Kathmandu Don Bosco College Semester VIII 1 Advertisement Management Semester VIII
Unit I: Introduction to Advertising
Meaning, Types and Functions of Advertising Advertisers: Who are they, what they do- The Traditional Advertiser Hierarchy Advertising Agencies: who they are, what they do, the traditional agency hierarchy, specialized agencies, agency compensation, advertiser-agency relationship The media: who they are, that they do- Media Sales, Media Measurement
Meaning, Features, Benefits, Types and Functions of Advertising
Definition
Advertising is a paid form of a non-personal message communicated through the various media by industry, manufacturers, business firms, non-profit organizations, or individuals. It is a persuasive and informational communication and is designed to influence the purchasing behavior and/or thought patterns of the audience. Advertising is a marketing tool and may be used in combination with other marketing tools, such as sales promotions, personal selling tactics, or publicity.
Advertising is a form of communication used to encourage or persuade an audience (viewers, readers or listeners; sometimes a specific group of people) to continue or take some new action. Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering. Advertising messages are usually paid for by sponsors and viewed via various traditional media; including mass media such as newspaper, magazines, television commercial, radio advertisement, outdoor advertising or direct mail; or new media such as blogs, websites or text messages.
The main features of advertising are as under: It is directed towards increasing the sales of business. Advertising is a paid form of publicity It is non-personal. They are directed at a mass audience and nor at the individual as is in the case of personal selling. Advertisement are identifiable with their sponsor of originator which is not always the case with publicity or propaganda.
Promotion
Promotion keeps the product in the minds of the customer and helps stimulate demand for the product. Promotion involves ongoing advertising and publicity. The ongoing activities of advertising, sales and public relations are considered aspects of promotions.
Publicity
Publicity is an act or communication designed to attract public attention, interest or support carried usually free through mass media. The main objective of publicity is not sales promotion but creation of an image through editorial or independent source of commentary. While the advertisers can control the content of the story, they may not have control over its interpretation by the media.
Advertisement Management Course Text Materials Kathmandu Don Bosco College Semester VIII 2 Marketing
Marketing is the wide range of activities involved in making sure that you're continuing to meet the needs of your customers and getting value in return. Marketing is usually focused on one product or service. Thus, a marketing plan for one product might be very different than that for another product. Marketing activities include "inbound marketing," such as market research to find out, for example, what groups of potential customers exist, what their needs are, which of those needs you can meet, how you should meet them, etc. Inbound marketing also includes analyzing the competition, positioning your new product or service (finding your market niche), and pricing your products and services. "Outbound marketing" includes promoting a product through continued advertising, promotions, public relations and sales.
Example "... if the circus is coming to town and you paint a sign saying 'Circus Coming to the Fairground Saturday', that's advertising. If you put the sign on the back of an elephant and walk it into town, that's promotion. If the elephant walks through the mayor's flower bed, that's publicity. And if you get the mayor to laugh about it, that's public relations." If the town's citizens go the circus, you show them the many entertainment booths, explain how much fun they'll have spending money at the booths, answer their questions and ultimately, they spend a lot at the circus, that's sales.
Marketing vs. Advertising: What's the Difference?
Quite often many people confuse marketing with advertising or vice versa. While both components are important they are very different. Knowing the difference and doing your market research can put your company on the path to substantial growth. Let's start off by reviewing the formal definitions of each and then I'll go into the explanation of how marketing and advertising differ from one another:
Advertising is the paid, public, non-personal announcement of a persuasive message by an identified sponsor; the non-personal presentation or promotion by a firm of its products to its existing and potential customers.
Marketing is the systematic planning, implementation and control of a mix of business activities intended to bring together buyers and sellers for the mutually advantageous exchange or transfer of products.
After reading both of the definitions it is easy to understand how the difference can be confusing to the point that people think of them as one-in-the same, so lets break it down a bit.
Advertising is a single component of the marketing process. It's the part that involves getting the word out concerning your business, product, or the services you are offering. It involves the process of developing strategies such as ad placement, frequency, etc. Advertising includes the placement of an ad in such mediums as newspapers, direct mail, billboards, television, radio, and of course the Internet. Advertising is the largest expense of most marketing plans, with public relations following in a close second and market research not falling far behind.
The best way to distinguish between advertising and marketing is to think of marketing as a pie, inside that pie you have slices of advertising, market research, media planning, public relations, product pricing, distribution, customer support, sales strategy, and community involvement. Advertising only equals one piece of the pie in the strategy. All of these
Advertisement Management Course Text Materials Kathmandu Don Bosco College Semester VIII 3 elements must not only work independently but they also must work together towards the bigger goal. Marketing is a process that takes time and can involve hours of research for a marketing plan to be effective. Think of marketing as everything that an organization does to facilitate an exchange between company and consumer.
More Literature on Advertising
Advertising is a non-personal form of promotion that is delivered through selected media outlets that, under most circumstances, require the marketer to pay for message placement. It is a method of mass promotion in that a single message can reach a large number of people.
To the core advertising is providing information, calling attention to, and making known something that you want to sell or promote.
Advertising is a message designed to promote or sell a product, a service, or an idea. Advertising reaches people through varied types of mass communication. In everyday life, people come into contact with many different kinds of advertising. Printed ads are found in newspapers and magazines. Poster ads are placed in buses, subways, and trains. Neon signs are scattered along city streets. Billboards dot the landscape along our highways. Commercials interrupt radio and television programming.
