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Advertising: Part I

Advertising: Part I. reasons to study advertising power of advertisements advertising and mass media development of the advertising industry new media age effect on advertising industry effect on consumers. Lecture Outline.

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Advertising: Part I

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  1. Advertising: Part I

  2. reasons to study advertising • power of advertisements • advertising and mass media • development of the advertising industry • new media age • effect on advertising industry • effect on consumers Lecture Outline

  3. “communication that is paid for and is usually persuasive in nature” • falls under realm of marketing • public relations • sales promotions (coupons, etc) • direct marketing (e-mail, telemarketing, etc) • product placement What is advertising?

  4. No Longer just for Business

  5. development of the advertising industry over time • from the ‘Big Five’ media to IMC (integrated marketing communication) • link between the advertising industry and the mass media • impact on consumers Reasons to Study Advertisements

  6. hard sell vs. soft sell • short-term power: • conveying new information, building awareness, enhancing credibility, etc. • long-term power: • conveying brand image, attaching emotional values to the brand, building positive reputation, etc. creativity entertainment Power of Advertisements

  7. ads can influence buyer decisions • cultural force: changing our minds and values • commercial force: creating desire for something we do not need • advertising imagery is a cultural consequence of transition in local and global societies Information and Manipulation

  8. word-of-mouth is the most effective form of advertisement • recommendation by someone else • ties into trust and credibility • “bad news” very powerful Still …

  9. interdependence • media depend on advertising revenue • advertising depends on media to provide audiences • advertising = primary income source for mass media • big corporations sell relatively privileged audiences to other businesses Advertising and Mass Media

  10. private media organisations: • all depend on advertising • public media organisations: • ratios vary between all publicly funded to partial dependence on advertisers Private versus Public

  11. free of adverts and independent of advertisers • paid for through TV license fees • one per household • international website now carries adverts

  12. early 1800s: • US and Europe after Industrial Revolution • 1990s onwards: • former Eastern bloc countries increase advertising expenditure • China and India seen as relatively new targets • market liberalisation and globalisation • equates to increase in global advertising expenditure Development of Advertising Industry

  13. Source: World Advertising Trends, 2007

  14. changes in role of ad agencies • in the past: • ad agencies operate in-between media owners and advertisers • sell media space to advertisers • get commission from media owners • now: • advertising companies have become formally independent of the media owners • in addition to selling space, they create the ad Development of Advertising Industry cont’d …

  15. increased options for advertisers • traditional advertisement platforms: • newspapers, television (incld. product placement), magazines, radio, direct mail adverts, some outdoor • contemporary advertisement platforms: • cinema, outdoor, online, email, mobile phones, stand-alone digital screens Development of Advertising Industry cont’d …

  16. traditional markets changing rapidly and remain unstable • typically less government intervention in markets • fragmented consumers • globalisation = global brands, cultural differences in advertising • age of new media Development of Advertising Industry cont’d …

  17. new media: • technologies associated with digital computers as opposed to print and analog broadcast • link to pervasive CMC What is the New Media Age?

  18. desire to catch up but not necessarily to understand consumer behaviours and changes within the new media age • Web 2.0 • UGC – user generated content • interactivity • ‘transference’ tends to be the norm • strategies for traditional platforms transferred directly to contemporary platforms Effect on Industry

  19. multiplicity of platform options • increased choice = more complex marketing strategies? • effectiveness uncertain • heavy competition • creativity important • brand identity formation • increased access to consumer • TV – limited access • finite source of information • new media – expanded access • responsive and flexible data source • personalized consumer relationship potential Effect on Industry

  20. Attention • Interest • Desire • Action AIDA Traditional Model of Advertising

  21. attention is a scarce commodity • deficit in attention is result of surplus of information • media and advertisers all competing for audience attention; follow consumers anywhere and everywhere • “attention economics” devoted to finding ways of getting consumers to consume advertising The “Attention Economy”

  22. advert-free spaces reduced • information pollution/ information overload • clutter • spam • daily interruptions • consumers cannot process it all • harder to make decisions Effect on Consumers

  23. empowerment? • spam filters • online ad filters • easily ignore banner ads • research products before purchase • ratings from other consumers • link to word-of-mouth/recommendations? • decreased control? • database marketing: • collecting and storing information about consumers • involves ‘data mining’ Effect on Consumers

  24. consumer culture • personal worth • identity • everything can be purchased • freedom • prestige • success • love products we purchase Effect on Consumers

  25. Cappo, J. (2003) The Future of Advertising: New Media, New Clients, New Consumers in the Post-Television Age, Chicago : McGraw-Hill. • Stafford, M. R. and Faber, R. J. (2005) Advertising, Promotion and New Media, New York: M.E. Sharpe. • http://books.google.co.uk/books?id=bwS3klAb7nMC&printsec=frontcover • Nielsen, A. C. (2007) “Word of Mouth the Most Powerful Selling Tool: Nielsen Global Survey”, Market Research World, • http://www.marketresearchworld.net/index.php?option=com_content&task=view&id=1651&Itemid=48 • Davenport, T. H. and Beck, J. C. (2002) The Attention Economy: Understanding the New Currency of Business, Boston: Harvard Business School Press. • http://books.google.co.uk/books?id=j6z-MiUKgosC&printsec=frontcover&source=gbs_summary_r • Rigby, R. (2006) “Warning: Interruption Overload”, Financial Times, • http://www.ft.com/cms/s/0/d0f71fb6-3243-11db-ab06-0000779e2340,dwp_uuid=4e612cca-6707-11da-a650-0000779e2340,print=yes.html?nclick_check=1 References

  26. read Introduction to Advertising and the End of the World • will be uploaded to WebCT Reading for Next Week

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