6 pages semester learning inspiration

zoewang

Week10-RevisionManagingMassCommunications-3-10.pptx

Home >Business & Finance homework help >Marketing homework help >6 pages semester learning inspiration

IMC-Development and Management of the Mix; Advertising, Sales Promotion, Events, Public Relations-Media Planning

Session 10

Integrated Marketing

‹#›

Developing and Managing an Advertising Program (1 of 2)

Figure 20.1 The Five Ms of Advertising

Advertising can be a cost-effective way to disseminate messages, whether to build a brand preference or to educate people. In developing an advertising program, marketing managers must always start by identifying the target market and buyer motives. Then they can make the five major decisions known as “the five Ms”:

1. Mission: What are our advertising objectives?

2. Money: How much can we spend and how do we allocate our spending across media types?

3. Message: What should the ad campaign say?

4. Media: What media should we use?

5. Measurement: How should we evaluate the results?

These decisions are summarized in Figure 20.1.

Developing and Managing an Advertising Program (2 of 2)

Setting the advertising objectives

Deciding on the advertising budget

Developing the advertising campaign

Choosing media

Evaluating advertising effectiveness

An advertising objective (or goal) is a specific communications task and achievement level to be accomplished with a specific audience in a specific period of time. We classify advertising objectives according to whether they aim to inform, persuade, remind, or reinforce. These goals correspond to stages in the hierarchy-of-effects model discussed in Chapter 19.

Informative advertising aims to create brand awareness and knowledge of new products or new features of existing products. Consumer packaged goods companies like Colgate, General Mills, and Unilever will often focus on key product benefits.

Persuasive advertising aims to create liking, preference, conviction, and purchase of a product or service. Some persuasive advertising is comparative advertising, which explicitly compares the attributes of two or more brands. Comparative advertising works best when it elicits cognitive and affective motivations simultaneously and when consumers are processing advertising in a detailed, analytical mode.

Reminder advertising aims to stimulate repeat purchase of products and services. Expensive, four-color Coca-Cola ads in magazines remind people to purchase Coca-Cola.

Reinforcement advertising aims to convince current purchasers they made the right choice. Automobile ads often depict satisfied customers enjoying special features of their new car.

Setting the Advertising Objectives

Informative - Knowledge, awareness - CPG

Persuasive - Liking, preference, conviction - comparative - why we’re better!

Reminder - stimulate repeat purchase (4-pg Coke)

Reinforcement - Made the right choice (cars)

Reminder advertising aims to stimulate repeat purchase of products and services. Expensive, four-color Coca-Cola ads in magazines remind people to purchase Coca-Cola.

Reinforcement advertising aims to convince current purchasers they made the right choice. Automobile ads often depict satisfied customers enjoying special features of their new car.

Deciding on the Advertising Budget (1 of 2)

Stage in the product life cycle - New, medium, old

Market share and consumer base

Competition and clutter

Advertising frequency

Product substitutability - commodity product - beer, banks, credit cards - heavy advertising for unique image

Although advertising is treated as a current expense, part of it is really an investment in building brand equity and customer loyalty. Here are five specific factors to consider when setting the advertising budget:

1. Stage in the product life cycle—New products typically merit large advertising budgets to build awareness and gain consumer trial. Established brands usually are supported by lower advertising budgets, measured as a ratio to sales.

2. Market share and consumer base—High-market-share brands usually require less advertising expenditure as a percentage of sales to maintain share. Building share by increasing market size requires larger expenditures.

3. Competition and clutter—In a market with a large number of competitors and high advertising spending, a brand must advertise more heavily to be heard. Even advertisements not directly competitive to the brand create clutter and a need for heavier advertising.

4. Advertising frequency—The number of repetitions needed to put the brand’s message across to consumers has an obvious impact on the advertising budget.

5. Product substitutability—Brands in less-differentiated or commodity-like product classes (beer, soft drinks, banks, and airlines) require heavy advertising to establish a unique image.