Advertising is nothing but a paid form of non-personal presentation or promotion of ideas, goods or services by an identified sponsor with a view to disseminate information concerning an idea, product or service. The message which is presented or disseminated is called advertisement. In the present day marketing activities hardly is there any business in the modern world which does not advertise. However, the form of advertisement differs from business to business.
Essentially advertising is spreading of information about the characteristics of the product to the prospective customers with a view to sell the product or increase the sales volume.
Commercial advertisers often seek to generate increased consumption of their products or services through "branding," which involves the repetition of an image or product name in an effort to associate certain qualities with the brand in the minds of consumers.
Advertising also has a history of being considered a one-way form of marketing communication where the message receiver (i.e., target market) is not in position to immediately respond to the message (e.g., seek more information). However this is changing. For example, in the next few years technologies will be readily available to enable a television viewer to click a button to request more details on a product seen on their favorite TV program. In fact, it is expected that over the next 10-20 years advertising will move away from a one-way communication model and become one that is highly interactive.
Types of Advertising
1. Product-Oriented Advertising 2. Image Advertising / Institutional Advertising / Corporate 3. Notice / Public Service Advertising
Advertisement Management Course Text Materials Kathmandu Don Bosco College Semester VIII 4 Product-Oriented Advertising
Most advertising spending is directed toward the promotion of a specific good, service or idea, what we have collectively labeled as an organizations product. In most cases the goal of product advertising is to clearly promote a specific product to a targeted audience. Marketers can accomplish this in several ways from a low-key approach that simply provides basic information about a product (informative advertising) to blatant appeals that try to convince customers to purchase a product (persuasive advertising) that may include direct comparisons between the marketers product and its competitors offerings (comparative advertising).
However, sometimes marketers intentionally produce product advertising where the target audience cannot readily see a connection to a specific product. Marketers of new products may follow this "teaser" approach in advance of a new product introduction to prepare the market for the product. For instance, one week before the launch of a new product a marketer may air a television advertisement proclaiming "After next week the world will never be the same" but do so without any mention of a product or even the company behind the ad. The goal is to create curiosity in the market and interest when the product is launched.
Product advertising may be further classified as pioneering, competitive, and reminder advertising.
Pioneering advertising Pioneering advertising tries to develop primary demand that is demand for a product category rather than a specific brand. It's needed in the early stages of the adoption process to inform potential customers about a new product. The first company to introduce a new technology to its industry doesn't have to worry about a competitive product since they alone have the technology. They have to sell the industry on the advantages of the new technology itself. Pioneering advertising is usually done in the early stage of the product life cycle by the company which introduces an innovation.
Competitive advertising Competitive advertising tries to develop selective demand; demand for a specific manufacturers product rather than a product category. An innovating company is usually forced into competitive advertising as the product life cycle moves along. After pioneering technology is accepted and most manufacturers are supplying competing products, the innovator is forced to sell the advantages of his specific design over that of the competition. This is usually the situation in a mature market.
Reminder advertising Competitive advertising tries to keep the product's name before the public. It is useful when the product has achieved market domination. Here, the advertiser may use "soft-sell" ads that just mention or show the name as a reminder. Reminder advertising may be thought of as maintenance for a product with the leadership position in the market.
Of course none of the above classifications are exclusive. Some companies combine elements of the institutional ad with product advertising. The classifications are merely aids in developing the objectives which the company sets for their ads.
Advertisement Management Course Text Materials Kathmandu Don Bosco College Semester VIII 5 Benefits / Importance of Advertisement
Advertising broadens the knowledge of the consumers. With the aid of advertising, consumers find and buy necessary products without much waste of time. This speeds up the sales of commodities, increases the efficiency of labor in distribution, and diminishes the costs of selling. It is an accepted fact that without market stimulus of heavy advertising, consumers might have waited another sixty years for the product evaluation that took place in less than ten years - it took after all over sixty years from the invention of the safety razor before the first acceptable stainless steel blades appeared in the market. These words are more than enough to testify the potentialities of advertising in the field of modern marketing system. The main benefits of advertising may be narrated as follows:
Benefits to Manufacturers It increases sales volume by creating attraction towards the product. It helps easy introduction of new products into the markets by the same manufacturer. It helps to create an image and reputation not only of the products but also of the producer or advertiser. In this way, it creates goodwill for the manufacturer. Retail price, maintenance is also possible by advertising where price appeal is the promotional strategy. It helps to establish a direct contact between manufacturers and consumers. It leads to smoothen the demand of the product. It saves the product from seasonal fluctuations by discovering new and new usage of the product. It creates a highly responsive market and thereby quickens the turnover that results in lower inventory. Selling cost per unit is reduced because of increased sale volume. Consequently, product overheads are also reduced due to mass production and sale. Advertising gives the employees a feeling of pride in their jobs and to be in the service of such a concern of repute. It, thus inspires the executives and worker to improve their efficiency. Advertising is necessary to meet the competition in the market and to survive.
Benefits to Wholesalers and Retailers Easy sale of the products is possible since consumers are aware of the product and its quality. It increases the rate of the turn-over of the stock because demand is already created by advertisement. It supplements the selling activities. The reputation created is shared by the wholesalers and retailers alike because they need not spend anything for the advertising of already a well advertised product. It ensures more economical selling because selling overheads are reduced. It enables them to have product information.
