Advertising

1. Advertising MediaLink 3.0

2. Advertising • “Any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor” • American Marketing Association • Consumers pay for media by watching and listening to advertisements • You pay directly for books, movies and recordings • Television, radio, newspapers, magazines and many web sites are supported by television • Advertising is not a medium • Advertising carries the messages from people who pay for media

3. Ancient Advertising • Phoenicians painted messages on stones • 1200 BC • Criers carried signboards to announce the arrival of ships • Sixth century B.C. • Britain required products to carry trademarks to protect buyers • First trademark was issued for Bass Ale • Handbills were the first printed advertisements • William Caxton in England, 1478

4. Early Newspaper Ads in America • First newspaper ads in America were classified ads • BostonNews-Letter -1704 • Mass circulation penny press • New York Sun -1833 • Benjamin Day • Philadelphia Public Ledge • Reported “advertising is our revenue” • Advertising financially support media

5. Let the Buyer Beware • Penny press would accept any advertising content • Patent medicines that were mostly alcohol • Anti-Corpulene pills and Dr. T. Felix Couraud’s Oriental Cream to remove tan and blemishes • Unscrupulous advertisers prompted consumer complaints • Newspapers established an open advertising policy • “Our advertising columns are open to the public” • Except what is prohibited by law or immoral • No one took responsibility for advertising • Everyone deplored advertising

6. Advertising in Magazines • Magazines resisted advertising • Advertising as a way for magazines to succeed • The Ladies’ Home Journal -1887 • Cyrus H. K. Curtis • Success due to advertising • Hired Edward Bok as edtor • Campaign against patent medicine • Edward Bok led The Ladies’ Home Journal with Collier’s and the AMA to oppose adverting of patent medicine • Congress created Federal Trade Commission (FTC) • Monitor deceptive advertising • Today the Federal Trade Commission continues to monitor advertising

7. Advertising in Radio • First radio advertisement • WEAF New York -1922 • Ad for real-estate development • Lucky Strike Dance Orchestra premiered on NBC • Sales increased 47% • Continuous reference to the sponsors’ products • Sir Walter Raleigh Cigarettes • Sir Walter Raleigh Review • In the Raleigh Theater • With the Raleigh Orchestra • Accompanying the Raleigh Rovers • Performing “The Adventures of Sir Walter Raleigh” • Squeezed in 70 reference to the product • Radio advertising earned more than magazines in 1938

8. Advertising on Television • Television began as an advertising medium • Commercial radio networks established television networks • Direct sponsorship • Sponsors and advertising agencies took over the responsibility of producing shows • Led to the quiz sandal • Shows often bore the name of the advertiser • Gratitude factor • Viewers who liked the program would buy the product

9. Advertising on the Internet • Advertisers flocked to the Internet in the late 90’s • Primarily used banner advertisement on major web sites • Pop up ads were also tried • A window that contained the advertisement would open behind the users browser or on top of it • More of an annoyance to the web user • Advertising on the Internet didn’t necessarily bring increased sales • Click through rate is less than 1 percent • Rate at which web browsers click on ads to get more information • In 2000 online ads reached $8 billion • Declined in 2001 • Online ads are attempting to use multimedia to interest web surfers

10. How Advertising Works • A change in the meaning of the word advertise • From “to take note” to “to persuade” • Advertising is the rhetoric of democracy • Daniel J. Boorstin • Common characteristics of advertising • Repetition • Repeating message for effect • Advertising style • Hyperbole, fantastic claims • Ubiquity • To catch consumers attention

11. Advertising Appeals • Grabbing your attention • Get you to read, listen to, or watch an ad • Appeal to consumers • Advertising goal is to “tug at our psychological shirt sleeves” • According to Jib Fowles in Mass Advertising as Social Forecast • Fifteen appeals commonly are used according to Fowles • Sex, affiliation, nurture, guidance, aggression, achievement, dominance, prominence, attention, autonomy, escape, safety, aesthetic sensations, satisfy curiosity, physiological

12. Audience • Demography • Consumer characteristics • Age, gender, income, marital status, occupation, education • Target audience • Design messages to reach specific elements of the audience • Match the product with the audience • Advertise low calorie food in Weight Watchers Magazine not Gourmet • Advertising agencies try to match a client’s product to an audience

13. Criticism of Advertising • According to Louis C. Kaufman in Essentials of Advertising • Three main Criticisms • Advertising adds to the cost of products • Consumers pays the cost of advertising • Advertising helps make goods available and lowers prices • Advertising causes people to buy products they do not need • Dangerous goods like cigarettes • Advertising may stimulate the purchase of a new product but consumers will not continue to buy an unsatisfactory product • Advertising reduces competition and thereby fosters monopolies • High cost of advertising limits entry into the market place • Less expense then other forms of sales

