Introduction to Advertisement

1. Concept of Advertisement Advertisement/Ad/Ad-Film/Commercial

From Latin word which means “to turn attention of people to specific thing”

Is a from of communication

Represents the message/idea of the sender

Targeted at a mass audience – mass persuasion apart from disseminating information to target customers

Not always the efficient way of reaching people

Usually paid by sponsors and viewed on different media

A combination of creativity, market research & economic media buying

Diverse field

Ultimate aim is to increase sales

2. Meaning & Definition Derived from Latin word ‘advertere’ which means to turn on

attention

Powerful communication medium & vital marketing tool to help sale of goods

Convinces people to buy product

Contains information & persuasion

According to America Marketing Association, “Advertising is any paid form of non-personal presentation of ideas, goods or services by an identified sponsor”

According to William J. Stanton, “Advertising consists of all activities involved in presenting to a group, a non-personal, oral or visual, openly-sponsored message regarding a product, service or idea, this message is called advertisement, is disseminated through one or more media and is paid for by an identified sponsor”

3. Features of Advertisement

Paid form Ideas, goods & services Controlled Persuasive act Competitive act

Non-personal presentation & promotion

Identified sponsor Mass communication

media Not neutral; not

unbiased Informative act

4. Scope of Advertisement

1. Message

2. Media

3. Merchandise

4. Advertising functions

5. Advertiser

6. Objectives

7. Activities

8. Art & Science

5. Objectives of Advertisement1. Informing

2. Influencing

3. Reminding

4. Adding Value

5. Assisting with other company efforts

6.Functions of Advertisement

1. Communication with customer

2. Persuasion

3. Contribution to economic growth

4. Catalyst for change

5. Stimulates demand

6. Strengthens other promotion mix element

7. Develops brand preference

8. Reduce costs

9. Lower prices

10.Competitive weapon

11.Brand image building

12.Innovation

13.Growth of media

Principles of Advertisement

Grab people Be clever & creative Speak loudly Do not make people think Use colors that make sense Be informative Be memorable Show not tell Use humor

Types of Advertisement

Classification

On basis of geographical spread On basis of target group On the basis of demand influence level On the basis of Corporate Philosophy On the basis of Timing of the response it elicits On the basis of media Miscellaneous

A. On the basis of Geographical Spread

Global Advertising National Advertising Local Advertising

B. On the basis of Target Group

Consumer Advertising Trade Advertising Industrial Advertising Professional Advertising

C. On the basis of Demand Influence Level

Primary Demand (Stimulation) Selective Demand (Stimulation)

D. On the basis of Corporate Philosophy

i. Corporate Advertising

ii. Brand Advertising

a. Informative Brand Advertising

b. Persuasive Brand Advertising

c. Reminder – Oriented Brand Advertising

d. Negative Advertising

E. On the basis of the Timing of Response it Elicits

i. Direct action advertising

ii. Indirect action advertising

iii. Surrogate advertising

F.On the basis of media

Audio Visual Audio-Visual Written Internet Verbal

G. Miscellaneous

Covert Institutional Product

i. Pioneering Advertising

ii. Competitive Advertising

iii. Reminder Advertising

Advantages of Advertisement

To Manufacturers

Increased sales Steady demand Lower costs Greater dealer interest Quicker turnover & smaller inventories Supplementing salesmanship Encouragement to better performance Creating goodwill

To Consumers

Facility of Purchasing Improvement in Quality Elimination of unnecessary intermediaries Consumer’s surplus Education of consumers

To Society

Generates employment Standard of living Stimulates research & development Promote art & culture

Disadvantages of Advertisement

1. Multiplication of needs

2. Misrepresentation of facts

3. Consumer's deficit

4. Increased cost

5. Wastage of national resources

6. Barriers to entry

7. Product proliferation

8. Inefficient manufacturers stay in business

9. Propensity to consume

10.Deferred revenue expenditure

11.Managerial difficulties

Implications of Advertising

Introduction

Ads have social & legal implications When violated, social issues arise & government may

take corrective measures Society – decides what is offensive, excessive &

irresponsible Government – decides what is deceptive & unfair The implications are:

