objectives and budgeting we can’t afford advertising that isn’t working. –thomas knowlton...
Post on 19-Dec-2015
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Value of ObjectivesValue of Objectives
Focus and CoordinationFocus and Coordination They help to orient everyone involved They help to orient everyone involved
toward one, common goal.toward one, common goal.
Plans and DecisionsPlans and Decisions They serve as criteria for developing They serve as criteria for developing
plans and making decisions.plans and making decisions.
Measurement and ControlMeasurement and Control They provide the standards and They provide the standards and
benchmarks for evaluating results.benchmarks for evaluating results.
Measuring Advertising Measuring Advertising EffectivenessEffectiveness
Measuring Advertising Measuring Advertising EffectivenessEffectiveness
AdvertisingAdvertisingAdvertisingAdvertising SALESSALESSALESSALES
TechnologyTechnologyTechnologyTechnologyCompetitionCompetitionCompetitionCompetition
The EconomyThe EconomyThe EconomyThe Economy
ProductProductQualityQualityProductProductQualityQuality
PricePricePricePriceDistributionDistributionDistributionDistribution
Problems With Sales ObjectivesProblems With Sales ObjectivesProblems With Sales ObjectivesProblems With Sales Objectives
Many other variables may influence sales.Many other variables may influence sales.
Advertising has a lagged effect.Advertising has a lagged effect.
Sales objectives offer little guidance to creative Sales objectives offer little guidance to creative and media people.and media people.
Many other variables may influence sales.Many other variables may influence sales.
Advertising has a lagged effect.Advertising has a lagged effect.
Sales objectives offer little guidance to creative Sales objectives offer little guidance to creative and media people.and media people.
Where Sales Objectives Where Sales Objectives MayMay Work WorkWhere Sales Objectives Where Sales Objectives MayMay Work Work
In order of appropriateness:In order of appropriateness: Direct responseDirect response
In order of appropriateness:In order of appropriateness: Direct responseDirect response
Where Sales Objectives Where Sales Objectives MayMay Work WorkWhere Sales Objectives Where Sales Objectives MayMay Work Work
In order of appropriateness:In order of appropriateness: Direct responseDirect response Retail special event Retail special event
promotionspromotions
In order of appropriateness:In order of appropriateness: Direct responseDirect response Retail special event Retail special event
promotionspromotions
Where Sales Objectives Where Sales Objectives MayMay Work WorkWhere Sales Objectives Where Sales Objectives MayMay Work Work
In order of appropriateness:In order of appropriateness: Direct responseDirect response Retail special event Retail special event
promotionspromotions Mature & very stable Mature & very stable
marketsmarkets
In order of appropriateness:In order of appropriateness: Direct responseDirect response Retail special event Retail special event
promotionspromotions Mature & very stable Mature & very stable
marketsmarkets
Communications ObjectivesCommunications ObjectivesCommunications ObjectivesCommunications Objectives
90% Awareness90% Awareness
70% Comprehension70% Comprehension
40% Liking40% Liking
25% Preference25% Preference
20% Trial20% Trial
5% Regular Use
5% Regular Use
Hierarchy of Effects PyramidHierarchy of Effects Pyramid
Conative
Affective
Cognitive
Communications ObjectivesCommunications ObjectivesCommunications ObjectivesCommunications Objectives
Objective 1Objective 1: Create brand awareness among 90% of : Create brand awareness among 90% of the target audience.the target audience.
Objective 2Objective 2: Create understanding of key brand : Create understanding of key brand benefits among 70% of the target audience.benefits among 70% of the target audience.
Objective 3Objective 3: Create positive feelings about the brand : Create positive feelings about the brand among 40% and preference among 25% of the target among 40% and preference among 25% of the target audience.audience.
Objective 4Objective 4: Obtain trial among 20% of the target : Obtain trial among 20% of the target audience.audience.
Objective 5Objective 5: Develop and maintain regular use : Develop and maintain regular use among 5% of the target audience.among 5% of the target audience.
Objective 1Objective 1: Create brand awareness among 90% of : Create brand awareness among 90% of the target audience.the target audience.
Objective 2Objective 2: Create understanding of key brand : Create understanding of key brand benefits among 70% of the target audience.benefits among 70% of the target audience.
Objective 3Objective 3: Create positive feelings about the brand : Create positive feelings about the brand among 40% and preference among 25% of the target among 40% and preference among 25% of the target audience.audience.
Objective 4Objective 4: Obtain trial among 20% of the target : Obtain trial among 20% of the target audience.audience.
Objective 5Objective 5: Develop and maintain regular use : Develop and maintain regular use among 5% of the target audience.among 5% of the target audience.
