Seminar%20228.443:%20Advertising

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Seminar 228.443Advertising

• Dr. Teri Shaffer

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Introduction to Advertising

• Types of advertising
• Advertising industry
• Advertising trends

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What Is Advertising?

• Paid, nonpersonal communication
• Identified sponsor
• Using mass media
• To inform, persuade, or remind
• An audience

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Types of Advertising
Interactive Advertising
Brand Advertising
Public Service Advertising
Retail or Local Advertising
Institutional Advertising
Political Advertising
Business-to- Business Advertising
Directory Advertising
Direct-Response Advertising
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Brand Advertising
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Brand Advertising
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Brand Advertising
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Retail Advertising Institutional Advertising
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Retail Advertising Brand Advertising
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Retail Advertising
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Retail Advertising
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Political Advertising
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Directory Advertising
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Direct-Response Advertising
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B2B
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Institutional Advertising
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Institutional Advertising
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Public Service Advertising (PSA) or Advocacy Adver
tising
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Public Service Advertising
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Interactive Advertising
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Comparative Advertising
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Advertising Demand

• Competitive brand advertising
• Comparative advertising
• Build secondary demand
• Pioneering advertising
• Build primary demand

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Pioneering Advertising
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Pioneering Advertising
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Advertising Industry

• US Government StatisticsUs Bureau of Labor
  Statistics
• 395,200 people employed in US
• 300 billion globally

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Five Players of Advertising

• Advertiser
• Advertising Agency
• Media
• Vendors
• Target Audience

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1st Player

• The Advertiser

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Advertising Age

• http//www.adage.com
• Leading National Advertisers
• Major brands with ad spending gt 94.4 million in
  1998

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Leading National Advertisers (1998)

• General Motors Corp.
• Proctor Gamble Co.
• Phillip Morris Cos.
• DaimlerChrysler
• Sears, Roebuck, Co.
• Ford Motor Co.
• ATT Corp.
• Walt Disney Co.
• PepsiCo
• Diageo

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Domestic Spending by Category (1999)

• Automotive
• Retail
• Movies media
• Financial
• Medicines pharmaceuticals
• Telecommunications
• Food
• Restaurants fast-food
• Airline ship travel hotels resorts
• Direct response companies

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Top Advertisers in Austria (1998)

• Proctor Gamble Co.
• Unilever
• BML-Konzern
• SPAR
• Mobilkom Austria AG
• Mars Inc.
• Henkel
• Volkswagen
• Max. MobilTelekom Service
• Ost. Lotterien

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Top Global Marketers (1999)

• Proctor Gamble Co.
• Unilever
• Nestle
• Volkswagen
• Ford Motor Co.
• General Motors Corp.
• Toyota Motor Co.
• Coca-Cola Co.
• Peugeot Citroen
• LOreal

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2nd Player

• The Advertising Agency

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Advertising Agency

• Account management
• Creative department
• Media
• Research strategic planning

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Account Management

• Represents agency to client
• Client relationship
• Knowledge of clients business
• Competitive actions
• Consumer trends
• Helps set goals budget
• Coordinates day to day work

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Creative Department

• Creates ideas, images, words make up
  commercials and ads
• Copywriters
• Art directors
• Oversee print or broadcast production

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Media Department

• Planning
• Plan media schedule
• Buying
• Execute media plan

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Research

• Strategic planning
• Consumer research
• How does consumer interact with brand?
• How does brand fit into consumer lifestyle?
• Pretest and posttests

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Example

• 1995 campaign for California Milk Processors
  Advisory Board
• Declining sales from 1980 to 1993
• Result?
• Increased sales

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Paying the Agency

• Commission system
• Fees

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Commission

• Rebates offered by media advertising agencies
  (15)

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Commission System

• Agency creates commercial for advertiser
• Agency contacts TV station for air time
• TV station bills ad agency
• Cost of air time 10,000
• Less 15 (1,500)
• Due 8,500
• Agency bills advertiser 10,000

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Fee-based Compensation

• May vary according to departments or levels of
  salary
• Or flat hourly rate
• Charges for out-of-pocket expenses, travel, etc.
• Media charges are net of commissions

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Advertising Age (1998)Charges Over Time

• 1982
• 71 commissions
• 8 fees
• 21 combination

• 1997
• 35 commissions
• 58 fees
• 7 combination

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Full Service Agencies

• Four major staff functions
• Account management
• Creative
• Media planning and buying
• Research

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Top Ten Agency Brands (1999)

• Grey Advertising (NY)
• J.Walter Thompson Co. (NY)
• McCann-Erickson Worldwide (NY)
• FCB Worldwide (NY)
• Leo Burnett USA (Chicago)
• Euro RSCG Worldwide (NY)
• Young Rubicam Inc. (NY)BBDO Worldwide (NY)
• DDB Worldwide Communications (NY)
• Ogilvy Mather Worldwide (NY)

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World Top Advertising Organizations (1999)

• Omnicom (NY)
• Interpublic Group of Cos. (NY)
• WPP Group (London)
• Havas Advertising (France)
• Dentsu (Tokyo)
• B Com3 Group (Chicago)
• Young Rubicam Inc. (NY)
• Grey Advertising (NY)
• True North (Chicago)
• Publicis SA (Paris)

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Agencies on the Internet

• TBWA/Chiat/Day
• http//www.chiatday.com/
• Fallon McElligott
• http//www.fallon.com/
• Bozell Worldwide
• http//www.bozell.com/

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Agencies On The Internet

• A comprehensive list of ad agencies can be found
  at the following address
• http//www.digitaldirectory.com/ adagencies.html

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Limited Service Agencies or Specialized Agencies

• Functions
• Creative, media buying, etc.
• Audiences
• Minority, youth, etc.
• Industries
• Healthcare, computers, B2B, etc.
• Communication Tool
• Direct marketing, interactive, etc.

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Top 100 US Interactive Agencies (1999)

• MarchFirst
• Digitas
• iXL
• Grey Interactive
• Sapient Corp.
• Modern Media
• Aspen Interactive
• OglivyInteractive
• Luminant Worldwide Corp.
• AppNet

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In-House Agencies

• Perform most of the functions of outside agency
• Example Large retailers

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Why an In-House Agency?

• Savings
• Faster response
• Specialization
• Control

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Problems with In-House?

• Lack of initiative due to noncompetitive
  environment
• Inability to keep up with marketplace
• Less objective

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From The Internet

• The Advertising Agency Contract

--http//www.smartbiz.com/ sbs/arts/cwa4.htm
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3rd Player

• The Media

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The Media

• Channels of communication that carry message from
  advertiser to audience

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Media Organizations

• Sell space in print media
• Sell time in broadcast media
• Sell space/time in electronic media
• Assist in media selection and analysis
• Help w/ad production

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Top Leading Media Co. (1998)

• Time Warner (NY)ATT Corp. (NY)
• CBS Corp. (NY)
• Walt Disney Co. (NY)NBC TV (General Electric,
  Fairfield, Conn)
• News Corp. (Sydney)

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4th Player

• Vendors

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Vendors

• Freelancers/consultants
• Market researchers
• Freelance copywriters and graphic artists
• Photographers
• Songwriters
• Printers
• Direct-mail production houses
• Telemarketers
• Public relations consultants

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5th Player

• The Target Audience

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Target Audience

• Kellogg cereal?
• Consumer
• Purchaser

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Current Issues

• Interactive advertising
• Integrated marketing communications
• Globalization
• Consumer power, relationship marketing,
  permission marketing, and customization

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Examples

• Peapod
• Mass customization
• Levis Original Spin