Benefits to Consumers Advertising stresses quality and very often prices. This forms an indirect guarantee to the consumers of the quality and price. Further large scale production assumed by advertising enables the seller to seller product at a lower cost. Advertising helps in eliminating the middlemen by establishing direct contacts between producers and consumers. It results in cheaper goods. It helps them to know where and when the products are available. This reduces their shopping time. It provides an opportunity to the customers to compare the merits and demerits of various substitute products. This is perhaps the only medium through which consumers could know the varied and new uses of the product.
Advertisement Management Course Text Materials Kathmandu Don Bosco College Semester VIII 6 Benefits to Salesmen Salesmanship is incomplete without advertising. Advertising serves as the forerunner of a salesman in the distribution of goods. Sales is benefited the advertisement in following ways: Introducing the product becomes quite easy and convenient because manufacturer has already advertised the goods informing the consumers about the product and its quality. Advertising prepares necessary ground for a salesman to begin his work effectively. Hence sales efforts are reduced. The contact established with the customer by a salesman is made permanent through effective advertising because a customer is assumed of the quality and price of the product. The salesman can weigh the effectiveness of advertising when he makes direct contact with the consumers.
Benefits to Community or Society Advertising, in general, is educative in nature. In the words of the late President Roosevelt of the U.S.A., "Advertising brings to the greatest number of people actual knowledge concerning useful things: it is essentially a form of education and the progress of civilization depends on education." Advertising leads to a large-scale production creating more employment opportunities to the public in various jobs directly or indirectly. It initiates a process of creating more wants and their satisfaction higher standard of living. For example, advertising has made more popular and universal the uses of such inventions as the automobiles, radios, and various household appliances. Newspapers would not have become so popular and so cheap if there had been no advertisements. The cheap production of newspapers is possible only through the publication of advertisements in them. It sustains the press. It assures employment opportunities for the professional men and artist. Advertising does provide a glimpse of a country's way of life. It is, in fact, a running commentary on the way of living and the behavior of the people and is also an indicator of some of the future in this regard.
Functions of Advertising
1. To communicate product information 2. To differentiate the product 3. Stimulate demand 4. To expand the product distribution 5. To increase brand preference and loyalty 6. To reduce overall sales cost 7. Competitive weapon
1. To communicate product information
Foremost function of advertising is to communicate information about the product, its attributes, and its location of sale; etc. Product information is communicated to the customers in manner that meets their information needs. Most consumers tend to discount the information in advertising because they understand that the purpose of the advertising is to persuade. Making an advertising message believable is not easy; though often it is sufficient to make the consumer curious enough to try the product. Such curiosity is often referred to as interested disbelief. Advertisers use a variety of devices to increase the believability of their advertising: celebrities or experts who are the spokespersons for the product, user testimonials, product demonstrations, research results, and endorsements.
Advertisement Management Course Text Materials Kathmandu Don Bosco College Semester VIII 7 Advertising supplies the necessary information to consumers so that they know what is available and where to buy it. It communicates information on products, services and ideas sold on the open market through a variety of media portals.
2. To differentiate the product
An important function of advertising is the identification function, that is, to identify a product and differentiate it from others; this creates an awareness of the product and provides a basis for consumers to choose the advertised product over other products. The identification function of advertising includes the ability of advertising to differentiate a product so that it has its own unique identity or personality.
Products, services and ideas are sold through businesses that are differentiated by their brand identities. Brand identity is communicated to the public via advertising. Consumers build emotional relationships with certain brands with which they become increasingly familiar through the years, thanks to advertising.
There are four additional ways to differentiate your offering from the competition: Leveraging the brand Innovating your service offering Designing product Packaging
None of these methods are expensive and all are ways that can increase your perceived value to the customer and increase your market share.
Example: Garnier Fruitics shampoo, the bottle have the different color from all other shampoo available in the shelf. The bottle of the shampoo is unique from all others.
Example: Apple laptops make them different from others as the WHITE color and logo of APPLE on back of the screen.
3. Stimulate demand
The third function of advertising is to induce consumers to try new products and to suggest reuse of the product. This is generally the persuasion function. Persuasion is the core mission of advertising that tells how the product, service or idea you are considering will improve your life. The basic goal is to provide constant reminders and reinforcements to generate the desired behavior the advertiser wants from them.
By informing consumers about the availability of a product in the market, advertising stimulates hidden needs, and reinforces the aroused needs. There is a general agreement that advertising has some effect on aggregate consumption.
The demand generated by advertising, public relations, and sales promotion "pulls" the goods or services through channels of distribution. The idea is to generate consumer demand for specific products, services and ideas through ad campaigns that target the audiences that are most likely to buy them.
4. To expand the product distribution
Advertisement Management Course Text Materials Kathmandu Don Bosco College Semester VIII 8 When the consumer comes to know about the particular product from the advertisement he/she wants to try that new product. They go to shops to buy the product; if the new product is not available in a shop then the shopkeeper consults the distributor to make that product available in his shop. It is basically to provide the product all over market. It is necessary to make sure that product should be accessible to everyone. Availability of product effects the distribution and sales.