The DAGMAR ApproachThe DAGMAR Approach
DDefineefine
AAdvertisindvertisingg
GGoals foroals for
MMeasuringeasuring
AAdvertisindvertisingg
RResultsesults
Characteristics of ObjectivesCharacteristics of Objectives
Specific Communications ObjectivesSpecific Communications Objectives
Concrete Measurable TasksConcrete Measurable Tasks
Well-Defined Target AudienceWell-Defined Target Audience
Existing Benchmark MeasureExisting Benchmark Measure
Degree of Change SoughtDegree of Change Sought
Specific Time PeriodSpecific Time Period
Critique of Objectives
DAGMAR DifficultiesDAGMAR Difficulties
Legitimate ProblemsLegitimate Problems
Response Hierarchy Response Hierarchy ProblemsProblems
Doesn't always define the Doesn't always define the process people use to reach process people use to reach purchase/use.purchase/use.
Attitude - Behavior Attitude - Behavior RelationshipRelationship
Attitude change doesn't Attitude change doesn't always lead to change in always lead to change in actions or behavior.actions or behavior.
Questionable ObjectionsQuestionable Objections
Sales Objectives Are Sales Objectives Are NeededNeeded
Sales are all that really Sales are all that really counts, not counts, not communications objectives.communications objectives.
Costly and ImpracticalCostly and Impractical The research and efforts The research and efforts
cost more then the results cost more then the results are worth.are worth.
Inhibition of CreativityInhibition of Creativity Too many rules and too Too many rules and too
much structure curb much structure curb genius.genius.
Theoretical Issues in Budgeting Theoretical Issues in Budgeting Theoretical Issues in Budgeting Theoretical Issues in Budgeting
Concave-Downward Response CurveConcave-Downward Response CurveConcave-Downward Response CurveConcave-Downward Response Curve
Theoretical Issues in Budgeting Theoretical Issues in Budgeting Theoretical Issues in Budgeting Theoretical Issues in Budgeting
S-Shaped Response CurveS-Shaped Response CurveS-Shaped Response CurveS-Shaped Response Curve
Theoretical Issues in Budgeting Theoretical Issues in Budgeting Marginal AnalysisMarginal Analysis
Advertising / Promotion in $
Sa
les
in $
Point A
Profit
Sales Gross Margin
Ad. Expenditure
Problems with Marginal Problems with Marginal AnalysisAnalysis
Assumption:Assumption: Sales are the principal objective of Sales are the principal objective of
advertising and/or promotion.advertising and/or promotion.
Assumption:Assumption: Sales are the result of advertising and Sales are the result of advertising and
promotion and nothing else.promotion and nothing else.
Budgeting - Top DownBudgeting - Top Down
Historical MethodHistorical Method
Affordable MethodAffordable Method
Percentage-of-Sales Percentage-of-Sales
•May be based on last year’s with a percentage increase.
•May be based on last year’s with a percentage increase.
•Allocates whatever is left over to advertising.
•Allocates whatever is left over to advertising.
•Compares total sales with the total promotion budget during a previous or projected time period.
•Compares total sales with the total promotion budget during a previous or projected time period.
Budgeting-Top DownBudgeting-Top Down
Arbitrary AllocationArbitrary Allocation
Competitive ParityCompetitive Parity
•Budgeting by fiat.•Budgeting by fiat.
•Matching the competition’s percentage-of-sales expenditures.
•Matching the competition’s percentage-of-sales expenditures.
Examples of ad-to-sales ratiosExamples of ad-to-sales ratios
AirlinesAirlines 1.2 % of sales 1.2 % of sales
Soft drinksSoft drinks 5.3 5.3
Cable TVCable TV 1.3 1.3
DollsDolls 15.215.2
Food & kindred productsFood & kindred products 10.210.2
Steel works and blast furnacesSteel works and blast furnaces 1.9 1.9
Watches, clocks and partsWatches, clocks and parts 13.713.7
Wine and brandyWine and brandy 11.311.3
Records, audiotape, diskRecords, audiotape, disk 13.413.4
Plastic, resinsPlastic, resins 0.5 0.5
Budgeting-Bottom UpBudgeting-Bottom Up
Objective & Task MethodObjective & Task Method •Looks at objectives set for each activity, and determines the cost of accomplishing each objective.
•Looks at objectives set for each activity, and determines the cost of accomplishing each objective.
1. Isolate Objectives1. Isolate Objectives
2. Determine Tasks Required2. Determine Tasks Required
3. Estimate Required Capital Expenditures3. Estimate Required Capital Expenditures
4. Monitor4. Monitor
5. Reevaluate Objectives5. Reevaluate Objectives
1. Isolate Objectives1. Isolate Objectives
2. Determine Tasks Required2. Determine Tasks Required
3. Estimate Required Capital Expenditures3. Estimate Required Capital Expenditures
4. Monitor4. Monitor
5. Reevaluate Objectives5. Reevaluate Objectives