1. Social aspects of advertising

2. Economic aspects of advertising

3. Legal aspects of advertising

1. Social Implications of Advertising

To direct the desires of human beings Ads are the integral part of mass distribution of

Industrial Capitalism Objectives of marketers influence social values,

lifestyle and society’s tastes Generally agreed – Ads exert a powerful social

influence & is criticised for encouraging materialism in society

Critics say ads should be informative instead of using persuasion to influence the emotions, anxieties, etc

Positive Social Implications of Ads

Informed society Rights of Consumers New ideas Environmental

protection Quality consciousness Health & hygiene

awareness

Preventive course if dreaded diseases

Contribute to creativity of people

Social changes Promotion of national

interest

Negative Social Implications of Ads

Children & advertisement

Materialism & consumption

Wrong message Message problems

Control of media Stereotypes Religion & culture Undermines social

values

2. Economic Implications of Ads

Subsystem of economy – plays an important role in economy

Helps producer reduce costs Helps consumers widen choices Principles of free economies:

1. Self – interest

2. Perfect information

3. Many buyers & sellers

4. Absence of externalities

Positive Economic Implications of Ads

Effect on cost – Production, Distribution & Prices

Effect on competition Effect on business cycle Advertising & creation

of utility Effect on product quality

Effect on demand Effect on consumer

choice Effect on national

income Effect on employment

Negative Economic Implications of Ads

Not productive Multiplies needs Monopoly argument Restricts entry of new

business units Widens business cycle

Forces people to desire & buy things

Increases cost of goods Encourages waste Reduces consumer

choice Wastage of National

Resources

3. Legal Implications of Ads

Ads have been accused of many crimes – social, economic & moral

Gives exaggerated hopes to people Despite pitfalls, ads cannot be wished away Ads face legal restrictions Consumer-movement has forced government to

enforce laws to regulate advertising

Need to Regulate Ads

Morality & tastes Untruthful advertising Ads as Environment pollutant

Legislative codes controlling Ads

Indian Penal Code (IPC), 1860

Drugs & Cosmetics Act, 1940

Drugs Control Act, 1950 Young Persons (Harmful

Publications) Act, 1950 Indecent Representation of

Women (Prohibition) Act, 1986

Emblems & Names (Prevention of Improper Use) Act, 1950

Prize Competitions Act, 1955

Prevention of Insults to National Honor Act, 1971

Infant Milk Substitutes, Feeding Bottles & Infant Foods (Regulation of Production, Supply & Distribution) Act, 1992

Indian Copyright Act, 1957

Trademarks Act, 1999

Monopolies & Restrictive Trade Practices (MRTP) Act, 1984

Consumer Protection Act, 1986

Cigarettes & Other Tobacco Products Act, 2003

Setting Advertisement Objectives

Introduction

Objectives – end point towards which every activity of an organization is oriented

Philip Kotler – “The objectives of advertising is to communicate to a defined audience, the necessary information that simulates action in a given period of time”

Setting objectives is the integral part of planning process

If objectives are not formulated clearly, ads can fail

Functions of Advertisement Objectives

Serves as Communication & Coordination Device Criterion for Decision-Making Evaluation of Advertising Effectiveness

Types of Advertising Objectives

1. Sales Objectives

2. Communication Objectives

3. Specific Objectives of Advertising

1. Sales Objectives

To sell product & raise level of present sales When objectives are sales, a definite & quantifiable

perspective should be present If sales increase after an ad campaign, the campaign

is successful

Limitations: Ads not the only factor affecting sales Effect on sales is in long run

2. Communication Objectives

1. To increase brand awareness

2. To increase knowledge

3. To create linking

4. To induce preference

3. Specific Objectives of Advertisement

1. To increase demand

2. To sell new product/ build new brand

3. To educate masses

4. To build brand preference

5. To build good will

6. To attract & help middlemen

7. To support sales team

8. To remind customers of product & company

9. To reach customers left out by sales man

10.To inform about changes in marketing mix

11.To neutralize competitor’s ads

12.To enter in new geographical area

13.To do entire selling job

14.To overcome dissonance of buyers

15.Specific objectives of classified ads

DAGMAR Approach for setting Advertising Objectives

Introduction

DAGMAR – Define Advertising Goals for Measured Advertising Results

Approach to setting objectives in which advertisement effectiveness can be measured