Previews about the features of new products, services and ideas motivate consumers to obtain them because they don't want to be left out. Advertising lets consumers on in and up-coming trends and new markets. They also offer coupons, rebates and trial offers on new products, services or ideas to recruit new customers and induce existing customers to try things. Advertisers preview new or improved products, services and ideas to consumers in order to appeal to their sense of wanting to learn about leading edge trends. Previewing new trends is a technique employed by advertisers that capitalizes on consumers' desires to "keep up with the crowd" by owning the latest and greatest product, service or idea.
5. To increase brand preference and loyalty
Marketing is a dynamic thing. As your needs are changed your preferences are changed. When the product delivers the promised quality, service and value, it creates satisfied customers who become instrumental in spreading a favorable word-of-mouth. In turn satisfied customers develop brand preference which gets reinforced by repeated ads. Consistent quality advertising increases consumer loyalty for a product, service or idea. Advertising seeks to maintain the current customer base by reinforcing purchasing behavior with additional information about the benefits of brands. The goal of advertising is to build and reinforce relationships with customers, prospects, retailers and important stakeholders. Brand loyalty is a long-term customer preference for a particular product or service. Brand loyalty can be produced by factors such as customer satisfaction with the performance or price of a specific product or service, or through identifying with a brand image. It can be encouraged by advertising. People often make purchasing decisions based on how a brand makes them feel emotionally rather than based on quality or other objective evaluations. If "Just Do it" strikes a chord with an athlete, he'll buy Nike; the decision may have little to do with quality.
Products with strong brand franchise also offer some protection against the competition. Retailers develop confidence and do not hesitate in stocking strong brands. Brand loyal customers are an important asset for the company and are less likely to be influenced by competitive moves.
6. To reduce overall sales cost
When a product is selling you have to teach the people about the product. Like if we would advertise through newspapers, TV, broachers and internet, it would cater huge sum of masses and if you do individually it would be more costly and time consuming. Hence advertising becomes instrumental in cutting down production and selling costs. Increasing unit sales decrease unit costs. Selling costs also may decrease because there could be fewer wasted calls and less strain on sales people. In any market based and competitive economy, when unit cost of a product goes down, there are external and internal pressures which compel companies to lower prices to the advantage of consumers. This often leads to deeper market penetration.
7. Competitive weapon
Advertisement Management Course Text Materials Kathmandu Don Bosco College Semester VIII 9 Advertising by itself and coupled with other promotion mix elements, may prove to be an extremely potent weapon to counter competitive moves. Advertising has an established role in creating brand personality and image. It helps differentiate a companys offer in a manner that the product may be considered as something with unique value having a definite identity of its own. Advertising is unavoidable to complete with or neutralize competitor's advertising. When competitors are adopting intensive advertising as their promotional strategy, it is reasonable to follow similar practices to neutralize their effects. In such cases, it is essential for the manufacturer to create a different image of his product.
Advertisers: Who are they, what they do- The Traditional Advertiser Hierarchy
Advertisers: Who they are, what they do
An advertiser is a company or an individual that spends money to convey a persuasive advertising message to the public.
The advertiser is the puppeteer in the puppet show that is advertising. The entire business starts with the advertiser. The rise and fall of advertising business depends solely on the expenditure incurred by the advertiser. It is the advertiser that maintains the total complex of services and organizations that constitute the advertising business.
The major advertisers are the manufacturers of consumer products, particularly FMCG, consumer durables and elitist consumer services. Though the largest spenders are big manufacturers, the buyers of advertising are numerous and diverse. Not all of them use the services of advertising agencies, nor do all use the wide range of media available. Buyers of advertising extend from the individual to the massive conglomerate of a wide range of industries and services with production facilities and markets dispersed in different continents.
The advertisers may directly approach the media or approach an agency to accomplish its objective. When an advertiser solicits the help of an agency it is often referred to as the client.
The Traditional Advertiser Hierarchy
Structure of advertiser varies according to size, type and functions of the organization. However advertising always comes within marketing department. One of the sub-departments or units under marketing department. Other units are like sales, distribution, promotion, branding, research and creative services etc. Different types of structures of advertisers The Typical Product Management Structure A Centralized Organizational Structure A Decentralized Organizational Structure Smaller Advertisers
The Typical Product Management Structure
Different units such as Product Management, Marketing Research, Advertising, Sales & Distribution under marketing head. Each unit has their team and subordinates and reporting may be vertical and diagonal.
Advertisement Management Course Text Materials Kathmandu Don Bosco College Semester VIII 10 Product manager have the responsibility of success of the brand of line and not all the units.
A Centralized Organizational Structure
Decisions about advertising made from one central location. The central authority only deals with advertising agency works and not the branches and regional office Cost efficient in terms of budget and human resource Ensures similarity in marketing communication, branding, positioning Accomplishes overall corporate marketing goal.
A Decentralized Organization Structure
Appropriate for organization with huge number of products and establishment spread over a wide geographical location. Major advertising decisions made by the central authority and day to day activities handled by product managers or people from regional or branch offices. Quick adaptation to prevailing market conditions Product / brand managers directly deal with ad agency.
Smaller Advertisers
No distinct department May be a part time staff deals with the advertising assignment Most of the time some department handles the advertising job
Advertising Agencies: Who they are, what they do, the traditional agency hierarchy, specialized agencies, agency compensation, advertiser-agency relationship
Advertising Agencies: Who They Are, What They Do
Definition & Meaning
An advertising agency is a business that assists advertisers in all stages of the advertising process, from account management and planning to message creation, media planning and research.
