copyright © 2005 by allyn & bacon chapter 7 updated jan. 10, 2006 advertising “advertising -...

Copyright © 2005 by Allyn & Bacon

Chapter 7 Updated Jan. 10, 2006

Advertising“Advertising - ‘nonpersonal communication for products, services, or ideas that is paid for by an identified sponsor for the purpose of influencing an audience.’”

- Medoff & Kaye, quoting Vanden Bergh & Katz, p. 142

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Marketing

All the efforts by any person, group, or organization intended to advance the exchange of a particular good or service

Advertising: One element of the marketing mix.

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History-3000 B.C to 1900

3000 B.C.-Babylon Clay tablets

exchanged on which names of merchants were inscribed.

100 A.D.-Rome Merchants hung stone

signs outside their shops, advertising the goods inside

1525-Germany A publisher printed

a communication that advertised a book

1841-Boston Volney Palmer sells

newspaper space to those who wish to advertise in newspapers

1875-Philadelphia N. W. Ayer starts

first full-service advertising agency:

Ayer writes & produces ads & places them in newspapers & magazines


History-1901 to 1923 1922-Long Island, NY

A radio station sells air time to an advertiser

1923-New York City-The Browning King Orchestra, a program featuring music by that band, is wholly sponsored by Browning King clothiers

1923-General Mills produces a jingle for its Wheaties cereal. Sales zoom.


History-1924 to Present

1940s- New York City CBS founder William Paley airs first programs sponsored by more than one company

Bulova Watch Co. first to buy commercial (“spot”) time on a “magazine”-style program on both radio and tv

1970s- 30-second (:30) spot becomes the most popular ad “buy”

1990s- 15-second (:15) spot becomes common


History-1924 to Present II

2000s Return of sponsorship being tested

(CBS 60 Minutes) Product placement/brand placement

increasing…began in films, now a staple in TV narratives.

Pay-per-view as an additional revenue stream

Advertising specific digital stations and on the web (accessible through broadband)


Role of Advertising in U.S. Media

Advertising dollars provide foundation of most mass media.

Advertising finances most radio, television, cable television.

Advertising “model” has dominated since 1920s.

New media are changing mix of financial support

Other financial support models: Subscription Pay per view Membership


Why Advertise?

Benefits for advertiser.

An ad can: inform target audiences of a good or service

foster product & brand loyalty

develop product & brand images

Benefits for consumer.

An ad can: provide useful product information

reinforce widely-shared cultural values, such as capitalism & competition

social cohesion


Why Advertise?

Disadvantage for advertiser.

advertising is expensive

difficult to measure direct results

Disadvantage for consumer.

annoyance factor disrupts media consumption

annoyance factor too much influence over content

…annoyance…


Radio advertising

Benefits for advertiserRadio advertising: localizes a selling effort to:

a specific area a specific age, gender, &/or income

can cost less to make than ads for other media (range from $10-20/spot and up)

has high reach; three out of four Americans listen to radio every day

can be very creative - theater of the mind


Radio advertisingDisadvantages for advertiser products can’t be seen--yet radio tends to be used as a background

medium ethereal medium - here and gone (no “shelf

life”)


Why Advertiseon Broadcast TV?

Benefits for advertiserBroadcast TV advertising: products can be seen has high reach can be tailored to more program types than radio advertising


Why Advertiseon Broadcast TV?

Disadvantages for advertiser Broadcast TV advertising: can be “zipped” through & “zapped” off is streamed through a medium not yet as

portable as radio & print tends to cost more to produce--& display--

than radio & print ads.


Why Advertiseon Cable TV?

Benefits for advertiserCable TV advertising: can reach a greater variety

of target audiences than either radio or broadcast TV

can be tailored to more program types than either radio or broadcast TV

is less costly to display at more desirable times of the day than broadcast TV or some radio

Market Shares of Top 3 Channels

CNN FNC HBO


Why Advertiseon Cable TV?

Disadvantages:Same as for Broadcast TV Plus 30% less reach than Broadcast TV Higher audience “turnover” (subscribers who don’t re-subscribe)


Internet (web) advertising has yet to be fully defined

A Company Website: Marketing, or public relations--not advertising

Buying space on another company’s website--advertising

Why Advertiseon the Internet?


Why Advertiseon the Internet?

Benefits for advertiserInternet advertising can:

reach a global audience reach a greater variety

of target audiences than any other medium

be least costly of all other media to produce & display at more desirable dayparts

prompt immediate sales detailed consumer data

Disadvantages for advertiser

Internet advertising: requires an

interactive audience member

resists accurate measurement

is disfavored by some parents


Spam

Unsolicited messages requiring Internet users to actively decline them

are activated when a website visitor inadvertently triggers a permission to receive unsolicited emails

can prompt displeasure with advertising in general


Agency Types

full service creative boutique- specializes in ad production & campaign development

media buying service- specializes in placing an ad in those media outlets where it will most likely achieve advertiser goals

agencies work closely w/local media


Local Ad Sales - TV & Radio

Sales Manager National Accounts Manager

Handles national accounts: Coke, Ford… Buys done strictly ‘by the numbers’

Account Executives Local sales agents Account lists & cold calling Selling an “intangible” Per spot pricing Run-of-schedule vs. specialized buys

Traffic - places ads in schedule


Local Ad Sales - TV & Radio

Station will produce the spot and may provide talent.

Some regional/national production companies specialize in producing ads.

Competitive business Pay is commission on sales

Many local stations have a 40%+ profit margin!


Criticism of advertising

Ads, say critics promote materialism, consumption

reinforce stereotypes about historically subordinated social groups

can mislead consumers about product benefits

exploit children invade & pervade

copyright © 2005 by allyn & bacon chapter 7 updated jan. 10, 2006 advertising “advertising -...

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