Developing the Advertising Campaign (1 of 7)

Message generation and evaluation

Focuses on one or two selling propositions

Positioning of an ad—what it attempts to convey about the brand (market research/insights)

Creative brief

Key message

Target Audience

Communication Message - to do, to know, to believe

Key brand benefits

Supports brand promise

Supports Brand promise

Open sourcing/crowdsourcing

Advertisers are always seeking “the big idea” that connects with consumers rationally and emotionally, distinguishes the brand from competitors, and is broad and flexible enough to translate to different media, markets, and time periods. Fresh insights are important for creating unique appeals and position.

A good ad normally focuses on one or two core selling propositions. As part of refining the brand positioning, the advertiser should conduct market research to determine which appeal works best with its target audience and then prepare a creative brief, typically one or two pages. This is an elaboration of the positioning strategy and includes considerations such as key message, target audience, communications objectives (to do, to know, to believe), key brand benefits, supports for the brand promise, and media.

How many ad themes should the advertiser create before choosing one? The more themes explored, the higher the probability of finding an excellent one. Fortunately, an ad agency’s creative department can inexpensively compose many alternatives in a short time by drawing still and video images from computer files. Marketers can also cut the cost of creative dramatically by using consumers as their creative team, a strategy sometimes called “open sourcing” or “crowdsourcing.”

Developing the Advertising Campaign (2 of 7)

Creative development and execution

Advertising medium (television, print, and radio advertising media)- how effective is each?

The ad’s impact depends not only on what it says but, often more important, on how it says it. Creative execution can be decisive. Every advertising medium has advantages and disadvantages. Here, we briefly review television, print, and radio advertising media.

Role of Traditional Advertising

Goal of traditional advertising is to turn the consumer’s mind towards the advertised brand.

It does this by raising awareness of the brand among the target audience and by building positive attitudes towards the brand,

How does traditional advertising compare to digital and social advertising?

How is it the same?

How is it different?

Which is better and why?

Forms of Traditional Advertising

Mass Media

Local Media

Hyper Local Media

Trade Media (B2B)

Financial Media

Developing the Advertising Campaign (3 of 7)

Television ads

Vividly demonstrates product attributes

Persuasively explains consumer benefits

Portrays usage imagery/brand personality

Product/brand can be overlooked

Creates clutter

Easy to ignore or forget ads

Television is generally acknowledged as the most powerful advertising medium and reaches a broad spectrum of consumers at low cost per exposure. Properly designed and executed TV ads can still be a powerful marketing tool that improves brand equity, sales, and profits. In the highly competitive insurance category, advertising can help a brand to stand out.

Developing the Advertising Campaign (4 of 7)

Print ads

Provide detailed product information

Flexibility in design and placement

Can be fairly passive

Newspapers popular for local ads

In steady decline

Poor reproduction quality

Short shelf life

Researchers report that the picture, headline, and copy in print ads matter in that order. The picture must draw attention. The headline must reinforce the picture and lead the person to read the copy. The copy must be engaging and the brand’s name prominent.

Developing the Advertising Campaign (5 of 7)

Print ad evaluation criteria

Is the message clear at a glance?

Is the benefit in the headline?

Does the illustration support the headline?

Does the first line of the copy support or explain the headline and illustration?

Is the ad easy to read and follow?

Is the product easily identified?

Is the brand or sponsor clearly identified?

In judging the effectiveness of a print ad, marketers should be able to answer yes to these questions about its execution.

Developing the Advertising Campaign (6 of 7)

Radio ads

Occurs in the car and out of home

Main advantage is flexibility

Ads are relatively inexpensive

Can be schedule to air quickly

Effective when run in morning

Can be extremely creative

Can tap into the listener’s imagination

Radio is a pervasive medium: Ninety-three percent of all U.S. citizens age 12 and older listen daily and for about 20 hours a week on average, numbers that have held steady in recent years.

Developing the Advertising Campaign (7 of 7)

Legal and social issues

Advertisers must not make false claims

Must not use false demonstrations

Must not create ads with the capacity to deceive

Must avoid bait-and-switch advertising

Radio is a pervasive medium: Ninety-three percent of all U.S. citizens age 12 and older listen daily and for about 20 hours a week on average, numbers that have held steady in recent years.

Advertising Terminology

Reach & Frequency - Reach and frequency are terms generally used when planning advertising campaigns.

Reach - the number of people you touch with your marketing message or the number of people that are exposed to your message.

Frequency is the number of times you touch each person with your message.

