

Olympic Games (Winter)

123

7

Daytona 500

112 1-401

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

8

NCAA Men's Final Four

92

9

MLB All-Star Week

76

Kentucky Derby 70 10 Source: The Forbes Fab 40: The World's Most Valuable Sports Brands, Forbes, https://www.forbes.com/pictures/ffgh45ilef/the-most-valuable-event-brands/#74e87b70c256.

Note: To help emphasize the differences between public relations and advertising, please show your students the excellent Portfolio Review (pp. 598–601).

Web Resources for Enhancing Your Lectures How to Implement a Social Media Business Strategy

http://mashable.com/2009/12/28/social-media-businessstrategy

How to Measure Social Media ROI

http://mashable.com/2009/10/27/social-media-roi

Public Relations Student Society of America (PRSSA)

http://www.prssa.org

Public Relations Society of America (PRSA)

http://www.prsa.org

PR blog

http://prblog.typepad.com

Pedagogical Features Ethics, Diversity & Inclusion: Public Relations—Meet Social Media and the Web Ad Lab 18–A: ―Green‖ Advertising  My IMC Campaign 18–A: Corporate Blogging  My Ad Campaign 18–B: The Client Presentation Portfolio Review: Corporate Advertising Ad Lab 18–B: David Ogilvy on Corporate Advertising  People behind the Ads: Bill Imada, Chair and Chief Connectivity Officer, the IW Group

1-402 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Lecture Outline I.

II.

Vignette: Netflix Launched in 1998, Netflix allowed consumers to get their movie in the mail, keep it as long as they wanted, and drop it in the mailbox to return when they were done. All for one low monthly fee. Then the company tried to change things.

Public Relations: IMC and More The primary role of public relations is to manage a company‘s reputation and help build public consent for its enterprises.

For our purposes, we define public relations (PR) as the strategic management of the relationships and communications that individuals and organizations have with other groups for the purpose of creating mutual goodwill.

Every company, organization, or government body has relationships with groups of people who are affected by what it does or says. Marketing professionals refer to these people as stakeholders because they have some vested interest in the company‘s actions.

In PR terminology, each of these groups is considered one of the organization‘s publics, and the goal of PR is to develop and maintain goodwill with most, if not all, of its publics.

In short, the goals of public relations are to improve public opinion, build goodwill, and establish and maintain a satisfactory reputation for the organization.

A. The Difference between Advertising and Public Relations 1. Advertising reaches its audience through paid media. It appears just as the advertiser designed it, with the advertiser‘s bias built in. Knowing this, the public views ads with some skepticism.

2. While advertising is carefully placed to gain particular reach and frequency objectives, PR is less precise.

3. While PR activities may offer greater credibility, advertising offers precision and control. This is why some companies relay their public relations messages through corporate advertising, which we discuss later in this chapter.

B. Advertising and PR in the Eyes of Practitioners 1. Advertising professionals see marketing as the umbrella process companies use to determine what products and services the market needs and how to distribute and sell them.

2. Public relations professionals take a different view. With their background typically in journalism rather than marketing, they believe public relations should be the umbrella process.

3. To PR professionals, public relations should be integrated ―corporate‖ or strategic communications, which is broader than integrated ―marketing‖ communications.

4. Exhibit 18-1 shows some indicators of the PR industry‘s health and growth.

1-403 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

III.

5. When PR activities are used as a marketing tool, the term marketing public relations (MPR) is often used.

6. In an integrated marketing communications program, advertising and MPR need to be closely coordinated.

The Public Relations Job Public relations involves a variety of activities, from crisis communications to fundraising. And PR practitioners use many tools besides press conferences and news releases.

A. PR Planning and Research 1. The first function of a PR practitioner is to plan and execute the public relations program.

2. Effective planning requires that public relations professionals constantly monitor, measure, and analyze changes in attitudes and behaviors among a variety of publics.

3. A common form of public relations research is opinion sampling using techniques discussed in Chapter 7: shopping center or phone interviews, focus groups, analysis of incoming mail, and field reports.

B. Reputation Management Reputation management is the name of this long-term strategic process. PR practitioners employ a number of strategies and tactics to help them manage their clients‘ reputation, including publicity and press agentry, crisis communications management, and community involvement.

1. Publicity and Press Agentry a. Publicity is the generation of news about a person, product, or service that appears in print or electronic media.

1) To attract media attention, publicity must be newsworthy.

