Advertising Media and Integrated Marketing

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					Advertising Media and Integrated
  Marketing Communications




                   Chapter 11
Marketing Framework
Advertising Media

  •   Ad budgets are usually fixed, so choices
      must be made on how to allocate
      resources across media
      1. How much do we spend?
      2. When do we spend?
      3. Which media do we use?
How Much Do We Spend?

  • Ad budget as a percentage of sales
    – Use past percentage or industry norm
    – Make adjustments based on marketing
      goals
How Much Do We Spend?

  • Ad budget approximately on par with
    competitors
  • Service providers track companies’ ad
    expenditures
How Much Do We Spend?

  • When sales decline, previous
    approaches imply budgets should be cut
    – Smaller ad budgets mean less presence
      and a cycle of decreased sales


  • The strategic advertising goal approach
    views advertising as an investment
    – Determine advertising’s goal and work
      backward to calculate expenditure
Discussion Question

  • Should advertising be seen as an
    expense or an investment? Why?
Reach, Frequency and GRPs

  • Reach: the share of your target that has
    seen your ad at least once
  • Frequency: the average number of times
    target saw the ad (within set duration)
  • GRPs: Reach X Frequency
    – Ad reached 25% of target an average of 3
      times - the ad delivered 75 GRPs
Reach & Frequency

  • For reach, the goal is to expose as many
    of the target customers as possible
    – Find most cost efficient media for reaching
      target
  • For frequency, it depends on the goal
    – Awareness and memory can probably be
      attained with a few ads
    – Persuasion may take more
    – If ad/product is readily understood, wear-out
      may occur
Media Planning

  • You pay more to get more--but the
    relationship is not perfect
Return on Marketing Investments

  • Example
    – Grey’s Anatomy: 9.3 million TVs
    – Grey’s Anatomy: $440,000 per 30 seconds
    – McDonald’s meal contribution: $0.50
       • $440,000/0.50 = 880,000 meals/breakeven
    – 9.3 million viewers are exposed; thus,
      McDonalds needs 9.5% to purchase
       • 880,000 / 9.3 million = 9.5%
    – The question is…Is this reasonable?
Media Planning

  • Continuous: regularity in ad exposure
    – Periodicity depends purchase cycles
       • Coca-Cola, McDonald’s, Ford, etc.


  • Occasional: pop up from time to time
    – Periodicity depends on purchase cycles

  • Seasonal: infrequent and focused on the
    preterm season for the product
    – School supplies in August, grills in April, etc.
Discussion Questions

  • What type of schedule (continuous,
    occasional or seasonal) would you use if
    you were marketing Coca-cola?

  • What about your school?
Media Selection

  • The choice of media outlet is difficult
    because…
    – There are more media outlets
       • e.g., more television stations, more radio
         stations via XM, the Internet, etc.
    – Audiences are fragmented across the many
      media and use technology to zip past ads
Select an appropriate media for the
following:
 Product                           Media/Why
 Coaches restaurant in bricktown
 Calloway golf clubs
 Home Depot
 UCO MBA program
 Univ. of Phoenix MBA program
 Pampers
 Great Wolf Lodge
 Thunder playoff tickets
IMC

  • IMC: marketing messages must be
    seamlessly integrated across media
      – Positive relationship between IMC and good
        brand outcomes
        • High awareness, brand loyalty, sales, etc.
      – Some elements should be consistent, some
        should vary based on the strengths of the
        various media
  • Difficult to implement because ad
    agencies are not full service providers
Media Strengths-Business
Business Strengths of Media

  • TV ads are most expensive yet yield the
    largest reach
  • Magazines have broad appeal or can be
    targeted
  • Radio and newspapers are often
    purchased nationally, but can be
    purchased for local markets
Business Strengths of Media

  • Radio, newspapers, and magazines are
    less expensive than TV, but they also
    deliver smaller audiences
  • Billboards, bus ads, yellow page ads,
    etc. are relatively inexpensive and
    effective in covering local numbers
  • Magazines require long lead times for
    production but have nice reproduction
    quality
Business Strengths of Media

  • Newspapers and magazines are
    nonintrusive but viewers can ignore ads
  • Online advertising and direct mail have
    the best customization options
  • Online ads are inexpensive and can be
    targeted, yet, penetration isn’t 100%
  • Direct mail is relatively inexpensive and
    targeted, but it is not efficient (junk mail)
Media Strengths-Ad Content
Ad Content Strengths of Media

  • TV messages need to be simple and
    straightforward; radio messages even
    more so
  • TV allows for vivid, dramatic portrayals
  • Print vehicles are good for detailed
    product information
Beyond Advertising

  • IMC goes beyond integrating across
    traditional media. It includes personal
    selling, sales promotions, public
    relations, etc.
Personal Selling

  • Personal selling and a company’s
    sales force are essential
    communication vehicles for many
    industries

  • Accounts for 14 million jobs
     – Over 10% of work force
Personal Selling

  • Get attention of potential customer
     – e.g., prospecting, qualifying potential
       customers, and approaching them
  • Get interest
     – e.g., sales presentations
  • Get desire
     – e.g., product demonstrations, handling
       customer’s objections
  • Get action
     – e.g., closing deal, following up service
Advertising & Selling
Discussion Question

  • Do you think marketers of dry erase
    boards should use personal selling? Why
    or why not?
Advertising vs Personal Selling

   Product                Adv/PS – Why
   Dry Erase Markers
   Beer
   Office space
   Dog food
   Fishing poles
   Shower curtain rings
   Industrial glue
Designing a Sales Force

  • How many salespeople do I need?
    – Larger with an aggressive launch


  • Where do I deploy them?