Gross Rating Point (GRP) - Gross rating point(GRP) is a measure of the size of an advertising campaign by a specific medium or schedule. It does not measure the size of the audience reached. ... Target rating points express the same concept, but with regard to a more narrowly defined target audience

Cost per thousand (CPM)-Cost per thousand (CPM) is a marketing term used to denote the price of 1,000 advertisement impressions on one webpage. If a website publisher charges $2.00 CPM, that means an advertiser must pay $2.00 for every 1,000 impressions of its ad. The "M" in CPM represents the Roman numeral for 1,000

Cost per click (CPC)- Pay-per-click(PPC), also known as cost per click(CPC), is an internet advertising model used to direct traffic to websites, in which an advertiser pays a publisher (typically a website owner or a network of websites) when the ad is clicked

Choosing Media (1 of 7)

Reach, frequency, and impact

Figure 20.2 Relationship among Trial, Awareness, and the Exposure Function

Media selection is finding the most cost-effective media to deliver the desired number and type of exposures to the target audience. The advertiser seeks a specified advertising objective and response from the target audience—for example, a target level of product trial. This level depends on, among other things, level of brand awareness. Suppose the rate of product trial increases at a diminishing rate with the level of audience awareness, as shown in Figure 20.2(a). If the advertiser seeks a product trial rate of T *, it will be necessary to achieve a brand awareness level of A*.

The next task is to find out how many exposures, E *, will produce a level of audience awareness of A*. The effect of exposures on audience awareness depends on the exposures’ reach, frequency, and impact:

Reach (R). The number of different persons or households exposed to a particular media schedule at least once during a specified time period.

Frequency (F). The number of times within the specified time period that an average person or household is exposed to the message.

Impact (I). The qualitative value of an exposure through a given medium (thus, a food ad should have a higher impact in Bon Appetit than in Fortune magazine).

Figure 20.2(b) shows the relationship between audience awareness and reach. Audience awareness will be greater the higher the exposures’ reach, frequency, and impact. There are important trade-offs here. Suppose the planner has an advertising budget of $1,000,000 and the cost per thousand exposures of average quality is $5. This means 200,000,000 exposures ($1,000,000 ÷ [$5/1,000]). If the advertiser seeks an average exposure frequency of 10, it can reach 20,000,000 people (200,000,000 ÷ 10) with the given budget. But if the advertiser wants higher-quality media costing $10 per thousand exposures, it will be able to reach only 10,000,000 people unless it is willing to lower the desired exposure frequency.

Choosing Media (2 of 7)

Total number of exposures (E)

Reach x average frequency: E = R × F Gross Rating Points (GRP)

80% of homes with avg F of 3 GRP 9s 80x3+240

Weighted number of exposures (WE)

WE = R × F × I(average impact)

The relationship between reach, frequency, and impact is captured in the following concepts:

Total number of exposures (E). This is the reach times the average frequency; that is, E = R X F, also called the gross rating points (GRP). If a given media schedule reaches 80 percent of homes with an average exposure frequency of 3, the media schedule has a GRP of 240 (80 X 3). If another media schedule has a GRP of 300, it has more weight, but we cannot tell how this weight breaks down into reach and frequency.

Weighted number of exposures (WE). This is the reach times average frequency times average impact, that is WE = R X F X I.

Reach is most important when launching new products, flanker brands, extensions of well-known brands, and infrequently purchased brands or when going after an undefined target market. Frequency is most important where there are strong competitors, a complex story to tell, high consumer resistance, or a frequent-purchase cycle.

Choosing Media (3 of 7)

Choosing among major media types

Table 20.1 Profiles of Major Media Types

Medium	Advantages	Limitations
Newspapers	Flexibility; timeliness; good local market coverage; broad acceptance; high believability	Short life; poor reproduction quality; small “pass-along” audience
Television	Combines sight, sound, and motion; appealing to the senses; high attention; high reach	High absolute cost; high clutter; fleeting exposure; less audience selectivity
Direct mail	Audience selectivity; flexibility; no ad competition within the same medium; personalization	Relatively high cost; “junk mail” image
Radio	Mass use; high geographic and demographic selectivity; low cost	Audio presentation only; lower attention than television; nonstandardized rate structures; fleeting exposure

The media planner must know the capacity of the major advertising media types to deliver reach, frequency, and impact. The major advertising media along with their costs, advantages, and limitations are profiled in Table 20.1. Media planners make their choices by considering factors such as target audience media habits, product characteristics, message requirements, and cost.