2) In IMC terms, unintentional publicity is an unplanned message. b. The planning and staging of events to generate publicity is called press agentry. c. An MPR professional practicing IMC sees the press as an important public, and writers and editors as important stakeholders.

2. Crisis Communications Management a. One of the most important public relations tasks for any corporation is crisis management. b. The classic case of exemplary crisis management was Johnson & Johnson‘s handling of a product-tampering episode in 1982. c. The moment they received the news, management strategists at J&J and McNeil Products (the J&J subsidiary that markets Tylenol) formulated three stages of action: 1) Identify the problem and take immediate corrective action.

1-404

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

2) Actively cooperate with authorities in the investigation.

3) Quickly rebuild the Tylenol name and capsule line, including Regular Strength capsules, which were recalled, too.

3. Community Involvement a. The goal of community involvement is to develop a dialogue between the company and the community. b. As we discussed in Chapter 8, a company should ideally adopt one program relevant to its expertise and focus its mission marketing activities.

C. Other Public Relations Activities In addition to planning and reputation management, public relations professionals are often involved in activities such as public affairs and lobbying, speechwriting, fundraising and membership drives, creation of publications, and special-events management.

1. Public Affairs and Lobbying a. Organizations often need to deal with elected officials, regulatory and legislative bodies, and various community groups—the realm of public affairs. b. Lobbying refers to informing government officials and persuading them to support or thwart administrative action or legislation in the interests of some client.

2. Speechwriting Because company officials often have to speak at stockholder meetings, conferences, or conventions, PR practitioners often engage in speechwriting.

3. Fund-raising and Membership Drives A public relations person may be responsible for soliciting money for a nonprofit organization or for a cause the company deems worthwhile, such as the United Way or a political action committee (PAC).

4. Publications Public relations people prepare many of a company‘s communications materials: news releases and media kits; booklets, leaflets, pamphlets, brochures, manuals, and books; letters, inserts, and enclosures; annual reports; posters, bulletin boards, and exhibits; audiovisual materials; and speeches and position papers.

5. Social Media With the advent of social media and the rise in popularity of blogging and microblogging, staying on top of who is writing about what is a full-time job.

6. Corporate Blogs Maintaining and managing a corporate blog can help address important concerns, introduce new products or services, and maintain a dialog between a company and its publics.

1-405 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

7. Special-Events Management The sponsorship and management of special events is a rapidly growing field.

D. Public Relations Tools The communications tools at the PR person‘s disposal vary widely, from news releases and photos to audiovisual materials and even advertising.

1. News Releases and Press Kits a. A news release (or press release), the most widely used PR tool, consists of one or more typed sheets of information (usually 8½ by 11 inches) issued to generate publicity or shed light on a subject of interest. b. A press kit (or media kit) supports the publicity gained at staged events, such as press conferences or open houses.

2. Photos Photos of events, products in use, new equipment, or newly promoted executives can lend credence or interest to a dull news story.

3. Feature Articles Many publications, especially trade journals, run feature articles (soft news) about companies, products, or services.

4. Printed Materials a. Printed materials are the most popular tools used by public relations professionals. b. They may be brochures or pamphlets about the company or its products, letters to customers, inserts, or enclosures that accompany monthly statements, the annual report to stockholders, other reports, or house organs. c. A house organ is a publication about happenings and policies at the company.

5. Posters, Exhibits, and Bulletin Boards a. Posters can be used internally to stress safety, security, reduction of waste, and courtesy. b. Companies use exhibits to describe the organization‘s history, present new products, show how products are made, or explain future plans. c. Internally, the public relations staff often uses bulletin boards to announce new equipment, new products, meetings, promotions, construction plans, and recreation news to employees. d. Many companies now maintain an intranet site where they can post their internal messages.

6. Audiovisual Materials a. Slides, films, filmstrips, and DVDs are all forms of audiovisual materials and may be used for training, sales, or public relations.

1-406 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

IV.

b. Considered a form of corporate advertising, nontheatrical or sponsored films (developed for public relations reasons) are often furnished without charge to movie theaters, organizations, and special groups, particularly schools and colleges. c. Many PR departments provide video news releases (VNRs)—news or feature stories prepared by a company and offered free to TV stations, which may use the whole video or just segments.

Sponsorships and Events A. The Growth of Sponsorship 1. Sponsorship actually embraces two disciplines: sales promotion and public relations.

2. A sponsorship is a cash or in-kind fee paid to a property (which may be a sports, entertainment, or nonprofit event or organization) in return for access to the exploitable commercial potential associated with that property.