An advertising agency or ad agency is an independent service providing firm that creates new promotional ideas, designs print, radio, television, and internet advertisements, books advertisement space and time, plans and conducts advertising campaigns, commissions research and surveys, and provides other such services that help a client in entering and succeeding in a chosen market. For example: The work of a tailor is to collect the raw material, find matching threads, cut the cloth in desired shape, finally stitch the cloth and deliver it to the customer.
Advertisement Management Course Text Materials Kathmandu Don Bosco College Semester VIII 11 Advertising Agency is just like a tailor. It creates the ads, plans how, when and where it should be delivered and hands it over to the client. Advertising agencies are mostly not dependent on any organizations. These agencies take all the efforts for selling the product of the clients. They have a group of people expert in their particular fields, thus helping the companies or organizations to reach their target customer in an easy and simple way.
Role of Advertising Agencies 1. Creating an advertise on the basis of information gathered about product 2. Doing research on the company and the product and reactions of the customers. 3. Planning for type of media to be used, when and where to be used, and for how much time to be used. 4. Taking the feedbacks from the clients as well as the customers and then deciding the further line of action All companies can do this work by themselves. They can make ads, print or advertise them on televisions or other media places; they can manage the accounts also. Then why do they need advertising agencies? The reasons behind hiring the advertising agencies by the companies are: The agencies are expert in this field. They have a team of different people for different functions like copywriters, art directors, planners, etc. The agencies make optimum use of these people, their experience and their knowledge. They work with an objective and are very professionals. Hiring them leads in saving the costs up to some extent. Types of advertising agencies.
1. Full service Agencies
Agencies that offer advertisers all of the elements advertising like message creation, media placement, research and related services are known as full-service agencies.
Large size agencies. Deals with all stages of advertisement. Different expert people for different departments. Starts work from gathering data and analyzing and ends on payment of bills to the media people.
2. Creative Boutiques
Creative agencies specialize in "creative" or design-based business models and their basic interest is in the creation of the advertisement or branding. These agencies are known for their creative output, which can include website design, advertising copy, magazine advertisements, and radio and television commercials. While the full-service agencies offer design in conjunction with media buying, media agencies concentrate only on media buying. The client who chooses to use a design only based advertising agency must undertake some of the advertising purchasing such as media buying.
Very creative and innovative ads. No other function is performed other than creating actual ads.
Advertisement Management Course Text Materials Kathmandu Don Bosco College Semester VIII 12 Small sized agencies with their own copywriters, directors, and creative people.
3. Media Buying Agencies
The media buying agencies are the agencies who purchase large quantities of advertising space or time with various media on behalf of several clients. Their primary purpose is to manage the media buys and place the advertisers message in the media.
Buys place for advertise and sells it to the advertisers. Sells time in which advertisement will be placed. Schedules slots at different television channels and radio stations. Finally supervises or checks whether the ad has been telecasted at opted time and place or not.
4. In-House Agencies
The organizations who have their own department looking after advertising assignments or agencies coming from its own management is known as in-house agencies. An In-House agency is a team that focuses on one goal to sell the company's product, they will handle all aspects of the brand. Some advertisers believe that they can undertake advertising functions by themselves at a lower cost than would be charged by an outside agency. In-House is better if a company is looking to build up an image over a number of years.
As good as the full service agencies. Big organization prefers these type of agencies which are in built and work only for them. These agencies work as per the requirements of the organizations.
5. Interactive Agencies
Interactive agencies may differentiate themselves by offering a mix of web design / web development, search engine marketing, internet advertising/marketing, or e-business/e- commerce consulting. Interactive agencies rose to prominence before the traditional advertising agencies fully embraced the Internet. Today, the most successful interactive agencies are defined as companies that provide specialized advertising and marketing services for the digital space. The digital space is defined as any multimedia-enabled electronic channel that an advertiser's message can be seen or heard from. Interactive agencies function similarly to advertising agencies, although they focus solely on interactive advertising services. They deliver services such as strategy, creative, design, video, development, programming deployment, management, and fulfillment reporting. Often, interactive agencies provide: digital lead generation, digital brand development, interactive marketing and communications strategy, rich media campaigns, interactive video brand experiences, Web 2.0 website design and development, e-learning Tools, email marketing, SEO/SEM services, PPC campaign management, content management services, web application development, and overall data mining & ROI assessment. The creation of sites such as MySpace, Facebook and YouTube have sparked market interest, as some interactive agencies have started offering personal and corporate community site development as one of their service offerings. It still may be too early to tell how agencies will use this type of marketing to monetize client ROI, but all signs point to online networking as the future of brand marketing and Interactive being the core of Brand's Communication and Marketing Strategy.
Modernized modes of communication are used.
Advertisement Management Course Text Materials Kathmandu Don Bosco College Semester VIII 13 Uses online advertisements, sending personal messages on mobile phones, etc. The ads produced are very interactive, having very new concepts, and very innovative.
6. Specialized Agencies
There are some specialized agencies which work for some special advertisements that specialize in particular kinds of advertising: recruitment, help-wanted, medical, classified, industrial, financial, direct-response, retail, yellow pages, theatrical/entertainment, investment, travel, social message, finance and so on. These types of agencies need people of special knowledge in that field. Specialization occurs in such fields for a variety of reasons. Often, as in recruitment advertising, for example, specialized media or media uses are involved that require knowledge and expertise not ordinarily found in a general-line agency. In other cases, such as medical or industrial advertising, the subject is technical and requires that writers and artists have training in order to write meaningful advertising messages about it.
