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Brand Advertising

Professor Carl Mela Marketing 460 Product Management Fuqua School of Business. Brand Management System On Building A Brand Price Product Place Promotion Managing Across Brands. Brand Advertising. Agenda. Advertising Planning Advertising Efficacy Trends in Advertising.

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Brand Advertising

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  1. Professor Carl Mela Marketing 460 Product Management Fuqua School of Business Brand Management System On Building A Brand Price Product Place Promotion Managing Across Brands Brand Advertising

  2. Agenda • Advertising Planning • Advertising Efficacy • Trends in Advertising

  3. Advertising Planning Marketing Communications • Introduction • Situation Analysis • Objectives • Budgeting • Strategy • Execution • Evaluation Brand Management Market Intelligence

  4. Advertising Planning • Execution • Agency • Copy • Media

  5. Execution - Agency • Selecting an Agency • Account reviews • How well will they execute the strategy in your advertising plan? • Agencies pitch an execution strategy • Deutsch for VW 95 days, 50 of 175 employees, and $360K just for final pitch • and lost!

  6. Execution - Agency WSJ 2006

  7. Execution - Agency • Agency Organization • Account services (sales and strategy) • Marketing services (research, events, pr, direct marketing) • Creative (creates message) • Production (produces advertising) • Media (where, when, and how much) • Administrative (accounting and billing)

  8. Execution - Agency • Agency Compensation • Commission (typically 15% of media, less for big clients) • Fees (hourly rates) • Leads to conflicts with respect to billing supplies and support across clients • Pay for Results (sales, awareness, etc.) • P&G may switch from sales-based to Gilette’s incentive based approach

  9. Execution - Agency

  10. Product or Brand Manager Senior Managers Account Exec Copywriter Senior Writer Account Exec & Legal Execution - Copy Agency Client

  11. Execution – Copy (Firm)

  12. Execution – Copy (Agency)

  13. Execution - Copy

  14. Lodish et al. (1995) • Little relation between recall/ persuasion measure and brand sales • Ad elasticity is 0.13 • 2001 Interbrand study – only 1/6 of campaigns meet sales and budget objectives

  15. Why Ad Elasticities Are Low

  16. So, How to Break Through • New media trends

  17. Trends in Communication Strategy Source: Advertising Age by Robert J. Coen, McCann-Erickson Inc; Newspaper Association of America; Radio Advertising Bureau; Simba Information; Outdoor Advertising Association of America; Interactive Advertising Bureau (IAB); Lehman Brothers

  18. Internet Ad Spend

  19. Trends in Communication Strategy Mediametrix

  20. Internet Ad Spend

  21. Paid Search

  22. Trends in Communication Strategy

  23. Trends in Communication Strategy • Viral and Word of Mouth Marketing (Ford Sportka) • Web logs (blogs) • http://blogsearch.google.com/ • Advertainment • Branded content • Product placements • Other Media • Cell phones • In-store TV (P&G diaper ads in restrooms) • Video games

  24. Trends in Communication Strategy

  25. Trends In Communication Strategy

  26. Trends in Communication Strategy • Product Placements • $4.25 billion in ‘04, an increase of 22.8 from ’03 (NYT)

  27. Trends in Communication Strategy • $ 10 MM of Electronic Arts $4 BB 2004 Revenue (NY Times). • Will grow now that Nielsen can track • Issues of fit (this deodorant placement seems sensible)

  28. Trends in Communication Strategy

  29. Trends in Communication Strategy • Interactive, Customized and Adressable Media • Internet ($10 CPM) • $12 BB in 2005 market and growing (4% of US spend) • MSN Ad -- $1MM for 24 hours ($25 K 4 Years Back) • TV -- $2.4 MM for 0:30 Superbowl, $574,504 for Desperate Housewives • 1 Page People Ad -- $228,275 • Upfront v. bid model for pricing ads Up 27% in 2005 compared to 11% for TV (Jupiter/TNS) • DVRs/Video on Demand • Direct distribution of TV • Internet, DVR (6.5 MM), iPod, Google video and CBS • Cell Phones ($35 CPM) • $75,000 to $300,000 for campaign vs. $25,000 to $50,000 in 2005 • Battle between carriers and content providers over fees slows rollout

  30. Trends in Communication Strategy

  31. Trends in Communication Strategy • Relationship Marketing • Not only do new technologies deliver content, but they receive information on choices • Exploit addressability and interactivity of DVR and Internet to customize and target • Media models merging – Internet and DVR

  32. Trends in Communication Strategy • IMC - Integrated Marketing Communications • consistency across promotional mix and media • Publicis has “Chief Holistic Officer • Accountability • justify your communications expenditures • Media Convergence • The old media model is shattered and this implies immense opportunity and risk

  33. Media Convergence

  34. Don’t Give up on TV!

  35. Don’t Give up on TV!

  36. In-store TV

  37. Summary • “Evaluate marketing communications options strategically to determine how they can contribute to brand equity.” - Keller • Engage in advertising planning • Planning process • Agency, copy, media • http://scriptorium.lib.duke.edu/hartman/ • Consistent message across promo mix (integrated marketing communications)

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