3. The sponsorship fee may be paid in cash or in kind (i.e., through a donation of goods and services).

4. Philanthropy is support of a cause without any commercial incentive.

Sponsorship (and a related strategy, cause marketing) is used to achieve commercial objectives.

B. Benefits of Sponsorship 1. Today, the many benefits of sponsorship are well documented. Certainly one benefit is that the public approves of it.

2. One study by Roper Starch Worldwide reported that 80 percent of Americans believe corporate sponsorship is an important source of money for professional sports and 74 percent believe sponsorships provide benefits to the cities where events occur.

3. In the Roper Starch study, 74 percent of the people also said government should have little or no influence on which types of companies sponsor professional sports events.

4. Unlike advertising, sponsorships and events provide face-to-face access to current and potential clients.

5. A significant benefit is the opportunity to enhance the company‘s public image or merchandise its positioning through affiliation with an appropriate event.

6. Also important, but often overlooked, is the effect sponsorship can have on employees.

7. Some marketers have discovered that sponsorships can rapidly convert fan loyalty into sales.

8. Finally, sponsorships can be very cost-efficient.

C. Drawbacks of Sponsorship 1. First, it can be very costly, especially when the event is solely sponsored.

1-407

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

2. The problem with cosponsored events is clutter.

3. Finally, evaluating the effectiveness of a particular sponsorship can be tricky at best—especially since it rarely happens in a vacuum.

D. Types of Sponsorship While there are many, many avenues and events available for sponsorship, IEG Inc. groups most of them into six categories: sports; entertainment; causes; the arts; festivals, fairs, and annual events; and associations, organizations, and members (see Exhibit 18-2).

1. Sports Marketing a. In fact, the vast majority of all sponsorship budgets, more than 65 percent, is spent on sports events. b. By buying the rights to serve Gatorade on the sidelines of professional basketball and football games, that brand has received more credibility than any television ad could provide, at a fraction of the cost. c. In hotly contested markets, the giants in the field often fight over sponsorship rights. d. Many sports events are strictly local and therefore cost much less while giving the sponsor closer access to attendees and participants. e. The most controversial practice is ambush marketing, a promotional strategy nonsponsors use to capitalize on the popularity or prestige of an event or property by seeking creative ways to gain brand exposure without paying for sponsorship.

2. Entertainment After sports marketing, the largest area of sponsorship is entertainment, which includes things like concert tours, attractions, and theme parks.

3. Festivals, Fairs, and Annual Events a. Spending in 2018 was projected to be $903 million, an increase of nearly 3 percent from the previous year. b. One of the largest annual events in the state of Michigan is the National Cherry Festival in Traverse City. c. Similarly, annual events such as business-to-business trade shows attract large numbers of sponsors as well as exhibitors because of the economics of being able to talk to prospects and customers in the same place at the same time (see Exhibit 18-2).

4. Causes a. Sponsorship of causes and educational institutions is a tried-and-true PR activity that often fits with the IMC strategy of mission marketing. b. Health care marketers such as hospitals, HMOs, and managed-care companies are increasing their sponsorship activities.

1-408 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

5. Arts and Culture a. Symphony orchestras, chamber music groups, art museums, and theater companies are always in desperate need of funding. In 2011, sponsors spent an estimated $885 million to support the arts—one of the least funded of the major sponsorship categories. b. Unfortunately, this group is likely to be hardest hit by any legislation aimed at ending tobacco sponsorships.

6. Venue Marketing a. Finally, an area not covered by IEG‘s report is venue marketing, a form of sponsorship that links a sponsor to a physical site such as a stadium, arena, auditorium, or racetrack. b. Venue marketing is changing the economics of professional sports.

E. Methods of Sponsorship 1. Companies interested in sponsorship have two choices: buy into an existing event or create their own.

2. What‘s most important is to get a good fit between the sponsor and the event.

3. Kathleen Smith suggests several guidelines for brands that are selecting the right sponsorship opportunity or event. a. Look for opportunities that fit with the brand’s target demographics and audience interests. b. Select events that offer value, where organizers can justify the opportunities that are created given the brand’s spending. c. Find out who else is sponsoring the event to be sure it correctly targets the right audience. Even consider the events a competitor is sponsoring. d. Consider events that bring back sponsors every year. These are likely to provide value.

F. Measuring Sponsorship Results 1. One of the problems with event sponsorship (as with public relations activities in general) has historically been how to evaluate results. a. Experts suggest there are really only three ways to do this: 1) Measure changes in awareness or image through pre- and postsponsorship research surveys.