Integrated Marketing Agencies Regional and Local Agencies Midsize Agencies Niche Units Ethnic Agencies
The Traditional Agency Hierarchy
Advertising agencies are divided into four functional areas according to traditional approach. Creative Department Account Management Research Department Media Department
Creative Department
The creative teams take research and the clients' wants and needs as expressed by the account manager, and produce creative advertising campaigns. They are the people who create the actual ads form the core of an advertising agency. Graphic designers, web designers, writers, editors and creative directors make up an advertising agency's creative department.
Modern advertising agencies usually form their copywriters and art directors into creative teams. Creative teams may be permanent partnerships or formed on a project-by-project basis. The art director and copywriter report to a creative director, usually a creative employee with several years of experience. Although copywriters have the word "write" in their job title, and art directors have the word "art", one does not necessarily write the words and the other draw the pictures; they both generate creative ideas to represent the proposition i.e., the advertisement or campaign's key message. Once they receive the creative brief from their account team, the creative team will concept ideas to take to their creative director for feedback. This can often be a back and forth process, occurring several times before several ads are set to present to the client. Creative departments frequently work with outside design or production studios to develop and implement their ideas. The
Advertisement Management Course Text Materials Kathmandu Don Bosco College Semester VIII 14 creative process forms the most crucial part of the advertising process. The first known creative department in an advertising agency was formed by J.W Thompson.
Account Management
Account management or client servicing is to represent the agency to the client and coordinate between clients need with other departments of the agency. Each client is known as an account. Agencies appoint account executive or account manager also called client servicing executive to liaise with the clients. The account executives need to be sufficiently aware of the client's needs and desires that can be instructed to the agency's personnel and should get approval from the clients on the agency's recommendations to the clients. Creativity and marketing knowledge are the needed area of the client servicing. They work closely with the specialists in each field. The account manager will develop a creative brief, usually about a page that gives direction to the creative team. The creative brief often includes information about the target audience and their attitudes and behaviors. The creative team will take the brief and, in line with the account managers creative brief, develop original copy and graphics depending on media strategy.
The account manager ensures that client needs are expressed to the research and creative teams. They also work to ensure that necessary information is transferred to the client regarding creative, research, competition or any of other factor that may somehow affect how the client's product gets marketed to consumers.
Research Department
The primary function of research department is to learn as much as possible about the consumers, how they interact with the clients brand and how it fits into their lifestyle. This function is also known as strategic planning. Advertising agencies work with companies to establish the characteristics of their target markets through marketing research. From holding focus groups to conducting surveys online and in person, advertising agencies spend a substantial amount of time researching consumers to understand what they buy and what motivates them to buy. Once the ad is ready they test the ad among a small group of consumers to gather their feedback before going on large-scale. The account managers also research the environment, identifying competitors, and researching their companies and marketing tactics. Through market research, advertising agencies also identify political, social, technological and economic factors that may affect a client's campaign.
Media Department
The media department determines in which media and when should be the produced ad messages be placed. Their job is to determine the most appropriate medium in which to deliver the message and then choose from the limited number of programs or titles within that medium to find the most appropriate target audience.
There are two distinct functions of media department: Media planning Media buying
Media planning is putting together a schedule of different media vehicles deciding which one will be the most appropriate to reach the target audience. To accomplish this the media planners study the media habits and activities of the target to whom the ads are being addressed.
Advertisement Management Course Text Materials Kathmandu Don Bosco College Semester VIII 15 Once the plan is approved by the client the media buyers process to secure the media space and time from the chosen media. It is their duty to identify the most efficient media space and time. Once the buy has been made its their responsibility to ensure that the ad appear as per schedule.
Agency Compensation
Compensation amounts and methodologies are essential parts of every advertiser-agency relationship, and clarifying the issues involved in agency compensation has become increasingly important.
Media Commission Fee-Based Compensation Mark-Up Compensation
Media Commission The agency buys time or space with the media and charges the same amount to the client with certain additional amount of commission to it.
Fee-Based Compensation The agency and advertiser agree in advance on how much the agency will receive for certain period of time for providing service to the advertiser.
Mark-Up Compensation The agency charges the advertisers a set mark-up added to every element or services provided upon cost plus margin basis. This consists of addition of certain percentage of mark-up for the purchased media space or time and the services undertaken for the advertisers.
Advertiser-Agency Relationship
Advertiser Agency Relationships
As in any type of relationship advertiser and agency require trust, openness, and honesty to work well. Can deteriorate when there is suspicion, disagreements, or hatred between two sides. As the companies grow bigger they start generating complaints against each other. There are examples of advertiser-agency relationships that lasted as little as 3 months and other gone on for 50 years or more.
Reasons for Breakups between Advertiser and Agency
If advertiser finds that some agencies are more responsive, efficient and creative than the existing. Lack of flexibility in the case of agency. If the compensation received is not acceptable to the agency. If the agency go after competing account such as another brand in the same category.