  • How do I compensate them?
    – Proportion of salary and commission
Designing a Sales Force

  • Pull relies on advertising and sales
    promotions
    – Direct promotional efforts to consumers

  • Push relies more on personal selling
    – Direct promotional efforts to channel members
       • Trade allowances: price reductions to
         intermediaries for allocating space, etc.
       • May be passed on to retailer’s salespeople as cash,
         training and product demonstrations, free
         merchandise, conventions, etc.
Discussion Questions

  • How might Maytag implement a push
    strategy? What about a pull strategy?

  • Do you think they do both? Why or why
    not?
Public Relations

  • PR communications are the attempt of
    an organization to reach
     – Customers, suppliers, stockholders,
       government officials, employees, general
       community

  • PR’s intention is to convey a positive
    image and to educate a constituency
    about the company’s objectives
     – Generate goodwill on behalf of the company
PR People…

  • Issue press kits - news releases when
    anything “newsworthy” is happening
    – Features news (e.g., product launch),
      company information, bios, history, etc.

  • Maintain information on web site

  • Arrange events
    – Speaking engagements, sponsorships,
      philanthropy, etc.
Publicity

   • Communication tool that the company
     doesn't pay for

   • It has the appearance of objectivity
     – PR can prepare press releases, but there is
       no guarantee that they will be picked up

   • Publicity can be negative or positive
     because companies cannot directly
     control it
Discussion Questions

  • Can you describe the effects of negative
    publicity?
    – For example, describe the effects Ford and
      Firestone experienced following the “SUV
      tire blow-out” incidents.


  • Can negatively publicity be managed? If
    so, how?
Product Placement

  • Product placement is when products are
    integrated into shows
    – More subtle than ads
       • e.g., Hannah Montana with Adidas

  • Becoming increasingly popular as
    consumers increasingly zap ads
    – Over $1 billion annually
    – Is currently illegal in most of Europe
Event Sponsorship

  • Event sponsorship can occur in sports,
    cultural or artistic endeavors
    – Brands draw from their positive valence and
      high positive energy
       • Nascar racing

  • Not clear that sponsorship is cost-
    effective
    – When Coca-Cola sponsors the Olympics, do
      they really need the exposure?
Sales Promotions

  • Sales promotions activate purchase
    interest, thus effecting short-term sales
  • Coupons
  • Rebates
  • Promo prices
  • Trade-ins
  • Deals for loyalty programs
  • Free trial-sized products
  • Contests/sweepstakes
Discussion Question

  • Why might Nationwide Insurance
    allocate money to sponsor Nascar
    instead of allocating money for
    sweepstakes?
IMC Choices Depend on…

  1. The target audience
  2. The company’s goals
    –   Awareness
    –   Information about features and benefits
    –   Enhancement of brand attitudes
    –   Strengthening of preferences
    –   Stimulation of purchase trial
    –   Encouragement of repeat purchasing
    –   Attraction of brand switchers
Questions to Ask…

  • Should we schedule continuously,
    occasionally or seasonally?
  • What is the consumer’s purchase cycle?
  • What is the level of saturation desired?
  • What life cycle stage is the product in?
  • What can we afford?
  • What is best for our target?
  • What do we want the target to know?
Example: IMC Schedule
Media Effectiveness

  • If goal is awareness, reach matters
    – Can be measured by viewership, readership,
      circulation numbers, traffic indices, etc.

  • If goal is attitude adjustment, use surveys

  • It can be difficult to assess ROMI
    because customers can’t always tell you
    where they saw the ad
Media Effectiveness

  • If you spend more on advertising, do you
    see more in sales?
    – Increasing ad budget relative to the
      competition doesn’t increase sales in general
    – Qualitative differences, such as better ad
      copy, can increase the likelihood that TV
      advertising will positively affect sales
    – Ads that evoke positive and not negative
      feelings have been related to sales
Media Effectiveness

  • Online advertising
    – Track click-thru rates, downloads, inquiries,
      purchases, returns, etc. & compare with cost
      per click, per download, per acquisition, etc.
       • Online ad cost effectiveness is not great, but
         cost is low
Discussion Question

  • If increased advertising spending does
    not lead directly to increased sales, why
    do it?