2) Measure spending equivalencies between free media exposure and comparable advertising space or time.

3) Measure changes in sales revenue with a tracking device such as coupons. b. Unfortunately, none of these methods covers all the reasons for sponsoring.

2. The International Events Group (IEG) suggests the following pointers for measuring the value of event sponsorships: a. Have clear goals and narrowly defined objectives. b. Set a measurable goal.

1-409 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

V.

VI.

c. Measure against a benchmark. d. Do not change other marketing variables during the sponsorship. e. Incorporate an evaluation program into the overall sponsorship and marketing program. f. At the outset, establish a budget for measuring at the outset.

Corporate Advertising When a company wants to communicate a PR message and control its content, it may use a form of corporate advertising. Corporate advertising covers the broad area of nonproduct advertising, including public relations advertising, institutional advertising, corporate identity advertising, and recruitment advertising.

A. Public Relations Advertising To direct a controlled public relations message to one of its important publics, a company uses public relations advertising.

B. Corporate/Institutional Advertising 1. In recent years, the term corporate advertising has come to denote a particular type of nonproduct advertising aimed at increasing awareness of the company and enhancing its image. The traditional term for this is institutional advertising.

2. A variation on corporate advertising is advocacy advertising.

3. Such ads are frequently referred to as advertorials since they are basically editorials paid for by an advertiser.

4. Many advertisers use umbrella campaigns, called market prep corporate advertising, to simultaneously communicate messages about the products and the company.

C. Corporate Identity Advertising Companies take pride in their logos and corporate signatures. The graphic designs that identify corporate names and products are valuable assets, and companies take great pains to protect their individuality and ownership. This is the job of corporate identity advertising.

D. Recruitment Advertising Companies use recruitment advertising to attract new employees.

Chapter Summary A. Public relations is a process used to manage an organization’s relationships with its various publics, including employees, customers, stockholders, competitors, and the general populace.

B. The term public relations can describe a concept, a profession, a management function, and a practice.

C. Public relations activities include planning and research, reputation management (publicity and press agentry, crisis management, and community involvement), public affairs and lobbying, speechwriting, fundraising and membership drives, publication preparation, and special-events management.

1-410

© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

D. The tools used in public relations include news releases and press kits, photos, feature articles, all sorts of printed materials, posters and exhibits, and audiovisual materials.

E. Sponsorship is one of the fastest-growing forms of marketing today. It actually embraces two disciplines: sales promotion and public relations.

F. Sponsorship offers many benefits. It meets with public approval.

G. However, sponsorships can be very costly, and they are also subject to clutter, which reduces their effectiveness.

H. Types of sponsorships include sports marketing; entertainment; festivals, fairs, and annual events; causes; the arts; and venue marketing.

I. Companies may either buy into an existing event or start their own.

J. To help create a favorable reputation in the marketplace, companies use various types of corporate advertising, including public relations advertising, institutional advertising, corporate identity advertising, and recruitment advertising.

Pedagogical Features Ethics, Diversity & Inclusion: Public Relations—Meet Social Media and the Web 1. Do any of the activities described above strike you as unethical? Why? Answer Guidelines: Answers could discuss the ethics of paying consumers to write positive reviews or positively evaluate brands, companies, or establishments; the ethics of Tweeting or blogging and presenting yourself as someone else; the ethics of brands creating fake pages to inflate their ranking on Google‘s ―organic‖ search; or the ethics of brands, celebrities, politicians, or organizations buying followers to make themselves appear more credible. Student responses to why they view the activity as ethical or unethical will vary depending upon their personal stances.

2. Do you agree that consumers will not stand for deceptive or underhanded practices?

What actions, both corporate and governmental, will evolve if consumers lose faith in social media and the web as sources of marketing information?

Answer Guidelines: Students could discuss a shift back to more traditional forms of media that are viewed as more credible by consumers; brands striving to prove their honesty and believability; brands increasing their corporate social responsibility efforts; and increased governmental regulation of online content and social media transparency by brands, organizations, politicians, etc.

Ad Lab 18–A: ―Green‖ Advertising

1-411 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

1. Imagine you are marketing a new product that sells for $1.25 and is environmentally safe.

Would you spend thousands of dollars for a green seal on your impulse product if consumers are ambivalent toward such environmentally safe goods, as observed in the first wave?

Explain.

