Advertising Agencies and Advertising Agencies and their Functionstheir Functions

Why do I need their help?

Why Employ an Advertising Why Employ an Advertising Agency?Agency?

Specialized Services and Help i.e., professionals

Negotiation Skills with the Media

Coordination of Advertising and Marketing Efforts

What are the Negatives of What are the Negatives of Going Outside the Firm for Ad Going Outside the Firm for Ad Support?Support?

lack of control small company size may yield neglect agencies can be inefficient in buying

media agencies are often compensated through

a commission system the rewards high cost purchases

Role of the Advertising Role of the Advertising AgencyAgency

creative services media services research services account management

Agency CompensationAgency Compensation

Commissions from Media Purchases 15% initially can be lowered to

10% after first $10 million is spent

Hourly Fees Markups on Cost of

Services and Media

Media FunctionsMedia Functions Media Planners

perform strategic functions: when, where, frequency

Media Buyers negotiate best prices, keep up to date

info on audience profiles availability and costs researched

Vehicles vs. MediaVehicles vs. Media Media

general channels of communication

i.e., newspapers, magazines, TV, radio

Vehicles specific placement

choices i.e., Roseanne, ER,

Seinfeld, Vogue, NPR programming

Major Media CategoriesMajor Media Categories

TV Radio Newspapers Magazines Out-of-Home

The Print MediaThe Print Media

Why Should I Spend My Money Here?

What Are My Options?What Are My Options?

Magazines examples: Good Housekeeping, Time, Life

Newspapers Local: The Tennessean National: The Wall Street Journal

Magazines- AdvantagesMagazines- Advantages Flexibility in readership- regional, national

interest areas Color - excellent reproduction of high quality Authority and Credibility - can include alot of

information as well as glitter Permanence - longest shelf life of all outlets Prestige - image of the magazine rubs off on

the product!

More AdvantagesMore Advantages Audience Selectivity - most targeted option

available to marketers Selling Power - results have been

documented Cost Efficiency - minimized wasted coverage Reader Loyalty Pass-Along Circulation

Magazines - DisadvantagesMagazines - Disadvantages Inability to deliver

mass audiences Long Lead Times Clutter High CPM Declining Circulations Frequency Problems Shallow Geographic

Coverage

Circulation FactorsCirculation Factors

Guaranteed Circulation - number expect to circulate

Primary Circulation - number people buy through subscription or newsstand

Secondary or Pass along - give it away!

CirculationCirculation

Paid Circulation must pay the subscription price to receive

the magazine Controlled Circulation

receive if can have an influential role for the advertised products

Newspaper AdvertisingNewspaper Advertising

Pros Mass Medium Comprehensive Scope Geographic

Selectivity Timeliness Credibility Selective Attention Creative Flexibility Active Medium

Cons Lack of Selectivity Short Life Span Low Production

Quality Clutter Must pay for preferred

position to guarantee placement

Overlapping Circulation

Types of Newspaper AdsTypes of Newspaper Ads Display Advertising

includes copy, illustrations, photographs, graphics, etc.

Classified Ads copy only

Co-op Advertising share responsibility

between channel members

Public Notices Preprinted Inserts

sales promotions, coupons, contests, etc.

Out-of-HomeOut-of-Home

Oldest Form of Advertising - often referred to as ‘outdoor advertising’

Delivery Modes include: billboards, blimps, transit ads, etc.

Expenditures are approaching $1.7 billion

BillboardsBillboards Pros

Poster Panels vs. Painted Bulletins

Panels are silk screened - ranging in size from 6’2” by 12’’2” to 12’3” by 24’6”

Painteds- directly painted and leased for 1-3 years

broad reach/high frequency

Geographic Flexibility Low CPM Can be a last

reminder for products like fast food, shopping venues, etc.

product identification is easy!

Out-of-Home NegativesOut-of-Home Negatives

nonselectivity minimal exposure time difficulty in measuring audience environmental concerns limited use of copy

The Broadcast MediumsThe Broadcast Mediums

Television cable network National vs. Local

Radio FM AM National vs. Local

TelevisionTelevision Broadcast TV (Network) - 1100 Stations

UHF VHF

Cable TV Examples: BET, CNN, MTV, superstations

Who’s Advertising Here? Proctor and Gamble GM, Philip Morris

Television AdvantagesTelevision Advantages reach the masses can be both local or

national most dramatic form of

advertising best suited for

products that require demonstration or stimulation of emotion

More TV AdvantagesMore TV Advantages Prestige

highly visible firms use this medium Impact

immediacy, demos, sound and color interaction

Creativity Some Selectivity Low Cost

Disadvantages of TVDisadvantages of TV

Very High Cost of Production Media Time at a Premium Selectivity and targeting Difficult Brevity of Message Clutter Zipping and Zapping

Pros and Cons of Cable TVPros and Cons of Cable TV

Selectivity Younger, more

affluence audience, more innovative

Very low cost Flexibility

time for infomercials

Testability

Limited Reach Fragmentation Quality Zipping and

Zapping

Types of TV Types of TV AdvertisementsAdvertisements Network Advertising

4 major networks, erosion of audiences convenient and efficient coverage can buy spots , participations or sponsor

Cable Advertising interconnect for regional coverage syndicated programs, infomercials

Local TV Spots

How Do I Buy TV?How Do I Buy TV?

Dayparts decide on the time of day to air commercial viewing highest during primetime must choose vehicle

Dayparts Daytime 9 a.m. - 4 p.m.. Late Fringe 11:00p.m. - 1:00 a.m. Remainder Early Fringe

RadioRadio Who Listens? 96% of

U.S. population Youth the greatest

audience! Often a distraction or

background noise

FM or AM AM audiences growing

faster than FM Talk Radio!

Pros and Cons of RadioPros and Cons of Radio Image Transfer Selectivity Cost Efficient Timely Medium Geographically

Flexible Reach and Frequency

listen average 3x a day

No Visuals! Segmented

Audiences over Stations with Similar Formats

Distraction Clutter Push Button!

Buying Radio TimeBuying Radio Time

Networks lack of flexibility and choice of stations national coverage

Local Radio spots: live or taped local personalities can assist in credibility Dayparts: Morning and Evening Drive

Time Desirable (6-10 a.m.; 3-7 p.m.)

Interactive Advertising MediaInteractive Advertising Media

Entails reciprocal behavior

CD-Rom Virtual Reality The Internet Interactive 800

numbers Kiosks

Alternatives for the Alternatives for the Interactive SoulInteractive Soul CD-Rom - limited by households with the

PC capability great for tourism Virtual Reality - can visualize the

product and its demonstration in 3D Internet - growing access to the WEB -

can promote products, catalogs, firms here to catch surfers