Chapter One
WHAT IS ADVERTISING TODAY?
OBJECTIVES
The main objective in this chapter is to define advertising and introduce the profession. Students will learn the fundamental role of advertising in the communication process; how it works as an element of the marketing process, the basic terminology used; the functions and effects of advertising in business; the influence of economics on the evolution of advertising; and advertising's overall impact on the society in which it operates. These basic elements set the framework for the more detailed study to follow. (p. 4)
After studying this chapter, your students will be able to:
1. Define advertising and differentiate it from other forms of marketing communications.
2. Explain how the advertising differs from basic human communication.
3. Define marketing and identify the four elements of marketing strategy.
4. Discuss advertising’s role in marketing strategy.
5. Explain the difference between consumer and business markets.
TEACHING TIPS AND STRATEGIES
Students will develop an interest in Advertising after this chapter. It does not matter if these students are marketing majors. All the students are consumers, and after this chapter I find students tend to start thinking about how advertising influences them.
To activate learning, I suggest starting the class with a discussion on Mercedes. I ask the students if Mercedes are good cars. Students will convey to me that Mercedes are GREAT cars. Is a Mercedes really costing $20,000 more to build then a typical car? This leads to a discussion of who put the image of Mercedes as high-end product in our mind. Advertisers!!! I like to build on that idea with students and introduce them to the idea that brand image and perception usually comes from advertising.
I then ask if advertising influences everything we buy. Students will tend to debate both sides. Some students will convey that advertising does not influence them in anyway. I then write on the board the following brands (please change these to fit your style):
· Rolex
· Timex
· Nabisco
· Pepperidge Farm
· Nike
· Puma
I ask the students to tell me which are high-end or low-end brands. I then go down the list brand by brand, writing beside the brand high-end or low-end. This facilitates a discussion of how we know this information and who influenced these images in our mind that Rolex is better then Timex (does that mean surgeons only use Rolexes in complex procedures?). This is a great way to transition into discussing the communication process between the company and the customer. You will also want to discuss the different methods of advertising such as: word of mouth, television, radio etc. It is also a good opportunity to discus the consumer and the different mediums they use to learn about the company, product or service.
For example: In high school, students remember the peer pressure of having to have Guess jeans, or Nike shoes. Now Sean Jean is the clothing rage and Fubu is going out. New fashion companies do not have a lot of money to advertise. So how do they get the word out about their new line of clothing? Simple, they get celebrities to endorse the products. Cadillac Escalade is a great example, which sales have taken off over the last two years since the vehicle appeared in a rap video. Another way to help increase awareness of a product is by word of mouth. If a student sees someone wearing a neat looking pair of Nikes’ they are more apt to buy it. Think for a moment of the success of the recent Nelly song, Air Force One’s. This song helped revive a dead shoe brand for Nike.
Students start questioning what they are hearing and seeing in their surroundings. I like to ask students to then do a special project for me. The very next morning, I want them to write down all of the brand references they see in the first ten minutes of waking in the morning. I have students bring this list to class, and they are quite amazed at how many different brand references they see in the morning. For example: When I awake I see GE on the alarm clock. I see Crest on the toothpaste, OralB on the toothbrush, Price Pfister on the faucet, Kohler on the sink and the list goes on and on.
This little exercise helps students to understand how hard it is for a company to get their name out in the marketplace due to all the ‘noise’ and competition for consumers’ attention.
This leads to a discussion on the how many TV channels the typical home has now. The answers will vary from 50 to 500 per home. I then go over how in the early eighties it was typical for consumers to have only 10 or 15 channels in which to select. I explain this affects advertisers in different ways. Most likely, with advent of so many different television stations we are unfortunately are not creating more and more TV users. To put this in laymen terms, let’s pretend for a moment that CBS has a million viewers. Then five additional channels are launched. This affects CBS by dropping them to eight hundred thousand viewers and the other five new channels get the viewers. This is called cannibalization, as television, radio add more and more channels the universe (the number of audience members) is not growing at the same rate). For an advertiser this is a serious dilemma, because now they have to advertise on five to ten stations (it is probably more now) to get the same results they did from one station.
LECTURE OUTLINE
I. Introduction — The Altoid Story (pp. 5-6)
A. Contrary to the long history of Altoids, their success has occurred only recently (over the past decade). Altoids were developed at the turn of the 19th century in a small confectionary firm in London. Altoids were an exceptionally strong lozenge intended to relieve intestinal discomfort. Owners of the London confectionary were members of the Anglican Church. The church incorporated the lozenge into their religious practice, which developed a small following for the lozenge.
B. Reasons for Altoids slow start
1. The brand’s price was three times higher than competitive product
2. The product achieved only very narrow distribution
3. The product suffered from extremely low awareness due to virtually no advertising.
C. With a series of mergers and acquisitions Altoids landed in the Kraft General Foods subsidiary of the Philip Morris Company. In 1995, Altoids launched a major marketing campaign with the help of an ad agency, Leo Burnett Chicago with 50% of the budget of the competitors.
D. The strategy was simple and effective. Research discovered that their target market was young, active and yet elusive. So the strategy was to place ads outdoors where no one would miss them. Ads went on billboards, bus shelters, phone booths, and subway cars.
E. The Altoid ads themselves were creative and simple. The ads focused on product’s unique, exceptionally strong flavor and its one of a kind tin packaging. The ads were indicative of the mint-simple, clean and fresh.
