Chapter 6Slide 1

Goals List the many forms of advertising discuss advantages and disadvantages

of each type of advertising Define publicity and describe ways to

use publicity as a promotional tool

To succeed as a business and entrepreneur, your customers need to know about your business

Pick a photo that has shape and not real busy or you won’t be able to see what you have.

Chapter 6Slide 5

promotional mix – strategy created by adopting a blend of some, if not all, of the types of promotion available

Promotion includes:◦ advertising◦ publicity◦ personal selling◦ sales promotion

Chapter 6Slide 6

Advertising a paid form of communication sent out by a business about a product or service◦ very important for small and/or new businesses

◦ Purpose: Communicates with potential customers Details your products and services and why customers

should buy from you

Slide 7

Advertising should clearly communicate your message and image◦ If low price is your message, highlight this in ads

◦ Large companies hire advertising agencies – costly

◦ Small business usually handle their own

What are some types of Advertising you can think of?

Student contributions:

What are some types of Advertising you can think of?:

Online advertising still new – uses different guidelines than print◦ Graphics, photos, layouts, text and design must be

professional for a positive impact

Cost effective way to promote products to customers Can interact with customers via chat rooms, blogs,

and e-newsletters

Banner ad – graphic image in a box across the top or down side of web page

Floating Ad – ad that moves across the screen or floats above the page content

Wallpaper Ad – ad that changes the background of the page being viewed

Trick Banner – banner ad that looks like a dialog box with buttons appearing as an error message or alert

Pop-Up Ad – new window that opens in front of the current window with an ad

Pop-Under Ad – new window that loads behind the current window and appears when user closes the active window

1. Cost per Mil (CPM) the advertiser is charged based on the exposure of the

message to a specific audience priced per thousand viewers reached with the message

2. Cost Per click (CPC) the advertiser is charged based on the number of user

clicks on the advertisement viewers respond to the ad by clicking on the hyperlink

within the ad

3. Cost per Action (CPA) the advertiser is charged when a user takes an action to

complete a form advertisers prefer this type of charge for banner ads

◦ Viewers perceive it as SPAM mail utilize software to block promotions

◦ On-line advertising is used when customers extend beyond the local (home town) market

Chapter 6Slide 14

Can communicate through sight and sound Can be creative, entertaining, and informative Most Effective way to reach a large

number of people quickly Two types:

◦ Commercials - last less than a minute

◦ Infomercials - last ½ hour or more and provide in-depth coverage about a specific product

Most costly form or advertising

Fees include:◦ length of time of the commercial◦ the costs of producing the commercial

National advertising most expensive Local TV offers affordable rates for small

businesses Example:

◦ $250 for a 1 minute commercial that cost you $2000 to produce. You plan to air it 30 times. How much does the commercial cost? $200* 30 = $7500 + $2000 = $9,500

it is very expensive the audience is to broad to be effective for

most small businesses◦ Best for large national and global corporations

reaching more than 90 million viewers spectacular and innovative in most cases Highly anticipated even before the game Typically costs millions of dollars for 30

seconds◦ 2013 record high for cost?◦ $4 million for a 30 second ad◦ Best of 2012

Chapter 6Slide 18

less expensive than television advertising listener demographics are more specific

than television◦ easier to reach target audience◦ Ex: rock stations target teenagers/young adults

Fees:◦ pay for air time◦ pay for production costs

Chapter 6Slide 19

◦ the message is purely audio a visual of the product is not shown

◦ listeners may forget what they hear◦ listeners may tune out during commercials◦ May need to hire someone to create an ad

Historically, newspapers were the single largest form of advertising in the U.S◦ Changing as a result of the internet

Advantages of newspaper advertising include:◦ relatively inexpensive◦ targets a limited geographic area◦ reaches a large number of people

Many people in the audience may not be interested in your business

Competition from many other business ads

Chapter 6Slide 22

Consumers use telephone directories repeatedly Ads appear close to the listing of the business in

yellow pages

People looking in directory are seeking a specific business

In print is hard to persuade to use your business versus competitor’s

Chapter 6Slide 24

promotional materials sent to target customers through the mail◦ Fliers, catalogs, letters, and other correspondence

Estimated at $1.00 - $2.00 cost per item Direct mail coupled with incentive offerings are

more effective than a flier alone!

Chapter 6Slide 25

Direct-mail is often considered to be “junk mail.” ◦ It often gets discarded without being read

◦ Need attention grabbing design to get them to read it

Chapter 6Slide 26

Excellent way to aim products and services at specific markets (fitness products in fitness magazines etc…)

Local magazines that target a limited geographic area are often the best choice for small businesses

Chapter 6Slide 27

◦ National distribution can make some magazines an inappropriate way to advertise a local business

Chapter 6Slide 28

signs on public transportation can provide more information than a

billboard effective if your target market includes

consumers who use mass transit

billboards and signs◦ can be effective as the name of your business

is located where many people can see it

Disadvantages:

◦ limited information can be included

◦ may not project the image you wish to convey

Use social networking sites for business promotion◦Twitter – used for business promotions◦LinkedIn – job openings, find consultants and

contractors◦YouTube – promotional video demonstrations

or testimonials from current customers◦Facebook – web pages to promote your

business◦Blogging – to highlight new products and share

company info and customers can respond

Chapter 1Slide 30

Social Networking Video

Chapter 6Slide 32

Use a variety of methods for your ad campaign Obtain cost estimates for all advertising that is

under consideration Calculate a projected budget

Chapter 6Slide 33

Publicity - a nonpaid form of communication that calls attention to your business through media coverage

◦ can be positive or negative

◦ Publicity is free Staging events that generate publicity usually not free

Press release: a written statement meant to inform the media of an event or product

public relations - the act of establishing a positive relationship with customers and the general public◦ Done through community involvement in:

sponsoring a sports team donating to local charities supporting work-based programs at local educational

institutions supporting Big Brothers or Big Sisters organizing community programs

Chapter 6Slide 35

Self-promotion is a way to keep the name of your business visible and in the forefront of people’s minds.

Self-promotion methods include:◦ the distribution of goods with your company’s identifying

information on it t-shirts or hats with name on it office supplies – pens, notepads, coffee mugs etc.