Factors that help to Continue Good Relationship between Advertiser and Agency
Advertisement Management Course Text Materials Kathmandu Don Bosco College Semester VIII 16
Keep no secrets - the more information you can reveal to your agency, the better equipped they will be to reach your goals. Be realistic - set goals and metrics for the agency that you otherwise would expect to achieve yourself. Setting unobtainable goals will not benefit either party. Communicate, Communicate, Communicate - its essential to keep the lines open and flow of information in both directions constant. Although advertisers are the purchasers and ultimately sign off on their contract/services, they are not the experts. So, if the advertiser is going down a path that doesn't make sense for their business, the agency should speak up and make recommendations. How Does It All Work - having patience with an advertiser is key, particularly in an area where they may not be well versed. Education can go a long way when trying to introduce new services to your advertiser. If they understand it, they may recognize the potential benefits and buy into it.
Media
Channels of communication that serve many diverse functions, such as offering a variety of entertainment with either mass or specialized appeal, communicating news and information, or displaying advertising messages. The media carry the advertisers' messages and serve as the vital link between the seller of a product or service and the consumer.
Types of Advertising Media
1. Print Publications 2. Broadcasting Television, Radio 3. Outdoor Billboard, Signage 4. Online Website, Email 5. Direct Mail 6. Product Placement 7. Mobile Devices 8. Sponsorships 9. Other Media Outlets
1. Print Publications
Print publications refer to advertising through print media such as newspapers, magazines, brochures, fliers etc. Print media has always been a popular and common advertising option. Often, newspapers and magazines sell the advertising space according to the area occupied by the advertisement, the position of the advertisement in the publication (front page/middle page, above/below the fold), as well as the readership of the publications and at all geographical levels. For instance, an advertisement in a relatively new and less popular newspaper will cost far less than an advertisement in an established newspaper that has a high readership. The price of print ads may also depend on quality of the paper and the supplement in which they appear. Print media also offers the ability to target a specific audience based on geography or common interests. Print advertising usually includes larger display ads, as well as classified advertising. The classifieds are typically very affordable, whereas display ads are a bit more price.
Advertisement Management Course Text Materials Kathmandu Don Bosco College Semester VIII 17 Magazines, especially those that target specific niche or specialized interest areas, are more narrowly targeted compared to broadcast media. Additionally, magazines offer the option of allowing marketers to present their message using high quality imagery.
Newspapers have usually wider market coverage and is most suitable to target local markets.
2. Broadcasting Television, Radio
Broadcast advertising is a very popular advertising medium that constitutes several branches like television and radio. Television advertisements have been very popular ever since they were introduced and is an efficient way to mass-market message to large audience. The cost of television advertising often depends on the duration of the advertisement, the time of broadcast (prime time/lull time), sometimes the show on which it will be broadcast, and of course, the popularity of the television channel itself. The radio might have lost its charm owing to new age media. However it remains the choice of small- scale advertisers.
Radio jingles have been very a popular advertising medium and have a large impact on the audience, which is evident in the fact that many people still remember and enjoy old popular radio jingles. Radio commercials are an effective way for businesses to target a group of people based on location or similar tastes. For example, a local night club seeking college student clientele would probably consider advertising on a local pop station.
3. Outdoor Billboard, Signage
Outdoor advertising makes use of several outdoor tools and techniques to attract the customers attention. The most common examples of outdoor advertising are billboards, signage, kiosks and also events and trade-shows organized by the company. Billboard advertising is very popular. However it has to be really concise and catchy in order to grab the attention of the passersby. Kiosks not only provide an easy outlet for the company's products but also make for an effective advertising tool to promote the company's products. Organizing special events or sponsoring them makes for an excellent advertising opportunity and strategy. The company can organize trade fairs, or even exhibitions for advertising their products or participate in one. The use of signs to communicate a marketers message is called signage. The most obvious method of using signs is through billboards, which are generally located in high traffic areas. Indoor billboards are often smaller than outdoor billboards and are designed to attract the attention of foot traffic (i.e., those moving past the sign). For example, smaller signage in airports, train terminals and large commercial office space fit this category. While billboards are the most obvious example of signage advertising, there are many other forms of signage advertising include: Sky writing where airplanes use special chemicals to form words Plane banners where large signs are pulled behind an airplane Mobile billboards where signs are placed on vehicles, such as buses and cars, or even carried by people Plastic bags used to protect newspapers delivered to homes Advertisements attached public transportation vehicles
4. Online Website, Email
Any type of advertising done through website is called online advertising. It is an increasingly popular method and is fastest growing media for promoting a business. The Internet offers
Advertisement Management Course Text Materials Kathmandu Don Bosco College Semester VIII 18 many advertising options with messages delivered through websites or by email. There are many forms of online advertising such as banner ads that are image ads displayed on web pages, Google AdWords that is advertising that matches an ad to an internet user's search inquiry, social networking marketing, email advertising etc.
Internet advertising allows for a large variety of creative types including text-only, image- only, multimedia (e.g., video) and advanced interactive (e.g., advertisement in the form of online games). In addition Internet advertisements can be delivered in a number of different sizes (measured in screen pixels) ranging from full screen to small square ads that are only a few pixels in size. The placement of an Internet advertisement can occur in many ways including fixed placement in a certain website location (e.g., top of page), processed placement where the ad is delivered based on user characteristics (e.g., entry of words in a search box), or on a separate webpage where the user may not see the ad until they leave a site or close their browser (e.g., pop-under).
Social network marketing has been the fastest-growing form of Internet advertising. This includes using sites like Facebook, Twitter, and LinkedIn to promote a product or service. Many social networks have advertising available, such as Facebook Ads.