A1-1 Altoid Strong Man Ad (p.5)
F. The ad campaign worked and Altoids jumped from 6th in the breath mint companies to #1 in 2001. Brand awareness went up 60% and consumption 35%. Sales rose 31% to 18.7 million. Altoids were as recognizable as Coke-Cola, Sunkist and Energizer with good advertising after 6 years after beginning the campaign. Success stories like this cause companies to spend more than $230 billion annually on advertising.
II. What it Advertising? (p. 6)
Many people simply refer to all commercial messages as “advertising,” but in fact, collectively these various tools are called marketing communications. Advertising is just one of these tools.
A. For now, we’ll use the following definition:
1. Advertising is the structured and composed
2. Nonpersonal communication of information,
3. Usually paid for
4. Usually persuasive in nature,
5. About products (goods, services, and ideas)
6. By identified sponsors
7. Through various media.
B. Let’s analyze this definition:
1. Advertising uses verbal and nonverbal elements structured and composed to fill predetermined space and time formats that are controlled by the sponsor.
2. Advertising is nonpersonal communication of information because it’s directed to groups rather than individuals. These people could be consumers, who buy products for their personal use.
3. Usually paid for by sponsors who are identified in the ad.
4. Usually persuasive in nature — designed to win converts.
5. Promotes tangible goods (i.e., oranges, oatmeal, and olive oil), publicize intangible services (i.e., bankers, beauticians, bike repair shops, etc.) and advocate a wide variety of ideas (concepts based on economics, politics, etc.). In this book the term product encompasses goods, services and ideas.
6. Advertising identifies its sponsors (whereas public relations activities often refrain from open sponsorship).
7. Advertising reaches us through a channel of communication referred to as a medium, such as radio advertising, TV advertising, newspaper ads, billboard and the Internet. Mass media (the plural of medium) radio, T.V., newspapers, billboards
- Addressable media (direct mail)
- Interactive media (Internet and Kiosks)
- Nontraditional media (Shopping carts, blimps and video cassettes)
III. Communication — What Makes Advertising Unique (p. 8)
A. The Human Communication Process 1-1 (p. 9) A1-2 (p. 9)
1. Oral communication consists of:
a. Source — the party who formulates an idea
b. Encodes — translates the idea into a message
c. Message — the idea to be sent
d. Channel — a medium or set of media carrying message
e. Receiver — the party who receives the message
f. Decode — interpret the message
g. Feedback — a message that acknowledges or responds to the original
h. Noise —the distracting cacophony of many other messages being sent at the same
time by other sources.
2. Applying the Communication Process to advertising – The stern model, a sophisticated communication model specific to advertising, depicts advertising, the source, the message, and the receiver have multiple dimensions.
a. Source = sponsor
b. Message= the ad
c. Channel= medium
d. Receiver= customer or prospect
e. Noise= the din of competing ads and commercials
3. This model oversimplifies the process that occurs in the advertising or other sponsored marketing communications. It doesn’t take into account either the structure or the creativity inherent in composing the advertising message. Some of the complexities need to be taken into consideration especially regarding interactive media, which allow consumers participate in the communication by extracting the information they need, manipulating what they see on their computer or TV screens in real time and responding in real time.
1-2 The Stern model of the advertising communication process (p. 10) A1-3 (p.10)
1. Source Dimensions: Sponsor, Author, Persona. (p. 10)
Who is the source of the communication? The sponsor (legally responsible for the communication); the author (people outside the text of the message e.g. copywriter, art director); and the persona (the in-text spokesperson).
Ad Lab 1-A, “Advertising as a Literary Form” (p. 11)
2. Message dimensions: Autobiography, Narrative, and Drama. (p. 11)
Multiple types of messages used in advertising: Autobiography messages (author tell own story), narrative messages (third person persona tells story about others to imaginary audience), and drama messages (characters act out events directly in front of an imagined empathetic audience). The creative team develops the persona and message, along with any images and text that will act as communication symbols or triggers. The team then places these words and visuals in a structured formatted to fit with the medium selected for delivering the message.
3. Receiver Dimensions: Implied, Sponsorial, and Actual Consumers. (p. 12)
Implied consumers are imaginary characters within the ad that play role of the ideal consumer. Every ad or commercial has two real-life recipients—the sponsorial consumers (gatekeepers at the company who decide if the ad will run or not) and actual consumers (the message receivers who comprise the ad’s target audience). Advertisers have to be concerned with how these actual consumers will decode, or interpret, the message. Noise (advertising messages must compete with other commercial and noncommercial messages) complicates the communication process.
4. Feedbacks and Interactivity. (p. 12) Feedback is so important because it verifies that the message was received and understood. Feedback employs the same sender-message-receiver pattern except that it is directed from the receiver back to the original source. Feedback can take many forms (e.g. redeemed coupons, telephone inquiries, visits to the store, requests for more information, increased sales, responses to a survey or an e-mail reply, etc.) Low responses to an ad indicate a break in the communication process. Feedback helps to determine where a break in communication is occurring. Customers can provide feedback, with interactive media, in the same channels as the sponsors. This creates more of a give and take relationship, which benefits both the customer and the sponsor.
IV. Marketing: Determining the Type of Advertising to Use (p.13)
A. The Marketing Dimension