Answer Guidelines: A product‘s price is less important than the company‘s reputation when it comes to environmental certification. a. If a consumable food product, for example, is involved, consumers may find certification reassuring, proof that the company cares for their health and well-being. b. If the company has an extensive product line or a family of products, certification lends credibility to all products. c. From a competitive point of view, if the product‘s competition did not have environmental certification, then certification would be a winning strategy.

If the cost of certification were a deciding factor (likely for a product selling for only $1.25), then a number of factors would have to be weighed: a. At the retail price of $1.25 per unit, product distribution would have to be wide to cover costs. b. Assuming that 40% ($0.50) of that cost goes to the retail store, manufacturing costs would likely have to be less than $0.40, leaving $0.35 for administration, advertising, and other overhead costs—including profit. Thus, using this ballpark estimate, a product would typically have to pay for the cost from the remaining $0.35 per unit of revenue. This would take many units and a few years.

2. Imagine that you have just made manufacturing changes to your product so that it is now easily recyclable. Would you advertise these changes, knowing the restrictions on the term recycle?

If the product were not recyclable according to FTC restrictions, then the company could be punished for falsely advertising that it was recyclable.  My IMC Campaign 18–A: Corporate Blogging Most corporations have guidelines for blogging. Here is a set of marketing related guidelines that every corporation should think about if they intend on using blogging for a marketing tool.  Know the environment. What are people saying about you and your products? Venture out into the web and see what happens when you type your company name into Google or visit popular blogs that deal with your company‘s product category.  Determine what you hope to accomplish. What is your purpose? Why have you started the blog? To address rumors? Share company news? Inform customers about new products? Develop a corporate personality? Having clear objectives will make decisions about what and when to blog much easier.

1-412 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.





  







Practice, practice, practice. Do a trial run. Blogging is time-consuming, sometimes difficult, and a different kind of activity for many organizations. Smart companies generate initial blog posts internally until it is clear that the tactic will be useful and rewarding.

Remember that it’s a two-way street. Learn to share control. Blogs without comments have minimal value, but with comments comes criticism. Smart companies value input from critics at their blogs because it offers them an opportunity to respond and educate.

Live up to the commitment. Attention to blogs withers if postings aren‘t regular.

Offer value. Providing information that publics can‘t find elsewhere gives people a reason to visit your blog or subscribe to feeds.

Ask if you have readers. Is your public suitable for blogging? Not every market contains people who read blogs. If yours doesn‘t, you‘re wasting time and resources. Search for other blogs related to your industry or product and locate secondary information on your target market‘s use of the web to find out whether your blog might make a difference.

Avoid hype and puffery. The online community has a different personality than that of people who rely on traditional media. Web users are suspicious of hype and can be critical when they sense they are being preached to or misled.

Monitor the one place everyone visits—its name is Wikipedia. If your company or product is mentioned there, it is important to monitor, and occasionally correct, what is posted.

Use blogging as one piece of the puzzle. Blogging can be an effective way to reach and respond to your publics. But it is rarely a stand-alone tactic. Smart companies make it a part of their overall IMC and public relations plans.

 My Ad Campaign 18–B: The Client Presentation A. For most of you, the culmination of your project will be a presentation to the class or client that will be judged by the teacher, a group of peers, or local marketing and advertising executives.

B. By now you have spent hours belaboring the who, what, when, and where of your campaign, and now you need to explain why.

C. Most presentations utilize PowerPoint, but if you have the resources and the gumption, think about different ways to illustrate your thinking and your ideas.

D. Follow this basic outline and focus on how each section transitions from one to the other:  Goals and/or objectives of the campaign—What is the campaign trying to achieve?  Target audience analysis—Who are we planning on speaking to and why?  SWOT analysis—What are the strengths of the brand, the weaknesses, the opportunities, and the impending threats that factor into our decision-making process?  Strategic insight(s)—Based on everything above, how are you going to solve the business challenge at hand?

1-413 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.



Creative presentation—Ideas, ideas, ideas. And don‘t forget to explain why these ideas will help achieve the goals/objectives.  Media presentation—Where will these ads be placed, and what target and strategy insights lead you to choose those vehicles?

E. The main objective of the presentation is to communicate, in a concise and succinct manner, your ideas, both strategic and tactical.

F. Be sure to include everyone on your team in the presentation.

G. Last, if you are doing a PowerPoint, hand out copies of the presentation (in color) so the ―clients‖ can follow along and take notes.