Choosing Media (4 of 7)

Place advertising options - OOH - creative, unexpected

Billboards

Public spaces

Product placement - movies, TV, Netflix, Amazon, HBO

Point of Purchase - shopping carts, aisles, shelf-talkers, sampling, instant coupon machines

Place advertising, or out-of-home advertising, is a broad category including many creative and unexpected forms to grab consumers’ attention where they work, play, and, of course, shop. Popular options include billboards, public spaces, product placement, and point of purchase.

Billboards use colorful, digitally produced graphics, backlighting, sounds, movement, and unusual— even 3D—images. Public spaces: ads are appearing in such unconventional places as movie screens, airplane bodies, and fitness equipment, as well as in classrooms, sports arenas, office and hotel elevators, and other public places. Product placement: marketers pay $100,000 to $500,000 so their products will make cameo appearances in movies and on television. There are many ways to communicate at the point of purchase (P-O-P), including ads on shopping carts, cart straps, aisles, and shelves and in-store demonstrations, live sampling, and instant coupon machines.

Choosing Media (5 of 7)

Evaluating alternate media

Need to demonstrate reach/effectiveness

Selecting specific media vehicles

Media planner must choose most cost-effective vehicles and must estimate audience size, composition, media cost, and cost per thousand persons reached

Nontraditional media can often reach a very precise and captive audience in a cost-effective manner, with ads anywhere consumers have a few seconds to notice them. The message must be simple and direct. Outdoor advertising, for example, is often called the “15-second sell.” It’s more effective at enhancing brand awareness or brand image than at creating new brand associations.

Media planners are using more sophisticated measures of effectiveness and employing them in mathematical models to arrive at the best media mix. Many advertising agencies use software programs to select the initial media and make improvements based on subjective factors.

Choosing Media (6 of 7)

Selecting media timing and allocation

Figure 20.3 Classification of Advertising Timing Patterns

In choosing media, the advertiser makes both a macroscheduling and a microscheduling decision. The macroscheduling decision relates to seasons and the business cycle. Suppose 70 percent of a product’s sales occur between June and September. The firm can vary its advertising expenditures to follow the seasonal pattern, to oppose the seasonal pattern, or to be constant throughout the year. The microscheduling decision calls for allocating advertising expenditures within a short period to obtain maximum impact. Suppose the firm decides to buy 30 radio spots in September. The left side of Figure 20.3 shows that advertising messages for the month can be concentrated (“burst” advertising), dispersed continuously throughout the month, or dispersed intermittently. The top side shows they can be beamed with a level, rising, falling, or alternating frequency.

The chosen pattern should meet the marketer’s communications objectives and consider three factors. Buyer turnover expresses the rate at which new buyers enter the market; the higher this rate, the more continuous the advertising should be. Purchase frequency is the number of times the average buyer buys the product during the period; the higher the purchase frequency, the more continuous the advertising should be. The forgetting rate is the rate at which the buyer forgets the brand; the higher the forgetting rate, the more continuous the advertising should be.

Choosing Media (7 of 7)

Selecting media timing and allocation

Continuity - evenly distributed exposures

Concentrated - Focused on certain time period - heavy up

Flighting - concentrated, none, more advertising (funding limited)

Pulsing - continuous advertising at low levels, followed by heavier levels (audience exposed but lower cost)

In launching a new product, the advertiser must choose among continuity, concentration, flighting, and pulsing.

Continuity means exposures appear evenly throughout a given period. Generally, advertisers use continuous advertising in expanding markets, with frequently purchased items, and in tightly defined buyer categories.

Concentration calls for spending all the advertising dollars in a single period. This makes sense for products with one selling season or related holiday.

Flighting calls for advertising during a period, followed by a period with no advertising, followed by a second period of advertising activity. It is useful when funding is limited, the purchase cycle is relatively infrequent, or items are seasonal.