Using email to deliver an advertisement affords marketers the advantage of low distribution cost and potentially high reach. In situations where the marketer possesses a highly targeted list, response rates to email advertisements may be quite high. This is especially true if those on the list have agreed to receive email. However, as most people are aware, there is significant downside to email advertising due to highly publicized issues related to abuse (i.e., spam).
5. Direct Mail
This method of advertising uses postal and other delivery services including postcards, letters, brochures, catalogs and flyers, to a physical address of targeted customers. Direct mail is most effective when it is designed in a way that makes it appear to be special to the customer. For instance, a marketer using direct mail can personalize mailings by including a message recipients name on the address label or by inserting their name within the content of marketers message.
Direct mail can be a very cost-effective method of advertising, especially if mailings contain printed material. This is due to cost advantages obtained by printing in high. Consequently, the total cost of printing 50,000 postcards is only slightly higher than printing 20,000 postcards. Obviously there are other costs involved in direct mail, primarily postage expense.
While direct mail can be seen as offering the benefit of a low cost-per-contact, the actual cost-per-impression can be quite high as large numbers of customers may discard the mailing before reading. This has led many to refer to direct mail as junk mail and due to the name some marketers view the approach as ineffective. However, direct mail, when well- targeted, can be an extremely effective promotional tool.
6. Product Placement
Product placement is an advertising approach that intentionally inserts products into entertainment programs such as movies, TV programs and video games etc. It is also called covert advertising. Placement can take several forms including:
Advertisement Management Course Text Materials Kathmandu Don Bosco College Semester VIII 19 visual imagery in which the product appears within the entertainment program actual product use by an actor in the program words spoken by an actor that include the product name
Product placement is gaining acceptance among a growing number of marketers for two main reasons. First, in most cases the placement is subtle so as not to divert significant attention from the main content of the program or media outlet. This approach may lead the audience to believe the product was selected for inclusion by program producers and not by the marketer. This may heighten the credibility of the product in the minds of the audience since their perception, whether accurate or not, is that product was selected by an unbiased third-party. Second, entertainment programming, such as television, is converging with other media, particularly the Internet. In the future a viewer of a television program may be able to easily request information for products that appear in a program by simply pointing to the product on the screen. With the information they may get the option to purchase the product. As this technology emerges it is expected that product placement opportunities will become a powerful promotional option for many marketers.
7. Mobile Devices
Handheld devices, such as cellphones, smartphones, portable computers and other wireless devices, make up the growing mobile device market. Such devices allow customers to stay informed, gather information and communicate with others without being tied to a physical location. While the mobile device market is only beginning to become a viable advertising medium, it may soon offer significant opportunity for marketers to reach customers at anytime and anyplace.
Also, with geographic positioning features included in newer mobile devices, the medium has the potential to provide marketers with the ability to target customers based on their geographic location. Currently, the most popular advertising delivery method to mobile devices is through plain text messaging, however, over the next few years multimedia advertisements are expected to become the dominant message format.
8. Sponsorships
A subtle method of advertising is an approach in which marketers pay, or offer resources and services, for the purpose of being seen as a supporter of an organizations event, program or product offering. Sponsorships are intended not to be viewed as blatant advertisement and in this way may be appealing for marketers looking to establish credibility with a particular target market. However, many sponsorship options lack the ability to tie spending directly to customer response. Additionally, the visibility of the sponsorship may be limited to relatively small mentions especially if the marketer is sharing sponsorship with many other organizations.
9. Other Media Outlets
Advertising through inserted material in product packaging e.g., inside credit card bill. Advertising imprinted on retail receipts e.g., grocery store, cash machine. Word of Mouth Advertising - While some may argue that word of mouth is not advertising because it's free, this form of promotion is one of the most credible and priceless assets of any business. Even if business owners can't buy word of mouth advertising, they can
Advertisement Management Course Text Materials Kathmandu Don Bosco College Semester VIII 20 encourage their customers to tell their friends and family about the great product or service they purchased. Advertising using telephone recordings. Advertising via fax machine.
Functions of Media
1. Media Sales 2. Media Measurement
Media Sales
Media Sales is an activity of supplying advertising space or time to advertisers and agencies. The advertising space or time in a media is known as advertising units. Each media has personnel known as media representatives responsible for selling the advertising units at the best possible price to the buyers. The media representatives sell advertising space to companies who want to promote their products or services. Depending on the company, they could be sell advertisements in magazines, newspapers or on poster sites; airtime on TV, radio or cinema or online opportunities on leading websites.
Media Sales is a term used broadly to describe sales roles within a variety of different media; including advertising within magazines, on radio, on television and on websites, selling delegate places or sponsorship for conferences and events, selling outdoor space (large billboards and poster sites etc) or selling subscriptions and data/information.
The organization of media sales force varies by company. At some larger organizations, the representatives may be responsible for particular advertising category such as automotive or electronics while in small company one staff may represent the entire category.
Media Measurement
The other function of media is to keep track of the audience, determine whether their ad campaign is working, ascertain who has seen the ad, how frequently the audience has seen and what is the effect generated by the communication.
Types of measurement
Competitive Expenditure It is the study with regard to the amount being spent on each brand in different media.
Audience Research It is the study of audience with regard to media usage pattern, product purchase behavior, demographics of the audience and their lifestyle characteristics, etc.
Independent companies known as syndicated suppliers provide the service of media measurement.