Portfolio Review: Corporate Advertising Companies use public relations activities and various forms of public relations advertising to communicate with a wide constituency. PR people refer to these groups of people as publics.

Marketing people call them stakeholders.

As you study the ads in this portfolio, see if you can determine what stakeholders the company was targeting. Then analyze the ad to determine what objective the company was trying to achieve and if it succeeded.

Ad Lab 18–B: David Ogilvy on Corporate Advertising Find and discuss a corporate ad that demonstrates what Ogilvy referred to as the humbug in corporate advertising, the pomposity, vague generalities, and fatuous platitudes.

Answer Guidelines: The key issue is that the reader‘s style of thinking and the mood can easily determine his or her interpretation of corporate ads. Imagine a corporate ad warmly portraying employees as being dedicated to environmental safety. On a day when everything seems to be going right, a consumer may see this ad and agree with it. However, the next day, while waiting half the morning to see a doctor, the same consumer may see the same ad and comment that the ad is exploiting the company‘s employees.

Student reactions could go either way: a. Value-based thinkers, for example, can be expected to favor ads with elegant copy (uncluttered by details) and metaphoric portrayals using romantic images. b. In contrast, fact-based thinkers are likely to distrust undocumented statements, passing off romantic words and pictures as fluff or puffery.   People behind the Ads: Bill Imada, Chair and Chief Connectivity Officer, the IW Group  Bill Imada is Chairman and Chief Connectivity Officer at the IW Group, Inc.  His company describes itself as Culture Purveyors & Content Creators. Their clients include Lexus, Walmart, and McDonald‘s.

1-414 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

Review Questions 1. How does public relations differ from advertising?

The primary role of public relations is to manage a company‘s reputation and help build public consent for its enterprises. PR is considered a more personal process of business communication, relying on the goodwill of the media, rather than buying media space, to publish the information provided by a business in a timely manner with the least amount of editing possible. Because a company‘s message is subject to editing by the media, public relations messages are perceived as being very credible.

Advertising is viewed as a nonpersonal means of communication, involving payment to the media to publish its message as designed in a specific location, according to a schedule.

Because of this approach, advertising is usually ideal for creating awareness for products and services.

Although PR activities may offer greater credibility, advertising offers greater awareness and control. Advertising is carefully placed to gain particular reach and frequency objectives, but PR is less precise.

2. How is the perspective of advertising practitioners different from that of PR professionals?

How is marketing public relations used?

Advertising professionals tend to be sales or marketing oriented. They are inclined to view PR as publicity that should be used as a good-news vehicle for the promotion of the company and its products. PR professionals see marketing and advertising as sales tools for the public relations umbrella process. From their perspective, publicity should have a news orientation rather than a sales orientation.

When PR activities become tools for marketing (sales- and product-focused rather than relationship-focused), the term marketing public relations (MPR) is often used. Marketing public relations activities can raise awareness, inform and educate, improve understanding, build trust, make friends, give people reasons or permission to buy, and create a climate of consumer acceptance.

3. What is the role of public relations in relationship marketing and integrated marketing communications?

The concept of ―relationship‖ is the basis for both public relations and the strategy of relationship marketing. In addition, because integrated marketed communications are used to manage relationship marketing, PR is an inherently well-suited support tool for both of these processes.

4. What are some activities used in reputation management?

Reputation management is the name for the long-term strategy of managing the standing of the firm with various publics. PR practitioners employ a number of strategies and tactics to help them manage their firm‘s or client‘s reputation, including publicity and press agency, crisis communications management, and community involvement.

1-415 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

5. Why is it important to establish a crisis management plan? What types of companies are most likely to need one?

When a crisis strikes, people often become disoriented. Thus most companies or businesses should prepare a guide for taking action in times of crisis. In PR, the crisis plan is designed to minimize the negative effects on the attitudes of publics. Any type of company can benefit from such a plan, but among those most in need are manufacturers of potentially hazardous products, companies where masses of people are involved, and those in highly sensitive industries or organizations. Examples include airlines, chemical and oil companies, utilities, police and fire departments, military organizations, and health industry businesses.

6. What types of sponsorship activities are available to marketers today?

Although there are many events available for sponsorship, IEG groups most of them into five categories: sports; entertainment; festivals, fairs and annual events; causes; arts and culture, and venue marketing.

7. Which sponsorships are likely to offer the best return on investment, and how can that be measured?

Sponsorships that are most likely to offer the best return on investment are those that closely match the mass media audience and event participants with the demographics of the target consumer.

