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Chapter Sixteen Using Other Advertising Media 2007 Thomson South-Western
Chapter Sixteen Objectives • Explain why postal mail advertising is an efficient and effective ad medium. • Understand p-mail’s five distinctive features compared to mass forms of advertising. • Appreciate the role of database marketing, data mining, and lifetime value analysis.
Chapter Sixteen Objectives • Understand the role of audio-video advertising. • Appreciate the value of yellow-pages advertising. • Recognize the growth and role of videogame advertising (adver-gaming).
Chapter Sixteen Objectives • Appreciate branded entertainment and brand placements in various venues (movies, TV, etc. ). • Understand the role of cinema advertising and Web films. • Appreciate the potential value of various other ad media.
Postal Mail Advertising P-mail advertising: Advertising matter sent via the postal service to the person whom the marketer wishes to influence Ex. Letters, postcards, programs, calendars, catalogs, videocassettes, blotters, order blanks, price lists, menus, etc.
P-Mail Advertising 1. Countdown mailing 3. Special Issue of Road and Track Magazine 2. Subsequent Qualification Mailing 4. Test-Drive Kit Mailing
P-Mail Distinctive Features Targetability Measurability Accountability Flexibility Efficiency
What Functions Can P-Mail Accomplish? 1. Increase sales and usage from current customers 2. Sell products and services to new customers 3. Build traffic at a specific retailer or Web site
What Tasks can P-Mail Accomplish? 1. Simulate product trial with promotional offers and incentives 2. Generate leads for a sales force 3. Deliver product-relevant information and news 4. Gather customer information that can be used in building a database 5. Communicate with individuals in a relatively private manner
Who Uses P-Mail Advertising • All types of marketers • Some budget as much as 10% of their advertising to P-mail • Car companies’ expenditures alone exceeded $70 million in one year.
The Special Case of Catalogs Consumer’s Perspective: 1. Catalog shopping saves time 2. Catalog buying appeals to consumers who are fearful of shopping because of crime. 3. Catalogs allow people the convenience of making purchase decisions at their leisure. 4. 800 -numbers, web-sites, credit-cards, and liberal-return policies make it easy to buy. 5. Merchandise quality and prices are often comparable if not better than those of stores 6. Guarantees are attractive
The Special Case of Catalogs Growth rate has subsided because: • The novelty of catalog scanning has • • worn off for many consumers. The costs of catalog marketing have increased dramatically Third-class postal increases in recent years and sharp increases in paper prices have also raised costs.
Database Marketing • Successful direct mailing necessitates the availability of computer databases and the addressability inherent in the databases. • Up-to-date databases allow a firm to offer varied messages to different groups of customers
Lifetime Value Analysis Customer lifetime value: Net Present Value (NPV) of profit that a company stands to realize on average new customer during a given number of years.
Lifetime Value Analysis 5 ways to augment lifetime values: 1. Increase the retention rate 2. Increase the referral rate 3. Enhance the average purchase volume per customer 4. Cut direct costs 5. Reduce marketing communication costs
The Practice of Data Mining “information extraction activity whose goal is to discover hidden facts contained in databases” RFM System: • Recency of a customer’s purchase • Frequency of purchases • Monetary Value of each purchase
Audio-Video Advertising - Videotapes, CD-ROMs, or DVDs are used to present key video and audio information about a brand. - Research shows that customers are less likely to throw these mailings away than they are a brochure or other printed material.
Yellow Page Ads • Annual revenues exceeding $15 billion. • Both local and national advertisers use the service • Heavy users tend to fall in the 25 -49 demographic with relatively • Reasons for using Yellow Pages: • Saving time spent shopping around for information • Saving energy and money • Finding information quickly • Learning about products and services • 60% of American adults use yellow pages at least once
Yellow Page Ads Yellow pages differ from other ad media: Unlike other media, yellow pages consumers actively seek ads Advertiser largely determines quality of ad placement by the actions it takes Clear-cut limits on possible creative executions Method of purchase (i. e. purchased for full year).
Video-game Advertising (a. k. a. Adver-gaming) • Video game users usually play a single game for 40 hours before they grow tired of it. • Over 60 million game players predicted by 2009, with 40% in the 18 -to-34 age category. • Today nearly 40% of game players are girls and women.
Brand Placement in Movies • Evidence of effectiveness of such advertising is limited but growing • Building Brand Awareness, as well as enhancing recall • Peripheral Route of persuasion • Little to lose and more to gain by using this form of advertising • Brand placement in movies dates back to the 1940 s. • Limited research to verify effectiveness of this type of advertising. • Younger consumers appear to be the most responsive to brand placement in movies.
Brand Placement in TV Programs • Brand placement spending on television is even greater than in movies, accounting for nearly 60% of brand expenditures in 2005. • Brand placement in books and songs reflect the lifestyles of the protagonists and singers and is very prevalent in hiphop music.
Cinema Advertising and Web Films • $350 million was spent in a recent year on cinema ads prior to films. • Especially valuable for reaching young audiences. • Web films are short feature films available on the Internet for free viewing. This media reaches a target of 18 -35 year old men and women.
Virtual Signage • Some brand logos seen at sports venues on t. v. are virtual (i. e. computer generated image) • Advertisers in the U. S. have embraced virtual signage but in Europe regulators such as the European Broadcasting Union have banned virtual advertising from events in which it holds broadcasting rights.