14. Does Advertising Work? • Advertising is simply information • Simply telling the consumer about new products • Consumers are always looking for a better way to meet their needs • Overwhelming power to deceive consumers • Making people buy what they don’t want • Evaluating is more difficult • A middle ground exists between the two arguments

15. Working in Advertising • 6,000 advertising agencies in the United States • Most bill under $1 million a year • Advertising agencies are paid through a commission on advertising time and space sold • Commonly 15% • Agencies also produce television, radio and print ads for their clients • Will bill clients for additional production services

16. Jobs in Advertising Agencies • Market research • Establish target audience based on product • Media selection • Suggest media for client • Creative activities • Create copy and design • Account management • Liaison between agency and client • Administration • Business management • Public relations • Extra service

17. Advertising Agencies Organization • Account executive • Creative department • Creative director • Copy platform • Art director • Client reviews • Media department • Media buyer • Media representative • CPM - cost per thousand • Market (audience) research • Media research

18. Business of Advertising • Media and advertising are interdependent • Advertising business is dependent on the national economy • If the economy is healthy advertising industry will grow • During recession advertisers cut their budgets • Advertising business declines • During recession advertisers may change media strategy • Choose radio over television • Radio costs much less

19. Television Commercials • Television adverting is expensive • Average 30 second ad on network television could cost $100,000 • 30 second ad on the Super Bowl would cost $2 million • Networks and stations sells 10, 15 and 30 second ads • National advertising on network programs is handled by national advertising agencies • The country’s biggest advertisers use agencies • Proctor and Gamble, Ford, GM, and McDonald’s for example • National agencies buy advertising based on CPM • Cost-per-thousand • Cost of reaching 1000 people • Television adds are expensive to produce • As much as a $1 million per minute • Using other media may be more cost effective

20. Print and Radio Advertising • Local television, radio and print are less expensive than television • Allows targeting of a specific audience • Based on demographics • Age, education, gender, income • Target audiences • Women who travel read Cosmopolitan but don’t watch daytime television • Newsweek delivers to more people for less money than Time • Audience information for broadcasting • Radio • Arbitron • Television • A. C. Nielsen

21. Local Advertising • Small local business • Many advertise in local newspapers, handbills • Susan’s Coffee and Tea • Coupon published in neighborhood weekly • Large local business • Many use local newspaper, television and radio • Bud Kennedy’s Ford Dealership • 30 second announcement during sports each night • Co-op with Ford Motor • Half page display ad on Saturdays • Most local advertising expenditures go to newspapers • Local advertising agencies • Design campaign, produce and place ads

22. Local Media Includes Services For Clients • Newspapers • Prepare ads using clip art • Radio stations • Produce ads • Write copy • Talent services and limited production • Barter • Trade airtime for advertiser’s product • Give a product as a contest prize • Television stations • Produce ads • Write copy • Limited production • May only shoot slides and graphics

23. National Sales Representatives • Manufacturers desire to sell product nationally • Hire a local advertising agency • Recommends a market strategy • Agency contacts a national sales representatives • Rep firm • Negotiates the purchase of air time and advertising space in local market to firms outside the market • Takes a 15% commission on sales • Work of rep firm • Prepares a media package to reach target audience • Based on CPM • Cost per thousand

24. Advertising Alcohol • Television networks • Voluntary self-regulation • Do not carry liquor ads • Does not show people drinking beer • Distilled Sprits Council • Voluntary code of good practices • Ban on television advertising • Bureau of Alcohol, Tobacco and Firearms and Federal Trade Commission • Do not have authority to regulate liquor commercials

25. Challenging the Ban • Seagram’s Advertised Royal Crown whiskey on local Texas television station • Television networks aired late night ads sponsored by liquor companies for two months in 2002 • Ads promoted the responsible use of alcohol

26. Regulating Advertising • Federal Trade Commission • Established 1914 • Stop businesses that restrict competition, injure or deceive consumers • If FTC determines an ad to be deceptive it stops the ad • Can require corrective ad • Food and Drug Administration • Oversees claims that appear on food labels • The claim of fresh orange juice means it cannot have been frozen

27. Other Regulatory Bodies • Federal Communication Commission • Enforces rules that govern broadcast media • Rules against misleading demonstrations of products • Environmental Protection Agency • Consumer Product Safety Agency • National Advertising Review Board • Self-regulation

28. International Advertising • Globe products • Advertising to a world • wide audience • Coca-Cola • McDonald’s • Global media • CNN Worldwide • Internet • Advertising agency billing outside the U.S. is increasing • Changing demographics • Addition of Spanish dialog to television commercials