Experts suggest that there are three ways to evaluate results of event sponsorship. a. Measure changes in awareness or image through pre- and post-sponsorship surveys. b. Measure spending equivalencies between free media exposure and comparable advertising. c. Measure changes in sales revenue with tracking devices such as coupons.

8. What are the various types of corporate advertising? Describe them.

Corporate advertising covers the broad area of nonproduct advertising, including public relations advertising, institutional advertising, corporate identity advertising, and recruitment advertising. a. Public relations advertising is used to direct a controlled public-relations message to one of its important publics. When companies sponsor art events, programs on public television, or charitable activities, they frequently place public relations ads in other media to promote the programs and their sponsorship, enhance their community citizenship, and create public goodwill. b. Corporate/Institutional advertising denotes the type of nonproduct advertising used to enhance a company‘s image and increase awareness. Institutional or corporate advertising campaigns serve a variety of purposes:  Report the company‘s accomplishments  Position the company competitively in the market  Reflect a change in corporate personality  Shore up stock prices  Improve employee morale 1-416 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

 Avoid a communications problem with agents, dealers, or customers c. Corporate identity advertising is used to communicate changes in a company‘s name, logo, trademark, or corporate signature. d. Recruitment advertising is used to attract new employees. Most recruitment advertising appears in the classified sections of daily newspapers, and it is placed by human resources departments.

9. What is the purpose of corporate identity advertising?

Companies take pride in their logos and corporate signatures. The graphic designs that identify corporate names and products are valuable assets, and companies take great pains to protect their individuality and ownership. Corporate identity advertising is necessary when a company changes its name, logos, trademark, or corporate signatures, or when it merges with another company.

10. What is the purpose of recruitment advertising? Why is it under the domain of corporate advertising and public relations?

A primary objective of corporate advertising is to attract quality employees, a task accomplished by recruitment advertising. Recruitment advertising may be considered a type of public relations advertising because it is used to manage one aspect of the company‘s relationship with one of its publics, i.e., prospective employees.

The Advertising Experience 1. Advertising for Future Stakeholders Every company wants the best and brightest employees. Look at five recruitment advertisements and evaluate them. Which one seems to be the most effective? What makes it superior? Then look at the one you feel is the least effective. Consider what could be done to improve it and redesign the ad to make it more attractive to the most qualified candidates possible. http://blog.hirerabbit.com/17-recruitment-ads-that-will-bring-a-smile-to-your-face/ 2. Public Relations Firms and Corporate Advertising Chapter 17 discussed the difference between traditional advertising agencies and direct marketing or sales promotion firms. Public relations firms, too, differ substantially from ad agencies. In addition, in some cases, they are stealing corporate advertising duties away from traditional advertising shops. It is important to explore the function of public relations. Visit the websites for five of the following PR companies and answer the questions that follow.  APCO Worldwide: www.apcoworldwide.com  Hill+Knowlton: www.hillandknowlton.com  Ketchum Public Relations: www.ketchum.com  Edelman: www.edelman.com  Euro RSCG Magnet: www.magnet.com  Porter Novelli: www.porternovelli.com a. Who is the intended audience of the site?

1-417 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

b. What are the scope and size of the firm‘s business? c. What is the focus of the firm‘s work (i.e., consumer, business-to-business, nonprofit)? d. What is your overall impression of the firm and its work? Why? Sample Answer: Ketchum Public Relations a. The audience for the site consists of current/potential clients, current/potential employees, current/potential investors, and other advertising/marketing professionals and firms. b. Ketchum is a worldwide network, with offices in North America, Europe, and Asia/Pacific. c. The firm‘s work is largely centered on public affairs and press agentry, although it has business-to-business, consumer, and ethnic marketing units, and largely focuses on the following core areas:  Strategy & Technology  Corporate Social Responsibility  Crisis Management  Business-to-Business Communication  Employee Communication  Public Affairs  Government Relations  Investor Relations  Labor Relations  National Media Relations  Hispanic Marketing  African-American Consumer Marketing  Communications Training  Research & Measurement d. Ketchum Public Relations is very impressive with its host of à la carte services and global capabilities. The firm is appealing to those who are interested in working for a large PR agency. The firm is attractive to potential large corporate clients in need of fullservice PR around the globe. Finally, advertising agencies who do not offer public relations functions could very well look to Ketchum to assist them in meeting their client‘s IMC objectives.