Prepared by Russel Collay for Association of National Advertisers in the year 1961

“The main objective of advertising is to communicate with the defined audience, the necessary information that simulates action. Advertisement succeeds or fails depending on how well it communicates the desired information to right people at right time at right cost”

Features of Advertisement Objectives in DAGMAR

1. Well defined objectives

2. Benchmark & degree of change sought

3. Well defined target audience

4. Specific time period

Contributions of DAGMAR

DAGMAR – many advertising planners use this to set objectives

DAGMAR focuses on communication objective as the criteria for evaluating ad-effectiveness

According to this approach sales is not the main objective because:

1. Advertising is not the only factor affecting sales

2. Impact of advertising on sales can be measured in long run

Criticisms of DAGMAR Approach

1. Sales objective

2. Difficult to measure benchmark

3. Costly

4. Problem with communication hierarchy

5. Effect of other factors

6. Inhibits the creative idea

Requirements for setting Suitable Ad Objectives

1. A precise statement of whom, what & when

2. Objectives must be quantitative & measurable

3. Specifying the amount of change

4. Objectives must be realistic

5. Objectives must be internally consistent

6. Objective must be clear and in writing

Advertisement Agencies

Introduction

A service business dedicated to creating, planning & handling advertising (and sometimes other forms of promotions) for its clients

George E. Belch – “Advertising agency is a service organization that specializes in planning and executing advertising programs for its clients”

Functions of Advertising Agency

1. Contacting clients

2. Advertising Planning

3. Creative Function

4. Developing & Preparing Advertising Copy

5. Approval from Client

6. Media selection & Media Scheduling

7. Ad-Execution

8. Evaluation Function

9. Marketing Function

10.Research Function

11.Accounting Function

Organizational Structure of Advertising Agency

Types of Advertising Agencies

1. Full-Service Agencies

2. In-House Agencies

3. Creative Boutiques

4. Media Buying Services

5. A La Carte Agency

6. Special Service Agency(Group)

7. Sweet Shops

8. Interactive Agencies

9. Search Engine Agencies

10.Health Care Communications Agencies

11.Medical Education Agencies

i. Promotional Education

ii. Continuing Medical Education

Services offered by various Agencies

1. Account services

2. Marketing Services

3. Research services

4. Media services

5. Creative services

6. Media buying services

7. Special services

8. Direct response services

9. Sales promotion services

10.Sponsorship services

Selection of Advertisement Agencies

Agencies vary widely in their focus Some cater to only a few larger clients & do not

generally accept new accounts Others have hundreds of clients It is important for businesses to work hand in hand

with agencies Many factors come into play when choosing

advertising agency

Criteria for selection & evaluation of Ad agencies

1. Location

2. Size

3. Agency working for competitors

4. Image of agency

5. Service offered by agency

6. Rates charged

7. Creative skills & new ideas

8. Past record of agency

9. Quality & calibre of staff

10.Financially sound

11.Agency experience

Remuneration Strategies for Ad agencies

1. Commission

2. Fee arrangement

3. Cost plus agreement

4. Incentive based compensation

5. Percentage charges

6. Speculative basis

5. Advertisement Campaigns

Meaning & Definition

Advertising campaign is a series of advertisement messages that share a single idea & theme which make up an IMC

Advertising campaigns appear across different media such as radio, tv & internet

According to Dunn & Barban “ An advertising campaign includes a series of ads, placed in various media, which are designed to meet objectives, and are based on analysis of marketing & communication situations”

Importance of Ad Campaigns

Establish a feel of urgency for the buyer Advertiser’s benefit concerns Avoiding failure Consumer’s benefit concern Compliments to production area

Factors influencing planning of Ad campaigns

1. Organization

2. Advertising budget

3. Product

4. Consumers

5. Language

6. Competitors

7. Media

8. Sales promotion efforts

9. Identification of current problems

10.Government regulations

11.Advertising objectives

Successful Ad Campaigns

Nike – Just Do it Intel – Intel inside Coca-Cola – Open Happiness Dairy Milk – Sweet edu kondadu Amul – Taste of India (Mascot Girl)

End of Unit - I

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