Pulsing is continuous advertising at low levels, reinforced periodically by waves of heavier activity. It draws on the strengths of continuous advertising and flights to create a compromise scheduling strategy. Those who favor pulsing believe the audience will learn the message more thoroughly and at a lower cost to the firm.

Advertising Pretest Research Techniques

Table 20.2 Advertising Pretest Research Techniques

For Print Ads Starch and Gallup & Robinson Inc. are two widely used print pre-testing services. Test ads are placed in magazines, which are then circulated to consumers. These consumers are contacted later and interviewed. Recall and recognition tests are used to determine advertising effectiveness.

For Broadcast Ads In-home tests: A video is taken or downloaded into the homes of target consumers, who then view the commercials. Trailer tests: In a trailer in a shopping center, shoppers are shown the products and given an opportunity to select a series of brands. They then view commercials and are given coupons to be used in the shopping center. Redemption rates indicate commercials’ influence on purchase behavior. Theater tests: Consumers are invited to a theater to view a potential new television series along with some commercials. Before the show begins, consumers indicate preferred brands in different categories; after the viewing, consumers again choose preferred brands. Preference changes measure the commercials’ persuasive power. On-air tests: Respondents are recruited to watch a program on a regular TV channel during the test commercial or are selected based on their having viewed the program. They are asked questions about commercial recall.

Evaluating Advertising Effectiveness

Communication-effect research

In-home tests, trailer tests, theater tests, on-air tests

Sales-effect research

Historical approach

Experimental data

Recognition Studies (lgo, tagline, ad

Recall Studies - unaided, spontaneous prompted by brand category

Figure 20.4 Formula for Measuring Different Stages in the Sales Impact of Advertising

Most advertisers try to measure the communication effect of an ad—that is, its potential impact on awareness, knowledge, or preference. They would also like to measure its sales effect. Communication-effect research, called copy testing, seeks to determine whether an ad is communicating effectively. Marketers should perform this test both before an ad is put into media and after it is printed or broadcast. (Table 20.2 – see slide 23) describes some specific advertising pretest research techniques.

The sales impact is easiest to measure in direct marketing situations and hardest in brand or corporate image-building advertising. Companies want to know whether they are overspending or underspending on advertising. One way to answer this question is to work with the formulation shown in Figure 20.4. A company’s share of advertising expenditures produces a share of voice (proportion of company advertising of that product to all advertising of that product) that earns a share of consumers’ minds and hearts and, ultimately, a share of market.

Researchers can measure sales impact with the historical approach, which uses advanced statistical techniques to correlate past sales to past advertising expenditures. Other researchers use experimental data to measure advertising’s sales impact.

Defining the Budget

Objective-and-Task Method

Establish market share goal

Select % of market reached by advertising

Estimate % of prospects who should try brand

Calculate ad impressions per 1% trial rate

Find gross rating points to be purchased

Calculate budget for cost of gross rating point

1. Establish the market share goal. The company estimates 50 million potential users and sets a target of attracting 8 percent of the market—that is, 4 million users.

2. Select the percentage of the market that should be reached by advertising. The advertiser hopes to reach 80 percent of the market (40 million prospects) with its advertising message.

3. Estimate the percentage of aware prospects who should be persuaded to try the brand. The advertiser would be pleased if 25 percent of aware prospects (10 million) tried Sunburst. It estimates that 40 percent of all triers, or 4 million people, will become loyal users. This is the market share goal.

4. Calculate the number of advertising impressions per 1 percent trial rate. The advertiser estimates that 40 advertising impressions (exposures) for every 1 percent of the population will bring about a 25 percent trial rate.

5. Find the number of gross rating points to be purchased. A gross rating point is one exposure to 1 percent of the target population. Because the company wants to achieve 40 exposures to 80 percent of the population, it will want to buy 3,200 gross rating points.

6. Calculate the necessary advertising budget on the basis of the average cost of buying a gross rating point. Suppose it costs an average of $3,277 to expose 1 percent of the target population to one impression. Then 3,200 gross rating points will cost $10,486,400 (= $3,277 X 3,200) in the introductory year.

The objective-and-task method has the advantage of requiring management to spell out its assumptions about the relationship among dollars spent, exposure levels, trial rates, and regular usage.

Marketing Budget