3. PR Organizations As you learned in this chapter, perhaps no other marketing communications function plays a more integrated role with advertising than public relations. Now take a moment to explore the world of PR a bit further by visiting the websites for the following public relationsrelated organizations and answer the following questions for each site.  American Association for Public Opinion Research (AAPOR): www.aapor.org  Cision PR Newswire: www.prnewswire.com  Public Relations Society of America (PRSA): www.prsa.org 1-418 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

 a. b. c.

Public Relations Student Society of America (PRSSA): www.prssa.org What is the organization‘s purpose?

Who makes up the organization‘s membership? Its constituency?

What benefit does the organization provide individual members/subscribers? The overall advertising and PR communities? d. How important is this organization to the public relations community? Why? Sample Answer: Public Relations Society of America a. The Society‘s mission is to advance the practice of public relations by:  Uniting professionals in the industry.  Encouraging the continuing education of practitioners.  Playing an active role in all matters affecting the practice of public relations.  Formulating the objectives and interpreting the functions of public relations (and those who practice it) to the public.  Strengthening the relationships of public relations professionals (with employers and clients, with government at all levels, with educators, with media, and with the public).  Encouraging high standards of conduct and public service. b. The organization‘s membership consists of individual practitioners and educators in the field of public relations. The organization‘s activities are meant to serve these members and the overall public relations industry, at large. c. PRSA membership provides individual members with a wealth of resources and research data, publications, conferences, APR accreditation, and a host of networking and professional development opportunities. The organization also enhances the overall marketing communications community as it strives to enhance the practice of public relations, focusing on professional development and the widespread implementation of effective PR activities. d. This is probably the most important organization in the public relations community because of its long-standing heritage with practitioners, its commitment to the industry, and its constant drive to improve and expand public relations activities in corporate and private America.

4. Reed Hastings had some missteps in his efforts to change the business model of Netflix. How might he have handled it differently? Create a press release announcing the change to the Netflix subscriptions that might have been better received by subscribers.

Answer Guidelines: The press release should apologize for the lack of communication about the rationale for the switch to two separate subscriptions, and Reed could work to explain why the change was necessary in order for Netflix to remain a sustainable and viable company. The release could also work to explain the simplicity of managing queues for both DVDs and the streaming service and where customers could access both queues. It should close by again 1-419 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

acknowledging that communication was mismanaged about the switch and outline what the company is doing to make the transition as easy as possible for all affected parties.

Connect Activities Title

Assignment Type

Topic

Media Challenges

Click and Drag

National Women‘s Soccer League PR Corporate Advertising

Video Case The Role of Public Relations and Publicity Case The Role of Public Analysis Relations and Publicity; The Role of Sponsorships in an IMC Program; The Role of Corporate Image and Issue Advertising

Media Challenges

Learning AACSB Bloom's Objective Accreditation Taxonomy Tagging 18-02 Analytical Understand Thinking 18-02; 18-04

Knowledge Application

Remember; Apply

18-05

Knowledge Application

Apply

Media Challenges Activity Summary: This activity provides students with a case about an organic, healthy meal provider, Green Foods, who is facing a crisis as several cans of their meat have been found to be contaminated with salmonella. Students are tasked with determining which Green Foods responses are appropriate given various stakeholders‘ responses.

Follow-Up Class Discussion: Ask students to discuss the steps they would have taken to handle the Green Foods salmonella crisis. Who are the various stakeholders PR practitioners would need to consider in their communication efforts? What would be the best way to communicate with these various stakeholders?

National Women’s Soccer League PR Activity Summary: This activity asks students to view a video highlighting Budweiser‘s sponsorship of the National Women‘s Soccer League and the League‘s use of PR and this

1-420 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.

sponsorship in their IMC mix. Students are tasked with answering questions relating to the various types of sponsorships and the benefits of sponsorship.

Follow-Up Class Discussion: Ask students to discuss if, and how, the league and Budweiser‘s PR/sponsorship efforts helped to achieve the objectives of corporate advertising as outlined by David Ogilvy in Ad Lab 18–B.

Corporate Advertising Activity Summary: This activity provides students with a case about Deep Discounts, a fictitious store that offers steep discounts on products, which is often attacked in the news media for hurting the profitability of local businesses. Students are tasked with answering questions relating to corporate/institutional advertising, advocacy advertising, advertorials, recruitment advertising, and umbrella campaigns (market prep corporate advertising).

Follow-Up Class Discussion: Ask students to discuss how they would have handled the Deep Discounts image issue. What efforts would be best for encouraging image repair in the local community?

1-421 © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.